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Chapter 11 Self Storage Construction



Chapter 11 Self Storage Construction

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Twenty-six items you want to remember during the Construction process to save you time and money.

 

  1. Research and completely specify as many items as possible. Construction allowances/change orders and extras always seem to cost a lot more than if they were in the original specifications and contracts. Even simple things like who pays for the temporary power, dumpster and temporary bathroom facility make a difference.
  1. You will need both construction and specialized self-storage insurance. For construction, you will need Builders Risk and general liability insurance.

In addition to the standard Property and Business Liability coverage, you may need insurance for Blanket Building and Contents, Customers’ Goods Legal Liability, Sale and Disposal, Legal Liability, Extended Business Income and other insurances post construction.

Once your site plans are approved you should contact an agent who specializes in Self Storage Insurance.  There are several things you need to consider in order to determine your self-storage insurance limits.

  1. It is recommended that construction contracts include a provision to hold back 10% of each payment until the work has been completed, including the final punch list items and the Town has completed its review and issued a final Certificate of Occupancy. Check with your bank to see what their required hold back is and make sure it is included in your bid package. Find out how often the bank will provide draws and how long after an inspection is request until the money is available.  Your contractors need to be aware and accept the payment schedules of your bank.
  1. Often you bid the job on preliminary plans. Prior to signing the final contracts make sure all parties confirm they have reviewed the latest plans and their bids are based upon these plans. This is especially important for the building erectors.  They will provide a price based upon similar buildings they have erected in the past.  But every manufacturer has different systems and components and construction times can vary.  Your building manufacturer should be able to email you a set of final plans for you to forward to your erector.  When construction starts check again to confirm everyone has the final set of plans.  You would be amazed how many times construction gets screwed up because outdated plans are used.  A list of all the current plans and last revision dates should be issued to all contractors when construction starts.
  1. There will be problems and questions. Make sure the contractor provides you a contact person both in the field and the office, including cell numbers.
  1. The contract should be clear that all change orders require signed approval by the Owner. Do not violate this requirement. This will not always eliminate change orders but will permit for you to confirm the cost and possible negotiate the costs or find other options.
  1. Your design team should determine what independent testing (typically paid directly by you) that is going to require, such as compaction test for the building base, driveway base and concrete strength testing. The contract should require your contractor to coordinate these tests and redo any work not meeting the specifications.
  1. If you are the general contractor expect discrepancy between where one contractor leaves off and the next starts and the condition of the work by the previous contractor. For example, if the grading for the floating slab is off by 1 inch it can easily be an extra couple of thousands of dollars or more in concrete.  For this example, it would be important to know how many cubic yards of concrete is included in the concrete contractor’s price and his contract should say he has to review and accept the foundation grading and excavation prior to placing any concrete forms.  Of course, if there is a discrepancy, the problem becomes scheduling and delays when the concrete contractor notifies you the site work is not right and either you have to pay extra or have the site contractor fix his work.  So whenever possible, check completed work in detail as soon as possible yourself or hire the appropriate engineer or surveyor to check for you.
  1. All contracts should make it clear who pays for the building permit, who is responsible for inspections, as built, and any documents or inspections the Town (or bank) may need to the issue the occupancy permit. If at all possible, it is recommended the contractor be required to hire a licensed surveyor to stake out the buildings and set proper grades. If you hire the surveyors you often have to pay for several stakeouts, as the contractor will inevitably knock out the stakeout survey stakes.  Also, if you hire the surveyor you will be responsible if there are any discrepancies or errors.
  1. Don’t forget to make sure the contracts include bringing the various required underground utility conduits and utilities for phase 2.
  1. It is a good practice to visit the construction site every day during construction. There are always plan interpretations and changes or corrections to be made. Scheduling constantly needs to be reviewed.  Often, what you told the foreman today is not relayed to the new foreman the next day.
  1. Makes sure the limits of construction are properly staked in the field prior to the start of construction. Any trees in the limits of construction or near construction you want saved should be barricaded with fencing or hay bales prior to the start of construction otherwise they are very likely to be eliminated during construction.
  1. Make sure the erosion control silt fence is securely in place prior to the start of construction. One rainstorm can make a mess if the silt fence is not properly installed.
  1. Check to confirm they are compacting the fill in 8” layers per the contract. Contractors like to save time by filling and compact a couple of feet at a time.
  1. Check that the rebar and wire mesh is installed for all the concrete per the plans. Hint: neither should be on the ground.
  1. For a single-story metal building there is typically a 1.5” lip in the concrete foundation edge to make sure no water gets in the building. This is done with the use of a 2 x 10. If the concrete under the 2 x 10 is not vibrated extremely well, and even then, sometimes, there will be air pockets under the 2 x 10 that create surface voids the size of a silver dollar and larger when the boards are removed. Let the contractor know in advance about this concern.  Insist they take off the 2 x 10’s while the finish crew is still there.  If there is a problem, it needs to be fixed while the concrete is “wet”.  If they wait until the next day to fill in the voids, it is extremely likely after a winter or two all the filled-in patches will pop out and require expensive ongoing maintenance.
  1. It is critical that the entrance gate opening and the entrance and exit keypads be staked in the field, so you can try them with your car prior to their installation. What looks good on paper often is a difficult maneuver for a car in the field and can be corrected with ease if done prior to construction.
  1. Make sure the office windows and doors sizes and locations are coordinated long before the contractors show up. Often, approximate locations and sizes are provided until a window manufacturer is chosen.
  1. Make sure the concrete is sealed the day after the concrete is poured. This will not only help the concrete cure but also just as important, keep the concrete dust down for your renters.
  1. The concrete saw cuts should be done as soon as possible after the concrete is poured, typically no later than the next day. This helps reduce the number of visual cracks.
  1. After the office concrete floor is in, draw the office floor plan, including interior walls, desk and cabinets on the concrete floor with a maker. It is easy to make a change now.
  2. Make sure your communication wires and electric wires to the gate controller are in separate conduits.
  1. Layout your perimeter fence for review before the fence installers come. There are typically conflicts and options. You will want to take time to review.
  1. Often one of the biggest problems is construction scheduling. Review the schedule in detail with all contractors, including the building manufacturer. The scheduling should be reviewed when the request for bids are submitted, again when the contracts are signed and again when construction starts.  Delays due to scheduling are one of the most stressful parts of construction.  Add some buffer time to your schedule.
  1. Your bid document should require all contactors and sub-contractors to provide proof of insurance. The bid documents should further require all contractors and sub-contractor to wear hard hats and meet all local and OSHA job site safety requirements.
  1. Often the building manufactures will require large deposits and final payment on or prior to the delivery of the buildings. These fees should be reviewed with both your contractor and your bank to insure there will not be a cash flow problem. Sometimes the size of the deposit can be negotiated but full payment upon building delivery or prior to delivery is typically required.
  1. If you build your own buildings or if you hire local guys who are building self storage buildings for the first time remember temporary bracing is required and not shown on the construction plans. Temporary bracing is required in all directions until the final construction of the entire frame. You can see some of the bracing in the photos below.

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That’s me in Caraquet, New Brunswick, Canada, and my first international project!  When you start construction, your marketing must be full speed ahead.

 

Have development questions?  We are ready to help.  Marc 860-830-6764

 

 

Chapter 10 Site Plan Regulatory Approval

Seven items you DO NOT want to forget to bring to your Wetlands Commission meetings for a faster approval.

1. A colored rendering is a Must. While many items like the building design or looks are not supposed to be a part of the wetlands commission purview, but a pretty picture goes a long way.

2. Pictorial information about your facility. Pictures of cameras, TV monitors, fencing, access gate, lighting, signage, office, mounted on a single board tells a great story about your security.

3. Know your facilities policy on prohibition of storage of hazardous materials. Provide a copy of your lease provision prohibiting hazardous materials. Provide a copy of the sign to be posted in your office prohibiting hazardous materials. Give an explanation that includes how you know your customers, i.e. a copy of every renter’s driver license, home & work phone numbers, email address, a second contact person etc. An explanation in detail how the staff is required to walk and inspect the site several times a day can help give the commission confidence there will not be a problem at the facility.

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4. If you are going to rent units for car storage (which is worth fighting for!) be prepared to explain the steps you will take to insure gasoline will not leak and cause a problem. If you can’t figure this one out email me and I will point you in the right direction. (Hint: look up the requirements for cars in public buildings like a car show in your civic center and include the 2 or 3 safety items in your lease.) Also, you should only rent for cars that are registered and insured, i.e. no problem cars.

5. While you (and your engineer) always had to be prepared to explain the storm drainage design and storm drainage detention design, now it is common to provide detailed (and expensive) storm water quality best management practices. Make sure you personally understand these site features and the required maintenance, so the commission has confidence that they not only will be built but you, as the owner, personally understand the importance of maintaining them.

6. Make sure that you and your engineer have walked the wetlands, even though your soil scientist is coming to the meeting. Your knowledge of the property could help turn the deciding vote your way.

7. Early on in the design process you should have confirmed there are no endangered species on the site. Often the Department of Environmental Protection can provide areas of know or reported endangered species. Be prepared to confirm there are no endangered or threatened species or be prepared to discuss the impact to endangered or threatened species if they exist.

Ten items you don’t want to forget to bring to your Planning and Zoning Commission meeting, which can make a difference.

1. All the items you brought to the wetlands meeting.

2. Bring all the professionals (you can afford), design engineer, landscape designer, traffic engineer, architect and attorney if customary in your town. But a single presenter can do the majority, if not the entire presentation.

3. Office hours and gate hours.

4. Samples of the building materials, including colors.

5. Light photo metrics to show the light does not impact neighbors. A manufacturer’s detail sheet for full cutoff lights is helpful. LED lights cost more to install but will pay for themselves in a short time and save you money for many years. Let them know you are a green builder and will be using energy efficient LED lighting.

6. A copy of a standard lease. You can get one from your state’s self-storage association.

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7. Knowledge of your marketing study to confirm the need for self-storage in the area. Again, this should not be part of the commission decision process, but I have had the questioned asked several times. Let them know it’s a benefit to the area as most of your customers will be the people located within 5 miles or less from your property.

8. The owner should attend all meetings and be prepared to let the commission know they are an expert on self-storage and are excited about being a part of the community. Be prepared to make concessions the night of the meeting if necessary to get an approval.

9. Be prepared to rebuff the many myths about self-storage such as; noise; drugs; low value; no taxes; people living in units; used mostly by people from out of town; ugly; self-storage does not mix with residential uses; high traffic, etc.

10. Be prepared to present a traffic study. Traffic is often a concern if there is any opposition. If the Town did not require one as part of your application, I would at least have a simple on page summary for the estimated daily and peak hour traffic generation. This can be very beneficial to show that self-storage is one of the lowest traffic generators and has less traffic than typical retail, office, businesses and even a residential subdivision.

Self-storage is a local business. The majority of your renters will be people from town. Early in the design phase you will have to determine the percentage of climate control units for your site. Often the outside of the Climate Control building will have non-climate control units with doors directly to the driveway.

August Newsletter 2018 — Now Taking Reservations!

 

 

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August 2018 Newsletter

Storage Authority
Pre Opening News/Tips

As we prepare to open multiple facilities starting next month, finding land, design, and approvals for these franchisees is a thing of the past and now pre-opening operations and pre-opening marketing are the subjects of the day.  This is a BIG Crunch time so being super organized is critical.  Here are 7 tips you need to complete prior to crunch time.

1 Have a checklist for pre-opening operations – 100 + items
2 Have a checklist of for pre-opening marketing – 110+ items
3 Make a list of all the vendors you need to get on board before you open (Bookkeeper, SiteLink for the management program, G5 for the website, Open Tech Alliance for kiosk & gate systems, Attorney for lease and forms, graphic designer, utility companies, insurance agent, etc)
4  Make a list of all social marketing platforms you will use.
5  Make a list of every unit by unit with the number, size, type, and price.
6  Make a list of what makes your facility different than your competition, Your unique selling features.
7 Prepare your help wanted ads and employee manual.

If you are a Storage Authority Franchise Owner many of these items are prepared and reviewed with you long before crunch time so you can get a head start to rent double, even triple or more units in your first 4 months then projected in your Feasibility Study.

WHY CARE?

If you simply double your monthly rentals from 15 units a month to  30 units a month for the first 4 months it is an extra $108,000 income for you in your first year!  Want to see the math email marc@SorageAuthority.com

Last month we told you the  Storage Authority Walters Rd in Houston Texas roofs were on. And last week Ed called excited to tell us he has taken his first reservations – over a month and a half before he opens! Storage Authority Walters Rd Houston TX is slated to open Sept 15, 2018

The #1 Pre Opening Tip
When your first customer walks in they are going to ask the same questions that your next 1000 clients are going to ask.  They will start with what is the price of a unit simply because they do not know what else to ask and often follow up do you have any specials?  If you want to charge premium rates you better have written scripts memorized that provide the answers to these and the 7 other concerns they will ask you or you will lose many rentals.  I can visit 20 facilities and maybe one will have some of the answers to:1  I need to think about it
2 I need to check for with my wife or boss
3 I just need information
4 Price seems high or can you do any better on the price.
5 I don’t need it until next week
6) I don’t need it until I sell my house sells
7) The client who does not provide his concern or objection
________________________________________________________
Check out this recent article at Inside Self Storage: By Marc Goodin

How to Perform a Mini Demand Study on a Potential Self-Storage Site

For a great resource to retrieve initial metrics for your demand study go to  RADIUS here  radius.unionrealtime and get your free credits now.

 

Here is our add that is going to be the September issue of Minico Magazine, next to Marc Goodin’s Article on why Franchising for Self Storage you need to read.

As part of our Dynamic Ease Self Storage Development Series, we help our franchisees around the development landmines, including finding land, designing, financing and building a premier self-storage facility and to understand the options and prepare accordingly.
_______________________________________________________________
If you want to learn more about Storage Authority Franchise there is a wealth of information on our website www.StorageAuhorityFranchise.com  Don’t forget to check out “Why Storage Authority” and our blog/newsroom. Then the next step is to apply on our website or email or call Garrett Byrd (Garrett@StorageAuthority.com or Direct 941-928-1354)
Vendor Highlight

Instead of highlighting one Storage Authority Vendor we want to highlight how extremely important it is that your vendors work together and the better they know you, your systems, platforms and each other, the more efficient and profitable you will be since you will have double the time to market your business.  For Storage Authority Franchise owners the savings in time because of this vendor synergy is well over 200 hours in your first 6 months of operations.  And even a second 200 hours because Storage Authority has done the research on the vendors.

For example, Sitelink can set up our franchisees by cloning the Storage Authority forms, fees, various automatic late letters, emails and fees, user settings, tenant insurance, discounts and more saving hours and hours.   Then the next part of the startup puzzle is making sure your other vendors are all tied together day one. Before you open you need to make sure your open Tech gate & kiosk, storsmart insurance, G5 website, Late 2 Lien, SiteLink Merchant, StorageTreasure online Auction and others are all tied together.

One simple example that saves us time and money and even makes us money is the vendors we use for the auction process. Late2Lien accesses our 30 day past due customer direct from SiteLink and adds them to our Late2Lien dashboard, for our managers to approve them for auction and then  late2Lien sends the required lien/auction notice. And then Storage Treasures (who by the way is part of the OpenTech Alliance vast host of products and services we use) host our online auction.  As a team things get done and our managers have the training and backup they need to be successful.

It may sound simple but it is not easy. Owners depend on the store’s manager to market, maintain and expand their business. Unfortunately, owners are discovering that the managers are ill-equipped with little to no operational, marketing, sales or customer service experience. And they also cannot keep up with the ever-changing technology  Most facility managers spend 100% of their time doing the day to day and never get to the sales and marketing that can double your profits.

Industry News & Tips You Can Use Today

5 Pre Opening Tips You Can Use Now!

1. Start your list of emails today for your very own facility newsletter.  It is not hard to get 500 or a 1000 local emails when you do it over several months

2. Open your own Mail chimp newsletter account: Every month during construction send out a newsletter keeping your prospects updated on progress and your grand opening.

3. Ask the city about a temporary CO: Construction always takes longer than planned.  If your office is going to be ready before the total facility is completed ask early about a temporary CO.  Even opening a week or a month early is a big deal.

4. Practice Autopay script –  By having this late fee schedule on your desk and starting the lease presentation with a simple “I just need your debit card and I.D to get started”, you can make an easy extra $30,000 a year profits and more time.

5. Visit every funeral home & real estate office within a 5-mile radius twice before you open 

Storage Authority experts are ready to help you every single step of the way, from finding land to operations, to driving your revenue year on year.  If you have a question give us a call. Team up with the experts to save time and maximize your profits.

ARE YOU READY?

Click here to Get Pre-Qualified to Begin your Journey to Financial Freedom with Storage Authority Franchising!

“The way to get started is to quit talking and start doing.”  –Walt Disney, Co-Founder, Disney

Recent Storage Authority Blogs You Will Enjoy!

Complete Storage Authority News Room

Sample Self Storage Development Budget & Proforma

Self Storage the Art of the Auto-pay

Recent Storage Authority News Letters

July 2018–Roof Tops are on Getting Ready to Rent

June 2018 Newsletter Self Storage Development–Aerial Drone Video

May Newsletter 2018–New Self Storage Construction Photos

Storage Authority Video of the Month

Storage Authority Pre-Opening Preparations

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Storage Authority
677 N Washington Blvd.
Sarasota FL 34236

www.StorageAuthorityFranchise.com         Garrett@StorageAuthority.com
1-941-928-1354

July 2018–Roof Tops are on Getting Ready to Rent

July 2018 Newsletter

Storage Authority Construction News

The roofs are on at Storage Authority Walters Rd in Houston Texas. Time to start taking reservations!  The typical feasibility study will have you renting 10 – 15 units in your first month.  With Storage Authority’s pre-opening marketing plan we aim for 30 – 60 units rented in the first month.

Storage Authority Walters Road is a single story facility, but as you can see here it is important to beef up the office area to help provide that “just feels right” feeling.

The concrete pads have been constructed for Storage Authority Mulberry FL.  This project will also provide vehicle parking including RV & Boats.

We are excited that our Storage Authority Franchise owners from the Tampa Fl area had their land offer accepted and are proceeding with their due diligence and site plan design.  We helped them with preliminary concept plans on several properties before they decided on the above parcel.

Land clearing has been completed on the latest Storage Authority facility to start construction in Central NJ.  We estimate a 6 month construction period.


Construction is exciting but preparing for construction and post-construction is what is going to make Storage Authority facilities premier facilities.  Our customers will be able to open the gate simple by driving up to the gate with the Storage Genie.  And it does a bunch of other great things like email or call the facility, or make a Payment from your cell phone.  You can even get a notice when you ( or other you gave your codes to)  have accessed the facility.  We put the renters in control and they love it!  Don’t think you can add it after construction because it does not work that way.

As part of our Dynamic Ease Self Storage Development Series, we help our franchisees around the development landmines, including finding land, designing, financing and building a premier self-storage facility and to understand the options and prepare accordingly.
_______________________________________________________________
If you want to learn more about Storage Authority Franchise there is a wealth of information on our website www.StorageAuhorityFranchise.com  Don’t forget to check out “Why Storage Authority” and our blog/newsroom. Then the next step is to apply on our website or email or call Garrett Byrd (Garrett@StorageAuthority.com or Direct 941-928-1354)

Vendor Highlight

We are excited to announce that Storage Authority has partnered with the best self-storage management software available to our industry.  With 10 years of first-hand experience working with Sitelink in the trenches, they are first in class with their innovative features and user-friendly platform.  Their Cloud base platform is second to none when it comes to running an efficient smart connected facility that enhances the customer’s experience and reduces the facilities overall cost.

Here are just a few reasons why we went with Sitelink:

1.) Training: With Sitelinks certified professional training course with ongoing, training videos and webinars anybody new to the industry can be brought up to speed in a short amount of time. Even seasoned managers can polish their self-storage skill set.

2.) Support: The amount of real-time support Sitelink provides is unbelievable. During operation hours you or your staff can call in for real-time support to walk through any procedure or resolve any issue if need be they have a built-in tool where they can remotely log in instantly to assist you.

3.) SiteLink eSign is the legally binding signature capture component of eFile Management, allowing owners to execute, track and store leases, insurance forms, and other documents electronically.  Sign in-store, on your website or send leases by email and track progress throughout the signing process, including quick lease audits to ensure proper completion.

4.) Customer Relationship Management (CRM), SiteLink delivers more leads and automatically saves reservations from all of your lead sources such as websites, listing services, and call centers. Automatic follow-up reminders for managers and notices sent to prospective customers turn more leads into rentals.

5.) Revenue Management: SiteLink Price Optimizer provides the industry’s best toolbox for managing price lists and tenant rates. You can set parameters to “push” unit rates based on occupancy percentages. Push rates are calculated daily, similar to the airline industry’s demand-based pricing.

6.) TOTAL Accounting & Reporting: SiteLink manages your financials and integrates with the accounting software of your choice. Track financials with confidence using cash or accrual basis methods. Reports are always just one click away. Access real-time reports on any computer or mobile device such as smartphones and tablets.

Overall, as Storage Authority grows and scales we are aligning our selves with the best in business and Sitelink Management software checks that box with their cutting-edge technology.

Industry News & Tips You Can Use Today

5 Tips You Can Use Now

1. Free Demand Studies: Now you can get the information on your 3-mile competition, including existing building square footage, rates, population, unit pricing, in minutes for more than a dozen locations FREE.  Check out RADIUS here  radius.unionrealtime and get your free credits now!

If you need help understanding  the data take a screenshot and email it to Garrett@StorageAuthority.com

2. Get your own Storage Genie: Email sklein@opentechalliance.com and she will tell you how.  Let her know Marc from Storage Authority sent you.

3. Reduce your construction time by: including a construction schedule in your contract.  And by requiring a detailed written update every week of the next two weeks schedule and completion date.  The office is the last thing completed.  Make sure the contract requires the office foundation and building to be done first.

4. Have some fun: Required your contractor to upload photos weekly to a private photo sharing site for your viewing.  You can share with others like your engineer, Architect, and your family.  Pictures tell a 1000 words so they often help between visits in many ways

5. Don’t end up with a sub-par website. Owners spend millions building their facility and are losing money every week because they skimped on the website. Make sure your web provider has built a few hundred self-storage websites and understand SEO. It is time to take online rentals!  We recommend you call Christina at G5 for your website design at 541-306-3383.

Storage Authority experts are ready to help you every single step of the way, from finding land to operations, to driving your revenue year on year.  If you have a question give us a call. Team up with the experts to save time and maximize your profits.

ARE YOU READY?

 

Recent Storage Authority Blogs You Will Enjoy!

Complete Storage Authority News Room

Are you planting enough Acorns for real oversized Self Storage Profits?

The 3 Big Myths About Rental Rates

Recent Storage Authority News Letters

June 2018 Newsletter Self Storage Development–Aerial Drone Video

May Newsletter 2018–New Self Storage Construction Photos

April 2018 –Advantages of Buying a Self Storage Franchise

 

Storage Authority Video of the Month

Storage Authority Franchising Development Series
Share
Tweet
Forward
Please share!      We Love Referrals.

Storage Authority
677 N Washington Blvd.
Sarasota FL 34236

www.StorageAuthorityFranchise.com         Garrett@StorageAuthority.com
1-941-928-1354

Thirty-four items you don’t want to forget during the design process!

Thirty-four items you don’t want to forget during the design process for a better and more profitable facility.

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  1. Early in the design process determine the parking requirements of the town for self-storage. They can vary from a half dozen to 30 for the same size facility. In some cases, where very high parking is required, parking in half of the 24 isles may be accepted as parking.  You want at least a half dozen customer parking spaces next to the office outside of the fenced in security area.
  1. Provide a secure drop box for after hour payments. It’s been our number two request from tenants. If you remember prior to construction you can put it in the office wall. Otherwise, you can add a free-standing drop box.
  1. For protection, provide steel bollards at all building corners, entrance gates, and entrance/exit key pads. I recommend 6”- 8” steel bollards filled with concrete. Over the years this will save big bucks and a lot of aggravation. Make sure these are in your original bid package because the change order price of $900 each will kill you budget.
  1. Determine if you should put the outside lights on two circuits with timers so you can turn half the lights off after hours or at a certain time. You may also want the front entrance driveway, sign and parking lot lights on a third separate circuit, so you can leave them on all night. LED lights will cost a little more to buy but they will more than pay you back with reduced electric bills.
  1. Make sure all utilities are designed to include future phases and are clearly included in your bid request. Make sure your electrical/camera underground conduit system for phase two is brought to the limits of phase one so you do not have to tear up phase one. Make sure the pull cords are in.
  1. Have your engineer provide the largest driveway radius permitted at the street intersection for easy site entrance. A 25 to 45-foot radius is recommended. No matter how large you make them some drivers will still drive over the curb.
  1. Make sure there is room at the end of the buildings for vehicles to safely turn. Thirty feet of pavement is recommended minimum with 40 feet preferred, and much larger if you need large RV’s or tractor trailers to make the turn.
  1. Determine what percentage of climate control units to construct. We have constructed 15 – 20 percent and that has worked well for us in the northeast, but many areas like Florida build significantly more. Check to see what your competition has done. Learn more about climate control/humidity systems. Also, make sure the designer has experience designing self-storage heating & air conditioning & humidity systems. Self-storage systems are designed significantly different from then residential or typical commercial systems.
  1. Your office will be a major showcase for your facility and a is a key factor in the success of your facility. It should be located outside the gated area. Visit several other self-storage offices to help determine your office size and layout. We have found that having a large product sale area and large windows helps increase the overall acceptance of our facilities and increase our unit rentals. The offices in our self-storage facilities are about 1,100 square feet, including a single bathroom and a small utility/furnace room.

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A colorful bright large retail office and showroom will increase your rentals.  Remember the majority of the rentals are by the ladies. Believe it or not you are in the retail and fashion business and need to wow your customers.

  1. Typically an access gate has a security loop installed in the pavement that can detect a car, so the gate will not close on a car. Make sure it is clear who is responsible to provide and install the safety loop. Will it be installed under the pavement or will the pavement be saw cut and patched? It is a much nicer job if the safety loops are under the pavement and not saw cut into the pavement. The gate should also have a safety mechanism, so the gate cannot accidentally shut on a person that meet present building codes.
  1. It’s always a nice touch if the appropriate office doors are keyed alike.
  1. If you use propane, consider buying your propane tanks versus renting so when you buy propane you can get the best price on the open market.
  1. Put the fencing 30 feet or more off the pavement where snow will be plowed to leave room for snow.
  1. A 4-foot person gate in the security fence near the office comes in handy for many reasons.
  1. Typically the entrance/exit gate needs a clearance past the end of the gate of at least 1.5 times the gate opening. Be sure to check with your gate manufacturer and design accordingly. If you do not have the room you will need a lift gate.
  1. In Connecticut you are required to get a CT Department of Environmental Protection “General Permit for Storm Water Discharge Permit for Construction Activities”, if the development (all phases included) disturbs over 5 acres of land. This permit requires several best management practices be incorporated into the designs, including weekly inspections of the erosion control. Often, there are similar or other special regulations in many states. Make sure you have a complete list of all approvals required when you start your design, so you can plan accordingly.
  1. In many states, disturbance of wetlands may require a Federal Army Corps of Permit in addition to your local Wetlands Commission approval. Check with your soil scientist and engineer. An army Corps permit can add significant time and costs to your approval process.
  1. Don’t forget to have an electrical outlet installed at your sign for your holiday lights. Also, electrical outlets should be installed in the 1 or 2 units of the facility you will use. An outside water nozzle is recommended. Typically, no electricity or lights is provided in self-storage units. You may want to put electric plug in 2 or three 10 x 10 units, so you can rent to pharmaceutical reps who will need a fridge in their unit.
  1. If possible, place the larger units on the side of the building that do not have another building on the opposite side of the drive. This will make it easier for cars to access and be stored in these 10′ x 20′ or larger units. Nine-foot-wide doors are nice touch on 10’ x 20’ units for car storage.
  1. Include a bank of 5′ x 5′ x 4′ lockers in your climate control buildings. One is stacked above the other. They typically rent out and provide the highest rent per square foot. It is a good design practice to have several different sizes typically from 5’ x 5’ to 10 ‘x 30’.

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  1. Slat walls in the office are great to hang locks and other products. Built in shelving for certain products is a good idea as well. Make sure they are included in your construction specifications. Change orders are expensive.
  1. Review your landscaping plans. In addition to the various trees and bushes it is very beneficial to have a raised flowerbed or two for your clients to admire.
  1. Handicap access should be reviewed early on and included in your design. Self-storage units typically have a lip at the door to keep water out. A ramp design and special doors are required for handicap access. The good news is if the handicap units do not rent you can rent them out as regular units. Your Engineer, architect and building manufacture should able to help you out with the handicap requirements. You may also want to do an online search regarding the new HC regulations.
  1. Determine if there is any room for outside car storage or RV storage. Even a few spaces can help market the entire facility. Outside parking of vehicles should be clearly noted on the site plans and applications to the town. Typically, you will make more money with self-storage units than outside parking. Outside parking is provided if you have excess land.
  1. Some states require two bathrooms, male and female. You may be able to request a waiver from the state for just one bathroom. I got waivers for just one bathroom in my facilities and there are no problems. Access to the bathroom should not require a user to go behind the office rental counter and should be clearly marked.
  2. Most metal building manufacturers provide insulation in the non-climate control unit ceilings. This is a must because it helps prevent condensation and possible dripping onto the customer’s stuff. Double check to insure your building includes insulation in the non-climate control unit ceilings.
  1. Avoid sheetrock construction in storage units. Sheetrock attracts mold and is easily damaged.
  1. If you have a sidewalk directly abutting your office make sure the sidewalk elevation is coordinated with the building design. If the office is a metal building the sidewalk may need to be an inch lower than the office concrete floor to accommodate the metal lip that hangs over the concrete floor.  Even where the building is not metal it is a good idea for the sidewalk to be lower than the office floor by an inch.  Of course, the sidewalk should match the floor at the door for handicap access.
  1. Many building codes have recently changed or are about to change based upon what state you live in. Insulation requirements, fire walls, separation distances, climate control building design, multi-story design requirements, handicap requirements are just some of them. Make sure you enlist the help of a self-storage building code expert early on, so you are not surprised.
  1. Now is the time to determine your facility management software and gate control companies, website developer etc. Once construction starts you will be extremely busy.  Making sure they are compatible with each other is critical and a must.
  1. Provide a driveway entrance light at the street. It’s been our number one request from tenants.
  1. Make sure your camera/DVD system has enough capacity/ports for all phases. I recommend two large camera screens in your office. Safety/security is the second concern of most renters.  Meet with your security expert early on and show the camera locations on your site plan.
  1. There are significant differences between video camera systems. Purchase high definition systems. And confirm you can view the cameras from your home computer and cell phone. There should be 2 cameras in the office on the customer and on the manager.
  1. Several things can differ between building manufacturers. When you order a building, you should be aware of your door sizes and eve heights as both can have an impact on your facility.  I recommend minimum doors widths of 8’-8” feet wide and a minimum building eve height of 8’-4” and you should consider 9’ wide doors and 9’-4” eve heights.

If you want the whole scoop can buy the entire book at Amazon.com

https://www.amazon.com/Marc-Goodin/e/B0098B0A20

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Chapter 8 – 10 things to consider to find an A+ Site

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  1. Location, Location, Location. This is the single most crucial factor in the success of a self storage business. The majority of your rentals will come from drive-by traffic. Out of the way locations typically struggle to get customers compared to main street locations. The best properties are on a main road with an average daily traffic volume of at least 10,000 vehicles per day with a preferred average daily traffic volume of 20,000 plus vehicles per day or greater. These are often State roads. Of course, due consideration must be given to surrounding population and how much of the potential renters should be proportioned to existing or other planned self storage facilities nearby. Often you can get roadway traffic counts from The Department of Transportation.

Think retail. Would you put retail on a back road or behind another development? No and the same goes for new self-storage developments.

  1. Unmet Self-Storage Demand is just as important as location! For a quick first total demand review, you can use 8 square feet of self storage demand per person, in a 3-mile radius. To get the unmet demand the square footage of the existing and planned self storage facilities in the 3-mile radius will need to be deducted from the total demand. For rural areas with little competition you may draw from a larger area. For large metropolitan areas of high population, the demand area may be smaller. Higher population density is often better because it is easier to have better service and out market the competition and get more of your share of renters than find renters that do not exist.

Too many people tell me they are about to build self-storage on land they own or located because self storage is needed in the area.  And they are right about half the time. Not a good enough percentage to move forward with a multimillion dollar investment. In the end, new developers are going to need help to make the final decision. But you can rule out some properties with a bit of effort and determine which property in an area would be the best one to choose for a feasibility study.

First you need to determine the existing population.  The population can be provided by many realtors or is often provided with many property listings. There are also several on line programs that can provide the population.

The unknown is the demand of square foot of self-storage per person.  And there is not one size fits all locations correct answer since demand can and does vary from state to state and even area to area within a state. Demand in the end is not a square foot per person but rather a square foot/person where facilities reach equilibrium (90% -+ full) at acceptable rates.  In other words, demand cannot be determined in a vacuum and must be used in conjunction with a review of the existing market occupancy rates and prices.  Be careful not to assume full means there is a need for more facilities.  Full with a regular 10 x 10-unit renting for $70 is not a good sign while 10 x 10’ renting for $160 is a great sign.

For many urban areas where there are numerous self storage facilities to choose from the draw/competition area of 3-mile radius is commonly used.   And the demand of 8+_ sf per person can be used as a temporary starting point.

So, if the 3-mile population is 30,000 the total self-storage demand would be:

30,000 people x 8 sf/person = 240,000 sf of self-storage needed.

Next you need to determine the location, number and size of the existing self-storage in the 3-mile radius.  Most novices underestimate the number of nearby facilities.  You can use google earth pro or “google nearby” to help you find the 3-mile facilities. On google earth pro you can draw a 3-mile radius and visual search for the self storages.  For a given address on a google map you can enter self-storage in the nearby tab and it will show the nearby self storages. But it does not go over town lines, so it is tricky to get all the facilities. This is considerable work to make sure you get it right but can often give you a quick count.  You may be able get the existing square footages from the land records or scale from google earth pro, again a lot of work.  Or you could use a real rough estimate of 50,000 sf of self-storage for each facility with a square footage check as part two of your demand study.

So, if you had 3 existing self storages in the three-mile radius you could temporarily assume that: 3 facilities x 50,000 sf/each = 150,000 sf of the existing demand has been met.

The needed demand for this case would be:

The total demand of 240,000 sf – 150,000 sf existing = + 90,000 sf. demand needed.

You would also need to subtract the demand for any facilities under construction or in the approval process.

You can see a sample mini demand study at the Storage Authority News Room

The good news is there are programs that can quickly determine the population and the existing self storages and even the square footage of the facilities, so the existing and unmet self storage demand can be determined quickly as part of a preliminary study.

One developer who recently contacted me did his own demand calculations.  When I emailed him back our check of his findings with an online demand review he said “ Wow what you did in 10 minutes took me over 2 day to do by hand.”

Below is a screen shot of the Radius program we use to determine the existing self-storage demand & population.  It also does a ton more, from providing the existing self storage square footage, the names of your competition and the rates of your competition.

The program is available at : https://www.unionrealtime.com/radius.html

I suggest you set up a demo with James de Gorter the co founder of Union Real time. Here is a link to set up an appointment on his calendar  https://calendly.com/radiusteam/radiusdemo

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This location is a 3-mile radius review for one of the FL Kmart locations closing this year.  While it shows the existing self-storage is 7.36 sf per capitol (see bottom left hand side) the key is the fact that there is only 0.69 sf/person of climate control.  So, this is a great location to investigate further for a big box conversion to climate control self-storage.  If you want to learn more about this program or even conversions email me at marc@storageauthority.com

Of course, Storage Authority and our national brokers will help find and review your potential sites, saving you mega hours.  Better yet we will even help you determine the best areas to look for land in your neighborhood.

The occupancy of the existing facilities (and their rates) can tell you a good deal about the local market demand.  You should stop by a couple and call a couple to get their rates and see if they will tell you their occupancy even before you start looking for land.

In the end, there are many important factors in addition to demand so a feasibility study is highly recommended. For your planning purposes, each can cost $6,000 to $7,000.  If you need preliminary assistance with your initial investigations or need a recommendation for a feasibility expert email me at marc@storageAuthority.com and I would be happy to help.

  1. Dry flat usable land with no restrictions can typically support 10,000 to 15,000 square feet of 1 story self storage buildings per acre. I recommend you use 10,000 sf per acre before you have done your due diligence. I have not found many parcels without restrictions of one kind or another, so it is prudent to do significant due diligence to determine if a parcel of land is suitable for your needs and to determine a fair purchase price of the land.

The shape of the land, topography, wetlands, drainage, flood limits, neighbors, building design, and zoning requirements can have a significant impact on the final building square footage. Some towns, for example, only permit 50% impervious lot coverage for the buildings and pavement, other towns do not permit a new self storage within 3 miles of an existing facility. Regulated wetlands setbacks or wetland buffers often vary from 50 feet to 150 feet from the wetlands in many locations. On site storm drainage detention, if required can require a half acre or more land. High parking requirements in some towns can also limit the amount of buildings.  In other words, the regulations can significantly reduce the amount self storage permitted. Often self storage is not even permitted in residential zones and other zones.

  1. Typically, you will be looking for 4 to 5 acre or larger parcel of land with few constraints or unusual zoning restrictions for a 50,000 sf one story facility. Don’t overlook the importance of walking the entire property before you make an offer. Water, wetlands, watercourses, steep slopes, easements (overhead wires), abutting uses can sometimes be observed on a site walk.  If you have a civil engineer you are working with, ask him to walk the site with you. It will be well worth his fee, especially if you do not have experience with land development.
  1. Many self storage building manufacturers will provide a conceptual layout plan. This is a good preliminary start, but remember they often do not take into consideration all the land feature restrictions or zoning restrictions.
  1. Early on in the due diligence process you should have the wetlands delineated on the site. Of special concern are vernal pools, special breeding areas, that often require very large buffer areas. Endangered or threatened species should also be reviewed early on.
  1. Consider the limitations and cost of steep sloping land before making an offer. Because single story buildings are often long and because they are only 24 to 30 feet apart they require a relatively flat finish grade. Buildings can be stepped down, but only so much and this also adds to the cost. Filling or excavation on steep slopes can cost tens of thousands of dollars, sometimes more.
  1. Once you find a parcel that appears to meets your qualifications, I highly recommend you have a local engineer do a conceptual plan for you. Ask them specifically about all the utilities, including water, sewer, drainage, and storm water detention. Make sure they tell you about any zoning regulations that may be of concern.  Easy access and street views are two important items to attract more renters.

If you don’t have city sewer you will need extra land for a septic system.  If you do not have city water, you will need room for a well and significant building fire walls will be required that will add substantially to the project cost.

  1. Remember to review the local design and approval process in detail before determining the purchase option time frame. I recommend at least a 6 to 8-month option period to get your approvals, if possible. I also recommend that you include a 6-month extension clause, even if you have to pay to execute an extension.  To get the extension clause approved by the land owner you might have to agree to submit site plan application to the Town by a certain date to show you are moving swiftly forward with the project.
  1. The best sites do not always have a for sale sign on them. We are having great success finding off line parcels.  Fallen down signs, friend of a friend, word of mouth, or land record research have led to best parcels.  I knocked on doors. I called them and told them I was interested in buying their land and asked if we could meet.  If they ask the price you are willing to pay, ask if you can walk the property to help you determine the price.  It often takes two or three meetings of no’s to get to the yes. In all three cases, no one had to pay a realtor’s fee. And even better, they were purchased below market rates.

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5 acres were used on this 9-acre site.  The rest of the land was not usable.

Sample Self Storage Development Budget & Proforma

Chapter 7

Sample Development Budget & Proforma.

 You will do multiple budgets proformas for yourself along the way to a final one for your bank.  The first is one based on several assumptions and estimates so you can have some initial discussions with your banker.  The second, one after you have a site plan, so you can provide a proforma based upon your actual design plans, including the exact number and size of units to be rented to get an updated pre-approval.  And the final application with real construction cost from contractor bids and expenses from your feasibility report and other investigations, for the final loan approval.  Your loan request will include several items in addition to the proforma.  This information will help your banker make a positive decision on your application.  It will provide valuable information about yourself, your business plan and your expertise and an executive summary which help your banker quickly understand your project and find the major data they need without looking everywhere for it. It is one more item to let the bank know you are a professional day one.  Self storage is loan friendly because self storage loans have one of the lowest failure rates for real estate development. But part of loan decisions are based directly on you and how you present yourself, your project and your team.

There are no one size fits all standard construction cost, expenses or profits for self storage.  Typically, the first semi accurate development and operational cost and profits come after you have found land, obtained a conceptual plan and obtained a feasibility study by a self storage expert.  But it is important to understand the basic general magnitude of construction, operating expenses, rental rates and various financial information to determine if self-storage makes sense for you. The concept budget below is based upon assumed costs & expenses that may vary greatly.  Be cautious as it would be easy to tweak one or several factors to eliminate the profits or double them.  Many items and details are not included in this example such as carrying cost to get from empty to break even.

This is an example for educational purposes only and should not be used to make any final self-storage investments or development decisions.

 CONCEPT BUDGET & PERFORMA*

50,000 Square Foot New Single Story Construction   

TYPICAL LAND REQUIREMENTS*

Single Story Self Storage: Typically, 5 +_ usable acres when storm water detention is required and or subject to certain zoning restrictions.  Land requirements can vary on local zoning requirements and land quality.

Typical Construction Cost vary on many factors from design, amenities, locations, land quality and more and must be determined by actual construction bids.  Cost below have been assumed and will vary.

 PRELIMINARY DEVELOPMENT COST* – 50,000 SF Single Story

Land                                       $800,000 + –

Construction:                        $3,250,000 +_    $65/sf x 50,000 sf

Unusual land etc.**.                $0 if none

Unusual City regs. **              $0 if none

Soft cost                                  $400,000+_

Carrying costs                         $300,000+_

 Total                                        $4,750,000+_ Single story 1 phase

 

Phase 1 -25,000 sf                  $3,300,000+_  Note land/office/soft                                                                                                    carrying costs in phase 1

35% Bank

Loan  Equity                        $1,155,000 Phase 1 owners’ equity                                                                                              required

12.5%  SBA

Loan Equity                            $412,500 Phase 1 owners’ equity                                                                                              required

As you can see there is a vast difference in equity required between a traditional bank loan and a SBA loan.

Typically, when phase one occupancy reaches 70% it is time to get started on phase 2.  Most of the time you will use the same bank for both phases so you do not have to pay a prepayment penalty.  Often your equity in phase one will be enough for most if not all of the loan equity required for phase 2.  You should have these discussion with your bank when you apply for the phase one loan as this is not the case for every lender.

PRELIMINARY PERFORMA*

STORAGE RENTAL INCOME* FOR A 50,000 NET RENTABLE SPACE

Rental income varies upon many factors and are very dependent on location, unit mix, managers experience, marketing and several other factors.  The SSA reported the 2015 national average rental rate for Q4 2014 was $1.18/sf for a 10’ x 10’ non climate control unit and $1.51/sf for a 10’ x 10” climate control unit.  It is important to get data from your local area.

Typically, we consider 90% rented at premium rental rates full.  For this example, 90% Rented at an assumed average rate of $1.35/sf is used.

50,000 sf x .9 x $1.35/sf = $60,750 monthly income = $729,000 Annual income

 PRELIMINARY OPERATION COST*

Operation cost vary on many factors. Often, they range between $5 to $6 a sf.

Use $5.75/sf for this example.

Assume $5.75/sf x 50,000 sf = $287,500/ year or $23,958/month (Before Debt Service)

NET OPERATING INCOME* (Before Debt Service)

 $60,759 – $23,958 = $36,729/month = $441,504/Year (Before Debt Service)

 VALUE*

 Assume 5 Cap rate – $8,830,080

Assume 6% Cap Rate = $7,358,400

 DEBT SERVICE*

 Assume/use a 4,000,000 loan at 5.5%, 25-year amt. = $24,563 month (P & I)

CASH FLOW AFTER DEBT SERVICE*

 $36,729 – $24,563 = $12,166 per month = $145,992 Per year cash flow before taxes.

 Will this be your cash flow?  Of course not.  There are too many variables.  Your land could cost more or less.  You could put in more or less equity.  Your rental rates may be higher or lower. Your expenses could be more or less.  You could do more or less marketing and sales then the typical self storage.

The goal is to build a self storage that provides a six-figure income while you can still continue your career if you want to and down the road to have a retirement nest egg that many people could never even dream of.  Once you have found a property that meets your initial review and requirements you will get a 3rd party feasibility study that will not only provide you with a demand review but also all the above financial information above based upon data to your specific location and facility size.

Disclaimers:  This informational and example is for preliminary education and overview purposes only and should not be used for investment purposes.   This is an over simplified financial review.  Once a property is located a detailed feasibility study, site investigation, site designs, construction costs and regulatory investigation are required in order to determine the feasibility of a project and projected profits.

*Development cost can vary widely based upon location, zoning, standards, your experience and a variety of factors. You should consult with a local self storage expert for development cost in your area. This is an example and there is no representation these numbers will represent your development costs.  Industry rental rates, income & expense can and do vary upon many factors including, competition, local property taxes, location and owners experience.  Typical rent up periods for the industry are between 18 months and 3 years and can be longer.

 ** Unusual construction requirements such as ledge, significant cuts or fills, retaining walls, unusual zoning requirements, off-site improvements, local pricing etc. are not included and can significantly increase construction cost.

Multi story facility cost more and typically can’t be phased, so they require significantly more capitol and initial equity. This is why first time self storages developers typically build one story facilities.  Many multi story self storages will even have a higher price tag because they are often in areas of higher populations and are larger to offset the development cost per unit, to get better returns.

A word of caution, never develop a parcel of land simple because you own it or the purchase price is low.  It must have several important features including significant drive by traffic and enough unmet demand for self storage.

Now based upon your liquid assets you can start determine the best options for your needs and investigate land, design, regulatory and banking requirements in more detail.  At this point you are either ready to charge forward or realize you don’t have the capital required.  If you don’t have the capitol don’t give up.  Finding a more aggressive lender and or finding a partner with either the land equity or cash equity may be a great option.

Working with an experienced self storage development expert can also help reduce the construction cost, operational expenses and increases profits. You can look at building a smaller facility but they tend to be significantly less profitable and more of a hobby than a business.

 

If you want to learn more about how you can start your own Storage Authority self storage Franchise send me an email.  Marc@StorageAuthority.com

Chapter 6 The Five Most FAQ’s

Chapter 6

The Five Most Frequently Asked Questions

1 I don’t have any self storage experience; can I build a successful self storage business?

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Yes, you can.  In fact, the vast majority of the 50,000 self storage businesses in the USA are owned by individuals who only own one self storage facility.  They started out just like you with no self storage background.  With research and help along the way you can build a successful self storage business that will be more profitable than most other real estate businesses.

Many of the existing self storage were built when “build it and they will come” infancy period of self storage.  Now with all the competition and smart money you must be better prepared from day one.  You need 3 out 4 of the four things to develop a very successful self storage:

1 Time

2 Money

3 Self Storage Experience

4 Marketing & Sales Experience

Storage Authority obviously provides items 3 & 4 but you will be surprised how Storage Authority helps you with items 1 & 2 as well.

The three most common problems I have noticed for new developers is 1) to under estimate the costs (often by over looking some items), 2) under estimating the development and rent up time frames and 3) underestimate the importance of sales and marketing platforms online and off line,

  1. Why build a self storage vs. other business?

Self storage consistently has provided better returns on investment then the other types of real estate investments.  It requires fewer employees and significantly less maintenance, which means less headaches and work for you. (better lifestyle)

And best of all self storage produces one the most important things that many businesses never produce: a residual positive cash flow that can last a lifetime or even for generations.  And its fun!

  1.  How much money (equity) do I need to build a self storage? (How much will the bank loan me?)

I hate do give a dollar amount because there are so many factors not to mention size.  But I know that is what you are looking for.  So to start a self storage business (not a self storage hobby or side line) it is typically approx. $400,000 for an SBA bank loan and more for a conventional loan.

Typically, you will need 25% to 35% equity for a conventional bank loan.  There can be exceptions to both the low end and high end depending on the market, economy in your area, your business experience & credit rating, individual banks and other factors.  It is important to meet with your banker(s) early in the process.  You do not even need a piece of property or facility picked out to meet with a banker (or two) to get some preliminary banking input.

SBA loans are available for self storage and they typically require significantly lower equity often 15% of the total cost.

There are several specifics that must be considered to determine the best option.  And it is very important to realize not all loans are equal by a long shot.  Yes, interest rates and required equity are important there are several other equally import items and that is why you need a self storage expert help you with your loan package.

  1. How much does it cost to build a self storage?

There are three main areas of cost that should be considered.

The first is the pre construction costs (or pre loan costs).  These include feasibility study cost, land surveying engineering costs for site plans and regulatory approvals; bank fees for the loan application (loan application fee or points, appraisal fees etc.), soil testing fees and land option fees, architectural fees etc.

STORAGEFINAL2

While these fees are often considered part of your equity in the project you typically have to pay these fees out of pocket because a bank will not give you a loan without a Town approved project.  This is money at risk because there is no guarantee that the town or bank will approve your project.  So it is very important you do your due diligence regarding the “quality” of the land (wetlands – easements -zoning – other restrictions) and with the chances of approval with the Town before you spend large sums for final engineered site plans.  Often paying a local civil engineer to review the property and zoning regulations and provide you with a conceptual plan to review with the Town is money well spent.  Typically, this first group of fees are typically range from $75,000 to $200,000 if no major problems are incurred.

The second group of costs is the land and construction costs.  These costs can vary greatly depending on the price of the land, individual land improvements and size and type of self storage facility.  Land can vary from $50,000 and acre to several hundred thousand per acre depending on the location and amount of land.  Individual land improvements can vary greatly between sites.

I own 3 self storages and each had distinct special land improvement cost.  One site was relatively level with sand and gravel which had low site improvement cost.  A second self storage was on a sloped parcel which required an extra 3-4 feet of fill for half of the site. One property required $20,000 worth of soil testing for pollution and more for soil remediation required.

It is hard to give a specific cost for construction.  Recently many feasibility studies are using $60 per square foot for construction for typical single story metal self storage buildings, plus soft costs and the land. This preliminary construction cost by square foot estimates do not include the special land improvements or other unusual cost that may be encountered.  Multi buildings are typically higher than the cost of single story buildings.

The costs can be refined after you have a chosen a property and your local civil engineer has done a conceptual site plan.  And once a final detailed site plan is completed you can have a contractor(s) provide you a construction estimate for a more realistic cost

Early on in the process, as soon as you find a piece of property, I recommend you contact a building manufacturer to get input on the building design.  They can also give you a proposal to supply and construct building.  I use Trachte www.trachte.com because they make the process simple, and have a better product at a great price.

The third group of expenses is the costs during the rent up period before you break even.  Some banks will loan you some of the rent up cost but many (even most) do not.   If you did not include the office, maintenance equipment & supplies in your construction cost (which I recommend) don’t forget to include them here. You are going to open your new self storage business with your typical operational costs (loan – employees – utilities – taxes etc. outlined in your business plan) and limited rental income.  Every month you will have to put money into your business until you have enough rentals to pay all your bills.  This can take several months to two or three years depending on a lot of factors.  If you have done your due diligence and determined there is a need for the new storage facility, have a good location with suitable drive by traffic and are prepared to market the facility well you can significantly reduce the time to break even and make a profit. Hopefully you have worked with your bank to cover at least some of your start up costs in your loan package.

Typically, the second phase cost much less to build because you have already paid for the engineering, the property and don’t need new staff so the break even point comes faster.

Financing is one of the major issues for many businesses.  Banks typically require 30% down and SBA loans require 15% down.  So in many regions you can get started with $350K to $400K cash equity.  One option is to join forces with a local land owner as I did for my second facility.  The land and design cost may be enough to meet your equity investment in the project.  A good written partnership agreement is important.

A good feasibility study is a msut and should provide some preliminary cost until you have more detailed plans and actual bids.  If you need initial prices before than I recommend you contact a self storage feasibility consultant to review your circumstances and what size facility you plan to build.

  1.  How many square feet should I build?  (& How much land do I need)

First you need to determine how much self storage the existing population can support and how much self storage already exist.  You can do some preliminary calculations on your own.  The key is accurately calculating the square footage needed in your area and subtracting the existing square footage and any storage proposed or under construction. For many areas where there are numerous self storage facilities to choose from the draw area is typically a 3-mile radius and the demand is typically 5 to 8.3 sf per person.You can see a sample mini demand study at the Storage Authority News Room

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These factors do vary significantly from place to place. For rural areas and areas where there are no self storage facilities the draw area may be larger.  You can call a local self storage appraiser (make sure they have a background in self storage feasibility) and ask what numbers they use in your area. Your bank will typically require an appraisal of your project by their approved appraiser. Your bank may give you the names of their appraisers to contact for this local information.

If you are not confident of your calculations or simple want confirmation and some guidance you should get a feasibility study done by an expert.  Please understand a feasibility study is not the same as the appraisal required by your bank.  For your planning purposes each can cost $6,000 to $7,000.  If you want a feasibility study or preliminary assistance with preliminary development cost I recommend you contact Bob Cooper, 866-269-1311 http://www.selfstorage101.com

There are some business theories that should be observed when deciding how much storage to build.  One is having an exit stagey.  Typically, the highest prices for self storage sales go to facilities that are purchased by REITs or other large self storage operators.  Typically, they want facilities that are 40,000 to 50,000 sf and larger.

Also you don’t want to have a facility that is so small that it only proves self storage is a good fit for the area and attracts a larger self storage operator to make the majority of the profits after you did the hard work.  The exception to this is if you are considering your self storage business a side business that you built on land your already own and run out of your existing business office.

Self storage rent up is so much faster (and rents for more per sf) when you have an office with regular office hours.  To pay for a manager and make a good profit and pay for all your efforts and risks you can use a preliminary estimate of 40,000 sf (for all phases) until you have done all the due diligence for your specific project.

You do not have to build out the entire project in one phase and in fact phasing is highly recommended.   It will save you the added expenses of having a large supply of unrented units.  A 50,000 sf project could be built in two or maybe three phases depending on the storage needs of a specific area.

The amount of land you need is highly dependent on the local zoning regulations and specific land features.  Typically, you will need 4-5 acres for 50,000 square feet of single story buildings, less for multi story buildings. See Site Selection for more information regarding property requirements.

  1. What are some of the site plan design flaws you have seen?
  • No office.
  • No curb appeal.
  • Outdated technology.
  • No bollards at building corners
  • Led lights not used.
  • No product sales area in office or sales area too small.
  • No easy access to customer bathroom.
  • Customer has to go through the security gate to get to the office.
  • No 4-foot man gate to access the storage area without opening the main gate.
  • Access key pads not aligned up with gate.
  • Located in industrial park or other out of the way locations.
  • Space between buildings less than 24 feet.
  • Larger units (especially car storage units) not located to the outside of the project where there is not a second building to constraint the access drive for better access to the units.
  • Not enough landscaping provided. A lot of landscaping is a great marketing feature.
  • No windows or small windows in office.
  • None or not enough site lighting. A light at the site entrance is a nice touch.
  • Storage units not visible from the road.
  • No security measures.
  • Too many dead ends.
  • Loss of units due to poor layout.
  • No small units or no large units or not enough variety in unit sizes.
  • No locker (5’x 5’ x 4′) units provided.

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  • To meet town approval building some architectural features actually make metal building   more noticeable and unattractive.
  • Phasing not provided on the approved plans requiring applicant to return to the commission for approval.
  • Site signage not on the plans requiring the applicant to return to the commission for approval.
  • Driveway widths and or radius at the Town road are too small.  Minimum driveway entrance radius of 25 foot should be provided and a 45 feet radius is preferred.
  • Access for RV’s or large moving trucks not suitable, especially at the ends of the buildings.
  • Rental kiosk not provided in new construction.
  • Climate control not properly designed.

Self Storage Planning……… Chapter 4 & 5

Planning-SiteSelection-Design-Build

Your Self Storage

Planning – Site Selection – Design – Build

Over 150 proven ideas to save you time and money and make you a success!

By Marc Goodin

Chapter 4

Why New Construction Vs. Buying Existing Facilities.

     1.Be Closer to Home.  There Are Very Limited Quality Facilities Presently for        Sale.

  1. Better Locations. “Build It and They Will Come” is a thing of the past. NOW: “Build It in The Right Location and Market it and They Will Come”.
  2. Many Existing Facilities Are Over Priced Due to Bidding Wars and REITs Paying New Record Prices Every Month. As A Facility Owner I Get Unsolicited Request at Least Twice a Month to See If I Want to Sell from Buyers Who Have the Cash to Buy Now.  Buy at 4 Million Vs. Build $2 Million = More Equity and More Profits
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  3. New Facilities Can Be Developed for 1/3 The Equity Requirements of Buying.
  4. You Reap the Rewards of Your Efforts Vs. Paying A Premium for Others Efforts.
  5. You Can Build in Phases So You Can Start Off with Lower Equity Requirements.

 

Chapter 5 

 Why Self Storage Now? – The Top Seven Reasons

  1. There Has Never Been a Better Time to Get Started.
  2. Extremely Profitable – 30% Plus Returns Vs. 0-10% Returns for Other Real Estate Development Like Apartments or Hotels. Self Storage Not Only Provides Present Day Income but It Also Provides Retirement Income.
  3. Abundance of Financing Options with Equity Requirements as Low as 10%. And interest rates at all time lows.
  4. Significant New Construction Is Required to Meet Pent Up and Surging Demand.
  5. Owner Life Style – Replace Your Income with A Manger Driven Self Storage Business with Automation: Franchising; Kiosks; Web Based Automation.
  6. No Painting, No Backed Up Toilets, No Midnight Calls and Just a Couple of Employees.
  7. You Can Keep Your Present Job with A Manger Driven System.
  8. Storage Authority Franchising Is Not Only Ready To Help You Compete With The REITs And Big Boys But Will Help You Surpass Them. They Are Ready to Provide You the How to Knowledge and Help You Need Get Off to A Fast Start and Provide You the Systems and Experience That Will Make a Difference.

 

If you want to have the complete book as a reference you can order it now for just $9.99 at www.SelfStorageMarketing101.com 

Chapter 3 Start Today!

Chapter 3

Start Today!

Thirteen things you can to do this week to get off to a fast start.

  1. Do a personal review to make sure you have sufficient time, energy and money to get off to a great start. After you read this book you will have a much better idea of the time, money and work it takes to build a self storage.
  1. Join your local State Self Storage Association and attend meetings.
  1. Subscribe to one or two Self Storage trade magazines: www.insideselfstorage.com or www.ministoragemessenger.com.
  1. Read the Zoning and Wetland regulations from the Town(s) you may purchase land in. Often they can be found online for free. Meet with the Town Engineer and Planner to discuss the permitting process for a self storage facility, where in Town they are permitted and the zoning regulations on self storage development.

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  1. Find a commercial realtor to help you with your search for land.
  1. Meet with your banker and ask about self storage loans.
  1. Meet with a local civil engineer to get rough time frames and costs for site plan design and approvals.
  1. Stop at every self storage you pass by and talk to the owners. Let them know you are thinking about starting your own self storage. Some owners will be reluctant to say much but many will be happy to give you tons of useful information.
  1. Join our LinkedIn group “Marketing Self Storage” for great marketing ideas and a forum where you can ask any questions you may have. Feel free to ask any questions you have too.
  1. Order your free developers “getting started packet” from http://www.trachte.com a premier self storage building manufacturer.
  1. Start a business plan folder today. A lot of the information you accumulate over the next several weeks will be used to prepare your business plan.  Your business plan will help you understand the costs, planning, work and risks associated with your new project.  When you apply for your loan the submission of a well prepared business plan will let the bank know you understand the self storage business and are well prepared. This can often help the bank make a positive decision in less time and often with better terms.
  1. Check out the fastest and most profitable way to get started in self storage www.StorageAuthorityFranchise.com  Don’t forget to read the blog for tons of great info you will need to build & market your self storage.
  1. Email me at marc@storageauthority.com when you have 3 of the above items completed for a free 1/2-hour phone consultation for faster profits.

You be amazed how quickly you start learning valuable information.

For the three self storage facilities that I built and presently own it took aprox. 1.5 years from when I initially decided (before I found the land) to finish building a facility.  The longest period of time for me was making the decision to build.  The rest went by quickly.  After you make the concrete decision to build self storage you have to find a piece of land that fits your needs, and negotiate an option to buy. If you already have a piece of land under consideration you are already off to a fast start. Then, your engineer has to design the project and get approval from the local municipal boards. After the regulatory approvals you have to do more detailed designs. Next, you have to choose a contractor(s) and, of course, you than have to build the facility. The more realistic you are about your time schedule the better prepared you will be, and certainly it will be a lot less stressful.

Need help – send me an email marc@storageauthority.com