Today, I’d like to talk about a segment of industrial real estate you’ve probably never heard of, much less considered. It’s called IOS.
No, not the operating system that powers your Apple devices. In this case, IOS stands for industrial outdoor storage. And until a few years ago, almost no one was talking about it.
Then COVID-19 hit.
Suddenly, IOS went from an afterthought to one of the most sought-after property types in commercial real estate. Today, it is not just a niche. It is its own asset class, and demand is exploding.
Why?
Because IOS sits right at the intersection of three powerful forces.
First, the supply chain broke and companies needed space fast. Not warehouse space. Yard space. Places to store trailers, containers, equipment and overflow inventory when buildings were full and ports were backed up.
Second, service-based businesses never stopped growing. Plumbers, electricians, HVAC contractors, landscapers, equipment rental companies and construction yards all need a place to park trucks, store materials and operate close to their customers. In infill markets like Orange County, that means outdoor space is essential.
Third, and this is the big one, you cannot create more of it.
Orange County is built out. Zoning is tight. Cities do not love outdoor storage. And many existing IOS sites are legally nonconforming, which means they are effectively irreplaceable.
So what happens when demand surges and supply is fixed or even shrinking?
Prices go up. Competition intensifies. And a once-overlooked property type becomes a hot commodity.
That is exactly what we are seeing today.
Industrial outdoor storage may not be glamorous. It is not shiny, it is not new and it will not win any architectural awards.
But it is functional. It is necessary. And increasingly, it is valuable.
And here is the part that should get your attention. If you own a piece of industrial land with yard space, even if it looks rough around the edges, you may be sitting on one of the most in-demand and underappreciated assets in today’s market.
Tenants are not looking for perfection. They are looking for usability. They need space that works. Space that is secure, accessible and close to their customer base.
That shift in mindset is important.
Because in a market like Orange County, where land is scarce and regulation is tight, the highest and best use is not always the newest building or the most polished project. Sometimes, it is simply well-located dirt that solves a real operational problem.
IOS is no longer the leftover. It is no longer the forgotten corner of industrial real estate.
It is now a critical piece of the supply chain and a growing opportunity for those who understand its value
Allen C. Buchanan is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714-564-7104.