The self storage industry has become a rather sought-after investment opportunity. While this is good news for the industry, there is a catch.
Lenders are still more apt to approve loans for converting an existing structure into a self storage facility or renovating an old one than to approve loans for new construction. Since this option is less expensive and there is a quicker turnaround (in comparison to building new) investors don’t mind. The trick is to find the right kind of building to convert.
Premier Storage thinks it has discovered a promising building in the Minneapolis/St. Paul area: an old brewery warehouse.
The company has entered into an agreement to buy the former Schmidt Brewery Warehouse from its owner, Bruce Hendry, for an undisclosed amount. Hendry has already sold the brewery itself, which has since been converted into the perfect place for a new self storage facility to find customers: an apartment building.
According to Todd Jones, the founder and principal owner of Premier Storage, the idea has the support of the community since a self storage facility will not cause much of an increase (if any) in traffic, pollution, or noise.
There had been hopes that a new microbrewery and restaurant could succeed at the location, but efforts to get them off the ground were not successful.
With his track record, Jones should have no trouble succeeding with taking the 67,000 square foot warehouse and turning it into a thriving self storage facility. A 25-year veteran of the self storage industry, he has developed or owned approximately 40 self storage facilities in Minnesota, Arizona, and California. The company currently owns seven facilities in the Minneapolis/St. Paul area.
Premier Storage is not alone when it comes to the practice of converting existing buildings into self storage facilities. For example, in early July Metro Storage announced that it had acquired a former liquor distribution center in Wisconsin with the intent to convert it into a self storage facility.
“This is a great opportunity for us,” said Metro Storage LLC Chairman Matt Nagel. “We’re looking forward to entering the Milwaukee market with this outstanding store.”
Along with the former liquor distribution center the company plans on constructing three new buildings in order to bring the total square footage of the final product to over 107,000+ square feet. When completed it will have 638 self storage units.