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On Cloud Wine: Top 7 Considerations for Developing Wine Storage

Jun 03, 2022

Raise a Glass and Your NOI with Wine Storage!

Are you looking to make more profit through your self-storage business but aren't sure how? It may be time to mix up your current unit offering. From unit re-mixes to adding new options like wine storage, boat and RV storage, or relocatable storage units, mixing up your current unit offering could be exactly what your facility needs to attract new business and maximize revenue.

Different regions and demographics are attracted to different niches in storage. We've seen trends throughout the years supporting smaller units being most successful in college towns, boat and RV units being most successful near lakes, and wine storage being most successful in affluent urban markets. With the right research, you can mix up your current unit offering to better target your market and maximize profit greater than ever before. If you're interested in combining wine storage with your existing or future self-storage development, you should consider the following aspects: market feasibility, facility design, location, climatization, security, legality, and marketing.

wine storage units wine storage locker with wine bottles inside

7 Considerations for Developing Wine Storage:

1. MARKET FEASIBILITY

Wine storage is a rewarding bonus to many self-storage facilities fitting the demographic landscape because it generates higher revenue per square foot, broadens the market appeal and quality perception of your facility, and is a relatively easy build that often allows you to make the most of small spaces that may otherwise be unrentable as storage units. With any real estate asset, it's important to do your homework. After all, doing the right research upfront can save you time, headaches, and money down the road. Wine storage is no different, and it takes extremely careful planning to pull it off successfully.

It’s no secret that wine storage appeals to a very specific demographic. From restaurant owners to wine collectors and retailers, wine storage is most prevalent in affluent urban markets. It’s important to perform qualitative and quantitative research before deciding to add wine storage to your current self-storage setup. You should take personal bias completely out of the equation and turn to the industry experts to help you conduct a thorough market analysis and feasibility study to determine financial viability.

It’s preferred to have a market that makes up the top 20-30 percent income bracket, living within 15 minutes from your self-storage facility. You should analyze income and professional variables, construction details of housing units, and the drive time to your specific location. In addition to your market research, make sure you’re considering the competition, population, and industry growth. Ask yourself what types of units are most and least successful at your facility, what’s your competition offering, and are your customers interested in this specific niche in storage.

While wine storage is steadily growing, it’s important to remember that it still makes up a small percentage of the industry compared to traditional units, so it’s better to leave room for expansion than it is to overbuild. Consider the industry growth and what is expected to take place around your community in the next 5 to 10 years. Many operators decide to test the water (or wine) in phases. Thankfully, wine storage is a relatively easy build in terms of construction, so leaving room for growth is often the preferred approach.

2. FACILITY DESIGN AND AESTHETICS

Just because you’re a wine enthusiast doesn’t mean you have your own wine cellar at home. That’s why more and more wine consumers are turning towards self-storage to safely store and preserve their wine. From large collections to expensive or sentimental bottles, people want a safe, secure, and climate-controlled environment to store their wine. The presentation of your facility is very important to attracting and retaining this distinguished clientele. Consider taking a modernized but luxurious approach to your facility’s design.

The exterior of your facility has the potential to serve as a marketing piece, showing traffic what you offer and enticing them to visit and rent from your facility. Because of this, you should have pretty landscaping that’s well maintained and inviting. Consider adding seating areas, patios, and water fountains for customers to enjoy.

The aesthetics, quality, and design of the inside of your self-storage facility are just as important. Consider adding displays, fine art, and carpets that set the tone for your facility and lure in those wine aficionados. Common rooms that can be used for gatherings, tasting rooms, or meetings are a great addition. Both walk-in units and locker units are popular choices for wine storage. Locker units have the unique benefit of bringing in more rental revenue per square foot since several units can be stacked on top of one another.

A great way to class up your storage units and take them to the next level is with a perfect medium between wood and steel. The French Oak collection offers a rich wood-like façade but is actually printed steel. It can be used indoors and outdoors, on flush or corrugated panels and roll-up doors. Backed by a 20-year warranty, the French Oak collection is a durable upgrade that offers a luxurious look to your storage or wine units.

3. LOCATION

Location is critically important to any self-storage facility. After all, it’s the one thing an operator can’t change over time. It’s no secret that location can make or break your retail business. According to the SSA 2020 Self Storage Demand Study, 62% of tenants rented units 15 minutes or less from their homes. It is simple, convenience is key. You want to make sure your facility is in a high-traffic, prime location to attract different and desirable segments. A good retail location is also a huge form of marketing for your business, as it announces the facility and its offerings to every person passing by in a ‘show and tell’ type of manner.

The location of your wine storage inside of your building is also important. Not only do these customers want secure and convenient, 24/7 access but they also want a climate-controlled building that perfectly preserves their wine. You may not realize it, but natural light can have a big impact on wine storage. It’s important to have a properly insulated, well-designed building that prevents air movement and condensation. Locate your wine storage in an area inside of your building that isn’t exposed to direct sunlight. This will help you maintain the desired wine storage temperatures and humidity levels while minimizing the work and utility costs it takes to achieve them.

4. CLIMATIZATION

You don’t have to be a wine connoisseur to know the proper temperature is key in keeping wine in perfect preserved condition, making climate control the most critical aspect of wine storage. The wrong temperature can cause your wine to age too quickly and the incorrect humidity can affect the bottle’s label and cork. If you’re investing in wine storage at your facility, no expense should be spared for proper climatization. Consult with the wine industry and refrigerator experts. You want to make sure your building is well insulated and designed to prevent air movement and condensation. The desired temperature is around 55 degrees, with a humidity of around 65-70 percent. Many facilities bring in smart technology for monitoring refrigeration systems and even invest in backup systems should one fail for any reason.

5. SECURITY

Wine professionals take their collection seriously. When a client spends top dollar for a bottle of wine, they expect their investment to remain secure and well cared for. Many self-storage owner-operators consider adding a separate access point for wine storage customers. This access point should be secure, convenient, and available 24/7 so that the client always has access to their wine collection.

The most popular option for client access to wine storage is through a smart entry system with Bluetooth electronic smart locks. Smart Locks allow the owner-operator to customize access per tenant, see exactly who’s accessing their facility and when, and take advantage of the many benefits that come with Bluetooth technology. When smart locks are installed on the various access points and unit doors around your facility, it will take security to the highest level, which is very important for the wine collector.

With smart entry access, tenants can access the facility and their unit door with their mobile phones. If someone from the restaurant is needing to pick up some wine, the tenant can share a digital key. Shared keys are customizable, revocable at any time, and completely tracked and monitored during the key sharing period. Each unit door is also equipped with a thermal motion sensor, so you’ll know immediately if someone is tampering with a unit. Smart locks even come with tenant wayfinding features, one-touch entry, remote management, and other benefits that are helpful for the client and owner-operator.

6. LEGALITY

There are several legal considerations when adding wine storage to your building. First, you’ll need to find out if there are any state or federal regulations that impact your facility. If there are regulatory agencies in your marketplace, such as the local alcohol-control board, you may need a permit to operate in their jurisdiction.

It’s also important to make sure the liabilities associated with your wine storage are covered thoroughly in your rental agreement. Many self-storage associations offer thorough rental contracts that owner-operators can adopt for their own facility. It’s becoming more and more common that these rental agreements have language including ancillary services such as wine storage. You may notice things like the non-liability of owner and the power of space protecting the owner from loss or damage to wine being stored at their facility. Be sure to contact your legal representative when considering wine storage, as the language requirements vary by state.

7. MARKETING

After you’ve done all of your homework and decide that wine storage is for you, keep in mind that the rent-up process may take longer than traditional storage units, as it applies to a much smaller market. In addition to traditional marketing approaches such as paid-per-click ads and social media posts, consider joining local wine tasting clubs and regularly calling on restaurants, country clubs, and retailers in your area to spread the word. You can also build awareness by advertising in upscale publications or participating in local wine expos. Don’t forget to connect with your customers and educate them on the many benefits of properly storing their wine bottles.

HEAR IT FROM THE WINE STORAGE EXPERTS!

Hoover Self Storage is a converted 146,875 square foot facility that has 32 climate-controlled lockers dedicated to wine storage. Bill and Jack Nix had determined their market could support this type of service, and they set out to build a façade that set the standard for the wine storage market.

The City of Hoover threw out some stringent zoning ordinances but the Nixes met them head-on. Their architect designed an impressive façade, using materials that allowed the proposed facility to appear more like an office building than a self-storage building. They overcame tax dilemmas, water main issues, and soil removal. But their crowning achievement came when they convinced city administrators to re-write the code to increase the signage allowance from 20 square feet to an impressive 200 square feet. Their persistence paid off, and today Hoover Self Storage is booming. They've won a Beautification Award, partnered with Chick-Fil-A on a successful rental promotion, and even host the Hoover Police Canine Unit as a tactical training site.

Selecting the right vendors was critical to their success. While visiting a major industry tradeshow in Las Vegas, the Nixes saw the Janus French Oak Collection, a steel laminate that offers a wood-like façade for wine storage and public areas. “We were immediately impressed with the French Oak finish, but it was the reputation that Janus has in the industry that really solidified our decision,” says Bill. The Nixes selected gloss white doors, soffits, locker systems, and hallway components for a fresh, clean appeal. “We always had a reliable go-to person at Janus, and all our needs were quickly met,” says Jack. The French Oak collection proved to be an impressive landscape for other design elements in the 32-wine locker area, including artwork, carpeting, and chandelier lighting. And the room has been allocated for up to 100,000 square feet of expansion. “When the time comes to expand, there’s no question where we’ll go for our doors,” echoes this dynamic father and son team.

Self-storage development remains high despite supply chain challenges, and wine storage has proven to be a lucrative offering when placed in the right community. If you’ve done your homework and the findings support the addition of wine storage, adding it to your current unit mix may be exactly what you need to differentiate yourself from the competition, attract new customers, and maximize your NOI– Let’s raise a glass to that!

Wine storage at self-storage facility

Changing Your Self-Storage Unit Mix?

Click here to learn all the ways you can change your self-storage unit mix with the R3 (Restore. Rebuild. Replace.) Program at Janus International. 

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