"Thawing" Fundamentals, Attractive Valuation: Upgrade to O/P, PT to $18

Research evidence excerpt

"Thawing" Fundamentals, Attractive Valuation: Upgrade to O/P, PT to $18

June 26, 2026

Where Could We Be Wrong?

◼ Unlike most REIT sectors, cold storage is a highly operationally intensive business,

making COLD more exposed to macroeconomic variables such as food inflation,

tariff-related disruptions, and broader supply chain volatility. Because COLD both

owns the real estate and operates the facilities, adverse changes in these factors

can have a more direct impact on earnings and cash flow than for traditional REITs.

◼ Consumer spending pressures could lead to a shift toward lower cost food

alternatives or changes in purchasing behavior that reduce demand for products

requiring temperature-controlled storage and distribution. In addition, potential

reforms to government assistance programs could alter food consumption patterns

and purchasing power among certain consumer cohorts.

◼ While still in the early stages, broader adoption of GLP-1 drugs has the potential

to impact food consumption trends over time. Should this result in a meaningful

reduction in overall food demand or materially change the mix of products

consumed, cold storage utilization and throughput volumes could face incremental

pressure.

◼ Our thesis assumes that the inventory destocking cycle has largely run its course

and that occupancy trends begin to stabilize. If customer inventories remain under

pressure for longer than anticipated, or if inventory rebuilding fails to materialize,

occupancy and throughput recovery could lag our expectations.

Updated Ests. & PT

◼ After updating our model and incorporating changes into our underwriting

assumptions for economic occupancy and tweaking our SS exp. assumptions, our

’26 AFFO est. increases by 3¢ to $1.27 (vs. $1.24 prior) which is 2¢ above the MP