Self-Storage Construction

Feasibility Studies and Site Selection

Most new developers will spend days, weeks, or even months looking for a site on which to build a self storage facility. Once the property is found, a consultant is then hired to complete a feasibility study. As seen in the Mini Storage Messenger 2007 Development Handbook. If the feasibility study returns negative, then the process of looking for the site begins all over again…

Who Are Our Customers

Before finding the right Self Storage markets, it is always important to determine your customer base and where they will come from. Our self storage research indicates that women comprise up to 84% of self storage patrons. Although women seem to lease the units, it appears that over 95% of the actual move-ins are performed by men. The typical Self Storage tenant demographics are:

Why Do Renters Select a Particular Facility?

Before 1997, cost was the primary reason indicated for patronizing one facility over another.

Today, cost accounts for less than 2% of all rentals. Pre 1997, security was a non-issue; today it has become the pivotal concern. Computerized entry-controlled gates, personalized coding and security cameras are deciding factors in selecting a facility. Self storage has escaped the realm of a disposable income business and is quickly becoming a “necessity”.

As discovered in customer exit surveys, an on-site manager or roving manager is still very important to self storage tenants. Today’s renter expects a high level of professionalism in all aspects of the facility, from the developmental considerations to the management team. The absence of an onsite manager or roving manager, substandard maintenance and cleanup, lack of professionalism, and, interestingly, inefficient unit mix layout were all listed in exit surveys as causes of renter dissatisfaction.

Obtaining The Required Market Data For Your Own Market Feasibility Study

Now, by knowing your customer, you can take your first step to discern feasibility in a market by conducting a simple “Demand Analysis”; a phase one in executing your own feasibility study. Remember that you must obtain the right market data to discover the right market.

Identify Existing Market Competition

Defining the demand for self storage in a market is impossible without first examining the current competition in that market. Technology has made this information readily accessible to anyone. Internet services such as MapQuest, Google Earth,, and Storage Net all provide a wealth of information. Utilizing MapQuest and Google Earth allows you to generate radiuses, and then mark related businesses within your radius. (Both will sometimes give duplicate counts on facilities that overlap streets and may count moving companies and warehouses. A little “sifting” is necessary to delete redundant information.) To establish a beginning point, a center for measured radiuses, choose the center of a small community, or for a large city, a major intersection in a section of that city. Remember, depending on your objective, your radius can incorporate a whole city or a small part of it. Mark and note each self storage facility within your radiuses. We’ll cover the radius diameters again later.

Determine the Square Footage of Each Competitor

Next you’ll need to find the actual size of each competitor in the radius desired. Sources for determining a competitor’s size are:

  1. A majority of County Tax Appraisers have a website that once accessed with either the parcel ID number or physical address, gives a complete description of the improvements along with its square footage.
  2. Google Earth features a device that permits you to measure each building and to calculate square footage.
  3. The last and least appealing technique is to drop by a store and try to count eight foot doors, (equaling a 10 foot space,) and so on, and attempt to estimate the total area. You can work out a useable estimate in this manner, but it is time consuming and tedious.

Determine Competitive Rents

Your next step is to verify the competitive rent rates. Spend a day or two shopping the competition. Telephone all of the facilities within the trade radius to determine their rental rates; physically shop them if you have to. Many companies will have this information online. Then create a simple spreadsheet listing all of the rates for all of the different size units, both non-climate and climate control.

Determining Competition’s Occupancy

Next, you must attempt to compute the competition occupancy. While shopping competition to learn rent rates, you can also glean information concerning occupancy. Phone or physically shop the competition and listen to what the manager says. If you hear, for instance, “Well, I don’t have any 10 x10s left. I have two or three 10 x 5s,” what does that tell you? His 10 x 10s are 100% occupied. The statement “I have some 5 x 5s, but I’m out of just about everything else,” concludes that that facility should be more than 90% occupied. By spending two or three days investigating, you’ll be able to speculate within five to ten percent the competitor’s occupancy within the market.


The last data to obtain to complete your feasibility study is found through the assistance of a national demographic service. Be sure to ask a demographic service if they use postal counts. A service that does not incorporate postal counts is depending on the 2000 census for their numbers. The numbers they will use for 2007 information will be based on the percentage of growth between 1990 and 1997, by applying that percentage of growth to the period between 2000 and 2007. The numbers in a given area can be in error as much as fifty percent. Postal count figures will account for every name receiving mail at each residence and will be far more accurate.

PHASE 1 – “DEMAND ANALYSIS” (Per attached worksheet)

Step 1 – Determine Existing Market Supply

The first step is to determine the market’s existing supply? The process includes:

  1. First, list all the competitors, from the closest to the farthest from the site.
  2. Then add the square footage of each competitor in the column representing the radius the competitor is found within.
  3. Total all the competitors by each radius and the three combined

Now you have determined the actual square footage supply that exists in the market area.

Step 2 – Determining the Markets Potential Demand.

This step will calculate the market’s potential demand by use of the demographics data collected previously. This process includes:

  1. Determine the footage / person “Forecast Demand” included in the lasted Self Storage Almanac. (For this demonstration the forecast demand is 5.5 square feet per person)
  2. Determine the population within each radius.
  3. Multiply the “Forecast Demand” by the population of each radius to determine “Demand Based on Population.”
  4. Multiply the above “Demand Based on Population” sf. /person by 1.15 (which represents the additional square footage based on the average percentage of commercial tenants)

You have now determined what the industry experts say is the existing Market Potential Demand for self storage.

Step 3 – Determine the Markets Net Demand

This is the final step in determining if the existing population can support another self storage property. The final calculation is subtracting the existing sq ft. supply in Step 1 for each radius, from the “Total Combined Demand” for each radius. The result is the “Net Demand,” the excess (+) or negative (-) square foot per person in the market.

Your “Demand Analysis” is now complete. If there’s a negative demand, you can stop here after spending a little time and very little money and move on to find another market. If there is sufficient net demand, then it’s time to graduate to Phase 2.

PHASE 2 – RENT ANALYSIS – Will The Rents Justify the Costs? (Per Attached Worksheet)

The best way to evaluate competitor’s rents is by the use of a spreadsheet, whether it is a computer program like Excel or on a plain piece of paper. Start by:

  1. Labeling non-climate control units across the top starting with 5×5’s to going to 10×30’s.
  2. From the top to bottom, list the competitors listed on the “Demand Analysis” in order of the closest to the farthest.
  3. Place existing rents collected earlier by each unit size of the competitor.
  4. Once finished with all competitors’ rents, calculate an average of all unit size’s rents.

This same process should be repeated again for Climate Control units and RV/Boat spaces if applicable. Upon completion, you have a rent summary of the competition which will bring to light many important factors. For instance:

  1. Higher rents usually indicate “Class A” Players and first class properties.
  2. Lower rents indicate a property’s inability to compete in the market.

Once you have finalized your Rent Analysis, it is imperative to resolve whether or not the rents that you will be able to charge will justify the costs of development and construction. In the last five years, construction costs have risen from $28.00 a square foot, to $40.00 a square foot, based on the increased cost of materials. In addition, within many markets the price of land has nearly doubled. This also means that anyone who built their facility five or more years ago has a major competitive advantage over those who are developing today.

Take a look at the rent information that you gathered while shopping the market’s competition. For a “rule of thumb,” if your monthly rents for non-climate control 10×10’s are between $0.75 and $0.80 per sf. and your climate control unit rents are thirty percent or higher for the same unit size, you should have a market that will support today’ average development costs! If the rents don’t justify developing a facility, don’t compromise! Cutting corners on the design, security, driveways, etc, will only send potential clients to your competition. Always match or exceed what the competition offers.

Finding A Site Within a Feasible Market

After finding a market with a positive net demand and with rents to justify development, its time to start looking for sites. A self storage complex requires property that is anywhere from 1 ½ acres to 5 acres. When faced with higher land cost and smaller acreage, you might have to build two or three stories to achieve the necessary net rentable square footage. This is great as long as everyone else in the market is building multilevel for the same reason. If the market has available 3 to 5 acre sites, you have the option of building single story, or a combination of single and multilevel. You must remember, that if all facilities in a market are single story, it’s hard to bring in single story / multilevel and make it work.

Before getting started finding sites in the newly justified market, be sure to go by the local jurisdiction’s zoning department to find all the zoning designations for self storage and their restrictions. While there, ask is there are any new self storage properties in for zonings.

Now that the proper zoning classifications are known, it is time to start finding zoned sites. The best way to find sites within an unknown but feasible market is to hire a local commercial realtor.

Once you found a real professional, tell him the acreage and zoning requirements and ensure he or she understands the sites must have excellent visibility or high traffic counts. Once he or she has located a few potentials, check them out. Pay very close attention to visibility and traffic patterns. When you find a location that peaks your interests, fine tune the study to hone-in on that site.

Never Forget Traffic Patterns

Never forget that 85% of your business is from drive-by traffic. Traffic counts and visibility are extremely important. With traffic time driving to work being between 15 and 40 minutes or longer, the population is spending more and more time behind the wheel. This increased and stressful traffic situation will lead the population to determine a traffic pattern providing a “path of least resistance.” It is within this traffic pattern that the residents will do everything. Whether it is shopping, the cleaners, food, restaurants, doctors, pharmacies…whatever, it’s done on their particular traffic pattern. Why? Because it’s easier, safer and over time, the pattern becomes familiar. With an older population, this becomes an essential part of their lives.

Traffic statistics are often available from the county or city online. With the money you’re preparing to spend, it couldn’t hurt to drive the patterns yourself and spend some time sitting in a parking lot watching traffic. Look for possible visibility barriers and research sign ordinances.

Go or No Go?

This is not the end of due diligence in determining the feasibility of the market; however these steps are the most important. These steps will guard you from building on top of someone else, building in a market that is already saturated, and protect you from building where others have a competitive advantage. Beyond these research tactics that you can reasonably perform yourself, you’ll need to seek the assistance of professional developers, civil engineers, architects, commercial real estate brokers, etc.

Here’s what you can accomplish:

  1. Find the market, confirm the feasibility THEN find sites that will work in that market. Conduct a simple supply and demand study based on the information that you can find in the Almanac, online and factors that you can search out yourself.
  2. The rent analysis. Find your ability to compete with the existing competition.

With just two steps, you have eliminated a very expensive report that supplies reams of statistics but does not tell you if you can compete with existing self storages already in the market. You can use the same steps to determine feasibility in a 1, 3, 5 or 20 mile radius! This method works at the metropolitan or rural market level. If you look for sites first and do feasibility studies on each one of them, you may look at a hundred sites to find one while incurring major expenses! Doing market feasibility first allows you to find several sites in an area you know already meets the necessary market conditions to be successful.


It’s your choice! You can catch nothing and waste time in the vast majority of the lake. OR load the boat based on finding the portion of the lake where the fish live.

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