The owners of a 78-property U.S. outdoor storage portfolio nabbed a $672M refinancing that their lenders call “the largest ever of its kind.”

Starwood Property Trust and global logistics and infrastructure investor Realterm originated the loan for the sites, which span 33 markets, they announced Tuesday.

Stonemont Financial Group and Cerberus Capital Management own the 830-acre IOS portfolio. The companies partnered in 2021 to build a billion-dollar portfolio of logistics and industrial outdoor storage facilities across the country.

The deal refinances a $486M loan tied to the properties, Bloomberg reported.

Eastdil Secured Savills arranged the transaction.

Starwood Property Trust President Jeffrey DiModica said in a statement that the transaction is an example of the “breadth and depth” of the Miami Beach-based REIT's lending platform. 

Realterm Head of Credit Paul Sisson said the deal “reflects a significant milestone” for its credit platform. 

“Borrowers are continuing to seek lenders with a deep understanding of the industrial real estate and logistics sectors,” Sisson said in a news release. “A transaction of this scale is the ultimate validation of our track record and niche expertise.”

The 1.4 million acres of industrial outdoor storage in the U.S. — a land mass equal to the area of Delaware — is supply-constrained, with low vacancy and little in the pipeline.

The sector had a vacancy rate of 5% as of September, and its rents have increased by 123% since 2020, according to a Newmark report.

IOS hasn’t traditionally been an institutional ownership play, but that is changing, according to Newmark. The report says that over the past five years, the number of these properties at least partially owned by tax-exempt institutions has more than doubled, according to the Council of Real Estate Investment Fiduciaries’ Expanded National Property Index. Returns have significantly outpaced traditional industrial real estate over the same period.

Earlier this year, Brookfield acquired IOS investor Peakstone Realty Trust in a $1.2B deal, and Canadian pension fund La Caisse launched a $360M IOS joint venture with Sagard.