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Gabfocus Session | Constructing Your Facility

Constructing Your Facility

Listen in to learn about the average self storage construction schedule, hurdles you'll face, and more!

Unless you're buying an existing facility with no plans for updates or expansions, then getting into the industry means some amount of construction. This is especially true for completely new builds. Thankfully, our expert panelists have the experienced take you're looking for when it comes to self storage construction. Listen in and learn about hurdles you'll face, timelines, and how important it is to choose the right team.

Featured Speakers: Nigel KreftJeremy Rollwitz
Moderators: Tommy Nguyen & Melissa Huff

Category: Construction
Focus: Owners & Operators
Aired: July 28, 2022
Duration: 1:27:17

Overview

If you don't have time to watch the whole Session, here are some of our favorite parts:

  • At 5:55, our panelists open the session by giving advice on how to know when and where to build your storage facility.
  • Answering a question from the audience at 10:20, Jeremy tells us how—exactly—to find a vendor to get a feasibility study done.
  • 13:00, Jeremy and Melissa discuss whether or not to go with your bank's recommended feasibility study vendor.
  • Starting at 15:40, our guests discuss how to know if the market is ready for your to build.
  • At 18:40, Nigel tells us what time of year is best to build for the different regions of the U.S.
  • Jeremy adds at 19:45: Plan for delays.
  • Beginning at 22:40, panelists talk about the differences between new builds, expansions, and conversions.
  • At 28:30, our guests talk about major decisions owners might need to make regarding construction.
  • From 30:35, Nigel breaks down why good communication with your stakeholders and team is key.
  • At 37:43, multistory construction takes center stage with a discussion about the pros and cons of building vertically.
  • 40:10, panelists talk about the pros and cons of climate-controlled storage from an owner's perspective.
  • Starting at 43:15, Nigel breaks it down with a step-by-step guide to building a self storage facility.
  • 49:20, panelists discuss how involved an owner should be in construction.
  • At 53:55, Nigel tells us what red flags signal that an owner should start asking more questions.
  • 56:18 - A material lightning round where Nigel and Jeremy give us their thoughts on different building materials and structures from slab to steel to gates.
  • Our live Q&A starts at 1:06:00, with our guests answering a variety of questions from the audience.
  • At 1:21:48, our experts answer the Question of the Week!

Resources


Question of the Week

We asked our experts: What are the biggest blindspots operators have when starting a construction project?

Yea, totally agree. It's a time and cost equation. So go in eyes wide open. Understand nothing is perfect. Construction has its hurdles... Construction is not a quick process. From feasibility to door opening, it is not a fast process. And a lot of those hurdles are put in by local municipalities." - Nigel Kreft

Overall cost, time on the project, delays, planning to get it right. Those are all—generally, if you're new in the industry, those are some blinds spots you'll see." - Jeremy Rollwitz

Gabfocus Takeaway

Construction can be pricey and time-consuming. You might think that you've budgeted time and money properly, but you should always expect unforeseen delays and costs. Put together a great team of people with experience in the self storage industry because they'll be able to give you better estimates and keep you as close to your target budget and timeline as possible.

And please, get a feasibility study!

What are Gabfocus Sessions?

Gabfocus Sessions are virtual workshops for self storage owners, managers, and operators. Brought to you by the team behind Gabfest: StoragePug and Affordable Storage Guys Management.

Each session features hand-picked industry pros who will dive deep into relevant topics surrounding our industry, share best practices, and explore trends in the market. It's our hope that these sessions help you navigate your self storage business better during these uncertain times.

Want to learn more about self storage? Join us on select Thursdays for Gabfocus.

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Questions Answered in this Session

  1. When and where to build?
  2. How do you know when building is right for you?
  3. How do you know when your business is ready?
  4. How do you know when the market is right?
  5. Is there a good time of year to build?
  6. What to build?
  7. What are the big differences between expanding, converting, and building new?
  8. What are the major construction decisions an owner has to make?
  9. How do you determine the amenities and unit mix of your builds?
  10. What are the pros and cons of multi-floor buildings?
  11. What are the pros and cons of climate control buildings?
  12. Can you provide an overview of the whole building process? What is each major step?
  13. How involved should an owner be with a build? How much does an owner need to know?
  14. Material Lightning Round
  15. What are the biggest blindspots operators have when starting a construction project?

Live Poll Results: What tools are most important to provide to your employees?

poll-manager-skills

 

 

Meet your speakers

Nigel-Kreft-square

Nigel Kreft

Storage Structures

Website: https://storagestructuresinc.com/
Email: nigel@storagestructuresinc.com
Jeremy-Rollwitz

Jeremy Rollwitz

The Jenkins Organization

Website: https://www.jenkinsorg.com/
Email: info@jenkinsorg.com

Got questions or comments for the panelists?

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Resources from this session

Awesome Quotes

“Once your operation is in place, you can become more dynamic with your pricing, but that requires data. You need some method of being able to record the data that you need to know whether your price is in the right place - whether you need to move it up or start giving some concessions.” - Warren Lieberman
“I never want to downplay to what someone else is doing. I'm better than they are, then I'm going to be worth a higher price. That's what value is. If you go out to a restaurant and get really good service, would you go back? Yes! What if it was pricier? You'd still go back because you got better service and a better product.” - Jim Mooney
"It's good to be informed on your competition. I don't want to ignore them, but I don't want to respond too strongly to them either." - Warren Lieberman
"We did a survey of 10,000 facilities on their pricing. We found out that two-thirds of those operators didn't change the price of a single unit of the course of a month." - Warren Lieberman
“Rate increases and value pricing are the number one ways to grow your revenue.” - Jim Mooney
"Tenants in more convenient units tend to be less price sensitive." - Warren Lieberman
"The size of the unit is only one aspect of what people are willing to pay for." - Warren Lieberman

Highlights

Foundational marketing strategies to have in place - whether leasing up or stabilized:

  • Website
  • Set up listings (Yelp, Google My Business, Apple Maps)
  • Social Media
  • Establish Local Partnerships

Lease up marketing strategies:

  • Lead Generating Strategies (like digital ads)
  • Aggregators (Sparefoot, Storagefront, etc.)
  • Awareness Campaigns (like billboards, flyers, and sponsorships)

Your average customer value
Find the average stay length of all tenants. Next take your economic occupancy and divide by how many units you have. That will tell you what the average customer pays.

Multiply the average length of stay by what the average customer pays, and that's the average value of a customer.

For example, if a customer stays for 12 months and pays $100 per month, then their value is $1,200.

Your average lead value

Figure out your closing rate (or conversion rate) i.e. how many leads do you turn into tenants? Multiply that by your average customer lifetime value to figure out what your leads are worth. 

Pro Tip: see which lead sources are converting the best. It may be that certain sources have a higher conversion rate, so those leads are worth more to you than a source that barely converts.

Typical Lease-up timeline

According to our panelists, it's typical to see a 3-4% increase each month, putting your facility at 36% after the first year, and 72% after the second.

Alternately, you can look at your lease up goals through the lens of your units, aiming for 20 units rented per month.

For Nick and StorageMax, they pro forma their economic occupancy at 85% with their sweet spot at 92%.

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