Building On Up: Important Factors to Consider for Multi-Story Self-Storage Developments

If you were to ask self-storage developers to name the most difficult aspect to building a facility, most would probably say “finding the right land.” Ideally, you want to build close to dense areas of population, but if you can find a vacant parcel in a mature area, it may be too expensive or small to be financially feasible.

One way to overcome this challenge is to pursue a multi-story project. If the demand is there, building up instead of out allows you to create more rentable square feet on a smaller footprint. What’s more, these properties typically are heated and cooled, which commands higher rent. Here are some other key considerations when developing a multi-story storage project.

Do the Math

Though building vertical incurs higher construction costs, these are ideally offset through increased land coverage and premium rent. Multi-story facilities also typically take longer to break even. Unlike traditional, single-level sites, which can be built in smaller phases as the business grows, a multi-story structure can easily house 100,000 square feet under one roof. This results in a longer, negative period of cash flow during lease-up. Effective marketing can help increase market share and ensure customers find you, but there’ll be a finite number of prospective tenants in any given month, regardless of how much space you build.

The higher stakes of these larger projects make it that much more important to retain the services of an experienced feasibility consultant. Calculations of unmet demand and population growth in your market area will help determine what size facility is reasonable to build. A good consultant can also help guide you in preparing a reasonable forecast of rental rates.

Building Types

These are the primary structural options for multi-story self-storage:

Light-gauge, two- to four-story steel construction. Current building codes allow self-storage structures to be up to three stories of light-gauge steel or four levels if the lowest is a basement. In this type of building, partition walls between storage units are load-bearing steel studwalls. Upper levels will have floorplans similar to those below to ensure loads are transferred directly down through the building. Larger open areas on a lower level, such as a lobby or management office, will use heavy, red-iron beams to eliminate the need for some walls. Elevators and stairwells are typically constructed of fire-rated, concrete-block enclosures. Floors between levels are typically steel pans filled with poured concrete.

Traditional construction with partitions. In some complex projects, traditional commercial-construction contractors will create a building shell. The self-storage manufacturer/builder will then complete the interior-partition buildout. Projects of five stories or more require fireproofing applied to structural members, which isn’t feasible with typical light-gauge construction.

Two-story into a hill. If a property has a natural elevation change of eight or more feet over the buildable area, it may be an ideal property for what’s called “two-story into a hill.” These buildings are designed with an exposed lower level as well as an upper level with ground-floor accessibility. At their most basic, they have drive-up units on both levels, with unit doors on opposite sides. Wider versions will typically feature hallways with interior-access units. Buildings can be ambient temperature or insulated to accommodate heating and cooling.

The type of multi-story building right for a specific project may depend on market demands, land cost and availability of capital. A building may have exterior-access units on the ground level or units accessed entirely from the interior. The latter design won’t be able to serve clients looking for boat or vehicle storage, but it can offer the advantage of covered or indoor loading/unloading areas.

Aesthetics and Curb Appeal

Self-storage customers often put significant value on facility appearance, and municipalities may set architectural requirements in premium locations where multi-story projects are increasingly being built. Thankfully, these types of developments have room for much more creativity than single-story projects.

The standard and most economical material for exterior walls is corrugated steel, but developers are raising the bar of modern self-storage design. Insulated panels, brick, and fiber-cement panels with either a brick or wood appearance dress up many projects. For structures in which unit doors wouldn’t normally be visible, large windows designed to showcase doors within a hallway can help make the business instantly recognizable. Towers, parapet walls, and indoor loading areas have become increasingly common features used to increase the appeal.

Multi-story buildings are significantly more complex than traditional single-story structures. Accordingly, they’ll take longer to design, permit and build. An architect with self-storage experience can be an important member of your development team, helping to speed up the design process and bringing together ideas for serious curb appeal.

Design for Accessibility

With the exception of two-story-into-a-hill structures, multi-story buildings typically include one or two elevators. Having two will reduce wait times for tenants during busy days, but more important, the extra lift also serves as a backup in case of mechanical problems. These should be located near a main entrance or, if possible, a canopy or loading dock. Automatic sliding doors are increasingly common for main entrances. Carts should be available for client use.

If the building includes an office, the ideal location is usually within eyesight of the loading dock but accessible from outside any secured area. Some properties include a conference room for tenants to use, which is an attractive perk for commercial customers. During the design phase, consider leaving space for an automated kiosk, which can be beneficial in renting units and processing payments after hours, particularly in urban or college markets.

Safety Concerns

Building codes vary, but at a minimum, expect to install sprinklers or firewalls in any project beyond 12,000 square feet. In multi-story, sprinklers are common. Include them in your budget and investigate if the water supply to the property is sufficient to serve them.

The upper levels of multi-story buildings most commonly consist of a steel deck pan filled with concrete. Simple steel decking has been used; however, there’s a risk of having liquid spills from upper floors drip into lower units, resulting in an uncomfortably loud property. One option is to use a pre-finished resin composite, which can be laid over steel decking.

Operational Impact

Multi-story properties with interior-access units often employ two managers to keep up with the operational demands. Halls and restrooms will need regular cleaning. Offering temperature- or climate-controlled units also means more mechanical equipment to maintain.

Though multi-story projects aren’t the answer for every market, they are an increasingly common segment of the maturing self-storage industry. They require more planning, more capital and more time to develop. However, in the right market and location, they can be the best option to maximize rentable area.

Steve Hajewski is marketing manager at Trachte Building Systems, which designs, manufactures and erects a full line of pre-engineered and customized steel self-storage systems, including single- and multi-story, portable storage, interior partition and corridor, and canopy boat/RV. He also owns a self-storage facility in Wisconsin and is a frequent contributor on Self-Storage Talk, the industry's largest online community. For more information, call 800.356.5824; visit www.trachte.com.