Map Planning

Where to Build? Factors That Make a Desirable Self-Storage Site

When developing a self-storage facility, one of the biggest decisions is where to buy land. Here are some of the characteristics successful developers seek in a parcel.

When developing a self-storage facility, there are many decisions to make. However, none are as important and vexing as where to buy land. Finding the right market and parcel on which to build will involve several tradeoffs. In this article, I’ll discuss the location characteristics sought by successful developers and the factors that make a site desirable.

Correct Zoning

An improperly zoned parcel will stop your project in its tracks. As a self-storage owner or developer, the first thing you need to discover is which zoning category allows for storage in the market you desire and where that land is. This information is typically available through the city or county website.

Properly zoned land may still require a conditional-use permit. It’s very common that if you find a market with great unmet demand, there are zoning or community restrictions preventing self-storage construction. Most areas have a process to petition for a zoning change; however, this typically involves a significant investment in design and architectural-rendering services, with no guarantee of success. If you do succeed in a zoning change, it may afford you an excellent location with high barriers to entry for future competitors.

When properly zoned land isn’t available, pursuing the conversion of a large vacant structure may improve your chances of winning approval. The longer a building has been empty and the uglier it is, the less resistance you’ll encounter.

High Visibility

A location with a high traffic count is very desirable, and one that will be passed by local commuter traffic is ideal. In most communities, these parcels won’t be zoned correctly for self-storage. If competitor sites aren’t highly visible, however, it’s less of an issue for a new development.

Easy Access

The perfect site will be easily accessible. Some parcels may be highly visible, such as from a freeway, but not directly or easily accessible. However, unless competitors in the immediate vicinity are both more visible and accessible, this isn’t a major concern.

Proximity to Residences

Putting a new facility close to residential developments has become increasingly important as customers search for storage online. Go ahead and do a search on your mobile phone for “self-storage near me.” Chances are, Siri (or your friendly Android equivalent) will point you toward the closest site. Therefore, it’s highly advantageous to build near homes or apartments. If you must choose between visibility or proximity to population, the site closer to residential rooftops is the better choice.

Inside City Limits

Municipal borders are also important. It can be tempting or convenient to look just past the city limits for available or less expensive land. However, a site that sits across the city line won’t show up as prominently in online search if the customer is investigating a specific town, so it pays to be in the actual city than a neighboring suburb. A “just outside the city” location may require you to invest in pay-per-click advertising to maintain an online presence, especially during the rent-up period.

To see borders of a community as defined by Google, do a search for the desired city name and state. The town should show up with a fine red border.

Rectangular

In reality, self-storage facilities can be and are built on any land shape available. The buildings are highly adaptable and can make use of parcels that aren’t ideal for other uses. That said, a rectangular site is the easiest to lay out and build.

Several Acres

The size of the property you purchase will depend on the amount of demand forecasted for a market and the type of storage that will be built. Traditionally, sites consisting of drive-up buildings (commonly 30 to 40 feet wide) work best on parcels ranging from 3 to 5 acres. Smaller sites can be financially feasible if run remotely, but they’re often not attractive once the manager expenses are factored.

What about established areas where a parcel that size isn’t available? In places where land is costly and rental rates are higher, you can use a smaller parcel and wider buildings with interior-access units to increase the amount of rentable space. Taking it a step further, you can build multi-story. Just keep in mind that the more complex the buildings are, the longer they’ll take to design, engineer and build. Some larger buildings will require firewalls or sprinklers, for example.

Level Topography

Flat or minimally sloped parcels are the easiest on which to build, but buildings can also be adapted to hilly sites. In this case, they’re designed in a “two-story-into-a-hill” layout that provides access to both levels without the need for stairs or elevators. These sites may require a greater investment in site work and engineering.

Good Water Drainage

As you look at properties, consider how you’ll comply with the state’s storm-water retention requirements. In most areas, you’ll need to hire a civil engineer to design this plan. It usually involves engineering and creating a pond, unless there’s a shared pond within a development. This can be a significant expense—as much as $100,000 for a pond to serve a 5-acre parcel. Your civil engineer, planning department or state department of natural resources can give you guidance on local requirements.

Compromises

In most areas, you simply won’t discover the ideal site. The key is to find the compromise that works in your situation.

Keep in mind that whether you choose expensive or low-priced land, the remaining construction costs are similar. The charge for concrete, asphalt and steel will be the same regardless of the location. However, with a premium site, you’ll rent up faster and likely can charge higher rental rates. While costlier, a better location will normally be a better investment.

Your ability to absorb loss can also be a factor. A site that might be ideal for an established developer likely won’t be right for a first-time investor. Larger sites in highly populated areas might generate the best returns, but there are good investments to be had in smaller communities where owner-managed facilities are more common.

When seeking a site, the most obvious method is to use real estate websites to search properties for sale, or to contact agents via the information on a for-sale sign. That said, some of the best deals may be had by taking a more aggressive approach. If you identify a property that would work well for storage but it isn’t for sale, you have nothing to lose by approaching the owner to inquire. Use local tax records to find this person’s information.

Don’t limit your search to vacant land, either. Existing buildings can be converted or demolished. An old home can be converted into a self-storage office. Think creatively when looking for the ideal site for your next project.

Steve Hajewski is marketing manager at Trachte Building Systems, which designs, manufactures and erects a full line of pre-engineered and customized steel self-storage systems, including single- and multi-story, portable storage, interior partition and corridor, and canopy boat/RV. He also owns a self-storage facility in Wisconsin and is a frequent contributor on Self-Storage Talk, the industry's largest online community. For more information, call 800.356.5824; visit www.trachte.com.

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