The cost of storage for freezer warehouses is astronomical. Apart from the building cost itself, other considerations such as the warehouse’s size, refrigeration controls (ex. automation), electrical utilities, insulation, flooring, and more can increase costs.
Boston Appraisal & Consulting Executive Director Thomas Jensen, in an article for New England Real Estate Journal, said the refrigeration sections of these warehouses alone could cost over $125 per square foot to construct. Often, the cost of construction exceeds the resale value of the property.
You’d want to start turning a profit fast to recoup your expenses. One way you can do this is to maximize storage density and outfit your staff with a fleet of equipment, such as narrow aisle forklifts, to move inventory into those dense storage locations. By doing so, your storage cost per item will be lower, but you’ll have a bigger inventory, allowing you to recover operating costs faster and gain a profit.