The Real Estate Problem That Could Delay The Coronavirus Vaccine Rollout
UPDATE, NOV. 10, 12:30 P.M. ET: Pfizer's vaccine, which is kept at ultracold temperatures, has been shown to be 90% effective in early trials. It could be approved later this month and distributed to essential workers before the end of the year.
As cases of the coronavirus reach new all-time highs, the production and distribution of an effective vaccine is the moment most of the world is waiting for before life can return to some sort of normal.
But as the race for a vaccine continues, a real estate problem has emerged that could slow its rollout, potentially delaying any real economic recovery in the process.
Some of the vaccines currently in development need to be kept at extremely low temperatures at all times from development to injection; some at negative 80 degrees Celsius or lower. Public health experts have raised serious doubts that the country has enough space to store hundreds of millions of vaccines at extreme subzero temperatures.
“We have never seen anything like this before,” said Catherine Troisi, an infectious disease epidemiologist at the University of Texas’ School of Public Health. “Distributing the vaccine through that cold chain, or a frozen chain … It’s going to delay when we get people vaccinated.”
Local, state and federal governments are still in the beginning stages of securing such storage space. While cold storage companies have seen an uptick in interest and demand for their product, commercial real estate owners and brokers said they have not seen an increased interest in cold storage industrial space for a COVID-19 vaccine from private companies or the government.
Pfizer, which is developing a vaccine with an ultracold temperature profile, is buying up freezer storage boxes to help transport and distribute the vaccine, but has not yet sorted out where they will store the doses once they get distributed, The Wall Street Journal reported earlier this week.
CVS, the largest pharmacy chain in the country, told Bisnow it has enough space to store most of the vaccines being developed, but declined to comment on its storage capacity until a vaccine is approved.
But Troisi, who has worked on coronavirus research at UTHealth, said only research labs have freezers that reach ultracold temperatures. There is not currently enough freezer space to store at least two of the vaccines in development — Pfizer and Moderna’s vaccine attempts both must be stored at or below negative 80 degrees Celsius from manufacturing to delivery, she said.
Commonly distributed vaccines, such as the flu shot, are stored above freezing. Even then, nearly 50% of vaccines worldwide are discarded because they weren’t kept cold enough before the vaccine could be administered, Troisi said.
A spokesperson for the New York State Department of Health said the state hasn’t yet identified spaces to hold the vaccine when it becomes available, but that officials are in the process of identifying a strategy for storage. Citing national security reasons, the U.S. Department of Health and Human Services said it couldn’t comment on which spaces it has secured for storage and distribution.
“In an effort to minimize the potential risk to delivery and distribution, we are unable to provide specific details regarding where vaccines are produced and stored,” an HHS spokesperson said in a statement.
The severity of the storage problem will largely be determined by how cold the vaccine that ultimately gets distributed will need to be. If Moderna or Pfizer’s vaccines — or one of the other candidates that also needs below-freezing storage temperatures — win approval, space may be hard to come by, presenting a real problem for vaccine distribution.
“You can retrofit for cold storage, but freezer space needs to be purpose-built,” said Tom Griggs, Hines’ East Region head of industrial and logistics. “The line of demarcation is whether it needs to be cold or if it needs to be frozen.”
None of the groups involved in funding or distributing vaccines, from federal and state governments to pharmacies and supply-chain companies, have outlined comprehensive plans for vaccine storage.
Last week, all 50 states were required to submit plans for vaccine distribution to the Centers for Disease Control and Prevention. New York State, which public health experts say has been a leader in vaccine preparedness, released a public COVID-19 Vaccination Program Oct. 16, but the 96-page document is short on specifics.
“Refrigeration storage requirements is one of the unknown variables to be decided upon,” New York State Department of Health spokesperson Erin Silk said.
The DOH wrote in the program that it doesn’t yet know whether the federal government will be distributing the vaccine or whether local and state governments will. It states that once a vaccine is approved, it will work with local government and private companies to distribute it. Listed among the vaccine distribution sites are long-term facilities, pharmacies, community health centers, health departments and schools.
The DOH doesn’t outline a plan to create cold storage in these places, nor does it outline leasing any additional space for cold storage. Gov. Andrew Cuomo also created a distribution and delivery task force, which includes pharmacy trade organization leaders, state health officials and hospital and health center leaders.
A New York City Department of Health spokesperson said the city is working with health providers on vaccine storage, but didn’t give details beyond that.
“We will be prepared when the vaccine is available and have been preparing for many months now,” spokesperson Michael Lanza said in a statement. “We are actively working with hospitals and [Federally Qualified Health Centers] around vaccine storage plans.”
CVS also declined to comment on how many vaccines it would be able to store in its refrigerators and freezers in its pharmacies.
“Almost all of the vaccine candidates have temperature storage requirements that we can accommodate in the freezers and refrigerators we have in our pharmacies,” a CVS spokesperson said in an email. “We look forward to playing a significant role in the vaccine distribution process, and our experience of providing millions of flu vaccinations each year is helping inform our plans.”
The flu vaccine is kept at a normal refrigeration temperature above freezing, much different than the temperature profile of some of the vaccines in the pipeline. Cold storage facilities that reach below negative 80 Celsius are sparse.
“Most hospitals don’t even have those,” Troisi said. “One of the only places that has freezers at that low of a temperature are research labs.”
North Dakota Immunization Program Manager Molly Howell told CBS News that “a lot of providers don’t have that storage.”
"The minimum increment of 1,000 doses, and figuring out how we can get that to the rural areas, is what's keeping me up at night," she told CBS. "We're thinking about the possibility of having to repackage and redistribute that vaccine into smaller quantities."
'Not Big Enough To Move The Market'
While the vaccine has been touted as the saving grace of the economy, those in the real estate industry have seen little demand for or interest in property with cold storage for vaccine use.
“You also can’t just take a warehouse and make it a vaccine storage space,” said JLL Executive Vice President John Cunningham, who works in the brokerage’s New Jersey office and co-chairs its Life Sciences Advisory Board. “Currently, there is no overlap between [industrial] and biopharma.”
Standard floors used in cold storage wouldn’t be able to withstand the extreme subzero temperatures, Griggs said, to say nothing of buildings’ internal HVAC systems, so any retrofit would require a costly, impractical construction job. Developers also doubt there will be much appetite in the real estate community to build new, ground-up freezer space for the vaccine rollout.
“A vaccine is a short-term demand spike, you may see a spike in retrofit, but freezer storage is two to three times more expensive,” Griggs said. “What I don’t think you'll see is companies going to spend $200 to $300 a foot for something that’s only going to be needed for a year or two.”
Beyond the developer appetite, there are still unanswered questions that could delay the process of accessing space.
“The question will be: What really is going to be required? When? For how long? And to what specification?” Cunningham said. “To design, build and validate and get approval … that could take two years.”
Investing in converting portions of existing pharmaceutical manufacturing buildings to add more freezer space could be a way to go, Cunningham said.
Even with a vaccine, the percentage of cold storage facility space used for medicine is small and massively outpaced by the percentage of cold storage facilities used for groceries.
“[Medicine] is not big enough to move the market,” Griggs said. “It’s a big portion of GDP but it’s a small portion of the overall market ... It’s very expensive, but it doesn’t take up a lot of room.”
More mobile, temporary options may be the best way to go in the short-run, cold chain logistics provider Cryoport Systems President and CEO Mark Sawicki said.
“Once we inoculate a large portion of the population, then we can move towards long-term storage,” Sawicki said.
Until the time when movement is made on this front, the vaccine — and ultimately the recovery — will be delayed.
“Until we have an effective vaccine that people will feel comfortable taking, we’re going to be socially distancing and wearing masks,” Troisi said. “I don’t have a perfect crystal ball, but I would say I think we’re going to be doing this until at least this time next year, if not longer.”