Identifying Opportunities and Considerations for Self-Storage Conversions
Abandoned big-box retail buildings are not only depressing reminders of shuttered businesses, but they can often lead to crimes like arson and vandalism and lower property values. That's why many communities across the country are finding new and creative ways to reuse vacant buildings and prevent these unwanted side effects. One solution that gained popularity during the past few years is self-storage. It's an attractive solution because many of these buildings come equipped with large parking lots, warehouse-sized interiors, and ideal visibility. However, not all buildings are a perfect fit for a self-storage conversion project. So how do you know when to convert? We'll explain the things you need to consider when planning a self-storage conversion project, so you know if it's worth the overhaul.
Benefits of a Self-Storage Conversion
Breaking into the self-storage industry can be exciting, but weighing all of your options is crucial. For example, repurposing an existing structure can save you time and money on a new build. If you're eager to open a business, a conversion project will be much faster than starting from scratch. Of course, this is all contingent on selecting a building with minimal defects.
If the desire to help your community is also a part of your business goal, utilizing an old building could provide tangible benefits in several ways. For example, the U.S. Department of Housing and Urban Development's Office of Policy Development and Research reports that vacant and abandoned properties can lead to increased rates of crime and declining property values. The maintenance or demolition of vacant properties is also a considerable expense for many cities. So, converting an abandoned structure to a self-storage project can solve many community concerns.
Figure 1: Comfort Storage Pre-Conversion in Punta Gorda, FL
Figure 2: Comfort Storage Post-Conversion in Punta Gorda, FL
What You'll Need for a Self-Storage Conversion
Finding an existing building on prime real estate might be the easy part. Self-storage conversion projects require the same extensive market analysis as traditional construction. You'll need to do a feasibility study to consider the local self-storage market and how your business will fit. You'll also want to check zoning rules to ensure you can locate a self-storage business there, as you'll likely need to get approvals from the local municipality before proceeding.
You'll also need a complete inspection that identifies any structural flaws. For example, if it's a multi-story self-storage building, you'll need to ensure the mezzanine meets weight requirements so tenants can store heavy items. An inspection will also identify problems like mold, asbestos, leaks, or malfunctioning HVAC systems if it's a climate-controlled facility. Uncovering these problems signals more costly repairs.
Things to consider:
- Building visibility
- Zoning rules and local government fees
- Nearby competition
- Building improvement costs
- Building layout options with plenty of parking and door access
- Bringing to the current code for Americans with Disabilities (ADA)
- Multi-story costs such as elevators, extra sprinklers, etc.
When It's Not a Fit
While inspecting, you could discover significant issues that make you shelve your conversion project. For example, while big-box stores like a former K-mart in your neighborhood might seem fine on the outside, upon further discovery, it could be a dilapidated structure with construction costs too high for a new self-storage facility.
You could also discover the building is unfit for a self-storage conversion if you run into a rentable space issue. When calculating square feet, you might find that you don't have enough storage space for the unit mix you'll need to generate a return on investment. If the building isn't a fit, don't force the project and keep looking.
Still On The Fence?
If you're still unsure whether to do a building conversion or start with new construction, don't hesitate on seeking guidance from industry experts like the Janus International R3 team, who can help you throughout the process. A field technician and a sales representative can meet you on-site to assess and measure the square footage of the property. They'll also be able to estimate conversion costs and a timeline for completion.
Transforming an old building in your community into a viable resource is not only good for business - it's good for your neighbors. While vacant buildings aren't ideal, the next store that closes could be your first opportunity to open.