Mom-and-Pop Industrial Outdoor Storage Owners Cash In

The industrial outdoor storage (IOS) market has traditionally consisted of thousands of self-contained land parcels — some housing a small building, some just bare — used for the storage of large equipment like shipping containers and 18-wheelers. The owners were generally specialized, knew the sector, and were accustomed to dealing with other specialists.

These were industrial real estate’s truest version of mom-and-pop businesses.

But the past few years have seen such a jump in value for IOS, a once-overlooked sector that lately has been burnished by supply limitations and rising rents. Consolidation is now firmly taking hold, with major players like J.P. Morgan and Blackstone making significant investments in collections of parcels assembled by smaller partners.

According to a September 2025 report from Newmark, rents in the IOS sector, which occupies around 1.4 million acres throughout the U.S., have grown 123 percent since 2020, over twice the rent growth (58 percent) of bulk warehouses nationwide.

Newmark estimates that the market for “readily tradable IOS real estate” hovers at around $200 billion, though adding certain rarely traded types, such as rail yards, puts the potential market cap nationwide at over $1 trillion.  

That said, the typical tradable site is around 1 to 15 acres.

In early June 2026, Alterra IOS, a company that has acquired over 470 IOS sites nationwide, announced the closing of a $244 million loan from Blackstone Real Estate Debt Strategies (BREDS) secured in part by 37 IOS properties spread among 27 markets. The announcement noted that this was BREDS’s sixth loan within the IOS sector, bringing it to over $1.1 billion in IOS exposure.

Other major deals in the sector have included the November 2024 sale of a 51-property, 14-state IOS portfolio from Alterra IOS and J.P. Morgan Asset Management to Peakstone Realty Trust for $490 million; Realterm’s $277 million purchase of a 13-site IOS portfolio from Brookfield in January 2025; and the March 2025 sale and recapitalization of two portfolios totaling 18 IOS properties by Catalyst Investment Partners for $163.5 million. 

JLL Capital Markets represented Sitex Group, a New Jersey-based private equity firm focused on the industrial sector, in its March 2026 sale of a two-property IOS portfolio in New Jersey to Sagard Real Estate and investment group La Caisse for an undisclosed amount, and also arranged $226 million in financing through BREDS for a 46-property IOS portfolio totaling 212 acres across 15 states in April 2026.

Tyler Peck, a managing director at JLL Capital Markets, explained that COVID helped ignite the IOS sector, and that the Alterra/J.P. Morgan/Peakstone deal was a milestone that propelled it further.

“IOS emerged as a way to accommodate surplus goods, trucks and vans when we had high freight volumes during COVID, so that was definitely part of the emergent story of IOS,” said Peck. “When Peakstone, a publicly traded real estate trust, made a big portfolio acquisition of Alterra products, the fact that there was a public company making a big investment in IOS [said to the industry], ‘OK, this is an asset class that’s here to stay.’ ”

But what makes these major deals especially exciting to those in the space is that, from a consolidation standpoint, it feels like this is just the beginning.

“It’s still very early innings, and, from Alterra’s perspective, we think about the institutionalization of this space in not three or five years, but in decades,” said Matt Pfeiffer, managing partner and chief investment officer at Alterra. Pfeiffer noted that companies like his — which, after setting a $750 million target, closed its Alterra IOS Venture III Fund in 2024 at $925 million — do the hard work of collecting smaller sites that behemoths like Blackstone generally won’t do.

“What is accelerating is the capital markets’ interest in the sector,” said Pfeiffer, who noted that the past three years have also seen an increase in international money seeking out IOS opportunities. “It’s one thing to have interest in it, and another to access it at scale, and that’s a big dividing line. Our average transaction size has around a $6 million purchase price, and we did north of 100 acquisitions last year. It’s not easy for large pools of capital to replicate buying that many small transactions in the space.”

Ben Atkins is the co-founder and CEO of Zenith IOS, which owns around 100 IOS properties nationwide with an asset value of around $1.2 billion, according to Atkins. Zenith announced two separate partnerships with J.P. Morgan Asset Management this year, including the acquisition of an 11-site portfolio in the Phoenix area in February. 

In addition to touting the data collection advantages of being an early mover in the space — “There is no CoStar for IOS,” said Atkins — he noted the importance of firms like his in doing the work of consolidation for the sector.

“For the allocators, the granular roll-up strategy is very challenging, and it’s a lot of work,” said Atkins. “As a result, what you’re starting to see is large capital entering the space looking for portfolios so that they can get into the space quickly and at scale.”

Part of the value proposition inherent within IOS sites rests on the limits of IOS supply. For one thing, no one is making more land. For another, exposed outdoor sites dedicated to storing industrial equipment are not the most attractive to municipalities, making zoning for new sites difficult to secure.

“There are only so many of these sites that exist in each market. It’s very tough to create new supply here,” said Blake Chroman, a principal at Sitex Group. “You can build new industrial buildings if you get them approved and find land, but zoning is difficult to come by for this type of site. They’re a little gritty, and some of them have environmental concerns. Towns we operate in are not generally excited about them. They want taxes, rentables, etc. So it’s tough to create new supply, and investors are glomming onto that supply story.”

Reid Halverson, a senior managing director at Newmark and the company’s IOS practice lead, noted that these factors and others made the current industry consolidation an almost inevitable result for a scattershot sector.

“It’s always been a very fragmented market,” said Halverson. “Seventy-five percent of the inventory hasn’t traded over the last five years. We’re seeing 0.2 percent new inventory come online nationwide — which is essentially nothing — and that doesn’t account for sites you may be losing due to zoning issues or entitlements, where cities are saying, ‘This was great for a little bit, but now there’s retail or houses all around. We no longer want this. This use is no longer grandfathered in.’ You’re really losing inventory while demand’s going up. That’s why we’ve seen some of these huge rent bumps over the last five years.”

Chroman noted, however, that while these sites may not be desirable to communities, they are also not capital intensive, increasing their attractiveness to investors.

Max Heiden, a partner at institutional investor and IOS site operator Catalyst Investment Partners, said that the pool of investors with interest in the sector has widened over the past few years.

“The investor base for our funds is pretty similar to who you would see in a typical real estate private equity fund: pension funds, endowments, foundations, family offices and wealth managers,” said Heiden. “That’s changed a lot in six years. Our first fund was mostly family offices, and it has evolved into a mainly institutional roster since then.”

Heiden said the company’s first IOS fund found him educating investors on the sector’s basics. By the time of Catalyst’s third fund — which closed in January 2026 with $400 million of equity commitments after setting a target of $300 million — the questions he faced were far more advanced. 

“For the first fund raise, in 2020, most of our conversation centered around answering questions of, ‘What is IOS? What are these little weird parking lots?’ ” said Heiden. “By the time our third fund came around, the conversations were much more, ‘How are you different? How are you better than everyone else?’ Clearly, the education has come a long way, and it’s a much more defined institutional category.”

Spencer Johnson, a partner at the law firm King & Spalding, noted how the various factors enhancing the sector have worked in tandem to add a professional sheen to IOS that has made it more attractive to institutional investors.

“Historically, you’ve had unconsolidated ownership in the sector not unlike what traditional industrial assets looked like 30 years ago,” said Johnson. “Institutional investors and professional private equity shops have become interested in the sector because you can consolidate it and professionalize it. When you start to bring larger network-associated systems under one roof, you professionalize the operation. Then you can push the rent from a pure economic perspective with the underlying tenants and customers.” 

The fact that IOS sites are mostly barren land has also helped open up the sector due to the potential for them to be used however owners desire. 

Capital advisory firm Cooper-Horowitz created an IOS platform around five years ago and has executed a little over $4 billion in IOS debt placement, including arranging $189 million in financing from Blackstone Mortgage Trust to Alterra IOS in February 2025. This was Blackstone’s introduction to the IOS space, and won Commercial Observer’s award for Industrial Transaction of the Year.

Justin Horowitz, a senior managing director at the firm, noted that among many other advantages of the sector, the explosion of data centers has relevance for the IOS space due to the increasing demand for powered land.

“You have positive rent growth in high-barrier-to-entry markets, and you have triple-net leases that are similar to traditional industrial with equipment rental companies, trucking firms and logistics tenants,” said Horowitz. “Now, you also have the explosion of data centers, and the goal is to have powered land. So that brings in a whole other new tenant base for properly zoned sites.”

Newmark’s Halverson elaborated that data centers can house many necessary elements on nearby land, and IOS sites can serve this purpose.

“Data centers can cost a billion dollars-plus,” said Halverson. “You need new water pipes, new transformers, electrical products, telephone poles, and all this stuff does not fit well in an actual warehouse. It can be out in the elements, close to where these projects are, so you’re seeing a lot of these large infrastructure groups pool around where these large data centers are. They can afford the rent because they’re going to make so much money off these projects.”  

With all these factors in its favor, those CO spoke with agree that IOS sector consolidation is just getting started, as institutional investors continue to pair with smaller specialty firms to greatly increase the value of this much-desired asset class.

“Multibillion-dollar companies have reached out to us since the release of our report, trying to get into the sector,” said Halverson. “A lot of those come paired with an operator like Zenith or Alterra to manage the day-to-day, but groups are taking notice. There’s more people jumping in at $100 to $300 million at a time, giving seed capital to acquire these portfolios.”

Larry Getlen can be reached at lgetlen@commercialobserver.com.