Construction and industry experience play key roles in the success of future self-storage buildings.

September 7, 2008

8 Min Read
Taking a Cue From the Past to Build the Future of Self-Storage

Business owners have two choices whenever the economy takes a serious downturn. They can either “dig in” and get conservative or go the other direction and become more aggressive. To paraphrase guerilla marketing author Jay Conrad Levinson: Only the top company in any market can afford to play defense.

Back in the day—yes, I have been around for a good number of them—development and construction were cyclical markets. There were periods of extensive growth, but we always knew lean times would follow. Admittedly, our economy has rarely experienced the kind of sustained “boom” we have seen over the past decade or so. The hard truth is the cycle of growth has slowed. Things could turn around tomorrow, this trend could continue for some time, or it could sadly get even worse. No one really knows.

The new generation in our industry has never experienced these “tough times,” and some are in panic mode. They didn’t experience the oil crisis and gas lines of the ’70s, or the savings and loan scandals that rocked the economy in the ’80s. They have never been in the trenches and forced to dig and scrape to make projects work.

We’ve made it through these times in the past, and will make it through them now. Some may think “the sky is falling,” but construction and development always seem to come back around—and usually stronger than before. We used to call it a “correction,” one of those natural occurrences of capitalism that somehow makes a free market work.

Back in the Box

The obvious concern is what to do in the meantime. To borrow from a sports analogy, when a once-great team begins to struggle, what does the coach usually say? “We need to work on the fundamentals; we just need to get back to the basics.” Or, as I recently read somewhere, maybe it’s time to “get back in the box.”

I often tell self-storage owners, “We didn’t invent this type of building construction.” Over the years, through trial and error, the current engineering, design and construction methods commonly used in our industry have proven to be the most economically efficient way to build storage buildings.

However, day after day, I unroll sets of plans only to reveal that yet another well-intentioned architect or engineer has come up with a “better way” to build storage buildings. Don’t get me wrong, I'm not saying there may not be a better way. If there is, I just haven’t seen it yet; and if it existed, the major building suppliers in our industry would be doing it that way. As with any product, the more you deviate from what is the standard, the more it’s going to cost.

When the storage industry was at its peak, you could use tilt-up concrete, masonry block, clay tile roofs or clear-span modular systems and still be able to recover the additional costs. In today’s market, the numbers simply don’t pencil out anymore.

Moving Forward

Our proverbial paradigm hasn’t just shifted, it’s standing out on a ledge threatening to jump and take cap rates with it. The economy has changed, our industry has changed, and the storage market has definitely changed.

So what are your options? Stop developing and hope things turn around before it’s too late? Continue to look for that perfect acquisition with great potential but is not ridiculously overpriced? Take your money and do something else with it, like the stock market, finances or real estate? Or, find less expensive sites and build more cost-efficient buildings that will still create profitable facilities?

If you weren’t a risk-taker and true entrepreneur, you most likely wouldn’t be in the self-storage business. Before the boom, one of the admired traits of an entrepreneur was the ability to spot changes in the market and quickly adjust to take full advantage. Maybe it’s time for a correction in our industry, the consequential elimination of the weak and survival of the strong. What you do from this point on is what really counts.

Can We Talk?

To quote one of my favorite philosophers, Yogi Berra, “You’ve got to be very careful if you don’t know where you are going, because you might not get there.” Based on that, here are some recommendations on getting back to the basics of building a successful self-storage facility.

Hire an industry professional. Ask for a comprehensive demographic study and pro forma. It’s surprising that clients who invest $3 million in a self-storage facility balk at a few thousand dollars to obtain this vital market data. It’s not just about whether the site is financially feasible, but also about getting a better handle on unit sizes, rates and amenities in a particular market.

Hire an architect, engineer or design-build general contractor who is experienced with self-storage. We have many good ones who work in our industry and this is not the place to save money. An experienced design professional can help you avoid costly mistakes particular to our business. There is value in working with experience!

Get your building supplier involved early in the process. Any major or reliable supplier will gladly be involved with your architect or contractor during the planning stages. These professionals can provide standard details, connections and material specifications generic to the industry. They can ensure the unit layout coordinates with the most efficient framing layout. Plus, they’ll suggest collateral architectural materials that work most economically with their building systems and add aesthetics in areas that are visible, or where they may be required by local codes or ordinances. Your building supplier can also consult with the mechanical and electrical subcontractors on the best places to locate equipment, duct work, lighting and fire sprinkler systems.

Don’t let a building “salesman” lay out your facility based on templates or “canned” designs. The obvious goal is to get as much rentable square footage as possible on a site, regardless of your particular market needs or site requirements. An experienced construction professional should be asking about the topography of a site and where the retention area will be located based on the natural drainage flow. You’ll end up moving a lot of dirt if your buildings block the natural flow.

The person doing the layout needs to know required setbacks, easements and wetlands. They will determine where the most advantageous access and egress are to the facility; where the office will be most visible; what types of businesses or structures will abut your property, and will it be best to be visible or protected from them. These are important considerations that are difficult to determine by someone in an office several hundred miles away.

Involve the security system provider during the planning stages. Underground requirements, electrical power requirements and computer and monitor locations must be coordinated. I have been on several sites where new pavement or concrete was torn up because the security company was brought in late in the game. Don’t let this happen to your project.

Plan, build and complete the office and retail area first. Consider permitting the office building separately. This will allow you to obtain a Certificate of Occupancy on the office while the storage buildings are completed. The security company will need an area ready for equipment installation. You should have computers and gate operators installed, tested and ready to go. Many projects have been delayed while waiting for the office to be finished.

Put your money where the rent is. The introduction of new products, ideas and “better mousetraps” seems to have become an everyday occurrence in our industry. When any business venture begins to attract the money self-storage has in recent years, it generates a lot of attention, and everyone wants a piece of the pie. Before you spend money on the “new and improved,” or the next “must have” bell or whistle, ask yourself: “Will a customer pay more rent for my unit than at my competitor’s because I added XYZ?”

A New Direction

Another pearl from Yogi Berra: “When you come to a fork in the road, take it.” Sometimes we tend to forget just how young the storage business really is. We’ve hit our first big speed bump, and some are acting like this was all just a “trend,” and now it’s over, time to run on to the next thing. Self-storage has become a part of our landscape, routine to more than a few and a necessity to many.

Until some brilliant new building design or material is developed, the next generation of “robo-storage” is created, or a better big box in your driveway comes along, maybe we should go back to what made this industry successful in the first place—building a quality self-storage facility within a budget that will, at some point, pay for itself and begin cash flow. It doesn’t get much more fundamental than that. How we got from there to where we are at today is hard to say. Maybe it’s simply time to go back to basics—making sense and making money.

L. Bruce McCardle is the vice president of eastern division operations for Mako Steel Inc., a self-storage manufacturer and supplier based in Carlsbad, Calif. He has worked in architectural design, development, construction and the metal-building manufacturing business since 1977, and specifically in the self-storage industry for 11 years. For more information, call 800.383.4932; visit

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