Bain Capital, Barber Form $500M Cold Storage JV

Chill Storage site in Denton, Texas. Image courtesy of Barber Partners LLC

Barber Partners LLC and Bain Capital‘s Special Situations strategy have formed a joint venture for the development of 15 Class A cold storage facilities in high-demand markets across the U.S. The partners plan to invest $500 million of asset value in the freezer/cooler warehouses, which will operate under Barber’s newly launched Chill Storage brand.

Barber defines its Chill Storage brand of temperature-controlled industrial properties as the union of the next generation of the cold storage chain with modern building requirements and technology. The joint venture will deliver the first properties under the brand with alternative investment firm Bain acting as operating developing partner. Barber relied on Trey Morsbach and Will Mogk of JLL for guidance on the equity placement with Bain.

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The joint venture’s inaugural project will be an approximately 302,400-square-foot speculative cold storage warehouse in the Dallas-Fort Worth Metroplex area. The development will take shape on a 34-acre site in Denton, Texas, known as the golden triangle of DFW for the city’s focus on smart growth and business investment. In addition to the state-of-the-art freezer/cooler space, the highly adaptable facility will feature up to roughly 2,900 square feet of office space and will be able to accommodate a single tenant or multiple users. Construction of the Denton project is on track to get underway in June 2022.

A gap in the market

The strong demand for cold storage extends well beyond the U.S.; the cry for additional accommodations is growing louder around the world.

“With last-mile delivery gaining precedence amid the rise in e-commerce and direct-to-consumer shopping, warehouse construction near key logistics hubs has gained momentum,” according to a new report on the sector’s trajectory by Global Industry Analysts Inc.

Construction of cold storage properties in the U.S. is projected to total an estimated $3.2 billion in 2022. “The U.S. is witnessing pressing need to construct new cold storage facilities for addressing rising demand for COVID-19 vaccine rollouts and food delivery. The requirement is prompting more owners and developers to kick-start new cold storage construction projects in the country, with California being the primary destination for these projects,” according to the Global Industry Analysts report.

The Chill Storage project in Denton is scheduled to reach completion by December 2023. Barber and Bain will kick off construction of several additional developments across the U.S. in the coming months, while the partners will execute their half-billion-dollar joint venture’s investment goals over the next several years. Barber has tapped CBRE to handle marketing for the Chill Storage brand.