Now that I’ve exposed a few myths, here are three rules for identifying, evaluating and securing a great self-storage site, not just a site.
Rule No. 1: Be prepared to look many potential sites. I’ve worked with Richmond, Va.-based self-storage developer Tom Kern of Innovision Development LLC for more than three years in evaluating self-storage sites. During that time, he has developed a comprehensive database of potential self-storage locations in his target markets.
“You have to look at site selection as a process of filling your pipeline,” Kern says. “You have to evaluate multiple sites simultaneously before you can eliminate the lesser sites and focus on the good ones. Plus, there are lots of things that can hold up a great site for months, even years. The more you get in your pipeline, the better positioned you will be to be objective in evaluating sites.”
Rule No. 2: Understand the local zoning rules and approval climate for self-storage. It may be a great site, but if you can’t build storage there, you must be open to moving on. I’ve seen developers get so locked into a site that isn’t zoned for self-storage that they overlook equally strong sites. They end up spending a ton of cash and valuable time on rezoning applications only to wind up at square one at the end of the day—without a site and with less cash for the next project.
Don’t get me wrong, I’m not opposed to applying for rezoning. Great sites have been developed that way. But in the first stages of your site-selection process, know where the opportunities exist ... and where the doors are closed.
How do you learn about zoning? First, go online and check to see if your city or county has online zoning resources. Many will provide (sometimes for a nominal fee) a zoning map that details stratified zoning classes. Often self-storage is allowed only in manufacturing or industrial areas. Other municipalities have a commercial zone that allows self-storage. Some cities or counties only allow it by special-use permit or as part of a larger development.
By contacting the local zoning office in your jurisdiction (city, county, township, etc.), you should be able to quickly learn the rules for developing self-storage—where it can go, how much can be built and how to gain approvals.
Rule No. 3: Do the work. When you identify a site, know the competition. Walk in and speak to the local self-storage managers. Rent a unit. Observe the market. Too often, would-be developers rely solely on brokers to find them quality sites. “A good broker is essential to your team, but you have to be your own birddog,” Kern says, “And like any profession, you have to have the right tools to locate and evaluate sites.”