Greenfield Mini Storage Unit Development

[Tyler Rasmussen]

I'm working on a mini-storage development in Independence Iowa.

Independence has a population of 6,000 and currently has about 330 storage units. From the research I've done, they're at 99% occupancy. There's one site with 109 units that was built in the last 5 years, but everything else is 20+ years old. 

We've purchased a 3 acre parcel on one of the main arteries through town and have designed a layout for 50,400 ft2 of storage, 288 units. We looked at doing a phased approach where we'd build 152 units, then expand later once those were full. But with the city TIF incentives, it was the difference of about $80K in property tax savings if we just did the whole project at once. 

We priced out doing the 152 units at $800K where the cash flow at 90% occupancy was $30K/yr after all expenses. We would get a TIF rebate of $80K on this project.

To do the full 288 units, we've got it priced at $1.4M but the cash flow at 90% occupancy is $71K/yr. This will be a TIF rebate of $142K. 

Our plan on the phased approach was to do a perimeter fence and gate in the second phase. But now that we're doing the entire build out at once, we've added in the fence and automated gate right away. 

We've got construction financing set up through a local bank for 18 months at 4%. Our buildings should all be up by August 1, so then we have a 12 month runway to get to 60% occupancy, which would be break even. So we need to fill 13 units per month. 

Buildings are set to show up on site on June 23rd and we're using a contractor who we can purchase the buildings from and he will erect them. We got several quotes for buildings, but many of them didn't have crews to do the erection as well. With the approach we're taking, there's one party who's responsible for providing the materials and putting it up. So if there's any grey area, I would expect them to have to handle any issues rather than me getting in the middle of it. 

Here's our breakdown of costs:

Land: $90K

Building Materials and Erection: $760K

Concrete (not paving all driveways): $360K

Dirt Work: $50K

Fencing (1440 linear feet with an automated gate) : $50K-$60K

Electrical and Security: $75K

Engineering: $15K

At this point we're still deciding which software we want to go ahead with. I want it to integrate with our gate system so we can lock people out if they haven't paid their rent. And we're still looking at camera/security systems to see what's best.