Because legally usable yards are scarce, creating new industrial outdoor storage (IOS) — by entitling and improving raw or underutilized land — can be highly profitable. But development is also where IOS is riskiest, because the value you create lives or dies on getting the use approved. This guide walks the process from raw land to stabilized yard.
Raw land
Development starts with identifying land that can become a yard: industrial or industrially-adjacent parcels in the right location with a realistic path to outdoor-storage entitlement, adequate size and shape, buildable topography, manageable environmental condition, and access to utilities and roads. The art is finding land cheap enough as its current use that, once entitled and improved for IOS, it is worth substantially more — the development spread. Underutilized industrial sites, former industrial uses, and parcels in the path of logistics growth are common starting points, and the same location logic from IOS Site Selection applies.
Entitlements
Entitlement is the crux of IOS development. It means securing the legal right to operate an outdoor-storage yard — confirming or obtaining zoning, winning any required conditional-use or special-exception approvals, and clearing site-plan, screening, traffic, stormwater, and environmental requirements. Because many jurisdictions resist new outdoor storage, entitlement carries real risk of delay, conditions, or denial, and it is often the single largest value-creation step. Developers who can navigate hostile entitlement environments and emerge with a permitted yard create value that is genuinely scarce. Controlling land with options contingent on entitlement, rather than buying outright, is the standard way to manage this risk — and the entitlement landscape is covered in depth in IOS Zoning & Entitlements.
Site work and surfacing
Once entitled, the land must be cleared, graded, and prepared — earthwork, compaction, and shaping the site to drain properly and bear heavy loads. Site work is a major cost and a common source of overruns, especially where soils are poor, the land needs significant cut and fill, or contamination must be addressed, so good geotechnical work up front prevents expensive surprises. Surfacing then converts graded ground into a usable yard, and the choice — gravel, crushed stone, asphalt, or concrete — follows the intended tenants and loads. Surfacing is typically the largest single improvement cost and the one most directly tied to achievable rent; phasing it (stabilizing the whole yard, paving the high-value areas, reserving capital to upgrade as tenants demand) can balance cost against income.
Utilities and security improvements
Development brings power, water, sewer or septic, and telecom to the site as needed for the office, shop, lighting, gates, and security. IOS utility needs are modest compared with buildings, but extending service to a raw parcel can still be costly and slow, so confirm availability during the raw-land and entitlement phases. Fencing, gates, lighting, cameras, and access control then turn graded, surfaced ground into a secure, leasable yard — relatively inexpensive but essential to the product and often required by code for screening.
Leasing strategy
Development is only successful if the yard leases, so leasing strategy should be set early — single-tenant or multi-tenant, net or gross, which tenant segments to target, and at what rents. Some developers pre-lease to an anchor to de-risk the project and secure financing; others build for multi-tenant lease-up to capture higher blended rents. Aligning the surface, layout, security, and entitlement with the target tenant strategy from the outset is what turns a development spread into realized profit. For the capital that funds it, see IOS Financing.
Frequently Asked Questions
Can you build a new IOS facility?
What is the hardest part of IOS development?
How much does it cost to develop an IOS yard?
What is the development spread in IOS?
How do developers reduce IOS entitlement risk?
Developing or entitling an IOS yard?
Carson Jones is a licensed commercial real estate advisor and business broker with eXp Commercial. For land acquisition, entitlement strategy, and connecting developed yards to buyers and tenants, get an experienced read on the opportunity.
Related IOS guides
- The Complete Industrial Outdoor Storage (IOS) Owner's Guide
- IOS Zoning & Entitlements
- IOS Due Diligence
- IOS Financing
Educational only — not legal, tax, engineering, or investment advice. Costs, timelines, and rules vary by jurisdiction and change over time; verify locally and engage qualified professionals. Carson Jones is a licensed commercial real estate advisor with eXp Commercial. Last updated June 19, 2026.
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