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Site-Selection Checklist: Finding the Perfect Parcel for Your Next Self-Storage Development
You might think you own or have found the perfect parcel for a self-storage development, but before sinking money into your project, take a step back and determine if the site is really ideal for this use. The following guidelines will help you decide.
5 Min Read
“It’s the perfect site!” We’ve all either said or heard it said about a parcel for a potential self-storage development. But is it really perfect?
Over the past several years, facilities have been developed in locations that most of us would now question as viable. Site selection for self-storage doesn’t follow the same rules as other types of real estate, and as the market changes, so do the guidelines. For example, with more renters shopping online, projects often don’t need street frontage to be found. But one thing is always true: Care should be taken when selecting a land parcel. Consider the following advice to find one that’s at least close to perfect.
Feasibility
Developers sometimes believe they can simply build self-storage on their previously owned, undeveloped land, but that isn’t always the case. Before moving forward with any parcel, ask an industry consultant to perform a feasibility study. You need to consider the market demand per capita as well as what the cost per square foot will be once all the necessary entitlements and utilities are conveyed.
But before you reach out to a feasibility expert, do a bit of homework to see whether your proposed location may be suitable. First, look in the area for a well-known user such as a Walmart, McDonalds or other big, class-A retail or restaurant business. They’ve already done a feasibility for their own product, and you can piggyback on their knowledge. They always know before the smaller developer what’s coming down the pipe in the way of schools, hospitals and other economic impacts.
In addition, do a search on Google Earth for self-storage in the region and map it. Mark any locations that are within three to five driving miles. This’ll help you determine market demand.
The Site-Selection Checklist
Once you’ve identified a favorable piece of property and your feasibility consultant confirms that it has promise, it’s time to ramp up your investigation. The following checklist will help determine whether you should bring the deal to close.
Check the zoning. If a rezone or special-use permit is necessary, you’ll need to add time to the due-diligence phase of the purchase contract. You don’t want to close unless you know for certain that the use will be allowed.
Obtain a current land survey as soon as possible. The seller should have one, but you might need to find a third-party source. Have that survey reviewed by a civil engineer or another qualified party. They’ll be able to tell if you if there’s anything on the site that would prohibit self-storage or restrict facility size.
Is the site platted, or does it need to be? This is very important, and it’s common for municipalities to require it. This will take time and, in many cases, the county or city will ask for specific items to be included such as easements for utilities.
If the land survey doesn’t show what utilities are available, go to the property to do your own visual study to locate markers, manholes, electrical signs, etc. If utilities are needed, such as a watermain or sanitary-sewer extension, you’ll need to get at least an idea of the lineal cost per foot to install. This has a big impact on your overall expenses and may help you negotiate a lower sale price for the property.
Are there any landscaping or tree ordinances required? If so, you’ll need to obtain a tree survey. Work with a professional landscape architect to ensure the tract doesn’t have any restraints that would impact the overall site plan.
What setbacks are on the property? This can be verified by an engineer.
Determine the cost of land per square foot. If you’re in an urban area, the price may be high, which means you may want to purchase less land and build multi-story. If you have more than 2 acres, know how many square feet you can afford to build with only single-story structures. You may need a combination.
Ask the owner if they have a Geotech Soils Report. If not, order one. Typically, this costs $5,000 to $8,000 and takes about three weeks to receive. Only do this if you feel you’ll close on the property. If the soils are bad, it’ll cost you to replace or repair it, and this fact could be used to lower the sale price.
If the land had a previous development or existing building that needs to be demolished, you’ll need a phase-one environmental report and possibly a phase-two. This will need to be done prior to closing.
Finally, what are the water-detention requirements? If a detention pond is necessary, it’ll impact overall costs and impervious coverage of the project. It could even make the site impossible to develop.
Some Final Thoughts
When shopping for development land, it’s important to understand that self-storage can be built on various (even challenging) parcel shapes, and a piece of land doesn’t need to be “perfect” to be a good choice. You can change the site plan to include different structure sizes and accommodate a property that might be less than ideal for another use.
The topography can also be manipulated by pushing a structure into the landscape. In this case, some portion of the building will be underground.
The above guidelines will help you determine if a piece of land is right for self-storage development and negotiate the best price. You’ll be way ahead of the competition and financially educated as to what you need to do to make this the “perfect” site! Whatever you do, review the checklist with an experienced industry professional during the feasibility and due-diligence phases, even if you must pay for an extension.
Glenda R. Jacoby is owner of RCM Services, a design and construction-management company specializing in self-storage. She works directly with developers and owners in pursuit of projects, works with jurisdictions to ready sites for development, and creates plans to arrive at Certificate of Occupancy. She’s served the self-storage industry for 28 years and has experience in multiple states. To reach her, call 210.861.9216; email [email protected].
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