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A Self-Storage Developer's Kit

Oct 28, 2011

by Brom Hoban, TSSA Director of Communications

It’s not uncommon for TSSA staff to receive inquiries from folks interested in developing a self-storage facility. The number of calls and e-mails we receive varies depending on how the national economy is faring. Though 2011 had its ups and downs, at TSSA we have seen an increase in our “Developer” members over the past year, and we think they’ll find the November/December issue of the Self-Storage News very helpful.

Consider it your “developer kit.” Just like learning how to play a musical instrument, there’s time and effort involved—we can’t do the work for you, but we can guide you through the process, giving you the steps to take and pointing you to the right tools and resources.

The first step, of course, is determining feasibility. If you’re just starting out, should you build a new facility, or expand your current holdings?

In the November/December 2011 issue (whic h hits the mail this week) Randy Smith, Another Closet Self Storage (McAllen), provides a fascinating article describing how to use Google Earth to create a detailed market study of the area you are interested in. Best of all, it’s free and anyone can duplicate the process Smith writes about.
 
“Google Earth is free and a great tool to use if you are in the self-storage business.  With it, you can plot all of your competitors’ locations, and you can even use the ‘measure’ tool to measure their buildings and determine pretty closely the built-out square footage of their facilities,” says Smith.

Kate Spencer of Cushman & Wakefield in Dallas will step you through the entire feasibility process in her “Self-Storage Feasibility Primer” article, a comprehensive look at how to go about determining whether or not to build.

Says Spencer, “There are four key demographic variables that are good demand indicators for self-storage development. They are: population, average household income, percentage of renters, and household size. The typical self-storage trade area is a three-mile radius; however, it can be smaller or larger depending on the characteristics of that specific area.”

Dave Knobler of Marcus & Millichap, Houston gets down to facts and figures with a Texas market snapshot, and offers the kind of hard-to-get information only available in a detailed market study.

“Our recent report shows that occupancy rates in the Southwest have stayed flat at 80 percent after dwindling across the board in Texas’s four major metros for the past five years. In 2006, in San Antonio and Austin, self-storage occupancy rates averaged in the mid 90s but both cities dropped to 80 percent at the end of last year. The Alamo City staged a sizeable comeback through the first six months of 2011 and was up to 89 percent. Austin owners saw occupancies improve to 82.4 percent and Houston owners had a one percent increase during the past six months.”

 Want more? Open up this issue to any article and start reading.

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