The Ugliest Lots on the Block Are Beating the Market
Industrial outdoor storage vacancy averaged just 2.5% nationally. IOS rents hit $13.14/sqft, a 17.9% premium over standard industrial. And since 2020? IOS rents are up 123%. Here's the play.
The Ugliest Lots on the Block Are Beating the Market
Nobody put industrial outdoor storage on their mood board. No soaring ceilings. No dock doors. No Class A anything. Just paved yards, security fencing, truck access, and a small utility building if you are lucky.
And yet, here we are.
According to CBRE's Q4 2025 report, IOS vacancy averaged just 2.5% nationally. Compare that to 6.7% for traditional industrial. IOS rents hit $13.14 per square foot, a 17.9% premium over standard industrial at $10.85. And since 2020? IOS rents are up 123%, more than twice the growth rate of bulk warehouses.
The gap is not closing. It is widening.
Here is why supply cannot keep up: municipalities hate these sites. Truck traffic, lower tax revenue, community opposition. That regulatory friction is not a headwind. For anyone already holding well-located IOS, it is a permanent moat.
The Electrified Layer: IOS sites with excess electrical capacity are breaking out as their own investment category. JLL analysis found that sites capable of delivering roughly 4,000 amps or more are commanding 49% rent premiums over standard industrial leases. Who is leasing these electrified IOS sites? EV charging operators. Autonomous vehicle fleets. Edge data centers. Advanced manufacturing.
Capital is moving fast. Catalyst Investment Partners launched a $400 million equity fund targeting IOS acquisitions. Steel Peak and Tarsadia Investments committed $150 million to IOS deals in 2026.
Dirt Dawg Take: The best-performing industrial asset of the last five years is the one without soaring ceilings or dock doors. The value is in the land, the location, and the logistics access. The zoning complexity that kept competitors away is exactly what built the premium.
What the "Boring" Lots Are Really Teaching You
For years, the investors willing to sit with the complexity of zoning resistance, municipal pushback, and unglamorous tenant rosters were laughed at. Now those same sites are trading at 17.9% rent premiums with sub-3% vacancy, and institutional capital is scrambling to catch up.
This is the pattern. Complexity filters out first-order thinkers. The investor who sees a zoning restriction and walks sees a dead end. The investor who sees a zoning restriction and stays sees a moat.
Vacancy below 3%. Rents up 123% since 2020. Institutions building nine-figure funds to chase it. That is what happens when patience meets a supply constraint nobody else was willing to sit with.
1. Scout Your Market for IOS Candidates. Pull up a map of your target area and look for industrially zoned parcels near logistics corridors, ports, rail lines, or highway interchanges with minimal building coverage.
2. Check the Power Profile. If you already control industrial land, call your utility provider and ask what capacity can be delivered to the parcel today.
3. Pressure-Test What "Boring" Looks Like in Your Portfolio. Walk through what you own or are tracking and flag anything that feels too unsexy to underwrite seriously. Then ask: Is this complexity... or is this my moat?
Here's to building your success, one step at a time... from the dirt up.
Kris "Dirt Dawg" McGee 🐾
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