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Overcoming Common Self-Storage Development Hurdles: Guidelines for Site Selection, Project Planning and More

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By Benjamin Burkhart

“It costs more and takes longer” is a fairly common sentiment among real estate developers. Obstacles to development, whether in finding the best sites or in planning and building the right project, slow the process and are hard on the bottom line.

Self-storage developers face unique challenges. Unattractive and outdated facilities pepper towns of all sizes nationwide. Terms like “mini-warehouse” or “discount storage” on signs next to eyesores with rickety gates, gravel driveways and overgrown weeds present inherent difficulties to the developer trying to build a modern-age storage property.

While there will always be development hurdles, these can be overcome through careful and efficient planning. From selecting the right parcel of land to watching your budget, here are some guidelines to help you surmount the trials that often come with building a new self-storage facility.

Choosing the Right Site

Self-storage has become a “darling” asset that’s reasonably viewed as having some resistance to economic recession. The potential to generate passive income with few employees while outsourcing competitive operations management makes the industry attractive to investors everywhere, and rightfully so. However, many think just about any parcel of empty land will do for a new development, and that’s simply not the case. You want to avoid oversaturated markets, sites that are too costly for a new build, or ones that come with zoning headaches.

One method you can use to target a site is geographic information system (GIS) analysis. By taking a macro look at a broad market, you can quickly identify pockets of competitor concentration, recent growth trends, forecasted growth, traffic patterns and zoning information. GIS provides a strong visual analysis of a broad market, allowing a developer to see the data that’s important to him.

Self-Storage Feasibility Grid 1***  Self-Storage Feasibility Grid 2*** 

For example, the purple graphic shows a geography north of Houston. The darker shades represent the areas with the highest forecasted growth by number of households. The green graphic shows the same geography but reflects median household income. The colored dots represent existing self-storage competitors. Such an analysis can provide a strong starting point for site selection.

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