EQUIPMENT RENTAL

🏗️Equipment Rental: Bigger Fleets = Bigger Yards

If you’re in IOS, equipment rental companies should already be on your radar. The American Rental Association expects industry revenue to climb 5.7% in 2025 — a trend powered by residential construction and infrastructure work.

And as these rental fleets grow, so do their storage needs.

That's where IOS comes in:

• Heavy equipment can’t be stored indoors.

• Proximity to end-users is critical.

• Turnover is high, so accessibility matters.

It’s no wonder national and regional rental operators are gobbling up yards.

💸 M&A Alert: United Rentals vs. Herc vs. H&E

Just a couple of months ago, United Rentals made a $4.8B play for H&E Equipment Services to bulk up its rental business. But not so fast — Herc Holdings came in with a $5.3B counter and won the prize.

Don’t feel too bad for United Rentals. United Rentals alone has over 1,400 locations, and most are leased, not owned. That means IOS investors holding these sites are effectively betting on location stickiness and lease renewal probability, not just current cash flow.

📉 Why this matters for IOS:

Larger fleets post-merger mean more IOS demand — especially near metro areas and major project sites. The more a company centralizes operations, the more strategic their yard locations become. It’s important to note that while these tenants help drive rent growth, consolidation also introduces “go-dark” and renewal risk when portfolios are “right-sized” post-acquisition.

Cap rates for rental yards have compressed alongside the rest of IOS, but that’s only sustainable if demand stays strong. For now—it appears that it is. Equipment rental revenues track closely with construction spending, which remains solid thanks to infrastructure funding and reshoring and IOS is a key piece of the equipment rental puzzle.

Here are 3 great visuals that the Collier’s team put together that help tell the story of the equipment rental landscape:

ROOFING SUPPLY

Roofing Supply: $11.1B That Will Reshape Distribution

On the other side of the IOS coin: building materials.

QXO, the Brad Jacobs-led roll-up machine, just announced it's acquiring Beacon Roofing Supply for $11.1 billion — a nearly 40% premium over Beacon’s share price.

Jacobs isn’t just playing to win; he’s building a supply chain empire. And supply empires need land. Lots of it.

📦 Roofing suppliers rely on IOS for:

• Material laydown yards

• Quick delivery staging areas

• Contractor pickup logistics

Now combine Beacon’s physical footprint with QXO’s ambitions to become a $50B revenue company in the building products distribution industry … and you’ve got a serious need for outdoor space.

But wait, let’s not forget…

🧱 Home Depot made moves in 2024, acquiring SRS Distribution — one of the largest roofing and building materials distributors in the country — for $18.25 billion.

That deal gives Home Depot a serious foothold in pro-focused, B2B distribution — and a massive physical network of branch and yard locations across the country. SRS has long been known for its aggressive real estate strategy: finding well-located IOS sites to serve contractors fast.

🔍 These two deals — QXO + Beacon and Home Depot + SRS — effectively reshuffle the top of the roofing supply chain. And both hinge on having the right real estate to support next-day delivery, just-in-time fulfillment, and high-volume contractor traffic.

📉 Why this matters for IOS:

Unlike logistics or trucking tenants, these users don’t relocate often. Their revenue is tied to local contractor relationships and dense delivery networks. This makes for a durable IOS footprint—they want to stay at existing IOS sites to preserve relationships and continuity for their customers.

The roofing supply chain runs on fast-moving, heavy inventory — think shingles, siding, and lumber — that’s stored outdoors and turned over quickly. M&A-driven consolidation will supercharge demand for IOS locations near rooftops (literally), especially in fast-growing metros. The need for well-located contractor yards is about to hit a whole new level.

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