Whole Foods Wants To Build A 140K SF Distribution Facility In Aurora
Whole Foods is the latest company in need of cold storage space in the Denver area, and wants to build a refrigerated distribution center in Aurora, Colorado, according to plans submitted to the Aurora Planning Department.
One potential site for the facility is a building at the intersection of 60th Avenue and Denali Street in Hyde Development’s Highpoint Industrial Elevated Class-A development.
The northeast metro area continues to attract logistics and distribution facilities, including for cold storage users and grocery retailers. It’s among the reasons The Ryan Cos. decided to open an office in the Denver area nearly two years ago, which has since grown to about 30 people.
“It’s an attractive place to be,” Ryan Cos. Executive Vice President Todd Schell told Bisnow.
“There's a lot more desire for these cold storage facilities to be located in dense metro areas and be able to focus on fulfillment and e-commerce delivery right to the end user,” he said. He added there’s a need for cold storage facilities outside of those already aligned with major large grocers such as Kroger so e-commerce companies can efficiently manage the last mile of delivery and help ensure food stays fresh when it lands on the doorstep.
The company has four projects in planning or construction in Colorado, two of which are cold storage distribution facilities. These include a 280K SF cold storage facility it is building for an undisclosed e-commerce food delivery company in northeast Aurora. The second project is a 500K SF facility with multiple temperature chambers planned in Thornton.
“There are a lot of small companies out there that need cold storage space to run their operations efficiently,” Schell said. “The existing inventory of cold buildings is ancient. They’re not efficient, they have inefficient systems, they don’t have the right ceiling heights, so the need to replace some of that inventory is also driving some of the growth in cold storage.”
Karis Cold, a cold storage investor and developer backed by private equity, purchased a 170K SF cold storage and food distribution facility located at 4475 East 50th Ave. in Denver for $20M in January and has plans to upgrade and modernize the facility.
Pinemelon launched its online Denver-area grocery delivery service in April, and is currently operating out of a warehouse at 5915 Broadway. Target Corp. is nearing completion on its own new last-mile sortation center a few blocks north of Pinemelon’s current operations.
Schell said that supply chain inconsistencies are driving food manufacturers to return to domestic operations and “they need someplace to store it, so they’re [also] looking for cold storage space.”
Schell said that advancements in material handling systems technology are another factor in the equation. “There have been automated systems for a number of decades, but they just get better and better every year,” he said. He added that automation helps companies achieve more efficient operations while also helping them manage labor challenges and that many companies are repurposing the labor typically needed in traditional distribution centers to shift to workers who understand automated environments.
Other major grocery chain investments in the northeast Denver metro area include Dollar General, which in July announced it will invest $172M to build a new 919K SF distribution facility on 75 acres it purchased from DIA earlier this year. The new facility is located on the southeast corner of East 64th Avenue and E-470 in Aurora.