Opportunities With Industrial Outdoor Storage & Industrial Service Facilities


While the mood of the market today shows a slowdown in transaction volume, there remains opportunities to be had. We’re continuing to pursue the opportunities in Baton Rouge and have begun to develop a pipeline of opportunities in Central Texas, with a keen eye on Industrial Outdoor Storage and Industrial Service Facilities.


Industrial Outdoor Storage Properties (IOS), also referred to as Industrial Service Facilities (ISF), can be distinguished from more traditional industrial assets in several ways:

  • This subset typically has a much lower floor area ratio (FAR) in comparison to warehouse or manufacturing properties. FAR values for IOS/ISF facilities typically don’t exceed 20%.
  • Users of IOS/ISF properties find value in the storage capabilities of the excess yard, which are often concrete paved or crushed rock surfaces. Typical uses for these facilities include equipment storage and maintenance, container yards, bulk material storage and distribution, fleet vehicle storage, trailer parking and drop lots. Properties that can accommodate these unique storage requirements are incredibly attractive to tenants in the fields of equipment rental, trucking, building materials, shipping container, chemical, auto/vehicle parking, energy and waste and environmental services, among others.
  • IOS/ISF assets command higher rents per square foot of building area in comparison to their more traditional industrial counterparts. The additional value that tenants derive from the larger outdoor storage component helps drive this increase. For this reason, rents for IOS/ISF properties are oftentimes quoted in terms of rent per acre per month for ease of comparison in a market or submarket.

Two major operators have emerged in IOS in the last few years, Zenith IOS and Alterra. Zenith recently launched $700M JV with JP Morgan and Alterra is managing $2.5B of IOS.

As we pursue critical manufacturing & IOS there is significant opportunity to roll up sub institutional assets (below $10M) and package up these properties to sell to either Zenith or Alterra.

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