Alterra IOS reports outdoor-storage rents up more than 110% since 2020 in the top eight markets

Outdoor-storage permitting is nearly impossible in much of the country

The Wall Street Journal described one of the biggest beneficiaries of the AI boom as an obscure corner of the industrial real-estate business. Will Parker reported that demand for industrial outdoor-storage yards—usually parcels of fewer than 10 acres that can hold construction equipment and materials—is soaring alongside the rapid build-out of data centers.

Parker reported that surging demand for the space is driving up rents, especially in the most in-demand markets near ports on the East Coast and in the South. According to Alterra IOS, rents have risen more than 110% since 2020 across the top eight markets, including Houston; Savannah, Ga.; and Norfolk, Va.

The Wall Street Journal reported that in much of the country, getting new land permitted for outdoor storage is nearly impossible, largely because such sites are overwhelmingly associated with noise and ugliness and are unpopular with local governments and residents. Pasha Johnson, principal of industrial real-estate owner Steel Peak, said, “The municipalities are not really creating any more of this stuff.”

Parker reported that individual storage lots are often small and priced too low to attract direct attention from the biggest investors on Wall Street. The Wall Street Journal described Alterra, Catalyst Investment Partners and Zenith IOS as so-called aggregators picking off dozens of lots from regional firms and mom-and-pop owners to create institutional-grade portfolios.

Manufacturing headcount grows as automation raises skill demands

A separate report in the same Logistics Report issue examined factory employment. Konrad Putzier wrote that the U.S. is adding manufacturing jobs again, but a person seeking one of those jobs might need a college degree. Factories are searching for more highly skilled workers as blue-collar roles increasingly require advanced training in increasingly automated and complex operations.

Swift Coat, a maker of antireflective coated glass for satellites, sits within a broader shift in America’s factory landscape. The company plans to hire two or three workers at its facility in northern Phoenix. All positions require an engineering degree.

U.S. manufacturers increased their head count by 72,000 since December, which Putzier described as a “flicker of hope” after years of declining employment. Putzier wrote that the additions are not the factory jobs of earlier generations because automation has made factory work more complicated. As companies rely more on sensors and data to track machines and spot potential problems, they need analysts to sift through the numbers. Robots also require skilled technicians who can maintain them.

The report’s two industrial developments remain distinct. Surging demand for space is driving up rents in the most in-demand markets near ports on the East Coast and in the South, while new outdoor-storage land is nearly impossible to permit in much of the country. Separately, U.S. manufacturing employment is recovering as factories seek workers with advanced training and technical skills for increasingly automated and complex operations.

A separate item in the same Logistics Report issue included a Sea-Intelligence measure of the share of Asia-Europe ocean-shipping capacity that has returned to Red Sea routes via the Suez Canal.