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Inside Self-Storage Magazine 07/2004: The Big Box Project

July 1, 2004

7 Min Read
Inside Self-Storage Magazine 07/2004: The Big Box Project

The Big Box Project
U.S. Storage Depot conceives industry-first shopping/storagecenter

By Kimberly Hundley

Storage Depot CEO Ronald Hagen may have accomplished aworldwide first in the self-storage industry. The designer/builder has blendednational retail with climate-controlled self-storage and mini-offices in amammoth shopping complex. Created through a joint venture with Schonsheck Inc.,Willow Creek Center spans 22 acres in Canton Township, Mich. The complexcontains two out parcels and 10,000 square feet for national restaurants,200,000 square feet of commercial retail space, and 70,000 square feet ofbusiness self-storage. It already boasts such big-name retailers as Pier 1Imports, Michaels and PETsMART.

In its previous life, Willow Creek was a real estate albatrossavacant big box off the interstate. Though highly visible, the gargantuanbuilding had zero appeal in todays penny-pinching business climate. U.S. Storage Depots conversion thoroughly revitalized theproperty, attracting shops, small businesses, and commercial and residentialstorage.

The mixed-use concept for self-storage construction is Hagensbrainchild, and he believes it holds the power to salvage abandoned real estateacross the country. Many communities, especially in the Midwest, arestruggling to find viable uses for their empty big boxes, he says. Thisstrategy could be the solution for those buildings currently standing vacant inmany desirable high-visibility areas.

Although Saline, Mich.-based U.S. Storage Depot played thewhite knight to Canton Townships property in distress, the community was notinitially receptive. Getting the enterprise off the ground was a tremendouschallenge, says Hagen, whose team spent more than two years convincing cityofficials to approve the unique project. The area wasnt even zoned forself-storage.

We first had to educate and gain the understanding of thecommunity, tenants and builders on how we would blend everyones requirementsinto a unified, coordinated design, Hagen says. Combining business self-storage with retail isa mutually beneficial relationship. The retail enjoys maximum use of thefrontage, while the storage utilizes what, in most situations, is adisadvantage: the rear of the complex. In our case, weve been so successful,our retail tenants are starting to wrap around us. They took the sides and thefront of the building.

Parking is another happy trade off. Willow Creeks designrequires self-storage tenants to drive inside the complex, leaving covetedparking spaces for retailers. The internal loading and unloading set-up alsoenhances security, convenience and privacy for storage tenants. Plus, storageactivity occurs behind the scenes, away from retail clientele.

One-Stop Shop for Businesses

Willow Creeks self-storage portion, located in the core ofthe building, is designed primarily for business rather than residential users. Tenants have the option of small offices with a bathroom,phone and fax. Interior storage walls are adjustable so customers can rent onlythe space they need in 200-square-foot increments; if a tenants storage needsgrow, the space is easily expanded. A business center in the lobby, whichoperates much like a Kinkos, provides support services such as privatemailboxes, copy machines, UPS drop stations and Internet access. Other amenitiesinclude racks, shelving and palate jacks, provided free for tenants use.

Were set up to be a one-stop shop for business people,Hagen says. However, we dont discriminate against residential useweencourage it. And tenants still get all the perks, like loading inside. They never have to worry about rain, snow, wind and dust.

U.S. Storage Depot has begun incorporating small-business incubator units into all its newer facilities. Hagen calls the approachthe next generation of self-storage, fulfilling a growing need in the modern business environment. More and more people arestarting small businesses at home, he explains. If they want to move outof the home, we are the next step. Current tenants include manufacturing reps, a silk-flowerproducer and a mail-order catalog business. Office rental fees are a littlebelow market, Hagen reports, but higher than income off self-storage.

Big-Box conversions renderings of Willow Creek Center, due to open in August.

Crucial Advantages

U.S. Storage Depots focus on the business customer could bean important new direction for self-storage, according to Hagen. Today, everyone in this industry is designing theirfacilities, advertising and marketing programs for the residential user, hesays. Were doing a lot of unique things to adapt to thechanging needs of businesses and our society. We want to be innovative andservice those people. Thats what our mission is, and what makes us a littledifferent.

Diversification allows U.S. Storage Depot to combat apersistent self-storage handicap as well: the winter seasonal slump. Offices arelet under annual or bi-yearly leases, leveling off the occupancy rate. But thereal advantages, according to Hager, are security and financing.

A combined-use project gives you different sources ofincome, helps increase profits, and makes earnings more secure because you dontput all your eggs in one basket, Hagen says. Banks love us now. It gives them greatersecurity in their investment.

Some predict the nations self-storage market is reachingsaturation. To remain viable, Hager advises developers to look for new ways todraw customers and secure financing. The beauty of the U.S. Storage Depot concept is itsadaptable and can efficiently use big boxes, regardless of the size orconfiguration of the building and land.

The model also follows a national trend in city planning inwhich retail and residential developments are integrated for safer, moreefficient land use. Big-box conversion allows developers to penetrate primeretail locations for self-storage. Willow Creeks storage business, forexample, has no competition in the area, because zoning simply doesnt allowfor a single-use storage facility.

U.S. Storage Depot has several other projects on the go,including an innovative selfstorage facility under construction near Ann Arbor,Mich. Blueprints include a climate-controlled, three-story building; an outdoorsingle-story structure; and a building designed especially for contractors, with14- foot ceilings and 10-by-10 doors. When completed, the facility will be160,000 square feet, making it the largest self-storage shop in the state.

The Future

Hagen is proud of his teams accomplishments and eager toshare the big-box concept. Ive known a lot of people in the industry for manyyears, and a lot of developers out there are hurting. Id like to give themsome insight. We all learn from new ideas someone pioneers an area and otherpeople will modify it and possibly improve upon it. U.S. Storage Depot is in negotiations to develop a similarbig-box conversion in the Chicago area, while seeking other ideal sites acrossthe country. Hagen says every community is different and needs to be dealt withon a case-by-case basis. But experience should make the process easier nexttime.

We have assembled a team that is expert in working withcities and contractors, he says. It takes a lot of negotiations when youre introducingsomething unfamiliar and untried. People are a little reluctant and nervous. I started on theWillow Creek Center three and a half years ago, and its just now beingcompleted. Even with the builders and engineers, the first thing you hearis, Well, we havent done this before. Climate-controlled self-storagetakes a certain kind of engineering that is different than a shopping center, soyou have to blend the two together.

Hagen says big-box conversion with multiple uses is an ideawhose time has come. Developers of the future will have a whopping head start, too.When selling retailers and zoning boards on the concept, they can point toWillow Creek Center as a living example of property once thought dead.

U.S. Storage Depot has more than 22 years experience in theself-storage industry, designing and building award-winning facilities. For information, call 734.944.1803.

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