The Inside Scoop on Outdoor Storage: The Evolution of the Equipment Rental Market

Key Takeaways

• The IOS market is undergoing a pivotal transformation, driven by rising capital and rapid expansion. However, rushed investments could lead to potential distress, with zoning regulations remaining the primary barrier to entry.
  
  
• The equipment rental sector has become a common entry point for IOS investors, with revenue trends closely following construction spending patterns. The industry remains highly fragmented, and major companies are aggressively acquiring smaller competitors.
  
  
• Companies are strategically expanding in high-growth population areas, particularly in the Sunbelt region, while limiting their presence in the Midwest.
• In the recent acquisition battle for H&E Equipment Services, Herc appears better positioned than United Rentals due to less location overlap.

In the previous installment of our outdoor storage series, we explored the definition of industrial outdoor storage (IOS) and highlighted key macro trends shaping this niche property type. This edition will focus on the equipment rental market, which has been making headlines recently with the impending sale of H&E Equipment Services.

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RSK: A good primer and state of the state of Industrial Outdoor Storage (IOS).