Industrial Outdoor Storage: Strategy, Selection, and Secret Sauce

A firsthand account of IOS investing from a seasoned family office

Editor’s Note: I get asked about Industrial Outdoor Storage (IOS) more than any other real estate investment theme out there. I don’t know much about it myself, so I asked some real experts–Kristina Chang and Stew Cedarleaf at Westlake Realty–to do a deep dive. Enjoy! -BH

Westlake Realty is a vertically integrated owner operator of all asset classes of real estate in the greater San Francisco Bay Area. As a third-generation single family office, Westlake has been investing in real estate, private equity, and venture capital for the last 53 years. The firm is currently focused on executing niche industrial and multifamily investment theses in west coast markets.

Industrial outdoor storage (IOS) has emerged as a critical component of modern logistics infrastructure and a compelling real estate investment opportunity. Traditionally overlooked in favor of traditional warehouses, the $200 billion sector is increasingly recognized for its strategic importance in last-mile logistics, infrastructure, and fleet management.

$1.7 billion of institutional capital was raised to invest in the sector from H2 2023 – H1 2024. The rapid expansion of e-commerce, shifting global trade patterns, and rising costs in traditional industrial real estate have contributed to the sector’s accelerated growth.

This letter will cover the following:

• What is IOS?

• Who are the tenants?

• Why we think IOS is compelling

• Analyzing a typical deal