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Drive by the latest self-storage facilities being built today and you may need to look twice. The face of self-storage is clearly changing as developers find ways to blend their projects into neighborhoods.
For example, Skeans built a three-story, 104,000-square-foot facility on nearly 2 acres in the San Antonio suburb of Schertz.
Such multistory facilities are becoming more common, said Jeffrey Dallenbach, managing partner at Archcon Architecture in San Antonio. Multistory projects can be essential to creating density to make a project economically feasible. Amsdell has a redevelopment project set to open in May in downtown Cleveland that features a combination two- and three-story facility containing more than 500 climate-controlled units. Multilevel facilities require elevators, stairways and more interior corridors—all adding to the construction costs. Amsdell estimates the cost of building a modern, single-story self-storage property at $32 to $42 per square foot, while a multistory project generally costs $45 to $65 per square foot. In Texas, Skeans typically builds multilevel, fully climate-controlled facilities at roughly $50 to $55 per square foot.
However, it’s important to note that when site work and land costs are included, a multistory facility actually may be less expensive. The upside to multistory projects is that they can cost less to operate on a per-square-foot basis.
On the cleanliness front, dust and dirt don’t come in the door and then get into an elevator and go up to the higher floors, Skeans pointed out.
As for security, multilevel facilities usually have more controlled-access points, making it easier to keep an eye on things.
In areas like New York City and Chicago, where customers are used to living vertically, multilevel facilities aren’t a drawback. At a multistory facility, you don’t always “have that ease of going into a drive-up unit and grabbing a large, heavy item and putting it in the back of your vehicle,” Dallenbach said. Welcome.The Storage Facilitator is the modern self-storage professional's destination for useful education, intriguing news, diverse expert perspectives, technology updates, and beyond.
Get our free white paperThe Four Pillars of Profitable Self-Storage Management is an in-depth resource that empowers facility owners and managers to get more out of your business and stay ahead. The information contained herein has been obtained from third parties and we cannot guarantee the accuracy or completeness of the information.
How to Make Millions in the Fastest and Easiest Commercial Real Estate Investing Strategy, Without Tenants and Toilets®! Self Storage is creating a mini-revolution all across the country and giving thousands of people the ability to create wealth right from their living room or favorite coffee shop. The good news is that Self Storage is a $220 billion+ (market cap value) and $22.6 billion (annual revenues) industry in the United States that comprises more than 23 million rental units with more than 2.2 billion rentable square feet! And of those 23 million, roughly 8 million have been added since the year 2000, making Self Storage The Fastest Growing Real Estate Business in The United States for the past 30 years! In addition, a recent study by the National Self Storage Association showed that only 1 in 10 US Households are now renting 1 or more Self Storage Units, creating a high growth industry with only 10% penetration!
Over 18 years ago I started looking for the perfect business…one I could do without sabotaging all my time, my current job, my marriage, or my friendships.
The development cost of self storage is one-third to one-half that of apartments (multi-family), office buildings, or retail properties. Owning real estate requires regular maintenance of the grounds, appliances, plumbing, electrical fixtures, etc., which usually requires a maintenance staff. When owning investment property, you simply must fill a certain amount of space to keep from losing money.
This chart illustrates that the annual rent ranges for self storage fall within the range of other real estate. Compared to other real estate investments, self storage has the ability to absorb economic fluctuations, maintaining value during both good and bad economic times. The Current State of the MarketChapter 2: Investment Opportunities In Self Storage 20 Reasons for Self Storage Now! The Prospecting Fact Sheet: The 27 Questions you must ask every seller Before moving Forward!
How to Choose the Entity that Matches Your Facility & SituationCHAPTER 15: Asset Protection Plan Now! 6 Full length DVDs including 4 Live Case Studies from my all day live training event – that you can pop into your home DVD player and get a "classroom at home" teaching experience from the comfort of your favorite chair. 6 Audio CDs From my all day live training event that you can plug into your car or home CD player.
The Self Storage Valuator Software™ CD and accompanying step-by-step manual – This fool-proof software will save countless hours of critical calculations, with a level of accuracy that eliminates easily overlooked but extremely costly errors. The Document Library CD with 18 various checklists, agreements, contracts, spreadsheets, mailers, Purchase Contract and accompanying forms for Buying Self Storage Facilities.
A $29.00 Value!Bonus #2 – My Self Storage Manager’s Tool KitFor a limited time, you'll get a CD that includes every possible manual, form, and document you will ever need to operate your self storage facility, over 70 documents in all!
Also, please drop me a line when you close your first deal or pass a milestone (like passing your current income). AFFILIATE STATUS DISCLOSUREYou should assume that the owner of this website is an affiliate for all providers of goods and services mentioned on this website and will be compensated when you purchase. I heard Scott’s story on a webinar in May 2009 and ordered his home study course to study while recovering from surgery over the summer. The weekly coaching calls address not only the specific techniques and strategies we must implement to find our first good self storage deal, but also provide, as a bonus, thoughtful guidance in living a balanced life based on strong relationships in both business and personal arenas. I retired from American Vanlines several years ago, and after talking to a friend of mine in Tennessee, I decided to visit his the facility he built to see if this was what I wanted to do in retirement. I recently had the opportunity to participate in a deal for a self storage facility, located in Fort Wayne, Indiana with Scott.
After years of spending every weekend and many evenings remodeling single family houses to rent or sell, Scott Meyers convinced me that Self Storage is the way to go.
My family company has been blessed to participate with Scott in real estate transactions that were very successful. Tackling a self-storage conversion project can be much harder than putting up a brand-new facility. Westport Properties has completed 21 development projects over its 25-year history, including six conversion projects.
Amsdell, which owns 35 properties under the Compass Self Storage brand, has converted a variety of structures to self-storage facilities such as vacant grocery stores and strip shopping centers.

For some developers, the downturn in the economy and the subsequent slump in the commercial real estate market have created more buying opportunities for potential conversions. New development projects remain scarce as commercial real estate markets continue to rebound from the recession.
For example, the downturn in the market has created empty big-box retail space such as former Kmart stores. Retail demographics are complementary to self-storage demographics, which is why the conversion of former retail property often represents a great opportunity—provided a developer can pick up a property at the right price, and obtain the necessary zoning and permits, Ponti said. On top of all that, site work already is done, and existing systems like electrical, plumbing and mechanical already are in place and can be reused. Yet the key is to be able to purchase a property at a price where a conversion makes sense. For Amsdell, it has taken more than 18 months to obtain re-zoning for the proposed conversion in Shaker Heights. In any conversion, Lopez estimates the developer will lose about 30 percent of the gross leasable area as some of the space is converted to non-rentable space like corridors. In some cases, it’s cheaper just to raze the existing building and start fresh with new construction rather than try to convert the existing facility for self-storage. Penn Pointe Development Site is an infill site with strong demographics located in desirable Edmond (Oklahoma City MSA). Shovel-ready site with opportunity to fast-track storage development and capitalize on current investment in soft costs. Miller Building Systems has been a leading manufacturer of pre-engineered metal self storage buildings for over 35 years. Miller Building Systems serves the self storage and pre-engineered metal building industries with exceptional quality, design and installation of climate controlled metal self storage buildings, interior conversions, clear span warehouses, utility buildings and prefabricated structures. At Miller, we stand by our installations with an exclusive 5-year warranty on the installation and 25 year manufacturers warranty on the factory painted siding and roof material. The contemporary brick-and-glass facades and multilevel designs make these projects look more like office buildings than storage facilities. Such multistory properties have been on the rise as self-storage moves out of industrial parks and into more visible locations—bringing with it a higher price tag on land. The old-school method of developing self-storage was to enter an industrial area or an empty field where land was cheap.
So, you have to go vertical,” says Mark Skeans, managing partner of Skeans & Associates LLC, a self-storage developer based in San Antonio.
In that case, the site was desirable because of its highway frontage, with exposure to 172,000 cars a day. Seven of the last 10 self-storage projects Archcon has designed have included multistory construction for all or part of the projects.
Yet developers also must grapple with projects that are more expensive and complicated to build. The size of a multilevel project often requires fire and safety codes be followed, such as equipping buildings with sprinkler systems. By comparison, single-story “drive and drop” facilities cost about $39 per square foot to build. In addition to meeting fire codes with features such as a fire-proof shaft, a storage facility must install larger elevator cabs that can fit a couch or other big storage items. A single-story self-storage project typically requires 3 to 7 acres, while a multistory facility can fit on less than 1 acre. Furthermore, multilevel facilities also might be cleaner and more secure than their single-story counterparts. For example, at one of Skeans properties, people can enter and exit through just two spots. Outside major cities, though, units in a single-story facility generally are easier to lease than those in a multistory facility. This white paper identifies major trends and best practices in rate management, occupancy analysis, rental contracts and profit management.
The Self Storage business may seem familiar to you, but it's actually re-inventing itself in so many important and exciting ways.
What I wanted was a business that I could mold into my lifestyle and personal financial goals. As the graph illustrates, self-storage operating costs are less than half that of other real estate properties.
In self storage, this break-even point is considerably lower than other real estate ventures due to its low development costs.
However, considering the lower development and operational costs we discussed above, self storage can yield a better bottom line. 2000, by Mike Parham, National Development Services, IncI found out the hard way, however, that there are a few important differences between buying a single-family house or apartment building, vs. CHAPTER 9: Due Diligence The Due Diligence Checklist: A must have list of items needed Before Closing! You'll discover how to find the deals, how to evaluate facilities, keys to successful negotiations, writing offers that get accepted, where to find the money to fund your deals, and how to extract maximum dollars. The Self Storage Valuator™ Software tool gives you concise information and the professional format necessary for getting deals approved through lenders, investors, and appraisers alike. You'll get a Customizable Operations manual and all the forms required for the day to day operation of a self storage facility for reference, or to train your employees.
I read and respond personally to every letter I get, because I’m committed to seeing you succeed.
After seven years investing in residential real estate, I had sold most of my properties and was eager to invest in anything that didn’t involve tenants, toilets, and termites!
Yet the challenges can be well worth the extra effort when it opens the door to urban markets. The company converted a former industrial laundry facility that had been used by UCLA Medical Center.
If there is land, city leaders are protective in terms of choosing projects such as retail or office that will create more taxable income. The company has proposed conversion of a car dealership in Shaker Heights, OH, and is looking at a similar conversion in Detroit. In the past, it would have been a non-starter because the city wouldn’t have even considered the use,” Amsdell said.
As such, cities are more willing to consider alternatives such as self-storage to get vacant property occupied.
Furthermore, grocery retailers have added to the supply of vacant space as they’ve relocated stores to accommodate shifting trade areas or changing size requirements.
An existing retail or industrial property often comes with a large parking area, which can be used for additional development.

Although that varies by the market rents an owner can charge, Ponti estimates an average price target for a conversion-oriented acquisition is $20 to $27 per square foot. For instance, some conversions demand a hefty amount of work to prepare the site for additional development and modify the existing building, such as removing asbestos or underground storage tanks.
The former car dealership site is almost 4 acres and includes a 45,000-square-foot building. Newcomers that get into the business often think they can save time and money by converting an existing building and quickly sign up new rentals. As such, Westport Properties typically looks for conversion properties that are at least 50,000 to 55,000 square feet. The facility also sits in a busy commercial area near a grocery store, a Home Depot and a Walmart. For example, Stor Cresta Bella is an 86,228-square-foot facility in San Antonio that was recognized as the 2013 Facility of the Year by Mini Storage Messenger. Therefore, some facilities charge less for higher-floor units than ones on the ground level, Nesbitt said.
A single-story facility often provides drive-up access to units, whereas such access may be limited or nonexistent at a multistory facility.
It is also widely regarded as the most profitable and easily managed real estate investment in the country. A business that was isolated from good and bad economic cycles, not a fad that would fizzle out, leaving me right back where I started. It's all there; from auction forms, to truck rental and retail sales forms, leases, and everything in between. While attending a Commercial RE Bootcamp with my son Joe in August, I was surprised to see Scott show up as a speaker on the last day. Westport added a second floor to the existing building to create 1,203 self-storage units and a total of about 86,000 rentable square feet. Some grocers have traded up to larger store sizes, while other have downsized to smaller formats. In some cases, a retail site also might have pad sites, which a self-storage developer can sell to lower the overall cost of a project. Amsdell plans to put an office and climate-controlled storage units in the existing building, and construct self-storage buildings in what was the parking lot and service area. But there are plenty of horror stories from both small and large developers that run into unexpected costs and problems. The project contains about 500 storage units, as well as 32 mini-offices on the ground floor. Start part-time, earn while you learn, and ultimately replace and exceed your regular job's income before you walk away from it. You'll also get my completely customizable, fill-in the blank Human Resource policy manual for employees, that I paid several hundred dollars to have developed. After hearing him speak, my son instantly decided he would rather invest in self-storage facilities than in multi-unit apartments!! I especially appreciate the 1-on-1 personal phone calls with Dutch and Brian that specifically address my own strengths and weaknesses, and keep me focused on making the best use of my time. How many sites have you visited promising unlimited wealth with no risk or without lifting a finger? There's nothing left for you to create, or pay someone else to; I've already done it for you. He signed up for the Scott’s self storage training event in Indianapolis at the end of August and joined the affiliate coaching program, so he could hit the ground running as soon as he got out of the Marines in October. Brian has been exceptionally responsive in helping me with issues needing immediate attention over the last few weeks. Maybe you've looked at franchises that charge astronomical fees and huge back end royalties.
I wanted a proven step by step system – like a franchise, but without the hefty up front fees and back end royalties.3.
We are now partners in self storage investing and have been working directly with Dutch and Brian on Scott’s coaching team for two months. My son and I are learning new things every week and fully expect to locate our first good deal within the next three months. Low to No Overhead – I wanted the ability to run my business from my home, or my favorite coffee shop, and enjoy the tax benefits of operating a home-based business.4. I’m also encouraged by the weekly phone calls with my accountability buddies (two students in the coaching program), as we support each other and learn together how to overcome obstacles and stay motivated. Flexibility – I wanted the ability to go it alone, or bring on partners as the business grew. I’ve been a student in several other RE coaching programs and have found Scott’s program to be the most systematic, effective, and exciting mentoring program I’ve been involved with over the last seven years. In addition, I wanted a business that could be duplicated in any area of the country, so I could make money while vacationing in different cities (and make the trip tax-deductible)5. And I, unlike so many other people who buy courses and then stick them on the shelf, actually watched those tapes and read the manual. I bought my first piece of investment real estate, a 3- bedroom 1 bath single family home, for $30,000 with $0 money down!Then I rehabbed it, rented it, refinanced it, and pulled out enough money to re-invest in 2 more just like it. I repeated this several times over and had made a small fortune in the single family buy it, fix it, rent it, and sell it real estate business. I then took that small fortune and began to invest in several apartment complexes, and office buildings. In the recession that followed, our vacancy rate plummeted near our break even point, our insurance rates had soared, and a statewide property tax increase on all our properties a year later delivered the final blow. The promise of a better life and the creation of wealth through residential rental real estate had been jeopardized in just a few short years, and I knew something had to change!As I pondered my options, I realized that my passion still lied within real estate. The main reason I was in this mess because I was in the business of renting space to PEOPLE. Or was it the best kept secret in Real Estate Investing?So How Does Self Storage Stack up against other forms of Commercial Real Estate Investments?When comparing Self Storage to other real estate investments such as Apartments, Office Buildings, and Retail, how do they compare?

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self storage development costs capitalization

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