• Tenant demand is broadening, extending beyond traditional construction and logistics users to include utilities, energy services, infrastructure contractors, waste management firms, and last-mile service providers.
• Lease structures are lengthening, with fixed escalations appearing more frequently as tenants seek long-term site control and landlords lock in income growth.
• Underwriting scrutiny is increasing, particularly around zoning, entitlement risk, and environmental considerations, elevating the importance of localized market knowledge.
• Off-market transactions now dominate, with well-located IOS assets often trading before being broadly marketed.

As the industrial outdoor storage (IOS) market evolves, a consistent theme has emerged in major metros and secondary markets: buyers and sellers remain misaligned on pricing expectations. Capital remains active and focused on the sector, but many owners are hesitant to transact at values that fall short of their long-term view of asset worth, particularly given IOS’s durable cash flow characteristics and growing strategic importance.

This disconnect has driven a noticeable shift among IOS owners nationwide. After years of persistent inbound interest from investors and owner-users, many owners are now more aware of the intrinsic value of their sites. Rather than selling, an increasing number are choosing to retain ownership and lease their properties to users, generating cash flow while maintaining long-term ownership.

Leasing fundamentals continue to validate this strategy. Across the United States, rising land values, zoning constraints, and limited supply have pushed IOS rents higher. These dynamics help explain why many owners are comfortable holding assets and waiting for capital markets to recalibrate.

Colliers Insight

Greg Gosselin

Selectivity and asset-level nuance are playing a greater role in IOS transactions.

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At the same time, true infill IOS inventory is becoming increasingly scarce. Municipal resistance, zoning restrictions, and competition from higher-density uses continue to limit new supply in core markets. As a result, investors are reassessing geographic strategies, with growing interest in tertiary markets, exurban locations, and secondary transportation nodes where land availability is greater and entry pricing remains more attainable.

As 2026 unfolds, leasing conditions are expected to remain resilient, supported by sustained user demand and limited infill supply. Sales activity, however, is likely to remain selective, with outcomes increasingly driven by asset-level nuance, timing, and disciplined execution.