SoCal Industrial Outdoor Storage Market Stabilizes as Institutional Investors Target Long Beach and South Bay Yards

Southern California's Industrial Outdoor Storage (IOS) market is emerging from a post-pandemic downturn, with vacancy rates stabilizing and institutional capital flowing back into the sector, according to market commentary published by Voit Real Estate Services on May 13, 2026.

The IOS segment — which encompasses truck and trailer parking yards, pallet and shipping container storage, and related logistics facilities — has attracted renewed attention from institutional investors following a period of sharp rent corrections that began in mid-2022.

Institutional Acquisition Activity Surges

A wave of large-scale acquisitions and fund activity underscores growing investor confidence in the IOS asset class. In February 2026, Brookfield Asset Management announced plans to acquire Peakstone Realty Trust, a REIT focused on IOS properties, for $1.2 billion. Separately, Catalyst Investment Partners closed an oversubscribed $400 million fund targeting IOS assets, with investor demand reported at nearly double that total.

Canadian investment managers La Caisse and Sagard Real Estate launched a joint venture targeting $360 million in IOS acquisitions near major U.S. ports, population centers, and trade infrastructure in infill markets. On the West Coast, Steel Peak Properties, an Encinitas, California-based IOS owner and operator, formed a joint venture with Tarsadia Investments of Newport Beach, with plans to expand its portfolio to $500 million in assets, including $150 million in acquisitions in 2026.

A Q4 2025 report by Partner Valuation Advisors noted that IOS "has evolved from a niche asset class into a strategic investment target for institutional capital," adding that "in 2025, demand surged as e-commerce growth and supply chain resilience strategies drove the need for well-located outdoor storage sites."

Southern California IOS: From Slump to Stabilization

Kevin Fults, Executive Vice President in Voit Real Estate Services' Los Angeles office, said the Southern California IOS market is beginning to recover after a prolonged correction.

"Demand began to collapse by mid-2022, when people realized that the appetite of the consumer is not unlimited," Fults said. "And when people got back out of their houses and stopped spending as much, then the warehouse market took a hit. And since it's directly related to the truck yard market, that also took a hit. With less traffic coming through the system, that market collapsed and probably bottomed out early last year."

During the pandemic, IOS demand surged alongside a 42% spike in e-commerce activity. By mid-2022, vacancy had fallen below 3% — under the historical average — while rents climbed by nearly 30% on average, according to a 2023 CoStar report. Lease rates peaked at $1.25 to $1.50 per square foot before the market reversed course.

Fults noted that logistics operators were caught between high peak rental costs and rapidly falling rates they could charge their own customers. "The trucking and warehousing market is a very day-to-day kind of pricing world," he said. "And the pricing with their customers swings very quickly because it's all very short-term. The leases are obviously more stable, generally 3 to 10 years, so the trucking world — 3PL and warehousing — can get caught short when they swing like they did."

By mid-2025, the market had stabilized, with e-commerce accounting for 16.3% of total retail sales — matching the peak recorded during the Q2 2020 lockdown period, according to the U.S. Census Bureau's Q2 2025 report. Fults said vacancy in Southern California peaked in the first quarter of 2025 and, while it has not significantly decreased, leasing activity "has been steady the last couple of quarters." He noted that several large truck yards have been leased in the South Bay port market, where vacancy stands at approximately 5%.

Current lease rates range from $0.50 to $0.60 per square foot for older properties, with better-quality product leasing for just under $1.00 per square foot — down 30% to 50% from the 2022 peak. "There was overexuberance on the pandemic-era lease rates, and now we're seeing the recovery," Fults said.

EV Charging Infrastructure Emerges as New Demand Driver

A new demand driver is emerging in the SoCal IOS market: electric vehicle charging infrastructure for commercial truck fleets. Fults said early adoption had been limited to small sections of existing yards, but dedicated IOS EV fleet charging deals are now materializing.

"We're seeing the first electric charging deals going down now," Fults said. "Tesla is in the market building out a charging network for their new trucks that they're going to start selling here this year, and other providers are trying to get into the market as well."

Fults recently leased a 63,000-square-foot yard in Long Beach to Tesla, and the company has also secured several properties in the South Bay port area. He cautioned, however, that the build-out timeline is lengthy due to grid constraints. "They've got to upgrade the power dramatically. Generally, truck yards have historically had zero power, and they've got to have the super-heavy power up, which takes a lot of time. It's going to take them almost three years to get the power to the site because of the reality of the limits to the grid," Fults said.

Oil Pricing and Near-Term Headwinds

Despite improving fundamentals, the IOS market faces near-term uncertainty tied to energy costs. Conflict involving Iran and the closure of the Strait of Hormuz has contributed to rising diesel prices — AAA reported California diesel at $7.50 per gallon as of March 4. While truckers typically pass fuel cost increases to customers, the immediate shock is prompting some operators to defer expansion decisions.

Fults said he was in active negotiations with a prospective tenant when the conflict began, and the tenant stepped back due to concerns about fuel costs threatening business viability. "We have an oil shock every few years… so fingers crossed, and hopefully things will get back to normal soon," he said.

Despite the near-term headwinds, Fults recently brokered a renewal of a 467,000-square-foot rail-served industrial outdoor storage site in Compton at $0.67 per square foot. "The market was soft, but their specific needs were very hard to replace. So, they chose to renew at a very solid rate for its location in the Central Los Angeles market," he said. He is also nearing a deal for a 131,000-square-foot truck yard in Compton, which had been marketed at $0.65 per square foot and listed for sale at $115 per square foot — approximately 30% below 2022 peak values.

"We're starting to see recovery," Fults said. "I wouldn't say we're going to see significant price pressure, but it sneaks up on us every cycle. Right now, every deal is a fantastic deal that's going down in the truck yard and IOS world. And if all of a sudden it does swing, I can see that we'll get to that point where we'll have a limited number of options and people fire up again."

Supply constraints remain a structural feature of the IOS market, as municipalities limit by-right zoning for outdoor storage sites due to lower tax revenue generation, limited job creation, and increased traffic. Partner Valuation Advisors cited scarcity of zoned land and entitlement hurdles as primary drivers of sustained investment demand, with rent growth expected to continue in 2026.