The One Hour Self Storage Preliminary Demand Review.

The One Hour Self Storage Preliminary Demand Review

By Marc Goodin   1/2017

Demand is one of the several items that must be reviewed to determine if a property is suitable for a new self storage development.  It is important not to over assign to much importance to Demand or any one of the item or any one the important site features.   This preliminary demand is not a substitute for a Feasibility Study by a self storage expert but rather a quick way to determine if further research and if a full demand analysis should be completed by experts.

Demand is typically measured based upon the existing population in 1 and 3-mile radius in the Urban areas and the 1, 3 and 5-mile radius in rural areas.  Typically, a combination of square foot per person is determined based upon individual State averages, National averages and micro averages, existing rental rates and occupancies.  Many experts use the state average of 8.3 sf per person as a starting point. And add and subtract based upon local conditions and features.  Additional demand may be added if there is a large commercial base that may use storage or subtract demand if poor rates or large vacancies exist.

Once the total demand is calculated the available demand for construction is determined by subtracting the demand used by the existing competition, plus competition under design, approved, or under construction

This used demand is again based upon the square footage of the existing competition.

These are quick down and dirty calculations.  If they look favorable, then it is time to get the actual square footage of each facility (often available at the city records and often online) and confirm with the city if any facilities have been approved or even submitted for approval.  There is no excuse for not driving the area to assist in your research.  Once the calculations are performed with the more accurate data look favorable and you have confirmed the site has the other characteristics of a good self storage location it is time to get a professional feasibility study done.

Example  1 – Urban Location

 1 Mile Radius- Existing Population 22,000 people

Total Demand available = 22,000 x 8.3 sf/person = 176,000 square feet

Demand used by 1 Existing self storages of 62,000   square feet

New Construction Available Demand = Total Demand available – Demand used =

176,000 sf – 62,000 = 114,000 sf available for new construction    –

Looks good for additional research

3 Mile Radius – Existing Population 86,000 people

Total Demand available = 86,000 x 8.3 sf/person = 713,800 SF

Demand used by 9 Existing self storages, assuming an average size of 60,000 sf = 9 x 60,000 = 540,000 sf

New Construction Available Demand = Total Demand available – Demand used =  713,800 sf – 540,000 = 173,800 sf available for new construction    –

Looks good for additional research

Example 2 Rural Location

 1 Mile Radius- Existing Population 3,000 people

 Total Demand available = 3,000 x 8.3 sf/person = 24,900 square feet

Demand used by 0 Existing self storages = 0 Square feet

New Construction Available Demand = Total Demand available – Demand used =  24,000sf – 0 sf = 24,900 available for new construction

Not enough population available in 1-mile radius but in conclusive since typical in rural low population areas.

5 Mile Radius – Existing Population 15,000 people

Total Demand available = 15,000 x 8.3 sf/person = 124,500 sf

Demand used by 1 Existing self storages = 55,000 sf

New Construction Available Demand = Total Demand available – Demand used = 124,500sf – 55,000 sf = 69,500 sf available for new construction

Looks good for additional research.  I should note, among other things, I often like to see a demand needed that is double what is to be built.

Example 3 – Self Storage Opened In 2016 In Sarasota FL

Let’s take a look at a facility that opened in 2016 on Route 41 in Sarasota, FL and see if we come up with the same conclusion to build a new 3 story facility as the owner did.

The two items we need are the population stats and near by self storages for the 1 mile and 3-mile radius.

To do this I used programs from PAC-COMM  http://pac-comm.biz. If your business has interest in self storage acquisition, location feasibility studies, facility research for future development, or any type of self storage location research; PAC-COMM’s Google Mapping API provides an important service.

PAC-COMM offers free two and three-day trial periods for accessing and exploring both their demographic reporting and their mapping applications. To learn more about the demographic reporting and the mapping applications download this PDF:  http://freepdfhosting.com/d11807d40f.pdf . To reserve your test trial, ask additional application or licensing questions, contact Teresa Roemer at PAC-COMM, troemer@pac- comm.biz.  Let them know Marc from Storage Authority sent you.

I simply plugged in the address into the PAC-COMM demand URL form and got the demographic and population report and the existing facilities in the area.  Here are the results of the population section of the demographic report.

screen-shot-2016-12-31-at-12-59-23-pm

Next I entered the address and radius into the self storage mapping program.  The program permits for several different radius options and you can click on each facility to get the name & address to assist in further research.   Here are the results for the 1 mile & 3 mile facilities.

screen-shot-2016-12-31-at-12-59-33-pm

As you can see there are two existing self storages in the 1 mile radius.

screen-shot-2016-12-31-at-1-00-25-pm

As you can see there are 9 self storages in the 3-mile radius.

You can zoom in and out and also get an Arial views, as well as choose other radius to help with your research.  You can also click on each facility to get the name & address to assist in further research.

For the quick and dirty calculations, I assumed all self storages are shown and the ones shown are self storages (vs RV only storages), and I simple estimated the square footages by my experience of driving by or looking at them at google earth.  I also assumed no new facilities are on the drawing boards, have been approved or are under construction in the 3-mile radius.

1 Mile Radius- Existing Population 9,504 people

Total Demand available = 9,504 x 8.3 sf/person = 78,883 square feet

Demand used by 2 existing self storages of approx. 25,000 sf and 70,000 sf for a total of 95,000 Square feet (estimated)

New Construction Available Demand = Total Demand available – Demand used =   78,833 – 95,000 sf = negative 16,167 sf for new construction

3 Mile Radius – Existing Population 60,844 people

Demand available = 60,844 x 8.3 sf/person = 505,000 sf

Demand used by 9 Existing self storages consisting of and estimated 450,000 sf

New Construction Available demand = Total Demand available – Demand used = 505,000sf – 450,000sf = 50,000 sf

Based upon these numbers you may consider this to be an A location based upon demand.  But since I live around the corner and know the area well, my initial reaction would be this is a great location and dig deeper. I would first get the actual square footages of the existing facilities and check their occupancy and rental rates.

In certain areas driving habits and drive times must be considered.  This location has an advantage as Route 41 is THE major road in town and many people head to this road to shop and access the town north and south. Making this location a shorter travel time and more often taken route leading prospects to this location vs. other locations that may be closer to home mileage wise.

The closest self storage is a haul dealer with inside multi story self storage that is not air-conditioned that concentrates on truck rental and not will not be a major competitor. And did you notice there is a long stretch to the north on 41 with facilities.  Also this area has a high commercial and retail storages that will also provide 15% plus of the renters.

Secondly did you notice how 5 of the 9 self storages are located just on the 3-mile line?  If we did a 2.9-mile radius the numbers we would have almost the same population and less than half the self storages.  Likewise, if we added area to the west we would not add any self storages but add substantial traffic.

For this location around 40% of the 3-mile radius has no population due to be located next to the ocean. Which is not the case for the 5 facilities at the three-mile radius.  I would visit these self storages and I bet they are both full at great rates.  If we go to the 5-mile radius we are not going to add any facilities to the west and the facilities to the north have a natural break at Fruitville Avenue where people to the south of Fruitville Avenue would have the tendency to go south due the better neighborhoods and shopping districts.

I would normally have to do a host of further research to determine if this site has the demand and other features to determine if this location is suitable for self storage. And my guess is many professionals would have stopped their research early on and skipped this site, but in this case we have the evidence this is a superior location.

Our newest addition to our Storage Authority Team (to help you) is Garrett Boyd who was the manager of this facility for its first 6 months of operations, before he joined Storage Authority.  In just six months under Garrett’s management this new 3 story facility went from opening to over 60% full.  This is an incredible feat! Of course we believe and give much of the credit to Garrett due to his superior self storage sales and marketing expertise.

This bring me to one very important fact over looked by most self storages.  If a manager is a simple order taker/clerk or even a good customer service agent an A location can rent as a C location.  A superior experiences sales and marketing self storage manager can literally garnish much more than their fair share of the demand.

You owe it to yourself to contact Garrett at 941-928-1354 or Garrett@StorageAuthority.com to learn more about the Storage Authority Franchise opportunity. www.StorageAuthorityFranchise.com

 

Marc Goodin is President of Storage Authority Franchising.  He owns 3 self storages he designed, built and manages. He has been helping others in the self storage industry for over 25 years.   He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answerer your development, marketing, sales and operations questions.  His best selling self storage books are available at Amazon and here.

Incredible Franchise Business!

 

Storage Authority

The Best Business For The Busy Professional 

Would you rather take a shot or sit in the bleachers and wonder what it is like to play? 

The DOW lost 2.23% in 2015 – There is a much better place to invest your time & money!

Storage Authority’s high demand manager driven operations, sales and marketing systems & platforms are revolutionizing the self storage industry.  We are now offering an extraordinary opportunity of self storage ownership in your neighborhood to qualified individuals.

Contact us now to learn more about this extraordinary opportunity:  marc@storageAuthority.com or 860-830-6764 Marc Goodin, Storage Authority President

 

A professional Image from day one

 

Seven Reasons Why Self Storage Now?

  1. There Has Never Been A Better Time To Get Started.
  2. Extremely Profitable – 30% Plus Returns Vs. 0-10% Returns For Other Real Estate Development Like Apartments Or Hotels.  Self Storage Not Only Provides Present Day Income but It Also Provides Retirement Income.
  3. Abundance of Financing Options With Equity Requirements As Low As 10%.
  4. Significant New Construction Is Required To Meet Pent Up and Surging Demand.
  5. Owner Life Style – Replace Your Income with A Manger Driven Self Storage Business With Automation: Franchising; Kiosks; Web Based Automation.
  6. No Painting, No Backed Up Toilets, No Midnight Calls And Just A Couple Of Employees.
  7. Self storage is a 26 Billion dollar a year business and projected to a billion dollars a year over the next five years. The smart money is going into self storage.

Storage Authority Franchising Is Ready To Provide You The How To Knowledge And Help You Need Get Off To A Fast And Provide You The Systems And Experience That Will Make A Difference.

 Self Storage & You:

  • You can enjoy the many rewards of owning your own business.
  • You can build an incredible income and retirement nest egg at the same time.
  • You can be your own boss.
  • Enjoy family participation in the business.

Self Storage & You & Storage Authority Franchising:

  • You can keep your job with our manager driven system. (Or you and or your spouse can quit your job when your ready.)
  • Better locations and faster start up.
  • Profit from Storage Authority Experience and networking with other franchisees.
  • Control your own future and security with a proven system of success.
  • Save time and money with a tested business plan and systems
  • Professional start-up training and on going programs.
  • Enjoy the many benefits like, higher profits, avoid costly mistakes, group marketing, better locations, group discounts, professional image from day one, brand recognition, internet platforms, etc. that most business owners can not obtain on their own.
  • A rare opportunity to have BOTH a self experts and a Franchise experts working for your you and your success!  In business for yourself but not by yourself.
  • We’ve done the research and provide you National & individual web sites with SEO, on line reservations, Management programs, including Owners Insight program to better control and understand your operations to make your job easier!

What the Industry is Saying about Storage Authority 

“Trachte has long a standing relationship with Marc Goodin and looks forward to providing Storage Authority franchises top quality buildings. Storage Authority offers a one of a kind opportunity for developers.”

Steve HajewskiTrachte Building Systems

 

‘’Franchised self-storage is a good way to get into a very profitable industry without the costly mistakes of learning a new business.  And Marc has put together an excellent team with expertise and experience every step of the way.  At Space Control we have been working with storage owners for over 20 years and that is reflected in our software.  With Storage Authority you’re in good hands from day one.’’  

Ramona Taylor, President Space Control

 

‘Self storage franchising combines the best of what can make self storage such a fantastic business: the independence that the successful entrepreneur loves and the proven systems and resources used by the ‘big guys’ that improve revenues, profits and values. The smartest people in our business surround themselves with smart people and this new concept combines the true independent spirit with some of the most experienced professionals in our industry to provide affordable and effective policies, programs and procedures. Taking advantage of these combined resources is smart and forward thinking.’

Bob Copper, President Self Storage 101

 

 “Marc is not just a “franchisor”; he is a long time developer/owner/operator in this very fragmented industry. Experience counts in not only getting started in the right direction, but in maintaining the operating systems necessary to stay competitive in this “bigger is better” world. Our industry is long overdue for a national franchisor to compete against the public REIT’s”….

Nick Malagisi, National Chair-Self Storage- Sperry Van Ness International.

 

Marc and I have worked together for several years helping clients get into the self-storage business. Marc’s experience, has no doubt, helped give new entries into the industry a head start in doing things the right way without the normal learning curve or having to re-invent the wheel. I look forward to assisting Storage Authority franchisees with their financing needs.

Terry Campbell, Live Oak Bank 

 

Storage Authority Makes it easy for your clients to find you and decide 

Clients as easy as 1- 2- 3

Contact us now for full details about our extraordinary opportunity:

marc@storageauthority.com

(Marc Goodin, President Storage Authority – direct phone 860-830-6764)

or visit www.StorageAuthorityFranchise.com

Storage Authority, LLC 101 NE Third Avenue, Ste 1500 Fort Lauderdale, FL 33301

1-844-33-STORE  www.StorageAuthorityFranchise.com

 

 

 

 

 

 

How Much Cash Do I Need To Get Started? How Much Land?

You typically need between $200K to $400K.  More or less depending on your experience, time committed to the project and location.  Here are some general ideas to get you thinking.

Finding the right land parcel is the first challenge.

Concept Budget 1: – No land Chosen  – 50,000 square foot facility

Typical Land Requirements

Typical Single Story: 4 usable acres, up to 5 acres for strict zoning requirements and/or storm water detentions is required

Multi Story: 2+ acres.

Typical Construction Cost:  – single story $40 per sf, multi story $70 per sf.

When people project lower cost per square feet they are often assuming everything is perfect which is rarely the case and or do not include all soft costs.

Unusual construction requirements such as ledge, significant cuts or fills, retaining walls, unusual zoning requirements, off site improvements, local pricing etc are not included and can significantly increase construction cost.

Item                                        Single Story             Multi Story

Land                                      $400,000 + –             $700,000 Plus

Construction:

$40/sf x 50,000 sf =          $2,000,000

$70sf x 50,000 sf =                                                 $3,500,000

Unusual land etc.                $0 ?                            $0 ?

Franchise fee                       $20,000                     $20,000

Design                                   $30,000                     $50,000

Banking/Prof.  fees            $30,000                      $40,000

 

Total                                       $2,480,000               $4,310,000

Phase 1 -50%                        $1,480,000               No phasing

30% Bank Loan

equity requirements           $444,000                   $1,077500

15% loan equity                   $222,000                   $646,500

 

Challenge #2 is making sure you have a smart design!

Preliminary Profit & Loss:  50,000 sf single story facility when rented

Income – Assume 85% rented with average rental rates at $1/sf

50,000 sf x .85 x $1/sf = $42,500 monthly income

 Expenses – Assume $0.35/ sf  = $17,500/ month

 Gross profit: 25,000/month = $300,000 year

Industry income & expense can and do vary upon many factors including, competition, local property taxes, location and owners experience.  Typical rent up periods for the industry are between 18 months and 3 years.

As you can see multi story facility cost more and can’t be phased, so they require significantly more capitol and initial equity. This is why seasoned self storages developers typically build them.  Many multi story self storages will even have a higher price tag because they are often larger to off set the land cost per unit, to get better returns.

The hardest part is proper operations, sale and marketing. This is where 90% fail.

A word of caution, never accept a parcel of land simple because you own it or the price is low, it must have significant drive by traffic and the area must have an unmet demand for self storage. With the help of a good commercial broker like Sperry Van Ness (Tell them Marc from Storage Authority sent you) you can quickly determine the land cost in various areas to help you update the above budget and determine your options moving forward.

Often there are several ways to reduce the required 30% down payment.  Franchising, which gives you experience and credibility can reduce the required equity requirements.  If you need to reduce the equity requirements further a SBA loan from a preferred SBA lender who understands franchising typically require the least amount of equity sometimes as low as10%.

Now based upon your liquid assets you can start determine the best options for your needs and investigate land, design, regulatory and banking requirements in more detail.  At this point you are either ready to charge forward or realize you don’t have the capital required.  If you don’t have the capitol don’t give up.  Finding a more aggressive lender and or finding a partner with either the land equity or cash equity may be a great option.

Working with an experienced self storage development expert can also help reduce the construction cost and increases profits. You can look at building a smaller facility but they tend to be significantly less profitable and more of a hobby than a business.

Storage Authority Franchising can not only guide you through the planning, design and Construction phase but will give the operational systems and platforms required for success with todays sophisticated competition around the corner.

Your just one call away from Success! 860-830-6764 Marc

If you have any questions please feel to call or email me.

To Your Success!

Marc Goodin

President, Storage Authority

Marc@StorageAuthority.com

Direct: 860-830-6764

Disclaimer:  This is for preliminary education and over view purposes only and should not be used for investment purposes. It is not a Storage Authority Franchise offer. Storage Authority offering is by the Storage Authority Franchise Disclosure Documents only.  Once a property is located a detailed feasibility study, site investigation, site designs, construction costs and regulatory investigation are required in order to determine the cost and feasibility of a project.

 

Why & How To Get Started In Self Storage Today.

 

The Top 7 – Why Self Storage Now?

1. There Has Never Been A Better Time To Get Started.

2. Extremely  Profitable – 30% Plus Returns Vs. 0-10% Returns For Other Real Estate Development Like Apartments Or Hotels.  Self Storage Not Only Provides Present Day Income But It Also Provides Retirement Income.

3. Abundance of Financing Options With Equity Requirements As Low As 10%.

4. Significant New Construction Is Required To Meet Pent Up and Surging Demand.

5. Owner Life Style – Replace Your Income With A Manger Driven Self Storage Business With Automation: Franchising; Kiosks; Web Based Automation.

6.  No Painting, No Backed Up Toilets, No Midnight Calls And Just A Couple Of Employees.

7. Storage Authority Franchising Is Ready To Provide You The How To Knowledge And Help You Need Get Off To A Fast Start.  And Provide You The Systems And Experience That Will Make A Difference.

 

Why New Construction Vs Buying Existing Facilities.

1. Be Closer To Home.  There Are Very Limited Quality Facilities Presently For Sale.  As A Facility Owner I Get Unsolicited Request At Least Twice a Month If I want To Sell From Buyers Who Have The Cash To Buy Now.

2. Better Locations.   “Build It and They Will Come” is a thing of the past.  NOW “Build It in The Right Location And Market it and They Will Come”.

3. Many Existing Facilities Over Priced Due To Bidding Wars And REITs Paying New Record Prices Every Month.

3. Buy 3 Million – Build $2 Million  = More Equity And More Profits
.

4. New Facilities Can Be Developed For 1/3 The Equity Requirements Of Buying.

5. You Reap The Rewards Of Your Efforts Vs. Paying  A Premium For Others Efforts.

 

Question: What Does It Take To Get Started in Self Storage? 

 Answer:  http://www.StorageAuthoriyFranchise.com   Or

Three out of the following Four of the following items.

1 Time

2. Experience

3. Money

4. Web Based Platform For Branding, Rental And Operational Systems.

With Storage Authority on your side you will have the Experience and Web Based Platform.  And we will help reduce both the time and money you will need to be successful.

Check Out http://www.StorageAuthorityFranchise.com To Learn How You Can Get Started Today.

Or Contact Storage Authority Co Founder Marc Goodin directly at marc@StorageAuthority.com or 860-830-6764.

Note:  This is not a solicitation for Storage Authority Franchise.  Offerings can only be thought the Storage Authority Federal Disclosure Documents available via the Storage Authority Franchise web site.