Many changes in construction and unit mix have taken place in self-storage over the last 35 years, and a lot can be learned from past experience. Take, for example, three older projects: one in New Jersey with 600 units, all 5-by-10s; another in South Florida with 600 units, all 10-by-20s; and a third in Texas with 500 units, all 10-by-20s. These projects are still around, but their unit mixes have been modified, either by expansion or the demands of the self-storage market.

The New Jersey project was expanded and the unit mix enlarged, with some of the 5-by- 10s converted to 10-by-10s. The South Florida project now has more than 3,000 units of various sizes, including climate-controlled units. The Texas project has maintained its original mix, charging $50 per month for each unit. The property is full, but if it had a better unit mix, its value would be more than 50 percent higher.

Storage owners should avoid having all one unit size or a mix not designed to fit their particular markets. At the same time, all properties should include some climate-controlled units. One of the best approaches is to phase a project, which allows the owner to create a unit mix that matches rental demand.

Using Demographics

The first step in determining a proper unit mix is to analyze an areas demographics. If you feel uncomfortable doing your own research, purchase a market study from a professional. This can be used as a tool for obtaining financial commitments as well as raising your own confidence before building. The cost of a market study is quickly offset by the information it provides and may serve to prevent costly mistakes.

Demographic information can be obtained in a variety of ways. Utility companies have huge amounts of data. Real estate companies and chambers of commerce also have information on who is moving into and out of an area. These organizations are generally willing to share.

If you gather your own data, first determine the areas population. In urban areas with high-density population, the market area should be relatively small, with a 2-mile radius; in a rural area, the radius should be taken to 5 or even 7 miles. If the project is in an area that attracts customers from farther away, take customers locations into consideration.

When gathering data, visit and survey all the competitors in the area (of course being friendly, honest and courteous). Leave no project overlooked. A newer project may not yet be in the Yellow Pages or in a particularly visible area, so it is important to use as many avenues of research as possible. An area map will be useful in locating all local storage properties. Once all demographic information is collected, many of the answers for your proper unit mix will be apparent.

Looking at the Data

Once you have your data, here are some things to consider:

An Average Mix

The average unit size ranges between 90 and 130 square feet. Unit-mix percentages for the standard project are: 15 percent 5-by- 10s; 40 percent 10-by-10s; 25 percent 10- by-15s; 10 percent 10-by-20s; and 5 percent 10-by-25s. This leaves 5 percent available to be divided into larger or smaller units. Some 5-by-5s should be used as low-cost price leaders. Larger units are necessary for commercial customers and tenants storing an entire house worth of possessions.

This mix is a guide and will work for conventional or climate-controlled units. Variations can be used to fit lot sizes and local design requirements. The important thing is to be flexible. Phasing allows the opportunity to adjust the mix to the percentages of units that rent best. As a project fills, requests for larger units will push the average unit mix higher.

For example, commercial tenants generally require large units. If their goods are in any way perishable, they will also require climate control. In fact, the government now requires climate-controlled storage for pharmaceuticals and similar products. Storage of these items in a residence, garage or basement is no longer acceptable as quality control cannot be guaranteed.

All facilities, new builds or conversions, should include some climate-controlled units. Climate control currently makes up about 40 percent of the total self-storage market. Rent premiums for this type of storage range from 25 percent to 60 percent over the cost of conventional rentals, while operating costs average 10 cents or less per square foot per month. The temperature in these units ranges between 40 degrees in winter and 90 degrees in summer, with humidity at 60 percent to 65 percent.

Rising land costs, declining land availability, and government-imposed building restrictions all make multistory projects a good building option. For similar reasons, conversion projects have gained popularity. In some cases, column spacing and other obstructions may dictate the unit mix, though it generally only affects a small portion of the units.

To get the right unit mix, an owner must first study the demographics of a selected area, noting traffic patterns and local competitors. It is always preferable to build an upscale property with a variety of unit sizes. Higher land costs may require multistory development of an already climate-controlled building. Higher rents will offset the higher cost of developing this type of property. In all cases, the unit mix will remain about the same.

Dan Curtis is president of Atlanta-based Storage Consulting & Marketing, which provides feasibility and marketing studies to potential self-storage owners. Mr. Curtis is a frequent contributor to

Inside Self-Storage as well as a speaker at numerous industry conferences. For more information, call 404.427.9559.