A $3B joint venture to develop cold storage facilities is building its first project in the Port Richmond neighborhood of Philadelphia.
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Local developer and investor BG Capital plans to build several facilities in "port-centric" parts of U.S. cities, with FreezPak Logistics as both triple-net tenant and equity partner, the company announced in a press release. But the JV's first project, a 170K SF cold storage warehouse on 7 acres at 2201 East Allegheny St., is a bit of an outlier, being positioned more as a last-mile distribution hub to replace a property FreezPak leases from BG in West Kensington.
“[The West Kensington warehouse] is a hard access point in a very dense, urban area, and ultimately, they’ll be moving out of that facility and into this new-construction one, but it still gives them last-mile access,” BG Vice President of Capital Markets Tyler Huffman told Bisnow, noting the new site is less than a mile, without turns, from an Interstate 95 exit.
The Port Richmond facility, scheduled to break ground this quarter on the site of a surface parking lot for school buses, would be 75 feet tall, allowing for two more pallets per stack than the more common 54-foot ceilings. Half of the facility will be operated with an automated storage and retrieval system, Huffman said.
The building will have 20 trailer loading docks, while the site will have 30 trailer parking spots and 60 car parking spots.
Sitting blocks away from a Market-Frankford Line stop and in a primarily residential neighborhood, the lot had been zoned as CMX-3, the third-densest commercial mixed-use designation in the city. BG has already secured a variance from the Zoning Board of Adjustment to build on the lot as if it had I-2 industrial zoning. To do so, the joint venture secured a community benefits agreement with neighborhood organizations from Port Richmond and neighboring Harrowgate, Huffman said.
FreezPak estimates that the facility will create 60 permanent jobs.
The next two markets where the joint venture is set to build are Houston and Jacksonville, Florida, with both being targeted for groundbreaking in the first quarter of next year. Especially in fast-growing Sun Belt markets, cold storage is arguably more in demand relative to the available supply than traditional warehousing, though it remains a specialized property type.
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