Institutional Investors Parking Money in Atlanta's Outdoor Storage Market

Zach-Harris-Bisnow

Excerpt of article originally published by Bisnow


WPM Commercial founder Price Muir got a Christmas bonus this year he couldn't have fathomed in his years buying and selling land around Atlanta.

Three days before Christmas, JPMorgan Chase and Realterm Logistics paid Muir $53.5M for 40 acres of industrial land 11 miles south of Downtown Atlanta. A year earlier, Muir, along with other local partners, assembled the site — a vast sea of truck parking called Transport City — and paid just under $10M.

“Basically, we began buying industrial outside storage four years ago at around $200K to $250K an acre,” Muir said. "It's now selling for five times that."

Metro Atlanta has become one of the hottest markets for industrial outdoor storage investors, Stan Johnson Co. Director Zach Harris said during a Bisnow webinar last week, listing Georgia's capital alongside other in-demand markets like Chicago, Dallas, Houston, Kansas City, Philadelphia, New York, Orlando and Phoenix.

Industrial outdoor storage can be any number of property types, but it is largely undeveloped land for truck and trailer parking, maintenance facilities, construction materials storage and other mainly open-air industrial properties. The investors in these properties are evolving from small, often local real estate players to major institutional funds as the subsector of industrial real estate gains popularity across the country.

Experts say there are numerous reasons why the IOS sector has grabbed institutional investor attention. IOS properties typically command higher rents for the actual facilities, if structures are on the properties. They can often be found close to major metropolitan areas and the renewal rates from tenants, which are more likely to stay put than go elsewhere, are higher than for average industrial properties, according to a recent report by Stan Johnson Co.

Despite the demand for IOS, the supply isn't growing. Even though they are fairly cheap to build and maintain, industrial sites close in to major metro areas are often snapped up for more traditional commercial developments.

 

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