How hot is the industrial outdoor storage market today? A new report from Newmark says that rent growth in this sector has increased an impressive 123% since 2020.

That easily outpaces the 58% increase in rent that bulk warehouse product has seen during the same time, according to Newmark’s report, Lots to Gain: Industrial Outdoor Storage Outperforming Bulk Warehouse.

Newmark estimates that there are 1.4 million acres of industrial outdoor storage space across the United States. For reference, that’s an area roughly equivalent to the state of Delaware. Newmark estimates that a conservative estimate of readily tradeable industrial outdoor storage real estate in that footprint signals a $200 billion market capitalization.

The vacancy rate for industrial outdoor storage space, known by its abbreviation of IOS, remains low. Newmark reported that it stood at around 5% as of the middle of 2025. That’s because of both strong demand and a lack of new IOS space.

At the same time, the vacancy rate for bulk warehouse space had risen to slightly more than 8%, another example of IOS space outperforming bulk warehouse.

Don’t expect this trend to change anytime soon, either. In its report, Newmark says that land density and zoning issues are driving more bulk warehouse occupiers to IOS. This is especially true in dense markets such as Chicago, where a lack of available land has pushed rents higher for bulk warehouse space. This has caused some tenants to lease IOS space instead.

Zoning restrictions also frequently make it difficult for developers in denser markets to add bulk warehouse space. Users that can’t find bulk warehouse space in tighter markets might choose IOS as a replacement.

Because of these factors, the number of acquisitions of IOS space by large equity managers is rising. Some examples include Alterra IOS and J.P. Morgan Asset Management’s sale of a $490 million, 51-property IOS portfolio and Realterm’s $277 million portfolio acquisition from Brookfield. Catalyst added to this activity by closing a $163.5 million sale of 18 IOS properties.

During the past five years, the number of IOS properties reported in the National Council of Real Estate Investment Fiduciaries’ Expanded National Property Index more than doubled. Five-year annualized returns in this sector now exceed those of the broader industrial sector by 126 basis points, Newmark said in its report.