Industrial Outdoor Storage (IOS): A Growing Asset Class and Evolving Investment Landscape with Expert Vytas Norusis, Senior Valuation Services Director at Colliers.

April 16th, 2025

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Industrial Outdoor Storage (IOS) has rapidly evolved from an overlooked niche to a booming asset class attracting major investors. What was once considered an interim land use is now a high-demand sector with growing institutional interest. In this discussion, valuation expert Vytas Norusis, Senior Valuation Services Director at Colliers, one of the more seasoned professionals in the space who has had his fair share of deal stories. From working with the largest truck stop in America to taking part in the Blackstone jump in the IOS game in a big way, he shares insights on the rise of IOS, the challenges of financing, and how investment strategies are shifting in response to market trends.

Golden insights:

• Growing Investment in IOS: Industrial outdoor storage (IOS) has evolved from a niche asset class to a major investment area, with institutional players like Blackstone entering the market. However, concerns remain about speculative investments.

• Challenges in Financing & Valuation: Lenders still struggle with IOS properties due to limited data and unfamiliarity with the asset class. Smaller lenders often focus on business financials rather than appraisals, while institutional investors are more comfortable with the sector's growth.

• Investment Strategies Are Shifting – More investors are considering short-term sale-leaseback deals with mom-and-pop truck lot owners, allowing for a smoother transition while also keeping revenue streams active during redevelopment.

• Amenities & Market Differentiation: In markets like Dallas-Fort Worth, truck parking with amenities like lounges and Wi-Fi is in high demand, while in places like South Florida, even basic gravel lots stay fully occupied. The truck parking shortage remains a major issue, with demand exceeding supply in key freight markets. While rents are rising, there's still room for further increases before reaching a price ceiling.

• Managed Parking is Gaining Traction: Investors are increasingly embracing managed parking, using short-term revenue streams while marketing sites for long-term leases. New technology and contract labor help reduce operational risks and costs.

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^Transcript

_{Jose: Cool, so Vytas, thanks for taking the time to connect with Jake and me. I wanted to get your insights on the market. You share great knowledge on social media about industrial outdoor storage (IOS), so I'd love for you to talk about your background, how you got into this space, and what you're doing today.}

_{Vytas: Absolutely. I work in valuation and have been a commercial real estate appraiser for 15 years, specializing in industrial properties.}

• _{First IOS appraisal: ~10 years ago for a container yard near an intermodal facility.}

• _{Initially, nobody wanted to handle these properties. I took on the challenge and started seeing more deals over time.}

• _{Investors and developers started acquiring these properties, leading me to take a closer look at IOS as an asset class.}

_{By 2019, I saw real potential when a developer started a new construction deal in the stockyards. The financials were eye-opening:}

• _{Three acres of land generating high monthly income per acre (triple net).}

• _{Minimal development costs (paving & fencing) but strong revenue potential.}

_{Since then, IOS has exploded in popularity:}

• _{Small operators (e.g., moving company owners) turning small lots into valuable portfolios.}

• _{Institutional investors and life insurance companies entering the space.}

• _{Blackstone issuing ~$200M loans in IOS—something unimaginable a decade ago.}

• _{Rapid expansion raises concerns about speculative investments chasing the trend.}

_{Jake: Going back to your first deal 10 years ago—before IOS became widely recognized—how were you approaching valuations? Were you using comps, land basis, or factoring in income}

_{Vytas: Back then, valuations were tricky.}

• _{Opacity of data: Few comparable sales, so we leaned on developers operating in other markets.}

• _{Zoning restrictions: Container stacking limitations made site selection critical.}

• _{Location dependence: For intermodal facilities, relocation options were extremely limited.}

_{Lenders were skeptical, often viewing IOS as an interim land use rather than a long-term investment. Even today, I still have to educate lenders on IOS fundamentals—10 years ago, most IOS sites were:}

• _{Oddly shaped parcels unsuitable for high-density development.}

• _{Owned by intermodal developers who understood the demand drivers.}

• _{Difficult to finance—many deals relied on cash or private funding.}

_{Over time, understanding of IOS has evolved, but financing remains a challenge in some cases.}

_{Jake: Are lenders still resistant to these deals today?}

_{Vytas: It depends on their familiarity. Smaller, relationship-driven lenders focus on business financials rather than appraisals. But they’re often shocked when a property near O’Hare has increased in value 5x in five years. The challenge is educating them about market dynamics—big players like Blackstone are buying at these new prices. For larger lenders, the issue is data. The lack of transparency makes it hard for conventional banks to justify capital investment, unlike private equity firms with higher risk tolerance.}

_{Jake: Are more owner-operators selling and leasing back properties to free up capital?}

_{Vytas: Yes. Many older trucking operators are retiring and using short-term sale-leasebacks to transition out of their businesses. Investors prefer these deals, even if they don’t offer the highest price, because they allow time for an orderly shutdown—selling fleets, liquidating assets, etc. Investors then improve the properties—upgrading from gravel to asphalt, adding security, etc.—which increases rental income.}

_{Jake: Have you seen many managed parking deals?}

_{Vytas: More are happening as the sector grows. For example, a developer built what they claimed was the largest truck stop in the U.S., and a managed truck operator bought it. Most investors prefer leases over revenue-sharing models, as revenue-sharing adds risk. When evaluating deals, we look at revenue per spot per month, income per acre, and vacancy rates to determine sustainable rents. It’s similar to how hotels are valued—by revenue per room per night.}

_{Jake: Managed parking should, in theory, yield higher returns due to operational risk, but that’s not always the case. Often, a well-located site will attract a tenant willing to pay more than what managed parking generates. Occupancy is high in major freight markets, yet many operators haven’t raised rates in years. We believe truck parking rates still have room to grow.}

_{Vytas: As rents rise, local trucking companies struggle to absorb the costs. Is there a natural rent ceiling for local vs. national operators?}

_{Jake: There is a ceiling, but no one has hit it yet. In South Florida, one operator charges 40% more than a competitor and is still fully occupied. The fragmented nature of managed parking makes it an inefficient market. As operators consolidate, pricing equilibrium will emerge. But right now, there's still room for increases.}

_{Vytas: The truck parking shortage is well known, but the numbers are shocking. There are only 40,000 public truck parking spots across the U.S.}

_{Jake: The old "300,000 spaces for 3.5 million drivers" stat is outdated. Many new parking sites have been built in the past four years, but not enough. Major land-constrained markets (South Florida, Newark, Long Beach) likely have 11+ drivers per space, while inland areas have more availability. We need a real analysis to understand the true supply.}

_{Vytas: Right. Even large truck stop operators provide data, but private managed parking companies don’t publicly disclose their numbers.}

_{Vytas: There's been a growing demand for driver amenities—lounges, showers, and more. Without these, even the best parking facilities struggle to attract drivers. Have you noticed an increase in tenant demand for these amenities?}

_{Jake: Absolutely. It's market-driven. In places like Dallas-Fort Worth, where land is available and zoning is flexible, we see full-service facilities with lounges, movie theaters, restaurants, and free Wi-Fi. Parking rates there range from $150–$200 per truck/trailer. In contrast, in South Florida, demand is so high that even a fenced, gravel lot with minimal amenities stays full. The challenge is understanding how much to invest in improvements when revenue potential is limited. Most high-amenity sites cater to overnight parking for drivers needing rest. However, small operators often avoid short-term parking due to the added management burden. Still, optimizing based on actual usage could increase revenue and reduce costs for both landlords and carriers.}

_{Vytas: Markets like DFW are stopovers along major highways, while South Florida is a destination. This affects the structure of truck parking facilities.}

_{Jake: Exactly. Some markets serve long-haul drivers needing mandatory rest stops, while others—like South Florida—serve as endpoints.}

_{Vytas: It'll be interesting to see if investors start acquiring mom-and-pop truck lots for short-term leasebacks. Do they understand the operational challenges, or are they just chasing rising rents?}

_{Jake: Investor attitudes have shifted. Two years ago, institutional funds wouldn't touch managed parking. Now, they see it as a revenue stream while marketing sites for long-term leases.}

_{Instead of vacating a site immediately, some owners keep operations running using tech and contract labor. This reduces vacancy costs with minimal risk.}

_{Vytas: Plus, with supply chain delays—like waiting nine months for electrical switchgear—owners might as well collect interim income rather than leave a site empty.}

_{Vytas: It’s a fascinating space, and I enjoy being part of it. Are you guys heading to the NAAS conference in Dallas?}

_{Jake: Yes, we’ll be there.}

_{Vytas: Great! Let’s connect. The best way to reach me is on LinkedIn—I have my email listed there. Things have been busy with a newborn and a toddler, but I try to stay active.}

_{Jose: Keep posting! That’s how we found you. If you ever want to discuss truck parking further, give us a call.}

_{Vytas: Absolutely. Thanks, guys.}

_Conclusion

_{The IOS market continues to expand, driven by rising demand for truck parking, shifting investment strategies, and evolving tenant needs. While financing challenges persist, the entry of institutional investors signals confidence in the sector’s long-term potential. As the industry adapts, amenities, data transparency, and strategic site selectionwill play a crucial role in shaping the future of IOS.}

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