Truck Terminals: Why Institutional Investors Are Pulling In More

Truck terminals, and the wider industrial outdoor storage (IOS) sector, remain perhaps the rare asset class that is both extremely unsexy — in many cases, mostly and merely asphalt — but also sought after, supply constrained, and scouted out by institutional buyers.

“​​There has been an institutional recognition that the space offers strong dynamics, from both the cash-flow perspective as well as the idea that these are kind of an irreplaceable asset within the industrial markets,” said Ben Atkins, CEO and co-founder of Brooklyn-based Zenith IOS, a vertically integrated company in the industrial outdoor storage space. “It’s our belief that we’re going to continue to see this trend in 2025.”

At a time when so many supposed sure bets seem wobbly at best — overbuilt multifamily and life sciences, and don’t even bring up non-trophy office space — IOS offers a solid investment opportunity that institutional players have started to seize. Analysts at Green Street have labeled the $200 billion sector a collection of “beautiful ugly duckling[s]” that functions as a series of critical nodes in rapidly expanding logistics networks, and that offers relatively high rates of return up to 8 percent, paired with low capital investments.

“One thing that helps me sleep at night is just the story of supply and demand,” said Steel Peak co-founder and principal Pasha Johnson, a commercial real estate investor focused on IOS properties in California and the Mountain West markets. “Municipalities aren’t creating a lot of new heavy industrial zoning, and some IOS land is being bought and turned into traditional industrial and self-storage, so we actually have a shrinking supply.”

With few if any new sites getting built, market dynamics firmly favor IOS owners, and existing properties in major port cities like Los Angeles, Long Beach, New York and Newark continue to command strong demand. The high demand for these assets means that any larger shifts in the shipping industry, such as changes in trucking and freight, can result in a frenzy of property transfers. 

When Yellow Trucking went bankrupt in 2023 in the largest freight bankruptcy in the country’s history, auctions of its sought-after truck terminals attracted more than 500 potential buyers, with $1.9 billion pledged for 130 properties in the first four months alone. When United Rentals, which specializes in industrial and construction equipment, announced in January 2025 that it was acquiring H&E Equipment Services for $4.8 billion, there was immediate excitement around potential property sales. If the two industry giants started combining storage sites and shedding excess IOS assets, that might create buying opportunities that would be seized quite rapidly. 

“The majority of truck terminals are user-owned,” said Joe Moriarty, senior managing director of acquisitions for Chicago-based Dayton Street Partners, a longtime IOS investor. “But when something like Yellow’s bankruptcy happens, massive amounts of space are put back online.”

Increasingly, big investors, real estate investment trusts, brokerages and capital markets teams see these IOS spaces as places to park both big rigs and their money. The trucking niche within IOS, which started attracting more mainstream attention during the height of the COVID pandemic as e-commerce spiked, has matured, with more money raised for truck terminals, truck maintenance facilities, and truck and trailer parking bays, and more competitive pricing.

Despite uncertainty around the trade policies of the second Trump administration, including the full extent of Trump’s tariff threats, IOS real estate still remains poised to benefit. Threats to previously free-flowing trade may mean stockpiling of goods and even vehicles and construction equipment, which means more demand for truck yards and storage space, said Matt Hunsucker, founder of industrial outdoor storage newsletter IOSList. Cross-border facilities nearer Canada and especially Mexico may accrue benefits in the short term as well.

“The first year, it’s gangbusters,” Hunsucker said. “And, then, after that, you could probably see a dropoff due to the tariffs.”

In recent months, a number of big transactions have underscored the demand for these properties and the increasing institutional interest in acquiring sizable portfolios. In April 2024, Philadelphia-based Alterra Property Group announced a $1 billion war chest focused on acquiring IOS assets. In December, it set a record with a $51 million purchase of a 15.2-acre storage facility in California’s Inland Empire. In June, Fortress Investment Group completed a pair of refinancing deals, including a $493 million CMBS loan that the firm’s global head of real estate, Tom Pulley, said “affirms that IOS assets are treated very similarly to traditional industrial buildings from a capital markets perspective.”

In November, Peakstone Realty Trust, which focuses on industrial assets, acquired 51 IOS assets from a joint venture between Alterra Property-owned Alterra IOS and institutional investors advised by J.P. Morgan Asset Management in an off-market deal valued at $490 million. The properties, which were 100 percent leased, boasted average lease lengths of four and a half years. Hunsucker called the move one of the most consequential deals for the industry last year. 

“For the first time, public investors could gain one-click exposure to industrial outdoor storage,” he said. “The reported entry cap rate at 5.2 percent showed the desirability of the asset class, and the potential 70 percent mark-to-market rent upside highlights the pricing power of landlords in the space.”

J.P. Morgan Chase, through subsidiaries such as J.P. Morgan Asset Management, has been playing in the trucking space for a few years now. J.P. Morgan partnered with trucking and infrastructure owner-manager Realterm at the start of 2021, for instance, to buy a 1.75 million-square-foot portfolio made up mostly of truck terminals in 28 markets. The following year, the bank and Zenith IOS launched a $700 million joint venture for IOS investment, including in truck terminals. And, in August 2023, J.P. Morgan bought a truck terminal near Georgia’s Port of Savannah for $74.7 million.

These are a few examples of the nation’s largest bank by assets investing in trucking properties because it sees the trend lines running down the road.  

“No one ever thinks about this, but there’s four times as many delivery trucks on the road as there were 20 years ago,” Chad Tredway, head of real estate in the Americas for J.P. Morgan Asset Management, told Commercial Observer in a separate interview toward the end of 2024. “Those trucks have to go somewhere to get packed with those goods. So, we’re buying truck terminals all around the United States.”  

Finally, this January, Realterm purchased 13 IOS assets from Brookfield Asset Management for $277 million, picking up
“transportation-advantaged IOS truck terminal assets in key markets,” per a statement by Ben Andreycak, Realterm’s vice president of investments. 

“It’s pretty clear that there’s a serious interest from institutional equity to be in the space,” said Steel Peak’s Johnson. “A lot of the traditional asset classes don’t pencil the way that they did in 2020 or 2019, and capital allocators have been kind of pivoting to more alternative real estate assets where you can achieve yields and make deals work.”

But that enthusiasm doesn’t always easily translate into deals. A lack of sophisticated data around the IOS sector means institutional equity partners can grow frustrated by the lack of comp numbers. That makes it difficult to validate their assumptions. 

In addition to the current nature of financing and the state of the market, larger players want to write big checks when acquiring or investing in property. That’s more challenging for these kinds of assets, which are often simply fenced-in industrial sites with a few small buildings that can run $3 million or $7 million apiece — amounts that are often mere rounding errors for big funds and firms. Private equity, for instance, looks for investments of at least $5 million to $10 million or more, said Johnson. Steel Peak’s strategy has been to establish more programmatic relationships and to bundle smaller equity checks into larger funds. 

“It’s been a little bit of a struggle for a lot of these groups, figuring out how to enter the sector in a way that’s meaningful for them,” said Johnson. “But more are going to enter the space. There’s this window of opportunity, just like self-storage or manufactured housing, like all onetime niche asset classes.”