04 Sep 2023
While we continue to love secondary markets for all things self storage, we can’t forget that those in the most densely populated cities need self storage more than ever before. Choosing an urban location is a big decision for the self storage business owner or operator, which could result in riches just as quickly as it could result in ruin. For the time being, self storage is still a fantastic investment, especially in places like New York or San Francisco, where space is at a premium. Let’s get a bit deeper into the nuts and bolts of what to expect when you make the decision to own a storage facility in one of the most densely populated cities or areas in the United States.
One of the issues you can expect to run into is that large parcels of land are almost nonexistent in urban cities. If you are lucky enough to find one, you will also find that it has an appropriately large price tag to go with it. You might need to go for a far smaller plot of land for your build, but that doesn’t mean you are restricted.
Just as land is sold at a premium in more urban cities, construction costs can quickly soar if you don’t watch carefully. It’s often a good idea to go with local construction companies with experience in the self storage arena, but again, you will pay for this experience.
In urban areas, you must remember you are sharing space with both workers and local residents, who may have an opinion about the way your facility affects their quality of life. Remember, a single rental community has the power to make up 70% of your customer base as a self storage business owner.
While we’ve hit on the complex parking situation in several of our articles, we are going to hit on it again! Parking isn’t easy in most urban areas, forcing many business owners to get creative when offering parking to self storage facility renters.
On a recent business trip to New York, I set out to visit several self storage facilities in lower Manhattan. I was unable to find ANY of the facilities I was hoping to visit, due to an extreme lack of signage at street level.
One of the greatest benefits of starting your self storage business in an urban area is the opportunity to build partnerships with local businesses that offer ancillary services.
Did you know that crime in urban areas is between 29-42% higher than in rural areas? This means you must plan for security from the jump.
It’s critical that you plan out your facility with Americans with Disabilities in mind. Find data related to your local population and take the time to look up local ADA statutes to ensure that you aren’t missing out on any opportunities.
When deciding what type of units to build in your new self storage business or facility, you need to consider what your local market will be storing. Urban areas have vastly different needs than more rural areas.
Yes, big cities are paved with proverbial gold for self-storage business owners and operators, but only with the right planning and a clear purpose. Do you research before deciding to enter the market in the most densely populated cities in the United States, to ensure you are ready for whatever comes your way. For more information on local demographics for any area, visit us at Radius+!
