38,000 sqft Office Building Conversation to Storage Units

[Dan Leverence]

Hi everyone,

I am currently in a position where I have the ability to buy an office building with 38,000 sqft for about 300,000 at 4 floors, and do so with cash with a partner. This building has very solid construction, however in its 40 years of life, has never had its interior finished, so it is still a shell of a building.

My current plan is to purchase this building and convert it into storage units. There is parking for only 15-20 cars once we pave a lot. My partner is trying to find an easy cashflowing and low upstart cost business since we project we can fill only about 70% of our units consistently with market demand, leaving an entire floor of empty space.

In your experience, what is the best way to proceed? Do we attempt to start a business, or cater to a business to rent from us, in an attempt to fill that extra floor? Or do we keep the plan of renovating all floors into storage units, trusting that the market in our area will continue to grow (3 apartment buildings right next to us, with 2 condo associations and plans for 4 more acres of residential to be put up across the street from us) and eventually fill the demand for these storage units?

Thank you for bearing with the long message!

[Brian Plajer]

I have zero experience with commercial properties, but my questions are: are you allowed to convert to storage units? cost to do so? competition in the area for storage? Expenses to run the storage facility?