Going into business is not an easy thing to do. Just making the decision is hard enough. Tack on all the planning and design work that goes into it and it can take months before you are even ready to break ground or purchase an existing building. One of the first decisions that have to be made of course is where you are going to go.
Location is one of the most important aspects of opening a business—self storage or otherwise. There are many factors that go into choosing one, but one of the most crucial has to be the need.
It sounds like common sense. Why open a business where there is no need? The trouble can be in figuring out where the need exists.
When it comes to the self storage industry there are a number of different factors that can be taken into consideration, i.e. population, number of existing facilities, however there is one that is better—density. The more people living in a given area the more of a need there is for additional space.
Take New York City for example. The Big Apple is the most populous city in the nation and is the most densely populated one as well. As of the 2010 estimate there were 8.175 million people living in the city, and more than 27,000 per square mile.
With such a dense population it would seem that the area is perfect spot for self storage facilities, but according to the New York Self Storage Association there are only 30 in Manhattan.
“The investment demand for self-storage in this marketplace is hot and heavy,” said Michael Knott, a managing director of Green Street Advisors, a research firm.
Gotham Mini Storage recently opened a facility in the city off 10th Avenue near West 39th street. The facility has 1000 units on the fourth floor of the building right now and has plans to expand into the 5th and 6th floors in the near future (DHL occupies the 2nd and 3rd floors).
Of course when it comes to building in New York City it doesn’t come cheap. According to Broadway Storage (the company operating Gotham Mini Storage) the new facility cost around $15 million.
That may seem like a substantial amount of money, but one self storage company recently paid $650 million for 16 facilities in Brooklyn, Queens, and the Bronx.
“In a Crowded City, Storage Rooms With Amenities.” NYTimes; 22 January 2013.
List of United States Cities by Population; Wikipedia.