Data centers are turning truck yards into a land trade

Realterm and Starwood Property Trust refinanced a 78-property industrial outdoor storage portfolio in August, 830 acres spread across 33 U.S. markets, at $672 million, which Bisnow reported as a record for the asset class. Deals that size are routine in apartments, grocery-anchored retail, and big-box warehouses, but in truck yards and heavy-equipment depots they are new, and the reason sits in the tenant demand underneath the dirt.

The traditional IOS tenant is a trucking company, and trucking is working through a prolonged contraction, squeezed by a driver shortage and high diesel prices that cut into carrier margins. What keeps capital at the table anyway is construction. Data center developers lease IOS lots for staging and to store heavy equipment and building materials, activity that now makes up roughly 20 percent of new demand for the space, according to Max Heiden, co-founder and partner at Catalyst Investment Partners. Google and Microsoft have also invested in IOS sites to advance their data center buildouts, per the same report.

The capital base has widened to match. Institutional money now supplies 45 percent of investment in the sector, up from 30 percent four years earlier, according to Matthews' latest report, and IOS investment reached $14 billion to $16 billion in 2025, a 15 percent increase over the prior year by Matthews' count. Heiden expects twice as many portfolio sales this year as last, and forecasts new records in deal size as buyers pursue whole portfolios rather than single sites.

The fundamentals are tight. Nationwide IOS rents reached $11.07 per square foot per month in the second quarter, a 1.6 percent year-over-year rise, and vacancy sat at 3.6 percent against 6.5 percent for industrial property generally, according to CBRE's Q2 IOS report. A 1.6 percent rent gain barely tracks expense growth, which leaves the 3.6 percent vacancy as the part of the story an underwriter can defend.

The buyer list shows the shift. Small regional banks, CMBS lenders, and private capital have all grown comfortable with IOS, according to Heiden, and core-plus capital — a lower-return buyer than the opportunistic funds that first seeded the space — has started to arrive, per Blake Rodgers, a principal at Steel Peak, which acquires and manages IOS property. Clarion Partners, with $73.7 billion in regulatory assets under management, funded a 2.3 million-square-foot IOS portfolio in March 2025; Stockbridge Partners invested in a Texas portfolio in October; and Apex IOS, backed by Clarion, moved early this year to acquire property in Jacksonville, Bisnow reported. "There's been a ton of recent trades in the last year," Rodgers said. "That flywheel is moving faster."

Maturation brings more capital, which brings larger deals, which brings more capital. Matt Hunsucker, founder of the IOS List newsletter, described the pattern to Bisnow as "more institutionalization of the space in general as more people realize the investment thesis is sound."

The thesis being capitalized at those prices is not the thesis that built IOS. Truck yards draw their rent from carriers, and the carriers are contracting. Data center developers do not sign the lease a trucking company signs; they take space for staging during construction, a use that ends when the buildout ends. If a fifth of new demand is construction-cycle demand, the marginal buyer in this market is underwriting the land's next use rather than the income in place today. That is an inference, but it is the reading that reconciles record prices with 1.6 percent rent growth.

The record transaction fits it. An 830-acre portfolio across 33 markets is less a rent roll than a set of land positions inside the country's most active industrial construction geography. As this publication has argued, power — not land — is what prices a data center site today; the IOS version of that position is that the lots worth a premium sit within the staging radius of energized projects, and the ones beyond it are truck yards with a more institutional owner.

It also cuts against the trade this publication flagged when the cheap-buying window closed — that value gets made on the income statement rather than at the exit. IOS buyers are running the opposite play, paying for land optionality while the in-place income comes from an industry in retreat. The bet works only if the data center buildout outlasts the trucking cycle and the land sits close enough to the construction to be repriced by it.

The bull case is not thin. Chronic undersupply of IOS lots is why investors will pay up at all, and 3.6 percent national vacancy in a country that keeps adding warehouses and data centers is a landlord's market. Institutional capital's climb from 30 to 45 percent of a $14 billion to $16 billion market is real demand, and Heiden's forecast of twice as many portfolio sales this year may well prove right.

The variable to watch is the construction calendar. Staging demand expires on a schedule the carrier market does not share, and Heiden's expected doubling of portfolio volume would price a full construction cycle into a single year of trades. Realterm's 830 acres across 33 markets spread that risk around. A single-market portfolio bought at a record does not.