Triten and TPG Angelo Gordon Plan $1B Investment in IOS Assets

Investors are turning scrap yards and dirt lots into valuable industrial outdoor storage (IOS) assets to tackle the commercial parking shortage.
  • Triten Real Estate Partners and TPG Angelo Gordon aim to acquire over $1B in IOS assets over the next five years, expanding their 2020 JV.
  • The JV has already acquired over $500M in IOS assets across 16 markets, highlighting the asset’s long-term investment potential.
  • The historically fragmented IOS market presents a lucrative opportunity amid rising commercial parking demands.
Key Takeaways

Triten Real Estate Partners and TPG Angelo Gordon have announced plans to acquire over $1B in additional industrial outdoor storage (IOS) assets over the next five years, as reported on Globest. 

Investment History

This move greatly expands their initial joint venture formed in 2020. The firms aim to build an extensive IOS portfolio to address the nationwide commercial parking shortage.

Since its inception, the joint venture has purchased an average of 18 properties annually, amassing more than $500M in IOS assets across 16 markets. Matt Lazar, managing director for TPG Angelo Gordon, emphasized the pair’s long-term commitment to IOS as a valuable asset class.

Market Potential

According to Scott Arnoldy, founding partner at Triten, the IOS market has traditionally been fragmented, offering a prime opportunity for consolidation into a high-yield portfolio with minimal capital expenditure. 

A Marcus & Millichap industrial investment forecast reports that institutions have raised over $2B to acquire IOS properties as of March 2024, underscoring their appeal amid high interest rates.

Growth Drivers

A significant driver of IOS market growth is the shortfall in commercial parking, with 900 light-duty trucks registered per commercial parking spot back in 2019. An 85% surge in online retail sales has upped the number of trucks on the road even further, boosting commercial parking demand. 

Trucking congestion, which caused an estimated $95B in 2021 losses, has further spurred demand for cost-effective parking solutions.

Why It Matters

Despite its attractiveness to tenants, IOS supply remains limited, with new properties being scarce. Strategic IOS sites are often located along residential, commercial, and heavy industrial corridors, where zoning authorities usually favor more traditional property developments.

Supply constraints have led investors to repurpose dirt lots into sophisticated commercial parking and storage solutions. The pandemic also shifted the perception of IOS facilities from basic scrap yards to multifaceted service properties meeting the needs of various commercial fleet operators.

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