36 — Fall Preview — September 2026 — M id A tlantic Real Estate Journal
www.marej.com
I ndustrial O utdoor S torage
By Brendan Wewer, Commonwealth Commercial Appraisal Group The Rise of IOS: Industrial outdoor storage is becoming an institutional asset class
D
rive through an estab- lished industrial cor- ridor and you will see
yards or low-coverage indus- trial sites, these properties are now recognized as indus- trial outdoor storage, or IOS, an active commercial real estate niche. Logistics com- panies need trailer parking. Contractors need space for vehicles and equipment. Util - ity providers need yards near service areas, while equipment rental companies require ac- cessible inventory space. For these users, outdoor storage is essential. IOS reflects a growing im - balance: demand for function- al outdoor space is rising while
industrial land is disappear- ing. New sites are also difficult to approve. Municipalities raise concerns about truck traffic, noise, lighting, and compatibility with surround- ing properties. IOS may also provide fewer jobs, less build- ing investment, and lower tax revenue per acre than conven- tional industrial development. Municipalities may therefore favor higher-coverage projects, further limiting the supply of properly entitled IOS assets. Scarcity has attracted in- stitutional capital, private equity, logistics operators,
properties outside the traditional warehouse category. They may include a small office or maintenance building, but
Brendan Wewer
most of the site is paved or stabilized yard used to store trucks, trailers, equipment, con- tainers, or building materials. Long viewed as contractor
continued on page 38 • Location: Access to high- ways, ports, customers, con- struction markets, and com- plementary industrial uses improve operating efficiency. • Entitlements and Site Constraints: By-right use, du- rable approvals, or established construction firms, and fleet users to a property type once dominated by more lo- cal owner-users. Within the Mid-Atlantic, IOS markets can generally be viewed in three tiers: • Gateway markets: North Jersey, Philadelphia/South Jersey, Baltimore–Washing- ton, and Northern Virginia • Established markets: Le - high Valley, Central Pennsyl- vania, Wilmington/New Castle, and Richmond–Hampton Roads • Up-and-coming markets: Northeast PA, Harford/Cecil, and Hagerstown/Martinsburg The Yard Is the Fundamental Demand IOS requires a different valuation lens. Conventional industrial analysis is building- driven, which can mislead for IOS. Consider a 5,000-square- foot maintenance building on eight paved acres. A building- based metric may make it appear unusually expensive because it attributes the pur- chase price to a relatively small structure. In reality, the buyer is paying for the ability to operate across eight secure, functional acres. The yard may generate most of the rent, determine operating capacity, and drive acquisition and occupancy decisions. A small building on a large, paved site is not necessarily underim- proved. For many IOS users, it is the ideal configuration. What Separates Quality IOS? Quality IOS typically shares six characteristics:
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