By Bray Allen
Conversion projects are ideal for self-storage owners or developers who want to start or expand their business but are unable to find land for construction, or who face local moratoriums on new building. Those who own or can purchase an existing, unoccupied structure in a high-demand market can also greatly benefit.
Often, a conversion can save you time and money. Because the building enclosure and much, if not all, of the necessary auxiliary infrastructure (i.e., water, sprinklers, electricity, lighting, HVAC, security, etc.) already exist, the time from start to facility opening is significantly reduced compared to new construction.
Conversions can also be developed in phases, allowing for greater flexibility in schedule and budget. Fewer moving parts during the interior construction and unit build-out, as well as protection from adverse weather conditions and the availability of onsite material storage all serve to reduce costs and increase the speed at which units can be available for rent.
Though conversions offer many benefits, a common challenge is finding the optimal balance between features that improve functionality and those that are aesthetic in nature. Both can maintain or increase property value and allow operators to charge higher rates. So how do you create this balance while maintaining at least 75 percent rentable space and maximizing the return on investment? Following is some insight.
When embarking on a conversion project, first understand the requirements of your area to avoid additional costs, delays or even a cancellation. Conducting a feasibility study before investing will ensure you understand the local market and how to best to maximize your earning potential. The study should include information for the area within a three- to five-mile radius of your property. It should contain:
- Market size: How many people live and work in the area?
- Market type: Is the area urban, suburban, rural or industrial? The answer will help you decide the size and number of units to build.
- Market growth: What’s the expected evolution for the area?
- Disposable income: How much does the average resident have?
- Traffic: Will your facility serve those who live or work outside of the three- to five-mile radius? If yes, how many more people could be accommodated?
- Competition: Are there existing facilities in your market? If yes, how many, and is there still an unmet need your business could fulfill?
After facility location, your unit mix is the most important consideration. You want to offer the ideal combination of unit sizes and types. Based on the market factors listed above, it’s important to create a balanced and focused mix (not a banker’s mix), with 75 percent net rentable space and 25 percent reserved for hallways and office areas. Additional considerations include:
- Unit placement: Consider the frequency with which renters will need access to their units. For example, commercial renters typically visit more frequently and, therefore, appreciate having larger units near entrances. On the other hand, this is less of an issue for residential customers, who access their space less frequently.
- Site layout: Door manufacturers and architects can provide you with layout options that meet your unit-mix needs.
There are several options for conversion projects that enhance site functionality and increase rentable space, despite the limited building footprint or constrained budget you may face. To ensure your project will deliver the desired investment return, consider the following:
- Building protection: Kickplates, corner guards, wainscot and column wraps all help to protect your facility from the everyday wear and tear of tenants moving items in and out.
- Door type: While swing doors can obstruct access and visibility for tenants and security cameras, roll-up doors eliminate these challenges and the associated dangers.
- Door installation: Using qualified installers not only ensures your facility will look nice (by using the correct screw patterns, for example), they’ll ensure the doors roll correctly and the latches are properly fitted and functioning.
- Hallways and wall systems: Available in flush or corrugated styles, these must be at least 8 feet high to accommodate roll-up doors. Liner panels may be added to the back of each unit, depending on building construction.
- Mezzanine systems: Suitable for buildings with 18- to 20-foot clearance, these can increase your available space by half. For example, a 40,000-square-foot building can net 60,000 rentable square feet by using a mezzanine. They do require a slab that can handle the load, with concrete or composite decking used for the second level. An added benefit is the layout of the top floor can be redesigned after the bottom floor is complete.
- Security: Depending on ceiling height, burglar bars or mesh panels can be used to protect unit contents from above. Additional security components to consider include cameras, keypads and gates.
- ADA: Kits are available to ensure your facility complies with the Americans With Disabilities Act (ADA).
- Lockers: Smaller locker units can be double- or triple-stacked or even placed above standard storage units. These are popular in urbans areas, on military bases and with student populations.
- Specialty options: Specialized wine lockers in various sizes can be included as a small portion of your unit mix and will yield high rental rates.
The aesthetics of your facility can make or break its success. Curb appeal is of the utmost importance because it can affect a consumer’s decision to rent with you. Even a property with a perfect unit mix that expertly suits area demographics from a functional standpoint can deter business if it doesn’t have the right allure. Furthermore, customers are generally willing to pay more for facilities that look welcoming and safe. Here are few high-impact options to consider for a conversion:
- Improvements: It’s easy to upgrade a dated building with minimal investment. Possibilities include painting the floors with epoxy coating; repainting with bright, friendly colors; and outfitting the facility with kickplates, corner guards and soffits to cover exposed edges.
- Customization: Proper branding of your facility will not only serve as a consistent advertisement that drives traffic to your business, it’ll help justify higher rental rates. Areas that can be customized to promote your brand include awnings, free-standing and digital signs, interior and exterior door displays, and anything that can be painted with your signature color.
- Retail areas: Renters are more likely to do business with a facility that can conveniently meet as many of their needs as possible. Creating a bright, clean area where products such as boxes, packing supplies, locks and tenant insurance can be sold is a great way to elevate your business above the competition.
All of these ideas will help you balance function and aesthetics in a conversion. In the end, you’ll optimize your project, shaping it into a self-storage facility that achieves your business goals.
Bray Allen is the general manager of sales at DBCI (Doors & Building Components Inc.) Allen began his career with the company in 2004 as an inside sales representative. Over the last decade, he’s held positions in customer service, sales, and research and development. He also serves as the company’s representative to the Door & Access Systems Manufacturers Association, where he serves as chairman of the Sheet Door Committee and vice chairman of the Rolling Door Division. For more information, call 800.542.0501; visit www.dbci.com.