August 2017 Newsletter
Seven Basic Steps To Find Land for Your Self Storage Project.
1.) Look for the right size parcel of land.
Land size depends on the size facility you are going to build, the quality of the land, (shape, slope, easements, wetlands etc.) zoning, and if you are going to build a single story or multi story facility. Typically, we recommend a new developer build 50,000 sf plus or minus since it is an efficient size for profits vs investment and has a much higher real sale value than small facilities.
Single Story – 50,000 square foot facility: look for 4 – 6 acres
Multi Story – 50,000 plus square feet facility: look for 1.5 to 2.5 acres.
2.) Look for land in the right location.
Many renters choose a facility because they have driven by it many times. Self storage needs to be on a main street with easy access, high visibility and good traffic. Start by thinking “would someone build a grocery store or retail plaza to find the best location. In a rural/country area the traffic maybe between 10,000 – 20,000 vehicles a day. In the metropolitan/city area the traffic maybe between 20,000 to 30,000 vehicles a day or even more. We typically want to see the traffic on the property access road and do not consider traffic from a non access highway.
3.) Look for land based upon the cash equity you have available to invest in your self storage business.
Self Storage is very loan friendly due to the high profits and the lowest failure rate for real estate investments. Banks typically require owners to provide total project cost equity of 15% for an SBA loan to 30% for a standard bank loan. A multi story building can require double or even more than double the owner cash equity requirements because multi story facilities cost more to build and can not be built in phases.
If your cash equity to invest in self storage is $400K to $1M we would recommend you build a single-story facility where you would need the 4-6 acres noted above. If you have under $400K you may want to consider finding a partner or private investor. Storage Authority does have a match program where we match Storage Authority Franchisees with other franchisees with at least $250,000.
4.) Look for land in the right zone.
Typically, self storage is not permitted in residential zones and is permitted in one or more Business zones, Commercial zones or Industrial Zones. Typically zoning regulations will have a list of uses that include self storage and note specifically what zones self storage is permitted in. If there are any question you should call the Town Planning or Building department and they can assist you.
We do not recommend a zone change for your first project as zone changes typically require additional time, money and add additional risks as well.
5.) Land features to be aware of.
Wetland areas and the wetland setbacks should not be considered part of the required 4- 6 acres. To reduce your approval risks, time and cost we recommend you project be built outside of the wetlands and the wetland setbacks. Wetlands are not always detectable by the novice developer and as part of your due diligences determined in the field by an qualified expert.
100-year Flood plane area should not be considered part of the required 4- 6 acres. To reduce your approval risks, time and cost we recommend your project be built outside of the 100-year flood plane.
Easements should not be considered part of the required 4 – 6 acres.
6.) Hire a Quality Broker to Assist You in Finding Land
There are several steps to hiring a professional that will help you get the best results. First, research brokers who work in your area and have experience in land transactions.
Determine which brokers:
- Are active in the area?
- Specialize in land acquisitions?
- Have a good web presents?
- Have access to demographics and local traffic counts.
- Have access to major commercial listings sites such as Loop Net.
Next, choose two or three brokers to interview. Often brokers are skeptical of individuals looking land for self-storage because they have wasted time with tire kickers so let them know you are Partners with Storage Authority and provide them a copy of the Typical Land Requirements.
Any good broker will want to compete for your business.
Interview the brokers during the evaluation process. Listen, but also have some prepared questions. This is your chance to get into the nitty-gritty before you make a decision. Remember, people are generally on their best behavior during this phase, so if they don’t take the time with you on the front end, it’s doubtful they will once you’re signed up as their client.
7.) Other ways to find land and your check list.
There are several other ways to find Land. At Storage Authority, we have found that around 50% of the land for new facilities is found “off line” and have devoted a significant section to our proprietary Dynamic Ease Development Series “Finding Land Through Pre-Opening Tasks”. Your first step to finding land off line is to let everyone know you are looking for 4-6 acres for self storage.
You should develop a check list of the basics so record your findings. As you get more experienced your check list will expand.
You found a possible parcel of land, now what?
The next step is to do a mini demand study and a development layout sketch before you spend time and money on consultants. On the Storage Authority blog/news room you will find blogs on how to do this and the other steps of a self storage business. Most or our Storage Authority Franchisees come on board with us before they find land so we can help them find land, so they get the most value and end up with a much better facility. If you want to learn more about Storage Authority there is a wealth of information on our web site 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)
Storage Authority is excited to announce its latest Vendor Partnership with SelfStorageAuction.com
Storage Authority Auctions just got easier, SelfStorageAuction.com is ready to revolutionize the storage industry by providing the most reliable, safe, manageable and efficient platform for online self-storage auctions.
One of the unique business features of Self Storage is having the ability to over lock non paying renters units, which provides owners collateral that helps insure renters pay their rent on time. And when they don’t pay it is a simple and quick process to “evict them”. We even get to use the auction funds to pay for past due rents.
SelfStorageAuction.com provides Storage Authority Franchisees the best online self storage auction platform, along with the tools, and assistance to make the job easy.
Self Storage Industry News
Revenue in the U.S. self-storage industry
According to IBISworld, annual self-storage revenue was estimated to be about $32.7 billion in 2016. That figure is expected to grow at an annual rate of 3.5 percent over the next five years.