The Mandate
A regional food-distribution operator expanding refrigerated warehouse capacity engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a USDA B&I financing request for a project located in York County, Pennsylvania. Total project capitalization fell within the $25M-$50M band. The capital provider, a community bank originator with USDA Rural Development guarantee, required documentation consistent with current program review standards. The analytical question put to the team: Did Mid-Atlantic perishable-food throughput and regional cold storage utilization support 120,000 square feet of incremental refrigerated capacity.
Engagement Scope
- Primary market area defined as a 75-mile drive-time
- Comparable supply set of 8 properties
- Demand model framework: regional perishable-throughput and cold storage utilization analysis
- Financial projection horizon: 10 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 75-mile drive-time from the subject site, calibrated to the demand catchment behavior typical of cold storage assets in Pennsylvania. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 8 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a regional perishable-throughput and cold storage utilization analysis approach over a 10 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 1.6 across the projection window, with a stabilized capture rate of 4.7%.
Exhibit 1: Comparable Supply Set, Pennsylvania PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 10 years Horizon
[Table or chart rendered in delivered report.]
Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- Regional cold storage facilities operated at 91% to 96% utilization, indicating capacity-constrained submarket.
- Pre-leasing of 68% of subject capacity was secured at lease execution.
- Comparable Mid-Atlantic cold storage achieved $18.40 to $22.80 per square foot stabilized rents.
- USDA B&I eligibility, rural designation, and equity tests confirmed.
Deliverable
The delivered report ran 144 pages with 33 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the community bank originator with USDA Rural Development guarantee. The corresponding USDA B&I review framework guided exhibit selection and supporting documentation.