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    Found a couple of parcels of land. Looking to put a new facility on either one of these. Looking for some feedback. Thanks

    1. 4.6 acres on the corner of a 4 way intersection with 14,000 cars per day. Population is 73,000 in a 5 mile radius. Avg. HH income is 46,000. Closest competitor is 1.9 miles away. Land is wooded and will need to be cleared and graded. $28K/acre

    2. 8.2 acres on the corner of a 4 way intersection with 6,300 cars per day. 2 miles away from brand new bypass around a major city that hasn't opened yet and 4 miles from major interstate with 100,000 cars a day. Land is cleared with old post office building already on site. Still waiting on the exact figures but population is approximately 30,000 in 5 mile radius. Closest facility is 6 miles away. $24K/acre

  • #2
    Because I have always wanted a combination of units and outside parking for Rv's/boats/trailers/trucks, I would go with the 2nd choice but there will be better, less emotional, suggestions thrown your way on this.
    "Never let the inmates run the asylum!"

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    • #3
      what type of buildings are near these sites? commercial? apartment? retirement? A lot of times its not about the size of population, its the mix.

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      • #4
        A few more questions and thoughts...
        - Are both zoned correctly to allow storage?
        - Which location has more unmet demand by your research?
        - What type of storage does your research indicate is in demand? (ie the sizes or types that are sold out at competitor locations)
        - Will the sites yield the same rent or is one more upscale?
        - What level to competitors compete at, ie what amenities are expected and how much nicer does your need to be to compete? Knowing this will help you to ballpark a cost per sq ft to build.

        My instinct from what info you have provided is the small site should rent up faster and possibly have higher rent. I don't care much about RV storage potential, regular storage has a better ROI on most projects when you look at cost to build vs rental income. But to truly know the answer, you'll want to create a financial model for both.

        Here's a free tool to predict cash flow, break even, and ROI on a self storage project: http://www.trachte.com/resources/cal...nt-calculator/

        It's normally worth it to pay for a better location close to population. Those sites will rent up faster and command a higher rent. Comparable development costs are about the same in either location, so you are really looking at the effect of land cost and rental income, and of course whether or not demand exists for what you want to build.

        Steve Hajewski
        Trachte Building Systems
        shajewski@trachte.com
        608 327-3208

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        • #5
          Thanks for all the feedback. I know for the 2nd property the closest facility that is 6 miles away just went up for sale for $11M and is 99% full. Will the feasibility study give us more insight on if we can get the same rent as the one 6 miles down the road?

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          • #6
            Based upon the local traffic and population the 4 plus acre site is going to provide the best returns. Assuming normal zoning and usable land you should get 50,000 sf which is a perfect site facility. In this case the price of the land is so low land price is not a real factor.

            A feasibility study is a must to confirm demand and end potential profits. And will typically be required if you get an SBA loan.

            Cheers,

            Marc
            Marc Goodin, President of Storage Authority Franchising
            Self Storage Owner, Designer and Author
            Self Storage Planning - Design - Marketing Services

            www.StorageAuthorityFranchise.com

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            • #7
              I would go with site #2 if zoning laws allow. You've done well with your research, especially knowing the closest competitor is 99% and 6 miles away. That shows a need in that area that is possibly unfulfilled. I would suggest you not start marketing until you have a semi-firm opening date and then market two months out so you are opening with renters ready to move in. That's always a good thing! Good luck!
              Tall Terri

              The customer's fantasy doesn't always match with our reality! http://www.selfstoragetalk.com/core/...ilies/cool.png

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              • #8
                I spoke with a firm about doing a desktop feasibility study on property #2. Any advice on speaking with the realtor about putting the land under contract and what kind of contingencies to put on the offer? Also does anyone have experience with these desktop studies before getting the full study done? I feel like they are just going to say you should pursue the full study regardless just to get that full study price. Thanks again everybody this forum is great!
                Last edited by rdcrabtree0212; 10th September 2016, 02:56 PM.

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