My wife and I have a favorite TV show, Bravo’s “Top Chef.” She likes the fast-moving, out-of-the-box challenges that drive the competition. I like how the chefs prepare so many unique dishes even though they’re following the same recipe. The challenges are timed, and sometimes, rather than serve a failed dish, a chef will scrap it entirely in the name of competition. It’s usually some error in planning or preparation that fuels the final elimination.
It seems to me that developing a self-storage project is a little like being a chef. You start with a broad recipe, add experience, external influence and individual preference, and end up with a final product. Your feasibility study should show you what to expect in your market and locale, so you can build the best project or scrap a bad one in the name of success.
I can give you a good recipe for building self-storage. But as you move through your due diligence, you will likely see that recipe morph into what is demanded by location, market and finances. Building a quality facility is like preparing the right meal: It takes time, preparation, education and discipline.
While the elements of a feasibility analysis should be specific, they probably fall into three broad categories: site quality, market dynamics and financial performance. Quantifying these variables—and qualifying their individual impact on overall feasibility—is the goal.
Ingredient 1: Site Quality
The ideal site has easy access and good visibility from a main road with strong traffic counts. It would be positioned close to the population base but well distanced from competitors. In most markets, convenience of location is important. Of course the dream site would already be zoned for storage, with minimal restrictions on building requirements. If not, you need to know costs and timeframe for a rezoning request. The local zoning/planning/building office can provide this is along with a record of any recent rezoning requests that were approved or denied.
Evaluate the location as it compares to the competitors. Which competitor has the best location and who has the worst? Where does your site rank? Objectively answering these questions can help predict your future.
Often, the prime location for storage is dedicated and zoned for other uses like retail, restaurants, etc. Therefore, when researching the feasibility of your site, find out if there are any barriers to entry. You want your location to be viable and competitive for years. If you’ve got the only site in the market that will allow storage, great! But if your site is the fifth best out of 10, you’ll want to qualify that risk.