Any experts here in developing land for storage facility?

Question

Being a residential agent, I have never worked on such project. My buyer/investor wants to explore the possibility of building and running non-temp controlled storage facility. Anyone on this forum has done such project? Any pros and cons? What's the ROI on such portfolio? Any guidance that you can provide will be appreciated.

Neil Henderson · Answer

I'll echo a lot of what @Brad Hayden is saying:

1. Can you zone it for storage? Is it already zoned for storage? A lot of municipalities have put moratoriums on new storage. Talk to the local zoning board and ask them what their plan for storage is.

2. Is there a demand for storage in that area? Do your own desktop feasibility study. If you don't know how, you probably should go learn how before going any further. Pay for a 3rd party feasibility study from someone like Bob Copper or Katherine D'Agostino.

3. Impossible to tell you an ROI but most people I know are looking to double the value of an existing small facility in 12-24 months. Or if they're a bigger operator, they'll be looking to double their investor's money in 5 years or less, which works out to about a 20% annualized return.

4. Often, in regards to ROI, the question should be "What ROI are you looking for?" Now, find out what it would take to generate that ROI and go find a facility or plot of land that would generate that ROI. Work backwards from there.

Brad Hayden · Answer

@Beena Shah - very high level

1) zoning - is it zoned for such use2) feasibility study - does it make sense3) self-storage builders - they can help with preliminary design, cost estimates, etc4) analysis - no way to estimate ROI without many more details: what will be total project cost; what financing is available; how much capital investment will be required; how long will it take to build; how will it take to lease up; what are the local rates; how will it be managed; what are estimated expenses for that location; pro forma financials; etc

A lot of details before you break ground!

A good place to get more info:  https://www.ministoragemesseng...  lots of educational info and the Buyers Guide has contact info for all the resources.