Cold storage properties are growing in popularity across the nation, and one local investor is bullish on the trend outside of the county.
Irvine-based The Koll Company has acquired a nearly 80,000-square-foot food distribution warehouse building in Las Vegas for $18.6 million, bringing its portfolio in the city to just shy of 1 million square feet.
The development and investment company paid all cash for the LEED-certified building that was built in 2015 for Chefs’ Warehouse, a specialty wholesale distributor for restaurants, hotels, country clubs and food stores. Clients include celebrity chefs Thomas Keller, Michael Mina, Nancy Silverton and Daniel Boulud, among others.
The building is near Allegiant Stadium and across the street from another Koll Co.-owned building at 4210 Sobb Ave., a 42,000-square-foot property home to a relocation company.
“We are very excited about the opportunity to expand our significant presence in the Las Vegas market,” said Scott Meserve, principal of The Koll Co. “We have a long-term view on this asset as well as the overall market, and look forward to owning the property for the foreseeable future.”
Meserve added the Las Vegas market “remains resilient and strong” despite recent economic uncertainty.
“We are very bullish on this region and believe that it will continue to grow and expand.”
Grocery stores have been on a growth spurt that kicked into overdrive during the pandemic, as consumers focused on essential purchases, sending U.S. grocery sales to new highs.
Such companies have been vying for
industrial space to meet distribution needs to supply their stores, including organic grocer Sprouts Farmers Market Inc., which inked a 337,000-square-foot lease for a distribution building at the Goodman Logistics Center Fullerton last year.
E-commerce’s share of total U.S. grocery sales is expected to represent nearly 22% by 2025, up from 13% in 2021, which will continue to drive demand for cold storage, particularly within the grocery distribution segment, according to a CBRE report.
Koll’s new Las Vegas property is approximately 60% temperature controlled, ranging from -10 degrees for freezer to up to
60 degrees for a chocolate/dessert storage area. Chefs’ Warehouse has 12 years left on its initial lease, with options for additional terms thereafter.
Koll has slowed its industrial acquisition push as of late, coming off from 2021 when it spent north of $100 million in the sector, when it added 700,000 square feet to its West Coast portfolio.
This included an expansion into two new markets: Salt Lake City and Beaverton, Ore.
The company’s OC portfolio totals 4.5 million square feet, primarily consisting of low-rise office properties, which has historically comprised the bulk of Koll’s holdings.
Nearly two-thirds of that portfolio has been added in the past decade, when Meserve joined forces with Scott Lanni and Gerald Yahr to head the day-to-day operations of the company, founded by the late real estate development icon, Don Koll.