|Copyright 2014 by Virgo Publishing.|
|By: Rex W. Young|
|Posted on: 10/01/2001|
Vehicle StorageA profit-making opportunity
By Rex W. Young
There has been a great deal written in the past few years about boat and RV storage, but often the reader is left with more questions than answers. There is a good reason for this. The vehicle-storage business is like the self-storage business was 30 years ago in its sophistication. Once, an open dirt field with a fence around it was the norm. That is changing and will continue to change as the vehicle-storage industry evolves, just as the self-storage industry did.
If you are looking to expand your self-storage facility to include vehicle storage, you should have a good feel for the demand as indicated by your customers. If this is not the case, the first thing you need to do is determine if there is a need for this type of storage in your area. If there are no other storage facilities (including dirt fields) offering vehicle storage, that may be a pretty good indication that a demand has not made itself evident.
The development-radius concept of one facility every three to five miles does not apply to vehicle storage--in this case, the radius is usually about 10 miles. One of the quickest ways to determine need is to use your Yellow Pages and check how many RV, boat and trailer dealers--as well as their counterpart service facilities--exist and where they are generally located. This information will be very useful when it comes time for choosing a site location.
Look up city ordinances to see if they restrict on- and off-street parking of recreational vehicles. Check also to see how many retired persons live in the area, as they are the ones with the highest percentage of RVs, fifth-wheel vehicles and trailers. Break down the demographics and study them closely. Finally, listen to your "gut feeling," as this can sometimes be the best indicator of all. Remember, there are not yet any "books" of answers regarding vehicle storage.
Definition of 'Vehicle'
At my facility, we choose to define a vehicle as "anything on wheels or that can be put on wheels that needs to be stored." The individual/consumer side of the vehicle-storage business includes RVs, boats, fifth-wheel vehicles, trailers, pop-up camping trailers, box trailers and automobiles. On the commercial side, it will include small cranes, commercial trucks of any nature, landscape trailers, 45-foot construction trailers, church buses and small business vans, etc. We have stored an Indy racing team's support vehicles as well as a TV satellite truck. These are examples of some nontraditional vehicles that require storage.
There are three basic development choices: expansion of an existing self-storage facility, a new self- and vehicle-storage facility, or a stand-alone vehicle-storage facility. Whether we are discussing the integration of 300 to 350 vehicle spaces into an existing self-storage facility or the construction of a 550-space vehicle-storage facility, the project will require a minimum of five acres for expansion or 10 acres for stand-alone vehicle storage.
Operating a first-class facility requires that it be paved and offer at least some covered parking for all the lengths of vehicles you will store. A simple answer is to provide 50 percent covered and 50 percent uncovered spaces, but each market has its own demand. One advantage of vehicle storage is you can paint over your "mistakes" or adjust to your customers' changing needs. At our facility, we repainted the 40-foot covered spaces twice to provide more width until we had something that worked. We repainted all the uncovered 35-foot spaces from 90-degree angles to 45 degrees. We lost spaces, but gained paying customers because the aisles were widened.
You should include, as a minimum, a free dump station, 24-hour-a-day, seven-day-a-week access, separate ingress and egress gates for the vehicle area from the self-storage area, night-patrol security, TV surveillance with a recorder on at least all gates, excellent lighting, and electrical outlets on the poles of the covered parking for keeping batteries charged. Other amenities may include a wash rack or special vehicle services, but first check your liability and its costs. Our philosophy is that we are in the vehicle-storage business, not the service business.
Finally, if you design your canopies to extend more than 5,000 square feet, most cities will require you to include fire sprinklers. A loop fire line with hydrants and retention basins may also be required. Check with your local fire marshal.
Location, Location, Location
This is one of the most-used expressions in real estate development. At the same time, it is the least understood. For our purposes, "location" consists of accessibility, visibility and market area. All three are necessary in order to be successful.
Accessibility. Your customers must be able to easily enter and exit your facility. Remember, they are driving 45-foot vehicles or larger. You must also have accessibility to a freeway, state highway or other major traffic artery that leads to recreational areas such as lakes, ocean marinas, camping sites, etc.
Visibility. If they cannot see or easily find you, potential customers will not store with you. Street signage is extremely important. Visibility can also be achieved through advertising in the Yellow Pages with a clear map in all the listings, i.e., household storage, RV storage, boat storage, trailer storage and so on. Cold call all the RV, boat and trailer sellers or service facilities in your area and leave them with your information.
Market area. We discussed this previously, but there are always additional ideas to explore. For example, look for new home subdivisions and see if they ban outside vehicle storage in their CC&Rs. This is also an excellent place to provide information to home builders so they can easily answer their customers' questions about where to store their "toys."
Check with your city's planning department to determine the type of zoning required for your facility and with the building department to find out about building codes and retention requirements. Now comes the biggest restraint: price. We have found that $1.75 to $2 per square foot is the maximum you can pay or allocate for vehicle storage in order for economic viability to exist. Before you start yelling that there is no land available for that price, get in your car and start driving through the general area where you wish to locate your facility. Take an aerial map to assist you. There are usually sites tucked away that have been leaped over by development or have unusual configurations. The sites exist--you just have to find them.
Whether it is a combination or stand-alone facility, you must determine your mix of space sizes and widths, isle widths, canopy locations, sun orientation, and ingress/egress gates. Remember: A 30-foot fifth-wheel vehicle or trailer is really 40-feet-plus with the hauling vehicle when you consider the turning radius and space needed for backing into a space.
A Worthwhile Investment?
I have intentionally avoided discussion of the economic feasibility or costs of this type of facility because there are just too many variables involved to make broad generalizations. However, proceed with caution. The final economic viability of a project will depend completely on your county assessor. In our case, property taxes jumped from $20,000 to $70,000 per year because our land is zoned industrial and there were some prime pieces of real estate in the area selling for $4 per square foot. The assessor also treated our 70,000 square feet of canopies as buildings. We have filed suit against the assessor to reduce our valuation, the outcome of which will determine our project's feasibility. Find out before you begin how your local assessor will value your project to ensure the best financial success.
Rex Young has more than 30 years of experience in commercial development, 11 years in the self-storage industry and five years in the development of vehicle-storage facilities. His entities own and control a total of 1,641 vehicle-storage spaces, 642 of which are covered. He operates out of Gilbert, Ariz.