Designing & Building the Future of Self-Storage

For starters, self-storage units are relatively recession-proof. They often out-perform their peers during times of economic strain due to personal & professional downsizing as well as relocations. In addition to the high demand, there’s also a low amount of ongoing capital expenses. There are no commissions, no tenant improvement costs when tenants come and go, and owners can change rental rates monthly instead of waiting out a 5- or 10-year lease. Maintenance is also fairly minimal. 

Costs for completing a single-story self-storage build can vary wildly, but they typically range from $40 to $60 per square foot – not including land or site improvement costs. For multi-story units, you can expect to pay between $70 and $90 per square foot. In today’s market, these costs are changing daily. So, engaging a Design-Build Contractor with their finger on the pulse of the market is more critical than ever. Regardless of the size of your facility, you can expect to save up to 10% by using qualified designbuilders for your planning, designing, and construction. 

This can vary greatly depending on the building approach you take and the location/market you choose, but many self-storage facilities reach profitability within 18-24 months of launch. 

Before 2000, the rental price was the main reason someone chose one center over another. Since then, two other factors have taken the lead: security and location.

Computerized entry-controlled gates, personal codes, and security cameras are deciding factors in selecting a storage facility. Location is equally critical. In fact, 75% of all tenets live within two miles of their storage facility. That’s why choosing the right location is essential to the success of your project.

We have a wealth of information regarding self-storage renters, and we’d love to share it with you. You can download our complete infographic for additional stats, but here are a few key highlights:

• 84% of renters are older than 35

• 65% are female

• 40% of residential tenets stay for a year or longer

• Commercial tenants average 18-24 months

• 85% of tenants find you via drive-by traffic

This is another area that will vary considerably depending on the building methodology you adopt. If you took a design-build approach, for example, you can expect occupancy rates as high as 93%.

The most popular “state of the art” facilities range from 80,000 - 100,000 net rentable square feet, have a cost between $40-60 per square foot for single-story units and $70-90 per square foot for multi-story units. Typically, they possess break-even operating costs in the 40-60 percent range (not including debt service) of total stabilized income.