A couple of friends and I are interested in building a storage unit business from scratch. The two potential partners bring a lot of construction experience to the table, meaning that our build costs would likely be lower than if someone else was doing it.
We don’t have a location in mind, but it would be in the suburbs of a MCOL city in the Midwest. We are interested in offering a little bit of everything, individual units of various sizes, outdoor Boat/RV storage, and some units even climate controlled. Are there some good resources that can give guidelines based on population demographics/trends, vehicle traffic, etc how many units to build?
Lastly, I’m interested in a niche, building one large building tailored for vehicle storage, but in a museum style setting, where we can offer additional services, like battery tender, weekly start-up, washing/detailing, etc. Premium service for a premium price. My partners aren’t excited about this part, as they see it as high risk, basically nobody else is doing it, which is what I find attractive.
That sounds extremely risky unless its a place where you know there are a lot of classic/exotic car owners, in which case, it’s only normal risky. How much research have you done with members of classic/exotic car clubs to see if they would be interested and at what price point?
I’m not sure what exactly he means by museum style. But offering a large open indoor space for vehicles, etc is a decent idea - and once you offer that, all the other stuff only adds incremental cost and minimal risk.
cars and coffee is a great place to start, but based on my experience with them, most of those cars aren’t garage queens. i would definitely talk directly to the folks at those meets that have $100,000+ cars and see if they are collectors, or if the car they brought to the show is their only baby. look into the other classic car groups. if there aren’t any groups local that have regular meets, the market probably isn’t there in that locality.
BiggerPockets has multiple podcasts on the subject, especially recently since self-storage has been blowing up (allegedly). I just listened to #545 (from Dec 15, 2021), it mentioned a few resources used for market research.
I’d tend to agree with your partners. Sounds like what you want is to become the clubhouse for a resident car club, not renting storage “units” to individuals. I wont judge the viability of either one, but I dont see much synergy between the two concepts.
I’m in a burb of Charlotte, NC, and have been amazed at the number, size, and continuiing building of self storage facilities here. It astounds me, but is profitable, as none of these places are closing. Granted, we are in a very fast growing city, but there seem to be an awful lot of them.
As for data research, maybe consider investigating a franchise opportunity. If they don’t share specific data in their sales pitch, they will at least provide the types of research for which you will have to work or pay.
Regarding the museum style storage for show vehicles, I have doubts, on insurance costs alone. What I might be more interested in is providing storage/workshop stalls/units for the same type vehicles. This only attracts car guys who also work on their vehicles, but there may be a larger market than you might expect.
Good luck and I’d love to hear your process as you proceed.
I like the way you called it a clubhouse for a car club. Yes, that’s an accurate description.
The synergy between storage units and the clubhouse is that the buildings are very similar, and can be located on the same plot of land. Let’s say we have ~5 acres, one of the buildings can be the luxury car storage place. Also, if the car storage business fails, it can always be converted into individual storage units.
People with $100,000 cars already have an 8 car garage attached to their million dollar house. You’re market is probably more towards owners of $20-40K cars. Lower value and they will park it in the driveway.
Land and building costs are probably more than you think. An acre of industrial property anywhere close to a major city will be over a million dollars. Construction costs would be around $40 a sf for a basic shell warehouse.
I would rather look for existing properties that match your needs, and preferably foreclosure sales. I bought a 5500 sf warehouse building on 1/2 acre about 10 years ago for just over 100K. Have about 40 cars inside and 15 out. Taxes are the biggest expense, 4500 a year.