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Industrial Outdoor Storage Steps Into the Spotlight

Industrial Outdoor Storage Steps Into the Spotlight

A niche asset class is gaining serious traction thanks to logistics demand and cost advantages.

Nina Dale
March 19, 2026

Together with

Good morning. Industrial outdoor storage is having a breakout moment, turning low-frills assets into high-performing investments. Meanwhile, the Fed held rates steady at 3.50%–3.75%, sticking to its outlook for just one cut ahead despite continued internal pressure to ease.

Today’s issue is sponsored by Crexi—underwrite multifamily faster with Dwellsy rental data built into Crexi Intelligence.

🎙️Must Listen: Michael Cohen, Principal at Williams Equities, shares lessons from nearly a century of Manhattan real estate and what’s next for the city’s market.

CRE Trivia 🧠

Which U.S. city has the most miles of skyway connecting office buildings in its downtown?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,624.70

Pct Chg:
-1.36%

FTSE NAREIT

FNER

795.48

Pct Chg:
-1.49%

10Y Treasury

TNX

4.265%

Pct Chg:
+0.063

SOFR

30-DAY AVERAGE

3.67%

Pct Chg:
-0.00

*Data as of 3/18/2026 market close.

Shining Star

Industrial Outdoor Storage Steps Into the Spotlight

Industrial outdoor storage (IOS) is turning “just dirt” into one of CRE’s hottest—and tightest—asset classes.

By the numbers: According to CBRE, IOS rents averaged $13.14/SF in Q425, a 17.9% premium over traditional industrial ($10.85) with the spread widening YoY and highlighting the sector’s rapid rise from niche to standout performer.

Supply squeeze: Vacancy sits at just 2.5%, well below the 6.7% seen in traditional industrial. Development remains constrained by zoning restrictions, community pushback and limited land near logistics hubs, keeping supply tight and competition fierce.

Tenants buy-in: IOS serves construction, utilities, trucking, and public-sector users needing proximity to transport corridors without the cost of full warehouse space. With minimal infrastructure, these sites deliver lower costs and steady cash flow, often through net leases where tenants cover expenses.

Demand drivers: Growth in manufacturing, domestic energy production and infrastructure spending is boosting the need for outdoor storage. For many users, storing materials outdoors near transit hubs is simply more efficient—and cheaper—than leasing warehouse space.

Where it’s heating up: Secondary markets between major logistics hubs—like Kansas City, Indianapolis, Charlotte and Cincinnati—are seeing strong rent premiums. Emerging hotspots include Kansas City, Los Angeles, Savannah, Columbus and El Paso.

Limited alternatives: With few alternatives beyond lower-grade warehouses with yard space, IOS faces limited competition, reinforcing pricing power and tenant stickiness. As CBRE’s James Breeze noted, “there are few alternatives to IOS. The primary option is leasing a Class B or C warehouse with an available yard for outdoor storage.”

➥ THE TAKEAWAY

Power in simplicity: IOS is no longer an overlooked corner of industrial—it’s a supply-constrained, infrastructure-light asset class with outsized pricing power, making it increasingly attractive for investors hunting durable yield in a tight logistics landscape.

TOGETHER WITH CREXI

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Investors validating pro forma rent assumptions
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*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

✍️ Editor’s Picks

Simplify the stack: Instead of juggling disconnected software, CRE firms are turning to unified platforms that centralize data, automate workflows, and streamline the entire deal lifecycle from prospecting to commission. (sponsored)
Fundraise flex: Morgan Stanley raised $2.9B for a new global real estate fund, defying a sluggish capital markets backdrop.
Chips in space: Nvidia is building a processor supply chain for AI data centers in space as Google, Blue Origin and SpaceX push orbital computing.
Maximize depreciation: Accelerate tax savings with the nation’s leading cost segregation firm, 25% less than competitors. Cost Segregation Guys completed 10,000 studies and $1B in depreciation last year. Get a free analysis today! (sponsored)
Platform battle: Venture capital is flooding into AI-native proptech, but investors say the real shakeout between SaaS incumbents and bespoke AI platforms is still ahead.
Inflation jolt: Producer prices jumped 0.7% in February, signaling renewed inflation pressure and dimming hopes for rate cuts.

🏘️ MULTIFAMILY

Eviction load: Metro Atlanta logged more than 144,000 eviction filings in the year through February, with a quarter of rental households facing proceedings.
Missing middle: 2025 posted the highest volume of multifamily missing-middle starts since 2007, including 5,000 two- to four-unit starts in Q4.
Tax tweak: Florida lawmakers passed a Live Local update aimed at unlocking construction lending by clarifying the timing of project tax benefits.
Lending relief: A Trump-era policy proposal could ease multifamily lending regulations, potentially boosting apartment financing activity.

🏭 Industrial

Storage trends: Self-storage fundamentals remain steady with modest rent growth and improving occupancy nationwide.
Pipeline boom: The DMV industrial pipeline grew from 6.2M SF to 13.2M SF year over year, ranking fifth nationally on data-center construction.
Next chapter: Chicago-based Bridge Industrial has rebranded as Kurv Industrial, keeping its leadership and strategy while signaling a forward-looking evolution.

🏬 RETAIL

Retail raise: Nuveen raised $330M for a fund targeting retail investments in high-growth U.S. cities.
Depreciation play: Madison Capital launched a $200M fund targeting car washes and convenience stores eligible for permanent 100% bonus depreciation.
Legal pivot: A failed $947M JCPenney portfolio sale could lead to the creation of a new retail-focused REIT.
New look: Family Dollar is planning a smaller store format and projects roughly 25% EBITDA growth in fiscal 2026 versus fiscal 2025.

🏢 OFFICE

Flight upward: A redeveloped trophy office at 600 Fifth St. is betting on strong demand for premium workspace in D.C.
Refi of the day: Prometheus Real Estate secured a $145M SASB CMBS loan from Wells Fargo to refinance The Towers at Cupertino City Center.
Tower listing: Rithm Capital is seeking a JV partner for 1301 Sixth Avenue, valuing the 1.75M SF Manhattan office tower at $1.4B.
HQ move: Faraday Future is relocating its headquarters from Gardena to 1990 E. Grand Ave. in El Segundo.

🏨 HOSPITALITY

Transaction turn: Hotel executives expect transaction activity to open up in 2026 as a K-shaped U.S. economy continues to favor luxury assets.
Alpine arena: A multi-phase sports and entertainment district in Big Bear Lake aims to create a permanent hub for high-altitude training and skate culture.

A MESSAGE FROM HENRY

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*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

📈 CHART OF THE DAY

Recession risk is approaching a critical threshold of 49%, with weakening economic data and rising oil prices driven by geopolitical tensions increasing the likelihood of a downturn within the next year.

CRE Trivia (Answer)🧠

Minneapolis, MN, boasts more than 10 miles of enclosed, second-level pedestrian bridges that connect over 80 city blocks.

Industrial Outdoor Storage Steps Into the Spotlight

A niche asset class is gaining serious traction thanks to logistics demand and cost advantages.