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Publication VII |
By Michael McCune |
SELF STORAGE SITE SELECTIONResearch, Research, Research! Everyone knows that self storage is just an interim use for land until something better can be found, thus site selection isn’t important -- right? Wrong! This, of course, is an old saw that just doesn’t cut any more; if it ever did. |
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| Self storage has now become a true retail business serving the storage
needs and convenience of demanding customers. As a retail business, the site selection
process is just as demanding as it is when locating a traditional retail business. Some of
the selection criteria are slightly different, but the same principle requirements for
selecting a site are the same. Today the fierce competition requires that a self storage
site be convenient, visible and in the “right” place. For the same reasons that
McDonalds doesn’t build in an industrial park, a potential self storage developer
should share the concerns about choosing a site. A thorough site selection process is the single best marketing program and business insurance policy that a project can have! In a business that relies almost exclusively on yellow page advertising to attract business, a visible and accessible site in the heart of your customer base can easily become your most important competitive marketing tool. The site is not only a marketing tool for the product, in many ways it is the product! As a form of business insurance the site selection process is also very important because self storage is a business known for it’s ease of entry. An owner must have the best competitive site in the area to fend off irrational competition that builds on an inferior site and competes solely on rental rates. There is an old saying that “the best site wins and the second best doesn’t even get to play”. The site selection process in this context not only considers the attributes of the given site, but even more importantly, the relative merits of all the competitive or potentially competitive sites in the market area. Although a detailed review of all the site selection criteria is necessary, it is beyond the scope of this article. Thus, three of the most important requirements will be given a brief overview. Visibility: A site must be seen to be used. Although customers read signs, it is much better if the site allows the potential customer to see the project itself. It is important that the project be clearly visible in both directions from the main traffic pattern. It is not necessary to have a lot of frontage so long as the frontage available tells the “story” of what is there and how to get in. The evidence is antidotal, but it is generally thought that the view of the “doors” makes a much stronger impression on the customer than just a sign. Apparently, the potential customer understands the product being offered is self storage only when he sees the “doors”. This is important because brand name identification and common names for the product are not clearly established in the public’s mind. Access: Although access is very important and the easier it is the better, some compromises can be made in access if there are major gains to be made in visibility or other important criteria. Since self storage facilities are only visited rarely, the customer will inconvenience himself somewhat as to access if they can easily understand how the access pattern works. Unless, the customer has an intuitive understanding of how to get to the property he simply will not try. Demographics: Much has been said and written about demographics and self storage. Higher household income levels, typically above $40,000, have generally proven to be conducive to self storage projects because the customers can afford it, but some areas with smaller homes and no basements are also quite successful because the customers need it. One of the great fallacies of the business is the rule of thumb that an area will support an average number square feet of self storage per person. While the square footage ratio has some appeal because it is simple, the reality is that it has very little usefulness in determining demand in a very effective manner. Reviewing the competition and the relative vacancies and rental rates is the only valid way to determine the demand in the subject area. If the vacancies are high and the rates are declining, the demand is simply not there regardless of the square footage per person. If the vacancies are low and the rates are stable or increasing and if this is the most competitive site, you can be comfortable that the demand will be there. There are many elements to consider in making a site selection for self storage and each is important - in fact many certain fatal flaws. The process of evaluation requires diligence, intelligence, experience and most of all the discipline to act in accordance with the findings of your study. |
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