Mako Steel Blog

Self Storage Construction

Posted by Caesar Wright on Wed, Oct 24, 2012 @ 11:19 AM

What Every Self Storage Investor Needs to Know Before Building  

Every Self Storage Construction Project has its own nuances, and it’s pretty tough to throw a formula around that will work in all cases, but we might be able to help with some basic “rules of thumb” to help point you in the right direction.

Regarding the property

  • Most new development projects that incorporate Single Story Self Storage Buildings are developed on parcels between 3-5 acres. Each acre (provided the property is normally shaped) will yield approximately 17,500 – 18,000 sq. ft of rentable space. (Roughly 40% Coverage Ratio)  

  • Property should be zoned correctly for self-storage. Your self-storage facility would ideally be on a “use by right” parcel. Conditional use permitting is common with Self Storage Construction, but will likely cause higher than average construction costs to appease neighboring businesses or residences by utilizing more expensive architectural aesthetics.

  • Property should be visible with good traffic counts. There is no better marketing strategy in the Self Storage Industry, than people simply knowing where you are by seeing your business where they drive on a regular basis.

 Put Your Self Storage Facility where people will see it.

Preliminary Due-Diligence

  • Once a parcel is identified, a market study will help determine whether or not the “market” will support more inventory for rental, and what type of storage might be best suited for the parcel (i.e. climate controlled, boat and RV, standard storage, etc.) The typical cost for Feasibility Analysis is between $2500- $5000 – We recommend that this study be performed by a third-party unbiased source and NOT someone who might have a vested interest in your construction. Avoid the Most Common and Costly Mistakes in Self Storage Construction - download this guide.

  • Prepare a concept site plan. A concept site plan based on good plat map information will give you an idea of how much square footage can be built on the parcel, and will give prospective construction consultants a base line to help with construction budgeting.  

  • If you are looking at particular site for your project, let us know. Mako Steel has one of the industry’s most talented draftsmen at our disposal to assist with concept site planning. We provide this valuable service to all of our customers at no cost. We would be happy to work with you on your self-storage project.   

Establishing Financial Feasiblity

  • Most self storage facilities built today require about 60K square feet to support a full time employee and allow an investor to maintain a “hands-off” approach to the business. In some markets (depending on the rate of rent per square foot of storage) this may be as high as 80K or in some rare cases…much lower. The industry average nationwide is around $1.00 psf (i.e. a 10x10 storage unit rents for $100 a month).

  • Your rental rate per square foot is the single most important factor in determining financial feasibility. When a parcel is identified – the first step an owner should take is to determine what a baseline rental rate would be by “shopping” your potential competitors (Competitors are usually defined by a one-, three- and five-mile radius from your site). The higher the rental rate, the more you can afford to spend on construction and still maintain an adequate ROI.

Self Storage Building Costs

  • Single Story Self Storage Construction typically runs between $35 - $45 psf to build.  Your metal building portion (our scope of work) will typically represent about 25-30% of your overall construction budget. Learn more about budgeting single-story self-storage construction. Download Mako Steel's Single Story Self Storage Budget Guideline. 

  • The range for turnkey Multi-story Self Storage Construction, including the slab, landscaping, office T.I and off-site improvements, has been between $42-$70 psf. This is obviously quite a range. Give us a call, we would like to know more about your particular self storage project so we can help you more accurately budget. You can also download our Multi-Story Self Storage Budget Guideline.

We hope we answered some of your questions. Be sure to take advantage of our Low Cost Engineering and Design Services.

 
Low Cost Site Design Services

 

Tags: self storage construction, Single Story Self Storage Building