Paving the Way: Industrial Outdoor Storage

In recent years, industrial real estate has emerged as one of the most resilient and in-demand property types, supported by the rapid growth of e-commerce, logistics, and supply chain infrastructure. Within this sector, a subset of properties is attracting increased attention from both users and investors, Industrial Outdoor Storage (IOS). As distribution networks expand and companies seek efficient solutions to house equipment and vehicles, IOS has become an essential component of the industrial ecosystem. For investors, IOS can offer both standalone opportunities and creative ways to enhance value on existing holdings.

Industrial Outdoor Storage refers to land specifically designed for the parking or storage of trucks, trailers, containers, equipment, or materials. These sites are mission-critical for a wide variety of tenants, including trucking fleets, logistics and distribution operators, construction and manufacturing firms, utilities, and companies requiring overflow inventory space.

The way an IOS site is prepared directly influences both its usability and tenant appeal:

• Raw Land offers the lowest upfront cost but carries significantly limited applications, restricting the potential tenant pool.
• Gravel Surfaces represent a mid-range option, with usability determined by both gravel depth and site engineering. Depth typically ranges from 3 to 12+ inches depending on expected use: light vehicles may require just 3–4 inches, while heavier uses such as container stacking or constant truck traffic may necessitate 10–12 inches with additional reinforcement. Proper drainage is critical, as poor water management quickly leads to rutting and potholes.
• Concrete or Asphalt Paving involves a higher upfront investment but provides the greatest load capacity, long-term durability, and appeal to tenants with strict operating requirements. Paved sites tend to “cast the widest net” in terms of tenant demand.

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Why IOS Is Needed

IOS space fills a critical gap in today’s logistics and industrial networks. Most industrial buildings, particularly in urban and infill markets, lack adequate yard or parking space. At the same time, demand for trailer storage, staging areas, and vehicle parking continues to grow. For many users, IOS provides a flexible, lower-cost alternative to constructing or leasing additional building square footage, while supporting efficient last-mile delivery and overall supply chain reliability.

Drivers of Growth

Demand for IOS space is being driven by several key structural forces. E-commerce growth has heightened the need for trailer parking, staging areas, and overflow storage, while infrastructure investment and reshoring are fueling demand for equipment and material storage. Port congestion and intermodal expansion add pressure for container storage near transport hubs, and zoning scarcity has made entitled IOS parcels increasingly valuable and competitive. At the same time, population growth in the Sunbelt and Southeast is expanding regional distribution needs, further solidifying IOS as a critical component of modern logistics.

Investment Appeal

The IOS sector is increasingly being recognized as a distinct institutional asset class. Demand often exceeds available supply, allowing landlords to achieve premium rental rates and benefit from strong tenant retention. Once sites are prepared, capital expenditure requirements remain relatively low compared to traditional industrial facilities. For investors, IOS offers the opportunity to capture durable income streams, benefit from long-term demand drivers, and diversify holdings within the broader industrial real estate category. Smart investors can also identify opportunities to monetize underutilized land adjacent to or within existing industrial properties by converting it into IOS, creating an additional income stream without requiring new vertical construction.

Like all asset classes, IOS carries certain risks. Demand is closely tied to freight volumes and economic cycles, which can introduce some volatility. Zoning represents another possible challenge, as not all municipalities allow outdoor storage by right. Even where permitted, local governments may impose strict conditions related to screening, landscaping, noise, and environmental impact. Finally, site preparation costs vary based on tenant requirements, with certain users demanding upgrades such as paving, security fencing, or enhanced drainage.