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Zenith’s Ben Atkins & JP Morgan’s Ryan Kavanaugh (LinkedIn, iStock)

A new industrial real estate venture is looking beyond warehouses and heading out into the sun.

Zenith IOS and JP Morgan are teaming up to launch a $700 million joint venture targeting industrial outdoor storage, the companies announced Thursday. The venture aims to target urban infill industrial locations in big cities with growing populations.

Brooklyn-based Zenith often targets low-coverage industrial sites, as noted by the Commercial Observer, which first reported the venture. The sites can fulfill owners’ and tenants’ outdoor needs, including parking, container storage, construction supplies, machinery and more.

Ben Atkins, Zenith’s co-founder and CEO, said the company sees industrial outdoor storage “rapidly emerging as a new distinct subset of the industrial asset class.”

Atkins is also founder and president of property investor Abingdon Square Partners.

Ryan Kavanaugh, vice president of real estate in the Americas at JP Morgan Asset Management, pointed to growing need and a tight market for real estate supporting “e-commerce, transportation, logistics, infrastructure and construction.”

“The current supply and demand imbalance for industrial outdoor storage will be exacerbated by the increasing need for these mission-critical properties,” Kavanaugh said.

The joint venture said it is expected to close on more than $125 million in acquisitions by the end of February.

JP Morgan has previously shown interest in industrial real estate. The investment bank in November provided DH Property Holdings with nearly $442 million in financing for a planned 1.3 million-square-foot warehouse development in Brooklyn’s Sunset Park neighborhood.

Industrial remains one of the hottest real estate commodities nationwide. Data released by Savills show asking rents across the country were up 8 percent last year. National vacancy was just 4.4 percent at the end of the year and about 579 million square feet were absorbed in 2021.