Triten Real Estate Partners, Principal Asset Management Form Joint Venture to Recapitalize 17-Property IOS Portfolio
Triten Real Estate Partners has closed a joint venture with Principal Asset Management, on behalf of a large U.S. public pension fund, to recapitalize a 17-property industrial outdoor storage (IOS) portfolio spanning five major U.S. logistics markets. Principal acquired TPG AG's interest in the portfolio, while Triten maintained an ownership stake and will continue to serve as the operating partner overseeing leasing, asset management and execution of the portfolio's broader business plan.
The portfolio comprises approximately 120 acres and 340,000 square feet of improvements across strategic logistics corridors in Atlanta, Houston, Dallas-Fort Worth, Kansas City, Mo., and Miami. The assets are leased to a diverse tenant base supporting logistics, transportation, equipment rental and distribution operations.
Portfolio Structure and Transaction Details
The transaction represents a recapitalization rather than a full platform sale, allowing Principal Asset Management to obtain scaled exposure to the IOS sector while Triten preserves ownership and operating control. TPG AG continues to own other IOS assets alongside Triten outside of this 17-property portfolio, meaning the transaction is a portfolio-level realization and not a complete separation between the two firms.
The 17-property portfolio averages approximately 7.1 acres of land and 20,000 square feet of improvements per asset. Properties are positioned across infill locations within major logistics corridors, where supply is constrained by zoning and entitlement restrictions and by the ongoing redevelopment of industrial land for alternative uses.
"This collaboration marks a major milestone for Triten and reflects the growing institutional conviction behind both our platform and the IOS sector," said Scott Arnoldy, founder and CEO of Triten Real Estate Partners. "We've spent the past several years building a portfolio of infill assets in some of the country's most important logistics corridors, sites that are hard to find and even harder to replicate. Working with Principal Asset Management allows us to stay invested and continue operating the platform we built while leaning into the long-term demand we're seeing across IOS."
Zach Dobin, portfolio manager for Triten's Industrial Platform, emphasized the firm's familiarity with the assets and its commitment to remaining invested. "We know these assets, their tenants and their markets extremely well, and we still see meaningful runway within the portfolio," Dobin said. "Staying invested was important to us. With Principal Asset Management, we have a collaborator who shares our conviction in the sector and gives us the opportunity to continue building on what we've already created."
Principal Asset Management and TPG AG Perspectives
Devin Chen, head of private equity portfolio management at Principal Asset Management, said the transaction advances the firm's strategy of expanding into specialized industrial sectors. "This transaction represents another step in expanding the real estate portfolio for Principal Asset Management into specialized industrial sectors supported by favorable long-term fundamentals and growing institutional adoption," Chen said. "The portfolio provides immediate scale across strategically important logistics markets and enhances our exposure to the industrial outdoor storage sector, while Triten's proven operating expertise positions us to create value for the client through active asset management and continued sector maturation."
Matt Lazar, managing director at TPG AG, described the transaction as a realization of the firm's IOS strategy. "In partnership with Triten, we assembled a scaled portfolio of well-located IOS assets in markets where supply is inherently constrained. This transaction represents an important realization for our IOS strategy," Lazar said. "The growth of the portfolio and the institutional interest it has attracted validate the success of our joint venture and demonstrate the strength of Triten's execution. We're proud of what we built together and believe the portfolio is well positioned for its next phase of growth."
IOS Market Conditions Drive Institutional Interest
Industrial outdoor storage has emerged as one of commercial real estate's most sought-after niche asset classes, driven by rising demand from logistics operators, transportation companies, equipment rental firms and contractors seeking strategically located, yard-intensive properties. New supply remains constrained due to entitlement challenges and the continued redevelopment of industrial land for alternative uses.
Stabilized institutional-quality IOS assets in primary markets are currently quoted at roughly 6.00% to 6.75% cap rates, while secondary-market assets generally fall in the 6.75% to 7.75% range. IOS vacancy in primary markets is estimated at approximately 4% to 6%, with fully improved, paved and secured sites in leading metros sometimes running below 4%. Annual new IOS supply deliveries are estimated at less than 2% of existing inventory, a figure constrained largely by zoning and entitlement restrictions.
IOS rents increased approximately 8% to 10% in 2024 and 7% to 9% in 2025, with 2026 growth projected in the 6% to 8% range. Primary-market rents are estimated at approximately $5,000 to $15,000 per acre per month, with Dallas-Fort Worth near the high end of that range. The sector also offers a yield premium to conventional industrial, with IOS cap rates generally estimated at 25 to 75 basis points above comparable industrial assets, though that spread has narrowed as institutional capital has entered the sector.
Triten manages more than 3 million square feet across acquisitions and development and supports more than 350 tenants nationally, a scale materially larger than the 340,000 square feet of improvements in the recapitalized portfolio. The firm and TPG AG have also used portfolio-level financing strategies in the IOS sector, including a $150 million loan secured by a 29-property IOS portfolio completed in June 2025 and a $100 million loan from Truist Bank secured by a 19-asset IOS portfolio in a separate 2025 refinancing.
Outlook for the Portfolio
With Triten remaining as operating partner, the portfolio is positioned to pursue continued leasing activity, rental growth and long-term value creation across its five-market footprint.
Triten Real Estate Partners is a Houston-based real estate investment, development and operating firm. Principal Asset Management acted on behalf of a large U.S. public pension fund in the transaction.
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