Why IOS Investors are Getting Bullish Going Into 2026

After the last few years of uncertainty, higher rates, and slower transaction volume, sentiment is finally starting to shift. We closed 3 deals in December and have 2 more scheduled to close in February and March.

But the optimism going into 2026 is not broad based and it is not speculative. It is showing up in sectors with durable fundamentals, operational simplicity, and room to scale. Industrial Outdoor Storage continues to stand out.

Here are five things investors should be paying attention to as we head into 2026.

1. Capital Is Re-Entering the Market Selectively

Capital that sat on the sidelines is starting to move, but with discipline. Investors are prioritizing sectors with predictable demand and downside protection. IOS continues to attract attention because of its essential use cases and resilient cash flow.

2. Opportunity in IOS Is Being Created Through Execution, Not Distress

Unlike other real estate sectors, we have not seen widespread distress in IOS. Instead, opportunity is coming from a fragmented ownership base. Technology is allowing sponsors to source off market deals, underwrite faster, and efficiently roll up portfolios.

3. Technology Stack Now Separates Sponsors

For the first time, sponsors are differentiating themselves by how they use technology and AI. At Westlake, we are keenly focused on continuing to evolve our tech stack. We have applied technology to deal sourcing, underwriting, due diligence, and asset management. In IOS, strong execution at scale matters.

4. Fundamentals Still Matter Most

IOS continues to benefit from limited new supply, zoning constraints, low tenant churn, and simple operating models. We are underwriting real demand and local market dynamics rather than relying on macro narratives.

5. Investor Optimism Is More Disciplined This Cycle

The confidence going into 2026 looks different. Conservative leverage, longer hold periods, and operational focus are replacing aggressive assumptions. Back to what I’ve said many times in the last year, yield matters! That discipline is creating a healthier foundation for growth.

Final Thought

The real estate market going into 2026 is not about waiting for a rebound. It is about building resilient platforms and executing well. IOS is not benefiting from a recovery. It is benefiting from structural advantages. If investing in IOS is of interest, please feel free to reach our directly, would love to catch up and share what we are seeing in the market.