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Camps Bay Power Play - What is the most preferred IOS tenant?

Lee Sager from Camps Bay Capital analyzes the latest IOS poll on preferred tenant types.


After 141 votes came in, the Camps Bay Power Play has another takeaway for all IOS professionals and aficionados. We collected replies from the community on what its most preferred IOS tenant. Bear in mind that these results do not consider specific market conditions like vacancies in the market, current rent levels, tenant financial health, and conditions of IOS assets.

Camps Bay Capital is a real estate advisory firm led by David Harris and Lee Sager. We leverage our experiences in both investment banking and real estate private equity to provide strategic and thoughtful solutions for our real estate clients. For the past three years, we have been active helping industrial outdoor storage operators successfully expand and optimize capital relationships for both their equity and debt needs. Additionally, we have helped operators source and analyze acquisitions and dispositions by leveraging our deep IOS network.

Besides industrial outdoor storage, we also work with clients across a variety of other real estate asset classes and strategies. We are in conversation with capital providers on a daily basis, and we are happy to help platforms with our intel and insights. If you want to reach out, we can be contacted at either [email protected] or [email protected].

Overall, there was a tight race between trucking / vehicle parking tenants and construction industry related tenants as the IOS industry’s preferred tenant. Ultimately, trucking / vehicle parking tenants got nine more votes, but we will dive into each of the tenant type to understand the drivers for the poll results. Shoutout to Guy Hananya of Clear Height Advisors for inspiring us to write this! Check him out as he gives great overviews on IOS tenants and other IOS topics on LinkedIn as well as providing great acquisitions sourcing services for IOS firms.


Trucking and vehicle parking tenants are the life blood for the supply chain. Last mile delivery has driven the need (no pun intended) for trucks, vans, and other types of mobile transportation to deliver products nationally. With an increase in demand for these services, many tenants seek parking yards because older industrial assets typically lack adequate parking to accommodate idle vehicles. Overflow parking along streets is illegal in many municipalities beyond a certain time threshold. The imbalance of available parking is so pronounced that there are 11 truck drivers per 1 parking space in the United States (link).

Even with a large imbalance in available parking, there has been a trucking recession going on now with trucking rates dropping after spiking to record highs during the COVID-19 pandemic. One of the notable casualties of this trucking business cycle has been the bankruptcy of Yellow Corporation. According to Freightwaves, the freight recession has lasted longer than the COVID-19 bull market, but on the positive side, the publication is projecting that demand and supply should recalibrate later this year / spring 2025 (link).

There are other glimmers of hope too in the trucking industry with tenants in tow strategies that have proliferated to meet the needs for managed parking and secured truck parking. Private equity capital groups have stepped up to this need as evidenced by the $500M JV announcement for Semi Stow (now rebranded Outpost) partnering with Greenpoint Partners (link) as well as other operators / platforms building projects with this focus in mind.

Additionally, trucking and vehicle storage should be considered as a top tenant prospect due to strong historical demand and limited supply, which is illustrated by the by graphics below from J.P. Morgan (link). Truck terminals have historically outperformed broader the industrial real estate sector and have a negligible amount of supply being built currently.

Source: JP Morgan Asset Management

Source: JP Morgan Asset Management


Construction related tenants are the second most coveted tenant type within the IOS ecosystem and for good reason. The construction industry was projected to be $1.4 trillion in the United States in 2023 (link) and forecasted to continue to grow 5.3% annually between 2023-2027. The industry’s future growth is buoyed by increased government infrastructure spending and commercial/ residential real estate spending. As a result of increased activity, construction providers need a place to store machinery / surplus equipment in close vicinity to their customers.

With the sustained increase in construction spending since the GFC, publicly traded companies such as Ferguson Plumbing, United Rentals, Herc Rentals, and other construction related companies have outperformed the broader stock market. Conversations with other IOS owners highlighted that they prefer construction company related tenants because of the credit affiliated with these national tenants.

Within equipment rental related tenants, there was a recent Northmarq report that highlighted the construction industry’s contributions to the equipment rental’s strong subsector performance. The report (link) mentions that construction equipment rentals are expected to grow 6.12% annually from 2023 to 2030.

Construction related tenants such as Sunbelt Rentals have executed IOS sale-leasebacks with a variety of IOS real estate investors, and national IOS portfolios with these types of tenants are highly coveted.


Container storage came up in third in the poll. Container storage refers to traditional rectangular trailers and cylindrical containers used to store liquid items such as oil, chemicals, and food products (think corn syrup). Companies need container storage to place products waiting at coastal ports or inland ports for further distribution off ships / trains / trucks.

Containers were popularized in the 1950’s by Malcolm McLean, who created the modern container specifications that are now widely utilized and contribute to efficient supply chains we use today (link). Containers are a popular way to store goods because you can efficiently stack and place them in yards, trucks, trains, and ships. Container storage sites typically have close access to ports, rail systems, and highways.

Port activity has dropped off since the peak of the COVID-19 pandemic, and activity has shifted more from the West Coast to East Coast in recent years due to labor union related issues / concerns (link). Even with this drop off in activity, we notice investors still prefer being in port markets given the lack of available land in these infill markets and the prohibitive cost to construct new container storage facilities. We also see investors are willing to accept lower returns for higher quality port adjacent properties.

However, we believe there are overlooked inland ports that are staging areas for containers that can pique investor interest. As product moves away from water ports, the sought after inland ports have good connectivity to the national rail system as well as highway access to broader population centers. We’ve seen a recent large trade that shows institutional interest in inland ports. Stonepeak recently acquired a 1.7M SF inland port facility at the largest inland port in North America (Joliet / Chicago, IL) from CenterPoint for $125M (link).


Lastly, we will explore other IOS tenant types not specially specified in the poll. There are a variety of alternative tenant uses for industrial outdoor storage such as EV infrastructure / battery storage, which will be the focus of this section.

In recent years, there has been a proliferation of these real estate projects that also cross over into infrastructure. There has been a big investment focus because of elevated ESG interest and the need to control energy costs / emissions. There are private real estate groups looking to finance these projects in addition to infrastructure funds and government programs backing other developments.

Big companies such as Amazon have been investing in electric charging for trucks as a result of mandates by the California government (link). Just like with other legislative trends, California is usually at the forefront of policy and other states are encouraging more EV charging stations nationally. Within the real estate world, there have been announcements in the space to build national EV charging stations for trucks financed by real estate private equity firms as seen with Terawatt raising $1 billion (link) and EV Realty raising $200 million (link).

The other rising energy initiative in industrial outdoor storage has been battery storage. Utility companies and communities use battery storage to store / generate cleaner energy to service local populations. Battery storage facilities allow solar and wind power to be stored and used in times of excess demand.

Industrial outdoor storage assets with excess land and good access to power can be candidates for these sites, which can be a great income stream for owners. Alternatively, IOS sites can be converted into these facilities as an alternative use over time. An example of institutional interest in the battery storage space includes a recent $225M investment from Manulife into NineDot Energy (who also had Carlyle Group as an earlier investor) (link).

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