IOS and ISF - how will they hold up in a recession?

Another type of industrial property that is gaining popularity among investors is industrial outdoor storage (IOS). IOS is a land site zoned for industrial use where the tenant can store something outside, most commonly vehicles, construction equipment, building materials, or containers. IOS sites typically range from two to 10 acres of land with a small building (~10k sf) in the front center of the parcel. The building-to-land ratio, or FAR, is generally less than 20%.

IOS sites are attractive to investors because they offer a number of advantages, including:

• Shorter development timelines: IOS sites can be developed quickly and easily, which makes them a good option for investors who are looking for a quick return on their investment.

• Lower construction costs: IOS sites do not require the same level of construction as traditional industrial buildings, which can save investors money.

• High demand: IOS sites are in high demand from a variety of tenants, including businesses that need to store vehicles, construction equipment, or other large items.

• Low vacancy rates: The vacancy rate for IOS sites is typically very low, which means that investors can be confident that their investment will be leased up.

In addition to IOS sites, investors are also interested in industrial service facilities (ISFs). ISFs are specialized facilities that provide a variety of services to industrial tenants, such as truck loading and unloading, equipment repair, and waste disposal. ISFs are attractive to investors because they offer a number of advantages, including:

• High-margin services: ISFs typically offer high-margin services, which can generate significant revenue for investors.

• Recurring revenue: ISFs typically generate recurring revenue from their services, which provides investors with a steady stream of income.

• Low capital requirements: ISFs do not require a large capital investment to get started, which makes them a good option for investors with limited resources.

Overall, industrial outdoor storage and industrial service facilities are both attractive investment options for investors who are looking for a resilient and profitable investment. These properties offer a number of advantages, including shorter development timelines, lower construction costs, high demand, and low vacancy rates. As a result, they are likely to continue to be popular among investors in the years to come.