This site is part of the Global Exhibitions Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Informa

Investing in Self-Storage Renovation: 4 Improvement Projects to Consider

Comments
Print

By Leeann Fleming

Self-storage facilities are judged by their curb appeal. The first impression of the business can be great or … gasp! Aesthetics can even affect a customer’s perception of your site’s safety and security.

Self-storage has become a highly competitive market, so it’s imperative that your property is on trend. Faux doors in branded colors, glass fronts or windows, or an “urban feel” are just a few of the things today’s facility developers are using to create an upscale ambience for customers. If your buildings are aging, improving the façade and interior hallway systems can help you attract new prospects, retain existing tenants, improve revenue and even beckon potential buyers. This article covers four renovation projects that can help you unleash innovation to improve your investment.

Project 1: Replace the Roll-Up Doors

Whether your facility is traditional or offers climate control, the unit doors keep tenants’ belongings secure and dry, so it’s critical that they operate properly. Each roll-up door should open and close with ease, with a tensioning device on the springs to adjust when necessary. Dents and dings are common signs of wear on a door, but if it fails to function properly even after adjustments, it may be time to replace it.

Let’s look at a sample scenario for a 100-unit door-replacement project:

  • The investment for a full, turnkey door replacement would cost $350 per door, or $35,000.
  • Each upgraded unit would result in a rent increase of $5 per month, equaling $6,000 per year in added revenue.
  • Let’s assume a capitalization rate of 6.5 percent.

In this case, a $35,000 investment provides $92,308 in added facility value ($6,000 in additional annual revenue divided by a 6.5 percent cap rate). Then we also need to factor in savings on your commercial insurance of up to 20 percent as well as annual depreciation for a net income offset, and savings from reduced insurance claims and maintenance fees. Your increased revenue and facility value, combined with lower expenses, can make it possible for the project pay for itself in a matter of months.

Project 2: Consider a New Unit Mix

Refreshing your facility’s unit mix can be as critical as updating the building’s façade. When updating your existing mix, consider these five factors:

  • How to maximize the occupancy rate
  • How to maximize total square footage
  • How to maximize rent per square foot
  • Your customers’ needs
  • Your target market

Design your unit mix with flexibility in mind. Even the best-laid plans may require adjustment. Perhaps you have 20 larger units that haven’t rented, but your demand for smaller units is increasing. Design experts can add or remove partitions and doors to change unit sizing quickly and efficiently. Furthermore, you may even realize greater revenue for the same space.

For instance, four large units may generate $175 each per month for a total of $700—but only if they rent. If they’re empty, creating eight smaller units that rent for $100 or more each would generate more in monthly rent and provide a better response to market demand.

« Previous12Next »
Comments
comments powered by Disqus