A New White Paper on Industrial Outdoor Storage
Welcome to The Real Estate Espresso Podcast, your morning shot at what’s new in the world of real estate investing. I’m your host Victor Menasce. On today’s show we’re taking a look at a relatively new product category: Industrial Outdoor Storage. This is something that Y Street has been active in for some time, but the industry and the investment community are slowly waking up and starting to take notice.
A recent white paper from the folks at Green Street is entitled “Industrial Outdoor Storage: A Beautiful Ugly Duckling.” So, on today’s show I’m going to be quoting from their research report and providing some of my own commentary. According to Green Street, IOS is a niche in commercial property that’s grown in popularity among institutions in recent years. It’s part of the broader industrial boom. Investor demand for IOS has been buoyed by strong recent operating results, long-term supply-demand dynamics, and minimal capital investment. Research in this sector is fairly scarce, which can create opportunities.
I couldn’t agree more with Green Street’s opinion. We operate our industrial outdoor storage facilities under the brand Longyards, and we have more opportunities coming up as part of our Storage Fund for you to invest in. If you’re interested in learning more, please check us out at: www.ystreecapital.com.
The report provides a high-level overview of the key fundamental and valuation drivers of the iOS business. Green Street and our team at Y Street Capital believe that IOS sites in infill markets are priced to deliver risk-adjusted returns that are superior to those available in most other commercial real estate investments, including traditional industrial. On a national basis, average risk-adjusted return for commercial real estate is 6.9%, traditional industrial at 7.2%, and infill IOS at 8%. It’s clear that there’s a significant difference in performance between these three different asset classes.
I’m excited about the future of IOS and looking forward to sharing more with you about the opportunities at Y Street Capital. As you think about this, have an incredible rest of your day. Don’t forget to go out there to make great things happen, and I’ll talk to you again tomorrow.
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