For years, industrial has been the sector to watch in the world of commercial real estate. E-commerce and global trade has fueled the growth of warehouses, manufacturing facilities, and logistics hubs. While these properties have taken center stage, another asset class has steadily gained traction: Industrial Outdoor Storage (IOS).
IOS properties are often straightforward in appearance, featuring paved or gravel lots with minimal structures. Behind their simplicity lies an essential role in modern supply chains; these sites support everything from truck and trailer parking to container storage, construction laydown yards and, more recently, staging for data centers. Their role is not new, but without them goods cannot move through ports, logistics networks, or last-mile delivery channels efficiently.
The numbers tell a compelling story. IOS rents have surged more than 100% since 2020, significantly outpacing traditional warehouse growth. Analysts now estimate the global IOS market is valued at over $22 billion, with forecasts reaching more than $35 billion by 2032. That kind of trajectory has not gone unnoticed. Private equity groups, real estate funds and REITs are dedicating billions to assemble IOS portfolios, transforming what was once a fragmented mom-and-pop asset into a mainstream institutional play.
What continues to make IOS compelling is the persistent imbalance between demand and supply. E-commerce logistics require proximity to population centers for trailer and fleet parking. Infrastructure projects rely on staging space for equipment and materials. Concurrent with trends across various sectors nationwide, the rise of artificial intelligence and data centers has fueled demand, with companies using IOS sites to house specialized machinery and backup systems. At the same time, zoning hurdles and community resistance make it difficult to develop new IOS facilities, meaning well-located sites are increasingly scarce.
This supply constraint has created durable pricing power for landlords and steady returns for investors. As institutional players consolidate the market, IOS is evolving from a patchwork of local yards into national platforms offering standardized leases, enhanced security, and operational scalability. For logistics companies, contractors and fleet operators, that level of service and reach is something individual owners could never match. As this consolidation continues, IOS is moving out of the shadows of “niche” investing and establishing itself as a core component of the modern industrial portfolio.
For commercial real estate professionals, the implications are clear. IOS may not boast the polish of a Class A warehouse, but its value to supply chains, construction projects and infrastructure development is undeniable. As demand drivers diversify and available land remains constricted, IOS remains one of the most dynamic and resilient segments in the industrial landscape.
If we take a step back, this trend underscores a broader lesson on how some of the most impactful investments are found not in what captures headlines, but in the underpinnings of how the economy actually works. IOS exemplifies how real value often lies in the infrastructure that quietly keeps the economy moving.
Executive Vice President Terri Alexander has been advising business owners about real estate acquisition, disposition and investments for more than 25 years. She is based in Chicago, where she leads Transwestern’s south suburban market team.
SEE ALSO:
- US Industrial Market Overview - Transwestern
- TW National Industrial Report: Elite Market
- Big Investors Gobble Up IOS in Large and Small Bites
