With prime real estate at a premium, many of these new facilities are multi-story to capitalize on a smaller footprint. This alternative floor plan calls for elevators as well as designated, and often covered, loading/unloading areas.
Establishing a Hub
But it takes more than a good first impression, quality product and fancy technology to establish a community hub. With a growing focus on convenience, many facilities offer more than just storage space. Taking a cue from retail, it’s all about service and convenience.
As 33 percent of self-storage businesses (up from 17 percent in 2004) serve as a one-stop shop for everything “moving,” including supplies and truck rentals, even more are emerging as office headquarters for transitory workers such as home-based salespeople and tradesmen. By offering conference facilities, Wi-Fi access and a coffee bar, these properties create the ideal atmosphere for small-group meetings and business-networking events, often free of charge, essentially locking in that immediate community connection. Further, many serve as package-delivery sites accepting shipments on behalf of their renters.
As more self-storage businesses stake claim to street-front, retail real estate with appealing façades, small retail and service providers are finding this property type to be a lucrative bedfellow. Boutique tenants, such as coffee shops, spa services and fast casual dining, are opening their doors adjacent to the storage front office. Business models are also being defined by self-storage, as units are retrofitted for hair salons and used by records-management firms capitalizing on the property’s state-of-the-art security, further embedding self-storage into the daily lives of neighbors.
New self-storage development has been virtually flat over the past five years. This has allowed demand to catch up and outpace supply in specific markets. It’s expected that properties coming online in those markets will serve as community and business hubs that will ultimately outlast the lifestyle storage of yesteryear. There will always be a need for self-storage, but what gets stored and where will drive the evolution of this recession-proof asset class. Yet, the embedded nature and long-term value of this product will keep the “sexy” in self-storage.
Jeff Stein is principal at Stein Investment Group, where he's responsible for the overall strategic direction of the company as well as identifying investment and ownership opportunities that align with the firm’s growth strategy. He has facilitated the acquisition of office, retail, self-storage and multi-family properties valued in excess of $200 million in five states, and purchased more than $13 million in performing and nonperforming loans. He was previously involved in more than $900 million in commercial real estate transactions as vice president of Harbor Group International and Fortress Capital Investors, which he co-founded. To reach him, call 678.892.6963 or e-mail firstname.lastname@example.org .