Industrial Outdoor Storage (IOS) assets, once just a niche within the broader industrial commercial real estate segment, have become increasingly sought-after by both private and institutional CRE companies. The market for IOS is now estimated at $200 billion.
What’s IOS and why is it in demand?
IOS properties are characterized by low building coverage with excess yard space or primarily parking areas with small buildings. These sites are occupied by a variety of tenants across numerous industries that support the supply chain through storage, maintenance, and dispatching of delivery vehicles or other industrial equipment. They may be used as truck terminals, e-commerce distribution points, trailer storage yards or container storage facilities – all critical components for transporting products throughout the United States.
Three factors have contributed to this growing desire for these assets: COVID-driven increases in e-commerce business necessitating logistics/transportation facilities; limited availability of industrial outdoor spaces in large urban areas; and value driven largely from open space rather than Class A amenities requiring minimal capital expenditure on such properties . In Los Angeles alone out of 1.5 billion square feet only 2%, 30 million square feet was classified as Industrial Outdoor Storage (IOS).
At BLT Enterprises we understand first hand how strong this submarket has become given our ownership/management over four million square feet of industrial property throughout Southern California . When identifying these types of properties we look closely at three key features: low coverage , functional space , location – including access to major freeways & transportation hubs like deep water ports , airports & train depots .
Recent bank collapses & financial market jitters coupled with economic volatility have caused many investors to pause while import/export power struggles threaten global imports causing further slowdown potential halt on imports – yet there remain interesting opportunities when investing in IOS due its increasing scarcity combined with long term tenant prospects looking for suitable locations that include parking /storage plus outbuildings which can be difficult find due land availability issues especially desirable urban cores where typical outcome proceeds towards building rather than utilizing outdoor storage thus driving up demand existing asset inventory while cities grow more stringent regulations making conversion other property types into Ios even more challenging task .
Despite economic concerns Industrial Outdoor Storage continues flourish competitively amongst institutional investment companies highest national level creating cash flow stability between owner tenant relationship solidifying business certainty occupant side – hence presenting attractive short term long term prospects investors alike who seek identify acquire such niche type asset class amidst current industry conditions ..
