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Important Do's and Dont's of Self-Storage Site Design and Unit Mix


Site design and unit mix are two of the most important aspects of self-storage development. Creating too many units can leave a facility struggling to fill, while too few equates to lost revenue. This article identifies key considerations for building a successful self-storage project, and decisions that must be made before construction begins.

Design can make or break a self-storage project. While not quite as important as the facility location or management, it’s still critical. Developers make design decisions that can have a dramatic impact on the asset value. One of the most critical design elements is unit mix, which can dictate a project's financial future. These factors can be equally important in the acquisition of existing projects as the development of new ones.

The Identity Crisis

Sometimes design elements are not within the owner’s control. In an attempt to make self-storage more neighbor-friendly—and to permit storage as a land use when regarded as an industrial one—municipalities will use architectural controls and approvals to disguise self-storage as something else. This sometimes allows a facility to appear in retail or commercial zones.

Are we winning the battle but losing the war? If a project suffers from an identity crisis, the municipality may have achieved its desired outcome (self-storage as a permitted use), but only because the consumer doesn’t think it looks like storage project.

Is it even a battle won? Often, the “masking” of the use is very expensive and can dramatically lower the expected financial return because of increased costs in meeting architectural standards. Unfortunately, that may be only half of the problem. The other issue is now that the project doesn’t look like a self-storage facility, how does the consumer identify its use?

In the absence of rows of buildings with brightly colored roll-up doors, the cost of overcoming the identity crisis will be lost revenue as the result of slower lease-up and discounting to motivate consumers to seek and find. This, coupled with increased advertising and marketing costs, can add up to economic disappointment.

The flip side is because storage was permitted in an area where it was previously not allowed, you may have a strong enough market to transcend the identity issue. If increased costs can be overcome by increased rents, then the battle and the war are both won! This would dictate that the site location is extremely strong, with strong demographics.

Mixing Up Unit Sizes

It’s difficult to predict exactly what size spaces should be built. You might get it right at the outset and then the market shifts. Fortunately, most developers are in touch with their market attributes and can create a unit mix that’s site-efficient and meets consumer needs.

Take, for example, a dense urban setting, such as Manhattan, where the average unit size might be less than 60 square feet, with a predominance of 5-by-10s and 5-by-5s. In New York City, the consumer is rarely storing large equipment such as riding mowers in the winter and snow plows in the summer. In a more rural setting, such as Minot, N.D., the unit size may be a 12-by-25 or larger to accommodate everything from toys to tools.

The laws of development and land use also create a natural dictation of unit mix based on land costs, size and availability. It would be difficult to find five acres in Manhattan to store farm equipment, and if you did, it would have to be pretty pricey space. This is where market forces meet reality and tend to sync up.
The trick is accommodating projects in the middle of the spectrum. Again, start with your customers and what they need to store. College students need less space than contractors. A neighborhood with 1,200-square-foot homes creates different storage needs than 3,500-square-footers with three-car garages. Here are some of the key demographic drivers to determine average unit size:

  • Average age
  • Population density
  • Mobility/transience
  • Median home value
  • Median home size
  • Median and average household and per-capita income
  • Family/household size
  • Daytime population
  • Number of business establishments

These demographic drivers can influence a developer's unit-mix decisions. The combination of commercial vs. consumer targets will also influence the mix, with commercial users tending to require larger space.

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