After reviewing zoning maps and engaging direct mail marketing to land owners, I located the one site that I feel is best suited for self storage in my subject market place. The site will require a use permit from the City and being 32 acres is size, a minor subdivision to break off 7+/- acres. The use permit and sub-division will take approx 6-9 months to complete. I have spoken directly with the owner and he will consider splitting off 5-10 acres. This is the premier self storage site surrounded by residential on two sides and main commercial arterials on the others. There is no additional land close to the subject site that would allow for future competition.

Should I go with an option agreement or standard purchase contract with long escrow language to tie up the property while I secure the entitlements and subdivision? I am nervous about the sellers ability to find a way out of the deal during the process? i.e. the seller decides to not sell after the value of his land has been greatly improved. Is there some advice out there for these type of scenarios besides "consult your real estate attorney/broker?" I’m sure developers work these type of scenarios frequently and any adivice about the how to procced would be welcomed. Anyone have some example contracts/option agreement? I know contracts can greatly vary between state to state and I am located in CA.

Once the property get's tied up I'll call in a third party to determine feasibility. If acceptable, start the process of sub-divding and entitling for self storage. I welcome all comments/ideas and suggestions.

Elite:

Based on 20 plus years in this industry, I would go for the contract with the obvious contingencies for your approvals. A properly constructed contract will not only lock down the property, but give you the time frame to get it all done. Seller will obviously need to agree to be out front within the approval process. Be careful about the imposed set-backs from the abutting residential zones. I have seen acres of land lost because of set-back and buffering requirements. Any land seller will have to understand that you need the approval and feasibility time before a final closing commitment. The last thing you want to own is a 5-10 acre Park! One final thought from all my years in this crazy business, try to determine the level of opposition that you will face from local homeowners as quickly as possible It is very rare today to see politicians (even appointment members of Boards) at the local level go against organized opposition from residents (translate that into Voters).

Best of luck with your negotiations.

MisterJim444

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Learning Never Ends

How would you strategically go about flushing out the anti-self storage patron and at what point would you disclose to the local residents your intent to build a safe and secure self storage facility? Would you post a notice in the paper or send direct mail? Would you knock on doors and personally introduce yourself (although tenant occupied homes won't help)? With everything coming down to the use permit and public hearing, it seems so important to figure out what the issues are so come "d" day you will have plenty of ammunition.

Do others self storage developers typically get planning commission support up front before the decision is made to proceed with the use permit. Furthermore, if planning dept is in favor then your chances to win should greatly increase?

Security and aesthetics seem to be the typical complaint that I hear. It would be interesting to hear what negatives people have came across when dealing with government officials and the public?

Jim is "spot on". I would worry less about my opposition if I knew whom it was. By getting a "coming soon" sign on the property, they may come out of the woodwork. You will know ahead of time who your opposition is likely to be because of the posting radius for zoning required by the City. If there are large homeowners groups within the posting range, that is the place to start. Feel them out by contacting their leaders, and offering to sponsor a wine and cheese or some such meeting. Present your case, and make sure you have photos of cars in the street, RV's in yards, sheds in backyard, anything that will help you to show how self-storage can beautify their community. Simple renderings of an attractive storefront and entrance will help. Just make sure you can deliver what you show them. Don't create a drawing with $750k of gingerbread if you can't deliver it. Also, do not box yourself into an identity crisis. Start with drawings that you can live with also.

Once you have identified and hopefuly mitigated the neighborhood risk, remember that you may get hit from your competitors. I have seen NO neighbors show up at zoning meetings and many self-storage owners whining about how bad their market is and how another self-storage property will put them out of business. NONE can back up their claims, and when was the last time a City said "too many hamburgers in town, no new McDonads here?" They WILL and HAVE taken that approach in self-storage with some cities even legislating distance radii for self-storage. Be prepared for the worst, and be ready for the best.

See you at the roundtable,
RK

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RK Kliebenstein
Leader,
Coast-To-Coast Storage
P: 561.963.4004x81
U: www.askrk.com or www.HowToInvestInSelfStorage.com
E: rk@askrk.com