Working With Your General Contractor: Advice for Self-Storage Owners and Builders

The secret is out, and everybody knows self-storage is a hot asset class. In recent years, new buyers have moved into the market, making it harder to purchase existing facilities that meet financial expectations. This leads many owners and investors to purchase value-add properties they can renovate or raw land on which to develop.

If you’ve decided to expand or construct new, you’ll need to work with a general contractor (GC). However, you may not know what to expect from this person or how to hold them accountable during the development process. This can lead to misunderstanding and frustration on both sides.

GCs are hired to manage three main project areas: cost, time and scope, also known as the triple constraint. Think of it as a three-legged stool; if one leg fails, the whole thing can topple over. While every self-storage project has its bumps along the way, holding your contractor accountable for major items will ensure you and your design team are aware of risks sooner, thus allowing everyone to work toward a solution before problems get out of control.

There are three specific deliverables you should expect from your GC that’ll reduce the risk of communication and ensure the transaction goes smoothly. These tools and the information they provide will allow you to verify everything on the project is moving along as planned. Let’s look at them in detail.

The OAC Meeting

Once a self-storage project kicks off, you should receive an invite to a recurring OAC (owner, architect, contractor) meeting. This is a weekly coordination between the major stakeholders, typically lasting 30 to 60 minutes. The agenda for each meeting will vary based on the phase of the project, but you’ll get updates from each party who’s actively engaged at that stage.

For example, when the project is in the entitlement and design phase, there should be updates regarding the engineering activities that were completed the week prior, what’s upcoming, if the project is trending to meet the schedule and, if not, why. At this point, it’s good to have each engineering discipline on the call to discuss coordination and best practices learned from former projects.

The GC should also include input regarding constructability and cost savings, known as value engineering. Everyone should have a solution-based and team-oriented mentality to propel the project forward.

As the development moves into construction phase, the GC should provide updates on progress from the previous week, what to expect for the coming week, insight on current roadblocks, and anticipated hurdles. In addition, it’s a wonderful opportunity to review any open submittals with the engineer or architect in conjunction with addressing open requests for information (RFIs) that might not have been answered yet.

Lastly, your GC should bring up any potential change orders on these calls. Not all of these are avoidable, but if the team can work on a solution together, it can often reduce the cost and schedule impact of a scope change.

It’s imperative to document all meeting minutes to memorialize any decisions and incorporate them into the project documents. (At my company, we use a software called Procore for this purpose.) At the end of each session, an email should be sent to all participants with a copy of the notes. Not every contractor will use the same software, but it’s important to send the recap regardless of which platform they have.

Daily Reports From the Field

While the OAC meeting is important, waiting until this weekly conversation to bring up potential or existing problems can have a negative impact on the schedule. For this reason, it’s important to ensure your GC is providing daily project reports. This not only addresses possible bumps in the road, it gives you the sense that your self-storage development is moving forward as planned.

These daily reports should include a list of any subcontractors that were on site and what their activities were for the day, weather observations, schedule impacts, and photos to provide additional verification as to progress. It’s particularly important to catalog any notes that may turn into an RFI or scope change. This way, you can communicate with your architect and engineers as soon as possible regarding any information needs or potential change orders.

A Detailed Monthly Invoice

Each GC is a little different, and every self-storage owner has varying requirements for monthly pay applications. In general, invoices should be collected from subcontractors by the 25th of the month, then reviewed by the GC for accuracy and to ensure they have a lien waiver attached. The GC will then roll all invoices into their pay application, add in their own costs, and submit the invoice to the architect or owner’s representative for approval.

As an owner, you might not have an architect or representative on your team to review the application against the progress on site. This is where having OAC meetings and daily logs can allow you to confirm the work being billed is actually complete.

Many owners also require a monthly report to accompany the pay application from the GC. This is a version of the daily report containing an executive summary of progress from the previous month and details of what’s expected in the month ahead. It’ll include a copy of the project timeline, potential and full change orders, RFI and submittal logs, anticipated obstacles, and safety and quality-control topics. There will also be a handful of progress photos. You and your team can review this report as justification for your monthly payment.

The Importance of Communication

As with most challenges in life, lack of communication is often the culprit. Whether expanding an existing self-storage facility or working on a ground-up development, it’s vital to set expectations with your team early and reinforce them through honest and transparent conversations. An engaged owner who’s vocal in the OAC meetings, asks questions about the monthly and daily reports, and holds the GC accountable for errors in reports will ensure the team is committed to moving the project forward.

It’s also critical that your contracts with your architect, engineers and especially your GC include the three deliverables outlined above. Being diligent and engaged in the project's development will only increase the odds of a successful self-storage facility.

With more than 16 years of experience in construction, Aaron Saunders is president of Spartan Construction Management, a Golden, Colorado-based firm that offers self-storage due diligence, entitlement, design and construction. He holds a general contractors license and is a certified project-management professional. After spending much of his career in heavy industrial, he pivoted to bring his skillset to the self-storage industry. To reach him, call 855.588.1326 or email [email protected].