In my line of work, I speak to a lot of first-time self-storage developers. They have their eye on some land, they want to learn about the business, and they’d like to build a facility in about two months.
If you’re familiar with commercial development, you’re probably already giggling. The process is usually measured in years, not months. Delays in self-storage building are common, and many factors are out of your control. If you’re working on a project, let’s look at the kinds of interruptions to expect and what you might do to prevent or combat them.
Site Issues
One of the first tasks to complete in the development in a self-storage facility is the creation of the site layout. It’s typical to revise it a few times, but some developers get into a state of analysis paralysis, changing their layout repeatedly in search of that last nickel.
Research your property and design it correctly as soon as possible. Know the easements and setbacks, where utilities will be available, and where your runoff will go. If it’s your first project or you haven’t developed commercial property in a decade, hire a good civil engineer early in the process to help keep things moving along. This person can help you avoid mistakes like underestimating the impact of stormwater planning. A homebrew layout that doesn’t account for critical specifics isn’t going to get you far.
Wetland is another common issue. You’ll be surprised at what can be designated as such. Its existence on your property doesn’t mean the project can’t be built, but it’ll likely add six months to a year to the approval process. Additionally, the engineering cost for wetland delineations can be more than $10,000. These expire after a certain number of years and can only be created during particular times in cold-weather climates. So, if you have wetland concerns, check how old the existing delineation is and how long it’s valid in your location. For example, for my self-storage project in Wisconsin, it was five years.
Permitting
Receiving a building permit requires structural plans, which usually come from the building supplier or, occasionally, from an architect. The more complex the project, the longer it’ll take to get these plans. In fact, permit-plan sets take far more hours than most owners realize. Ordering them will require a deposit or possibly a building-order commitment (depending on your vendor). Ask your building supplier early what kind of lead time to expect.
To help speed things along, order the permit set as soon as you’re relatively confident the site has approval. However, review your site and building layouts carefully. Changes in your project beyond this point can slow the process and increase the odds of mistakes down the road.
Do some research to fully understand the permits and approvals you’ll need. Common ones include:
- State building permit for the city or county
- Conditional-use or zoning approval
- Energy compliance
- Stormwater approval
- Department of transportation approval for driveway access
- Fire and life-safety approval
You may seek some exemptions, and those take time, too. For example, on every project I’ve built, there have been excessive parking requirements. The city was cooperative in waiving them, but it took about three months to request an agenda item, get into the published meeting notices, and wait for the committee’s recommendation to be approved by the city council.
Financing
Financing is generally only available after you have a solid site plan and approval, if not a complete building permit. This means you need to pay for early engineering and permitting fees out of pocket. These expenses can be as low as $10,000 for a simple project or as high as $100,000 for a complex one. Being equipped to cover these expenses promptly is your first step.
To put financing in place, you might begin when purchasing your land. Discuss with your lender everything he’ll need upfront, as the lead time to set up lending is longer than you’d expect. This will likely include appraisals and inspections, and plenty of information on your finances as well as those of any other business you own.
The ideal situation is if you already own your land or can purchase it outside your bank loan. Many loans will include an interest-only period, and you want to delay the start of this period as long as possible. A home-equity line of credit is a common method of generating cash in a pinch for new developers, but this may affect your ability to use the house as collateral if there’s a shortfall on your project.
When securing your financing, build in some contingency funds for the unexpected. If you can build at or under budget, that’s great; but it’s best to avoid going back to the bank to restructure your loan for a higher amount.
Weather and Materials
The past year has been particularly wet for much of the country, and that can be a major problem for self-storage developers. When weather delays sitework, it compresses the construction season and puts grading, concrete and paving contractors under pressure.
You can’t change the weather, but you should understand how it’s going to impact your build. Wind, rain or snow might delay your own sitework, or that of the project your contractors are working on right before yours. Either way, it means your development will be behind.
That said, if the site is properly prepared, weather will be less of an issue. Before your materials arrive, topsoil should be stripped, and driveways should be graveled or paved. If the erectors arrive and the site is a mud pit, they’ll be unable to work.
When scheduling the ship date for building materials, allow extra time for weather delays. You want to avoid items arriving at a site that isn’t ready to build. Nothing good happens to unsecured materials sitting on pallets in the mud on a job site. If you see your sitework isn’t progressing as expected, talk to your building supplier about rescheduling sooner rather than later. The closer you get to your ship date, the less likely the factory will have the ability to move you out.
Also, order your access-control equipment, lighting and signage well in advance. Be aware that many of these items will arrive on a flatbed truck. If your gate motor arrives after your erectors have left and returned the rental forklift, you’ll need to rent a forklift again. Plan materials to arrive when resources are available.
Subcontractors
Communicate timelines with your subcontractors and pay them promptly to remain one of their priorities. Provide clear written plans and, if possible, involve them in that planning process to best coordinate work. Making changes once construction has started may slow them down. If you’re late to pay, they may go work on another project. Also, have temporary restrooms on your site and a dumpster to dispose of waste.
Planning is what’s going to help you reduce delays when building your self-storage facility. Hope for the best but plan for the worst. The construction process can be stressful, particularly if you serve as your own general contractor. As you choose subcontractors, step back and assess your own experience and how involved you expect to be. Hire the right professionals to help you through it and listen to your suppliers when they share their experiences.
Steve Hajewski is the 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.
