Do you know you can talk to the person you hire for a self storage feasibility report and ask them to focus on a few additional things before you engage them?
At least I do.
So far, it has worked.
Now every feasibility report (at least good ones) will have basic items such as what is the trade area for the project, the population now and in the future, supply now and in the future, estimated square feet per capita of supply now and in the future, potential barriers to entry, Proformas, etc.
I have purchased feasibility reports that do not have all of these basic items before but chose not to use those particular providers again.
But often, I need to know other specifics that will help me determine just what to do with a specific self storage opportunity.
I have often had to ask the feasibility report provider to focus on a few other items as well.
Here are some examples:
- What is optimal climate control to non-climate-controlled space for an x number square foot expansion, and what are optimal rates to charge?
- Is there demand for parking in this trade area?
- Who is my real competition in this trade area, and what are their strengths and weaknesses?
I will usually ask for one, no more than three, things for them to focus on while completing the feasibility report.
This only works on full feasibility reports, not desktop or abbreviated ones. Those usually focus on supply/demand.
I may start with a desktop, but if I am ever bringing new supply into a market, I always get a full one. This will help with financing and fundraising, what to actually build, not to mention covering my tail on a multi-million-dollar loan I usually have liability for.
Sometimes I have been surprised by some of the “extra” information I received.
Recently, we had a feasibility report completed for a boat & RV development contemplated in a southeastern market.
We had asked the provider to let us know the optimal type of product to offer, like how much canopy, enclosed, and surface parking.
Surprisingly, she said, “Whatever you do, ensure you provide some climate-controlled self storage as well. There is a real demand for it in that trade area, low 5 square feet per capita.”
Did that ever enhance the Proforma? Ultimately, we did not do the project because of wetland issues on that site, but we are focused on a few other nearby locations.
But do not be afraid to ask for what you need to know for the specific opportunity you are looking at.
Also, always have the provider go over the report with you. I have learned many things I would have never realized just by reading it.
I have also asked for clarification and sometimes challenged a few items in the reports. Most of the time, I get convinced they have the correct data and conclusions, but sometimes I know something they did not have access to.
My experience is most providers want to create the best product they can and are not attached to their results. They do not have a position or an agenda they are trying to provide you.
If you have information, they will consider it and weigh it in their findings.
And remember, we are lucky in this industry. These reports can be very accurate because of the localization of our customer base in this business.
Find one or two good feasibility report providers you have confidence in and develop a good relationship with them. If they ever call you asking questions about your project or even other ones they are doing for someone else, always try to respond fast and accurately. These relationships are very important.
Ultimately, I will put millions at risk on the information they provide. So, get the information you need for that specific deal.
