A 'Beautiful Ugly Duckling,' IOS Market Rolls On Despite Broader Industrial Slowing
Industrial outdoor storage rode a wave of pandemic-era interest and outside investment in late 2022 and 2023, despite the seeming mundanity of specialty parking lots. But that same predictability and steady performance — despite financing uncertainty, a cooling warehouse market and a freight recession — has industry analysts expecting a solid 2024.
“I think the outside capital is going to grow,” Timber Hill Group Managing Partner Cary Goldman said. “It became a trendy niche in the last few years, so people that you know are new to it or didn't do their homework thought all they had to do is buy 20 acres. But now, the difficulty level has gone up.”
IOS remains stuck in a low-supply, high-demand moment, and that helps explain why IOS properties perform well despite negative forecasts.
The larger industrial market has been treading water, and trucking companies, a big group of tenants, face the oversupply and underperformance of a freight recession. When warehouses remain in high demand, many IOS spaces are converted, further shrinking the overall supply.
