Insider Insight to Storage Condos
After my recent blog entries regarding storage condos (storage units for sale rather than lease), I'm pleased to share with you the following thoughtful letter, written by Ted Deits. Ted is the president of 20 Seconds and Building, the developers of Eucalyptus at Beaumont (referenced in THIS POST from Dec. 8th). By the way, I still have yet to receive any feedback on this subject from self-storage operators. What's the matter—condo got your tongue?
I read your blog entry regarding "storage condos" and the recent activity in that market. I am currently building 117 storage condos in Beaumont, Calif., geared toward the RV enthusiast.
I have been contacted by no less than 40 "developers" or wannabe developers in the last six months while I was in the initial planning stages. Most were people who liked the idea, but lacked the where-with-all to actually develop this product. You wouldn't think building 117 boxes would be all that difficult but, trust me, it is.
I have a blog of sorts on my website at www.rvstorage.biz/progress.html , which takes you through all I have been through for the last year. It has taken me five years to get to this point. I have been through 15 cities and 24 properties in Orange and L.A. Counties trying to get this concept off of the ground. Beaumont is the only city so far that has embraced this cutting-edge project.
Here in Orange County, our situation is unique in that we have an extreme shortage of RV storage. Property in this area is just too expensive to produce it. RV storage is not the highest and best use of land that is now costing upward from $60 per square foot. That equates to about $2.5 million an acre. Add another $10 a foot to improve the property, and you are getting close to $3 million an acre.
Added to the expense of raw land, we also have another crisis in the making. An old abandoned airport, the El Toro Marine base, was sold to developers in July 2005 (see www.rvstorage.biz/news.html ). There are 2,500 RVs stored on that property. It has been that way for years. Last I heard, the lease for RV storage will expire this June. Where are all those RVs going to go?
Many of the "mom and pop" RV-storage facilities are selling out. I can't blame them. If they have 5 acres of land, they’re sitting on upward from $10 million of a nest egg. They are cashing out. I don't blame them. I would too.
As far as this type of product (storage condos) competing with rental style facilities, yes, we are, but we're only capturing a small percentage of the market. Our units will be selling from the high 70s to 100s depending on the size of the unit. My typical buyer is someone between 55 and 65 years old, with a high-end motor coach typically costing more than 300K. While I am also marketing to the classic-car collector, I have only two out of the first 30 units I sold. Everyone else is an RVer. By the way, three are from Hawaii. Go figure.
Fivers and towables, which are dominating the market at the moment, are not suited for this type of facility; therefore, those clients will be the mainstay for the remaining rental facilities. For what it is worth, I released my first phase of 30 units and they sold out in two days. So the demand is there. I have proven it.
Ted Deits, President
20 Seconds and Building
Developers of Eucalyptus at Beaumont, A Private Storage Community
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