![]() ![]() IOS sites have caught on as an unlikely institutional-caliber asset as other more established areas of the real-estate-investment market, like office buildings and retail space, have been upended by the growing popularity of working from home and online shopping. Investors estimate there's at least $200 billion of industrial-outdoor-storage land across the country, a sizable enough market for years of investment to come. The segment has even been rechristened with a more sophisticated-sounding moniker: industrial outdoor storage, or IOS. What's new is the rush of major investors who see a lucrative opportunity to corporatize a niche of the real-estate market that is still overwhelmingly owned by an array of small businesses and individuals. Such land has been around for as long as the country has had heavy industry. The interest in industrial land reflects the growing recognition that these sites are as essential as they are ordinary, providing key infrastructure for the delivery of goods and services to large swaths of America. Industrial land is used for a range of purposes, such as parking trucks and buses, storage for bulky equipment like cranes, cherry pickers, and bulldozers, and a place to stage heavy goods that can weather exposure to the elements including gravel, lumber, or shipping containers. Morgan Asset Management, the private-equity players Fortress and Cerberus, and real-estate-focused investment giants, including Brookfield and the San Francisco-based firm Stockbridge. Recent buyers include the financial firm J.P. ![]() "But as crazy as it sounds, it's fantastic real estate."īrookfield's portfolio is still headlined by blue-chip real-estate assets such as the Manhattan West mixed-use complex in New York City, where major office tenants, like the law firm Skadden Arps, base their operations, and Canary Wharf, a similarly large-scale London property with a mix of office, retail, and residential space.īut the development and investment firm, whose global real-estate portfolio includes $260 billion of property, has also amassed about $500 million - and counting - of industrial land sites across the country since 2018.īrookfield is one of several big-name investors that are paying increasing attention to lowly industrial land. "I'm not sure if someone driving down the highway would look out and think, 'Hey, that's an immaculate truck terminal,'" Smith conceded. This past December, Brookfield paid a little more than $67 million to acquire the site at 1100 Newark Turnpike, which it plans to continue to operate as a terminal for trucks. ![]() To Andy Smith, a managing director at Brookfield Asset Management and the global head of its logistics investments, the parcel, located less than 10 miles outside of New York City, was as attractive as any of the top-tier properties his company owns. ![]() The site is surrounded by a tangle of major highways that are often clogged with traffic, abuts a rail yard packed with clattering freight cars, and is just down the street from one of the most polluted landfills on the northern New Jersey waterfront. The nine-acre truck depot in Kearny, New Jersey, wouldn't appear to fit anyone's definition of prime real estate. Investors see profits in corporatizing a once-obscure asset class as office and retail struggle.The market for industrial outdoor storage, or IOS, is worth about $200 billion, investors said.Big commercial-real-estate players from Brookfield to Fortress are snapping up industrial land. ![]()
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