March 1, 1998

7 Min Read
Retrofit

By Cecile Blaine

Self-storage facility developers used to ask themselves whenit made financial sense to offer climate control. Today, they askthemselves when doesn't it make sense to have the amenity. Inthis article, we'll take a look at recent trends and changes inclimate control.

Upscale, multilevel facilities, urban and Southern facilitieshave brought climate control to the forefront of amenities thatare becoming status quo for self-storage. While the percentage offacilities that are 100 percent climate-controlled is still quitesmall, many predict that a majority of facilities around thecountry will soon have a portion of units that are heated, cooledor ventilated.

We normally associate climate control with air conditioning,but it also includes heating, humidifying, de-humidifying andother types of climate modification. It's probably no surprisethat the 1997-98 Self Storage Almanac estimates that theSoutheast has the highest percentage of climate-controlledfacilities--approximately 21.6 percent--compared with other areasof the country. But many self-storage developers and guruspredict that trend is quickly changing.

There are, of course, facilities in which climate controlwould not be financially feasible, especially those that storevehicles, automobiles, RVs and boats, for example. Being able tooffer climate control, on the other hand, enables a facilityowner to capture a broader market share than ever, offering anedge over the competition and therefore boosting a facility'sprofits. It can make the difference between a customer choosingone facility over another. Also, it can help draw commercialtenants, who typically stay longer than their residentialcounterparts.

William Smith Jr., director of sales and marketing with RuffinBuilding Systems in Oak Grove, La., says about 30 percent of thefacilities he recently designed have climate control, compared toless than 5 percent in 1987.

Smith says controlling humidity is the key to climate controlin a facility. "When the humidity gets up around 90 percent,things start to go bad," he says. "And when you getdown to 20 percent, things start to dry out and break."

So, it makes sense that climate control is more popular amongSmith's customers that are closer to the Gulf of Mexico, whereboth the humidity and the average income are higher than inland."Believe it or not, we have more climate control along theGulf Coast in Alabama and Florida" due to the humidity andstrong economy, he explains. "Down there, it's a moresophisticated customer base and they have better stuff tostore--stereos, electronics, photos and files."

The Amsdell Companies, a Cleveland, Ohio-based self-storagemanagement company that currently manages 96 facilities with52,000 units, held three grand openings in January and three inFebruary of this year. While President Todd Amsdell saysapproximately 10 percent of their current holdings are climatecontrolled, between 40 percent and 60 percent of the units in newfacilities are climate controlled. It's no surprise that the sixfacilities that recently held grand openings are all located inFlorida, but Amsdell says even the facilities that are on thedrawing board for North Carolina and New England have between 40percent and 80 percent climate-controlled units.

"We are moving climate control into areas that we havenever had climate-control storage facilities in the past,"he says. "Actually, last year we built a new building on anexisting facility in Cranford, N.J., and we made that 100 percentair-conditioned."

In terms of the physical equipment needed, Larry Jenkins,business development manager with Trachte Building Systems of SunPrairie, Wisc., says you can generally assume that a facilitywill need one ton of compressor power for each 1,000 square feetof climate-controlled space.

Retrofit

For many development companies, retrofitting is the answer.For example, Amsdell recently retrofitted a project in NorthCanton, Ohio, with 100 percent climate control.

Geography plays a part in which facilities are retrofitted,says Amsdell, but it is more often a factor of the market."Florida is really a prime candidate for climate control,but we are also retrofitting some of our buildings in SanBernardino, Calif.," he points out, adding that only about 5percent of the building will have climate control.

"Temperature is not really a problem out in SouthernCalifornia for the people's goods," says Amsdell. "Youcan get some extreme heat, but the buildings are pretty wellventilated and they have a different way of attacking thatproblem. So, it's more of a comfort and a perceived value."

Some developers are building facilities with phased climatecontrol in mind. In addition to having moveable partitions tostay flexible in terms of unit mix, Amsdell says they are nowincluding other features in their new construction that willenable them to go to climate control more easily in the future:insulated doors, more interior hallways, doors with better sealsand roofs that will accommodate the physical unit outside with ahigher pitch to accommodate the ductwork inside.

"There are little things you can do in the beginning thatmake it a lot easier," says Amsdell.

Cost has to be one of the biggest deterrents to retrofitting.But what Amsdell and other developers are doing prepares thebuilding and lowers the cost of construction--in the case ofconversion. At some point, there are diminishing returns toconverting a large space, explains Amsdell.

"You don't want to build a 100,000-square-foot facilityand put 10,000 square feet of climate control and then have all90,000 square feet ready to roll to be converted to climatecontrol some day, because it is going to be too costly to carrythat extra weight in the future," he says. "You mightbuild a 100,000-squarefoot storage center and initially put up20,000 and allow for an additional 10,000 at a later date. And Ithink that would be reasonable."

Payback of Climate Control

The revenue raised by climate control must justify the cost ofinstalling it or retrofitting. Just how much of an increase inrent can a developer or operator expect from climate control?Some estimate that rents can withstand up to a 15 percentincrease, but the answer is much more complex that a simplefigure.

When the amenity is already established in a particularmarket, then the facility is simply offering what everyone elsealready has, Amsdell points out. Bringing climate control into amarket where it hasn't been offered usually means being able toask higher rents.

"If you are moving into a market that doesn't haveclimate control, you might have a better chance of having abetter ratio," after educating the customer, he adds.

"It is the same thing we experienced when we brought theself-storage product to the market and taught people about allthe different ways they could use it."

Adding the amenity enables developers and facility operatorsto charge a premium for their units. "We have alwaysperceived ourselves as industry leaders by bringing things likehigh-tech security, customer service and climate control into themarket to be the leader in the market," explains Amsdell."And with those things, it also means we can be the priceleader. We feel that way we attract the best clients."

"You are able to attract a whole different kind of tenantthat wouldn't rent from you under any circumstances until youhave climate control," he says.

Climate One

Climate control has become so much a part of the self-storagethat one builder recently created its own customized HVAC system.Trachte Building Systems and Trane, a national manufacturer ofHVAC systems, recently announced plans to sell and installClimate One.

"We felt that there was a need for an industry standardfor climate control," says Jenkins. "In terms of beingan industry standard--whether it is a clear-cut ordirectional--it was so easy to plan and implement that peoplecould feel secure that it would operate and accomplish itsobjective and be profitable."

Climate One's target temperature range is between 50 degreesand 78 degrees Fahrenheit, according to Jenkins, with 78 degreesbeing the optimal point for most customers. "That will coverthe vast majority of situations," he points out. "Wedon't want it to get too warm."

Climate One is still relatively new and while Trachte hasreceived commitments for the system, it hadn't been installed atthe time of this interview. Jenkins says one of the appeals ofthe system is the fact that it is designed with long hallways andlots of small units in mind. The mechanical part of the HVACsystem will be compact and basically out of sight. Ductwork willgo into the ceiling, rather than the hallways, allowing thehallways to be standard height. "We have been able to keepstandard heights, which also keeps your building cost down,"Jenkins says.

Another attraction Trachte offers developers is a costanalysis to figure out what their operating costs are and whichenergy source will provide the most financially feasible option."They do a cost analysis of the three energysources--electric, gas and heat pump," says Jenkins."Heat pumps work well in more moderate climates."

Working with Trane offers other advantages to developers,including a five-year warranty on parts, compared withone-to-three-year warranties elsewhere, says Jenkins.

When all is said and done, whether facilities are located inAlaska or Florida, they are new or old, multistory or singlestory, it is likely that the future will bring climate control totheir doors.

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