In todays competitive self-storage environment, the old real estate axiom "location, location, location" needs to be amended to include "homework, homework, homework." The challenges to building a self-storage facility from the ground up, repurposing a vacant building, or buying an existing business have never been greater.

In an era of low interest rates and very high occupancies at established facilities, there are some folks who mistakenly think things must be easy in our industry. I remember talking to a prospective owner who said he had a fabulous site for development, with just four competitors within a 5-mile radius. My quick research turned up 20 existing facilities in the area. He had gotten so caught up in the idea of getting into the business that he unintentionally donned blinders. He had not done all his homework.

With an industry that in many parts of the country is running at 90 percent-plus occupancy levels, and with positive economic data flowing from the storage real estate investment trusts (REITs), the temptation to rush forward and jump in with both feet is real. However, just like you learned in Girl Scouts, Boy Scouts or at a summer camp, always investigate the right place to enter the water.

My first admonition is to take a step back and get a big-picture perspective on the entire process. Whether youre planning to build, convert or acquire, the practice of conducting an objective feasibility analysis is vital to your future success. This is especially true if you already own the land or building under consideration.

Your End Goal

Lets go over some basics you need to consider in conducting your feasibility due diligence.

I first encourage you to answer two questions:

• What rate of return on your investment are you willing to accept?
• What is your exit strategy for your equity?

I could write thousands of words on just those two topics. These are important questions only you can answer, and those responses will help frame your decision-making.

If youve read this far, youre likely serious about getting into the self-storage business. Perhaps you already own a piece of land, have identified a building for conversion, or made an offer on an existing facility. Or maybe you just want a refresher to remind you of all the feasibility steps.

I wont get into a long dissertation about land zoning. Suffice it to say you have to verify all the facts yourself. Just because a seller or broker said you could build self-storage on the property doesnt mean you can. You have to verify that to your own satisfaction. That is just one of the factors that make it essential to obtaining a minimum 90-day due-diligence period for any real estate acquisition. If youre going to have the land rezoned or a special-use permit will be necessary, you shouldnt be required to close on the property until you know the project is approved. The last thing you want to own is a park.

With the site/building/business selected, you can identify the target market youll serve. You need to completely understand the demographic profile of the area youll be competing in for customer market share. While there are several good sources for this type of information, Ive used The Nielsen Co.s demographic services for years. Youll find the companys SiteReports at www.claritas.com/sitereports/default.jsp.

Heres something else noteworthy: National research conducted on behalf of the national Self Storage Association (SSA) shows that storage customers come from all household income levels. However, you certainly would rather build in a more prosperous area than a community in economic decline.

The Competition

Time to talk about the competition. You must identify every existing facility within the target market. I dont care if its just 50 or 100 units with no manager, no security and unpaved, or the Taj Mahal of self-storage. They all must be identified and then examined, not just for their rates and occupancy but for their strengths and weaknesses.

Theres roughly 7.5 square feet of self-storage space per capita in the United States. At the present time, industry occupancies in many markets are running 80 percent to 85 percent and higher. The REITs are reporting 90 percent-plus occupancies, for example.

I look at households when considering the storage-demand potential within a target area. The SSAs Self Storage Demand Study 2013 Edition, conducted by national analysts, reported that 8.96 percent of households, or approximately 10.8 million, are using storage. Using one of those baseline figuresper capita or householdsyou can make a determination of demand potential within a given area.

If your calculations indicate a market-demand potential of 375,000 square feet and you have identified 1 million square feet of existing storage space, I would look somewhere else. If the calculation is at or near the demand potential, then the issue of competition quality comes into play. I might be willing to go into a market with multiple first-generation projects and build a quality facility to attract the upscale customer.

The Site Details

As we walk down the path past the big sign that reads, The Demographics and Competition Are Not Deal-Killers, we advance to the Mountain of Site-Specific Details. More homework. At the start of the trek up this mountain, you get into these questions:

• How much net square footage can I build?
• What should my unit mix be and what will it cost?
• Have I considered all the Americans With Disabilities Act requirements?
• Will I be facing development impact fees?
• What about insulation standards?
• Security is vital. What will it cost?
• What rental rates can I charge?
• What will it cost me to operate?
• How big of a construction loan can I get?
• How fast will I lease up?
• How much working capital will I need?

After answering all those questions and making the various calculations, you arrive at the question from the very beginning of this process: What rate of return are you willing to accept? If after everything is calculated the indicated rate of return is 14 percent and you wanted 20 percent, you have your answer. For you, since the development doesnt meet the desired return, the project is not feasible. For someone with lower return expectations, it could be a green light.

If you started reading this article several minutes ago because you thought you would find the magic formula, Im sorry to disappoint you. My goal was to get you thinking about the feasibility process. Theres so much information now available online and from a variety of industry resources. Seek guidance, ask questionsdo your homeworkbefore moving forward with your next self-storage project.

Jim Chiswell, aka "The Storage Coach," is an industry veteran and owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry. He is a frequent speaker at the Inside Self-Storage World Expo and various association events. He is also a moderator on selfstoragetalk.com. To reach him, call 434.589.4446; e-mail [email protected]; visit www.selfstorageconsulting.com .

SpareFoot, an online marketplace that assists consumers in finding and renting self-storage units, has launched a Clear That Clutter sweepstakes through social media. Entrants can accumulate points to increase their odds of being chosen the random winner of a $500 Visa gift card, worth about six months of storage.

Consumers can enter the drawing now until Dec. 15 by visiting the companys Facebook page. An entry platform hosted by Rafflecopter will help keep track of point accumulation. Entrants can gain points toward additional drawing entries by liking SpareFoot on Facebook, following it on Twitter, subscribing to the companys blog and visiting its Google+ page.

Entrants who tweet about the sweepstakes up to once a day will increase their odds of winning the gift card, company officials said in a press release. A winner will be selected at random on Dec. 15.

Based in Austin, Texas, and founded in 2008, SpareFoot.com helps consumers find and reserve self-storage units, with comparison shopping tools that show real-time availability and exclusive deals. With a network of more than 6,500 storage facilities ranging from mom-and-pop operations to real estate investment trusts, the company reaches prospective storage renters though partnerships with brands including SelfStorage.com, Apartments.com and Penske Truck Rental.

By Molly Bilker

Five rental trucks. Six parking spaces. Snow 32 inches high. In February 2009, Penny Casassa spent the day jockeying trucks and trying to clear more than two and half feet of snow from her cramped parking lot at 21st Century Storage in Baltimore. Her snow-removal crew dropped off a single man in a Bobcat snow blower with slick tires. She would have been better off with a superior place to house the trucks, she says, and probably a snow blower of her own.

"It was a huge mess," remembers Casassa, a member of the Self-Storage Talk (SST) online community and current manager at an Atlantic Storage Solutions in Jobstown, N.J. "But then again, so was the entire Baltimore area!"

With winter weather arriving, self-storage operators in some parts of the country are facing snow-packed driveways, wet walkways, frozen pipes and a host of other challenges. Luckily, here are a few tips to help them keep climate trials  from creating a winter horror story.

Get the Equipment You Need

If you don't have the appropriate winter-maintenance tools, you won't even be able to begin dealing with larger problems. The Pogoda Cos., which owns or manages 38 facilities in Michigan and Ohio, ensures its managers have a variety of equipment to use when the weather turns icy, says John George, vice president of operations. The basics include:

• Heavy-duty snow blower
• Salt spreader
• Salt with disposable cups
• Snow shovels
• Snow-track footwear and eye goggles for store managers
• Lock de-icer
• Jumper cables for stored RVs and cars

The more equipment you have ready when winter comes, the more innovatively you can deal with the host of problems that can arise, including ordinary troubles you may not expect. "A couple of the most common problems a tenant runs into are not being able to open a frozen lock on their unit door and a stored RV or car that wont start," George says.

Routine Maintenance Is King

Preparing for winter weather early will help you handle issues efficiently when they occur. First, make sure your gutters are clean so debris doesn't block them and cause overflow when rain or snow hits. Protect outdoor hoses from frost damage by moving them indoors. Insulate exposed pipes and outdoor plumbing fixtures so they don't freeze, which can block your water supply and potentially cause pipes to burst. Remove temporary curbs so they don't get scooped into the snow pile, and service your facilitys heaters to make sure they're working properly.

A large part of preparation is having your equipment at the ready. In an SST thread about winter maintenance, forum member eileen recalls when hers wasn't. "Don't leave your snow shovels and Ice Melt inside a company unit in case a three-foot snow drift ends up in front of it," she says. "You'll only do it once."

Buy your equipment and set it out early. If you have your salt and shovels ready before the first snow hits, clearing it will quickly become much more convenient. "Every [Pogoda-managed] store keeps a large bin of salt with disposable cups near the property entrance as well as snow shovels, making them easily accessible to tenants and employees," George says.

Remove Snow

When those winter storms do blow in, the most prominent issue is usually snow removal around your property. At Pogoda Cos., the managers walk the facility daily to look for snow and ice trouble areas where snow plows can't reach. eileen digs out the access gate so the chain doesnt run through the snow. She also shovels and uses Ice Melt in front of the office, gate, climate-control exterior hallway doors, company unit and tenant units. "Keeping these high-traffic areas clear will benefit when snow or ice starts to melt because they will be the first areas to dry and minimize hazard to the customer," she says.

Piled snow can also make it more difficult for tenants and employees to see where theyre going. "When mounds of plowed snow become large and there is risk of visibility issues, the snow is physically removed from our property via a dump truck," George says.

Many operators suggest hiring a snow-removal company. In fact, Casassa says this should be every manager's first order of business. Likewise, Pogoda contracts with reliable snow-plow services to make sure its lots are plowed and salted efficiently. If you do hire an outside company to plow, protect yourself from risk. "Snow-plow companies that are contracted to maintain each location are required to provide us with a current Certificate of Liability Insurance naming the location as an additional insured  in the event damage is done to the facility grounds as a result of the snow plowing," George says.

Look Out For Customers

Customer slips and falls are common when winter maintenance hasn't been done properly, so its critical to remove as much snow and ice as possible. You also don't want to over-salt sidewalks because it can damage waterways. Four pounds per 1,000 square feet is enough, according to "Winter Maintenance for Cities and Businesses" by the Rice Creek Watershed District in Minnesota and Nebraska.

Another way to protect customers is via signage, George says. "Proceed with extreme caution" and "Weather-appropriate footwear strongly advised" are just a couple of signs that can help keep customers safe in bad weather. "This signage also lets tenants know that snow shovels and salt are available at the entrance for their use," he says.

The most important part of winter maintenance is excellent planning. If you come into bad weather, be preparedwith your own snow blower or a reliable snow-removal company. Youll  come out of bad weather with minimal brain freeze and be safe, secure and feeling good.

Molly Bilker is a sophomore journalism major at Arizona State University in Phoenix, where she is part of the Barrett Honors College and completing a minor in Spanish. She comes from an arts-focused high school with a creative-writing background. She actively participates in the arts, including creative writing, guitar and vocal music, theater, photography, ballroom dance, drawing, and film. To reach her, e-mail [email protected] .

Randall B. Soggs, the owner of a retail plaza in Watertown, N.Y., has requested a special-use permit to convert the plazas roller-skating rink into a self-storage facility. The Watertown City Council is scheduled to consider the request on Dec. 2. The citys planning board recommended the permit earlier this month.

The special permit is required because the citys commercial district does not include self-storage in its zoning. Soggs wants to close Showtime Skating in favor of offering self-storage out of the 22,000-square-foot indoor facility, but his plan faces opposition from the rinks manager and customers.

"We have got our regulars who come in here every Saturday. There's 50 to 60 regular kids that come in here and look forward to coming here," said Ron Brown, Showtime Skatings manager.

If the skating rink closes, it would be the second family-friendly attraction in Watertown to go out of business in the last year, according to the source. "There's a group that's going to be opposing [the permit] at the meeting on the second," Brown said.

Those in opposition to the conversion project believe the city is losing constructive places for youth to hang out together. "I've been here every weekend since I moved here, said customer Jordan Parker. I like to hang out with my friends a lot, and it's a good place to hang out."

The rink has operated in Northland Plaza, 144 Eastern Blvd., for about four years.

U.K.-based self-storage operator Len Lothian U-Store could be poised to reap the benefits of a healthy housing and tourism market in Scotlands capital of Edinburgh and the surrounding historic region known as the Lothians. A recent quarterly housing report from real estate website S1 Homes revealed Edinburgh had a 5 percent rise in home-sale prices, the largest increase in Scotland, according to the source. Len Lothian currently operates three self-storage facilities in the capital.

Rising home prices often coincide with an influx of residential move-ins, which can increase the need for personal self-storage, the source reported. In addition, the Lothians is Scotlands most popular tourist destination, drawing scores of visitors into Edinburgh. The areas popularity is an economic boost for businesses, particularly those serving tourism. As a result, businesses often need self-storage for excess inventory and document storage, as well as seasonal needs, according to the source.

Len Lothians storage space ranges from 25-square-foot units up to a 36,000-square-foot warehouse. In addition to Edinburgh, the company operates two facilities in Glasgow, Scotland.

Amazing Spaces Storage Centers, a self-storage operator with four facilities in Texas, recently donated $1,748 to the Shriners Hospitals for Children in Galveston. The company began collecting funds in September for the annual Make a Difference Donation Campaign, which was launched by the Texas Self Storage Association (TSSA) in 2001. Amazing Spaces joined the effort in 2004.

The campaign encourages customers, associates, friends and families to donate money to the cause. Amazing Spaces received $874 in donations and then matched the amount to gift $1,748 to the campaign.

Every year during the fundraiser, we ask our customers to donate just $1. By the end of the fundraiser, its amazing to see that when we all work together by contributing a little, we raise a lot for the kids at the hospital, said Missy Colgin, property manager at the companys facility in Medical Center, Texas.

The 2013 Make a Difference campaign ended during TSSAs annual convention in October. A charity poker tournament, live auction and silent auction during the tradeshow also raised funds for Shriners. In total, the TSSA raised more than $90,000 this year.

Shriners Hospitals for Children is a healthcare system of 22 hospitals dedicated to improving the lives of children by providing pediatric specialty care, innovative research, and teaching programs for medical professionals. Children up to age 18 with orthopedic conditions, burns, spinal cord injuries, and cleft lip and palate are eligible for care and receive all services in a family-centered environment, regardless of the patients ability to pay. Of the 22 hospitals comprising the hospital network, the Galveston hospital is one of only four that specialize in pediatric burn treatment.

Established in 1986, the TSSA is a non-profit trade association dedicated to enhancing the quality of the self-storage industry in Texas. It provides opportunities for members to increase their industry knowledge through education, research, discussion and the exchange of information.

Open since 1998, Amazing Spaces has locations in Houston, Spring, the Medical Center, and The Woodlands. In addition to traditional self-storage units, the facilities offer RV- and boat-storage, wine storage and more.

Virtus Real Estate Capital, an Austin, Texas-based private equity firm, has purchased Nichols Hills Self-Storage in Nichols Hills, Okla., in a joint venture with Advantage Self Storage, a real estate development and property management firm based in McKinney, Texas. The property comprises 59,400 square feet in 404 units.

Built in 2005, the facility at 2900 N.W. Grand Blvd. will be operated by Advantage Self Storage. This is the companys first facility in the Oklahoma City area.

We are excited about moving into the Oklahoma City market, said Rick Jones, president and CEO of Advantage Self Storage. With Virtus, we are also actively looking for additional acquisition opportunities to build a portfolio in [the area].

"With its dynamic growth and diverse economy, Oklahoma City is a target market for Virtus," added Scott Humphreys, acquisitions manager for Virtus. The infill location of Nichols Hills Self-Storage, in a highly desirable submarket of Oklahoma City, makes this one of the best self-storage properties in the area.

The deal marks the first joint acquisition between Virtus and Advantage.

Founded in 1996, Advantage Self Storage has developed more than 20 storage facilities in the Dallas and Fort Worth market and is looking to add to its portfolio through new development and acquisitions. The company currently owns or manages a portfolio comprising 1.36 million rentable square feet in 10,000 storage units.

Since its inception in 2003, Virtus has acquired more than $2 billion in commercial real estate assets, including more than $100 million in self-storage. The companys strategy is to acquire commercial niche properties that serve the high-growth segments of the U.S. population, including medical offices, self-storage, senior living and student housing.