he additional profits from ground-up self-storage development make them very attractive. Successful projects start long before construction, with confirmation of data from well over a dozen data points to make sure you are choosing a winning location.

The following information is provided for discussion purposes only and will change based on individual risk tolerances, available cash, loan type, loan interest rates, construction cost, location, and other factors. Conversions of existing buildings to self-storage have many of the same data review requirements as land parcels.

Many parcels are going to fall in the maybe or long-shot range. When they do, it takes a considerable amount of time, additional research, and multiple preliminary designs to see if they are worth making an offer on. Without this significant additional research pre-contract, your money and time during the contract due diligence will be at higher risk.

Many developers can’t afford to spend days or even weeks reviewing many marginal sites. Sometimes you must pass quickly on a “maybe” parcel so that you have more time to look for a winner. You must establish your data limits where you are going to quickly pass to save time. In the end, it can take a review of over 100 parcels and three or more offers to purchase one great site. Again, there must be a line that we should quickly say no and move on, otherwise land search can be exhausting and lead to failure.

The following are major data points and their yes, no, and maybe ranges. They are based upon a typical 6-acre, single-story, 80,000-gross-square-foot (approximately 62,000 net rentable) development that helps determine the final evaluation. If you have a low- or high-risk tolerance or high- or low-experience level, these data points may need to be adjusted.

Yes ++: Zoned for self-storage, permitted use. Final approval by staff only.
Yes +: Zoned for self-storage, permitted use. Final approval by citizen commission/board with a public hearing.
Yes: Zoned for self-storage, permitted by special exception. Final approval by the citizen commission/board with a public hearing. The commission has leeway to confirm that the use fits in with the neighborhood and requires additional design requirements not specified in the regulations. It’s important to have the city staff support your project and design features.
No: The property requires a zone change. Typically, this can cost $10,000-plus and four months of time, and there’s an extremely high likelihood of denial.

Assuming no wetlands, floodplain, easements, or steep slopes, etc. (add a half acre if no sanitary sewer).

Yes: 6-plus acres for 60,000-plus net rentable square feet.
Maybe: 4 to 6 acres but could end up with less rentable square feet.
No: Less than 4 acres (unless you are building multistory).

Yes: City water and sewer available on site.
Maybe/No: If not available, more land acreage will be required. Research local sprinkler building codes.

Yes +: Greater than 30,000 people.
Yes: Greater than 20,000 people.
Maybe: 15,000 people if there’s no competition in the three-mile radius.
No: Under 15,000 people. There’s often too long of a rent-up time, or this population size will only support a small facility.

Yes: Competition achieved rental rates over $150 per month, so you can charge more.
Maybe: Achieved rental rates $130 to $150 per month if you have done the research and have a game plan that allows you to charge $160-plus per month and the land may be purchased at an exceptional price.
No: Achieved rental rates under $130 per month.

Note: This is dependent on your cash investment, rate of return required, and is subject to change based on land price and loan interest rate. Not all self-storages are competition, so you need to visit each one and do a detailed evaluation. “Achieved Rental Rates” refers to the average actual rental income, not advertised web or in-store rates. “Achieved Rental Rates” represents the average rates paid by tenants after factoring in discounts, rate increases, and other pricing adjustments.

Yes: The competition is full and has great rental rates; there is limited pipeline facilities and sufficient population.
Yes: Total square footage per person, including existing, pipeline, and your self-storage facility, is 8 square feet per person or less.
Maybe: Eight to 12 square feet person, including existing, pipeline, and your facility. You’d need to check the competition’s rates and occupancy.
No: Unless there is a very high population, 12 square feet per person, including existing, pipeline, and your facility.

Note: Facility occupancy and rates are a better determination of demand. Some existing facilities with a detailed site visit and review may be determined not to be competition and need not be included in the square feet per person.

These answers are assuming typical site costs, no extreme interest rates, and you have $1.5 million cash to develop an 80,000-gross-square-foot, single-story facility. In the end, a feasibility study including a detailed P & L projection by your feasibility expert must be done.

Yes: $500,000 to $800,000 goal.
Yes: $800,000 to $1 million if you pre-confirm all land is usable and the land is flat with no unusual or municipal roadway or utility construction required.
Yes: Over $1 million when the competition has high rental rates, the facilities are full, and you have over $1.5 million cash to purchase the land and have design plans completed before the bank loan.
Maybe: Slightly over $1 million and do not meet the above yes items.
No: Over $1 million and you only have $1.3 million to invest.

Yes ++: Greater than 30,000 cars a day.
Yes +: Greater than 20,000 cars a day.
Yes: Greater than 15,000 cars a day.
Maybe: 10,000 to 15,000 cars a day.
No: Less than 10,000 cars a day.
No: Dead-end streets or good traffic counts but not visible from the street.

Note: Highway traffic is a bonus but typically not to be included in your traffic count.

Yes: Good, unobstructed view and easy access.
Maybe: Mostly good, unobstructed view.
No: Visibility from the main road is obstructed.
No: Difficult access.

“Maybes” take a lot of work and often serious assumptions that many people are not willing to take. “Maybes” take extra work once open to make the assumptions come true. Some people should never go to the next level on a “maybe.” Others are more than willing to take the chance and accept the extra time and cost of turning a “maybe” into a “no” or a “yes.” A “maybe” can be like a zone change; they feel good if you get approved and terrible if you get denied because of the time and money spent.

One problem with the “maybe” group is it takes a lot of work to turn it into a high “maybe.” Then, to go to the next step, you take a chance and spend $3,500 to $10,000-plus to have the contract prepared, third-party feasibility study, etc. It will become a learning experience. Even if it is a go, it could be for a limited-sized facility and a longer rent-up time frame.

Of course, some data points are more important than others. Sometimes a single data point, like low population, can sink a site, so check the easy data points first.

How you evaluate a location for self-storage development is more than just a numbers game. While it is true that gathering traditional empirical data, such as demographics, zoning, acreage, traffic, household income, competition data, etc., is critical, you must visit every location and the competition early on. The emotional data you obtain from this in-person visit can often trump the empirical data. (More on emotional data coming soon.)

Gathering comprehensive data prevents missteps and strengthens your case for financing and approvals. To that end, the numbers and hard data matter. However, it is not a complete picture. The combined empirical and emotional data collected ultimately will help guide you to viable locations for self-storage development. Building a strong and experienced team early on will help you analyze the data and help you determine your acceptable parameters. Data-driven decisions now lead to successful and profitable self-storage projects later.