Industrial Outdoor Storage: A Rising Asset Class in Modern Logistics

We are pleased to have been featured in Thesis Driven – Brad Hargreaves’ widely regarded industry publication, and thought we’d share a summary of our commentary on Industrial Outdoor Storage.

Once overlooked in favor of traditional warehouses, IOS has emerged as a critical component of modern logistics real estate. With a market size of $200 billion and rising institutional interest – $1.7 billion was raised for the asset class from H2 2023 to H1 2024 – IOS assets have become a key advantage for e-commerce, fleet management, and infrastructure providers.

IOS sites are generally defined by low building coverage (<25% FAR) and an extensive open yard area, making them ideal for last-mile delivery, construction staging, and port logistics. As industrial land in and around urban centers is redeveloped into housing and other commercial uses, zoning restrictions and physical scarcity are driving demand for IOS. The asset class remains highly fragmented, with institutional ownership representing just 10% of the market, creating strong acquisition opportunities and optionality to consolidate smaller assets into portfolios of institutional scale. For investors, this essential sector presents a rare opportunity to capitalize on strong fundamentals and limited competition.

Investors are drawn to IOS for its combination of high yield, low capex requirements, and economic resilience through recessionary cycles. Stabilized assets in infill markets generate yields exceeding 7%, often outpacing multifamily on a risk-adjusted basis, and benefit from both inflation-protected lease structures and lower average vacancy rates than traditional warehouses.

In the full article, we explore the unique characteristics of IOS, its key tenant base, why it is poised to deliver superior risk-adjusted returns in the years ahead, and our secret sauce for deal sourcing and execution. To receive the full article or to chat further on IOS, please reach out directly to Kristina or Stew.