Space-Age Designs, Part l

Self-Storage has been one of the fastest growth industries to enter the American economy in the past 30 years. Its success can be attributed to a variety of factors, but one of the main reasons has been the industry's ability to evolve quickly as more of the public has been educated to the value of its use. As public awareness increased, storage demands increased, which in turn gave rise to the tremendous growth of both institutional and private self-storage development.

This nearly instantaneous growth in market competition sparked the need for specialty vendors and new technology to support the industry's continued expansion. The final evolutionary step is the search for the most cost-effective means to develop the most marketable facility while maintaining the highest return on investment. Since the self- storage product is storage space, the quest to develop the most economical, marketable facility centers on the design of its components. Nothing in the 30-year history of self-storage is more evident of this quest for success than the evolution of self-storage design.

The Evolution of Basic Design

The first- and second-generation self-storage facilities were those developed before 1970 and by the mid-1980s, respectively. The vast majority of these facilities had site plans that incorporated very poor land utilization, and unit mixes that were not based on local demand or placed for the best use by the customer. The storage buildings were a mixture of expensive commercial designs that incorporated components requiring extensive maintenance over time. In addition, the designs did not allow for the flexibility of changing the unit mix without very expensive building modifications.

In comparison, today's self-storage facilities have economic land coverage, maximizing land utilization and lowering the cost of the land vs. the facility's net rentable square footage. The vast majority have standardized their unit mixes based on the demands of the market, and have user-friendly positioning of unit sizes based on commercial and residential users. These same facilities have "master-planned" any remaining land to facilitate future phase expansion. Today's building designs are economically feasible, since they incorporate the most available local building products and the industry's most cost-effective building technologies. Current designs utilize "long-term, maintenance-free" design components, and have incorporated maximum flexibility for future unit-mix changes or other building modifications.

Driving Factors for Evolution

As you can see, there are major evolutionary design differences between those first- and second-generation facilities and today's self-storage properties. The main causes of this design evolution are centered around a constantly changing market, which has given evidence to three primary driving factors.

The first market-driven factor has been the ever-increasing cost of land. Caused by increased competition and the market's maturity of other real-estate development, the availability of economically feasible sites has greatly decreased. Thus, as the land increases in cost, the self-storage developer has been forced to maximize land coverage to decrease the cost of the land to his net-rentable square footage. As a result, cost-effective designs have become even more important--along with "maintenance-free" design-component considerations and building-design flexibility.

The second driving factor for evolution has been the increase in cost for building-design components. As many real-estate markets have "heated up," so has the demand for building materials and labor. Therefore, today's designs have been incorporating components that are both locally and nationally available to keep cost in line. For example, the cost of using concrete tilt panel walls may be prohibitive when prices for concrete are $90/cyd vs. other parts of the country where concrete is readily available at $52/cyd. In addition, building designs that allow for the use of specialty metal- building contractors vs. a commercial steel contractor could result in a savings of $3 to $4 per square foot.

The last driving factor has been the constantly changing jurisdictional requirements by local, state and federal government agencies. Zoning departments increasing setback distances, fire marshals increasing fire-lane widths, and new landscape ordinances increasing area percentages are just a few examples of jurisdictional changes that have greatly affected site coverage and increased land cost per net-rentable square foot in some markets. In addition to these factors are the building-code changes for fire separation, fire-code changes requiring fire sprinklers, and the zoning departments' requirement for buffering adjacent land.

Site Planning

In today's self-storage marketplace, the first key to having the most marketable and economically feasible facility is proper site planning. And the key to proper site planning is an understanding of the cost variables. Everyone in real estate has heard the old saying, "The three keys to success are location, location, location." For successful site planning, those three keys are the cost of the land, site coverage and the cost of site improvements. These three keys are the most important elements, not only to successful site planning, but also for the insurance of the facility's greatest economic potential.

As discussed, land prices will continue to increase and the availability of good sites will continue to decrease. As this market condition continues, most available sites cannot be used for any other purpose than that for which they were zoned--for one reason or another. Therefore, the good remaining retail sites may have an attractive price, but due to natural grades, existing easements, drainage, utility requirements and a host of other factors, the price for the land may be well beyond affordable for self-storage development. Understanding the normal cost of developing a self-storage property, along with the rents necessary to justify this expenditure of capital, is the key to determining what you can pay for the land along with any additional cost associated with its purchase.

With the impact of jurisdictional changes and normal zoning requirements, site planning to maximize site coverage will be the key to economic success. The more net-rentable square footage per land area (or increased site coverage), the less the cost of the land is to the development. The lower cost of the land over the facility's net-rentable square footage, the greater chance of site feasibility and the property's chances for the highest return on investment.

The last key to proper site planning is understanding the cost of site-work improvements. Site work normally includes grading, site concrete, paving, retaining walls, storm drainage, water and fire, sanitary sewer and landscaping. In regards to normal facility construction, site improvements have the greatest variable in cost, ranging from $4 to $10 per gross building square foot. Therefore, determining at least an estimate of what these costs are going to be is essential in determining, not only the site feasibility, but also the proper layout of the buildings.

Ensuring the Most Economical Site Designs

Knowing this, the question then becomes, "How does one ensure the most economical site plan?" If a new developer has limited experience in self-storage development, the best way is to hire an experienced design/builder, architect or civil engineer. However, it is advised that the new developer not leave everything to the professional. Do your own homework:

1. Review how other facilities in the market are site-planned.
2. Obtain all local zoning and landscaping ordinances.
3. Check with the local building inspections department and get approved building codes with any city amendments.
4. Visit with the fire marshal and obtain approved fire codes and any city amendments.
5. Check with local utility departments to determine the availability of utilities, and if there are any unique requirements or hidden costs.

Once fully studied by the developer, the gathered information should be reviewed with a hired professional to ensure site compliance. Once a preliminary site plan has been generated, it is recommended that it be walked through the jurisdiction's departments to determine if there are any further problems. It is also recommended that a follow-up letter be sent to each department outlining the things agreed upon during those meetings.

Site-Plan Considerations

There are a variety of site-plan considerations the developer and his design professional need to make. They should consider what will effect the final cost of the facility and how user-friendly it will be to the customer. These considerations set the stage for the facility's ultimate success. Those site-plan considerations, which have the greatest effect on the typical facility costs, are as follows:

1. Site Grading vs. Building Layouts: How the storage buildings are laid out on the site in regards to existing natural grades can greatly increase or decrease grading cost.

2. Site Grading vs. Building Types: When excessive natural grades exist, the choice of building types, such as "split-level" buildings, can greatly reduce grading cost while increasing net-rentable square footage on the site.

3. Site Grading vs. Retaining Walls: Always try to design site elevations that will eliminate or minimize the use of costly retaining walls. If there is no way to eliminate them, investigate the market's most economical types of retaining walls and utilize them.

4. Asphalt vs. Concrete Paving: Due to present demands, the cost of concrete has risen from 50 percent to 70 percent in most markets. Presently, the cost of concrete paving ranges from $2.25 to $3 per square foot vs. asphalt that has prices ranging from $1.40 to $1.65 per square foot. This variance between the two has given rise to the increased use of asphalt when concrete paving is clearly the best choice. Considerations should be made in using both--asphalt for the main drives and concrete paving for turning radiuses.

5. Storm Drainage: It is always more economical to design for surface drainage than underground drainage; however, sometimes underground drainage is the only option. When this occurs, ensure building and drive elevations are designed to eliminate as much underground storm-drainage piping as possible. Always investigate and discuss every cost-saving option with your design professional.

6. Detention/Retention Basins: If they are required in the storm-drainage plan, earthen basin with 3-to-1 slopes are by far the most economical; however, they require more land area. Analyze the increased cost of vertical concrete basins, which will also increase net-rentable square footage vs. the use of earthen basins, which will cause a net-rentable square footage loss but will have greatly reduced cost.

7. Fire Service: Once an investigation has been made by your design professional as to the location and number of fire hydrants required, determine if "looped "or "dead-end" fire-service lines are required. The looped system will double your cost. Also, check with the local fire marshal to determine if detector-check values with vaults are required. They will increase your cost by as much as $20,000 and will affect the building layout.

8. Sanitary Sewer and Domestic Water: The location of existing sewer and water improvements can greatly affect the cost of tapping into them as well as the layout of the storage buildings, especially if the local jurisdiction requires easements. This should be thoroughly investigated.

Site-plan considerations that ensure user-friendliness are just as--if not more--important than those pertaining to a facility's economic feasibility. These site-plan designs increase the facility's marketability and competitiveness. The most important of these to be considered are:

1. Wide Street Approaches: Always have at least a 25-foot or wider entry approach into the facility. Wide approaches assist large trucks, especially rental-truck entries by inexperienced drivers. They will also eliminate damage to improvements located around the entry approach.

2. Parking: Lay out parking spaces so they have minimal impact on ingress and egress traffic through the facility's security-gate system. Ensure they are as close to the office as possible and adjacent to sidewalks. Standard parking spaces are 9-by-18 feet. However, increasing the parking space width to 10 feet will be greatly appreciated by potential customers.

3. Entry-Control Systems: Always design the facility entry area around the entry-control gate system. Ensure that keypads are located to allow for the stacking of at least three cars where they will not interfere with traffic and parking back-outs.

4. "User-Friendly" Unit Placement: Locate larger units on fire lanes and/or the widest drives so they are more accessible to commercial customers. Try to segregate unit sizes, placing small and larger units in different areas. Don't place smaller units across from climate-control buildings since they will increase the amount of drive traffic for climate-control customers who have to use hallways and congregate around building entrances.

5. "User-Friendly" Hallways: Design hallway entrances with either 5-by-10-foot or 10-by-10-foot covered staging areas. Locate the larger units closest to the building entry while increasing the distance from the entry for units as they get smaller. Try never to have hallways more than 100 feet between building entries or elevators.

6. Increased Drive Widths: Be sure to use fire lanes, which are usually at least 30 feet in width, to maximize traffic flow through the facility. Drives with widths of at least 25 feet are preferable and will decrease building damage in the long run.

7. Turning Radiuses: Turning radiuses are most often determined by the fire department to have a 25-foot inside and a 50-foot outside radius. But in all cases, ensure that there is at least a 30-foot distance between the buildings and curb on all turning radiuses.

8. Site Amenities:  Locate trash dumpsters so they are convenient for customers while also providing straight-line access for service trucks in order to prevent damage. It is recommended that 6-inch, concrete-filled ballards be placed on all building corners to eliminate building repairs.

Summary

Over the next decade, the self-storage industry will evolve at a much greater pace than the preceding 30 years. As market competition continues to increase along with land and construction costs, there will never be a more important time for the successful quest of the most marketable and cost-effective facility design than in the near future. The key to success in this new decade will be the developer's understanding of the driving factors that have caused past evolution in self-storage design. This knowledge will set the stage for the developer and his design team to ensure their site planning incorporates the most economical improvements while maintaining the facility's maximum marketability and competitiveness.

Mike Parham is the owner and president of National Development Services Inc. (NDS) of Bulverde, Texas, which has designed and built more than 150 self-storage properties since 1980. The company's accomplishments include receipt of the "Facility of the Year" award in 1990, 1991, 1994 and 1996, and the "Design Excellence" award from Mini-Storage Institute in 1992. For more information, visit www.ndsinc.com.