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Recovery: Cleanup efforts continue at Lineage\u2019s Boyle Heights campus past self-imposed and city deadlines. (Photo by Rich Schmitt)<\/p>\nEditor\u2019s note: After this story was published, Lineage announced days later it had completed cleanup of the rotten food at its facility in Boyle Heights.<\/p>\n
Two months after a fire tore through Lineage\u2019s\u00a0480,000-square-foot cold storage warehouse in Boyle Heights, rows of single-family bungalows on the next block are still blanketed in the unmistakable smell of decay.<\/p>\n
Lineage missed its own Aug. 20 deadline to finish removing 85 million pounds of rotten meat from the smoldering remains of 1400 S. Los Palos St., despite Mayor Karen Bass\u2019 pleas to hasten the pace. <\/p>\n
But the end is in sight, the company announced Tuesday as workers closed in on the final 4 million pounds of food waste lodged inside the building\u2019s six-story shelving system.<\/p>\n
A spokesperson for Lineage declined to answer specific questions from the Business Journal, but so far, the company\u2019s balance sheet remains relatively unscathed by the roughly $100 million cleanup and mountain of pending litigation from displaced families and city attorneys. Bass, for her part, is calling for accountability from the world\u2019s largest cold storage company, which she said \u201chas failed to meet its responsibility to Boyle Heights and East L.A.\u201d<\/p>\n
Yet on the political stage, the fallout from the fire has only just begun. And that carries implications not just for Lineage, but across L.A.\u2019s aging and severely supply-constrained 19.4 million square feet worth of freezer space, industry experts warn. <\/p>\n
\u201cWhat\u2019s at risk is how we put fresh food on the grocery store shelves in the future,\u201d said Jeff Powers, a broker specializing in California\u2019s cold storage market for Cushman & Wakefield. \u201cThey are as critical to the supply chain as anything in industrial real estate. I just hope no more of these things blow up.\u201d<\/p>\n
Cold storage math <\/p>\n
Construction of \u201cBig Bear,\u201d as the Boyle Heights facility is known, began in 2017 on a 15.7-acre lot on the edge of a sea of warehouses stretching east along the Los Angeles River into Commerce and south toward Vernon. At the time, the Los Angeles-Inland Empire cold storage market \u2013 a historic hub for cold chain imports and agriculture producers in California\u2019s Central Valley \u2013 was beginning to look less like the rest of the country. <\/p>\n
Demand for industrial space, including cold storage, exploded across major metro areas during the COVID-19 pandemic as e-commerce grocery delivery took off and mutated into new categories of convenience spending. At the same time, the niche grew more concentrated as vertically integrated real estate investment trusts like Lineage and Americold snapped up competitors and took advantage of the sector\u2019s higher cap rates compared to industrial real estate broadly, according to research by Newmark. <\/p>\n
Boyle Heights is an ideal location for cold storage customers seeking space close to the ports of Los Angeles and Long Beach, but also within L.A.\u2019s urban core and within reach of more than 22 million Southern California consumers.<\/p>\n
Recovery: Cleanup efforts continue at Lineage\u2019s Boyle Heights campus past self-imposed and city deadlines. (Photo by Rich Schmitt)<\/p>\n
New Jersey-based Preferred Freezer Services bought the Los Palos Street parcel \u2013 which previously housed a 99 Cents Only Store warehouse \u2013 in March 2017 for $43.3 million and completed the six-story Big Bear facility two years later. Then, Lineage acquired Preferred Freezer and absorbed the newly completed warehouse into its growing California portfolio, which comprises nearly 8 million square feet, or 10% of its global total footprint today, according to its most recent annual statement.<\/p>\n
But in the past three years, the U.S. cold storage market seems to have turned a corner, according to a 2026 market report by Newmark. New construction across the country reached a peak of more than 10 million square feet last year, up from about 4 million square feet in 2019. But net absorption fell far short of the new space coming onto the market in 2025, and cold storage vacancy has been on the rise for five years in a row, reaching nearly 8% nationally at the beginning of 2026.<\/p>\n
Amid this market reset, Powers said Los Angeles has remained \u201cseverely underserved\u201d relative to the Sun Belt and Midwest, where new inventory has concentrated over the past decade in part because of land availability and lower construction and labor costs. <\/p>\n
The average age of cold storage industrial buildings across L.A. and the Inland Empire is 52 years, the oldest in the country, according to Newmark\u2019s research. The region\u2019s total inventory shrank from 20.5 million square feet in the first half of 2025 to 19.4 million square feet at the beginning of 2026.<\/p>\n
And that\u2019s not changing anytime soon, according to Newmark\u2019s Jeff Sanita. <\/p>\n
\u201cL.A. is unique. Freezer space is almost nonexistent,\u201d Sanita said. \u201cWe have not seen developers come in and build freezer storage recently. In other parts of the country, there\u2019s availability.\u201d<\/p>\n
Industry\u2019s safety track record<\/p>\n
For owners of newer vintage assets like Lineage, the sluggish pace of local development only adds upside: it\u2019s part of the reason median annual taking rent for cold storage in the region is the highest in the country at $26 to $32 per square foot, ahead of South Florida, which fetches the second-highest median taking rent of $22 to $25 per square foot, and nearly double Chicago\u2019s range, according to Newmark\u2019s research. <\/p>\n
Some local players are still betting on the sector, but Brentwood-based\u00a0Rexford Industrial Realty\u00a0and Santa Monica-based\u00a0Dedeaux Properties\u00a0haven\u2019t specifically grown their cold storage holdings in years, even as their industrial footprint expands in L.A., according to a review of the firms\u2019 recent acquisitions.<\/p>\n
Cold storage was once Dedeaux\u2019s specialty, chief executive\u00a0Brett Dedeaux\u00a0told the Business Journal in March of last year. <\/p>\n
\u201cWe took a deep dive in the beginning stages into understanding food safety regulations, different types of freezer systems and all the components that are involved,\u201d Dedeaux said. That changed, however, because \u201cwe saw an even bigger opportunity in doing these logistics, transportation-oriented buildings.\u201d<\/p>\n
Dedeaux isn\u2019t alone in backing out of the market, Powers said. <\/p>\n
\u201cIt\u2019s not a highly understood niche, and sometimes developers don\u2019t want to take the risk,\u201d he said. <\/p>\n
Today, Lineage and Americold Realty Trust control the lion\u2019s share of North America\u2019s freezer space, with a combined capacity of nearly 4 billion cubic feet between them, according to rankings by Global Cold Chain Alliance, an industry group.<\/p>\n
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Storage: Lineage\u2019s warehouse contained food which continues to rot. (Photo by Rich Schmitt)<\/p>\n
Regulatory scrutiny has followed. Lineage was fined in 2023 for violating the federal Clean Air Act at a facility in Iowa, one of more than $4.5 million worth of federal penalties the company has racked up since 2014, CBS News reported. And Lineage has also accumulated a trail of OSHA and EPA citations during its rapid expansion over the past decade, raising the question of whether growth outpaced safety oversight across the portfolio, according to Capital & Main. <\/p>\n
Now, the company\u2019s fire safety record has also come under question, and Lineage acknowledged to CBS News a total of 34 building fires throughout its history.<\/p>\n
Perhaps the most severe example was a blaze at a 525,000-square-foot Finley, Washington warehouse in April 2024 that started inside a freezer and burned for 60 days, reducing the property to rubble, according to local news coverage of the event. <\/p>\n
A fire that wouldn\u2019t die<\/p>\n
Big Bear\u2019s conflagration began June 17 while contractors were servicing a rooftop solar array owned by Altus Power, which leases the space atop the warehouse, according to Lineage. The exact cause of the fire is still under investigation. A spokesperson for Altus did not respond to a request for comment.<\/p>\n
It wasn\u2019t the first fire to break out from solar panels at this address. A previous blaze on the roof of 1400 S. Los Palos St. in 2024 was extinguished within 48 minutes \u2013 a fact cited in a lawsuit Boyle Heights residents filed this summer as evidence the company should have anticipated a larger failure.<\/p>\n
When flames broke out again this summer, the outcome was different. Crews stayed on scene for more than a week before it was finally knocked down June 24. By then, a smoke plume had wafted across the San Gabriel Valley and continued east into the Inland Empire, triggering local and state emergency declarations, a shelter-in-place order and the relocation of students from nearby schools. And roughly 85 million pounds of decomposing food sat trapped inside the facility for another 13 days before the city allowed Lineage to commence cleanup July 7.<\/p>\n
The real estate investment trust deployed 400 workers a day to tackle the mess. But they missed the Aug. 14 deadline imposed by Bass to complete the cleanup and still hadn\u2019t finished the job by Lineage\u2019s own deadline a week later.<\/p>\n
State air quality regulators meanwhile sprang into action after logging nearly 4,000 odor complaints across the district in two weeks. The South Coast air quality board ordered Lineage to take new steps to protect residents and pay up to $70,000 per violation. More than 300 residents filed a 155-page lawsuit against Lineage within weeks, alleging a ruptured line exposed them to ammonia along with smoke and ash. And a separate suit from a Boyle Heights cancer patient alleges negligence, nuisance and trespass. In recent statements, Lineage disputed the characterization of its safety record in the litigation.<\/p>\n
Crews are now on the \u201cfinal stretch\u201d of food waste cleanup, Lineage announced in the last week of August. Bass, for her part, escalated further, directing city attorneys to place a lien on the property and pursue \u201call legal options for cost recovery and penalties.\u201d <\/p>\n
In a statement Aug. 20, the mayor accused Lineage of moving the goalposts and said the owners of the warehouse \u201cdo not deserve to rebuild.\u201d<\/p>\n
A spokesperson for Lineage declined to comment on the mayor\u2019s statements. <\/p>\n
\u2018Not an Armageddon effect\u2019 <\/p>\n
In its Aug. 5 earnings call, Chief Financial Officer Robb LeMasters told investors the firm expects to retain a \u201csignificant majority\u201d of its customers at Big Bear. The company projected a $15 million impact on core earnings due to lost revenue during the fire recovery while raising its outlook for adjusted funds from operations for the year by five cents per share, ranging between $2.80 and $3.05.\u00a0<\/p>\n
LeMasters said the company carries insurance for \u201cexactly this kind of event,\u201d though current investor guidance doesn\u2019t assume any coverage. <\/p>\n
Greg Lehmkuhl, Lineage\u2019s chief executive, was direct about the scale. Big Bear represents about one percent of Lineage\u2019s global footprint, and the company has roughly 30 other Southern California facilities that have already absorbed displaced customers, he said during the earnings call. <\/p>\n
Wall Street, so far, appears to agree that this has been a one-off event rather than a systemic threat to the business. Lineage shares have continued to trade in the low-to-mid $40s in the months since the fire, and at least three analysts \u2013 at Baird, Piper Sandler and Mizuho \u2013 raised price targets or upgraded the stock, even as litigation mounted. <\/p>\n
Others in the industry are also eager to frame the Boyle Heights fire as an isolated event rather than a sign of systemic risk. <\/p>\n
\u201cI wouldn\u2019t say this will have an Armageddon effect across the landscape,\u201d Cushman & Wakefield\u2019s Powers said. \u201cIt\u2019s very isolated to Southern California and one cold-storage location. It\u2019s not an ammonia-based problem or an old system that malfunctioned.\u201d<\/p>\n
Even so, Powers said the fire adds momentum to a fight that\u2019s already underway in California as cities rethink where large logistics buildings belong. Local governments have moved to restrict industrial development near homes and schools over concerns about truck traffic and pollution, and Powers expects the Boyle Heights fire to be cited as further impetus for change. <\/p>\n
Bass has escalated her rhetoric as the Big Bear cleanup drags on. Last week, she became a sponsor of Assembly Bill 817, introduced by Assemblymember Mark Gonzalez, a Democrat representing Boyle Heights. The proposed legislation would require cold storage developers to undergo closer review before receiving building permits and would also requires them to set up a \u201ccontingency fund\u201d to support communities after industrial accidents. <\/p>\n
Global Cold Chain Alliance, the industry\u2019s leading lobbying group, opposes the bill, along with dozens of agriculture and food producer groups who make up the industry\u2019s customer base in California. <\/p>\n
In an Aug. 25 state Senate committee hearing,\u00a0California League of Food Producers\u00a0lobbyist\u00a0Katie Little\u00a0warned that the bill \u201creaches far beyond\u201d the cold storage industry. <\/p>\n
\u201cIt would affect food producers, distributors, growers, packers, frozen food manufacturers, agricultural cooperatives, retailers, dairy facilities, and even pharmaceutical distribution centers,\u201d Little said, adding that the contingency fund \u201ccould discourage investment in new and existing facilities at a time when California\u2019s food supply chain already faces capacity challenges.\u201d<\/p>\n
Supporters of the bill testified that the industry must protect Californians since future warehouse fires are inevitable.<\/p>\n
\u201cThe Lineage fire is not an isolated incident,\u201d said\u00a0Shana England, vice president of the nonprofit\u00a0California Community Foundation, which has aided in the Boyle Heights fire recovery. \u201cLarge warehouses and cold storage facilities are increasingly located in and near communities, schools, homes, and small businesses. In fact, there are several other facilities just like this within spitting distance of this facility.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Editor\u2019s note: After this story was published, Lineage announced days later it had completed cleanup of the rotten…\n","protected":false},"author":2,"featured_media":448702,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[48,52,51,150259,47,50,49],"class_list":["post-448701","post","type-post","status-publish","format-standard","has-post-thumbnail","category-los-angeles","tag-la","tag-la-headlines","tag-la-news","tag-lineage","tag-los-angeles","tag-los-angeles-headlines","tag-los-angeles-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/448701","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=448701"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/448701\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/448702"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=448701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=448701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=448701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}