Check List for Self Storage Site Selection

How to use this Check List:

The most important thing is to use this form or another check list. An organized check list is your best insurance against a disastrous error. We have divided this check list into two separate phases: The Comparables Rating and Due Diligence. While these phases will often overlap in practice, it is useful to keep them conceptually separate because the objectives of the phases are quite different.

The first phase, the Comparables Rating, is very important in that it will screen for the best site. Remember -- we don’t just want a site that will work, we want the BEST site! In a business with such an easy entry, the BEST site could become YOUR COMPETITOR!

If your property doesn’t score at least 500 on the comparables rating, it is unlikely that the property will be able to compete in the market place on a long-term basis.

The second phase, Due Diligence, proves up the useability of the site and tests for fatal development flaws. If your selected site fails the due diligence process, look back at Phase I and pick your second choice site for the Due Diligence phase.

The Due Diligence phase is often accomplished after entering into a contract, but if approached earlier it can often be a useful negotiating tool.

Comparables Rating

Ideally, one would complete this form for all competitive development sites and for existing competition. The items on the scale are guides to rating.

EVALUATION ITEMS

VISIBILITY
	1	2	3	4	5	6	7	8	9	10
Sign Only		Large Sign		Good view of Office		Sign both Directions, Office Visible			Full Project Visibility Both Directions, Large Sign
Score______ x weight 15 = ______

Visibility is among the most important competitive characteristics. As the market becomes more competitive, visibility will become even more important.

ACCESS
	1	2	3	4	5	6	7	8	9	10
Down a non-main Street			Can figure Out, but Difficult to Execute			Right in, right out only, Main Street			Full turn, Main street turning lane
Score______ x weight 10 = ______

Access is clearly a major issue, but modest compromises can be made for a site that is otherwise superior.

TRAFFIC COUNTS
	1	2	3	4	5	6	7	8	9	10
Rural Road		Feeder Road		Main Road 10,000 - 15,000 Cars/Day		Primary Road 20,000 - 40,000 Cars/Day			Primary Road at Freeway Intersection
Score______ x weight 9 = ______

Traffic counts are an important source of business. However, there can be an issue that too much traffic can inhibit access.

SITE CONFIGURATION
	1	2	3	4	5	6	7	8	9	10
2/acres No Frontage Flag Lot			No expansion long, narrow East/West layout			Expansion Reasonably Square Good Frontage			Excellent Frontage Corner Location Square with Expansion
Score______ x weight 8 = ______

Site configuration can cause development costs to increase and should be thoroughly understood as a part of due diligence. Frontage and potential expansion are the significant issues to watch for in this category.

COMPETITION
	1	2	3	4	5	6	7	8	9	10
Large Facility Next Door			Vacancies Nearby Projects Planned/Under Construction			Low Vacancies No Competition No Building Under Construction			Rents Increasing No Vacancy No Building Underway or Planned
Score______ x weight 12 = ______

Competition is another very important issue. Some analysts use the number of square feet of self-storage per population in a given area to determine total demand. We have not found much consistency in this method and believe that it is too simplistic. We recommend that you look at the market, letting increasing or decreasing units and vacancies be your guide to total demand. Remember your site must be superior to take market share away from someone else at market rates. Competing on price to make up for site deficiencies is a very risky approach to competing with established projects.

DEMOGRAPHICS
	1	2	3	4	5	6	7	8	9	10
Basements			Low Income Lots of Basements Stable Income			$25,000, per capita Income; Residential Stable Population Growth @ 1.0 - 1.5%			$35,000 per capita Income; High-end Apartments, No Growing Population over 1.5%
Score______ x weight 10 = ______

DUE DILIGENCE

This phase of site selection has two major purposes. One is to confirm the assumptions that are inherent in the Comparables Rating. Secondly, due diligence identifies fatal flaws and cost considerations that may affect the property feasibility. It is not unusual that the Due Diligence process will indicate that the best site does not necessarily result in the best financially performing project. This process may require going back to the Comparative Rating Analysis to find a workable project. The consolation is that if the project didn’t work for you, it probably won’t work for a future competitor, either.

It is also important that the Due Diligence be performed before significant commitments are made, i.e. buying the property.

Due Diligence Items

ZONING

Consider the availability of the zoning, the time necessary for approval, and the cost impacts of restrictions imposed by zoning such as density, setbacks.

ENVIRONMENTAL

The property should have a formal analysis of envrionmental risks. This area must be thoroughly investigated. There are no shortcuts on this issue as the liabilities are potentially unlimited.

FIRE REGULATIONS

Various fire departments have regulations that are not always consistent. For example, construction standards or turning radius! These can have a significant impact on the cost and useability of the site. Checking with the insurance company on rates in various areas is a good idea.

SOILS TESTS

Soils tests and engineering are important in determining construction costs.

GRADING PLAN AND DETENTION REQUIREMENTS

An understanding of the drainage is essential in determining both costs and the useability of the site. Often times proficient engineers can give preliminary opinions that are satisfactory, but if there are any complications, do a thorough study. This is also the place to understand wetlands and flood plain issues. If either of these become an issue, only a detailed study will tell you the appropriate answer.

UTILITIES

Determine the availability and costs, particularly any connection fees.

CONTRACTOR COSTS

Obtain a serious estimate from a qualified contractor. Do not rely on rules of thumb at this stage of the process.

FEASIBILITY STUDY

It is important to complete a feasibility study incorporating all that you have learned from the Due Diligence phase. Develop a detailed cost estimate and proforma. We have found that a professional third party assisting in this process can be helpful and maintain objectivity. This is the single most important step in site selection because it is the only place all elements come together.