Morgan Stanley Buys SoCal IOS Facility for $92M
Oldcastle Infrastructure — owned by the world's largest building materials provider — has used the property for over 30 years
By Nick Trombola November 10, 2025 2:55 pm
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Industrial outdoor storage (IOS) is outperforming most other industrial submarkets, and even global financial institutions want in on the action.
In the latest example, Morgan Stanley Real Estate Investing (MSREI) paid $92 million for a 26-acre IOS parcel at 10650 Hemlock Avenue in Fontana, Calif., one of the largest IOS parcels in the region. Oldcastle Infrastructure, a subsidiary of the world’s largest building materials provider CRH, sold the property, a Morgan Stanley spokesperson told Commercial Observer.
“This acquisition exemplifies MSREI’s strategy of sourcing and securing institutional-quality net-lease investments in core logistics markets,” Will Milam, MSREI’s head of U.S. investments, said in a statement. “The IOS facility is a mission-critical asset for Oldcastle and a cornerstone for regional infrastructure supply.”
Oldcastle has been using the property for over 30 years and will retain its triple-net lease, in which the tenant covers the costs of insurance, taxes and maintenance in exchange for a lower rent. A representative for Oldcastle did not respond to a request for comment or more information about the deal.
“By shifting property expenses, taxes and maintenance obligations to the tenant, net-lease structures mitigate real estate owners’ exposure to volatility and unexpected costs, making net-lease cash flows among the most predictable in real estate,” Lauren Hochfelder, MSREI co-CEO, added in a statement. “Beyond the benefits of net lease, we expect U.S. industrial to benefit from the continued supply chain realignment, including increased onshoring of manufacturing.”
Tight market conditions and lack of supply in key areas mean that the fundamentals of IOS assets are among the best of all industrial subclasses. IOS rents have increased by 123 percent on average since 2020, over twice the rate of bulk warehouses, according to Newmark research. IOS-focused firms are taking advantage of demand — Alterra IOS late last month closed a $150 million loan facility from Blue Owl Capital to fund its future purchases.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
