Article adapted from “Feasibility And Relocatables: The Good, The Bad, And The Ugly” by Amanda Helfrich, MAI, Owner of Starr Commercial Real Estate.
Why choose relocatable self-storage units for your storage facility? These moveable, portable, relocatable units are ideal for new and expanding storage facilities. When most people think about portable units, shipping containers may come to mind. But, did you know that portable units today have many upgrades? In fact, these relocatable units have come a very long way from the shipping container. For example, the construction and durability of relocatables is better than ever. Therefore, relocatables look like traditional storage. But with added benefits. For instance, they cost less, are easier to build, and can start generating revenue quicker!
Relocatable Self-Storage Units are Feasible
Relocatable self-storage units offer a lot of the same (and more!) features as the traditional units. For example, they are drive-up capable. They are also compatible with new entry and locking systems. In fact, tenants are unable to distinguish the two. And they tend to rent them for equal terms. For instance, relocatable units achieve similar rents and occupancy rates as traditional units. What does that mean for you? Well, if relocatables are treated as equals in a market analysis, but cost less, your return will increase. In other words, it’s a win-win to choose relocatables.
Let’s back up a bit and start with the basics. What is a feasibility study? What does it include? A feasibility study is an assessment of the practicality of a proposed plan. For example, it looks at the cost-benefit relationship at hand. (Sources: Oxford Languages online and The Appraisal of Real Estate). In a feasibility study, there are three main areas of consideration: supply and demand, physical feasibility, and financial feasibility.
It’s important to seek professional opinions from real estate professionals with experience in self-storage feasibility and valuation services. Let’s consider how to research for a feasibility study. It’s important to look for existing supply and pipeline supply. If positive demand exists for self-storage, then we perform a full market analysis. Here, we gather market info, such as rents, occupancy rates, absorption rates, and facility amenities. Positive demand justifies a need for storage. Next, we review the physical feasibility of the property. We create a hypothetical development using relocatables. We review the physical feasibility and estimate the sample unit mix and facility size. At this point, the financial component begins.
Another major positive for relocatables is land coverage. We look at the building to land ratio. Relocatables cost on average 33 percent to 50 percent less than traditional storage. Did you know that you can place relocatable storage units where traditional storage won’t fit? For example, place them on easements, excessive setbacks, areas in floodplains. In other words, you can achieve greater net rentable area on a site with relocatables. This would be at lower cost and result in more income and a higher return on investment. More square footage at a lower cost equals higher income and greater profit!
Relocatables are an equal counterpart to traditional self-storage units with significant upside. They are nearly identical to traditional storage. Consider their aesthetics, operation, and use. When a buyer purchases a self-storage property, they can choose traditional or moveable storage. Depending upon their site layout, timeframe, and budget, they may choose one or the other. Or they can choose to use a mix of the two. Relocatable units are a viable use for an existing facility needing expansion or for those looking to decrease costs. A facility can avoid the planning and design constraints for a new build when choosing relocatables. Relocatables are increasing in popularity for good reason!
