Understanding Industrial Outdoor Storage (IOS): A Comprehensive Guide
If you’re overwhelmed by the IOS industry jargon, you are not alone. I spent the entirety of my career in the commercial real estate business prior to starting Rig Hut, a proptech company helping stakeholders in the transportation and real estate spaces, and somethings even I can’t keep up with the verbiage. In an effort to promote transparency within industrial outdoor storage, we built this short guide breaking down some popular IOS subsets. While there are surely more sophisticated minds who can break this down, we have a unique perspective on IOS, viewing the assets from a technology angle with a real estate background. Here are our views on IOS and the different subsets within the asset class
Defining Different Types of Industrial Outdoor Storage (IOS):
1. Lay Down Yard: Typically associated with the construction sector, these yards function as storage grounds for contractors. Characterized by materials and equipment like PVC pipes, concrete blocks, roofing materials, pallets, and small trailers, lay down yards are indispensable to construction processes.
2. Trailer Drop Yard: Recognized by their branded trailers (sans the cab), these lots have drawn increasing attention from the media and real estate professionals. While they predominantly house trailers from names like “JB Hunt” or “Ryder”, there’s been a slow-down in leasing activity due to economic factors influencing transportation companies.
3. Managed Truck Parking Facility: Our flagship domain at Rig Hut. Unlike the uniformity of trailer drop yards, these spaces showcase diverse brands and equipment types. Resembling short-term rentals (STRs) in the industrial world, their clientele often consists of smaller tenants using 1-5 equipment pieces. Leveraging Rig Hut’s software, facility operators streamline their operations – from payment flows to slip assignments. Learn more about Rig Hut’s bag of goodies here and here.
4. Depot Facilities: Strategically located near intermodal ports, these depots facilitate container storage and movements, collaborating with port carriers. Their services, ranging from grounding containers to tracing them, pivot on transitory stages, thereby mitigating unnecessary detention and demurrage fees.
Why is Industrial Outdoor Storage Catching Investor Eyes?
The rationale behind the surging investor interest in IOS is straightforward: a mismatch between supply and demand. The areas with the highest rates for truck parking and IOS tend to be coastal, intermodal port cities. What else is in coastal, intermodal port cities? A lot of people. This brings additional challenged to land supply. We have the “not in my backyard” (NIMBY) mentality, where residents are pushing back on further industrial development or rezoning, coupled with the fact that by definition, most coastal markets are land constrained.
Additionally, every time a developer swoops up an appropriately (industrial) zoned piece of land for IOS and builds a fulfillment center, they are simultaneously adding demand for transport and all ancillary businesses that require IOS while removing supply. Truck parking, truck maintenance facilities, truck wash facilities, staging areas, and the like. In summary, rates for truck parking and IOS will go up and to the right for the foreseeable future, which bodes well for the fund model.
For any stakeholder, whether it’s a real estate aficionado, investor, or just a curious individual, understanding the dynamics of industrial outdoor storage is essential. As this domain evolves, it will undeniably play a pivotal role in shaping industrial real estate’s future landscape.
About Rig Hut
Rig Hut is your one stop shop for all things truck parking. We have the most robust, tech powered marketplace in the business, empowering landlords to take control of their managed truck parking facilities by building transparency in inventory management, payments, reporting and access. Stay in the loop on our upcoming launches which will provide for a fully automated experience.
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