I realize this really is a loaded question, however, I was hoping some of you could help me to understand some of the ballpark cost ranges associated with developing a new self storage facility.
I'm in Virginia and am looking at 2-5 acre lots with plans for phased development; likely starting with just two buildings. This rough estimate of my capability is based on my entirely limited research.
I know I can buy the land I want with cash or financing. I can probably pick a suitable location and I will have a feasibility study done. What I'd like to know about are the steel building and construction costs I would face?
I've never developed anything and am trying to determine if I can afford to do this. If I wanted to use cash for everything, rather than financing, what would a general estimate of cost be for developing a small lot with two steel buildings?
Again, I realize this is a loaded question with a lot of variables. I'm mostly interested in what's involved with the site work and building construction. Thanks!
Here’s a ballpark cost. Somewhere between $16 to $28 a sq ft. no land cost here.
How, that’s out of the way, constructions costs very greatly from one part of the country to another. Are you going to general the project yourself or hire a contractor? As far as the site work, you have to have a site in mind. i.e. Is it level? Do you need cut & fill? How much fill? Type of fill? Underground needs & requirement, etc.?
Please don’t get me wrong, you’ve come to a great place to get some good information. Before you jump in, consider attending a ISS conference and trade show or getting in contact with state storage associations. Then research, research, and research some more. When you think you got it all, hire a storage consultant to confirm your findings and don’t forget the business plan. Do your due diligent before you jump.
There is a lot more to self storage than putting up buildings and they (customers) will come. A good consultant is well worth the cost. Point: One of our competitors opened in 2004, their rates are 25% lower than ours, and they are still trying to rent up, current occupancy 26% now they want out.
Good Luck, my comment are just something to think about. Oh, I almost forgot, location, location, location.
Okay, so far one big cost factor hasn't even been touched on. You can build it, you can have a great location, but you need to plan to pay someone a nice wage to manage the site unless you're going all automated. Either way, there are some major costs involved with the operations aspect once you get the doors opened. BTW, a "free" apartment isn't considered a good wage either.
Location can be less than desirable, but someone has got to be a whiz at having doors slammed in their faces, being creative and marketing the heck out of the place. Find that person and even a C, D or a 'why would you even bother' grade property can be successful.
Sounds like the 26% site needs an SSTer at their facility! Anyone remember the thread of the guy trying to clean up, reclaim and remodel a site and his photos? That might be really interesting for C4talyst to view also for a different perspective and some insight.
You only live once, but if you do it right, once is enough!
I am not an attorney, just an experienced manager who is willing to share what I have learned. Your thoughts, practices or opinions may vary and neither of us may be right.
Gina, you are so right, the right manager makes the property, too bad we can't convince the employers of this fact. Like most mine feels the apartment is part of my wages, and it shouldn't be. Since my last rock encounter with him on the subject of renumeration, I have decided not to answer my cell phone, door bell, or knocks on the apartment door after hours and have told the call center he needs to deal with after hours problems. He's not too happy with it but he'll learn. Hope C4talyst pays attention to these words of advice if and when he gets his facility up and running.
Many thanks for all the replies. I have some locations picked out and am in the process of doing my due diligence now. I'm really trying to determine if I can do this with the cash I have on-hand, or, if I will need to get some kind of financing.
I will be starting small, on a 2-4 acre lot with 2 buildings initially. I am talking to Betco and Trachte and also found a local contractor who is a reseller of Wedgcor steel buildings. The contractor is offering me a turn-key operation where he handles all the site work and construction...we haven't discussed costs yet.