Lineage Logistics: Is the Cold-Storage REIT Heating Up After a Chilly IPO?

The cold-storage REIT sector has been a frosty landscape in 2025, with Lineage Logistics (LINE) and Americold (COLD) navigating a mix of macroeconomic headwinds and structural challenges. Yet, for value investors, the question remains: Is Lineage, the sector's largest player, finally showing signs of thawing after a rocky post-IPO journey? Let's dig into the numbers, strategy, and sector dynamics to see if this "chilly" IPO is worth warming up to.

A Rocky Start, But Signs of Resilience

Lineage's IPO in July 2024 was met with cautious optimism, but the company's financials told a mixed story. Revenue dipped 0.04% to $5.34 billion, while losses ballooned 498% to $706 million. The first quarter of 2025 brought further pain, with revenue down 3% year-over-year to $1.29 billion and adjusted EBITDA fell 7% to $304 million. However, AFFO per share rose 6% to $0.86, driven by tax efficiencies and disciplined capital spending.

The third quarter of 2025 offered a glimmer of hope. Revenue climbed 3.1% to $1.377 billion, and adjusted EBITDA grew 2.4% to $341 million. AFFO surged 6.3% to $221 million, outpacing the GAAP net loss of $112 million. While Lineage revised its full-year guidance downward-citing tariff uncertainties and weak fourth-quarter demand-it still expects adjusted EBITDA between $1.29 billion and $1.305 billion. Management's emphasis on "green shoots of optimism," such as declining new supply deliveries and rising frozen food demand, hints at a potential inflection point.

Valuation Metrics: A Tale of Two REITs

For value investors, Lineage's valuation remains a tightrope walk. The stock trades at a forward P/FFO of 20.07, significantly higher than Americold's 9.5x AFFO. Americold, with its 8.6% dividend yield and durable cash flows, appears cheaper on paper. Yet, Lineage's global scale-488 warehouses across 19 countries-and its LinOS technology platform give it a strategic edge in automating operations and enhancing margins.

Lineage's price-to-sales ratio of 1.5x is also compelling, well below its industry peers and a DCF-estimated fair value of $62.45 per share. At $35.82 as of November 26, 2025, the stock implies a 42% upside if the market eventually acknowledges its intrinsic value. Meanwhile, Americold's high debt load (net debt-to-EBITDA of 6.3x) raises questions about its long-term flexibility, even as its low AFFO multiple attracts income-focused investors.

Sector Headwinds and Strategic Moves

The cold-storage sector is grappling with oversupply and soft demand, as global trade disruptions and inflation dampen customer inventory building. Lineage's Q3 results reflect this: The Global Warehousing segment saw a 3.6% decline in same-warehouse NOI, while the Global Integrated Solutions segment grew 16%. Strategic partnerships, like its landmark deal with Tyson Foods, are critical to offsetting these pressures by enhancing network utilization and operational efficiency.

Lineage's net debt-to-adjusted EBITDA ratio of 5.8x is healthier than Americold's 6.3x, but rising interest costs in 2026-due to expiring hedges and new debt-could strain margins. The company's ability to maintain its $0.5275 quarterly dividend (annualized $2.11) will hinge on its capacity to balance capital deployment with cost control.

The Bottom Line: A Value Play With Caveats

Lineage's story is one of resilience amid adversity. While its P/FFO ratio may seem lofty, its technological edge, global footprint, and improving AFFO metrics suggest it's not just a "chilly" IPO but a potential long-term winner in a sector primed for consolidation. However, investors must weigh the risks: macroeconomic volatility, tariff uncertainties, and the specter of rising interest rates.

For the value investor, Lineage offers a high-conviction opportunity-if you're willing to bet on its ability to navigate near-term turbulence and capitalize on the inevitable rebound in frozen food demand. As the saying goes, "It's not about timing the market; it's about timing the stock." And with a DCF fair value of $62.45, Lineage's current price may just be the frosty setup before a thaw.