Buyers and sellers remain misaligned on pricing expectations in the industrial outdoor storage (IOS) sector across major metros and secondary markets, according to a recent Colliers IOS update.
Capital remains “active and focused” in the sector, Colliers noted. However, many owners are hesitant to transact when values fall short of their long-term view of asset worth. This caution is especially pronounced given IOS’s durable cash flow characteristics and growing strategic importance.
“After years of persistent inbound interest from investors and owner-users, many owners are now more aware of the intrinsic value of their sites,” the report said. “Rather than selling, an increasing number are choosing to retain ownership and lease their properties to users, generating cash flow while maintaining long-term control.”
Tenant demand supports this approach, extending beyond traditional construction and logistics users to include utilities, energy services, infrastructure contractors, waste management firms and last-mile service providers.
Leasing fundamentals further validate this strategy. Across the U.S., rising land values, zoning constraints and limited supply have pushed IOS rents higher, allowing many owners to comfortably hold assets while waiting for capital markets to recalibrate. Lease structures are lengthening, with fixed escalations appearing more frequently as tenants seek long-term site control and landlords lock in income growth.
At the same time, true infill IOS inventory is becoming increasingly scarce. Municipal resistance, zoning restrictions and competition from higher-density uses continue to limit new supply in core markets. As a result, investors are reassessing geographic strategies, showing growing interest in tertiary markets, exurban locations and secondary transportation nodes where land is more available and entry pricing remains more attainable.
Off-market transactions now dominate, with well-located IOS assets often trading before being broadly marketed, Colliers said.
Looking ahead to 2026, leasing conditions are expected to remain resilient, supported by sustained user demand and limited infill supply. Sales activity, however, is likely to stay selective, with outcomes increasingly determined by asset-level nuances, timing and disciplined execution, the report said.
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