When examining the issue of self-storage building style, consider the benefits from your vantage point as an investor as well as your customer’s point of view. If your customers see the style of facility as an advantage, it should increase your revenue with higher volumes of rentals. However, the building style is often dictated by the size of the property and the demographics of the area.
The Single-Story Option
A single-story facility would be the best option for a large site in an area where a large number of units would not be profitable. Single-story construction means no elevators, lifts or stairs. This provides easier access as more of your customers can park closer to their rental space.
Spreading out your facility over a large area also gives you greater marketing exposure to drive-by traffic. In some cases, I have seen facilities stretch more than 700 feet along a roadway. The long frontage is used to market the storage product. Of course, marketing is much more than simply consumer drive-by on a major road, but the exposure will help build your market awareness.
A single-level storage facility will obviously require more land to equal multi-level business volume. If you have already developed all the real estate resources on that site, any expansion will be restricted.
Depending on your municipality, you may have to pay increased property taxes as you continue to develop more of your land. When you submit your single-level site plan, you will be required to establish all of your building locations initially even if you are planning to build in phases. If you need to make changes or add structures later, you will have to go through the site-plan process again.
Additional costs are also created by the span of the facility and not the actual construction method. The biggest increase in cost of single-level building style is from additional roofing required to cover all the units. Other increased expenses would be for additional wiring for lights, cameras and security systems for units. Due to the longer distance between these elements and the office, more cabling will be needed.
When you are ready to put your investment into operation, you will also encounter additional expenses from maintenance and snow removal due to the spread of the laneways and the area of the site.
The Multi-Story Option
In today’s market it is becoming increasingly difficult to acquire large parcels of land for a storage facility in ideal locations. Older buildings in densely populated areas that will sustain a high occupancy in storage are at a premium. These existing buildings need to be multi-storied or have single-story height clearance to convert into two or three stories.
If you have only a small real estate resource to work with, a multi-story project may provide the best option. The greatest benefit is the ability to create more rentable square feet using less land to maximize real estate value.
In most multi-level building conversions, extensive site plans are not required because the conversion is inside an existing building. If you are developing a new multi-story project, it is much easier to gain approval with one multi-story building than several buildings on a site to achieve the same rentable space.
Costs for materials and labor can be reduced with multi-story construction due to floors being 10 to 12 feet apart, with less distance for crews to cover. Once the facility is operational, ongoing maintenance costs may be reduced as you would have less snow removal and only one roof to maintain.
Multi-story construction can still give impressive exposure by using the height of the building for distant visibility as a communication tool in marketing signage. Additional consumer benefits include heated or climate-controlled units (since the building needs to be heated anyway), indoor protection from the elements, consistent lighting 24 hours a day, and added security. An intercom system with soothing music can be piped through interior hallways to add ambience.
Converting an existing building into a new multi-story self-storage project is not without challenges. There are often additional building codes to deal with, plus the cost of installing elevators or lifts. Most buildings require an extensive sprinkler system. Obviously, you will require more wiring with motion-sensor lighting that will go on any time a customer is present.
The number of customers who can be serviced at one time may be limited. Your customers will not be able to drive up to their units and load or unload immediately on arrival. Some may not appreciate the distance they have to travel to transport their items from the loading area. And with less land, you may not be able to offer vehicle storage.
Don’t Overlook Good Management
Regardless of designing and developing the perfect facility, your project can still fail if you do not market and manage it effectively. I have heard many owners and managers place blame on location, the market or the age of the building. But this is not often the case.
Ultimately, the success of self-storage is driven by the management and the marketing effort. Ask any successful and confident managers and they will say even a bad location can have a high occupancy if you let them build it.
Don’t overspend your budget on building and try to save money on staffing. Your biggest asset when developing a successful storage facility will be the people and systems you have in place to deal with customers. If you don’t invest in the right management it won’t matter if you build one story or five. Customers simply won’t rent space from you if they are mistreated.
Serving Customers’ Needs
In an ideal situation, you could choose a combination of single- and multi-story construction if the property or budget allows. Regardless of your choice, you may need to review your project with experienced professionals in developing both.
When you think you have your solution, look at it from the customer’s perspective. Are tenants going to see it as an attractive and efficient facility to suit their needs? Will they appreciate the efforts you made to accommodate them? Will their storage experience with you be enjoyable or frustrating? Your final solution can’t be solely based on budget, but your objective should be to provide the best storage product for your market.
Cory Parrow is the president for the Ontario-based Your Storage Team, a consulting firm designed to service from facility development to site management, with many years in the self-storage industry. For more information, call 519.868.1982; e-mail [email protected].