In the midst of this robust self storage development cycle, many eager entrepreneurs are looking to develop several facilities in a small amount of time. However, many developers are quickly realizing that their own backyard – the most logical place to look for opportunity – is already bustling with other developers or is close to market saturation. Naturally they turn to new markets where they might find more success.
This should be encouraged. There are still plenty of markets with demand for self storage development and even underserved by both current product and active developers. But, if this a path you are considering, make sure you do the following:
1) Call Your Friends: Chances are someone you know will live in the market where you are looking to dip your toe. Give them a call. See what they know as a native to the city. Ask them what storage facility they use or would use if they needed one. Pick their brains. You might feel like you know a place because you’ve visited, but you won’t have nearly the same knowledge as the people that call that place home.
2) Use Your Brokers: As soon as you start talking to brokers in your new market, make sure they know what you need. Be specific. Tell them that if they send you a listing, you want to know a traffic count, the true trade market population, median household incomes, or any combination of categories you analyze. And definitely make sure they are up to snuff on what local zoning categories are and which will allow for storage by right.
3) Plan a Trip: If you’re serious about looking at a new market for self storage development, get there sooner rather than later. Wait too long, and the opportunity might pass you by. Learning about a city in person is something you just can’t do on Google Earth.
I’ve spent a lot of time working with storage developers trying to find the best deal somewhere other than their hometown. It certainly presents a bigger challenge, but many people are finding plenty of success. Do the things I mentioned above, and you’ll be on your way to self storage success beyond your backyard as well.
About the Author
Warner Russell is the Manager of Business Development for Jernigan Capital. He is responsible for assessing project demographics before working with developers to underwrite individual deals. Before coming on board at JCAP, Warner worked as a writer and account executive for a nationally recognized advertising agency. He has also spent time working in retail banking and personal wealth management. A graduate of the University of Mississippi, Warner is married and the proud father of a golden retriever.