Where to Build Your Self Storage Facility (2024)

February 14, 2023

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7 min

If you’ve been thinking about building a self storage facility, you are not alone. Self storage development has been on the rise for well over a decade now.

But if you’re going to build a self storage facility, you can’t just build it anywhere. More than ever before, the location of your self storage facility is likely the most consequential decision you’ll have to make.

This is a choice that could determine whether your foray into storage is a success or a failure. It may even determine whether or not you can secure adequate funding to begin with.

To help you out, here are all the things you should consider when trying to decide where to build your self storage facility.

(This post was updated in 2023)

 

How to Choose a Location to Build Self Storage

  1. Build self storage near people
  2. Zoning for self storage
  3. Get a feasibility study
  4. Make sure you have plenty of space
  5. Is the property accessible?
  6. Aim for high visibility
  7. Find level ground to build on

Finding the right place to build your self storage facility isn’t always easy. But it’s one of the most important decisions you can make.

It's right up there with (or even above) choosing the right software.

After years of the industry booming, it’s an understatement to say that competition is fierce. Gone are the days when you could open a storage facility almost anywhere with virtually any amenities and expect success.

Let’s take a look at each of these considerations in more detail below.

1. Build Self Storage Near People

Did you know that 62% of the nation’s self storage customers travel under 20 minutes to reach their storage unit from home? 

a pie chart representing the data from the bullet points below

How far do self storage customers travel to reach their storage unit? Here are some quick stats:

  • 30% of customers travel less than 10 minutes
  • 32% of customers travel 10 to 19 minutes
  • 19% will go as long as 29 minutes
  • Only the remaining 19% of customers travel 30 minutes or more

Now, this doesn’t mean you can only build a storage unit business in cities and other heavily urbanized areas. A self storage facility can be very successful in a more rural area so long as the market conditions are right and the right location is chosen. 

After all, rural customers tend to be willing to travel a bit further to reach their storage unit.

One trend to keep in mind, though, is that—according to John Chang of Marcus & Millichap—data shows that millennials are visiting their storage units far more often than the baby boomer generation.

And that’s big considering that millennials are currently the largest consumer generation, and more visits mean being closer to the facility is even more important.

During our State of the Industry 2023 Gabfocus event, John Chang painted an interesting picture of self storage’s largest customer demographic: “[Millennials] are visiting the property more often, they’re more likely to use the space, and they’re using more of the space.”

John Chang Quote from the above text

With millennials in their 30s and soon their 40s, home ownership and settling down are in process or on the horizon. These customers want to visit more often to grab their bike out of storage or their kayak or other items that see frequent use.

You can look towards markets where they’re likely to settle down—looking at shifts in the job market and population migration patterns—and build your storage facility accordingly.

This isn’t just important on a national scale, either. Because your customers will likely come from within a one-to-five-mile radius, you can even look at migration trends within your city limits to make an informed choice about where to build your storage facility for long-term success.

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2. Zoning for Self Storage

In November 2022, Public Storage and the Atlanta Botanical Gardens entered a land trade deal along the Atlanta Beltline.

The catch?

The Gardens had to get their land zoned for self storage before Public Storage would accept the trade.

Getting land rezoned is one of the biggest headaches a new self storage owner could face. If even one of the nation’s self storage REITs (What’s that? Check this post out!) doesn’t want to gamble on getting land zoned, you can bet that smaller operators will feel even more of a struggle in the zoning arena.

Make sure to look for land already zoned properly for self storage to avoid that problem.

And if you can’t find land zoned for storage in the area you want? Consider a self storage conversion project. Municipalities are more likely to allow an old building to be converted into storage than to have a new one built.

That’s a good way to enter a densely populated area!

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3. Get a Self Storage Feasibility Study

Have a feasibility study done before building a self storage facility.

When you’re starting a self storage business, it’s important for you to know all of the details to make informed decisions.

5 ways ebook

Self storage feasibility studies are carried out by experts in the industry and in parsing the data you need.

In many cases, banks will even prefer (or require) you to bring a feasibility study to the table to secure a loan before building a self storage facility.

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4. Have Plenty of Space to Build

While you want to target a populated area, it’s important to remember that you need ample space to build your facility.

When considering possible locations, look at how much space is available to you. Think about how this amount of space impacts the design of the building and the storage unit mix you can have. 

Pug Pro Tip: Your feasibility study will help you determine what size storage units are in demand in the area, and that can help inform your building’s construction layout.

Also keep in mind that there are obstacles—both physical and intangible—that might make your usable land smaller than the physical land you intend to purchase.

Here is a list of "gotcha" scenarios from Inside Self Storage that can affect how much usable acreage is on a location:

  • A storm-water retention pond is necessary and can quickly eat up half an acre.
  • The wetlands area with its beautiful cattails must be set aside, per city zoning regulations. Often, there will be a buffer area around the pond as well. Say goodbye to another acre.
  • The Army Corps of Engineers' Flood Plain Map shows the far corner of the parcel is in the 50-year floodplain. You can’t build on that ever.
  • Phase 1 and then Phase 2 Environmental Assessment reveals you have petroleum contamination from prior use as a truck-parking lot. Will your lender even consider offering a loan after you spend the money to clean it up?
  • You could lose half an acre for the community’s landscaping or green-space requirement.
  • You can’t build under the overhead power lines that bisect the land. There may be an option, however, for outside vehicle parking if the zoning code allows it.
  • You could be facing new competition. Ask at the zoning or building department if there are any new storage facilities in the pipeline for your target market area.
  • You can’t forget about the mandatory front, back and side-yard setbacks. This will vary by local ordinance but can be anywhere from 20 to 100 feet in many places.
While these scenarios are fictitious and may not apply to your self storage business, they are examples of real things that can happen. And if they do, they’ll eat up your usable land.

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5. Is the Property Accessible?

Imagine this scenario:

You have the perfect location right by a new housing development, across from an office complex, a mile from a major university, and right beside a popular area shopping mall.

Unfortunately, it’s nearly impossible to access the facility. Customers can only get in by turning right off a major road with a median barrier—and your nearest competitor is less than a mile down the other side of the road, where customers from the new housing would have to make a u-turn to reach you. There’s no turning lane to enter, so they have to slow down and turn in otherwise high-speed traffic. There’s only room for one entrance/exit, congesting the access to your facility.

The good news in the above scenario is you’re building a storage unit business in a place with lots of potential customers.

Get the most out of your self storage investment or learn how to get started  today with our Free Self Storage Investing Playbook

The bad news is that you’re not able to build a self storage facility that is accessible. It’s very possible you will lose potential customers just because of how inconvenient it is to reach you.

Accessibility can be a major factor. Make sure you have a solution for it before you build.

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6. High Visibility

High visibility is key.

While it’s critical to make sure your customers can find you while searching online, it’s still a fact that many—if not most—storage customers find a storage facility just because they drive by it daily.

You should aim to build your storage facility on a major road. If you can’t find a piece of land right on such a road? Try to find a location fairly close to the road and install great signage that IS visible to drivers from that roadway.

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7. Find Level Ground

Do your best to find land that is already level.

If your perfect location has uneven topography, there is always the option of grading the land. But this can cost upwards of $44,000 per acre.

land grading cost $44,000+ per acre

That’s an expense you can avoid if you’re able to find land that is well-positioned and already level.

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Location, Location, Location

In all real estate matters, location is the most important thing. This includes deciding where to put your new self storage facility. 

Don’t take the decision lightly.

Examine all the possible angles, come up with several options, and compare them against one another.

In the end, you’ll be happy you took the extra time to pick your location. It will set your business up for long-term success.


Interested in learning more about owning a self storage unit business? Check out some of these great resources!

 

There's more to opening a storage facility than where to build

Check out our investing playbook for all the tips to get you going!

Self Storage Investing Playbook eBook - 2021 - Cover