Cold storage development rarely follows a straight line from concept to completion. Tight timelines, specialized infrastructure, evolving end-user requirements and challenging existing conditions can create significant risks – and opportunities – throughout the development process.
At the CREDA I.CON Cold Storage conference this week in Dallas, the “From Paper to Project Case Studies: The Construction Room” session examined two cold storage projects from the perspectives of the developer and construction team.
Cory Singer, senior vice president of Griffco Design/Build Inc., moderated the discussion with Charles Coffin, vice president of Scout Cold Logistics; Don Tuttle, LEED AP-BD+C, director of cold storage at Scannell Properties; and KC Williams, chief operating officer of Griffco Design/Build.
The two projects offered distinctly different challenges. The first was a build-to-suit development for Performance Food Group (PFG) in Monroe, Ohio, while the second involved converting an existing dry warehouse in Lancaster, Texas, into a highly specialized food production and cold storage facility for FreshRealm.
Despite their differences, both projects underscored the importance of preparation, communication, flexibility and a willingness to address risks before they become expensive problems.
Case Study 1: Build-to-suit Development Requires Preparation and Perseverance
The Monroe, Ohio, project demonstrates that a successful build-to-suit can require substantial investment and preparation long before a deal is finalized.
Scannell had an established relationship with PFG and had completed numerous projects for the company. But the project did not move forward as expected. After appearing likely to receive board approval in late 2025, the deal stalled. Months later, the opportunity returned, with a compressed schedule and significant work still to be completed.
Tuttle shared some lessons learned from the project:
Keep moving when the deal is uncertain. One of the biggest takeaways from the project was the value of continuing to prepare even when the outcome was uncertain. Scannell retained control of the site and continued due diligence while the deal was stalled. The company also had other potential users interested in the property, which reduced some of the risk of continuing to invest in the site. That preparation positioned the team to move quickly when the deal came back. Maintaining optionality – whether through backup users, alternative sites or completed due diligence – can allow a team to act when an opportunity returns.
Identify site and entitlement issues early. The site presented several challenges, including zoning requirements, truck circulation, building elevations, existing uses and extensive tree cover. The team addressed many of these issues before the project was awarded. One particularly significant consideration was an Indiana bat population that limited the timing for tree removal. Scannell ultimately invested hundreds of thousands of dollars to clear the site before it had a signed deal. That was a calculated risk, but it eliminated a potential schedule constraint and helped position the project for construction once the deal was approved.
Be prepared to price a project before the drawings are complete. The construction team faced another common challenge: developing a reliable cost estimate while design information was still limited. The initial RFP included more than 150 pages of specifications, but the project did not yet have a fully developed set of construction documents. Griffco had to interpret the available information, work closely with its bidding partners, and develop a reliable picture of what the completed facility would require. That became especially important as construction pricing remained volatile. Some material bids, including structural steel, had very short validity periods.
Relationships can speed things along. The project moved exceptionally quickly once it received the green light. The team received the revised RFP in April and was moving dirt by the beginning of September. That schedule was possible because much of the groundwork had already been completed and because the developer and construction team had an established working relationship.
Case Study 2: Box-in-box Projects Demand Deep Due Diligence
The second case study involved a roughly 170,000-square-foot existing dry warehouse in Lancaster, Texas, that was converted into a highly specialized temperature-controlled food production facility.
Unlike a traditional ground-up development, the project had to work within the limitations of an existing building. That meant understanding the structure, utilities, floor slab, drainage and other infrastructure before determining how the new facility could be designed.
The project team shared some lessons from that project:
Existing conditions can drive the project. One of the biggest challenges was determining whether the existing structure could support the new use. The facility required extensive new infrastructure, including production rooms, coolers, freezers and other equipment. The additional loads meant the existing steel joists had to be analyzed and reinforced, ultimately requiring more than $1 million in reinforcement work. The team also investigated the existing concrete, including its thickness and reinforcing, before determining where new cuts could be made.
Pre-construction is where problems should be found
The project reinforced the value of doing as much investigative work as possible before construction begins. The construction team physically inspected the building, brought in structural expertise, investigated the existing joists and sought original engineering information. The team also examined the existing floor system and evaluated the implications of the refrigeration system and increased utility demands. This level of investigation was intended to produce a more accurate project cost and reduce surprises during construction.
The end user needs to be part of the conversation. The box-in-box project also demonstrated why the end user needs a voice in the development and construction process. FreshRealm understood its production operations, but its requirements did not always translate directly into construction specifications. The Scout team spent time visiting the user’s other facilities to better understand its processes and how the new facility needed to function. That knowledge helped the development and construction teams make better decisions and identify opportunities for value engineering.
Expect the scope to evolve. Even with extensive pre-construction work, the project continued to evolve during design and construction. The highly specialized production environment required multiple temperature-controlled areas, food-production spaces and other infrastructure. Changes to those requirements could affect walls, ceilings, utilities, equipment and the existing building.
The project also encountered permitting challenges, including a late requirement for a smoke evacuation system from the fire marshal.
Speed-to-market has a value – but it comes at a cost. Converting an existing building can provide a significant advantage when time is critical. In this case, construction took roughly eight months, excluding the permitting process – considerably faster than starting from the ground up.
But speed does not necessarily mean lower cost. Box-in-box construction can be more expensive on a square-foot basis because of the additional walls, ceilings, infrastructure and modifications required to fit a specialized operation inside an existing structure. The decision ultimately comes down to the economics of the individual project.
Ultimately, both case studies demonstrated that successful cold storage development is as much about what happens before construction begins as what happens once the first shovel hits the ground. Careful preparation, strong relationships and a willingness to address difficult questions early can help turn a complicated project from paper into a successful facility.
This post is brought to you by JLL, the social media and conference blog sponsor of CREDA’s I.CON Cold Storage. Learn more about JLL at www.us.jll.com or www.jll.ca.
