Turnbridge Equities, a rapidly growing New York City-based developer that has built up offices and hotels in downtown Austin and giant industrial buildings in New York City, is taking its first step into a new commercial asset class.

Turnbridge has acquired a 2.49-acre development site in Los Angeles' South Bay that it plans to develop into industrial outdoor storage, the first of many purchases in the asset class the company expects to make this year.

Turnbridge paid $18.3M for the site at 555 West 189th St. in an off-market transaction, the company announced in a press release. The deal marks the official launch of its “outdoor storage portfolio aggregation” strategy.

“The past several months have been challenging in the capital markets, however, we are proud of our team’s perseverance to successfully close the transaction and we look forward to many more this year,” Turnbridge Managing Director of West Coast Investments Michael Gazzano said in a statement.

The company, which owns some 8M SF of last-mile industrial warehouse spaces in New York, New Jersey and Washington, D.C., is looking for infill sites in dense coastal markets. Turnbridge Vice President of Acquisitions Jack Hechinger said those kinds of sites are insulated from new supply.

The first investment was attractive because it is next to the intersection of three freeways, putting it within an hour's drive of some 14.5 million people, per the release. It is 11 miles from the Port of LA and 11 miles from Los Angeles International Airport.

The industrial outdoor storage market is benefiting from vast amounts of capital at the moment. GreenPoint Partners launched a $500M investment platform to target the sector earlier this month, adding to an approximately $200B market nationwide.

Industrial outdoor storage, or IOS, refers to truck yards, maintenance shops, storage lots for shipping containers, equipment rental and even empty lots near ports.

“It's very attractive to investors,” Marcus & Millichap Senior Vice President and National Director Alan Pontius told Bisnow last month. “And it is perceived to be durable because you don't develop this space. Big, half-a-million SF warehouses are being developed in volume. In many regards, you look at the supply of IOS as being fixed."

Turnbridge was founded in 2015 by Andrew Joblon and has grown since to amass a $2B portfolio, including a large stake on Austin's South Congress Street corridor. It is raising a $500M private equity real estate fund, for which it has raised roughly $293M as of Dec. 13, according to a Securities and Exchange Commission filing.