If you’re a self-storage owner developing a new project, you’re going to have a team of experts to help you find the right property, design it, obtain zoning approvals and build it. These people will perform 90 percent of the heavy lifting, but that still leaves a critical 10 percent that falls on your shoulders. If you don’t do your job, you might find yourself behind schedule, over budget and unsatisfied with the end result—not to mention you might have limited your future profit.
You’re certainly not expected to be an expert in every aspect of development, but you do have to provide your input, ask the right questions, make choices and provide ongoing coordination. To do this, you need to do your own research. You’ll need to spend time with your team of professionals to learn and understand the options that’ll make your facility special.
Your Team
The four key members of your development team are your civil engineer, architect, industry consultant and contractor. If just one of them is even slightly inexperienced, you’ll often run into construction delays, expensive change orders or an inferior product. These experts are often chosen based on a recommendation or simple meeting, but to qualify them, you must conduct an extensive interview to get a true handle on their experience and what they consider important. Ask what isn’t included in their services and what they’ll need from you or others on the team to be successful.
Obtain a list of the last five storage facilities they designed or built. Then visit a couple and interview the owners. Ask if the person met the schedule and budget. Also ask about the quality of the work, supervision and coordination and what could have been done better. Of course, find out if they’d hire the person again and what would they do differently on their next project. Take notes!
Qualifying each expert takes significant time, even weeks, so build your team before you even start looking for land. Visiting existing self-storage sites and talking with the owners or staff will help you develop a list of design features you like and items to include in your project.
Make sure regular meetings are included in the experts’ contract. These will allow you to be part of the decision-making process. You can even require meetings prior to and during the design of certain features.
Remember, there’s no one-size-fits-all approach. One architect might suggest a minimalist office while another advises to build oversized—and neither might be right for your project! You need to review many design items with your experts and consider what’s right for you based on their input and your research, including what you liked when you visited other facilities.
Design Costs and Details
I can tell you story after story in which making development choices based on price rather than experience led to nightmares, including months of delays and cost overruns in the hundreds of thousands. There are many factors that come into play when determining design costs including project location, regulations, land features, size, competition, etc.
For many projects, the civil engineer's site-plan and regulatory-approval process cost from $40,000 to $60,000. The building designs by the architect cost from $80,000 to $140,000 ($2 per square foot, plus or minus). It’s important you present all your personal preferences to your designers up front, otherwise there’ll be an additional cost to change the plans. More important, they’ll cause you a significant increase in construction costs as change orders if they’re not on the bid plans.
A good checklist to the civil engineer is typically more than 30 items long. Some are items he should naturally include but might forget such as a light at the driveway entrance, room for snow between the driveway and fence, a large entrance radius for tractor trailers, or well-placed entrance and exit keypads. Other items the engineer might not think to include are a flag pole, over-the-top landscaping, commercial vacuum, 30-foot-wide entrance drive, a specific type of gate or decorative fencing.
It isn’t enough to label the front fence as “decorative black fence.” Who knows what you might end up with … Possibly even a black chain-link fence or cheap decorative aluminum fencing. So along with the correct plan description, you need to add specifics about the brand name, provide a picture of what it looks like and how to install it. For example, you might write “6-foot decorative black steel fencing; see details on page 5.” It sounds so simple, but I’ve seen fences with no concrete base for the support post or posts too far apart that the first big wind or snow storm will cause them to fail.
If the plans don’t specify that the low-voltage camera, security and HVAC wiring must be encased (in Romex, typically) and out of sight, you could have wires dangling in units, which means you’ll pay extra to have them redone. The devil is in the details.
A lot of money can be lost in construction and it all starts (or fails) with good plans, details and specifications by experienced professionals. You might not be a design expert, but you must take the time to go over the final plans inch by inch, component by component, with your team before they go to bid.
Contract Addendums
The next important planning step is to make sure the construction bid is complete. Too often the contract is a standard American Institute of Architects (AIA) contract or similar one that, in the end, simply states the project is to be built per the plans and provides remedies when there are disagreements. I recommend you include an addendum to go with the typical AIA contract or contractor’s boilerplate to protect yourself. Without additional clarifications, specifications, requirements and dispute resolutions, you might not be protected or get the service you deserve. If things go wrong, you’re the one who’s most likely going to have to pay extra and end up with delays.
So, what goes in the addendum? Remember the long list of features you developed by reading industry trade magazines and visiting several self-storage facilities, as well as any construction problems you’ve heard about from other owners, contractors and vendors. Many of these items won’t be in the plans, or won’t be clear enough, and should be added to the addendum. They can be broken into the following four categories:
Additional design details. Perhaps you’ve recently chosen specific products or brands that didn’t make it into the original design. Maybe you want your flag pole to be 50 feet high rather than 18 as shown on the plan. Perhaps you want the light shield on the top of your vacuum to be red to match the color of your building. A couple of my favorite design stipulations to include are that the contractor will provide and install 4-inch red (vinyl or plank) unit numbers centered over each unit, and clean the building interior and exterior, including washing the walls and floors. Too often, I’ve seen these and many more items left for the owner to deal with at the end of a project.
Non-design items not properly covered in the contract. These include might include permits, payment schedules and percent hold-backs that meet your bank standards, completion schedule date, weekly detailed work schedules for the next two weeks, and general schedule to the completion of the job to be provided. It might also include weekly site meetings with the owner, who pays for test and inspections, and a complete list of all required inspections and tests.
Office specifications. The building containing the office should be started first. This includes the foundation and building erection, with the intent of finishing the office as soon as possible. Many opening delays are because the office isn’t ready.
Conflict resolution. You’ll want to rewrite several clauses in the contract in your favor. Top areas of concern include what happens when there are problems such as delays, poor quality or no supervision. You should also consider what happens if you want to replace the contractor. You might need your attorney for assistance with this.
Even with the support of the right industry professionals, developing a self-storage project will take a lot of planning on your part. However, by following the above advice, you’ll exponentially decrease problems and increase the chances for your facility to meet and even exceed expectations.
Marc Goodin is president of Storage Authority LLC and the owner of three self-storage facilities that he personally designed, built and manages. He’s been helping others in the industry for more than 25 years. To reach him, call 860.830.6764, e-mail [email protected], visit www.storageauthorityfranchise.com. You can also purchase his books on facility development and marketing in the Inside Self-Storage Store.
