THOUGHT OF THE WEEK

According to AI, What are the Top US Markets for Industrial Outdoor Storage?

Introduction

The Industrial Outdoor Storage (IOS) market is touted as a critical niche in industrial real estate, spurred by robust demand from logistics, e-commerce, and port activity. And amid all the hype over AI's advancing capabilities, we decided to put five “advanced” AI models—ChatGPT, Grok, Claude, Gemini, and Perplexity—to the test by asking them to pinpoint the top U.S. IOS markets.

In this newsletter, we lay out their responses, spotlight recurring themes, and frankly question what these findings really mean for investors and industry professionals (if anything at all).

Methodology

For this analysis, we prompted each AI model with a similar query: “What are the top U.S. markets for Industrial Outdoor Storage (IOS)?” The question is vague, and we did not further define what criteria or attributes determine a “top” market. The models responded based on their training data and synthesis of recent market trends and industry reports. 

While each tool uses its own internal criteria, common factors that they considered included transportation infrastructure, proximity to major ports, supply constraints, and overall industrial activity.

Note: These outputs reflect AI-generated insights and should be treated as one perspective among many, complementing traditional market research rather than serving as definitive guidance.

AI Models' Responses: A Comparative Chart

Below is a summary chart displaying the top IOS markets as identified by each AI model:

What Does This Tell Us (If Anything)

Although markets like Dallas–Fort Worth, Los Angeles, and Atlanta consistently appear across the five AI models, this doesn't necessarily confirm their status as ideal IOS investment hubs. It does allude to the idea that these markets have positive attributes (specifically as it’s related to connectivity) that resources across the internet have deemed as ideal for IOS. While these insights can serve as a rough benchmark, investors should remain cautious and cross-check them against critical local factors—such as zoning regulations and infrastructure developments—before making any decisions.

Common Themes:

• Major Logistics Hubs: Across all responses, markets such as Dallas–Fort Worth, Los Angeles, and Atlanta repeatedly appear as top choices due to their robust transportation networks and high industrial activity.

• Port-Adjacent Regions: Models emphasize regions like Los Angeles/Long Beach and Southeastern Port Markets (Savannah, Charleston, Jacksonville), where there are limited developable land and where high port activity drives strong IOS demand.

Unique Mentions:

• Emerging Markets: Perplexity highlighted markets like Nashville and Columbus, suggesting growing opportunities beyond the traditional industrial hubs.

• Regional Nuances: Claude and Gemini draw attention to the Inland Empire and the Northern New Jersey/New York Metro areas, underscoring regional supply constraints and infrastructure advantages.

Conclusion

Our exploration using five advanced AI models reveals that the models have a strong consensus on key U.S. IOS markets. The recurring emphasis on major logistics hubs and port-adjacent areas highlights the critical role these markets play in today's industrial real estate landscape. 

There are factors such as population growth that seem to have been overlooked as critical criteria in the AI analysis. Also, the models focused on primary markets – there wasn’t much love for well located or booming secondary or tertiary markets in these results. 

While we think their analysis is a good conversation starter, we think that the IOS market is highly nuanced, and as a result the AI Models missed a number of key IOS markets.

What Did They Miss? 

What do you think about these AI-generated rankings? What additional markets or criteria did these models miss? Reply to this email—we’re curious to hear your thoughts.

RECS
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