From Overlooked to In-demand: The Rise of Industrial Outdoor Storage

Brielle Scott for Market Share Blog | June 10, 2026

Industrial outdoor storage (IOS) has long been a familiar sight near ports, airports and industrial corridors. Yet despite its visibility, the sector remained largely overlooked by institutional investors for years. That is changing rapidly.

In a recent episode of NAIOP’s Inside CRE podcast, NAIOP President and CEO Marc Selvitelli, CAE, spoke with Leo Addimando, managing partner and cofounder of Alterra Property Group, about the evolution of IOS from an under-the-radar property type into one of commercial real estate’s fastest-growing sectors.

Defining a Once-ambiguous Sector

Alterra has been at the forefront of that transformation, acquiring more than 470 IOS properties nationwide. According to Addimando, one of the biggest reasons the sector remained overlooked for so long was that it lacked a clear identity.

“It was the largest category of real estate that had not been institutionalized and frankly had been hiding in plain sight,” he said.

For years, investors struggled to define what constituted IOS and how to evaluate it. The sector’s fragmented ownership structure, inconsistent zoning classifications and relatively small property sizes made it difficult for institutional capital to gain traction.

Today, however, a more standardized understanding of IOS is emerging. Addimando defines the asset class as properties ranging from one to 100 acres with limited building coverage and zoning that supports outdoor storage and operational uses.

Infrastructure Investment Fuels Growth

While logistics and transportation companies were historically the dominant users of IOS properties, demand patterns have shifted.

“Three or four years ago,” Addimando explained, “I would have told you it was two-thirds to three-quarters logistics- and transportation-related tenancy.”

Today, federal infrastructure spending, population growth in key markets and the rapid expansion of data centers are generating significant needs for construction equipment, utility contractors and service providers that rely on IOS facilities.

“The logistics folks are not growing right now, and the infrastructure folks are growing. So that’s where the demand comes from right now.”

The data center boom is proving particularly significant. Beyond the facilities themselves, supporting infrastructure for power, water and fiber networks is creating sustained demand for IOS properties across many markets.