Trends in self storage: Demand offers builders a reliable sideline

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Self-storage buildings have been a part of the rural landscape for some 30 years. Although destined to stay, how good has it been for builders in this market the past few years and what are the current trends? We asked two builders and a supplier, each from a different geographic area, to give us a sense of what’s going on in their part of the self-storage building world.

A new trend: condo storage
MPB Builders, Inc., Ripon, Wis., is a diversified company with more than 51 years of business behind it. Owner Leo Souder was on the frontlines when the self-storage business began moving about 30 years ago. Although he isn’t seeing any fast growth now, he is seeing an interesting trend he expects to continue in areas where property prices are at a premium, a concept called condo storage.

What is condo storage? Simply put: Large storage units that aren’t rented, but rather sold to customers. Souder explains it further with examples of what he is seeing in the tourist areas of Wisconsin.

“You get near lakes and it’s getting pretty near impossible to build any more buildings on a property or the taxes would be too high,” he says. “We’ve got a guy [near Green Lake] who has six buildings we built for him and he partitions them off as 32x48s, or 32x54s. You can put a motor home in there, or a little shop.”

Peterson Marine boat storage

MPB Builders, Ripon, Wis., has built six self-storage buildings on the Peterson Marine boat storage site in Waupaca, Wis. The back of the property will be devoted to condo storage.

Another MPB customer near the Chain of Lakes in Waupaca County has also started to find a market for condo storage. He has devoted part of his property to its future growth. “There’s property in back [of the regular storage units] that’s been marked off so he can build buildings and sell them off,” Souder says.

The owner has a built-in market among his regular boat storage customers who may be yearning for additional space. So far there is one condo-storage unit on the property, 48×64 feet.

It’s a no-brainer for the developer. “He can say, ‘hey, we’ve got this land back here and we can build you any building to suit you and sell it off to you,’” Souder explains.

Because the actual land still belongs to the developer, an established MPB customer, Souders can continue a working relationship that has provided consistent quality and design to everyone’s benefit.

In addition to the condo storage trend, Souder has been noticing a trend towards larger rental units going up in his area, likely due to the tourist nature of Wisconsin. With boats and motor homes a common part of the landscape, it’s only logical that people who spend their hard-earned cash on larger toys, look for affordable options to safeguard them.

One of Souder’s more recent self-storage projects was the sixth building for Peterson Marine, Waupaca. All are post frame, as are other buildings MPB has done for the Peterson/Belke family throughout the years for its pier, boat maintenance and boat rental businesses.

“We built the first three [boat storage units] in 2007 and we had [zoning] approval for other buildings down the road. We built the fourth in ’08; the 5th in ’10, the sixth in ’12. We’ve got approval for one more down the road.”

Corner bracing

MPB owner Leo Souder developed his own bracing system over 20 years ago that keeps post-frame buildings secured during and after construction.

Each of the six units is 63×160 foot in size, with post spacing 8 foot on center. MPD

laminated columns with metal plates were used: a system developed by Souder a number of years ago. Poles and trusses have 16-foot clearance inside, providing potential for adding rack storage in the future if demand warrants.

Large overhead doors, 14 feet wide by 16 feet high, are located on each end. Souder has a financial interest in the Overhead Door Company with a company called Modern Overhead Door, and they are the doors of his choice.

The roof is a standard 9-inch on standard panel, with 1-7/8-inch Bay Insulation under the roof to control moisture. “And it keeps the building cooler,” Souder adds.

Each building also has 10-foot ridge vents for ventilation. Gravel is used for flooring since the building houses only vehicles.

Souder developed his own bracing system years ago that has proven the test of time and is still used. “About 20 years ago we started to prefab a corner brace with truss plates which we put in the corners of buildings to keep it stable while we’re building it,” he explains.

“We also have a frame we put in the roof, when we start framing the roof, to hold the trusses from tipping.

“And we also have what we call gable-end kick braces. They’re pre-made so the guys can cut them to the right length and put them in right away when they start, to hold the building. It eliminates any bracing to the ground. And it holds the building straight.

“We can brag a little bit that we haven’t had a building in the last 20-some years that’s gotten out of whack or tipped over in a storm during construction,” Souder concludes.

Peterson Marine boat storage

The sixth boat storage building on the Peterson site was constructed in 2012.

Slow but steady growth
In the state of Kansas, general contractor Dave Carpenter, owner of DJ Carpenter Building Systems, hasn’t seen any major shifts in the self-storage building business since completing his first unit 27 years ago as a Butler Builder. “Twenty-seven years ago I thought I had built my last self storage,” he admits. “Take a town the size of Manhattan, Kansas [with a population of 60,000], or the surrounding five counties, and you just wouldn’t think that any more would be built because you wouldn’t believe people had any more stuff, and you would be wrong.”

Self-storage construction is by no means a full-time endeavor for Carpenter but it has consistently accounted for 10-15 percent of his business. When the economy faltered in 2008, he saw no change. “We noticed that when the economy gets difficult, people want to hang onto their stuff,” he notes. “They don’t go to their self-storage unit – that costs them $100 a month – and sell off all their stuff,” he says, adding: “They put more stuff in there.”

CS-Taylor-Butler-outside-view

The latest project at Taylor Made Storage, Manhattan, Kan., built by DJ Carpenter Building Systems, meets demand for Kansas State Wildcat fans who want a secure place to park their high-end vehicles.

If he has noticed any change, it’s a slow but steady expansion of the business to rural areas. “We’ve noticed a pattern that in all the little towns around Manhattan, towns the size of 2,000 or 2,500, those towns now have self storage as well. There’s more of the mom-and-pops in rural USA,” he says, “not big units like you find in Minneapolis or Kansas City, but they’re building one building with maybe 25 units to serve the needs of their community.”

The slow but steady evolution of the self-storage business promises long-term business partnerships for a contractor who delivers good products and services, Carpenter believes. Don’t expect to go in and build everything listed on a master plan, but rather, be prepared to return and help the owner grow his business as demand dictates.

“What you see is someone looks at a piece of property and says, ‘I think this will support 100 units, but I’m only going to build 20. And when they’re filled and paid for I’m going to build another one.’”

Carpenter’s work for Rob Taylor, owner of Taylor Made Storage is a case in point where a business relationship that began nine years ago continues today.

“That’s how Taylor Made Storage became what it is. [The owner’s] philosophy was: build one, fill it up, get it paid for, then build another one. So we started with a master plan for that piece of property, but we’ve been building there for nine years,” Carpenter says.

There are currently eight buildings on the site, with the master plan calling for an additional three.

The type of building Carpenter has provided Taylor Made has changed, too, allowing the owner to adjust to consumer demands.

“When [Taylor] began to build, he didn’t know what his tenants would be, he could only guess. He did his market research, of course, but he didn’t know if there was going to be a demand for 10x20s, or 10x30s, or 5x10s so as he has grown he has grown to his market.”

And markets can vary greatly depending on location, separated by only a few miles. Again in the case of Taylor Made, located near the edge of town, the owner originally included 5×10 units. “He couldn’t give them away,” Carpenter says. “So the next five buildings he didn’t build any 5×10 units.

“On the flip side we have a customer in town that we built larger units for, and the demands for smaller units was so large we went in and revised it. We put more doors and partitions in it to create smaller units.”

The two storage businesses were literally located only five miles apart. The difference was location: the business in town, with the demand for smaller units, was located near a college campus.

No matter the unit size, however, quality remains paramount. “In the self-storage business there’s only two things that matter: the building can’t leak, and customers have to be able to work and operate their doors,” Carpenter explains.

Because self-storage buildings are fairly basic–four walls, a roof, doors and a floor–it seems like something easily accomplished, but Carpenter has seen his fair share of hack jobs. Sometimes he’s the one who’s called to help correct them. “Five or six different locations a year I’m repairing (someone else’s) poor product or poorly-built self-storage buildings that the guy can’t rent out,” he says. “We have one right now in Junction City where we’re just chasing roof leaks. The owner went with the cheapest product, a couple guys and a pickup truck, and now he’s at 50 percent occupancy, smothered in roof leaks and doors that don’t go up and down.”

Carpenter stands firmly behind the quality of the Butler Manufacturing product. “There are cheaper alternatives out there but the owners of those facilities are paying dearly for maintenance of their facilities and occupancies are a lot lower,” he explains. “Once the word gets out that your building leaks, then you can’t get clients to rent from you. It cannot leak.”

Carpenter is willing to offer better quality over lower price. “We want to work with that client who understands the long-term advantages and who’s willing

to put the industry’s best roof on and install the best doors.”

 Self-storage for “Wildcats”
The Kansas State University Wildcat mascot scowls across a water tower overlooking Rob Taylor’s self-storage center on the outskirts of Manhattan, Kan.

The initial relationship with DJ Carpenter Building Systems led to seven buildings designed and built through eight separate contracts. Carpenter installed the Butler

Manufacturing Self Storage System. The complete integrated package includes the high-performance MR-24 Roof System, Butlerib II Wall System, wind-rated doors and interior subsystems. Carpenter considers the MR-24 and high-quality doors essential to the center.

Taylor Made Storage

The latest project at Taylor Made Storage, Manhattan, Kan., built by DJ Carpenter Building Systems, meets demand for Kansas State Wildcat fans who want a secure place to park their high-end vehicles.

Taylor insisted on developing his center in conservative, building-by-building phases to gain an understanding of what would work. His most recent project was driven by Kansas State fans wanting a secure place to park their large recreational vehicles, rather than driving them back and forth long distances between tailgate parties during weekend sporting events.

“Some of these high-end RVs can cost from a couple hundred thousand upward to a million dollars,” Taylor said. “We had some folks calling to inquire about having fully enclosed facilities. In the past, this market historically had only open-sided canopy-type facilities.”

Taylor’s new generation high-bay buildings are subdivided into 12, 12-by-50-foot units with 14-foot-high doors. Customers can subscribe to 30-amp electrical service in their space for a flat fee to keep the batteries charged in their RVs. By avoiding 50-amp service to the units, Taylor prevents tenants from running their energy-gobbling RV air conditioning throughout the week.

A demand for climate control
Jim Wright, President, Wright Building Systems, Hendersonville, Tenn., has been seeing a pick up in demand for self-storage buildings in the southern states. His company is a supplier of pre-manufactured steel buildings used for a variety of reasons, in addition to storage. For self storage, he notes, “We had a really tough year in 2009.” It has progressively been getting better with each passing year, with 2012 showing definite signs of recovery and a promising 2013 ahead.

He hasn’t noticed a big change in types of storage building demand, except there has been some noticeable interest in climate control in his area. “They seem to have increased in the past year,” he notes. “I had more requests. I think I had three of them this past year … Paris, Ky., Jackson, Tenn., and one east of Nashville. And I probably did only one each year in the years before.”

Wright Building Systems

Jim Wright, Wright Building Systems, is getting more calls for larger storage facilities.

They, too, have ranged in unit size, with storage customers wanting everything from vehicles to small valuables kept in environments protective against damages caused by extreme temperatures. Insulation is the only solution needed in most instances. “The typical insulation for a building not climate controlled for this part of the country is a 2-inch, vinyl reinforced fiberglass insulation in the roof,” Wright says. “When it becomes climate-controlled, we use a 2- or 3-inch insulation in the roof and then also in the walls between the structure and the exterior panel.”

Today, there are five 30x150-foot buildings on the Thornberry site, each containing multiple units for rent.

Today, there are five 30×150-foot buildings on the Thornberry site, each containing multiple units for rent.

As a supplier to builders, Wright typically receives calls for standard rollup doors for storage units, either 8×7 foot or 9×7 foot, but quality is key. “There’s two or three companies that are good in providing those doors: Janis, DBCI. The last couple years we’ve been using a company out of North Carolina called Betco. They’ve also introduced me to galvanized framing at really no add. The galvanized framing helps protect that steel against the elements in case some water does enter the structure. Of course with mini storage, most of the time the framing is completely covered by the roof and walls and so there shouldn’t be any exposure, but it’s a selling point to offer a galvanized coating on the structure as opposed to the old standard red primer you would see.”

Betco also makes doors and by purchasing doors and windows from the same company, Wright is able to save on shipping.

One of Wright’s regular customers is Jerry Thornberry, a steel erector who has used Wright buildings on several commercial jobs over the course of the last 16 to 17 years. One of those projects includes Thornberry’s own mini-storage business.

Steel erector Jerry Thornberry built his self-storage business in Bluegrass Country, just outside the “Thoroughbred Capital of the World”, Paris, Ky., (population 9,000-plus).

Thornberry erected the buildings himself over the course of several years using Wright Building Systems.

Today, there are five 30×150-foot buildings on the site, located about 100 miles east of Louisville, each containing multiple units for rent, along with one 40×80-foot building devoted to boat and RV storage. Another 80×80-foot building and 20×24-foot attachment houses the office and climate-controlled storage.

For Thornberry, larger units are most in demand. The most popular size is 10×15 foot, so he has 64 units of that size, followed by 41 each of 10×10-foot and 10×20-foot. There is less demand for smaller units, so he has available only a dozen in the 5×10-foot size.

The site also provides space for Thornberry’s U-Haul rental business.

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