Commercial Update: Cold Storage Tenant Substantially Increases Office Space in West Loop

The West Loop real estate market is still red hot, but that’s not keeping a cold storage company from greatly expanding its footprint in the neighborhood. NewCold already has 6,000 square feet of space on the 31st floor of an office tower on West Madison Street, but now its planning on taking over more than 35,000 square feet of space in the same building.

As part of the expansion, NewCold won’t just be leasing substantially more space in the building, but also plans to hire around 125 new employees to fill the space. The company first moved in just two years ago and hired 75 employees.

The new expansion means the company could top 200 employees in the near future. NewCold serves large food product companies such as McCain and Conagra by owning, operating, and developing automated warehouses.

While the expansion likely means positive news for the company itself, it’s also good news for Downtown Chicago office landlords who haven’t had a lot of news to celebrate lately. Many companies are downsizing and getting rid of extra office space thanks to the trend of more and more companies offering their employees remote work.

It’s also an indication of a nationwide trend in the cold storage sector. Since the start of the pandemic, the industry has remained strong, and investors in other large cities are said to be developing more and more space to handle the high demand.

The tower that NewCold occupies in the West Loop neighborhood is said to be 96-percent leased right now, which is higher than the 83-percent average that Class A office buildings in the downtown area experienced in late 2022.