Editor’s note: After this story was published, Lineage announced days later it had completed cleanup of the rotten food at its facility in Boyle Heights.
Two months after a fire tore through Lineage’s 480,000-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.
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’ pleas to hasten the pace.
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’s six-story shelving system.
A spokesperson for Lineage declined to answer specific questions from the Business Journal, but so far, the company’s 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’s largest cold storage company, which she said “has failed to meet its responsibility to Boyle Heights and East L.A.”
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.’s aging and severely supply-constrained 19.4 million square feet worth of freezer space, industry experts warn.
“What’s at risk is how we put fresh food on the grocery store shelves in the future,” said Jeff Powers, a broker specializing in California’s cold storage market for Cushman & Wakefield. “They are as critical to the supply chain as anything in industrial real estate. I just hope no more of these things blow up.”
Cold storage math
Construction of “Big Bear,” 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 – a historic hub for cold chain imports and agriculture producers in California’s Central Valley – was beginning to look less like the rest of the country.
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’s higher cap rates compared to industrial real estate broadly, according to research by Newmark.
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.’s urban core and within reach of more than 22 million Southern California consumers.
New Jersey-based Preferred Freezer Services bought the Los Palos Street parcel – which previously housed a 99 Cents Only Store warehouse – 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.
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.
Amid this market reset, Powers said Los Angeles has remained “severely underserved” 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.
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’s research. The region’s 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.
And that’s not changing anytime soon, according to Newmark’s Jeff Sanita.
“L.A. is unique. Freezer space is almost nonexistent,” Sanita said. “We have not seen developers come in and build freezer storage recently. In other parts of the country, there’s availability.”
Industry’s safety track record
For owners of newer vintage assets like Lineage, the sluggish pace of local development only adds upside: it’s 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’s range, according to Newmark’s research.
Some local players are still betting on the sector, but Brentwood-based Rexford Industrial Realty and Santa Monica-based Dedeaux Properties haven’t specifically grown their cold storage holdings in years, even as their industrial footprint expands in L.A., according to a review of the firms’ recent acquisitions.
Cold storage was once Dedeaux’s specialty, chief executive Brett Dedeaux told the Business Journal in March of last year.
“We 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,” Dedeaux said. That changed, however, because “we saw an even bigger opportunity in doing these logistics, transportation-oriented buildings.”
Dedeaux isn’t alone in backing out of the market, Powers said.
“It’s not a highly understood niche, and sometimes developers don’t want to take the risk,” he said.
Today, Lineage and Americold Realty Trust control the lion’s share of North America’s 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.
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.
Now, the company’s fire safety record has also come under question, and Lineage acknowledged to CBS News a total of 34 building fires throughout its history.
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.
A fire that wouldn’t die
Big Bear’s 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.
It wasn’t 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 – a fact cited in a lawsuit Boyle Heights residents filed this summer as evidence the company should have anticipated a larger failure.
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.
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’t finished the job by Lineage’s own deadline a week later.
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.
Crews are now on the “final stretch” 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 “all legal options for cost recovery and penalties.”
In a statement Aug. 20, the mayor accused Lineage of moving the goalposts and said the owners of the warehouse “do not deserve to rebuild.”
A spokesperson for Lineage declined to comment on the mayor’s statements.
‘Not an Armageddon effect’
In its Aug. 5 earnings call, Chief Financial Officer Robb LeMasters told investors the firm expects to retain a “significant majority” 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.
LeMasters said the company carries insurance for “exactly this kind of event,” though current investor guidance doesn’t assume any coverage.
Greg Lehmkuhl, Lineage’s chief executive, was direct about the scale. Big Bear represents about one percent of Lineage’s global footprint, and the company has roughly 30 other Southern California facilities that have already absorbed displaced customers, he said during the earnings call.
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 – at Baird, Piper Sandler and Mizuho – raised price targets or upgraded the stock, even as litigation mounted.
Others in the industry are also eager to frame the Boyle Heights fire as an isolated event rather than a sign of systemic risk.
“I wouldn’t say this will have an Armageddon effect across the landscape,” Cushman & Wakefield’s Powers said. “It’s very isolated to Southern California and one cold-storage location. It’s not an ammonia-based problem or an old system that malfunctioned.”
Even so, Powers said the fire adds momentum to a fight that’s 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.
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 “contingency fund” to support communities after industrial accidents.
Global Cold Chain Alliance, the industry’s leading lobbying group, opposes the bill, along with dozens of agriculture and food producer groups who make up the industry’s customer base in California.
In an Aug. 25 state Senate committee hearing, California League of Food Producers lobbyist Katie Little warned that the bill “reaches far beyond” the cold storage industry.
“It would affect food producers, distributors, growers, packers, frozen food manufacturers, agricultural cooperatives, retailers, dairy facilities, and even pharmaceutical distribution centers,” Little said, adding that the contingency fund “could discourage investment in new and existing facilities at a time when California’s food supply chain already faces capacity challenges.”
Supporters of the bill testified that the industry must protect Californians since future warehouse fires are inevitable.
“The Lineage fire is not an isolated incident,” said Shana England, vice president of the nonprofit California Community Foundation, which has aided in the Boyle Heights fire recovery. “Large 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.”
