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Building Neighbor-Friendly, Mixed-Use Self-Storage Developments

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By Jesse Balaity

Self-storage operators know their facilities can be good neighbors, especially when they transition from being gated fortresses and invite community engagement as anchors of mixed-use projects. While mixing commercial, residential and retail adds complexity, it can also solve planning and economic challenges.

Planning and Economics

Sketch out a bustling urban streetscape in your mind. What do you see? Restaurants spilling onto sidewalks, apartment buildings with balconies, a pocket park with children playing, or a self-storage facility? Self-storage professionals might see the latter, but for the rest of the world, storage occupies the same realm as parking garages and utilities structures. They’re all necessary elements for a city to function, but they don’t contribute to the vitality of urban life.

A desire for activated streetscapes pervades urban zoning regulations, often with specific requirements for human-occupied interior spaces visible from the public way. This may be for a specified building depth, at the ground level or for several levels above.

For example, the new urbanist code that governs my neighborhood in downtown Sarasota, Fla., requires 20 feet of habitable space as a liner building around any non-occupied structure, like parking. Such configurations can be ideal for self-storage, as the habitable building area close to the street is also the highest revenue-producing space for retail, office, restaurant or even residential use. Greater human activity on a utilitarian site also enhances security (or the perception of security).

Now envision a suburban lifestyle center. What do you see this time? A shaded plaza with restaurants and retail shops, a movie theater, a specialty grocery store, maybe a department store anchoring each end? But wait, are department stores still a thing, or is that the shell of a shuttered Sears in your sketch? Perhaps that big box is better suited for self-storage.

Suburban zoning often relegates self-storage to commercial or industrial districts, but may allow it as a conditional use or part of a planned-unit development (PUD). PUDs can provide developers with the freedom to include self-storage in a master plan with other land uses, even if the surrounding zoning excludes it.

There are several arguments for this. First, developers must profit from all parcels in a PUD, so it’s in their best interest to consider compatibility and provide adequate buffers in the master plan. Second, a PUD will include design standards that are often more restrictive than those of the prevailing land-development code. This ensures all industrial, commercial and residential buildings complement the overall community design, often interpreted in vernacular architectural styles. Finally, a goal of PUDs is to reduce traffic by fulfilling residents’ needs onsite. This justifies the inclusion of any reasonable use within the master plan.

Even where zoning allows for dedicated self-storage, a mixed-use development can maximize a site’s economic potential. As efficient and profitable as storage facilities are, there are other uses that generate even more revenue per square foot of building area.

At one extreme, consider a storage facility in Manhattan, where small, ground-floor retail spaces can lease for more than $1,000 per square foot. Self-storage only makes economic sense deeper into the building, on upper floors, or in areas with less exposure and natural light.

Or consider a large site in a growing suburban neighborhood with excess building area potential once the self-storage pro forma is satisfied. Suburban sites often designate excess space for RV storage or future expansion, but savvy investors will analyze the marketplace and meet additional demand with other uses for a shorter-term return on investment. This can be as simple as an outparcel restaurant pad, or as insightful as an apartment component that provides built-in customers for self-storage.

Challenges

Mixed-use projects can be spread across a parcel or combined within a single structure. Each configuration has its own challenges.

With mixed-use sites, the self-storage circulation paths often overlap other uses, making it impractical to implement site access controls. This, in turn, limits the use of exterior-access units. Overlapped circulation also increases the risk of large trucks interfering with retail traffic, pedestrians and occupied outdoor areas such as sidewalk dining and plazas. Finally, there’s the cost of meeting design criteria. Design compatibility often requires more windows, increased façade articulation and higher quality finishes compared to freestanding facilities.

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