CBRE Weekly Take Recap - Investment Opportunities in Industrial Outdoor Storage

"It is a big market, but it's highly fragmented... north of 75,000 assets with a total capitalization of $300 billion." - Nick Firth

The U.S. IOS market represents a $300 billion opportunity across 75,000+ assets, yet remains highly fragmented with minimal institutional presence. This creates significant aggregation potential for sophisticated investors.

"The scarcity that we get in this property type is very real and that scarcity creates a high value." - Myles Harnden

Zoning restrictions and entitlement challenges create natural barriers to new supply, generating scarcity that drives premium valuations and sustained demand for existing IOS properties.

"You see a lot of the fund level family offices moving in saying ‘Man this is an irreplaceable location, this is a great asset, this has future growth to it'.’ That’s why you see such a diverse group of investors." - Brian Fiumara

IOS delivers exceptional performance metrics with sub-3% vacancy rates and strong rent growth, significantly outperforming traditional industrial assets and attracting diverse investor interest.

"Much like self storage, the institutional ownership in this segment is less than 10%... which gives this aggregation strategy a lot of credence." - Spencer Levy

With institutional ownership below 10%, IOS mirrors the early development stages of now-mature asset classes like self-storage and single-family rental, suggesting significant room for institutional capital deployment.

The panel collectively identified electrification trends, evolving logistics technology, and infrastructure modernization as key demand drivers reshaping the IOS landscape, particularly benefiting utilities, construction, and last-mile logistics operations requiring flexible outdoor space.

Here's the thing about Industrial Outdoor Storage – it's having a moment, and for good reason. Think about all the infrastructure projects happening around electrification, plus the ongoing last-mile logistics boom that's still working itself out post-pandemic. Companies need space to store equipment, stage operations, and handle overflow – but they don't necessarily need fancy warehouses.

To some, this feels a lot like self-storage circa 2010 or single-family rental in the early 2010s. You've got an asset class with solid fundamentals (hello, sub-3% vacancy), but institutional ownership is still hovering under 10%. That's a pretty compelling setup if you're looking for the next "boring" real estate play that could deliver outsized returns.

The barriers to entry are real too. Good luck getting zoning approval for new outdoor storage in most markets – which means existing sites are becoming increasingly valuable. It's basic supply and demand economics, in IOS real estate form.

Check out the full podcast and show details here: https://www.cbre.com/insights/podcasts/2025-ep24-outside-chance

Start with our guide: What is Industrial Outdoor Storage?

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