Cold Storage Market Stabilizing After Pandemic-Driven Oversupply

Key Details Lineage reported mixed first-quarter results as the temperature-controlled warehouse sector works through pandemic-era overcapacity. The company posted a $51 million net loss while delivering adjusted funds from operations of 78 cents per share, down 8 cents year-over-year. Consolidated revenue reached $1.3 billion with minimal growth of less than 1%. Why It Matters Management projects the cold storage market is stabilizing after years of imbalance. New capacity growth of 15% from 2021-2025 outpaced demand growth of just 5%, creating roughly 10% market oversupply. However, new facilities coming online represent less than 2% of total capacity this year and next, signaling the correction phase is nearing completion. Operational Performance Physical occupancy stood at 76.4%, down 30 basis points year-over-year. Pallet throughput declined 3% but storage revenue per pallet increased 2%. Lineage expects net price increases of 1-2% this year, with 70% of its revenue base already repriced for 2024-2025. Outlook Lineage maintains full-year guidance of $1.25-$1.30 billion in adjusted EBITDA and $2.75-$3.00 in adjusted funds from operations per share. The company is constructing 22 new facilities expected to generate $150 million in additional annual EBITDA.