In August, Canadian self-storage operator Dymon Storage Corp. announced it was building a huge facility in Greater Toronto. The property in Etobicoke, Ontario, will comprise up to 500,000 square feet of storage in about 3,000 units. But it will be so much more than just a “big” facility. It will also include wine storage, office and third-party retail space, delivery service, mailbox rentals, and security vaults. In conjunction with its wine-storage offering, Dymon will host wine tastings and even employ a sommelier. Additional services at the property will include document shredding, records storage, moving assistance, and the sale of moving and packing supplies. While most of these services aren’t new to the self-storage industry, combining them all at one site will make this Dymon Storage a fierce competitor.
As self-storage continues to move away from the “industrial” moniker and likened more to a “retail” offering, operators are experimenting with products and services that will meet their existing renters’ needs as well as attract a new demographic. In addition to generating new revenue for the business, it’s a great way to stand out in a crowded self-storage market.
Most operators today offer some kind of retail store that stocks basic items such as locks, boxes and other packing supplies. It’s often an easy sell, as the tenant will need these items during a move. The same goes for truck rentals.
For some operators, wine storage has become the profit center of choice. SoBe Wine & Self Storage, for example, opened this summer in the historic Flamingo/Lummus neighborhood of Miami Beach, Fla. The wine-storage area comprises more than 140 units in varying sizes, with an option for tenant customization. It also features a biometric security entrance, redundant refrigeration systems and a backup generator.
Another great example of a profit center is leasing retail or office space. A number of mixed-use projects under development contain dedicated space for restaurants or retail businesses. In these cases, the self-storage facility acts as the anchor. Office space is a good fit for a self-storage facility because small businesses often rent storage units. Having inventory close to their home base reduces traveling time and costs, and can even streamline operations.
Fortunately, a great profit center is only limited by an operator’s imagination. Some have found success with renting vaults, smaller lockers for college students, mailboxes, gun cabinets, and rehearsal or art studios. Other options include propane sales, valet storage and even notary services.
Of course, before adding any profit center to an existing site or new development, you must first do your homework. Wine storage might be successful in one market, but fall flat in another. You need to determine your demographic for your potential profit center, and assess the cost to build and maintain it. You may find, for example, that there’s a great need for covered vehicle storage in your market. Or perhaps you’re in an area that’s lacking facilities that offer records storage. Once you land on an idea, do some research about it, talk to vendors and perhaps even ask some tenants what they think.
If you have a successful or unique add-on profit center, I’d love to share your story in an upcoming issue of ISS. You can contact me at [email protected].