Two weeks ago I had the opportunity to take the ferry over to Liberty State Park in Jersey City to attend the Bisnow National IOS Conference. There were two panels: IOS Capital Markets-Debt, Equity and Everything In Between: How the Capital Stack Is Evolving as IOS Moves to Institutional Asset Class followed by a panel focused on Investment & Asset Management Strategies. The 11 panelists included lenders, brokers and operators from some of the best groups in the sector including few familiar faces onstage from some firms that I have done business with or been on calls with over the years. I will touch on a couple key takeaways in the lending and valuation space as well as leasing and asset management perspectives as well as an emerging sustainable transporation trend to keep an eye out for.
Capital Markets Highlights
In 2025 a lot of the lending for IOS property was driven by debt funds, in 2026 we are starting to see more appetite from life insurance companies and super regional banks. Key Bank (an event sponsor) stated they have done $450 million of lending in the sector which is another sign of the maturation of the asset class. Also on that note, in 2025, Realterm launched the inaugural Realterm Logistics Credit Fund (RLCF) a $350 million vehicle.
There is more capital available for smaller deals and on larger portfolios there could be between 8-10 bidders. If assembling a portfolio, you want to have a diversity of IOS subtypes for exposure to different tenant industries and better liquidity. Large laydown yards are one of the IOS subtypes that are getting kicked out of portfolios. In addition, truck terminals are also falling out of favor until there is more demand from the transportation sector as the YRC bankruptcy is still fresh in many investors memory.
On valuations, Class B industrial product is often 0.25-0.50 basis points wider than Class A prices. IOS is another 0.25-0.50 bps wider than Class B but IOS cap rates are compressing and there are occasionally some sub-6% cap deals getting done.
Asset management and leasing considerations.
Investors are still cautious in port markets like Savannah and LA which are seeing volatility from a couple different angles. There continues to be frontloading of imports followed by a seasonal slowdown and the uncertainty around tariffs and trade dynamics out of Washington is causing headaches. Fluctuating cargo volumes are keeping some container stacking, chassis depot and drayage providers on the sidelines and as a result some of the port-adjacent laydown yards are seeing slower leasing velocity in the New Jersey market.
For aggregators and operators, having a strong local presence/ regional investment strategy is key as it helps to have familiarity with the nuances of zoning jurisdictions, especially in the Northeast. Aggregators are still benefitting from the fact that the IOS market is an inefficient marketplace with limited data points which can make statistical analysis on the markets challenging. Data transparency is key for IOS and having an internal comp database is a strategic advantage for acquisitions and leasing.
New trends on the horizon.
A new trend I heard mentioned was “E-IOS” representing “electrified” properties with upgraded power capacity to be utilized for EV fleet charging use. This could be a new tenant vertical although at this point there are really only a few users such as Amazon, Tesla, Uber Freight and a handful of LTLs and regional operators who can utilize these sites. In my experience, I have only seen Prologis roll out this out in Newark, NJ and Vernon, CA. The bottleneck is often still on the grid connectivity side and then it ultimately comes down to making an investment decision on whether or not to pay to upgrade the utility infrastructure to the site if there is not a deep pool of users requiring this power as a site amenity.
For more info on two of McGowan’s IOS availabilities check out 3400 S Christopher Columbus Blvd, Philadelphia and 111 E 13th Street Chester, PA.
Chad Buch is a commercial real estate market research and brokerage professional with 14 years of industrial sector experience spanning tenant representation, agency leasing, and investment sales. He currently serves as US Manager for Industrial/Supply Chain & Logistics Market Intelligence at Avison Young and previously spent a decade at JLL in Chicago, where he co-led the industrial research platform covering more than 1.3 billion square feet of inventory. He is licensed in both Illinois and Connecticut. Chad can be reached at cgbuch@gmail.com or 919-270-3162.
