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5 Unforeseen Disasters That Could Affect Your Self-Storage Development Project

By Marc Goodin Comments
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Cost Estimating

Soft costs for self-storage development and construction are often significantly underestimated. The site and architectural design itself can run from $100,000 to $200,000 or more. In addition to listing the services they’ll provide, your engineer and architect should itemize any supplementary services required, including ones that must be provided by others. Here are examples of items that can fall between the cracks, creating additional costs and delays:

  • Soil borings and geotechnical report
  • Traffic report
  • Wetlands delineation
  • Site lighting
  • Landscaping
  • Subdivision plan, if required
  • Elevations and renderings for commission applications
  • Endangered-species review
  • Regulatory permits
  • Meetings and hearings
  • Security design, including video-camera location
  • Office design
  • HVAC design
  • Applications and fees, including DOT
  • Utility applications (water, sewer, electrical and gas)

You also need to consider additional costs including the following, which can run another $300,000 to $400,000 or more:

  • Regulatory process
  • Plan revisions
  • Soil testing
  • Permits
  • Utility fees
  • Construction inspection and supervision
  • Erosion and sedimentation inspections
  • Professional and banking fees
  • Startup fees (including insurance)

Bid Specifics

Construction bids should include a specific list and description of the work to be done. However, site plans don’t always detail everything required to open the doors for business, and so items get excluded from bids, or they’re left unspecified. Consider the following examples:

  • Gates
  • Fencing
  • Office cabinets and countertops
  • Office doors and windows
  • Security equipment
  • Signage
  • Lighting
  • Bollards
  • HVAC equipment

If specifics for these items aren’t included in the plans, the contractor may exclude them from the bid or insert costs for inferior-quality products. You should provide as much detail in your plans as possible, even specific brands and product names whenever possible.

Because contractors only bid on what’s clear and specified on your plans (and often less), a 15 percent contingency fund is common and highly recommended. It’s critical that you and your designers review your plans to ensure they’re detailed and specific, and that any bids you receive are comprehensive.

Lack of research and planning on the above areas can lead to lost time and money, not to mention unrealistic financial projections. Pay careful attention to these items during the development phase to avoid costs and delays during the construction phase.

Marc Goodin is president of Storage Authority Franchising and the owner of three self-storage facilities that he personally designed, built and manages. He’s been helping others in the industry for more than 25 years. To reach him, call 860.830.6764 or e-mail marc@storageauthority.com. You can also purchase his books on facility development and marketing in the Inside Self-Storage Store.

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