Atlanta Cold Storage Startup Gets $500M For Rapid Expansion

An Atlanta-based logistics company specializing in storing and shipping food and beverages has taken on a half-billion-dollar investment as it looks to supercharge its cold-storage warehouse footprint.

An undisclosed capital partner invested $500M into Envision Cold, giving the company run by a former Americold executive the ability to acquire and develop more than $1.5B in cold-storage facilities across the country, according to a press release. Envision, which launched just over a year ago, has already purchased facilities and their operating companies in Oakland and San Francisco; Laredo, Texas; and Vancouver.

“Demand for cold storage has never been stronger,” Envision CEO Austin Solem told Bisnow in an interview Monday. “We have aggressive growth plans, both through acquisition and development.”

Envision provides not only cold storage, but also transportation and import and export services. It also plans to use the funding toward ground-up development of new facilities as well as acquisitions, according to the press release.

Solem previously ran the mergers and acquisitions department at Americold, helping to take the company public in 2018. 

Envision looks to ride the tailwind of cold storage growth. While e-commerce growth has slowed since the depths of the pandemic, the demand for cold storage has not wavered, especially as grocery sales as a percentage of online retail is expected to jump from 13% in 2021 to 21.5% in 2025, according to a CBRE report. That demand growth has spurred rapid development, with 3.3M SF of spec cold storage facilities underway in the U.S. as of the second quarter of 2022, up from 300K SF in 2019, according to CBRE.

The costs to build and operate cold storage surpass traditional warehouse development. Cold-storage facilities cost between $250 and $350 per SF to build, three times more than traditional warehouses, JLL recently reported. That has kept a cap on development and the entrance of new players in the market, with Americold and Lineage Logistics combined accounting for more than 70% of the total cold-storage space in the U.S., according to Global Cold Chain Alliance data cited by CBRE.

The lack of supply, growing demand and an aging cold-storage infrastructure have caught the attention of investors, with 28% of investors surveyed by CBRE saying they want to spend more dollars on industrial and logistical spaces, with some 5% of debt seeking to specifically invest in cold storage.

Solem told Bisnow he expects Envision will have fully deployed the $500M by next year, with the company’s growth being focused on underserved markets and strategic plays.

Jordan Roeschlaub and Dustin Stolly, Newmark's co-presidents of debt and structured finance, secured the financing for Envision. 

“There’s a need for additional supply all around the country,” Solem said. “But we don’t want to acquire just to acquire and build just to build. It would take a very long time to get to the size of an Americold or a Lineage.”