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The what, why and how of Industrial Outdoor Storage (IOS)

A reader waking up from a quarter-long slumber on April 1, 2025 would be forgiven for confusing the headlines for an April Fools’ Day prank. They would scan the news and see stories about: • large tariffs alternately announced, rescinded, delayed and reintroduced at a breakneck pace (see LaSalle Macro Quarterly, or LMQ, p. 4);• US equities in correction territory as ex-US markets, including even China’s, outperform (LMQ p. 25); • increasing calls that the risk of a US recession is rising (LMQ p. 20); and • substantial upward revisions in forecasts of long-term European GDP growth (LMQ p. 21).  Each of these is at least partly (and in some cases completely) contrary to expectations from the beginning of this year. But the quick reversal in the economic narrative is no April 1st joke. The post-election consensus of a supercharged US economy pulling ahead of the rest of the world has clearly been challenged, if not upended.  In this period of elevated policy uncertainty, real estate investors should focus on what they can and should do amidst all the noise. At the risk of stating the obvious, we think it helps to take a step back and break down the analysis into three basic steps of incorporating news flow into investment strategy — the what, the so what, and action steps. But as we will discuss, the first two are characterized by so much uncertainty that it is also helpful to start from the end and work backwards, asking: What can investors do to improve their chances of successfully navigating this environment regardless of what happens? Contributors: Brian Klinksiek Global Head of Research and Strategy Petra Blazkova Managing Director, Research and Strategy

Listen in as Dave White and Dominic Silman discuss questions about debt investing in Europe: 0:10-1:37 How have RED opportunities changed in the last few years? 1:38-2:50 How has LaSalle determined where and what to invest in? 2:54-4:21 What does all of this actually mean for investors?

Listen in as Dave White and Brett Ormrod discuss questions about debt investing in Europe: 0:10-1:10 Why do green loans seem to be the exception? 1:12-2:03 How is this affecting the market? 2:05-3:03 How are sponsors and investors responding to these challenges? 3:05-3:45 What does this mean for investors bottom lines? 3:48-4:37 How would you summarise the current opportunity?

The summer and autumn of 2024 saw growing optimism among real estate investors. The belief that the dawn of 2025 would open with sunny skies for the real estate market was driven by falls in interest rates from peak levels, fading economic growth concerns and real estate valuations now more aligned with market transactions. But with more uncertainty creeping into the picture in late 2024, especially around longer-term interest rates, what we see could be described as a “partly cloudy sunrise.” Contributors: Richard Kleinman Americas Head of Research and Strategy Chris Langstaff Canada Head of Research and Strategy

While dawn is universal, across Europe it can appear different from each location and every angle. European real estate is transiting inflection points following a deep capital market correction. The INREV ODCE index shifted in the latest quarter from declines to positive after seven down quarters. Against this backdrop, we share our Impressions of a Rising Cycle in Europe, with a focus on what makes the region different from others across the globe. We also share our five key strategy themes for investors in European real estate for the year ahead. Contributors: Dan Mahoney Europe Head of Research and Strategy Dominic Silman, PhD Europe Head of Debt and Value-add Capital Research and Strategy Petra Blazkova Europe Head of Core and Core-plus Research and Strategy

In the Global chapter of ISA Outlook 2025, we look at how to make the most of this new dawn and the opportunities it may present, but with a watchful eye on ways the new day could go off track. We examine these through four broad themes in this year’s report: the morning sky, the capital stack hangover, the breakfast menu, and the early bird. We examine each of these concepts in turn, and ask what each means for real estate and they intersect with one another and other key trends. Read more at: https://www.lasalle.com/Outlook2025 Contributors: Brian Klinksiek Global Head of Research and Strategy Eduardo Gorab Managing Director, Global Research and Strategy

We regularly receive questions about past property market dislocations and what they might tell us about today, such as: Is office the new retail?, Will the 7+ years it took retail to rebalance be a template for office? and Should we be worried about the wave of supply in US apartments? In our latest ISA Focus report, Rebalancing past and present, we engage in patten recognition across a range of historical episodes of occupier market challenges. We present a framework for how these imbalances tend to be resolved, and discuss the range of structural and cyclical factors that drive rebalancing. We also present a selection of historical case studies from around the world, highlighting the complex nature of the rebalancing process and how it can occur not only at different speeds, but also with “bumps in the road” for investors. Contributors: Brian Klinksiek Global Head of Research and Strategy Chris Psaras Senior Strategist, European Research and Strategy Heidi Hannah Senior Strategist, Americas Research and Strategy Kyra Spotte-Smith Associate, Research

One of the most important factors we consider when deciding where to invest capital is the transparency of a real estate market. This encompasses the transparency of market fundamentals and investment performance, as well as: its legal and regulatory transparency, the prevalence of listed vehicles, the transparency of transactions processes, and the transparency of reporting on sustainability factors. During times of heightened uncertainty, transparency is more important than ever as a foundation that allows real estate occupiers, investors and lenders to operate and make decisions with confidence. Our latest ISA Focus report, Transparency and Strategy, explores these factors and their implications for real estate investors. We release this report alongside the Global Real Estate Transparency Index (GRETI) for 2024. GRETI is a joint publication between LaSalle and our parent company, JLL, which is based on a global survey of our extensive network of real estate market experts. Contributors: Brian Klinksiek Global Head of Research and Strategy Eduardo Gorab Managing Director, Global Research and Strategy

While traditional banks’ appetite for providing commercial real estate loans has declined, other lenders (including investment management firms such as LaSalle) have moved in to fill the funding gap. As a result, we have recently seen increasing interest from institutional investors in real estate debt. But what is it about real estate debt that makes it a compelling investment? As the second largest of the “four quadrants” of real estate, it has a value in the US and Europe alone of approximately US $4.5 trillion, representing an enormous opportunity. Real estate debt historically has produced competitive risk-adjusted returns in addition to showing low correlation to other assets. In our latest research, we examine the three-part case for investment, including: Real estate debt’s place in institutional portfolios, The role of non-bank lending, and The debt opportunity today, which takes advantage of a looming debt funding gap and attractive pricing. Contributors: Brian Klinksiek Global Head of Research and Strategy Dominic Silman , PhD Europe Head of Debt and Value-add Capital Research and Strategy Jen Wichmann Senior Strategist, Research and Strategy Hina Yamada Senior Research Analyst, European Research and Strategy

We published the global chapter of the ISA Outlook 2024 on November 14, 2023, just before euphoria about a potential ‘V’-shaped property market turnaround emerged. Interest rates fell quickly as financial markets priced in several US Federal Reserve (Fed) rate cuts in 2024. For a time, it looked as though our prediction that it would take a little longer for markets to digest a renewed spike in rates would not age well. In this Mid-Year Update, however, we look back to find an outlook with an uncanny resemblance to that of six months ago. This is not because nothing has changed, but because the mood has gone full circle. The landscape remains characterized by interest rate volatility, soft fundamentals in some markets, and gaping quality divides, but also by pockets of considerable strength. Another factor that has not changed is that financial conditions (i.e., interest rates) remain the dominant driver of the market, and that political and geopolitical uncertainties are in focus in many countries. Contributors: Brian Klinksiek Global Head of Research and Strategy Eduardo Gorab Head of Global Portfolio Research and Strategy

Recognition has grown substantially in recent years that climate risk can shape real estate investment outcomes. This owes to an increasing frequency and severity of loss events,1 surging insurance premiums,2 improving data availability and a mounting reporting burden driven by regulations.3 Investors have had to move quickly from acquiring basic climate risk literacy, to sourcing good quality climate risk data, to most recently, leveraging that data into improved investment decisions. There is a clear and rising likelihood that investors on the lagging edge of this process may underperform. At LaSalle, we have sought to share insights from our own climate risk journey, combining that with broader analysis of our industry’s climate risk challenges and opportunities. In 2022, we partnered with the Urban Land Institute (ULI) on a report, How to choose, use, and better understand climate-risk analytics, which addressed the difficulties in selecting and evaluating climate data from an ever-changing and increasingly crowded—and sometimes contradictory—data provider landscape. In April, we released a new report with ULI, Physical Climate Risks and Underwriting Practices in Assets in Portfolios, which looks at how investors are taking these data and seeking to make better-informed buying, selling and portfolio construction decisions based on them.  While the joint ULI report takes an industry-wide view, this ISA Briefing looks at the topic through the lens of LaSalle’s own investment process. We present three case studies of our evaluation of climate risk on a regional, market and asset-level scale. These examples – one each from each of our global investment regions – illuminate how we are taking account of climate risk and lay out our views on issues investors should be thinking about. Contributors: Brian Klinksiek Global Head of Research and Strategy Tobias Lindqvist Strategist, Climate and Carbon Lead Simone Caschili Senior Analytics Strategist Amanda Chiang Senior Research Analyst

Roughly 60% of the world’s population lives in countries facing major elections in 2024, markets representing 65% of the institutional investable real estate universe.1 Elections are, of course, the cornerstone of the democratic process, which in turn underpins the appeal of the most transparent, investable markets; that said, elections come with the possibility of policy changes that may impact returns. Today’s geopolitical risks, whether they be this continuing election super-cycle (see LaSalle Macro Quarterly, or LMQ, page 4), or the various ongoing conflicts and trade disruptions, prompt important questions about how to manage investment risks related to these themes. Contributors: Brian Klinksiek Global Head of Research and Strategy Zuhaib Butt Head of Investment Risk Strategy and Management

Purpose-built student accommodation (PBSA) in Europe ranks as one of our top-conviction sectors for investment in the coming years. No longer deserving of the “niche” label in the United Kingdom, it is already more institutional than any other type of living sectors property in the country and is rapidly maturing in Continental Europe as well. The rise of student accommodation on investors’ buy lists is for good reason. This ISA Briefing will set out why that is so and discuss how the sector stands out in Europe compared with student housing in the rest of the world. Contributors: Brian Klinksiek Global Head of Research and Strategy Ryan Daily Vice President, Strategist Wayne Qin Vice President, Strategist Jen Wichmann Senior Strategist

In the past decade, the urbanization narrative in the United States has shifted from the “rebirth of cities” to the “rise of the suburbs.” What are the drivers of this shift, and how does it impact real estate? In this ISA Briefing, we tackle these questions and share our outlook for how future dynamics could impact migration and urbanization trends. Contributors: Brian Klinksiek Global Head of Research and Strategy Richard Kleinman Americas Head of Research and Strategy Jen Wichmann Senior Strategist, Research and Strategy