Primarily do Self Storage. As I have looked around several cities, I have come across Industrial Flex, Contractor Garages and Contractor Incubator buildings.
We have 4 acres set aside on a 4 lane road with 15,000 Vehicle Traffic Count per day. This is an 8 acre site. We built Phase 1 as self storage 230 units on the back side. Phase 2 will be 200 self storage units. However a mix will be 12 x 40 with electricity to support our Contractor Incubator buildings. Phase 3 which is along the road will be what I call Contractor Incubator buildings.
Normally you would select a site for a particular investment. In this case we could do 630 Storage units in this location, but we do not feel the market will support that. Thus we saved the road frontage and a separate access for this endeavor. We are lucky, this is a perfect site. 4810 South 35th street, Council Bluffs, IA if you want to Google. Veterans highway which is the 4 lane in front of us goes East (Council Bluffs) and West (South Omaha and Downtown Omaha). Interstate 80 and Highway 75 which are tied to Veterans run North and South. The actual location does not have a street light, but has two turn in/out lanes both to cross the street and to get off the street. The entrance to the location is on a slow dead end street, giving you a chance to approach the highway. With the internet, Contractors (electricians, plumbers, hvac, landscapers, etc don't need a location on the main drag anymore. Plus they don't bring their customers to their shops. Another big plus for this location, is the major Electrical Supply house and Welding Supply house are on our highway nearby, thus we get a lot of contractor traffic. Just need to clean some brush and move the Orange Storage container we are using during construction. Otherwise we have access, zoning, water, sewer, electrical and Ground project ready.
I will document the market next time. This will be harder, since I have a "proven" method for Self Storage. I need to come up with one for Contractor buildings.
If I'm missing a topic, just let me know to add.
This is great! Thanks for sharing. There is also need for single office suites right beside contractor incubator(love the name, didn't know what to call this) spaces. I was looking for similar for a different business recently and while there are several under construction nothing much was available in a reasonably convenient location. There are a lot of small e-commerce businesses that would use that same space if they had access to a single room office.
Thanks for the input above. My take away is to look beyond Hard product companies. Luckily we have Fiberoptics at our entrance.
If you get a chance and are up for a truck ride would like to show you a town I live near that I would like to help re-juvenate. About 20 minutes from you. Pacific Junction along with one of my storage locations (back up and running) were flooded for about 40 days last year. About 80% of the people have left or are being bought out. I don't do SFH or MFH. Would like to get ideas from you. This is a standalone town. Zoning and inspection the only rules are no Single wide trailers and the Electric has to be inspected. Check me out ClarkstorageLLC and let me know if your up for an hour round trip ride and discussion.
What lease structure? If gross, do you know what their usage will be?
What are your suggestions?
Looks like you've got some of the major items nailed down. This type of space is my bread and butter! The biggest thing on these type buildings is to make sure they are tall enough. My suggestion is a 16' tall building as that will allow you room to put a 12' x 14' overhead door, which means someone with a big truck, RV, or piece of equipment can get it inside the building. The sweet spot for me on the smaller shops are 2,000 sqft, with 1 restroom and 2 offices and the rest in warehouse space. Let me know if I can help in any way.
Originally posted by @Henry Clark :
What are your suggestions?
For self storage, you're gross. But for the contractor incubator I'd recommend some type of NN lease. You gotta be able to charge back some utilities, depending if they are washing equipment at the end of the day or if they run any power tools (non manufacturing, but just cutting? or minor tooling for a job) then you charge elec.
It comes down to what you can build in for sub metering, I'm not sure if you plan to always have fixed spaces, or wanted to flex it.
What type of electric service or alternatives do you see for the 2,000 soft spots? 100amp
Also what do you see for floor drains in the service area? None, middle or at the doorway and squeegee?
I’ve seen 14x14 doors mainly. Versus the 12x14 you mention. Obviously bigger is better. But in this instance the operator becomes $3,500. Versus just a chain operator. Or do you always go with a remote control door?
The major differentiator between locations I have seen is actually the parking outside. In your leases have you assigned outside parking? It’s usage so you don’t get a bunch of junk?
Cleanliness of the location. I’ve seen two ways. Professional and clean outside. No derelict vehicles. Or Joes weekend warrior location with spare vehicles and equipment sitting around. What are your approaches?
Normally we do a 3-phase service with 120/ 240. On the smaller spaces and we haven't done any floor drains but that is an excellent idea! The 12' x 14' door is pretty standard and I do a chain operated as it is easier to replace and less that can go wrong.
On the outside parking, I do assign some yard space either in the front or the back of the building, as so it does not block anyone else from getting to their unit. You might even do a small fence for each unit for yard space as most of the people that would rent these types of buildings will need some outside storage.
On cleanliness, I screen the tenants pretty good to start with and try and select the ones I think will take care of the property and keep things neat and tidy!
Got an update from City planning on our site. Attend City Council meeting for approval next week.
The property we are using for this project is part of the same 8 acres we are using for our Storage location. It was collateralized under that SBA Agreement. Unfortunately SBA does not finance these types of contractor buildings, where someone else works in them. So we are having to subdivided the 8 acres and go through the City. Attached below are the City notes for an upcoming council meeting for approval. For your info. Summary, key thing is all utilities go underground. And a sidewalk along the street needs to be installed. I have deleted most of the non-information data. For the Quick Read, just look at the Bold and Underlined. I will attend the upcoming Council Meeting to address any quesitons.
City Council Development Notes:
Request: Final plat approval of a two-lot minor subdivision to be known as Clark Storage, LLC Subdivision.
Clark Storage LLC Subdivision, as shown and legally described on Attachment ‘A.’ The subdivision contains 8.24 acres more/less of land and is located at 4810 South 35th Street. Proposed Lot 1 will contain 3.93 acres and proposed Lot 2 will contain 4.31 acres of land. The applicant’s commercial storage operation will be located on Lot 1. The applicant will retain ownership of Lot 2 and intends to locate contractor incubator buildings on this lot.
The subject property is zoned C-2/Commercial District and has nine (9) existing storage buildings and one (1) existing office building on the northern portion of the property. The proposed final plat shows six (6) additional proposed storage buildings.
Surrounding zoning in the general vicinity of the request includes R-1M/Single-Family Manufactured Housing District zoning to the north, A-2/Parks, Estates and
Agricultural District zoning across South 35th Street to the east and Veteran’s Memorial Highway to the south, and R-3/Low-Density Multifamily Residential District and C-2/Commercial District zoning to the west.
Staff Report Page 2
Existing land uses in the general vicinity of the request includes a residential neighborhood, Trailer park, to the north, and undeveloped land to the east, south, and west. xxxxx, a residential subdivision, is located across Memorial Highway to the southeast. The future land use plan of the Bluffs Tomorrow: 2030 Plan designates the area as Rural Residential/Agricultural.
1. The proposed subdivision is consistent with the Bluffs Tomorrow: 2030 Plan (comprehensive plan) as well as the purpose and intent of the City Subdivision and Zoning Ordinances.
2. Both lots in the proposed subdivision exceed the minimum C-2/Commercial District lot size requirements and have direct frontage on public roadways.
3. All development in the subdivision shall comply with the standards stated in Section 15.15 C-2/ Commercial District of the Municipal Code (Zoning Ordinance). Proposed Lot 2 is considered a corner/double frontage lot as the lot has frontage along both Memorial Highway and South 35th Street. Chapter 15.03, Definitions, of the City Municipal Code (Zoning Ordinance) defines the ‘front lot line’ of a corner lot as “the shortest lot line along a street other than an alley (§15.03.430)”. Based on this definition and the lot dimensions shown on the proposed final plat, the lot line adjacent to South 35th Street shall be considered the front lot line for proposed Lot 2 for zoning
setback purposes. The property line abutting Memorial Highway right-of-way shall be classified as the street side property line for zoning setback purposes.
4. A sign permit was issued to allow a 128 square foot pole sign in the southeast corner of proposed Lot 2 in June of 2020. The proposed minor, two-lot subdivision would not result in the creation of a nonconforming off-premises pole sign as Mr. Clark will retain ownership of both Lots 1 and 2. If Lot 2 is ever sold, at such time the pole sign would become non-conforming.
5. Public water, sanitary sewer and storm sewer utilities are available to service both lots in the subdivision. Any cost to construct, extend, remove and/or relocate any utilities within or to this subdivision shall be at the sole expense of the applicant and/or developer, and not the City.
6. All electric, cable and communication facilities shall be installed underground. All costs to construct, remove and/or relocate any utilities in this subdivision shall be the responsibility of the applicant and/or developer, and not the City.
7. Section 14.14.040, Sidewalks/Pedestrian Ways, of the Municipal Code (Subdivision Ordinance) requires that sidewalks be installed in all subdivisions and they be designed and constructed to comply with Public Works Department criteria. Proposed Lot 1 has frontage along South 35th Street and Proposed Lot 2 has frontage along both South 35th Street and Memorial Highway; however there are no existing sidewalks along South 35th Street adjacent to the proposed subdivision. A sidewalk designed and constructed to comply with all Public Works standards shall be installed along South 35th Street adjacent to the proposed subdivision. Installation of the sidewalk shall occur in two
(2) phases. The first phase of the sidewalk shall be installed along Lot 1 prior to issuance of a certificate of occupancy for the proposed additional storage buildings. The second phase of sidewalk installation shall extend the sidewalk along the entire length of Lot 2 and shall be completed at the time proposed Lot 2 is developed.
Staff Report Page 3
8. The cross access easement between the two (2) proposed lots shall be extended to the far west property line to ensure no access issues arise in the future between the two parcels.
9. The City Fire Department stated that they have no comments in regards to the proposed minor subdivision.
10. Cox Communications stated that they have no issues with the proposed minor subdivision.
11. The following technical corrections shall be made to the proposed final plat:
a. Revise the side yard easement for each parcel to state five (5) feet, as opposed to the 10 feet, stated on the plat.
b. The full metes and bounds legal description for the overall subdivision boundary shall be stated on the final plat.
c. The following standard easement notes shall be included on the final plat.
a) ERECTION OF STRUCTURES PROHIBITED: Grantor shall not erect any structure over or within the Easement Area without obtaining the prior written consent of the City Engineer, provided however grantor shall have the right to place and maintain a surfaced roadway over and within the Easement Area.
b) CHANGE OF GRADE PROHIBITED: Grantor shall not change the grade, elevation or contour of any part of the Easement Area without obtaining the prior written consent of the City Engineer.
c) RIGHT OF ACCESS: City shall have the right of access to the Easement Area and have all right of ingress and egress reasonably necessary for the use and enjoyment of the Easement Area as herein described.
d) REMOVAL AND REPLACEMENT: The cost of removal and replacement of any unauthorized
improvement or structures within the Easement Area, necessitated by the exercise of the rights under this easement, shall be borne by the Grantor or their successors or assigns.
e) SURFACE RESTORATION: City’s liability to restore the surface within the Easement Area shall be limited only to grading and seeding, and replacement of grantors surfaced roadway.
f) DUTY TO REPAIR: City agrees that any drain tile, drive or access way, fence, or yard or other improvements outside of the Easement Area which may be damaged as a result of any entry made through an exercise of the City’s right of access shall be repaired at no expense to Grantor.
g) EASEMENT RUNS WITH LAND: This easement shall be deemed to run with the land and shall be binding on Grantor and on Grantor’s successors and assigns.
h) GRANTOR RESERVATION: Grantor reserves the right to use the Easement Area for other purposes provided however these purposes shall not interfere with grantees use of the Easement Area under the rights of this agreement.
d. All building renderings shown on the final plat are not necessary and shall be removed.
Recommendation The Community Development Department recommends approval of the proposed two-lot minor subdivision to be known as Clark Storage LLC Subdivision, as shown on Attachment A, and subject to the comments above and the conditions below:
1. The final plat shall be recorded within 90 days of City Council approval or the plat will become null and void unless an extension has been requested and granted by the Community Development Department Director.
2. Conform to all City standards and specifications, the zoning and subdivision ordinances and the Department of Public Works Standards for Public Improvements.
3. All comments and technical corrections stated in the case staff report shall be addressed on the final
Staff Report Page 4
plat prior to execution of the document.
4. All utilities shall be installed underground. Any costs to construct, remove and/or relocate any utilities shall be the responsibility of the applicant and/or developer, and not the City.
5. A sidewalk designed and constructed to comply with all Public Works standards shall be installed along South 35th Street adjacent to the proposed subdivision. Installation of the sidewalk shall occur in two (2) phases. The first phase of the sidewalk shall be installed along Lot 1 prior to issuance of a certificate of occupancy for the proposed additional storage buildings. The second phase of sidewalk installation shall extend the sidewalk along the entire length of Lot 2 and shall be completed at the time proposed Lot 2 is developed.
Noted above we were having to segregate this land through a subdivision process for Financing purposes (SBA doesn't finance projects where other companies will be operating out of them). Had the City Council meeting last night. Did a brief reason on why this subdivision is occurring. Passed.
Now just waiting on Appraisal. Then go back to SBA show them they have enough collateral and to get their sign off on releasing this portion of the land.
Kind of anxious on the appraisal. Bought this 8 acres for about $20,000 per acre as "farm ground". Should appraise a lot higher since it has been cleared, levelled, filled in, and Water/Sewer/Electric are now on site; and put to commercial use. This will account for a good portion of our Collateral going into the next phases of both of these properties.
Got the appraisal back we need for the SBA to determine they will have enough collateralization to allow me to subdivide the Self Storage off, from the front ground. Appraisal cost $2,500 but definitely worth it. Again, they won't do the loan on the front property where I am going to do Contractor buildings, since they don't finance where other companies are operating out of.
Current: Bought 8 Acres for $200,000; then spent about $50,000 clearing, filling in low spots and bringing water and sewer into place. We only have $200,000 into this ourselves. Built 3 rows of Self Storage on 4 acres and opened in Feb. In the rent up phase at 30%, which I'm happy with, considering Covid slowed rent up in the spring.
Financing- Have a loan of $1.4mm; plus the $200k we put in for a total of $1.6mm. On Interest only during construction period and Rent up phase (18 months or 65% full); then we will convert to the SBA loan and lock in interest rates. Last rate 3 months ago was about 2.3% for 20 year fixed term for SBA 1/2. 2.3% for the banks half which is on a 10 term (SBA required), with 5 year increment renewals.
The storage with the 4 acres is valued at $2.05mm at 30% full; and $2.25mm filled. The spread seemed unusually light, but I'm not arguing since we have a total investment of $1.6mm.
The 4 extra acres up front was appraised at $580k. To think 2 1/2 years ago in the middle of winter I was cutting trees down and pulling stumps. Griping that the appraiser at that time would only do $225k for the land. I thought all 8 acres was worth $400,000 total. Adding a commercial facility on to the property helped increase the valuation.
Total appraisal of $2.63mm at 30% full on the storage. With only $200k invested. Plus a lot of sweat equity and executing.
SBA loan- Have enough value to cover for the SBA's 10% on the $1.6mm loan total. $160k versus $450k($2.05mm less $1.6mm loan). Banker will discuss with SBA and move forward to get them to release the front 4 acres.
Contractor 4 acres- $580k valuation, should be enough collateral to build and fit out the Contractor buildings we want to build, so we should not have to bring any of our funds into the deal. Since this will be a Non-SBA loan, collateralization will probably be at 25%, thus a total potential loan of $2.32mm for the total project. Might could pull $180k cash out, since our project will be in the $1.6mm range; but will leave in. Might use this excess collateralization with this same bank on another property we are looking at. This bank has a Loan cap rate of $8mm; thus they can do more projects with us, versus farming out any excess loan amounts.
Too late to get any construction going this year. My plan once loans and Subdivision are final; is to start laying out the Contractor facilities, deciding on a building type/configuration and then at the same time start running the numbers. Would like to get a Building identified, ordered, contractor selected, and engineering plans by February. Get building permits by Feb/Mach and start dirt work in May/June with a Fall opening.
This is a new market for me. Thus will figure out rental contracts, best practices, marketing/pricing, insurance, NNN or?, etc. Will seek your input.
Been doing paperwork to finalize the subdividing of the 8 acres:
1. City Economic development review- completed
2. County GIS review- finalize Thursday.
3. County Assessor signoff.
4. County recorders office- copy of plat, certified resolution, then record the subdivision.
Although this property is in the City, for whatever reason, need both City and County review/approval.
At this point the local Banker will work with the SBA, to get them to release the front 4 acres so I can do the Contractor buildings. Again, SBA won't loan on properties where someone else is running a business, which this will be 100% contractor rentals. Should not be an issue as noted in the post above. SBA portion of Self Storage, has roughly $400k value extra per appraisal than the 10% $160k equity required for the loan. But we will see, government and bank project.
On these long projects, every once in a while you want to stop and think why you are doing them. Pay for your house or Son's college. A bigger "Number". Pure joy.
Or knowing we got our 10,000 Teak trees planted down in Belize, and life is good. Can't wait to go down around Covid, and walk through the Teak plantation and seeing the trees growing.
Received all City Subdivision paperwork and Subdivision is now recorded. Documents to bank to work with SBA to get them to release excess collateral. Based on Appraisals they have about $1,080k collateral, and they only need $200k.
@Cole Bigbee ; @Brian m sweeney; @Brett Peter; @William Thresh; @Greg D; @Ronald R; @Zach Q; @Bjorik Mutize; @Shahriar Khan; Can't get addresses to show.
Getting ready to gear up for Building our Flex buildings in 2021. Please give input, especially on the highlighted items and any items not listed. Will probably be 3 separate buildings. 1. 100 x 400 on 25 widths and 50 ft depths. 2. 50 x 50. 3. 30 by 100, with 25 ft widths. Want to stay away from Welding, Mechanics, etc requiring a lot of outside storage or parking. Thank you.
I'm a list guy, but like to fail on paper first. Any input on the below is great.
|Contractor Bay Planning 2021:|
|1||Site being subdivided from Storage.||Done|
|2||Sewer/Water/Electric are on site.||Done- Might need 4 inch water if sprinklers|
|3||Zoning is adequate, just need plans for review.||Done|
|4||Engineer- John Jorgensen with HGM. Did Storage and has all land specs and surveys.||Next week|
|5||Electrician- Bryan Kriefels, Nebraska City||on board|
|6||Plumber- either A Raymond; or McIntosh who did the storage.||on board|
|7||Roads- Concrete, ? Inches. Trent Tieymeyer, SW Iowa parking, and Randy from Shenandoah||on board|
|8||Dirt work- Trent T. Should be little.||on board|
|9||Foundation work- ????????|
|10||Building contractor- ???????||????|
|11||Building Manufacturer- ?????||????|
|12||Storm sewers- not needed on this side of property. Allows for gravity flow.||done|
|13||Building- 10 foot increments, width and length, no less than 50 foot depth and at least 14 foot door clearance.|
|14||Electric service- ???????????????; amps, watts, # outlets, ceiling, etc.|
|15||Electric service- metered by unit.|
|16||Water/sewer service- none inside. Outside water available. No sewer drain.||No drains, make common bathroom|
|17||Floor drainage- up front, outside door, none in floor||No drains|
|18||Offices- none, split cost and stays when they leave.|
|20||HVAC- must be same as rest. Split cost and stays when they leave.|
|21||Roof- drains to the south, no water on north side of building due to sheet ice.|
|22||Security gate-roll, cantilever||American Fence|
|23||Security gate- access for north side storage.||American Fence|
|24||Security system- Mike Sullivan. HC to install and monitor.||on board|
|25||24 hour access, Fob activated, $100 lost fob fee, Fob specific security|
|26||Lights inside- ????????????? LED|
|27||Lights outside- ???????????? LED, photocell|
|28||Insulation- Spray or wrap???????????|
|29||Door size- 12 wide by 14 tall|
|30||Door mechanism- chain; or motor, will split cost, but stays when they leave, must be the same as rest.|
|31||Door Walk thru= metal door. Same key lock and deadbolt.|
|33||Types of businesses- not welding, not car repair, ???????????|
|34||Parking spots- directly in front of unit, part of rent.||25 foot deep|
|35||Parking spots- other, pay rent.|
|36||Driveway widths- ??????????????||25 foot wide|
|37||Driveway thickness-????????????||7 inches, no semis, load to/from street|
|38||Bulding floor thickness- ?????????????||6 inches|
|41||Building- surface- wainscoat, faux concrete, etc.|
|42||Building- Structure, metal, type ????????????|
|43||Building- Size 25 wide by 50ft deep increments||Can remove 25 foot interior walls.|
|44||Roofs drain to the south or through downspouts??????????|
|48||Financing with Availa Bank- Wes Nordquist|
|49||Project value- land is appraised $580k; if 25% collateral, then $2,900,000 total project. Looking at around $1,800,000|
|51||Lease terms- ???????????|
|52||Lease period- one year, with month to month after that.|
|53||Rental price- $1 per sq foot. Lowest $.85/sqft.|
|54||Lease contract- ?????|
|Note: Facing across from the north, the storage buildings will be 12 foot wide by 16 foot tall with 10 x 14 doors. No electricity. 40 foot deep.||Separate storage buildings across driveway they can rent.|
@Henry Clark - Something to think about is how the PEMB will be framed. I see a ton of RV type/small business storage spaces that are similar to what you have described. Some do them all out of cold-form cee and zee material vs the standard "built-up" columns and rafters that you would see on a standard red-iron building. If you do them all out of coldform it is the same as a standard mini storage meaning it all has to be screwed/bolted together in order for the structure to be stable. Going with a standard pemb building with 1 row of interior columns will benefit you if you have a tenant come along that needs a larger space. I would suggest the partition walls be framed out of metal building materials with metal panels on each side, so it would be easy to take down and store if a tenant wants a bigger area.
Insulation wise, go with the standard metal building insulation on the roof and walls. You'll obviously come back with batts for the drop ceiling and office walls only at the office areas. The metal building insulation is a lot cleaner look then the spray foam.
Roof panel-Standard 'R' panel in a Galvalume finish. -Make it a gable roof and not a single slope.
Wall panel-Do a 3-4' wainscot color change panel, with a different color panel up above. I assume that the city would not require any masonry?
Building slab- 4" is plenty. Have your pemb manufacturer include the footing design in their proposal.
Hope this helps.
Fantastic information Gentlemen. Thank you
Thanks a second time.
Main building will be red iron. This is for subcontractors wanting 25 x50; or 50 x 50 taking a wall down. Walk thru door and a lift door as described.
Thanks for the Gable comment, was thinking single slope for our snow, facing south to melt off originally. Gable will be easier to section off, with supports horizontal to floor.
4 inch sounds light, but a lot less money. Mainly service trucks- plumbers, electricians, some landscape, trades, etc.
Should be no masonry on this zoning. But they do have to approve.
What are your thoughts on common bathroom.
Access to outside faucets.
No drains inside.
Driveway widths? Parking will be 25 in front of building. There will be some storage buildings across the driveway with no parking in front of them. Our normal driveways are 25ft. That would give them 50 foot including their parking to turn into the bay.
I would say "Roll Tide"; but you don't know who your talking to in Alabama.
I'd stay away from the common bathroom. Stick 1 in each bay or for the time being, you can just rough-in the plumbing until you get a tenant. In the whole scheme of this project, the restroom will be least of the costs.
@Henry Clark thanks for putting so much detail into these posts. I learn a lot from reading them. I would love to develop something like this, but east coast land availability, zoning, and prices make it prohibitive. But even with your low land prices, I'm amazed that you did all this with only $200k into it. That's about how much cash I have to play with right now, would love to think that I could turn it into something as big as what you're doing.
One reason I want to get into this kind of space is that I make stupid big art. Last piece I made I had to go from Boston all the way to Philadelphia to find a place to finish the project. Me and the gang work in metal. We know how to keep the outside of a place clean. I say let the welders play, just be strict with them about not having the place turn into a junkyard.
Having worked in all kinds of shops, I can absolutely 100% say you need private bathrooms in each unit. Slop sinks, too. And in some cases, provisions for emergency eyewash or emergency pull chain showers. Shared bathrooms will get nasty in a hurry and no one will want to use them. Do you really want to have to pay a maid to come in daily and clean contractor bathrooms? Just make sure you make everyone sign some airtight documents about what they're allowed to dump down the sink drains and that they know if they break the rules the legal liability rests with them. Just stub in plumbing and drains on one wall in each unit and let the tenants decide what they want. Some may want two toilets, or his/hers bathrooms, or a shower, or laundry. Make it easy for them. PEX and PVC are cheap, this is no place to cut corners.
As for electric, more is better. Especially since we are coming to a future where people will soon need to be charging electric cars at their workplaces. Minimum of 200 amps to each unit, 400 might be nice to offer, if you can do 3 phase 120/240 that will be better, separate panel and meter for each unit is a necessity. Yes this adds up. Yes, it will pay for itself. You will get a higher rent and have a bigger tenant pool if you offer enough electricity for people to run all their tools. And with all electric F150s, Hummers, and Tesla Trucks coming to market in a year or two, you want to be ready for people to be charging those at their workplace.
For insulation, it is time to see the writing on the wall. Energy efficiency is going to be a big deal going forward. Do more than the bare minimum. It will save your tenants money on their electric heat and AC, it will keep the noise between units down, and it will keep the units more comfortable. All of which equals higher tenant satisfaction, higher rents, and lower turnover. I work with a wastewater utility up in Maine that keeps a chemical storage garage heated to 50 degrees all winter long with no fuel cost. They super insulated the walls, put radiant heat in the slab, bought an extra insulated garage door, and stuck two black solar thermal panels on the roof. Sun hits the panels, glycol gets hot and goes to a storage tank inside, then into the radiant floors. No boiler, no furnace, no cost for heat since they built the building 17 years ago. In Maine. It can be done. It's just a cinderblock building with lots of extra insulation, doesn't look any different than any other new garage. Extra costs for insulation are offset by reduced costs for HVAC equipment and ductwork.
Not sure about driveway widths but 50' sounds tight. My sprinter is over 20' long and doesn't turn well. A lot of these guys will be driving 4 door pickups with utility trailers. Make life easy for them.
For lights, see if your electric utility has any incentive programs to get you rebates. LEDs are great, but they leave dark spots if you don't have enough of them. Nice to have them on multiple banks so you can either go full brightness or just 1/2 bright if needed. And everyone likes natural light, so if there is a way to incorporate a big picture window into the front of each unit or put in some solar tubes or something, it will be a nice touch.
Lease terms seem short to me. This isn't self-storage or residential. I would want 3-5 years, but you can experiment.
Thanks for the detailed response. Just because of that and you said you went near Philadelphia.
Please check out these three properties; researched that area for another post person, who never responded.
240 Sickle Lane, Woodbury, NJ
105 Cedar Brook Rd, Sickerville, NJ
Bldg 801, 300 Thomas Ave, Williamstown, NJ
Not in my area and I am done opening new locations. With the high storage rents in that area, and high population, I would be looking at these types of properties. Realize you have to turn over 10 boulders to find gold, but I like the looks of these three, from several angles.
I see regular Self Storage, Large storage units, inside/outside vehicle storage, lay down yard, MFH, Wedding/Reception hall, subdivision lots, Contractor bays, etc.
$200,000 gets you into any of these with build out. SBA 10% on a $2mm loan. They won't do contractor bays.
Hey, I need a big Iguana art piece for our property down in Belize. Is it cheaper to ship it from Maine, to ship you down there to build? ha ha.
Again, thanks for input.
Our land is bordered on one side by Iguana Creek, and the front is the Belize River. Actually have 5 to 7 foot big Iguanas.
Haven't seen them, but my contractor says we have 7 foot crocodiles.
Forgot your $200k into it comment. We footed the $200k in cash. SBA 10% could have been $2mm loan. But we only needed around $1.6mm.
Everyone has a great deal they did or that they passed on story.
This was a great deal story. Was looking for land, had 3 spots I had identified with a realtor. Came back to their office and I wasn't really excited by any of them. The owner of the realty company sat down with me and the realtor as we went through the 3 properties. He said, I have a property you need to see, its not even listed yet, just came in yesterday. It was not in the location I wanted. He told me the price, 8 acres for $200,000. I said let me drive over right now. Came back 30 minutes later and said we will take it.
3 siblings in their 80's decided to sell their old homesite. No house on it, just 5 acres of soybeans and 3 acres of mid growth timber and brush. Wanted to sell it quick.
Bought the land for $25,000 per acre. See appraised notes above. About 2 years later after we cleared land, put in 2 acres of Self Storage, and added all utilities, the same appraiser, appraised the land at $145,000 per acre. So we end up with a lot of appraised collateral, which we can use on our next projects, with only having put the original $200k in to begin with.
Part of the big discrepancy, is when they originally appraised the land, he only appraised for about $28,000 per acre. I argued it should be in the $100k comparable, but he said since I just bought it for $25k, no way could he go that high. Maybe a year or two later. Which he finally brought it up to comps.
Key is a lot of chainsaw and bulldozer work; bringing utilities up, really increased the value of an agricultural property.