The best stories are those that have you anticipating an ending as you weave through the plot; yet when it comes, it is not at all what you expected. In fact, the ending is much stranger than you could have ever imagined. The unforeseen twist leaves you in thought, trying to recall small details and pieces of the puzzle, analyzing possible flaws.
While this recipe may make a good book or movie, for the self-storage developer, small, unforeseen design details can create a lifetime of second-guessing his misguided “plot” for success. Although it might have been possible in the past to build a self-storage facility in any populated or growing community and find triumph, the “build it and they will come” philosophy is now a catastrophe waiting to happen. Self-storage success is about careful and meticulous planning and preparation. While many have succeeded in the past and others are carving out great futures, nothing in the industry should be taken for granted.
The industry is constantly changing and redefining itself. Ask any veteran, and you will find it is not as simple or superficial as it appears at first glance. Sure the lure of a retail business that generates such high revenue with few employees is great. To most outsiders, self-storage seems to run itself— an avenue to a carefree lifestyle of wealth and leisure. While many people make a more-than-comfortable living in this industry, no one should be misled to believe it is done without solid planning and hard work.
An Experienced Team
In the old days, finding a good location was about identifying a market without a self-storage facility. Today, a successful location is more about finding a market that is not saturated. A sad but true trend is facilities achieving stabilization by taking market share from one another. Now more than ever, developers must base their decisions on competition.
The best way to discourage others from entering your market is to eliminate avenues of competitive marketing during development. This is achieved by obtaining the most experienced, knowledgeable design team as early in the planning stages as possible.
Poor site layout, building utilization and unit mix are just a few signs of a developer who is inexperienced in the industry. A common mistake made by first-timers in self-storage is to contract the architect or engineer who designed his last strip mall or commercial building. This will usually result in wasted time and delays, and revision of blueprints well after initial review and project commencement. Consequently, a difficult task many experienced vendors and contractors face is having to tactfully tell the developer he has a poorly thought-out plan. Many will forego this confrontation and allow the developer to wander in darkness. But there are far too many experienced architects to start a project in this manner.
On reviewing many project plans, it becomes obvious a more efficient layout would allow the same amount of storage on a much smaller portion of the property. You do not need six acres of land for 30,000 square feet of storage, yet some developers will say, “I don’t really care if we can get another 20,000 square feet—I only want to build the 30,000.” It’s like ordering the value meal at a fast-food restaurant just to get the cheeseburger. Do not build more storage than you want or need, but be resourceful. Get experienced help. Make the site layout efficient, and consider your alternatives.
An efficient layout gives the developer the option to sell a portion of the land as an out-parcel or set it aside for future expansion. If this can be determined at an early stage, the property seller may agree to subdivide prior to purchase. A very real possibility is subdividing and selling the smaller out-parcel at a much greater price per square foot than the original purchase. In many cases, this can be achieved by selling an out-parcel with prime road frontage, yet retaining enough of the same to market the facility with little or no negative impact. Many sites have overcome financial feasibility problems by using this method.
Building in phases poses many advantages. Other than the obvious benefits of minimizing the initial capital expenditure, it is the most accurate way of meeting the market demands in respect to unit mix and climate control. It allows developers to adjust to what is currently renting, and allows project expansions to react to market changes. If there is market demand and the zoning permits, the vacant property could be used to generate revenue from uncovered boat and RV parking with minimal development cost. Furthermore, other developers considering the possibility of building in the same market might be deterred by the projects ability to expand.
Civil engineers experienced in self-storage will know how to make use of various techniques and tricks of the trade to maximize site efficiency. This will involve factors and considerations such as property setbacks with respect to buildings, drives and tree buffers. In many instances, perimeter buildings will be used to maximize efficiency and eliminate fencing. They can also provide a more aesthetically pleasing appearance to the community.
Other considerations may involve using smaller drives and one-way traffic flow. Smaller drives usually require larger drives be placed at the ends of the buildings to accommodate the turning radius of moving trucks and trailers. The engineer will ensure drives meet the approval of local building and fire officials.
Furthermore, considerations will be made in the handling and retention of storm water. Other possibilities in design could include placing the slabs on grade to avoid costly building and drive step-downs. The engineer should also be taking into account the unit mix, percentage of climate control and how this will allow the use of different building types.
An experienced architect can use many building types and configurations to maximize a property. Outside the normal methods of layout for conventional and perimeter self-storage, other types can be incorporated into the design to maximize the site efficiency. Common ones used in self-storage are enclosed, multistory, enveloped and split-level.
The enclosed building is simple to define: a storage building made up of four or more exterior walls that enclose a given storage area. The exterior walls encompass the interior storage area with a few exterior doors allowing access to hallways and storage units. These units—almost always climate-controlled with insulated exterior walls and roof—make very efficient use of land due to the flexibility in size and dimension.
Like the enclosed building, the multistory building should only be used in an area where there is adequate demand for climate control. If there is a good market for climate control and zoning permits, multistory buildings provide the most efficient use of land. While they cost more per square foot to construct, the savings in smaller parcels of land help justify the expense, as does the revenue generated by the high percentage of climate control. This efficient use of land is—and will continue to be— the growing trend as land prices continue to rise. Multistory buildings can also be designed to accommodate conventional storage on ground levels. This is accomplished by what is referred to as an “enveloped” building.
The enveloped building technique encloses climate-controlled units inside the surrounding perimeter of conventional ones, with the two separated by an insulated wall. This provides for efficient heating and cooling by making use of the thousands of cubic feet of air and stored goods in the perimeter conventional storage. This is one of the most common and efficient building types found in self-storage.
Another method of building and site development includes the split-level building. The term split-level refers to a building that allows multiple floors to be accessible by corresponding exterior ground elevations. The site must usually have a significant amount of grade to accommodate this type of building. In this respect, the split-level building plays a vital part in making a site with steep grades able to accommodate a high-yield facility.
Like multistory buildings, split-levels cost more to construct, mainly due to the significant cost associated with the required retaining walls. For this reason, they are usually used to accommodate climate-control. However, in most instances, they also contain a percentage of nonclimate-controlled units in the same way enveloped buildings do. It also stands to reason that the wider the building, the less impact the cost of the retaining wall has on the overall price per square foot. For this reason, the splitlevel is usually only economically feasible in building widths of 60 feet or more.
All of these methods and building types should be considered by the civil engineer and architect to create an efficient site plan and layout. Keep in mind all of the building types can be used separately or together, even in the same building structure, to achieve the desired result.
The fact that the developer, architect and civil engineer all must work closely together to produce an efficient site and building plan is understood. However, valuable time will be wasted if the unit mix and climate-control percentage has not been determined. Both are important factors directly relating to the building and site configuration.
It makes sense that if a site plan relies on the building plan and the building plan on the unit mix, there must be information available to establish the preliminary mix. Building plans often give no indication of what unit mix the market will support. While it might be possible to supply generic, stereotypical information, if no market information is available, it is often useless to do a site plan.
There are a few numbers one could use to see if a site has any feasibility (these should only be used to determine if the site is worth further investigation): The site should yield a minimum of 45 percent total rentable square feet of the gross area of usable land. Usable land is the total area of land not including set backs, buffers, retention ponds or other construction-restricted areas. Obviously, multistory projects will yield at least twice the amount of rentable square feet.
While this may be used as a benchmark, keep in mind a site may be very inefficient at 80 percent, based upon building types, layout and unit mix. Any climate-controlled areas accessed by hallways will yield approximately 74 percent to 78 percent rentable square feet. With this information, it may be possible for an experienced person to give you a rough idea how many square feet of rentable storage could be developed. Now the focus shifts to whether there is a market and, if so, how much revenue the unit mix will produce.
No first-time developer should make the mistake of failing to get a study from one of the many feasibility experts in the industry. However, in the infancy of exploring various sites, this could be expensive. It is possible to do a preliminary evaluation yourself. Following are a few methods one might use to gather information.
Most projects serve an area with a 5-mile radius. This can be greater or smaller depending on natural barriers and traffic flows that affect the convenience and accessibility of the project. After determining an assumed radius of the market, you can search the Yellow Pages and websites to determine if and where any competition exists. This will allow you to do a market survey of storage facilities.
While many facilities may be reluctant to help, try to find out their square footage and occupancy, which sizes rent and which do not, and what type of customer makes up the market. Place a call to the Department of Transportation and obtain traffic counts for the roads that will provide visibility and access. Take a few hours and drive around, paying attention to traffic flow, neighborhoods, apartments, condos, colleges, local lifestyle and businesses. Above all, learn the area around the potential site.
Next, obtain some demographics on the area. These can be purchased for little or no money from companies that serve the industry or on the Internet through sites such as www.claritas.com/demographics.htm. The anticipated demand can be determined by multiplying the population figures in projected market radius by the demand factor, usually 3 to 4.5 square feet per person. Subtracting the existing storage facilities’ square footage will provide some determination of demand.
Create a list and rank each project on a scale of 1 to 10 in each category: demand, competition, visibility, accessibility, household income, traffic count and storage rates. Let the list include any other factors you feel will affect the project’s success. On the bottom of this page, try your best to break the market into various housing categories:
4) college and university
The last step of this process involves narrowing potential sites and carefully picking a qualified feasibility expert to review the top choices. Follow his lead from this point. He should help you make the final choice and provide a unit mix that can be developed by experienced architectural and civil-engineering firms. The success of the project is ensured through the use of experienced professionals. Like the feasibility expert, architect and civil engineer, the other industry vendors will bring valuable expertise to the project.
These are not original ideas but a collection of concepts and techniques learned from previous designs and, in most cases, actual experiences in the self-storage industry. As with any project, improvements to manufacturing processes and materials unique to self-storage come into play, augmenting the design ability of the individuals involved. A general medical practitioner knows the anatomy of the human body, but must sometimes yield to the knowledge and experience of a specialist. Likewise, specialists within the self-storage industry will benefit in the life and vitality of your development.
Bert Brown is director of marketing for Janus International Corp., which manufactures a complete line of storage-facility components, ranging from roll-up sheet doors to self-supporting hallway systems. For more information, call 770.562.2850; visit www.janusintl.com.