Self Storage Conversion

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Self Storage Conversion

Dan L.
Rental Property Investor · Albany, NY · Member since 2019 · 125 posts · 47 votes

Hello all! I have a question about self-storage conversions.

I am purchasing a commercial property that is completely empty, and basically was not completely finished when it was abandoned about 10 years ago. There is no HVAC and no plumbing! However, sheetrock is completed, some hardwood flooring installed, and even chandeliers are installed. The original builder definitely had an odd schedule.

I am getting the building at a very good price, and it includes 11 acres of land plus another small building. So, a thought has been to convert it into Self Storage. It was being built to be a restaurant, though. My one main concern is the physical strength of the building, in the sense, can you convert to a self storage facility from a building that has a basement? How do I know if that structure is strong enough to handle the requirements of a self storage facility?

The obvious answer will be to contact an engineer, which I will. But I was hoping somebody here could tell me if I am completely crazy and it can't work, or if they have had experience building self storage units in a commercial building that has a basement.

So I am thinking it's not a good idea? But wanted to know if it is possible. My alternative is to install HVAC and plumbing and rent it out.

Thanks!

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Paul MoorePro Member
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
5y

@Dan L. I agree with Neil that you should do a feasibility study. At least start By doing your own demographic study using radius plus. I wouldn’t go any further at all until you are happy with those numbers.

And you should probably reach out to @Scott Krone since he has done a number of conversions and has a background in engineering and architecture. You should also reach out to AJ Osborne. He was on the BP podcast a few times and has a book on self storage. He successfully converted the Reno Super Kmart into a self storage facility and made a boatload of money. Good luck!

Podcast Guest on Show #533
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  • Seth Tandett
    Specialist · Richmond, VA · Member since 2019 · 24 posts · 10 votes
    5y

    What’s the construction of the elevated floor(s)? If it’s concrete and/or steel, I would say the conversion would be less complicated than if the floor(s) are wood.

    A structural engineer will be extremely helpful as you mentioned. 

    Also, it all depends on your budget too and what makes sense. Obviously.


    1Reply
  • Charles Kao
    Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
    5y

    @Dan L.

    What is the zoning and are you thinking climate control and/or cold storage? I would not buy a building without a plan of action just because its priced well. Make sure you can make money on it.

    1Reply
  • Neil Henderson
    Specialist · Carolina Beach, NC · Member since 2016 · 390 posts · 496 votes
    5y

    The first step before you do anything self-storage related is to pay for at least a desktop feasibility study to find out if there is demand for storage at that location. They run about $2,500-5,000. Bob Copper and Katherine D'Agostino are two people I know of who do them. No bank is going to loan you money on the deal without first having a feasibility study done.

    1Reply
  • Dan L.
    OP
    Rental Property Investor · Albany, NY · Member since 2019 · 125 posts · 47 votes
    5y

    Thanks Seth. It's about 45 minutes away from where I live, and I did not look to see what the beams were made out of, which I regret. Next time I am there I will have to look.

    Charles It is such a good deal that if I just finished off the building, I could rent it out and make a profit. It was a government foreclosure. I am not worried about if I'm going to make money, I am just interested in maximizing it.  I'd like to do cold storage.  It was set up to be a huge restaurant - I know zoning may be an issue, but it's at the intersection of 2 state routes and across the street is a car mechanic and a lumber yard.  I think I should be able to make zoning work...  If not I have several options.

    Neil I am not worried about the financing aspects, I have capital, and lines of credit.

    Thanks

    0Reply
  • Daniel Lioz
    Houston, TX · Member since 2019 · 99 posts · 26 votes
    5y

    @Dan L.

    With 11 Acres of land you can probably maximize the value by doing outside self storage and convert the building into Flex space with offices and may be warehouses.  It may cost you less to finish the HVAC and plumbing then to retrofit it for self storage.  You can build outside self storage for around $30 to $40 per sq foot or do covered parking for RV's/Boats, etc.  Plus I would think you can get a premium for storage and offices mix combinations.  Again, as mentioned before, it all depends on zoning and area.

    0Reply
  • Dan L.
    OP
    Rental Property Investor · Albany, NY · Member since 2019 · 125 posts · 47 votes
    5y

    Hi @Daniel Lioz  By outside self-storage, is that essentially a giant fence around, people have a code to get in, and then you just trust them just to grab their own boat, etc? Yes I could do that, but do people really trust that? Or do I have to have many fences & gates that can only access one particular 20x20 area (for example)? So it would be kind of like units, but with fencing around it instead of walls/ceilings? That would not be a bad idea. I had not thought about that. Do you have any websites or anything I could reference to learn more about outside self storage?

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  • Daniel Lioz
    Houston, TX · Member since 2019 · 99 posts · 26 votes
    5y

    @Dan L. There are many different options. By outside storage there are several different things like a big fenced in area (1 or 3 acres, with 1 or 2 gates) hundreds of non-climate controlled units of different sizes with rolled-up doors.  Or buildings with just roofs for drive-in RV's or Boats. Or just parking for cars or trailers without roofs....all depends on your market.  Experts in this area would be Scott Meyers or Henry Clark here on BP or  @Mike Wagner at https://www.thestoragerebellio... you can always just search this forum on Self Storage and you will get a wealth of information.

    1Reply
  • Paul MoorePro Member
    Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    @Dan L. I agree with Neil that you should do a feasibility study. At least start By doing your own demographic study using radius plus. I wouldn’t go any further at all until you are happy with those numbers.

    And you should probably reach out to @Scott Krone since he has done a number of conversions and has a background in engineering and architecture. You should also reach out to AJ Osborne. He was on the BP podcast a few times and has a book on self storage. He successfully converted the Reno Super Kmart into a self storage facility and made a boatload of money. Good luck!

    Podcast Guest on Show #533
    2Reply
  • Scott Krone
    Investor · Northbrook, IL · Member since 2017 · 352 posts · 295 votes
    5y

    @Paul Moore  -  Kind of you, thank you. 

    @Dan L.  You are wise to question the load capacity.  Most building codes required 125 lbs/sf of capacity, so the load has to be reviewed in consideration of the deck, joists, beams and columns.  Size and spacing are all important to evaluate the existing conditions.  It is possible to reinforce the structure, but that does impact rentable space.  Another major consideration for conversions is ceiling heights.  8' lockers, 18" clearance, sprinkler and HVAC all have to be below the structure.

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