When it comes to structuring complex industrial leases, there is rarely a single playbook. That was the core message from a session at I.CON Cold Storage this week moderated by David Sours, cold storage expert and senior vice president at CBRE, who walked through two different deal types with Kevin Kelly, senior vice president at CBRE, and Zachary Romano, chief operating officer and partner at RL Cold.
The two examples – a second-generation leasing case study and a build-to-suit case study – illustrated how the different paths demand distinct strategies, timelines and risk calculations.
The Long Game on an Existing Asset
Kelly’s case study centered on the Dallas Food Center in Garland, Texas – a nearly vacant former grocery distribution facility he has worked on for more than 20 years. To win Kraft Foods as a tenant, the team undertook a roof lift across 150,000 square feet, raising clear height from 21 feet to 36 feet in a single phase. As Kelly put it, this was “nothing of this scale” compared to prior roof-lift projects.
The deal was not easy to land. The property was initially disqualified for not being tall enough, lacking sufficient loading doors, and having no cold storage at all. “It was a study of persistence with this one,” Kelly said, noting the team kept returning with new solutions each time Kraft said no.
One design decision proved especially important: the taller clear height allowed for denser racking, shrinking the original cold storage footprint from a planned 80,000 square feet to 60,000 square feet. That modest efficiency gain became critical eighteen months later, when the deal expanded from roughly 260,000 square feet to more than 450,000 square feet.
Kelly attributed much of the project’s success to an ownership group that understood cold storage operationally, not just financially. “If you just have people looking at it purely from spreadsheet numbers, it’s not as likely to resonate,” he said. Having other freezer-cooler buildouts within the same complex to point to as proof of concept gave his team credibility that ultimately closed the deal.
Structuring a Build-to-suit From Scratch
Romano’s build-to-suit case study told a different story: developing a new, LEED Gold-certified cold storage facility for Maersk in South Carolina, complete with rainwater capture and rooftop solar. The project unfolded during a period of rising construction costs and stretching lead times, with land acquired at Camp Hall in November 2020.
The facility itself reflected Maersk’s ambitions to connect an end-to-end supply chain, from ports to trucking to distribution. The team built 50-foot clear heights and incorporated very narrow aisle (VNA) racking along with semi-automation (after careful negotiation over which costs the landlord was responsible for and which were the tenant’s).
The land closed in December 2021, but the lease with Maersk was not executed until June 2022 – months after the team made the decision to release long-lead-time items like steel and electrical equipment. Romano was candid about the risk of making that call. His team modeled cancellation exposure in detail before committing and considered whether the materials could be used on other active projects if the Maersk deal fell through.
Incentives also played a substantial role, with the team ultimately securing $14.9 million through property tax rebates, income tax credits and sales tax exemptions. Romano noted that much of the extended timeline stemmed from the tenant’s sustainability requirements.
Trust Built Over Time
Despite their differences, both case studies pointed to the same underlying success factor: credibility earned through prior experience. Kelly’s team leaned on completed freezer-cooler buildouts in the same complex; Romano’s team leveraged a previously executed lease with Maersk in Houston. As Kelly observed, “it really comes down to the development experience, especially their experience with this type of product.”
Romano agreed, adding that understanding a tenant’s internal approval process – “what’s it take to get the deal to the finish line” – often matters as much as the physical building itself.
For brokers and developers navigating cold storage transactions, the takeaway is clear: whether retrofitting an older facility or developing a purpose-built campus from scratch, success depends less on any single structural decision and more on sustained relationships, disciplined risk management, and persistence through the deal.
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.
