Industrial real estate has experienced a rebalancing since the pandemic subsided, with most subclasses in the sector returning to pre-pandemic levels of demand. Unlike the broader sector, however, demand for industrial outdoor storage (IOS) has ticked steadily upward in the post-pandemic environment as companies rebalance their supply chains and change how they store and transport goods.

What Is Industrial Outdoor Storage?

A property classified as industrial outdoor storage is just what it sounds like. The site’s primary focus is to provide outside space to store goods or equipment. While some such properties may have a warehouse, garage, or office component, most of the property will be used for outdoor storage. Depending on the use case, IOS sites may range from less than one acre to more than fifty acres.

Common uses of industrial outdoor storage include:

• Trailer and container storage/pickup lots. Businesses use IOS properties to store trailers, chassis, and shipping containers. They may be used for long-term storage or as drop-and-hook lots, where shippers leave trailers for truck drivers to pick up.
• Construction equipment storage. Contractors or rental companies often need to store heavy equipment like cranes, bulldozers, excavators, road rollers, graders, dump trucks, and other large machinery. Equipment of this size requires specialized outdoor space for parking, storage, and maintenance activities that account for equipment weight and overhead clearance requirements.
• Bulk materials. Mining and construction companies need industrial outdoor storage to hold materials like lumber, precast concrete components, gravel, sand, and more.
• Retail overflow. Retailers often use industrial outdoor storage space to hold overflow inventory in containers or trucks during high-demand periods, such as the end-of-year holiday peak season.
• Oil and gas, renewable energy, and utility component storage. From pipeline segments to wind turbine blades, energy companies use outdoor space to store a variety of oversized components.
• Fleet parking and maintenance. Businesses operating large vehicles, heavy trucks, or equipment fleets often buy or lease IOS space to have sufficient room to park and maintain fleet assets.

The use cases for industrial outdoor storage may seem basic, but that’s also why this type of property continues to see steady demand growth. After all, even in the face of economic uncertainty, companies still need to park fleets and store materials.

The Changing Needs of IOS Tenants

While outdoor storage needs stayed pretty much the same for decades, new technologies and market shifts have tenants reprioritizing what they need from IOS properties. Some of the features tenants now look for may include:

• Surveillance technologies. With cargo theft steadily increasing, storage yards need good cameras, access control, and other security measures.
• Charging stations. Many businesses have begun adding electric assets to their fleets over the past few years, and that trend will likely grow over the next decade. IOS sites must accommodate this type of tenant by providing viable charging infrastructure.
• Sustainable elements. As consumers pressure businesses to operate in more environmentally friendly ways, IOS tenants may seek properties with good water management systems, solar-powered lights, emissions monitoring capabilities, and other eco-friendly improvements.
• Automation infrastructure. Solutions already exist to automate yard traffic, and it’s only a matter of time before autonomous vehicles and robotic loaders become commonplace at IOS sites. Tenants that want to implement these solutions will seek properties with the right power requirements and maintenance facilities.
• Internet of Things. GPS trackers, data loggers, RFID tags, and other IoT devices help businesses see inventory and equipment status in real time. The modern IOS tenant needs excellent connectivity throughout the storage yard to support inventory and asset management activities.

These technologies and add-ons help businesses transform IOS lots into connected spaces that contribute to broader operational goals. If you’re seeking industrial outdoor storage that suits the unique needs of your operation, find out how we can help.

About Phoenix Investors

Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations and public stakeholders, Phoenix has developed a proven track record of generating superior risk adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost efficient solutions, and a reputation for success.