The first three words uttered by any self storage professional thinking of building a new facility are basically the mantra of the industry – location, location, location. Determining the right location for a self storage facility is akin to being a gold prospector and finding the perfect creek. Basically, it is the difference between money in the bank or finding another line of work.
There are a number of questions that one must ask in determining the location of a new self storage facility. How easily it is seen from a road or highway? Also, how many residents are located within a five to ten-mile radius? Is there a smooth ingress and egress for customers? How much competition will you have? Is there sufficient land available for a new facility? What are the local traffic patterns? Is the right zoning in place?
The Self Storage Association (SSA) points out that any area that sports constant growth will produce much faster rent possibilities, while high ratios of multi-family residences will create a demand for smaller units, and smaller units generally pay a higher return on the dollar invested.1 The ideal location is one near the center of a dense urban area, preferably on a major road.
So where do you begin when coming up with a plan to find the right self storage location?
You want to be educated well ahead of time regarding your potential customers. A demographic study that uses census material for a five-mile radius surrounding the proposed site is a good way to start. It is generally accepted in self storage that a facility will rarely get very much business from outside a five-mile radius.
The SSA suggests that the information you will want to gather should include current population figures. Also look for projected population growth, the population mix and average income. Several industry vendors provide these types of demographic packages, otherwise known as feasibility studies.
It is always important to remember that a high percentage of your business will come from drive-by traffic (although the influence of websites and cellphones in decision-making is growing more and more every year). A solid traffic flow and good visibility are musts. Our urban and suburban populations are spending more time on the road. So drivers will always be looking for self storage facilities that are easy to access and located in popular parts of town, preferably near places they use, such as restaurants, grocery stores, drug stores, etc. Convenience is a key to success.
To be effective, a self storage facility typically requires anywhere from 1½ to 5 acres of property. Of course, if plenty of land is available, a potential self storage owner can not only keep the facility at one level, expanding as needed, but also can consider boat and RV storage possibilities. If space is tight, a self storage owner always can build up with a multi-level structure.
Finally, there is the matter of zoning. The best locations in the world won’t matter if the land is not zoned for your business. So, it is advisable to visit the local jurisdiction’s zoning department to find all the zoning designations and restrictions for self storage. And while you are at it, check to see if any other self storage companies are in the process of building a new facility in your area of interest. Make sure that you are not too close to a competitor, whose success could work against you.
In short, do your homework and find a location that will be seen, is easy to access and has solid demographics for potential customers.
Sources
1. SSA Self Storage Association http://www.selfstorage.org/ssa/AM/downloads/09_Abt_IntrotoSS.pdf
