NextGen IOS: A technology-driven approach to an old school segment of CRE

AUGUST 2024

Traditional industrial outdoor storage (IOS) has received a lot of attention over the past few years as investors have expanded their search for higher yielding assets. IOS is typically characterized by low ongoing Capex and involves triple-net, multi-year leases of space to a single tenant.  

We believe there are a number of opportunities to innovate and profitably invest in IOS. Today, available space is shrinking, while demand from IOS users like logistics companies, construction firms, and independent trucking operators continues to grow. It is an industry that is poised to benefit from leading edge technology and new ways of thinking. NextGen IOS delivers just that. 

The challenge 

Historically, IOS sites have been owned and operated locally by mom and pops, and more recently have been targeted by landlords seeking to rent sites on a triple-net basis to a single tenant. These models suffer from a few potential drawbacks. Renting a full site to one tenant at a time may leave revenue on the table; finding a large enough tenant is not an easy task given that more than 95 percent of trucking companies have fewer than 10 trucks, according to Trucking data. Second, like most fragmented sectors, technology can streamline operations and generate economies of scale, but implementation in the sector has been limited.  

Many IOS sites, even if fully leased, are underutilized and, therefore, most likely underpriced. For example, large trucking companies may acquire more space than needed at any given time to accommodate fluctuating demand (particularly during peak shipping periods) or to ensure that they can optimize routes and reduce deadhead miles (distance a truck travels while carrying an empty load). 

To read the full article, click here.

ABOUT ACCORD CAPITAL PARTNERS LLC

Accord, through its affiliates, is a global capital advisor, principal investor and investment manager. With its headquarters in San Francisco and personnel in Chicago, London, Hong Kong and Seoul, Accord engages with a wide variety of participants in the real estate private equity industry. Accord Capital Partners, its broker/dealer affiliate, provides advisory and capital raising services in the United States. Accord Europe Limited, its broker/dealer affiliate, provides advisory and capital raising services in the United Kingdom and Europe. For further information on Accord, visit: www.accord-group.net.