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'You’ve Driven Past Them A Million Times': The $200B Opportunity Of Industrial Outdoor Storage

March 02, 2023

Industrial outdoor storage, or IOS, a new property type born of climbing costs for traditional industrial buildings, is rapidly becoming a darling of the more opportunistic investors in commercial real estate, with an estimated market value of $200B in the U.S.

There’s no hard-and-fast definition for what makes an IOS property, but this nebulous property type benefits from two major factors: its simplicity and its physical constraints. Its simplicity makes it easy to manage. Its physical constraints, further restricted by unfriendly zoning laws, give it an element of urgency: Either get on board now or miss the train.

“It's very attractive to investors,” Marcus & Millichap Senior Vice President and National Director Alan Pontius said. “And it is perceived to be durable because you don't develop this space. Big, half-a-million SF warehouses are being developed in volume. In many regards, you look at the supply of IOS as being fixed.”
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