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Cold-storage market sees negative absorption early in 2026
About 41 million cubic feet of cold-storage space was delivered in the first half of 2026, while net absorption totaled 56 million cubic feet, leaving vacancy at 7.7% and highlighting a gap between newer and legacy facilities.
ConnectCRE reports the U.S. cold-storage market is dealing with a near-term supply-demand imbalance, with negative net absorption during the first six months of 2026.
Newmark’s 1H 2026 Cold Storage Market Overview cited long-term demand drivers including population growth, domestic food production, e-grocery, and expanding pharmaceutical and biologics supply chains. At the same time, occupiers are becoming more selective, favoring modern, higher-quality facilities over older product.
The data show 41 million cubic feet of cold-storage space delivered in 1H 2026, with net absorption of 56 million cubic feet and a 7.7% vacancy rate, according to ConnectCRE. The sector is also bifurcating, with older legacy properties driving most of the vacancy: vintage assets account for 68% of vacancy versus 24% for post-2020 product.
ConnectCRE also points to construction and conversion economics shaping development and reuse. New cold-storage projects face high construction costs of $130 to $350 per square foot, which Newmark said pushes projects toward build-to-suit, owner-user, or pre-leased plans, while lower conversion costs of $100 to $150 per square foot could encourage repositioning older dry-warehouse stock.