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Expansion Question - 1 Level or Multi?

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  • TDC79
    started a topic Expansion Question - 1 Level or Multi?

    Expansion Question - 1 Level or Multi?

    We are looking at a parcel that is approximately an acre nearby to develop a 2nd phase. Unfortunately it is not adjacent to our parcel but a short walk, maybe 1/4 mile. We have been stabilized over 90% for a number of years so we thought we would look into this although there are 3 multilevels being developed within 5 miles. We are waiting on a feasibility study and I am thinking if there is any projected demand with the new facilities coming online it will only be in the 20,000-30,000sf range.

    While I know our main need is climate controlled I am struggling with if it needs a multilevel phase as that is where the market is going or is a 1 story OK as long as the numbers work? Maybe a 1 story gives us a way to market against the competition as "All 1st Level Climate Controlled"? I worry that if we did go multilevel we wouldn't need more than 2 stories and I never see those I assume due to the need to spread the cost of elevators etc? Or is that a realistic option with some cost savings? Just wanted to get some input and recommendations and also see if there aresuggestions on where I can go to look at some newer elevations/looks for single story or 2-story facilities? All the great looking facilities I see are minimum 3.

    Thanks for any input!

  • Amy_ISS
    replied
    Unfortunately, Tall Terri isn't in the industry at this time. It looks like other members have advice on the topic.

    Leave a comment:


  • dakselfstorage
    replied
    Originally posted by mmidgley View Post
    Re: Expansion Question - 1 Level or Multi?

    I can honestly say... in my entire life, i have never seen a sloped elevation 2 story storage building... i think the ground work alone for that would be crazy... never mind the engineering fees on the soil bearing walls.
    This is exactly what we have. It is very much like a bank barn. Check the photo's on our webpage ogr google earth.

    Leave a comment:


  • KrisinNC
    replied
    Originally posted by TDC79 View Post
    Re: Expansion Question - 1 Level or Multi?

    Terri,

    Our main need is climate control as our CC units are at 99% with all our vacancy essentially in non climate. While others are coming on line we back up to an interstate with strong sign visibility and this additional parcel would give more visibility in 1 direction immediately off the interstate. I do worry about the logistics of how we can still manage with one manager (about 100 yards away w/1 parcel between).

    I noticed a facility outside our market offering larger drive up units with electricity and was considering that for one side of the building. Does anyone do that, I know it could turn into a nightmare depending what they are plugging in? How would you efficiently air condition units for vehicles? with the opening of the doors wouldn't the bills be crazy?

    With competitors coming in with multilevel, does staying single level give us a marketing advantage assuming land can be had cheap enough?
    Last facility I worked at said NO electricity in units.
    BUT, we had 10 warehouse units that people ran businesses out of, they got free electricity and free internet included with the warehouse. We were ALWAYS full in those.
    This facility has NO power in any units except two, one of which is a drive up garage type unit and the other a large unit that served as an office in the past and is now a unit for a previous manager. This facility is an old converted warehouse and I don't WANT people to have electricity due to the danger of fire.

    Leave a comment:


  • CWILM79
    replied
    Originally posted by Tall Terri View Post
    Re: Expansion Question - 1 Level or Multi?

    When your customers call and you can't help them with their storage needs, what are they asking for? Are you in the middle of an area where wine is used for entertaining? Build a "wine Cellar" facility. Do you have a lot of people asking for specific parking? Build that parking area. Such as where we are, many ask us for air conditioned garages to store their antique vehicles safely. Some of their paint jobs are over $20K so putting out $300 a month to protect that paint job from the Florida sun is a no brainer for them.

    Do you have people wanting to store RV's? Put in covered parking with electrical and a dump station if allowed. If there are a lot of competitors around you that are single story, build multilevel. You said that there are many multi-levels going in...is it feasible to be their direct competition?
    Terri how did these vehicle units work out?

    Anyone seeing any other niche unit types in demand?

    Leave a comment:


  • Tall Terri
    replied
    Re: Expansion Question - 1 Level or Multi?

    I noticed a facility outside our market offering larger drive up units with electricity and was considering that for one side of the building. Does anyone do that, I know it could turn into a nightmare depending what they are plugging in? How would you efficiently air condition units for vehicles? with the opening of the doors wouldn't the bills be crazy?


    We're about to find out. We are going to be retrofitting a large one story building of 10x20's or 10x25's with insulation and a/c for the above mentioned vehicles. The owner has had requests by more than 50 people for that type of storage.

    I worked at another property that had a small (30 unit) building that was a/c inside with some exterior a/c units that were larger. Most of the time the doors are closed to keep the air IN so the bill wasn't that high. He had 5 units and they ALWAYS had a waiting list. The big request for a/c is - can I drive right up to the door?......take the information your customers are asking for and tuck it away to use for your future plans!

    Leave a comment:


  • TDC79
    replied
    Re: Expansion Question - 1 Level or Multi?

    Terri,

    Our main need is climate control as our CC units are at 99% with all our vacancy essentially in non climate. While others are coming on line we back up to an interstate with strong sign visibility and this additional parcel would give more visibility in 1 direction immediately off the interstate. I do worry about the logistics of how we can still manage with one manager (about 100 yards away w/1 parcel between).

    I noticed a facility outside our market offering larger drive up units with electricity and was considering that for one side of the building. Does anyone do that, I know it could turn into a nightmare depending what they are plugging in? How would you efficiently air condition units for vehicles? with the opening of the doors wouldn't the bills be crazy?

    With competitors coming in with multilevel, does staying single level give us a marketing advantage assuming land can be had cheap enough?

    Leave a comment:


  • Tall Terri
    replied
    Re: Expansion Question - 1 Level or Multi?

    When your customers call and you can't help them with their storage needs, what are they asking for? Are you in the middle of an area where wine is used for entertaining? Build a "wine Cellar" facility. Do you have a lot of people asking for specific parking? Build that parking area. Such as where we are, many ask us for air conditioned garages to store their antique vehicles safely. Some of their paint jobs are over $20K so putting out $300 a month to protect that paint job from the Florida sun is a no brainer for them.

    Do you have people wanting to store RV's? Put in covered parking with electrical and a dump station if allowed. If there are a lot of competitors around you that are single story, build multilevel. You said that there are many multi-levels going in...is it feasible to be their direct competition?

    Leave a comment:


  • MamaDuke
    replied
    Re: Expansion Question - 1 Level or Multi?

    Originally posted by mmidgley View Post
    I can honestly say... in my entire life, i have never seen a sloped elevation 2 story storage building... i think the ground work alone for that would be crazy... never mind the engineering fees on the soil bearing walls.
    I worked at a property with 2 sloped driveways that eliminated the need for elevators to the 2nd floors on 2 of my buildings. It was my biggest selling point by far! I highly recommend it.

    Leave a comment:


  • TDC79
    replied
    Re: Expansion Question - 1 Level or Multi?

    Originally posted by Steve_hajewski View Post
    It's not future vs past, it's what provides you the best ROI in your particular project. Look at it this way... the building itself (steel, concrete, labor to erect, etc) cost does not vary much throughout the US with few exceptions. When working up a financial projection, you have two giant variables. Land cost and rental rate. And your hope as a developer is to find a place with demand accompanied by a relationship between those two variables that makes it all work. When the land and rent are both high enough (or if enough land is not available where you have identified a need), it simply makes sense to build up.

    If you can stomach the initial investment, there seems to be more upside building in cities than in rural areas, which would explain why the big REITS focus on these markets.

    The trend that I see is the quality of amenities offered. Think of hotels. The past is drive up motels where you can park by the door to your room. No one builds that now - even entry level hotels are pretty nicely appointed and take advantage of modern technology. I think self-storage is doing this in its own way. We're seeing more wider buildings with corridors, which gives you better land use. In some locations, these may still be ambient temp buildings. Clients don't seem to mind the hallways as much as you would think, so long as you provide carts. The need for drive up units isn't going away though - pretty hard to get your motorcycle, classic car, or boat down a hallway.

    Rural and secondary market facilities ARE getting nicer. Better architecture and security. But I think number of levels still is just a land cost vs rent income issue.

    Steve

    Steve,

    Great info, I appreciate it. I think a wide building with corridors and outside units on one side with the other backed up to the high traffic road might be perfect. We are 99% on climate controlled so that is where our need would be assuming the new competition doesn't overbuild the market. Excluding land, what would you estimate as a safe $/sf for 1 level vs 2 level? Thanks again.

    Leave a comment:


  • Steve_hajewski
    replied
    Re: Expansion Question - 1 Level or Multi?

    Originally posted by TDC79 View Post
    Steve,

    From an owner's perspective what are your thoughts on single vs multilevel? Is multilevel the "future" or only something to consider if land cost are too high for single to work?

    Thanks
    It's not future vs past, it's what provides you the best ROI in your particular project. Look at it this way... the building itself (steel, concrete, labor to erect, etc) cost does not vary much throughout the US with few exceptions. When working up a financial projection, you have two giant variables. Land cost and rental rate. And your hope as a developer is to find a place with demand accompanied by a relationship between those two variables that makes it all work. When the land and rent are both high enough (or if enough land is not available where you have identified a need), it simply makes sense to build up.

    If you can stomach the initial investment, there seems to be more upside building in cities than in rural areas, which would explain why the big REITS focus on these markets.

    The trend that I see is the quality of amenities offered. Think of hotels. The past is drive up motels where you can park by the door to your room. No one builds that now - even entry level hotels are pretty nicely appointed and take advantage of modern technology. I think self-storage is doing this in its own way. We're seeing more wider buildings with corridors, which gives you better land use. In some locations, these may still be ambient temp buildings. Clients don't seem to mind the hallways as much as you would think, so long as you provide carts. The need for drive up units isn't going away though - pretty hard to get your motorcycle, classic car, or boat down a hallway.

    Rural and secondary market facilities ARE getting nicer. Better architecture and security. But I think number of levels still is just a land cost vs rent income issue.

    Steve

    Leave a comment:


  • TDC79
    replied
    Re: Expansion Question - 1 Level or Multi?

    Steve,

    From an owner's perspective what are your thoughts on single vs multilevel? Is multilevel the "future" or only something to consider if land cost are too high for single to work?

    Thanks

    Leave a comment:


  • Steve_hajewski
    replied
    Re: Expansion Question - 1 Level or Multi?

    I have seen block and poured concrete used for the foundation of "two story into a hill" buildings. Personally I would want poured concrete if it were my project. The upper level will have a poured concrete floor as well. When land is scarce and/or expensive, these are a great way to maximize rentable space on a parcel with elevation changes, without the need for internal stairs or elevators. Everyone gets to be on the "ground" floor.

    We've built many of these. Often they are temperature controlled buildings with halls, which allows for wider buildings with a variety of unit sizes. This also helps boost rental rates for better return. We provide foundation design with these structures.
    Tom_Good_Hurricane_WV_011.jpgpg5-1.jpgpg6-1.jpgpg7-1.jpg

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

    Leave a comment:


  • TDC79
    replied
    Re: Expansion Question - 1 Level or Multi?

    Originally posted by mmidgley View Post
    you spend all that money on ground work and site prep just to build one story. We are currently expanding a 50k sqft facility that is three stories, and it will be 80k sqft when we are finished. The elevator is a very minimal investment in terms of whole project cost. As for occupancy... our 50k is 98% full and we are still thinking that is not enough. I would not expand on 90%, only if you had specific demands for certain units sizes that you could not fulfill and you were going to adjust your unit amounts in phase 2. we also have phases across the street and it has worked out fine. Just remember, there is a lot more cost involved in running cameras, gates, and security systems if you want it all to be connected to your main office. We have so many issues with cabling that goes under large city streets to different phases... big PITA.

    All in all, the stories really depend on the amount you can invest, and the need for uint numbers. But your going to spend most of your money on the your first floor, but if you build more, it will bring down your over all cost/ sqft. Also, you need loading bays on the first floor so you can have more net space on second and third.
    Regarding the cameras etc hasn't a lot of that gone wireless? We are fortunate we haven't needed them to this point but if we do this it would be needed. We may even look at moving the office to the new parcel as it has greater accessibility or at least include a small office so there is that option. Staffing is going to be tricky as technically we can't drive the golf cart on the city sidewalk...may lead to an assistant or have manager at new phase as current is 94%?

    Great info everyone......lot is flat so no slope to worry about. Regarding locating in the middle I was leaning towards having it up against the road with a very strong traffic count and a storefront look where you can see the doors, anyone done this with 1 story? Maybe the same on the secondary road with less traffic?

    With the new competition its hard to think there is a need for 3 floors but at the same time don't want to develop something new that is essentially a design of the past if that's the case? Hoping the storefront look where you can see the doors through the glass would give a newer look? I guess multi story though would leave some residual land and could build out upstairs as a future phase once needed?

    Leave a comment:


  • Stevedore
    replied
    Re: Expansion Question - 1 Level or Multi?

    I think they use cement block for the back of the first floor & water-proof the wall before backfilling.

    Leave a comment:

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