What do an old Kmart, a shuttered liquor store, and a former Buick dealership have in common? Each of these buildings can—and will—be converted into self storage facilities.
Conversions have become a common way for investors to get into the self storage industry and grow their portfolios. While lending agencies are often reluctant to lend for new construction, they are more willing to lend when it comes to converting an existing structure into a self storage facility.
DealPoint Merrill, a company based out of Los Angeles, has purchased what was once a Kmart in Saginaw, Michigan, which it plans to convert into a storage facility. Not just any old facility, but more of a supercenter complete with a business center, truck rentals, moving and packing supplies, and much more.
Thanks to its proximity to other retail stores and residential areas, the company has high hopes for how well the future facility will do. The company has yet to submit plans for the conversion to the appropriate city agency, but when it does, they’re confident that approval will be granted.
Conversions are becoming increasingly common in the industry. Milwaukee’s Metro Self Storage is working on transforming an old liquor distribution center. In Tennessee, Amerco Real Estate has big plans for a building that once housed a Fun Expedition gaming center, and in Wisconsin, Storage Master recently received approval to convert a former Buick dealership.
The practice of converting existing structures into self storage facilities is not exclusive to the United States. Australian entrepreneur Sam Kennard of Kennard Self-Storage makes conversions a regular part of doing business. Of the 74 facilities that his company owns, 32 of them were converted into self storage facilities.
He tends to get a little creative when choosing which structures to use. In the past he has used whole office blocks, hostels, wool sheds, and former factories. Last June he finished converting what was once the headquarters of Coca-Cola in North Sydney into a self storage facility.
Why convert though? Why not go with something new? The logic is pretty simple really. It costs less and it’s quicker to acquire an existing structure and redevelop it or convert it into a self storage facility than it is to build a new one.
When it comes down to it, do you want your self storage facility up and running now or later?