Self Storage- Building Cost increases

[Henry Clark]

Just got our latest estimate for our Phase 2 of a location. This is for your normal drive up units. Last fall Phase 1 we were $3,200 erected for 10 x 15 or 10 x 20. This was contracted around February of last year. Latest quote is $4,000 per unit erected.

Steel for buildings, rebar steel and Concrete caused the increase. Erection cost didn't change that much. This is for 7 buildings. About 198 units.  About $150,000 increase on the project for the erected buildings.

Still moving ahead, since the project "numbers" only work with the whole site completed. Our builder is actually going to buy the Steel rebar now versus in 3 months, and store. He does other Steel work and thinks both the price and Availability will get out of reach.  I agree with him.  I think there will be a Choke point on the West coast Cargo Ship ports as the economy plays catchup from last year.  Steel will have to battle, staplers, lawn mowers and plastic tubs, to get on a ship and get unloaded and distributed.

This is a solid location from both a Customer and a competition standpoint, so we can take on the additional costs.  A weaker location, would have to do some re-calculations.

If you have used historical data on a project you are running the numbers on, you might re-do the figures and challenge them.

"Start small and Make Your Big Mistakes Early."  You will still get Whacked sometimes even when you have learned a lot, but you can absorb it, when your bigger.