How Will You Determine Capacity For Your Self Storage Building Project?
When you are designing your Self Storage Development, your ultimate goal is to maximize your Return on Investment. Whether you're building a Self Storage Building facility from the ground up or looking to expand, it's important to understand the market and create the right investment strategy.
Let the Market Drive Design
A greater number of units will always make a Self Storage Building project look better on paper. Of course, on paper, you could be tempted to make big assumptions about demand, lease-up and future potential and be tempted to overbuild. We’ve had a lot of Self Storage Developers ask, “How many units can I get on a three-acre site?” That’s a loaded question with no definitive answer.
Some Self Storage Developers approach projects with a target square footage in mind. I often hear “80,000 square feet” stated as a reasonable target. Keep in mind, as you design, that not all markets will absorb that much storage capacity. A lot of newer, larger facilities fail to reach their target occupancy rates because the project is simply not scaled to market demand. If only 25,000 people live within five miles of your site, a 60,000-square-foot facility is probably not going to reach capacity.
Facility size, development phasing and investment should be based on facts and data, not guesstimates and ambitions. You might be able to put a 70,000-square-foot facility on a three-acre site, but it won't matter if the market can only absorb 40,000 square feet. Even if the market demands a larger project, it is important to consider other key factors such as access, visibility, convenience, security, parking and office space.
The amount you choose to invest in your Self Storage Buildings should always come down to supply and demand. You will need to conduct a complete market analysis and reasonable investment modeling before you determine project size. In other words, let the market drive the key elements of Self Storage Facility Design including; size, unit mix, climate/non-climate control, curb presentation, amenities, office space, access and signage.
For Single Story Self Storage Buildings, anticipate 30-38% building coverage. This rule of thumb provides approximately 13,000 to 16,000 square feet of storage per acre. The ideal site would consist of narrow buildings with driveways so that all of the units face the outside with drive-up access. Customers almost always prefer to be able to drive up to their own unit. The problem this creates is that it burns up a lot of land and you get only 30% coverage. Most people can't afford to build this way anymore.
The trend today is to build wide buildings and eliminate driveways. Developers are constructing buildings anywhere from 60- to 200-foot wide. This method allows you to increase your coverage up to 45%. However, if you build wide buildings, it may be necessary to climate control the hallways. This ensures the units are rentable and will also increase your net revenue since climate control demands a higher price.
If your land has more than a ten-foot elevation change in it, consider building a Multi-Level Self Storage Structure which can be built into a hill. This design is superior to conventional two-story buildings because there is no need for stairs or elevators. Consequently, to the customer it seems like a one-story building. Since you use two floors, you will lose around 20% of the building to hallways, but you should still end up with over 40% building coverage.
To maximize the number of units, many developers are looking to build two, three, or even four-story Multi-Story Self Storage. With each story you build, you gain a lot of square footage, but each floor carries a lot of additional costs. Customers don’t want to walk upstairs with their goods, so it is recommended that all Multi-story Self Storage Buildings have elevators. Two-story buildings are the most common designs, and some can be built without sprinkler systems, while three or four story Self Storage Buidings will require sprinkler systems. Regardless, with any Multi-Story Self Storage Building, you will need to allocate approximately 25% of building to hallways, stairs, elevators, etc.
The cost of Single Story Self Storage buildings typically runs at least $12.00 - $17.00 per square foot. Multi-Story Self Storage Buildings typically run $14.00 - $19.00 per square foot.
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