A surge of capital and rapid expansion has been driving the industrial outdoor storage market. Still, Colliers said in its most recent IOS market report that investors should beware that rushed decisions could lead to distress.
The report said zoning is the sector’s most significant barrier to entry, impacting both current use and future leasing potential. Aggregators pursuing volume for eventual recapitalization could underestimate zoning risks and create challenges. In addition, investors must consider how tax reassessments and insurance costs may affect projected rents, particularly in Florida and California.
“Despite the sector’s continued strong performance, thorough due diligence remains essential in all aspects of potential investments,” said Colliers.
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