The New Frontier of Industrial Real Estate

Submitted by: The Stubblebine Company/CORFAC International

The term real estate usually conjures up images of buildings, whether residential, commercial, or industrial. However, the newest trend in industrial real estate doesn’t involve buildings at all. Now you can sell large plots of land, even if you don’t plan to ever build on them. This trend is called industrial outdoor storage, and it’s making good use of land that can’t be developed but is essential to the real estate business.

IOS refers to land that can store vehicles, equipment or materials that can be held outside and don’t require interior space. In fact, most IOS sites have an 80:20 ratio of land to building square footage. They are frequently used to park heavy equipment for nearby construction sites, tractor trailers, container depots, and fleet parking. The best IOS sites are near heavy-traffic corridors, near industrial parks, and close to a large number of job sites.

“In our experience working with both regional and national IOS users, location is often the most important factor driving tenant demand,” says James Stubblebine, Director of IOS at The Stubblebine Company/CORFAC International in Boston. “Accessibility and functionality are critical, with strong highway access and proximity to major markets such as Boston and Providence frequently taking precedence. For some users, frontage and visibility along major roadways are also key considerations. Ultimately, well-located, functional sites continue to command the strongest interest from occupiers.”

The flexibility that IOS provides has made it a popular choice for tenants looking to scale their business or pivot to achieve:

• Cost Efficiency
• Operational Versatility
• Supply Chain Easement
• Scalability

IOS isn’t new in real estate, but the market has grown considerably in the last decade. Rents have surged by more than 100% since 2020. The e-commerce boom has contributed to the need for increased deliveries and vehicles.

Unlike warehouses, which are priced per square foot, IOS lots are usually rented on a per-acre or per-vehicle basis. This makes for a great and very flexible deal for tenants and landlords alike.

“Looking ahead, we expect demand for quality IOS assets to remain strong, Stubblebine noted. “Limited supply and increasing institutional interest should continue to support the sector with well-positioned properties attracting both regional and national users.”