Washington Self-Storage Owner Expands Portfolio With Construction-Challenged Conversion Opportunity
|Copyright 2014 by Virgo Publishing.|
|Posted on: 07/21/2011|
By Greg Moore
A Washington lumber company forayed into self-storage and expanded with the conversion of a former beer-distribution warehouse. Though its project was not developed without difficulties, the mill-town star succeeded and went on to build an award-winning facility.
When H.O. Seiffert Co. was established in 1901, it owned and operated one of the largest retail, wholesale-lumber and building-materials businesses in Everett, Wash. The company grew with the mill town, and in 1987, it shifted its focus from lumber to self-storage, building its first development on a portion of its own property. Today that facility consists of 464 units and 43,380 rentable square feet.
In 2002, H.O. Seiffert purchased a downtown building constructed in 1918. It had been converted to self-storage in 1987, with 19,063 rentable square feet over three floors and 292 units. Despite this acquisition, the company felt there was additional demand for storage in the area, and it sought more opportunities.
The company quickly focused on an industrial area on the downtown perimeter. After several months, it found a 48,000-square-foot beer-distribution warehouse that had been vacant for several years. Because there was no onsite parking, several potential sales for manufacturing and warehouse uses fell through. However, the property was zoned properly for self-storage and in a market H.O. Seiffert knew well. The building emerged as a good portfolio candidate.
The Decision to Build (And Bumps Along the Way)
After entering the building through one of its truck-loading bays, the H.O. Seiffert team found it had a clear ceiling height of about 22 feet. They realized a second floor could be added, increasing the square footage to 96,000 gross square feet of heated self-storage. Given these numbers, everyone knew this was a good site for the project. The company closed escrow on the property in September 2007.
Construction drawings were finalized at the end of 2007. Contractors were solicited and permits filed with the City of Everett, all in hopes of executing the storage-conversion plan as quickly as possible.
An early obstacle to development was parking requirements. The property had been fully built out to the boundary on all four sides. Despite improvements to city curb, gutters and sidewalks, which created 11 new parking stalls adjacent to the building, the city still required one interior parking stall per 300 square feet of interior office space. Original plans for a larger retail-oriented office were scrapped for an 850-square-foot version that required only three interior parking spaces.
The team suggested to the city that the proposed interior loading areas were large enough for at least four vehicles and provided the additional required customer parking. This argument was rejected, and the developers were forced to sacrifice three rentable drive-in units for customer parking bays to get plans approved.
Interior demolition on the project began in February 2008, and the construction permit was issued in March of that year. Although the single-story, concrete tilt-up shell was mostly empty, there were still a number of design challenges to overcome, including the many additions that had been made to the building over the years. Obstacles included the need to cut hallways through interior load-bearing walls. Steel-moment frames were constructed and installed to maintain structural stability in these areas where the building was modified.
Petroleum-like compounds were unearthed during the digging of the elevator pits, and the project was immediately red-tagged. Core test samples were done at the limits of the excavations and came back positive, a possible indicator of widespread contamination. After more probing and sampling, it was concluded that further soil removal might jeopardize the structural integrity of the original structure.
With advice from an environmental consultant and attorney, the difficult decision was made to encapsulate the remaining contamination and drill groundwater wells to ensure no contaminants were migrating offsite. Fortunately, additional groundwater-drilling tests indicated a water table below 50 feet in depth. This meant no need for ongoing water-well monitoring and no chance of encapsulated contaminates migrating to neighboring properties.
The general contractor, PugetWest Construction, ultimately removed and disposed of 87.5 tons of environmental contamination from the site. Thousands of dollars later and almost a two-month delay, construction continued and final Environmental Cleanup Reports were completed and submitted to the Washington State Department of Ecology under its Voluntary Cleanup Program.
A restrictive covenant on the deed was necessary to properly record the environmental contamination remaining onsite. This covenant requires notification of the known contamination prior to any digging on the property and full disclosure in the event of any transfer of the property.
It was also discovered portions of the new property were formerly used by the railroad industry. Further investigation revealed that a railroad-switching turnstile once existed where one of the elevator pits was being dug.
Maximizing Existing Features
The H.O. Seiffert team remained focused on the positive, maximizing the site’s net rentable square footage while modifying the existing structure as little as possible. The new second-floor, concrete-deck mezzanine doubled the footprint, but due to seismic restrictions, the exterior walls had to be independent from the new infill structure. The team essentially built a steel box inside the existing building.
Careful consideration was given to the unit-mix plan, which had to complement the Everett urban demographics while matching existing market demand. Working with existing conditions such as full-height interior loading docks with 14-foot exterior panel doors, structural systems and existing utilities proved to be a challenge that offered many opportunities. The integrated design features two 24-by-40-foot covered loading areas, 12 12-by-30-foot exterior drive-up units with automatic door openers, a centralized rental office, skylights, and two split-elevator locations to keep travel distances minimal. The combination of these amenities makes the property easy to manage, but more important, customer-friendly.
A Grand Opening
Everett Downtown Storage was completed in November 2008. The building features 67,740 net rentable square feet with 709 heated units and the following amenities:
While H.O. Seiffert didn’t accomplish its goal of opening in time for the busy summer/fall renting season, the facility’s occupancy has steadily grown, reaching 60 percent to date and averaging 35 new leases per month. Leasing has been slow but steady in a very tough economic time. The urban location has the good fortune of a strong pool of commercial customers. The large drive-up units with automatic doors have rented quickly and are 100 percent occupied.
The company is excited about the ability to draw from new and existing customer bases, and also refers business from its existing stabilized properties. The Everett project has been well-received by the local community and current customers, recently winning a “Neighborhood Friendly Business” award, sponsored by the City of Everett and its Office of Neighborhoods.
Despite significant construction obstacles, H.O. Seiffert Co. was able to increase its portfolio with a converted state-of-the-art storage facility that includes high-end amenities and is embraced by its market.
Greg Moore is principal of Moore Design Associates, formed in 2002 to specialize in self-storage design services. Moore has several years of design experience including high-rise office buildings, retail design and planning, multi-family housing, and institutional design. To reach him, e-mail email@example.com .
Everett Downtown Storage Project Team