By Hibba Meraay, Research Analyst and Giovanny Klyd Exilus, Research Intern
Firefighters battled a weeklong warehouse fire at a 500,000 square foot food storage facility in Boyle Heights, CA, a historically Chicano neighborhood in Los Angeles. The warehouse is operated by private equity-owned Lineage Logistics, the world’s largest refrigerated warehouse business, which has 22 facilities in Southern California alone. In addition to structural concerns, the massive plume of smoke has caused air quality issues in the Los Angeles area and the governor declared a state of emergency. The fire has already cost Los Angeles taxpayers three million dollars in fire services in five days, which does not include costs associated with health and environmental impacts or the shelter-in-place order.
Lineage, which employs over 23,000 people in 500 facilities across 19 countries, was formed by San Francisco-based private equity firm Bay Grove Capital through a series of “roll -ups” (serial acquisitions) starting in 2008. Bay Grove remains its majority owner. To date, Bay Grove has combined over 100 smaller companies into Lineage and is a driving force behind the consolidation in the refrigerated warehouse industry. Lineage and Americold, the next largest competitor, together hold a duopoly in control of 71 percent of rentable refrigerated warehouse space in North America, with Lineage at 43 percent. The impact on the cold storage business has been to push small businesses out of the sector and make the food supply more vulnerable.
Classic case of private equity playbook
As with other private equity takeovers, we’ve seen the same extractive business practices and a lack of investment in maintenance and upkeep at Lineage, which may have contributed to the severity of this fire. Bay Grove Capital has used sale leasebacks to fund the expansion of Lineage Logistics and further market consolidation. Sale-leasebacks are a classic example of private equity asset stripping, where the company sells a real estate asset to an investor and simultaneously leases it back to maintain operations. SEC filings show Lineage had $63 million in debt due to sale leasebacks by the end of the first quarter of 2025.
Lineage cut staff in two rounds of layoffs, cutting approximately 40 people in 2025 and more than 200 people in 2026, all after launching the largest initial stock offering in the U.S. of the year when it went public in 2024. The 2026 layoffs may have been in violation of the WARN Act, a federal law that requires 60 day notice for sizable layoffs.
A previous fire at a Lineage Logistics warehouse in 2024 in Washington state burned for two months and caused health hazards and environmental impacts months after the fire was extinguished. KTLA reports there was a fire at the same Boyle Heights warehouse a couple of years ago. California OSHA also investigated the warehouse operations in 2023. In all, companies owned by Lineage Logistics have racked up a plethora of environmental, safety and employment related violations, including workplace safety and health violations, wage and hour violations and air pollution.
Everywhere you turn, there’s private equity involved
The cause of the Boyle Heights blaze has not yet been confirmed, as it can take weeks for investigators to determine the source of complex fires. Lineage Logistics has told CNN it believes the fire started when the company they lease the roof to came to service solar panels. In a further attempt to distance itself from the fire, Lineage has noted it is merely a tenant of building owner Chill Build LLC, which appears to be a subsidiary of warehouse company Chill Development. No matter who is at fault, private equity is involved: Chill Development is a joint venture between private equity firm Bain Capital and real estate developer and investor Barber Partners, and the owner and operator of the solar panels, Atlus Power—the largest owner of commercial-scale solar in the US—is owned by private equity firm TPG.
Ironically, the same forces behind this tragic warehouse fire—financialization and consolidation— may also be making the fire more difficult to fight. A roll-up of emergency vehicle manufacturers into the predatory conglomerate REV Group by PE firm American Industrial Partners has severely crippled American fire departments by doubling vehicle costs, artificially closing plants, and pushing delivery backlogs out to over four years. REV Group reported it controlled approximately 44 percent of annual fire truck and ambulance sales in 2017 and that was before more recent significant acquisitions. REV has throttled production by closing down manufacturing facilities to inflate margins and patenting vehicle parts to force fire departments into lengthy, expensive repair bottlenecks, putting profits over public safety. This has left cities like Los Angeles dangerously under-equipped during major fires like this one as well as frequent wildfires. As we’ve seen in other crucial sectors where private equity has caused significant harm, like healthcare and childcare, private equity has taken an interest in emergency vehicles because of the reliable demand and steady stream of public revenue that creates conditions rife for extraction. LA County is currently suing American Industrial Partners and several fire truck manufacturers, including REV Group, in an antitrust lawsuit to try to break PE’s stranglehold on fire safety.