Institutional Capital Moves In on Industrial Outdoor Storage

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Good morning. After years of red-hot growth, industrial real estate is normalizing. Still, capital is flowing fast into industrial outdoor storage (IOS), where scarcity is driving triple-digit rent gains.

Today’s issue is brought to you by InvestNext—learn how to capture retail investor capital.

🎙️This week on No Cap: Kevin Heras, CEO of InvestNext, talks Detroit roots, fixing real estate’s “last mile,” and how streamlining capital flows boosts outcomes for sponsors and investors.

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Raising Capital from Retail Investors

$7 trillion in retail capital is entering alternatives through 2032, and many of these investors are looking to invest in real estate.

Yet most mid-sized GPs are still focused on institutional fundraising.

Here's what the data shows:

• 70% of high-net-worth individuals would invest in alternatives if properly approached

• Retail investors represent only 16% of alternative AUM despite holding 50% of global investable assets

• Industry reports show mid-market funds demonstrating stronger momentum with retail investors than mega-funds

The firms that understand retail investor expectations and act accordingly will capture new capital sources while those that don’t will miss out on this massive opportunity to acquire new investors.

Download your copy of How to Capture Retail Investor Capital

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

• Maximize earnings: HAH Parking uses dynamic pricing to maximize lot earnings and boost NOI. CRE pros earn 50% gross profits for 12 months on every referred parking lot. (sponsored)

• Tax trap: New depreciation perks from the “Big Beautiful Bill” are backfiring, saddling CRE owners with hefty tax bills when distressed assets go into default.

• Dividend detox: Brandywine Realty Trust slashed its dividend by nearly half to free up $50M in cash, aiming to prepay debt and regain full control of its core portfolio. 

• Deal divide: Large commercial property prices rose for a second month in August, signaling recovery at the top end, while smaller deals continued to decline. 

• Buying boom: Despite buying fewer homes overall, investors made up a record 33% of single-family purchases in Q225. 

• Rent freeze: Rent control is back in the spotlight, but critics argue it may hurt more than help by worsening supply and fueling gentrification. 

• Ballot dilemma: With Mayor Eric Adams out, NYC’s CRE sector must now choose between tenant-friendly Zohran Mamdani and the politically bruised Andrew Cuomo.

• Permit power: Columbus ranked 9th nationally for multifamily permits in August, hitting an all-time high as strong job growth and housing demand continue to drive development. 

• Premium cut: HUD is dropping multifamily insurance premiums to the legal minimum, scrapping green and affordable categories to cut costs.  

• Bargain shopping: Atlanta-based Penler, backed by major institutional investors like Carlyle and Crow Holdings, is aggressively acquiring Southeast apartments at steep discounts. 

• Migrant exit: Rising vacancies and falling rents in Doral highlight the housing ripple effects of shifting U.S. immigration policy. 

• Care crisis: Most U.S. seniors are aging in homes unequipped for their needs, but new data shows senior housing can reduce healthcare costs and improve outcomes. 

• Slumlord collapse: Fannie Mae is foreclosing on two Bronx towers after years of missed payments, $7M in unpaid utilities, and hundreds of hazardous code violations tied to a notorious landlord.

• Exit strain: Developers of leased data centers are turning to securitized debt and creative equity deals as traditional buyers shy away from high-priced, low-yield assets. 

• Florida buy: Ares Management purchased a 231K-SF warehouse in Weston, FL for $56M, expanding its industrial holdings in South Florida. 

• Made in America: U.S. manufacturers, from steel to sneakers, are investing billions in domestic factories to strengthen supply chains. 

• Nevada debut: Lincoln Property Company completed its first ground-up industrial project in Nevada—a 1.6M SF campus in Las Vegas.

• Investor deception: The SEC is suing executives of Retail Ecommerce Ventures—owners of RadioShack, Pier 1, and others—alleging they ran a Ponzi-like. 

• Vacancy advantage: Small businesses are finding rare retail openings as malls shed national chains and landlords seek creative tenants.

• Bulk expansion: Costco is doubling down on property ownership and hot dog production as it expands its $31.9B real estate empire.

• Access first: Consumers in 2025 value accessibility and efficiency most in retail, while emotional connection and brand purpose have become less of a priority. 

• Pitch progress: Chicago has approved a $650M privately funded stadium for the Chicago Fire FC, set to open in 2028. 

• Shrinking shelves:  Sycamore Partners’ acquisition of Walgreens signals major store closures, lease renegotiations, and a shift in retail real estate.

• Hiring hubs: New York and San Francisco are leading the nation’s office rebound as AI-fueled tech hiring drives record demand in both markets. 

• Boston beacon: Hines has officially opened the long-awaited 51-story South Station Tower in Boston after decades of delays.

• Refi of the day: BXP and Delaware North scored a $465M loan to refinance Boston’s Hub on Causeway office-and-retail tower, paying down nearly $490M in debt. 

• Suburban demand: Westchester County office demand hit its strongest level since 2021, fueled by suburban leasing gains and major tenant renewals.

• Project pushback: Barry Sternlicht’s Standard Hotel expansion in Miami Beach is on hold after local backlash.

• Bronx bet: Bally’s Bronx casino plan advances after winning local committee approval, joining two other NYC proposals in the state gaming race.

📈 CHART OF THE DAY