Barriers to entry aren’t just buzz words, it’s real when it comes to industrial outdoor storage.
Industrial Outdoor Storage (IOS) isn’t hard because of construction costs or competition. It’s hard because, in most major markets, you simply can’t build it anymore.
Across the country, municipalities are tightening restrictions on outdoor storage. Community opposition, environmental concerns, and competing land uses have pushed IOS to the fringes of what’s allowed, especially near population centers where demand is strongest. The result? Existing, well-located IOS sites are becoming increasingly irreplaceable.
Sacramento is a perfect example. As a major logistics and distribution hub for Northern California, demand for IOS is driven by construction, utilities, transportation, and infrastructure-related users. Yet zoning that permits outdoor storage is extremely limited and new entitlements are nearly impossible to secure. In many submarkets, there are effectively no viable alternatives for tenants that need outdoor space.
That’s why we’re excited about IOS in infill markets like Sacramento where Westlake Realty Group closed our first deal last December and continue to have a robust pipeline. It’s not just about the location or the tenant demand… it’s about scarcity. When zoning creates a hard stop on new supply, existing assets benefit from pricing power, long-term relevance, and durable cash flow.
In IOS, zoning isn’t a footnote in the underwriting. It is a critical part of the investment thesis.
And in markets like Sacramento, where “you can’t build another one,” that moat matters more than ever. Feel free to reach out if investing in IOS is of interest, always happy to chat.
When You Can’t Build More, Scarcity Becomes the Moat
