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Building Your First Self-Storage Facility: Planning, Timeline, Budget and More

By Steve Hajewski Comments
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Building a self-storage facility is exciting and stressful, and going through the process for the first time can be daunting. But it can be less so if you enter it with realistic expectations and proper preparation.

First-time developers often try to skimp on the planning stage. However, this is a critical step that will allow you to minimize facility maintenance and problems as well as allow for future expansion. Following are important considerations for building your first self-storage project, including feasibility, timeline, budgeting, construction and more.

Feasibility and Site Selection

Location is one of the most important decisions you’ll make during the planning phase, and site selection will be driven by the size and type of storage needed in an area. For example, a multi-story facility can be built on a smaller property with a higher land cost than a facility offering boat/RV storage, which requires more, less expensive land to be profitable.

Before designing your project, conduct research to determine the proper size for your first phase and the unit types that will be in demand. If your own investigation indicates there’s a need and economic opportunity to develop self-storage, hiring a feasibility consultant is an excellent way to get a second opinion. A good advisor can help you prevent expensive mistakes and provide valuable insight. Some lenders even require a third-party study. Consultants offer a variety of services, from simple demographic reports to full-blown studies containing recommendations for facility size and unit types.

You’ll also want to evaluate nearby facilities and those in similar communities. You don’t want to overbuild, but you do want to aim for better curb appeal and features than the competition. Nicer sites usually command higher rents and have higher occupancy. Also consider the resale value—what size and features will make the facility attractive to a buyer if you decide to sell?

When choosing a site, check with your city to see which zoning classifications allow storage. Getting a zoning change is difficult and expensive, if not impossible.

During phase one of construction on the author’s facility, Columbus Self Storage in Columbus Wis., they removed 2 feet of topsoil and replaced it with gravel fill. The land was previously used for farming.You also need to think about dirt. If you haven’t been involved in construction in the past, you might not have an appreciation for how important this is. Before making an offer on land, consult with a civil engineer to help you understand what’s needed to make the site buildable. New developers often focus—somewhat obsessively—on the building cost and unit mix, when in reality, the largest variable they face is the unknown cost of excavating topsoil, replacing it with free-draining granular fill (known to non-engineers as gravel or sand), and possibly engineering and creating a pond. Your engineer may need to order soil testing to predict the scope of the grading work required.

The Timeline

Most new developers underestimate the amount of time the development process will take. From the point that you decide you’re going to build a facility to when you rent your first unit can easily be three years.

First, the process of negotiating an offer on a land purchase and gaining approvals to build can be long and arduous. Before you secure financing, you might easily spend 5 percent to 10 percent of your project value on architectural, engineering and legal fees. This design work must be done to create an accurate budget as well as to plan and possibly create the renderings your city might require before granting a permit.

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