Investors looking at the industrial outdoor storage (IOS) space should focus on three main categories: zoning, environmental considerations and seller motivation. Zoning and permitting can be challenging, as some communities may have concerns about the impact of these operations.

“Many people unfamiliar with the sector do not realize how many changes to zoning can happen and how much they can impact the space,” says Lisa DeNight, managing director and head of North American Industrial Research at Newmark. She adds, “It’s often even more restrictive for IOS properties than for bulk warehouses in many jurisdictions. Investors should understand not only the current zoning but also potential changes, which tend to be more restrictive rather than more permissive.”