Self-Storage Feasibility Studies

Carol Mixon answers the most commonly asked questions about self-storage feasibility studies

Why Do I Need to Do This Feasibility Study?

Self-storage feasibility studies are crucial, especially for potential investors. There is a lot to assess when considering putting a property on a piece of land, which can be expensive and time-consuming. The more data you must support your decision, the better. Conducting due diligence is essential. When you hire an expert for honest advice, you should listen to them. It’s challenging because sometimes people are too eager about a piece of property and believe they can succeed despite the competition.  

When reviewing a feasibility study, inspecting the land itself is essential, as there can be hidden issues. For instance, when I visited a property years back, I expressed my concerns about the soil. It had once been a walnut orchard owned by Blue Diamond in the Sacramento area, and remnants of crushed walnuts were embedded in the ground. The clients were adamant that everything would be fine, but I suggested we conduct further testing, as I suspected problems with the soil. 

After some hesitation about the cost of additional analysis, one of the partners finally acknowledged the seriousness of the situation. When they dug down about 3.5 feet, they found that the top layer needed to be removed. The costs associated with this soil issue would have made it impossible to profit from the property. So, they explored other locations without walnut contamination, which would have been more viable.

It’s those kinds of situations that aren’t the norm, but sometimes we discover new requirements. For example, if you plan to build in a particular area, the city might request that you install a stoplight or create a small park for the students nearby. So, it often involves more than just the piece of land itself. That’s crucial once you demonstrate genuine interest in your project and what you aim to do.  We experienced a situation where what started as a promising deal fell apart because the city suddenly wanted changes. They know developers are often willing to make these additional accommodations to move forward, and they can leverage that.

You can’t approach this casually; it requires more than a quick search. You must engage directly with the city officials, visit them, and discuss your plans.

What’s the Normal Turn Around Time for a Feasibility Study?

If we are doing an in-depth self-storage feasibility study, it will take about two weeks. However, it all depends on various factors. For instance, the timeline can change if we must travel to a different location or if we have several tasks ahead of this customer. That’s how it works for us.

Do You Have an Area of The Country in which You Have Expertise?

Oh well, I really connect with the West Coast. It’s not that I can’t work in the East; I can. However, I feel like I know people who are closer to that area and could handle it more quickly. I prefer to focus on the West, which includes states like Arizona, Colorado, Texas, and Wyoming.

Do You Have References Potential Customers Could Call?

Yes, I have references from people who know I understand the business. They are aware that I have conducted studies.

As An Expert in The Self-Storage Industry with Many Years of Experience, I Assume You All Know the Main Players in this Field.

We know each other well, and even if someone goes to a person who isn’t familiar with us, that person will likely contact me if they see that I’ve already conducted a study. If their client talks to me and I’ve already declined to put my stamp of approval on a project, they will probably still reach out to me. When asked why I said no, the answer is simple: because of the walnuts!

Even though some investments involve institutional money—meaning it’s someone else’s funds, like those of an institution—the situation feels entirely different when it comes to my own money. This is a part of my job I don’t take lightly. I treat it as if it were my own and always ask myself, “If this were my money, would I make this decision?”  I believe it’s essential to be truthful.