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 Institutional Criteria
» INSTITUTIONAL GRADE CRITERIA FOR Self-Storage SITE SELECTION
When developing self-storage property, particularly your first store, you may want to consider an easy exit strategy. Building a store to the criteria of the most ready, willing and able buyers may be your best strategy. We have assembled a rough guideline of what the institutions look for in purchasing self-storage assets.
- Land
Size: Two to Five Acres (net useable)
- Building
Size: Must support 75,000 Net Rentable Square Feet
- Topo:
Mostly level with adequate drainage
- Environmental
Sensitivity: Typical to R.E.I.T. standards
- Residential
deed Restrictions acceptable
- Consider
impaired but insurable sites
- Demographics:
Population:
1 mile: 25,000+
3
mile: 100,000+
5
mile: 150,000+
- Population
Growth: < +2%/annum
- Median
Household Income: $45,000
- Traffic
Counts: <20,000 c.p.d., or top 2% of market
- Access:
Direct from Traffic Count Criteria Street
- Zoning:
Self-Storage by right or with PSP approval
- Barrier
to Entry: High for Self-Storage competitors by virtue of economics
or zoning
- Competitive
Evaluation: Competitors acceptable if stabilized occupancy (<90%)
has been reached
- Land
Cost Analysis: Dependent on Self-Storage rental rates
- Determine
3 most likely competitors
Call
for rate on 10x10, calculate median $/Sq. Ft. Rate (Rent/Sq Ft)
» EXPLANATION EXAMPLE
| Rent/Sq Ft *Net Rentable
Sq Ft (GPI) |
$ 15.00 |
75,000 |
$ 1,125,000 |
| Less 10% Vacancy/Credit
Loss |
90% |
|
$ 1,012,500 |
| Plus Other Income |
6% |
|
$ 60,750 |
| Revenue |
|
|
$ 1,073,250 |
| Less Operating Expenses |
35% |
|
$ (375,638) |
| Net Operating Income |
|
|
$ 697,613 |
| Cap on NOI |
13% |
|
$ 5,366,250 |
| Less "All-In" Construction
Costs |
$ 35.25 |
110,000 |
($3,877,500) |
| Less Closing Costs |
2% |
|
$ (95,150) |
| Land Price |
|
|
$ 1,393,600 |
Contact a development specialist at Coast to Coast to learn more about Institutional Grade Criteria. Contact RK at 877-622-5580 Ext. 81
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