Dayton Street Partners (DSP), a Chicago-based real estate investment and development firm, recently acquired a nearly eight-acre trailer parking and storage facility in Chicago. The site offers direct access to I-55. DSP has begun renovating the property after it razed two existing structures to make way for 237 truck trailer stalls. When complete, the facility will be fully lit and fenced with a motorized gate.

“These well-located properties that offer above-standard fleet parking are critical for today’s industrial users,” says Howard Wedren, founder and managing principal of DSP, which owns 30 assets valued more than $300 million.

In September, brokerage Stan Johnson CO. published a report detailing industrial outdoor storage (IOS) as an emerging asset class within today’s industrial market. According to Stan Johnson, IOS properties often command higher rent per square foot than traditional industrial buildings due to the additional value that tenants derive from the outdoor storage component. There is also a limited supply of the asset type, which results in residual values being greater than traditional industrial properties.

“Properties that can accommodate these unique storage requirements are incredibly attractive to tenants in the fields of equipment rental, trucking, building materials, shipping container, chemical, auto/vehicle parking, energy and waste and environmental services, among others,” reports Stan Johnson.

IOS facilities make up one of the three platforms within DSP’s investment strategy. The other two are value-add buildings and ground-up speculative developments.

“The pandemic has only fueled the need for well-located logistics real estate,” Says Wedren. “We are aggressively acquiring land for development in the Southeast, Texas and our backyard here in Chicago and Northwest Indiana.”

Retail spending in the fourth quarter of 2021 was 15 percent above pre-pandemic forecasts, according to Newmark. Thus, space to produce, warehouse and distribute goods has been in high demand as firms race to keep up with consumption.

DSP purchased 42 acres in the Northwest Indiana town of Portage with plans to build a 538,000-square-foot speculative industrial development known as DSP Crossroads Portage. According to Wedren, each speculative development that DSP builds is sold upon stabilization. The typical hold period is one to three years.

In Morton Grove, Illinois, about 16 miles northwest of Chicago, DSP recently sold a 208,000-square-foot distribution center. DSP acquired the asset in 2016 and updated its facade, repaved the parking lots, installed a new roof and added new signage. Brookfield Property Group purchased the building, which at the time of sale was fully leased to five tenants.