The Baker House Newsletter Issue I
Hidden in Plain Site
The most overlooked real estate in America is the yard you drive past every day. Institutional money just started noticing.
THE LEAD
The Yard at the Edge of Town
Drive past the edge of any American town and you will pass it without looking: a fenced gravel yard where a contractor parks trucks, stages equipment, and stores containers. No sign, no lobby, usually a local owner who has held it for decades. Nobody calls it real estate. It might be the most interesting property on the road.
The idea is simple. The real estate everyone studies, apartments, warehouses, shopping centers, is priced by thousands of professionals reading the same reports. Plain, overlooked property with local owners and no data trail is where mispricing still lives. The plainest category of all now has an industry name: industrial outdoor storage, or IOS. It means exactly that yard.
The yard looks like nothing. It is scarce. Towns rarely zone new ones, because nobody campaigns for more truck yards. The businesses that use them cannot operate without them and need them close to customers. Rents in the category have climbed 123 percent since 2020, per Yardi. Scarce, needed, and cheap to maintain: an income-producing property wearing work clothes.
KEEP READING
The rest of this issue is yours for an email
Enter your email to finish reading — and get each new issue the morning it goes out. Free, and one issue a week.
No pitch. Unsubscribe whenever you like.
THE TURN
The lesson underneath: labels hide the scarce resource. A gravel yard is not land with trucks on it. It is entitled outdoor storage near customers, in a town that will never approve another one. A data center is not a big building. It is access to power, and power is the thing nobody can get. A marina is not waterfront. It is a fixed number of permitted slips no amount of money can add to. The market prices the label until someone makes it price the scarcity.
The value is not buried. It is filed under the wrong label.
THE FRAME
One Property, Two Ways to See It
Seeing differently is not enough. A fashionable trade and a mispriced market look identical from a distance, and the early discount in IOS has already narrowed as funds compete for the same yards. Before believing any niche is an opportunity, run six questions:
1. Is the demand durable, or this year's fashion. 2. Is supply blocked by something structural, like zoning or power, that money cannot manufacture. 3. Would the tenant struggle to replace the location. 4. Is ownership fragmented, so you can still negotiate with a person instead of an auction. 5. Can the income improve without heroic assumptions. 6. Does the price still reflect the old label, or has the new one already been paid for.
| WHAT THE MARKET SEES | WHAT THE BUILDER SEES |
|---|---|
| A gravel lot with trucks | Entitled outdoor storage near customers |
| A big industrial building | Locked-in power and fiber |
| A dock and some boats | A fixed count of permitted slips |
THE WIRE
The Big Money Starts Arriving
The play, in one sentence: local owners sell one yard at a time, operators assemble the yards into portfolios, and the biggest funds pay a premium for the portfolios whole, because a billion dollars cannot be put to work two acres at a time. Watch it run:
The top of the chain. In February, Brookfield agreed to buy Peakstone Realty Trust for roughly $1.2 billion in cash, a 34 percent premium. Sixty of its 76 properties are IOS yards. Peakstone had run the same play one level down, buying a 51-property portfolio for $490 million in late 2024. Fifteen months later the whole company sold at that premium. The check was written for assembled scale.
The middle. Stockbridge's niche logistics fund completed a buyout this year valuing one IOS portfolio near $900 million: 58 yards across 18 markets, mostly bought one at a time from local owners. The assembly is the value creation.
The fuel. Catalyst, a firm that buys only IOS, closed a $400 million fund this year, oversubscribed in seven months. Blackstone's real estate debt arm is past $1.1 billion in loans to the sector. The lenders are financing the assemblers.
The label is already mutating. The newest sub-category is EIOS, electrified industrial outdoor storage: the same yards with heavy electrical capacity, repriced as charging depots for electric and autonomous fleets. JLL finds such sites command up to 49 percent higher rents than typical industrial in markets like Silicon Valley. The question to ask about any yard is no longer just the zoning. It is the size of the power feed.
It is early days, but institutional interest is starting to arrive, and the chain is missing its bottom rung in most towns. Somebody has to buy the first yard from the retiring contractor. The funds cannot. The assemblers pay whoever does. That part does not require a billion dollars. It requires looking at the edge of your own town before everyone else does.
OFFICE HOURS
Which niches have real structural advantages, which are already crowded, and how to spot mispriced property in your own town: Richard takes questions on all of it every Wednesday at 2pm ET in his free office hours. No slides, no pitch. He answers whatever attendees ask, live, for an hour. If this issue raised a question for you, bring it.
SOURCES
- Brookfield and Peakstone Realty Trust joint announcement and SEC merger filing, February 2, 2026. Yardi rent data via Commercial Search, February 2026; CoStar News, February 2026. Stockbridge Capital Group announcement, February 2026; Catalyst Investment Partners announcements, February and June 2026; CoStar News, June 2026, Blackstone Real Estate Debt Strategies lending. Commercial Observer, March 2026, and JLL data via CRE Daily, electrified industrial outdoor storage.
- BAKER HOUSE · 1921
- You are receiving this because you signed up at bakerhouse1921.com. Unsubscribe .
- Baker House
- 745 5th Avenue United States of America
- You received this email because you signed up on our website or made a purchase from us.