By Leeann Fleming
Self-storage facilities are judged by their curb appeal. The first impression of the business can be great or … gasp! Aesthetics can even affect a customer’s perception of your site’s safety and security.
Self-storage has become a highly competitive market, so it’s imperative that your property is on trend. Faux doors in branded colors, glass fronts or windows, or an “urban feel” are just a few of the things today’s facility developers are using to create an upscale ambience for customers. If your buildings are aging, improving the façade and interior hallway systems can help you attract new prospects, retain existing tenants, improve revenue and even beckon potential buyers. This article covers four renovation projects that can help you unleash innovation to improve your investment.
Project 1: Replace the Roll-Up Doors
Whether your facility is traditional or offers climate control, the unit doors keep tenants’ belongings secure and dry, so it’s critical that they operate properly. Each roll-up door should open and close with ease, with a tensioning device on the springs to adjust when necessary. Dents and dings are common signs of wear on a door, but if it fails to function properly even after adjustments, it may be time to replace it.
Let’s look at a sample scenario for a 100-unit door-replacement project:
- The investment for a full, turnkey door replacement would cost $350 per door, or $35,000.
- Each upgraded unit would result in a rent increase of $5 per month, equaling $6,000 per year in added revenue.
- Let’s assume a capitalization rate of 6.5 percent.
In this case, a $35,000 investment provides $92,308 in added facility value ($6,000 in additional annual revenue divided by a 6.5 percent cap rate). Then we also need to factor in savings on your commercial insurance of up to 20 percent as well as annual depreciation for a net income offset, and savings from reduced insurance claims and maintenance fees. Your increased revenue and facility value, combined with lower expenses, can make it possible for the project pay for itself in a matter of months.
Project 2: Consider a New Unit Mix
Refreshing your facility’s unit mix can be as critical as updating the building’s façade. When updating your existing mix, consider these five factors:
- How to maximize the occupancy rate
- How to maximize total square footage
- How to maximize rent per square foot
- Your customers’ needs
- Your target market
Design your unit mix with flexibility in mind. Even the best-laid plans may require adjustment. Perhaps you have 20 larger units that haven’t rented, but your demand for smaller units is increasing. Design experts can add or remove partitions and doors to change unit sizing quickly and efficiently. Furthermore, you may even realize greater revenue for the same space.
For instance, four large units may generate $175 each per month for a total of $700—but only if they rent. If they’re empty, creating eight smaller units that rent for $100 or more each would generate more in monthly rent and provide a better response to market demand.
Project 3: Explore Re-Skinning
Re-skinning is a low-construction, invasive-free, cost-effective way to reinvent tired self-storage buildings. The concept is attributed to Patrick Reilly, president and CEO of Urban Self Storage Inc., which operates 60 facilities in Arizona, New Mexico, Oregon and Washington. Like many owners of older properties, Reilly was looking for a way to change out the wood hallway components and hollow-core doors at one of his sites. He’s reskinned several of his older sites.
As an option to provide a facelift to older, first-generation facilities, re-skinning is appealing on many levels:
- It improves the site aesthetics that are vital to attracting and keeping new renters.
- It’s a timesaver. Typically, an entire hallway of steel doors can be installed in a day.
- Many of the surprises typically encountered with a remodeling job are eliminated because there are no major structural changes to be made.
- Inconvenience to the customer is minimal. Because the new doors are installed over the existing ones, their unit contents are never disturbed. (As a side note, many re-skins use swing doors, which typically cost less to purchase and install, rather than roll-ups.)
- The facility owner is able to sidestep the myriad of potential liability issues when it comes to switching out doors and exposing stored belongings.
Project 4: Bring in Portable Units
Some self-storage operators have existing land and would like to expand, but adding another building may not be feasible due to costs, location or zoning restrictions. This is where portable units come into play. You might expand onto a large, unused parking lot or into areas where you wouldn’t typically build permanent structures. Relocatable storage units allow more flexibility than traditional structures and can be an attractive, cost-effective alternative to new construction. Here are some of their benefits:
- Easy to move around a property
- Immediately ready to be rented
- Offer security and convenience
- Can be classified as equipment so they can be depreciated over seven years
Some cities, counties and states are now offering incentives to businesses that make property upgrades. These include reimbursement grants for interior improvements and building development. Contact your city’s program manager to see if the government offers a façade-improvement or development-incentive program.
When tackling a renovation project, always keep the customer in mind. Consider all aspects of your facility, from the curb to the doors, hallways to unit mix. Older facilities can compete successfully with newer ones. Reshape the impression your property makes on customers through these smart upgrades.
Leeann Fleming is the director of marketing for Janus International Group LLC, a global provider of self-storage doors, hallway components, portable storage and mezzanine systems. For more information, call 770.562.2850; visit www.janusintl.com.