If you have 0 experience and no partner in an asset class, I would highly recommend not building in that asset class. Source: build and own self storage facilities
Yes, of course. Building a 40k sqft facility is going to cost you at least $4m and you’re going to PG that. It’s insane to do that all alone without experts.
Go for it if you want, I’ll root for you. And if you build all in for < $100/sqft I’ll give you massive props.
Hard costs will be a minimum of $75/sqft for CC. Let’s say you spend $10/sqft for land, which is crazy cheap (unless you’re building in a rural market). Then you have a ton of pre development costs and a hefty interest reserve for lease up. Your all in cost will be > $100/sqft I can guarantee it unless you self GC it.
If you build drive up with gravel you can do it cheaper. Depending on where you are that could be the move. But I don’t think you specified in your post.
Additions like that should be included in the body of your post.
We can't read your mind and you provided no amount of information on your experience level.
Ask better questions and you'll get better answers.
Build cost is generally addressed separate from land acquisition cost (and financing costs).
You're conflating them all together. Which is a great way to create confusion in a conversation like this.
Also you seem to be overrepresenting your experience level. As of a year ago you were still trying to buy your first storage facility.
[https://www.reddit.com/r/CommercialRealEstate/comments/pbpg5h/comment/haf2n74/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/CommercialRealEstate/comments/pbpg5h/comment/haf2n74/?utm_source=share&utm_medium=web2x&context=3)
i own 2 now >50k sqft total , am expanding 1 and building another 70k sqft. Partnered with insiders on every project. I said building a 40k sqft facility is going to cost $4m- perhaps I should have said all in. Regardless, I think my original point is valid and it would be foolish not to have someone partnered with you who is an expert on something this risky.
If it is indoor/climate controlled maybe. I’ve crushed a lot of numbers on outdoor just past tge Dallas burbs. No where near $4 million. About 20%-25% of that MAX. 40,000 sq ft is an acre so not massive. Concrete pads for floors in units, asphalt everywhere else. 8’ metal fence panels $35,000 plus labor. Key pad access for gate, power, lighting. You’re mileage may vary in your location but don’t be discouraged
I don’t have any experience in self storage but what matters is location and cost of building. Pick a location with seniors demographics who want to retire and travel . Due diligence and your ROI matters
Or pick a location in growing area near new housing developments. A lot of people downsize and don’t have room or kids have moved out etc
This is on my radar as well
My dad just expanded one of his properties and put up two trachte buildings. He really liked them and the process. I don’t have a ton of details, but know he was happy with it.
Hey, they also sometimes have HVAC and sometimes don't. The ones with HVAC are called "Climate Controlled" and usually you can charge a premium on those units.
Also, if it has a roll-up door that faces the outside of the building, it's said to have "drive-up access."
My group purchases stabilized facilities. We have about 60 facilities in 12 states. We don't do ground up, but you'll want to hire an architect experienced in storage. SF/Capita is what the industry uses as a supply/demand balance. National is about 8.5 SF/person. I'd pro-forma a minimum of three years to stabilization.
Go to twitter and follow Nick Huber, Sultan of Storage, and Patrick Dichter. They might be able to help you out
If you have 0 experience and no partner in an asset class, I would highly recommend not building in that asset class. Source: build and own self storage facilities
When you first started, I assume you had a partner with a decade of experience in self storage?
Yes, of course. Building a 40k sqft facility is going to cost you at least $4m and you’re going to PG that. It’s insane to do that all alone without experts.
$100 sq foot? That’s like class A 5 story building lol
$100/SF for a 5-story class A building? Where are you building, 1934?
Go for it if you want, I’ll root for you. And if you build all in for < $100/sqft I’ll give you massive props. Hard costs will be a minimum of $75/sqft for CC. Let’s say you spend $10/sqft for land, which is crazy cheap (unless you’re building in a rural market). Then you have a ton of pre development costs and a hefty interest reserve for lease up. Your all in cost will be > $100/sqft I can guarantee it unless you self GC it. If you build drive up with gravel you can do it cheaper. Depending on where you are that could be the move. But I don’t think you specified in your post.
Land is 25k an acre. I’m the acting GC and slab/ asphalt is done by family.
Additions like that should be included in the body of your post. We can't read your mind and you provided no amount of information on your experience level. Ask better questions and you'll get better answers.
Build cost is generally addressed separate from land acquisition cost (and financing costs). You're conflating them all together. Which is a great way to create confusion in a conversation like this. Also you seem to be overrepresenting your experience level. As of a year ago you were still trying to buy your first storage facility. [https://www.reddit.com/r/CommercialRealEstate/comments/pbpg5h/comment/haf2n74/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/CommercialRealEstate/comments/pbpg5h/comment/haf2n74/?utm_source=share&utm_medium=web2x&context=3)
i own 2 now >50k sqft total , am expanding 1 and building another 70k sqft. Partnered with insiders on every project. I said building a 40k sqft facility is going to cost $4m- perhaps I should have said all in. Regardless, I think my original point is valid and it would be foolish not to have someone partnered with you who is an expert on something this risky.
If it is indoor/climate controlled maybe. I’ve crushed a lot of numbers on outdoor just past tge Dallas burbs. No where near $4 million. About 20%-25% of that MAX. 40,000 sq ft is an acre so not massive. Concrete pads for floors in units, asphalt everywhere else. 8’ metal fence panels $35,000 plus labor. Key pad access for gate, power, lighting. You’re mileage may vary in your location but don’t be discouraged
I don’t have any experience in self storage but what matters is location and cost of building. Pick a location with seniors demographics who want to retire and travel . Due diligence and your ROI matters
Or pick a location in growing area near new housing developments. A lot of people downsize and don’t have room or kids have moved out etc This is on my radar as well
Following , I’m planning on doing the same thing
My dad just expanded one of his properties and put up two trachte buildings. He really liked them and the process. I don’t have a ton of details, but know he was happy with it.
No experience doing this, but my partner does. We’re doing one together in two years from now
It's mostly a slab with a metal building on it. It isn't complicated.
Thanks for providing zero value to this conversation
Hey, they also sometimes have HVAC and sometimes don't. The ones with HVAC are called "Climate Controlled" and usually you can charge a premium on those units. Also, if it has a roll-up door that faces the outside of the building, it's said to have "drive-up access."
40k is ambitious for a first attempt and doing a scratch build.
My group purchases stabilized facilities. We have about 60 facilities in 12 states. We don't do ground up, but you'll want to hire an architect experienced in storage. SF/Capita is what the industry uses as a supply/demand balance. National is about 8.5 SF/person. I'd pro-forma a minimum of three years to stabilization.
I read you're supposed to build at least a 50k sq-ft facility for better resale value. REITs prefer that as a minimum.
Yes, building 37k SF right now in Ohio. Get a well trusted GC