Several challenges arose during the renovation of this new mixed-use development, including having adequate parking spaces. The U-Stor-It facility required little parking, allowing almost all of the 150-car parking spots in the lower-level for customers visiting first floor retailers. Trader Joe’s was located on the second floor, and second floor parking was accessed via an exterior cantilevered ramp behind the building.
The convenient location and proximity to retail stores generated customers for the self-storage facility. It leased up quickly with rental rates among the highest in the entire market. Self-storage customers are attracted to the upscale nature of the overall development as well as the secure and safe location.
The Lock Up Storage Centers
The success of the Clybourn Galleria was preceded by another redevelopment of a similar obsolete industrial property situated within Chicago’s Clybourn Corridor. A few years earlier, The Lock Up Storage Centers converted a four-story former cosmetics factory into one of the first mixed-use self-storage and retail developments.
The facility consists of approximately 100,000 square feet of climate-controlled space and boasts some of the city’s highest rental rates. The separate retail space located adjacent to the self-storage conversion has nearly 16,000 square feet. Exterior surface parking for retail customers is located adjacent to the property. The retail space, originally leased to a Thomasville furniture store, was replaced with “Urban Fresh by Jewel,” a specialty grocery store.
The multi-tenant nature of this mixed-use project enabled the real estate tax burden to be reduced for the self-storage operation. The retail business was allocated a higher than pro rata share of taxes based on its valuable first-floor location with adjacent parking.
Simon Property Group and Simply Self-Storage
The next generation of self-storage has attracted the interest of the Simon Property Group Inc., the largest public real estate company with 383 shopping mall properties and 261 million square feet of retail space. Simon Property Group recently entered into a joint venture with Orlando, Fla.-based OB Co. to develop up to 20 new self-storage facilities. The new developments will be located adjacent to shopping malls and operate under the brand name Simply Self-Storage.
StorQUEST and McDonald’s
One of Los Angeles’ most highly visible developments demonstrates the synergy of combining self-storage with retail. The property overlooks the busy Pasadena Freeway with an average of 310,000 vehicles per day. A three-story, 54,000-square-foot former Storage USA facility was developed on a landsite of only 24,310 square feet. Currently, StorQuest owns and operates the facility.
The original property owner successfully integrated a new McDonald’s restaurant on the site by creatively designing a sufficient amount of parking spaces required for McDonald’s customers. The parking requirement for the restaurant did not interfere with the existing self-storage operation and helps bring additional local customers to the property.
Gateway Centre and LifeStorage
Another creative re-use of vacant retail space is the LifeStorage facility at the Gateway Centre Shopping Mall, located in the densely populated Rogers Park neighborhood of Chicago. The Gateway Centre is a grocery-anchored shopping center with national tenants including Dominick’s Finer Foods, Bally Total Fitness, Marshall’s, GNC, Foot Locker and Chase Bank. But approximately 115,000 square feet of retail space remained vacant.
The LifeStorage developers vertically subdivided the vacant space from the balance of the shopping center, allowing separate ownership of a new self-storage facility. The space was redeveloped into an institutional quality self-storage facility taking advantage of the bustling activity of the urban shopping center.
The next generation of self-storage has arrived with much success. The synergy of self-storage combined with retail is reaching some of the nation’s best-known retail corridors. With creative planning and designing, it won’t be long before the “future generation” of self-storage appears near the most upscale retail destinations—New York’s Fifth Avenue, Beverly Hills’ Rodeo Drive or Chicago’s Magnificent Mile.
Marc A. Boorstein, CCIM, is a principal with MJ Partners Real Estate Services, which offers self-storage disposition, acquisition and financing of single-assets and portfolios for institutional and private clients nationwide. To reach him, call 312.726.5800; e-mail email@example.com.