Industry experts, John Bilton of Janus International, Matt Maurer of BETCO, Mitchell Feldman of Feldman Companies, and Alison DeJaeger of List Self Storage join together to discuss what it takes to develop self-storage in today's market. In addition to talking about construction timelines and site preparation for developing in today’s self-storage market, the dynamic team will highlight ways to stretch the dollar, investments that pay off in the long haul, financing concerns, and more.
Click on the video below to watch the educational conversation and learn how the market for self-storage development has changed over the past few years and what to consider as a result!
John Bilton is the Western Regional Sales Manager for Nokē Smart Entry at Janus International. He's been in the self-storage industry for nearly two decades and has significant experience in self-storage technology.
Matt Maurer is a Business Development Manager at BETCO Inc. and has been with the company for over a decade. Being involved in high-level sales during most of his time at BETCO, Matt has spent much of his time focusing on developing and constructing multistory and single-story, climate-controlled self-storage buildings.
Mitchell Feldman of Feldman Companies started developing self-storage facilities over two and a half decades ago. Following suit to the self-storage industry's growth, Feldman Companies continues to strategically develop self-storage sites across the globe.
Answer: Every year, especially since the pandemic, the timelines seem to get longer and longer. A couple of years ago, we could have said 10-14 months. Today, it feels like we are experiencing more and more delays. From material suppliers and electrical components to zoning and even working with municipalities, a lot has slowed down. It's definitely harder to stay on track and it takes more effort and planning to keep things pushing forward. In spite of the obstacles, self-storage development still seems to be growing at a rapid pace.
Answer: Site prep work is incredibly important and you'll want to make sure you choose the right person for this job and develop a good working relationship with them. Whether it's a contractor, subcontractor, or general contractor, the site prep work lays the foundation for your self-storage facility. Make sure you're paying attention to things like soil and elevation early on in the process, so you don't get hit with any unexpected hurdles along the way.
In addition to preparing your self-storage property, your site selection is critical to your success. You learn from day one that the three rules of commercial real estate are location, location, and location. With a feasibility study, you'll want to make sure your self-storage business is in the right market, has egress/ingress, and has good visibility.
Answer: It's important to do your due diligence in every phase of the project to make sure everything goes as smoothly as possible and you're not running into any unexpected hurdles. After all, time is money, and cap expenses are real. As discussed, a feasibility study should be completed to establish you're in the right market. This will also help you develop the right unit mix to optimize your rentable square feet and maximize your revenue.
Technology is another great way to stretch your dollar when building a self-storage facility. It can help you save money through reduced operating expenses while making your site more efficient and providing your customer base with an overall better experience. Some of today's newest technology allows you to effectively, and remotely manage your facility. This means tenants can now onboard from their mobile devices in 1-2 minutes and gain immediate access to their smart, self-storage units rather than completing a lengthy and manual onboarding process with a self-storage operator present. If you don't want to rule out personnel completely, the exact same technology allows you to see when tenants are going to your site, how frequently they're visiting, and what units they're going to, which allows you to plan management and reduce that larger overall expense.
According to John, implementing technology isn't just for new self-storage facilities. He's seeing a lot of existing self-storage properties retrofitting their storage units with smart technology to take advantage of significant benefits such as reduced operating costs and increased rental rates that yield bottom-line results.
Answer: Spending more on the little things during new development can go a long way in increasing your occupancy rate and maximizing your cash flow by attracting and retaining new tenants. For example, adding music to the hallways, enhancing on-site bathrooms, installing climate-controlled units, and providing easy access to carts can elevate the renter’s experience.
Answer: It's no secret that inflation and interest rates go up and down over time. However, business occurs during good times and bad times and we have to learn how to navigate self-storage construction through it all. This requires self-storage companies to be smart and adapt their expectations when needed. Financing criteria for self-storage investments have slightly changed, rates are currently up, and the scrutiny is higher, but business in the self-storage industry is still moving forward.
