A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
The rapid buildout of AI and quantum infrastructure is sparking a boom in an often overlooked commercial real estate sector. Industrial outdoor storage (IOS) is suddenly seeing significant demand and rent growth amid lean supply.
IOS comprises all types of either paved or gravel land where companies can park construction equipment, vehicles, containers, supplies, really anything that can be stored outside. It acts as essential, back-office support for the movement of goods around the country – everything that isn’t a warehouse or a factory. It can have a structure on it, but the designation requires that structure be less than 25% of the overall space.
These sites are often located near highways, ports and other key infrastructure, but are now becoming essential staging grounds for data center construction. Developers are parking millions of dollars’ worth of generators, tractors and other critical equipment, according to Alterra IOS, a prominent player in the space that has acquired over 400 sites nationwide.
