With the recent pandemic and decline in big-box retail, there is now a significant inventory of vacant buildings out there for sale. The current trend of office vacancy rates increasing, building owners are seeking creative ways to make that empty space generate profit again. As such, some are converting these structures into self-storage facilities or selling them to others who wish to do so.
While this development path can be an efficient time and cost-saver, there are important considerations. This blog will help you decide if conversion of an existing building is the right path for you to be able to properly transform a structure into a well-built self storage facility.
Like any building project, there are definitely pros and cons to consider for conversions of existing buildings into a self storage facility. Here’s our take.
Pros. Because of the amount of inventory out there, you may be able to purchase an existing building for less than it would cost to build it, so after completing the renovation, you’ll have a lower cost basis for your project. Another advantage is that if you maintain the footprint, access points, and site circulation, you may also be able to avoid going through the site-plan approval process with the city, which can save money and simplify entitlements. These advantages add up to an expedited construction schedule at a lower cost.
Cons. On the flip side, since the structure wasn’t originally built with self storage in mind, it may not always be located in an optimal location for visibility. In addition, the design needs to adapt the building can cause irregular unit sizes and long travel distances from loading areas to units. One other consideration is zoning. This can be a problem since many vacant buildings in commercial zones don’t allow for self storage. Finally, it is important to assess the acquisition price and building condition against all the costs of the conversion and anticipated profits down the road to determine if conversion is the right business strategy.
Along with the pros and cons mentioned above, following are some other considerations.
For any self storage building project, whether it’s a conversion or one being built from the ground up, your site selection is the number one consideration. Retail-like visibility is always preferable to being out of sight. No amount of online marketing can replace the free exposure of being located along a frequently driven, high-traffic route. Proximity to potential customers is key.
One of the most restrictive challenges in pursuing a conversion project is finding a building where self storage is permitted. Thankfully, many jurisdictions appreciate creative solutions to filling empty structures. A zoning authority that has a positive view of storage as a community-serving use will aid your cause; however, if storage is still considered an industrial use that should remain on the periphery of communities, your development path is going to be all uphill, costing excessive time and money.1
As in any type of self storage build, it is critical to understand rates, occupancies, and the competitors around you. The team at Forge always recommends that a complete and thorough market study be completed. It is also key to investigate whether or not self storage is allowed in the zone where the building is located. If it is, then you may need a conditional-use permit or rezoning permit.
Old Idaho Statesmen Building Before Conversion to Self Storage
Forge also always recommends that you check the title and survey to determine if there are covenants, conditions, and restrictions, easements, and other agreements that could impact your ability to convert the building. It’s common, especially with retail properties, to have private restrictions that prohibit self storage, easements that impact circulation, common-area maintenance fees, shared utilities, etc. Environmental problems are also common, especially in older manufacturing and warehouse facilities. Thoroughly understanding your site and its history is a key part of having a successful project.
When looking at starting a conversion project, typically a commercial zone 2 (C-2) location is the most desirable in a market area. It will typically have a large and destination-bound traffic count and great visibility. In addition, facilities in C-2 typically rent up faster than those in light industrial 1 (I-1).2
It is also good to eliminate any potential site that cannot accommodate a minimum of 50,000 net rentable feet. This is typically optimal for cost-efficient management.
Once you have your site selected, you will need to assess the structure itself – the roof, structure, parking lot, mechanical, etc. In addition, many old buildings have refrigeration systems and other items that are costly to remove. Asbestos, and other hazardous materials remediation may also need to be addressed.
Floor load. If the building you are looking to convert is a multi-story building or has a mezzanine, it is key to ensure the floor load is adequate for self storage use.3 One of the most significant costs in the conversion of office space to self storage will be the assessment and likely remediation of the structural system. Most office buildings have been designed and constructed with a much lower live load than what’s required for self storage, often rated for 50 to 80 pounds load per square foot (PSF) compared to 125. That’s about a 50 percent deficit.
To help you calculate the loading design, it is key to do field measurements with limited destructive testing and a structural engineer. (See our blog titled, “Designing a Self Storage Facility – How to Select Your Design Team”)
If the structural engineer finds that the structure doesn’t meet the required loading for self storage, there are still solutions. Adding light-gauge bearing walls is the most cost-effective, while reinforcing existing beams could also be sufficient. Reinforcing under-bar joists is the costliest solution.
Old Idaho Statesmen Building During Conversion to Self Storage
Rentable Space. Most urban and suburban self storage facilities are 100,000 to 120,000 gross square feet. However, taking into account elevators, stairs, and corridors may reduce the rentable yield to 75,000 to 90,000 square feet. It’s key to know what amount of rentable square footage is necessary to be profitable.
Another consideration you will need to make in this same area of the design, is the average unit size and mix.
In a standard conversion, you’ll use the existing building without changing the overall footprint. This is the easiest, most straightforward type of project. Depending on the building, it is also common to add one or more floors in the existing footprint.
Increasing the rentable square footage of the building through a footprint expansion or the addition of more structures can be another great option. This may include adding drive-up units or vehicle storage in the rear or side of the building.
At the end of the day, the design of your conversion will play a significant role in its success.
Thermal envelope. Energy-code compliance has only been around since 2012. Therefore, the level of renovation necessary will depend on the existing wall, slab, and roof.
Elevators. Check to see if the existing elevators are in your tenant loading/unloading area. A self storage elevator should have a 4,500-pound capacity with a taller cab to accommodate large pieces of furniture.
Loading area. An appropriately sized loading and unloading area with ample space to maneuver large vehicles, such as moving trucks, is key. Your loading area should have a minimal vertical clearance of 14 feet. It should also be convenient to the building interior, particularly the elevator.
Old Idaho Statesmen Building After Conversion to Self Storage
Self storage has some of the easiest mechanical systems of any real estate type. In the case of an office conversion, the goal is to minimize replacement. The preferred self storage HVAC system is a residential-sized split system with minimal to no ductwork. Boilers and other perimeter unit systems lack efficiency.
A sprinkler system will likely be a code requirement for self storage structures of 100,000 square feet or more. If your building has such a system already, the upgrades should be minimal. The large open areas with no ceilings allow for an optimized sprinkler-head layout.
The last item to evaluate is the electrical system. Typically, the system already in place is likely to be sufficient to meet your self storage needs, but plan to replace the lighting to more energy-efficient LEDs with motion sensors.
The exterior look of the building is key, especially to potential customers driving by. That’s why it is key that your building stands out. Fresh paint, clear, visible signage and nice landscaping increase the curb appeal.
The building-conversion process always comes with extra surprises. Therefore, it’s important to carefully select a professional design and construction team with self storage experience such as Forge Building Company (see our blog titled, “Designing a Self Storage Facility – How to Select Your Design Team”).
Self storage conversions are a great alternative to ground-up development. Evaluating the site, assessing the building, designing the project, and understanding the costs will provide you the information you need to make a wise decision. Finding one that meets the criteria for self storage with limited need for remediation can be a tricky, so working with the team at Forge Building Company can make the process much easier. The budget savings of building a self story facility from a conversion can be 25% to 50%. Give the team at Forge a call today, we would love to help you convert an existing building.
Works Cited
1. Brown, R. (2023, March 22). Inside Self Storage. Retrieved from Insideselfstorage.com: https://www.insideselfstorage.com/conversions/converting-old-office-buildings-outstanding-self-storage-facilities
2. Pollack, L. (2012, July 20). Inside Self Storage. Retrieved from Insideselfstorage.com: https://www.insideselfstorage.com/conversions/retrofitting-building-your-dream-self-storage-facility-guide-intrepid-souls
3. Wyckoff, S. (2021, January 21). Inside Self Storage. Retrieved from Insideselfstorage.com: https://www.insideselfstorage.com/conversions/self-storage-conversion-projects-pros-and-cons-building-assessment-design-pitfalls-and
As 2022 winds down, the team at Forge wanted to make our customers aware of new laws that will go into effect in the new year that may impact their business. Many states have been busy updating self storage legislation this year. This affects the way facility owners handle lien sales, rental agreements, vehicle towing, employees, ADA compliance on websites, and more. Here are just a few.
Last year, at least 13 states modified some portion of their self storage statutes that address one or more of the following items.1 This will likely hold true for 2023.
The safest way to protect yourself and your business is to compare your lien-sale procedures and rental agreement against the current law to ensure any necessary language additions or removals have been made. As an example, some states allow self storage operators to send lien notices via email, however, they may also require some sort of formal disclosure and acknowledgement by the tenant before you can legally send notices that way. Another example is when states allow you to use online auctions for lien sales, they may require additional language in your rental agreement or sale notice, so tenants understand sales are no longer conducted on property.
Recently, there has been a significant increase in website accessibility where plaintiffs claim that they cannot access websites because they are incompatible with assistive technologies. In such cases, plaintiffs usually cite American with Disabilities (ADA) Title III violations.
Ironically, websites are covered by the ADA. The U.S. Department of Justice has interpreted Title III of the ADA to include websites as places of public accommodation, while Title I requires employers with 15 or more employees to comply. A website that is fully accessible is not at risk of receiving a demand letter claiming ADA violations.2
US Courts and the Department of Justice have cited the Web Content Accessibility Guidelines or WCAG 2.0 (Level AA) as the reference in lawsuits as the standard for website accessibility – and therefore ADA compliance.3
Who is covered by the Americans with Disabilities Act?
ADA compliance refers to WCAG compliance, a way of designing websites, tools, and technologies so that everyone, including people with disabilities, can use them as easily as possible. These take into consideration those with different types of disabilities such as:
How can you avoid legal risk? There are two main steps:
1 Check your level of compliance by performing an accessibility audit of your website usage.
2 Install a high-level web accessibility solution on to your website.
How Does This Help the User Experience?
The nature of accessible web design allows content to be shared across a variety of devices. This in turn ensures that every web user benefits from accessibility considerations.
As a matter of fact, one billion people globally have some kind of disability. This population has a spending power of more than $6 trillion. Statistics have shown that 80% of people with a disability will take their business elsewhere because of poor web accessibility.4 By building an accessible website, you are widening your audience and increasing your prospective customers.
Labor and Employment BillsAs we turn the calendar, you also need to be aware of many new labor and employment bills that will go into effect.5 For specifics, check with your state law details. These include:
When concerned about new laws, legislative updates, and compliance, please make sure that you are looking beyond your state’s self storage statute. Those statutes do not necessarily contain all regulations that pertain to your business.
One example is with the sale of tenant insurance. These provisions are normally placed in the state’s insurance statutes. In states like New York, the lien-sale advertising requirement can be found in a different section of the state statutes. Other laws in the various states control things such as what you are able to charge a tenant for submitting a bad check as payment.
These are just a few of the new laws that the team at Forge is aware of. Of course, any time you have questions or concerns, it is best to contact your attorney to ensure you are aware of the latest and most important statutory developments. This will help protect your self storage business and keep it in compliance with the current laws.
Works Cited
1. Greenberger, J. (2021, October 22). Inside Self Storage. Retrieved from InsideSelfStorage.com: https://www.insideselfstorage.com/legal/what-you-need-know-about-recent-changes-state-self-storage-legislation
2. Ronen, R. (2022, January 21). Forbes. Retrieved from Forbes.com: https://www.forbes.com/sites/forbesbusinesscouncil/2022/01/21/ada-compliance-for-websites-getting-it-right/?sh=386010f148c0
3. Siteimprove. (2022). Retrieved from Siteimprove.com: https://www.siteimprove.com/glossary/ada-compliance-checker/?utm_campaign=us_fy20_ppc_accessibility_bing&utm_medium=ppc&utm_source=bing&utm_content=ada-requirements&tad_id=84250407544633&adgroup_id=1348002241464864&campaign_id=413363497&msclkid=79f79cda3d
4. Michelle Yin, D. S.-M. (2018, April 17). AIR. Retrieved from air.org: https://www.air.org/resource/report/hidden-market-purchasing-power-working-age-adults-disabilities
5. California Employers Association. (n.d.). Retrieved from Employers.org: https://www.employers.org/events/private-webinars/2023-labor-law-update-sponsored-by-california-self-storage-association/01/26/2023/
Designing and developing a profitable self storage facility requires much more than picking the perfect location and unit mix. The vendors you select and the team you work with can impact decision making and impact the bottom line.
In the early years of self-storage, many facilities simply consisted of single-story, garage-style structures built from a flat slab with concrete block walls and simple wood-truss roofs. Today, with a scarcity of available land, many self-storage owners and investors are building multi-story units that are climate controlled and energy efficient. Materials being used are very different as are the requirements for new construction and building codes, especially those mandated by new standards of energy efficiency.
However, before you build or start down the design planning road, it is imperative that you engage a company to do a market feasibility study. This is a critical first step since most investors and developers want to know if the property will be profitable before going into the design phase.
Once your market feasibility study is complete, the Forge team will provide a complimentary site layout in this preliminary phase of the project. This site layout can then be turned into AutoCAD drawings so the architectural team can make any necessary updates and incorporate these into the architectural set of drawings (see below).
So, who are the key players you will need in your design team? Below we outline the major vendors and how they will contribute to the development of the most aesthetically pleasing, profitable, and cost-effective self-storage facility.
Now that you know who the players are, the next question is how do you choose the right companies to provide these services? Just like with many service-oriented businesses you’ll want to choose a business that has a solid reputation, comes from a referral, or meets your expectations with initial interactions. Beyond the basics of choosing a “good” company to work with there are some key attributes specifically for the architect, structural engineer, and civil engineer that you want to take into consideration.
First, it is absolutely critical to select an architect and structural engineer that have experience specifically with self storage. There are aspects to self storage that are very different from building a multi-family or commercial development. The architect and structural engineer don’t have to be local to the area that you are building in, however, they need to be able to effectively obtain information required in order to communicate with you about your project. It's a little bit of a different situation with the civil engineer.
It's a good idea to select a civil engineer that is familiar with the region in which the project is being built. The reason for this is you want the civil engineer to have experience and knowledge specifically with the conditions of the soil within a particular area. Different parts of the county have different types of earth that needs specific considerations. For example, building in the wetlands of Florida is going to vary greatly from building in the dry dessert of Arizona.
Another thing to keep in mind is that these companies should be working collaboratively together. If buildings need to move because of where the retention pond is, then the architect will need to make changes to the layout. If this causes a building size to change, then the structural engineer is going to have to adjust their drawings. So, with these things in mind, make sure that every player has the bandwidth to take on another project. To keep progress moving along, you don’t want anyone held up because one of the team members doesn’t have time.
As you are making selections on your design team, it is a good idea to make your selection on a steel building contractor. Many of these contractors, like Forge Building Company, offer structural engineering as part of their services. The benefit of bringing a steel contractor into the design phase is that it allows them to provide insight on best practices that they have seen over the years, as well as allow them to show where there may be areas to value engineer the project, ultimately saving you money.
When selecting a steel frame building contractor, it is key to work with one that has created custom steel buildings of every shape and size. Here are some questions to ask when making your decision on who to work with:
The right steel building contractor should also be able to provide:
For more considerations, also see our blog “Commercial Steel Building Developers.”
For the last 15 years, Forge Building Company has partnered with investors and developers on over 500 self storage projects. With our experience in this space, Forge can provide all the necessary vendors and information needed for your project to be a success – from start to finish.
Here is how we can help. Forge offers:
Whether you are considering your first or your fiftieth self storage project, we are ready to partner with you. Forge knows self storage and has built over 60 million square feet of it.
To hear more about what our customers are saying about working with Forge as a one-stop shop, see https://www.youtube.com/watch?v=P7WFCRms2kI.
Let’s begin the discussion on your next project. Click here to connect!
Contributing Editor: Melissa Anderson, Forge Building Company
With the self storage market booming, many investors are jumping in or expanding on existing facilities they own. Whether this is your first build or fiftieth, self storage facilities are designed and operated much differently than other real estate product types. So, before you start planning and building a self storage facility, there are some common mistakes you will want to avoid.
The team at Forge Building Company has repeatedly witnessed many of the same construction mistakes when the property owner didn’t hire someone with industry experience (like Forge) to oversee the development. Common design and construction mistakes can cost a self storage owner a lot in extra expenses, and possibly long-term financial losses, because these mistakes can’t be easily corrected. Let’s take a look at these common mistakes and how to avoid them.
From the onset, some of the biggest mistakes are made in site selection and design – from choosing the right site and land for development to determining unit mix. Here’s how to avoid these mistakes.
On average, here’s an ideal 100-unit ratio for a new facility:
Before you start your build, here are some of the very basic mistakes that can be completely avoided with proper planning and communication.
Not understanding fire code and fire hose access: It is key for property owners to fully understand fire code and provide fire department access roads that are up to code, which allow a quick response time.As you’re building your facility, it is key to keep in mind that your facility should be welcoming, easy to see, and easy to access. Here are some mistakes to avoid in this area.
What other areas do you need to think about when planning and building a self storage facility? Here are a few other mistakes that can easily be avoided.
Avoiding these common mistakes when planning your next self storage project, will ensure you build it right and enjoy a long and successful investment for years to come.
Works Cited
1. Goodin, M. (2014, July 23). Inside Self Storage. Retrieved from Insideselfstorage.com: https://www.insideselfstorage.com/security/25-design-and-construction-mistakes-self-storage-owners-and-developers-should-avoid
2. Reliant-mgmt.com. (n.d.). Retrieved from Reliant Real Estate Management, LLC: https://www.reliant-mgmt.com/self-storage/top-20-mistakes-in-self-storage-investing
In an economy that appears to be heading into a recession and investors preparing for another jumbo-sized rate hike next month, why should one consider investing in self storage today – especially given that the S&P 500 fell 2.9%, the Dow Jones Industrial Average fell 2.2%, or 669 points, and the Nasdaq slipped 3.7%?1 While not necessarily the sexiest asset class in commercial real estate, self storage is still seeing a continuum of strong growth and still appears to be the most recession-resistant sector in commercial real estate.
The good news for self storage owners is that history has proven the recession resilience of the self storage industry. During the Great Recession of 2008, all commercial real estate segments experienced a net annual loss from 25 to 67% with the exception of self storage, which posted a gain of 5%. In addition, this sector had the least number of foreclosures.2
Even with all of the recent price increases in construction materials, energy, and wages, self storage is staying ahead of inflation with rent increases. The higher rental rates paid by tenants are offsetting the rise in new-construction and operational costs while allowing self storage owners to reap financial gains during these current economic times.
Americans, in general, tend to accumulate and hold on to a lot of stuff. With the craziness of the real estate market, many millennials are being priced out of owning a home. In addition, many baby boomers are downsizing, opting to rent and live in apartments and smaller rental homes, which have much less storage space than the homes they are moving from. Thus, the biggest demand for self storage is created by people moving from one place to another.
With recession also comes job loss which may also force a homeowner to sell their home, or they may lose their home through a foreclosure. Changing jobs, relocation, divorce, death, college students moving back home for the summer, and many other events also create a demand for self storage.
Another reason that self storage continues to perform well is that self storage has one of the lowest break-even occupancies in the commercial real estate market, often as low as 60%. Self storage owners can also quickly and legally evict non-paying tenants. The contents of a storage unit can also be auctioned off to cover any unpaid rent.
Like any investment, there are always risks. Because self storage is a great investment, there is now an increasing number of properties being built and more competitors coming into the market.
Like other industries, inflation and the current economy has hit the self storage industry in two areas – operations and new construction.
Operation and life cycle costs such as marketing, utilities, property taxes, insurance, and routine repair and maintenance are definitely on the rise. And with the current economic environment, qualified labor is also becoming harder and harder to come by.
The cost of doing business coupled with rising interest rates could slow the pace of construction even more as financing for projects becomes more expensive. However, while some developers are pulling back from new construction projects as a result of the skyrocketing materials and labor costs, others have recently discovered self storage as being resilient during hard economic times and are now dynamically reallocating money into this industry, pursuing acquisitions and new development deals.3
While the self storage industry has its risks, many investors and developers are still seeing it as being very attractive as a recession-resistant investment in a time of uncertainty. And according to Mordor Intelligence Research, the self-storage market is expected to grow to $115.62 billion by 2025. This puts the compound annual growth rate (CAGR) at 134.79% over the forecast period of 2020-2025.4
Works Cited
1. Ebrahim, Y. (2022, October 7). Investing.com. Retrieved from Investing.com: https://www.investing.com/news/stock-market-news/sp-500-slips-as-strong-jobs-report-puts-hawkish-fed-bets-back-in-focus-2907596
2. Mainstay Global. (n.d.). Retrieved from Mainstayglobal.com: http://www.mainstayglobal.com/is-self-storage-recession-proof
3. Fitzgerald, J. (2021, December 14). Storable. Retrieved from Storable.com: https://www.storable.com/storage-beat/self-storage-inflation/
4. Meyers, S. (2020, December 1). Forbes.com. Retrieved from Forbes.com: https://www.forbes.com/sites/forbesrealestatecouncil/2020/12/01/a-look-at-self-storage-growth-trends-now-and-post-pandemic/?sh=1e5675912165
Boise, Idaho. – October 18, 2022 – Forge Building Company, a leading national building company focusing on self-storage and innovative building solutions, announced today the groundbreaking of the first phase of its new Stor-It facility construction project on Federal Way in Boise.
The first phase of this project includes 240,000 square feet of facility. The facility is located at 6099 S. Federal Way in Boise and will serve the growing population and business community. The new facility is on track to open in November 2024.
“Our relationship with Stor-It started in 2001,” said Hamish Bell, CEO of Forge. “Since that first project, we have been involved in helping Stor-It develop, do maintenance and repairs, remodel, or build facilities from the ground up for its 20 facilities. They now manage over three million square feet of self-storage space! This treasured relationship was the catalyst that led to the founding of Forge Building Company in 2007.”
New Stor-It facility construction groundbreaking ceremony
Stor-It has been around for 50 years and is the largest storage provider in Idaho. What started as just one storage location over three decades ago has since expanded to more than 20 facilities. From Boise to McCall, Stor-It facilities have over three million square feet of total square footage!
“The values that Stor-It holds strong are completely in alignment with those of Forge Building Company,” said C.W. of Stor-It. “Both companies treat their customers and employees like family. We would never build, renovate, or consider a property without Forge. Because of our relationship of over 20 years, we know that if Forge is involved, it will get built to the highest standards.”
The company started with a professor teaching business classes in real estate and financing at Boise State University. He loved teaching his classes using real examples and encouraged his students to apply them to what he was teaching them.
One day, some students came to him and said they had found a piece of property to invest in. The professor was excited and asked the students, “How will you purchase it? What are you going to build on it to make money? What is your plan to sustain the business?”
The students wanted to invest in a property on Mitchell Street in Boise, Idaho and put storage units on it as an investment. This was laughable at the time but did spark the professor's interest. The professor believed in his students, and they all took the risk.
Stor-It Self Storage was started in 1972 by this professor and four of his students. After the students graduated and moved on, they were eventually bought out by the professor. He continued to grow the business with his family every step of the way. He even has his grandchildren working by his side in the family business!
Founded in 1972, we opened our doors at the first Stor-It location on Mitchell Street in Boise, ID, making it the first operational self storage provider in Idaho. What started as just 600 storage units grew over 50 years to what we call a “well-oiled Green Machine.” We are unique in that we Forge build our sites very large, maximizing the square footage. One site can range from 80,000 square feet to the current largest of 455,000 square feet. Each site is designed perfectly to fit its our customer’s storage needs.
We truly know storage inside and out. Many of our family members were born and raised at the Stor-It locations. They say their backyard was an asphalt jungle of doors. With a core of strong family values today, our company is still a family-run business. For over 50 years, three generations of relatives have worked together to provide the best storage solutions in Idaho.
For more information, please visit https://www.stor-it.com/.
Founded in 2007 and headquartered in Boise, Idaho, Forge Building Company was created after its founders, Hamish and Hayden, spent decades working in the steel-structure industry. Using their expertise in storage and focusing on the three pillars of buildings, designing, and erecting, led the company to a more diverse portfolio and stronger strategic partnerships across the U.S.
Today, the company offers steel buildings for self-storage, RV & boat storage, car washes, airplane hangars, large warehouses, fish hatcheries, and craft breweries/restaurants. Other offerings include pre-engineered metal buildings for industrial and commercial applications.
With a strong portfolio of partners and clients, the Forge team has completed over 500+ jobs, built over 50 million square feet and remains privately owned. This solid team with complimentary skills was founded on a rugby field in New Zealand over two decades ago and is now working to be the best in the industry.
You have your storage facility up and running, or you’re in the planning phase of building your next facility... so what are the key factors you need to think about when it comes to your doors, roof, and climate control?
In our February 25th blog “Ensuring Form, Function and Long Life: How to Properly Care for Your Self Storage Unit Doors and Roof” we discuss how to properly care for your doors and roof. And in our November 21, 2021 blog post titled "Generate More Revenue by Offering Climate Controlled Self Storage” we discuss common uses and benefits along with design considerations when building a temperature or climate controlled self storage facility.
What it boils down to is that these three critical components are critical to keeping your facility and your tenant’s belongings safe, secure, and protected from any sort of criminal activity and/or weather elements. Using the right materials is also super important for curb appeal and energy efficiency.
One of the most distinguishing factors of a self storage facility are its steel roll up doors, so it’s important that they be well-maintained! Not only do they contribute to curb appeal, but they are a large part of the tenant experience providing safety for their belongings and can be a safety hazard if left untended. When building a new facility, metal wall and siding panel systems will provide the most flexibility when it comes to design, and these can be used for new construction or retrofit to existing buildings.
In addition, roll-up doors will also help maximize usable square footage in each storage unit.
Steel roll up doors should be inspected before a tenant moves in, and again after they’ve moved out. Inspection of a roll-up door doesn’t just mean ensuring it looks good, but also means it is functioning properly.
Here’s a closer look at metal panel wall systems.
Metal Panel Wall Systems
There are a number of benefits to using metal panel wall systems for a self storage facility. First, they often come in a variety of colors that can coordinate with any buildings' décor to create continuity and increase the facility’s curb appeal. Metal panel wall systems are also durable, environmentally friendly, and cost-efficient.
In addition to the aesthetic appeal and safety ratings of metal wall panels, they are also revered for their sustainability in the building industry. Not only can they help with reducing the consumption of energy within the building, but they can also be recycled. Recyclable metals can then be restructured into other metal wall panels with the same structural integrity.1
The good news is that Forge has one of the largest selections of metal wall and siding panel systems in the self storage industry. The Company’s wall panels include single skin, insulated, exposed fastener, concealed fastener, and interior wall liners, and most can be installed both vertically and horizontally, providing additional flexibility in design. Forge’s metal siding panels can be used for new construction or to retrofit existing buildings.
In addition to providing complete building packages, Forge also offers components to be installed in buildings by our experienced team. The system can include either swing or steel roll up doors as well as man doors. Additional steel angle, wire mesh, and burglar bars are available as needed. Hallway walls can be purchased as flush or ribbed PBU panel.
When looking at key factors for your existing or new facility, one of the biggest considerations is the roof. Protecting your tenant’s belongings is the main focus of a self storage facility. It doesn’t matter if you have a traditional, single-story facility or a multistory facility – your roof matters. Even a small leak can damage your customer’s property.
As self storage buildings age, roof maintenance and repair become more important and time-consuming. An inspection and maintenance program are an important part of sustaining roof life as well as keeping costly repairs and property claims in check. That’s one of the reasons the team at Forge Building Company recommends commercial metal roofs.
With proper inspection and maintenance, a metal roof can last for decades. The goals of a good inspection and maintenance program are to proactively locate and repair possible leaks while extending the life of the metal panels. This inspection and care will help you keep your roof in the best possible condition. The most effective examination for metal-roof systems includes four specific areas: the perimeter, the ridge, fasteners, and debris.
To learn more, see Metal Building Re-Roofing with Standing Seam Metal Roof Panels.
A metal roof will also act as a fire barrier if some part of the building or the surrounding area were to catch fire. Another benefit is that metal roofs can prevent water build-up from creating mold or decay problems that could destroy the building's structural integrity.
Very few places in the country are fortunate enough to avoid the frigid temperatures of winter every year or the extreme heat of summer. These extreme temperatures are not good for storing items unless you put them into a self storage unit that is climate controlled.
If your self storage facility is located in a part of the country that reaches temperatures above 90 degrees, air conditioning is definitely needed to protect customer’s property from problems like rotting or yellowing. Self storage units located in areas that fall below 32 degrees may need to be heated to prevent cracking or warping.2 And places with both extremes will need humidity protection. Fluctuating temperatures can create condensation inside electronics, causing irreparable damage. Likewise, anything that has liquid in it already can crack due to expansion from freezing. This is especially true of battery cells, including those for cars, mowers, and other small engines, which can crack when frozen.
A temperature-controlled self-storage facility is one that’s both heated and cooled. Its purpose is to provide an environment suitable for preserving stored goods, so the temperature range will typically be higher or lower than what you would find in a home or office—usually heated to 55 degrees and cooled to 85.
Today more self storage sites are starting to include climate control in the mix, and in some markets, many storage sites consist entirely of climate-controlled units. In most markets, climate or temperature-controlled units can be an excellent addition to your storage development. Through the use of insulation and central heating and air, a climate-controlled unit will protect your customer’s belongings in the harshest of winters and/or the hottest summers.
And with today’s more efficient building insulation, it’s more important than ever to work with a reputable storage unit contractor such as Forge Building Company to install a system that not only heats and cools, but also monitors and removes humidity.
Works Cited
1 Metal Sales. (n.d.). Retrieved from MetalSales.us.com: https://www.metalsales.us.com/metal-wall-panels/
2 StorageFront. (n.d.). Retrieved from storagefront.com: https://www.storagefront.com/storagetips/company-tips/climate-control/
Boise, Idaho. – September 1, 2022 – Forge Building Company, a leading national building company with a strong focus on self-storage and innovative building solutions, today announced the groundbreaking on the second phase of its LuxeLocker Boat & RV Storage project, the premium luxury RV and boat storage facility in Boise. What is unique about this project is that customers own the individual storage units instead of renting them.
This project has included 107,023 square feet of facility. In the newest second phase, LuxeLocker is adding 63 new units. The facility is located at 7373 S Federal Way in Boise and will serve the areas dynamic and growing population and business community.
“We are proud that Forge Building Company was selected for this project because of the need for a premium facility that offers numerous amenities not typically found on storage properties,” said Hamish Bell, CEO of Forge. “We are confident that we can provide the specialized expertise needed for this kind of project given our experience with building many quality commercial RV and boat storage facilities.”
LuxeLocker is a premium property, offering larger units with widths of over 14’ wide and depths of 40’-60’. The average unit is approximately 700 square feet. Accompanying the generous unit sizes are expansive driveways wider than 60 feet. The facility is designed to accommodate large recreational vehicles for easy maneuvering. They also offer amenities for RV owners that most others don’t, including RV cleanout stations, RV wash bays, and bright night lighting.
The property is leading the industry by offering fully integrated of ‘smart’ technology. Customers can acquire space at a LuxeLocker and manage their property remotely from the comfort and convenience of their computer or smartphone—at home or on the road.
Forge Building Company and LuxeLocker plan on a high quality and aesthetically pleasing building using the latest in reliable construction techniques and innovations in the steel building industry.
Development that enhances the community makes for great neighbors, boosts property values, and supports smart growth. Forge Building will be constructing a lower height building that only rises to 18 to 22 feet around the perimeter. Noise and light pollution are practically non-existent. LuxeLocker’s premium clientele of owners, along with larger size units and fewer tenants per square foot, along with the recreational vehicle enhanced space reduces traffic in and out of the site for lower impact on the neighborhood.
LuxeLocker offers storage space that customers own instead of rent. The LuxeLocker model offers customers a long-term real estate investment, along with the ultimate in storage space. Purchasing a storage unit provides customers with an active asset with the ability for future capital growth. Space can be subleased to give owners a consistent passive income stream. Mortgage payments offer a tax benefit and are often lower than the rent on comparable units.
For more information, please visit https://luxelocker.com/.
Founded in 2007 and headquartered in Boise, Idaho, Forge Building Company was created after its founders, Hamish and Hayden, spent decades working in the steel-structure industry. Using their expertise in storage and focusing on the three pillars of buildings, designing, and erecting, led the company to a more diverse portfolio and stronger strategic partnerships across the U.S.
Today, the company offers steel buildings for self storage, RV & boat storage, car washes, airplane hangars, large warehouses, fish hatcheries, and craft breweries/restaurants. Other offerings include pre-engineered metal buildings for industrial and commercial applications.
With a strong portfolio of partners and clients, the Forge team has completed over 500+ jobs, built over 50 million square feet and remains privately owned. This solid team with complimentary skills was founded on a rugby field in New Zealand over two decades ago and is now working to be the best in the industry.
For more than 40 years, the Self Storage market has proven to be one of the sectors with the most rapid growth in the U.S commercial real estate industry. The unprecedented growth of the industry has been attributed to self-storage consumers including renters, homeowners, students, businesses, and transitional populations who are constantly demanding rental storage.1
The COVID-19 pandemic also led multiple business owners to opt for self-storage. Having to work from home for most parts of 2020 drove up the demand for self storage to cut out on rents on spaces. And to confirm this, the July 2022 National Self Storage Report by Yardi Matrix, indicated that demand continues to come from all directions, including the growth in home offices as most companies employ some type of hybrid strategy for knowledge workers, consumer spending on items such as clothing and furniture, and to a lesser degree businesses using storage for distribution purposes.
Solid occupancy enables property managers to push in-place rents, calculating that vacant units can be filled at higher rates. Concerns center around the slowing economy and rising interest rates that have produced a sudden chill on home sales, which produces an even greater demand for self storage.
In addition, there has been a trend of retailers using self storage as a warehouse and a high end bus company renting two buildings to store their buses-non conventional uses.
The global self storage market was valued at USD 48.02 billion in 2020 and is expected to reach a value of USD 64.71 billion by 2026, registering a CAGR of 5.45% over the forecast period, 2021-2026. The growth in this industry is expected to be positive during the forecast period, owing to the trends of increased urbanization and improved economic outlook across the regions.2
So, how do you know if a property is the right one to invest in for a self storage development?
Market AnalysisThe first step is to conduct a market analysis. A market analysis looks to see if there is demand in a particular area for self storage, how much of a demand there is, what specifically is there a demand for, and what the current rates are going for. This part of the process is NOT looking at whether the investment will be profitable, but more about what is current state of the market. Conducting a market analysis gives good foundational information that is included in a business plan. It also gives you information on who your customer is and what type of storage they want.
This critical first step can reduce risk, identify emerging trends, and help project revenue. You can use a market analysis at several stages of your business, and it can even be beneficial to conduct one every year to keep up to date with any major changes in the market.
One of the first things you will need to analyze is who your targeted customers will be. A target audience is a specific group of people who want and need what you offer. With self storage, your target market will likely be defined by demographics. Is your facility located in a college town where your most likely customers will be young college students looking to store items short-term for the summer? Is it near a military base where active duty military need to store items during deployment. Or is your target audience suburban homeowners looking for climate-controlled storage for their cars or other household items?
Understanding who you are marketing to helps you choose the delivery, location, and tone of your marketing programs. If you’re targeting recently divorced couples in your area or college students, you may want to emphasize competitive rates and easy renting processes. If you’re targeting businesses in need of files storage, you may want to focus on climate control and security at your facility.
Part of any self-storage market analysis involves deciding on your trade area radius, or how much of the area surrounding your business likely contains your target customers. You can look at current leads and tenants to see how close they live to their storage units. You can also use a general rule of thumb. In cities, self-storage customers may live less than one mile from their units (up to three miles). In rural spaces, your trade area radius may be up to 10 miles.3
Once you have a trade area radius, consider the demand for self storage units. You will want to determine demand by evaluating how many units are vacant and how many renters there are in your area. It can be challenging to determine vacancy rates of competitors, so you may need to evaluate the local population size and income levels as well to determine overall possible demand.
On a per-person basis, if the supply is less than the demand, the market is deemed to be under-supplied. If the supply is greater than the demand, the market is deemed to be over-supplied. As a test of reasonableness, a comparison of the conclusion to the average occupancy in the trade area can be made.4
Generally speaking, over-supplied markets have occupancy rates less than 80 percent and under-supplied markets have rates greater than 90 percent. A market with an average occupancy rate between 80 and 90 percent is deemed to be near equilibrium.
Understanding the supply and demand of the trade area is a key component to analyzing and forecasting rental rates
Who Is Your Ideal Tenant?Once you have a general sense of the demand, supply, and trade area radius, you might want to consider tenants who may be under-served in your area. People who are moving are not the only ones who need storage units. Other possible leads include:
Once the market analysis is completed, the next and often simultaneous step is to do a feasibility study. A feasibility study can help determine the viability of a project or business venture by identifying the factors that can lead to its success. The study also shows the potential return on investment and any risks to the success of the venture.
A Market Feasibility Study determines the depth and condition of a particular market and its ability to support a particular development. The main objective of a market feasibility study is to understand the market to determine if enough demand exists to make the venture successful.
Conducting a feasibility study is always beneficial to the project as it gives you and other stakeholders a clear picture of the proposed project. It can also reveal many opportunities or pitfalls that may not have been apparent earlier. A feasibility study can help a self storage developer or owner understand the truth about a potential site, investment, and market. With this information in hand, you’ll be ready to plan and develop your project, mitigate known risks, or move on to the next opportunity.
A full Self Storage Feasibility Study also looks in depth at financial projections, marketing plans, unit mix, and many other factors.
The most important part of a feasibility study is the economics. Economics is the reason most projects are undertaken. This study should help you decide whether your self storage facility will produce enough revenue to generate a profit after taking care of debt and operating expenses.
Overall, this study will enable you to figure out who the customers within a one- to five-mile radius of the facility will be. Typically, a market for a self-storage facility encompasses a three- to five-mile radius, so your demand analysis should focus on this area.
Elements of a self storage feasibility study normally include business and demographic information such as:5
So, is spending the time and money to do a market analysis and feasibility study worth the investment? In our opinion, absolutely. A self storage analysis will help any owner or investor know what to expect in the future from existing or new projects. A self storage feasibility report is an important document that can help the stakeholders meet benchmarks and milestones as the project progresses.
A self storage market report can help an investor understand the local market and make an informed decision about buying or building. While a well-made self storage feasibility study will lay out the roadblocks to success and the likely paths to success, so investors can have a full picture of the range of outcomes.
Given this information, these two things are a definite necessity when determining whether or not to invest in the self storage industry, even if it means using a third party professional. A good Self Storage Advisor is totally worth the investment if they help you identify the best deals and steer you away from the ones to avoid.
Works Cited
1. InvestmentBank.com. (n.d.). Retrieved from Investment Bank: https://investmentbank.com/self-storage-real-estate-market/#:~:text=A%20sub-sector%20of%20the%20commercial%20real%20estate%20market%2C,growth%20in%20the%20U.S%20commercial%20real%20estate%20industry.
2. MordorIntelligence.com. (n.d.). Retrieved from Mordor Intellligence: https://www.mordorintelligence.com/industry-reports/self-storage-market
3. Scheib, K. (2021, 8 23). Investment Real Estate, LLC. Retrieved from irellc.com: https://irellc.com/resource/choosing-self-storage-target-market/
4. Spencer, K. (2019, May 2). Radius Plus. Retrieved from Radiusplus.com: https://www.radiusplus.com/post/how-to-conduct-a-self-storage-market-analysis/
5. Egan, J. (2021, August 23). Storable. Retrieved from Storable.com: https://www.storable.com/resources/learn/self-storage-feasibility-study/
