By Ed Clement
"Your Self Storage Planning - Site Selection - Design-Build" by Marc Goodin
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.
2. You will need both construction and specialized self-storage insurance. For construction, you will need builder’s 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.
3. 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 until the town has completed its review and has issued a final certificate of occupancy. Check with your bank to see what their required holdback is and make sure it is included in your bid package. Find out how often the bank will provide draws and how long after a bank draft/inspection is requested until the money is available. Your contractors need to be aware of and accept the payment schedules of your bank.
4. 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 on 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 You would be amazed how many times construction gets screwed up because outdated plans are used.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.
5. 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.
6. 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 you to confirm the cost and possibly negotiate it or find other options.
7. Your design team should determine what independent testing (typically paid directly by you) that is going to be required, 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.
8. If you are the general contractor, expect discrepancy between where one contractor leaves off and the next starts and the condition of the work left by the previous contractor. For example, if the grading for the floating slab is off by one inch, it can easily be an extra few thousand dollars or more in concrete. For this example, it would be important to know how many cubic yards of concrete are included in the concrete contractor's price. Also, 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 you either 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.
9. 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 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.
10. Don’t forget to make sure the contracts include bringing the various required underground utility conduits and utilities for phase two.
11. 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 needs to be reviewed constantly. Often, what you told the foreman today is not relayed to the new foreman the next day.
12. Makes sure the limits of construction are properly staked in the field prior to the start of construction. Any trees within the limits of construction or near construction you want to be 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.
13. 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.
14. Check to confirm they are compacting the fill-in 8” layers per the contract. Contractors like to save time by filling and compacting a couple of feet at a time.
15. Check that the rebar and wire mesh is installed for all the concrete per the plans. Hint: neither should be on the ground.
16. 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.
17. 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 is often a difficult maneuver for a car in the field and can be corrected with ease if done prior to construction.
18. Make sure the office windows and door sizes and locations are coordinated long before the contractors show up. Often, approximate locations and sizes are provided until a window manufacturer is chosen.
19. Make sure the concrete is sealed the day after the concrete is poured. This will not only help the concrete cure, but it will also keep the concrete dust down for your renters.
20. 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.
21. After the office concrete floor is in, draw the office floor plan, including interior walls, desk, and cabinets on the concrete floor with a marker. It is easy to make a change now.
22. Make sure your communication wires and electrical wires to the gate controller are in separate conduits.
23. Layout your perimeter fence for review before the fence installers come. There are typically conflicts and options. You will want to take the time to review.
24. 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 is 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.
25. Your bid document should require all contractors and subcontractors to provide proof of insurance. The bid documents should further require all contractors and subcontractors to wear hard hats and meet all local and OSHA job site safety requirements.
26. Often the building manufacturers 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 ensure 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.
27. 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.
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Ed Clement is a franchise director at Storage Authority. One of his passions and responsibilities is helping franchisees find land by sharing how to find land both online and offline. Ed has a strong background in real estate, investment banking, and management consulting. He is available at Ed@StorageAuthority.com or 727 946 0745 to answer your questions and share the Storage Authority Franchise opportunity.