*Courtesy of Los Angeles Times - Business Studio (Source Article)
*Image Above: Brandon Bank, Director of Acquisitions & Capital Markets. Rendering of Dedeaux Properties' Truck Terminal at 500-550 S Alameda, Compton. Currently under redevelopment. of Commercial Observ
December 14, 2025
By David Nusbaum, Contributor
Industrial outdoor storage (IOS) has become a buzz word in the last few years as often-overlooked parking and storage areas have increased in demand amid the explosion of e-commerce and the changing way that the supply chain handles logistics and distribution of key goods.
In Southern California, logistics and distribution are an enormous part of the local economy, as 40% of containerized imports to the United States come through the ports of Los Angeles and Long Beach. Much of these containers are transported to local warehouses by truck. Those trucks, as well as the containers and endpoint delivery vehicles, require parking and access to maintenance yards close to their industrial facilities.
“It’s a crucial part of the supply chain,” said Brandon Bank, director of acquisitions and capital markets at Dedeaux Properties, a Los Angeles-based industrial storage developer with a portfolio in excess of 14 million square feet that includes cold storage, cross-dock truck terminals and storage yards. “Overwhelmingly, on the majority of facilities, tenants want more trailer parking. If they lease a warehouse and a yard that’s a half mile away, it’s not efficient.”
IOS is increasingly a necessary component to the successful leasing of warehouse properties. In Compton, Dedeaux broke ground on an 11-acre truck terminal and IOS facility on an 11-acre site in July. Approximately 87% of the properties will be utilized as IOS, which can accommodate 173 trailers and 52 automobiles along with 13 EV charging stations. At another site that Dedeaux owns in Compton, it opted to tear down one of the two buildings at a cross-dock truck terminal to expand the trailer parking by five acres. In the Inland Empire, Dedeaux revised entitlements at a development site to include more trailer parking, which then led to a build-to-suit deal with a large transportation company.
Warehouse Slowdown
During the COVID-19 pandemic, a surge in e-commerce led to strong demand for warehouses from major retailers like Amazon as well as third party logistics companies. There were ships waiting off of the coast and a tremendous need for overflow parking and container storage. That surge in demand supported construction of more than 100 million square feet of new industrial space in Southern California since the beginning of 2021, according to data from Cushman & Wakefield.
During that period, the niche storage yard space evolved into a mainstream asset class that generated significant institutional interest. A conservative estimate of readily tradeable IOS real estate in that footprint signals a $200 billion market capitalization, according to a recent report from Newmark. The report showed that IOS rents increased 123% since 2020, more than twice the rate of bulk warehouses.
Locally, Newmark estimates that there are 52,500 acres available for industrial outdoor storage across Los Angeles and the Inland Empire, which is the largest market in the country. Outdoor storage rental rates are highest in Los Angeles of any market in the country at $336,120 per acre, edging out Northern New Jersey. However, the industrial market has slowed and asking rates have dropped from recent peaks.
“Lease rates and demand for IOS have held up exceptionally well compared to the broader industrial market,” said Ryan Butler, regional managing director with brokerage firm Northmarq. “Many of these properties began with below-market rents. Still, we’ve seen a strong push to reset them to market levels, particularly as owners recognize the value of outside storage land. This has created meaningful opportunities to drive rental growth by capitalizing on that land component.”
Preservation and development of these sites is becoming more challenging under new state regulations that went into effect earlier this year under AB 98. The law sets stricter guidelines for industrial zoning, which indirectly has boosted demand for industrial outdoor storage. With more restrictive zoning and limits on new construction, developers rely more on outdoor storage yards for staging and overflow. Dedeaux relies on its Southern California knowledge-base to understand the intricacies of these developments.
“Out-of-state companies chased sites that weren’t zoned appropriately,” said Dedeaux’s Bank, who touted his firm’s local roots. “We know how to navigate the regulatory issues in areas that are land constrained and supply constrained.”