By Jim Killoran

The topic of unit mix has probably caused more hand-wringingamong facility owners than most other considerations involved inthe development of a self-storage property. Why? Most likely it'sbecause up until this point they've probably been dealing withfactors of a larger, more conceptual nature.

Think about it. Through your feasibility study, you firstdetermined that your market will support "x" additionalsquare feet of storage; you were extremely cautious in your siteselection and all the necessary but frustrating steps to ensureits viability to your eventual success. Then came the layout ofthe facility, where you eked out the last possible square foot ofrentable spaces. But now you're at the point where the rubbermeets the road, the point where you say, "OK, this is whatI've determined that my customers will want to rent, so this iswhat I'll build."

But it's not as though you are holding a stack of signed,long-term leases in your hand as proof of the commitment of yourcustomer base. Even though you have done the legwork to determinewho your customers will be and what they will pay for, you stillare just making an educated guess as to exactly what your unitmix should be.

We've all heard it said before that we need to learn by ourmistakes. Instead of setting out blindly to tackle this unit-mixdilemma and trying to reinvent the wheel, though, let's try tolearn from the mistakes of others.

Unit Mix Mistake No. 1

Here is where the common mistake is made of throwing yourdemographic homework in the trash and trying to please everyoneby offering everything. Bad idea. Too many choices only serve toclutter your layout, increase the complexity of construction,hamper your ability to manage efficiently, and confuse yourcustomer.

I know a man who decided to take the Henry Ford approach,which adheres to the notion that a car can be any color, as longas its black. In a similar vein, this man built a 300-unitfacility consisting only of 10-by-10 units. His attitude was suchthat if someone needed a unit larger than a 10-by-10, they'd renttwo. Furthermore, he didn't specify what a customer would do ifthey only needed a 5-by-5.

He built this project in 1988 in an area that had little or nocompetition to speak of, and he rented his units. Since then,other facilities have opened in the same area, offering a morestandard fare of unit mix--a greater variety of sizes. Last Iheard, this man was re-configuring some of his buildings.

Unit Mix Mistake No. 2

This configuration is known as the banker's mix. I don'tbelieve that this mistake is as prevalent now as it was a fewyears back, mainly because the industry has matured to the pointwhere a developer has to cater to his customer base or hisproject will fail. Earlier, when we could get away with the"If I build it, they will come" attitude, and thedemand was such that the customer would take whatever we offered,we could dictate the mix to suit us. Or, in this case, thebanker.

The theory behind the banker's mix was to increase theprojected revenues of a project by including in your design adisproportionate number of small units, knowing that they commanda higher-per-square-foot rent. The higher the projected revenue,the more viable a project would appear, and the easier it was topersuade the lender or investor to provide the financing.

Once again, this mistake meant ignoring your demographicresearch (if any was done at all) and plowing ahead with thewrong motive.

Forging Ahead

So, you have armed yourself with data concerning yourpotential customers. Now what? First, stop wringing your handsand read your data. Who will be your customers? Commercial,middle-income single family, higher-income single family,apartment/condo/manufactured-housing dwellers, military personnelor university students?

Based on your customer profiles, you can calculate--withreasonable accuracy--what mix to offer. Also, for reference, Ioffer the table below as a guideline based on my own experienceand my study of the industry.

Be sure to establish the percentage of a particular type ofcustomer before applying the above schedules. For example, ifhalf of your customer base is apartment and condominium dwellers,and the other half is middle-income single family, then allocatehalf of your space to the percentages under the apartment column,and the other half to the percentages under the middle-incomesingle-family column.

A quick note on climate-controlled space: Experience tells methat, save for the rare exception, all new facilities shouldoffer climate control, even as much as 40 percent of yourrentable space.

Doing It Right the First Time

The development of unit mix deserves the same level of seriousresearch as your initial feasibility study. Make sure you planwisely, investigating your customers needs for storage, longbefore the walls are in place. Reconfiguring can be a costlymeasure to rectifying mistakes that could have been avoided.

Finally, don't forget that you have a safety net available ifyou construct your project in phases. In other words, if you arealready operating your first phase and are able to see whichunits rent the fastest, then you can customize your unit mix tofit your customer base. Plus, you can utilize the phasing conceptof developing to help make a more accurate determination of howmuch space to devote to climate control.

Jim Killoran is the owner of LeManx Information Products.Based in Shelton, Wash., LeManx Information Products specializesin providing information to the self-storage industry. Mr.Killoran is also the author of Self Storage Success and SelfStorage Startup. In addition, he has been in the self-storagebusiness for 15 years and is co-owner of Freeway Mini Storage inShelton, Wash. For more information or to order books, call (800)764-1909, or write to LeManx Information Products, P.O. Box 542,Shelton, WA 98584-0542.