Now that you have a general idea of the rules, here are the tools you’ll need to secure the best self-storage site.
Tool No. 1: Online resources. If you’re looking for sites, get familiar with the local resources that may be available on your city or county website. Cities, states and counties often have great information you can access right from your computer. If they offer a GIS-mapping resource, you can often identify zoning, acreage and property data quickly.
There are two great real estate websites you should check out: Loopnet.com and CoStar.com. For a basic membership fee, you can access property listings in your target market. These sites allow you to quickly focus your search by property type, ZIP code, county and other variables. Basic memberships may not provide all the data you need but will point you in the direction of listing brokers, who should provide as much info as you need for an initial review. Don’t be afraid to ask for data such as zoning, demographics, site limitations, traffic patterns, etc.
I use Google Maps to quickly identify major competitors in any given market. By searching “self-storage near 123 Main Street,” I can quickly identify approximately how many competitors are within a given distance of my potential site. From there you can often directly access competitor websites, which sometimes contain rate and availability info.
Tool No. 2: A big map. One developer I know had an 8-by-16-foot aerial map of his target market. He pointed out every competitor and residential development as well as the main traffic patterns around his site―no doubt a great resource. You can do the same thing with a big road map. Map out the competitors and zoning areas to identify specific ones where you should direct your search. Some great sites have been identified where others were not looking. Not all great sites are listed for sale.
“I look for sites in good locations that might have a little hair on them,” Kern says. “What I mean by that is a site that is not great for retail, might have some irregular qualities, maybe a ‘flag’ lot or a tract with great visibility near a power line or a railroad. They’re out there; you just have to be willing to go find them.” Having a big map that identifies zoning classifications and competitors will help direct your efforts.
Tool No. 3: The letter of intent. Your letter of intent should give you time to investigate how you will pull a deal together and specify your desired terms of purchase. It will give the seller an idea of how much you will pay, how long you need to investigate the feasibility of the site and market, and identify any contingencies that you will require in the contract.
Your letter is your first entry into the contract-negotiations phase with the seller or listing broker. It should spell out everything that’s important to you in acquiring the property. Give yourself adequate time to deal with any market investigation, feasibility analysis, valuation, environmental review, zoning, site planning and necessary approvals. It’s the vehicle to specify trigger points for contract length, extension, cancellation, earnest money handling, closing, etc. Your broker and attorney can help you draft one.
As you move toward finding your next self-storage site, keep in mind that great sites are out there, but you will have to work to find them. It is not easy, but it can be rewarding. Plus, finding the right site for your project is great for your long-term business strategy.
Ben Burkhart is the owner of BKB Properties and StorageStudy.com, a full-service self-storage consulting and resources firm. He works with developers around the country in assessing site feasibility, market strength, marketing strategies, financial analysis, profit enhancement, site design and deal structure. To reach him, call 804.598.8742; e-mail firstname.lastname@example.org.
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