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Q&A with Peak Construction’s Keith Dafcik on Cold Storage

Refrigerated warehouses, also known as cold storage facilities, are in high demand, not least because they’re in short supply, with much of the existing stock now outmoded. That means developing new facilities but building them isn’t as simple as putting freezers into a conventional warehouse space. Many considerations come into play. To help sort them out, Connect CRE spoke with Keith Dafcik, COO at Peak Construction. 

Q: With interest rates and regulatory pressures on banks for lending, what areas of construction remain strong? 

A: Cold storage facilities remain in very high demand, especially in coastal regions like Texas, Florida, Georgia and South Carolina, and at inland rail port locations such as Kansas, Illinois and Mississippi. Demand of perishable goods continue to increase with respect to inbound volumes; specifically, antibiotic and pesticide-free produce, fish, plant-based milk and other plant-based proteins and biproducts along with large imports of avocados, bananas, peppers and other fruits and vegetables. Another factor driving this demand is the need to replace aging/outdated existing buildings. Many are over 30 years old, which are unable to meet current end user requirements. These considerations have developers entering the cold storage market and building on a speculative basis; over eight (8) million square feet of new projects are planned for 2024, which is double that of 2023. 

Q: What are the critical design issues that need to be solved in planning a refrigerated distribution center? 

A: There are many important factors and decisions to consider when designing cold storage facilities. I will touch on a few of the main critical items. 

Understanding the client’s operational needs from a distribution standpoint for storing, shipping/receiving product, product flow, number of pallet positions required, racking configuration, and material handling equipment utilized, etc. will help determine the overall building layout, footprint, column bay spacing, and clear heights, etc. 

The proper sealing of the building thermal and vapor envelope is extremely important for these types of facilities. It consists of exterior insulated metal wall panels (IMP) and the roofing system. The integrity/continuity of the building thermal and vapor envelope through properly designed and installed flashing/caulking details for joints between the IMP walls/roof, and mechanical equipment openings, etc. is essential to control vapor drive, infiltration, and leaks. We typically see insulated metal panel thickness of 4” (R-36) for coolers while freezers require 6″ (R-54) or greater. Roof insulation values range from R-38 for cooler to R-50 for freezer applications. 

In conjunction with the building envelope, freezers must be isolated for thermal integrity with a separate steel system, column isolation blocks and heated insulated concrete floors to prevent potential issues with heaving floor slabs, etc. Equally important from a quality control standpoint is inspecting these details while under construction to ensure the installation meets the specifications. 

For the refrigeration system design, there are several types of refrigeration systems to utilize for different applications: freon commercial, cascade CO2 (ammonia or freon), CO2 trans-critical and ammonia (central/package). Each system offers different benefits and the initial investment vs. operating costs will need to be evaluated carefully. Often the end user drives the selection of the system to be used. Determining the amount of refrigeration required will depend on the product loads (incoming product temperature and final product temperature), transmission of heat conveyed through the walls, floor and ceiling, infiltration, and heat from building equipment and people, etc. 

Other critically important components/systems to design include the electrical service size and back-up power, fire protection system (Quell), shrinkage compensating concrete floor slabs for reduced floor joints, vertical dock levelers, pest and rodent control, truck and employee vehicle segregation and capacity for shift changes, and trailer parking, etc. 

Q: What are current trends in design and construction of cold storage facilities? 

A: For speculative freezer/cooler facilities, we’re seeing current trends with building sizes ranging from 200,000 – 300,000 SF with typical bay sizes of 56’x50’ and clear heights of 50’ to accommodate high cube storage/maximize pallet positions. The facilities are designed with flexibility in mind by utilizing multiple convertible cooler rooms which can operate at varying temperature ranges, from -20 deg to 40 deg, to adapt to different end users’ needs and their wide-ranging product types. Prepackaged refrigeration units are being extensively used in lieu of central ammonia systems. Prepackaged systems cost less to install and operate and have all the components housed in the roof mounted unit, unlike a central ammonia system which requires a separate machine room housing compressors/equipment and has significantly more ammonia piping. Fire protection for these facilities is typically done with a Quell fire protection system to allow for storage to 50’ with max deck height of 55’ to avoid in-rack sprinklers. 

Q: Based on the intricacies you’ve mentioned in design, how much more do refrigerated distribution centers cost to build versus conventional ambient facilities? 

A: As you’d assume, and you’d be right, both construction and operating costs are significantly higher for freezer/cooler facilities. A refrigerated distribution center’s construction costs are about 2.5 to 3 times that of a typical ambient warehouse. A few of the factors driving the increased construction costs are the refrigeration system, power requirements, perimeter steel framing for IMP exterior wall panels, increased roof insulation, Quell fire protection system and freezer floor slabs, etc. Operating expenses are also significantly higher, which can be as much as 60% more. This is mainly due to the heavy power required to operate the refrigeration system. 

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