Editor’s note: This post was originally published in January 2014 and has been completely revamped and updated for accuracy and comprehensiveness.
Launching into any new market can be hard, and becoming a successful storage owner is no different. If you’re new to owning a self storage facility, or you’re looking to build a new facility and need some expert tips, you’re in the right place. I recently got the opportunity to chat with CJ Bardy, co-owner of Storage Place in Stonington, Connecticut and pick his brain on advice for new storage owners and builders. Bardy recently built his 24,000 sq ft facility from the ground up, and the brand-new coastal property now features over 220 units, including 85 temperature controlled units and over two dozen outdoor RV, boat, and vehicle parking spots, as well as high-tech security monitoring, gated access control, and convenient online move-ins and bill payments.
Bardy recently took the time to answer some questions to help new owners get their bearings. Check out his advice for new self storage owners and developers below!
storEDGE: Looking back, what are three things you wish you knew before you started owning self storage facilities?
Bardy: This whole project was actually undertaken based on a business plan that I built in business school as a side project. I come from a career in asset management and investment banking, so I was very familiar with the public markets and the public operators, and that side of the business. My partner and I ended up finding a piece of land, going through the permitting process, and then building it to bring the plan to life. We ended up building exactly what we had laid out in the business plan from business school. So I had done a tremendous amount of research beforehand, and I was well aware of the service providers. I’d gone to conferences and trade shows. So coming into it, I was pretty confident in what we were doing. That being said, there are a few things I know now that I would change.
Be careful about your contractor. We had a bad experience with our first general contractor. He had been in the industry for quite a long time, working as a contractor under one of the largest building manufacturers, and unbeknownst to us, he had screwed over a lot of people. To make a long story short, I wish there were more resources to vet general contractors and builders. This guy had passed the smell tests, but we lost some hard money dealing with him. Eventually, we got a new contractor, who turned out to be a great guy and I highly recommend him to other people. If I could do it over again, I’d check a few more references and dig into the general contractor’s background more.
Choose a tough fence and use one, all-purpose gate. When it comes to small design changes, there are a couple things I would change. For starters, we used an aluminum, ornamental-style fence. For our next build, I would do a steel fence. The aluminum, ornamental-style fence we currently have enhances the look of the property and is still very secure, but steel fencing has become the new industry standard for strength and security, and it still looks very attractive. Our property also has two gates: a dedicated entrance and a dedicated exit. If I were to design the property all over again, I would change it to just one entry, whether it be entering or exiting, all through the same access-controlled gate.
Invest in more climate-controlled units. We’d also like to have more climate controlled units next time, and less drive-up, traditional storage units. That was one variable that was hard to define in our business model, so we had to kind of flip a quarter to determine the amount of climate controlled vs. drive-up units. After we opened, we learned there was a tremendous demand for the climate controlled units, so we’ll be doing a lot more units with premium amenities next time.
storEDGE: What's the most valuable thing you've learned as an owner and how long did it take you to learn it?
Bardy: Before getting into self storage, I did a lot of research before developing a business model. I went to a few trade shows, talked to tons of brokers, looked at lots of sites, whether they were operating or just pieces of dirt, and just spent a lot of time doing research on the industry. Our business model is predicated on automation and mobile-first technology. Everything is that way in our business, and we see everything going that way in the market. You go to a website, you pick your unit, you sign up online, you punch your credit card information in, and you’re done. And you know, when I started everyone said we had to have an on-site manager, and we’ve never had a manager, ever. So what I’ve learned is, people might have a way of doing things and they’re comfortable with it, but it might not be the best way. And if you change it up and make it simple, they’ll adapt. If you’re a renter and you have no manager to hold your hand throughout the whole process and you have to do it all online, the process has got to be simple. We wanted to function more automated, so we made it simple, and it’s been great.
storEDGE: What advice do you have for someone who just bought a facility?
Bardy: Make sure to do your research, especially if you’re going to start building from the ground up. You’ve got to make sure the barriers to entry are high and someone else can’t come in and start doing the exact same thing as you next door and have a pricing advantage or scale advantage. Your model, your profitability and your breakeven point may all be based on a certain rent rate, but if someone else comes in and they’re a larger operator with a lower cost structure and lower cost of capital, you’ve got to make sure they can’t move in next door to you and charge half the rent, or you’ll be out of business tomorrow.
In the future, Bardy plans on continuing to expand by adding more premium storage space at Storage Place and developing another facility in Charlestown, Rhode Island, a similar market to Stonington that can support an automated, class-A facility.
Thank you Storage Place! At storEDGE, we are proud to work with clients who excel at what they do, care about their customers, and lead the industry in technology. If you liked this article, you may also like: Client Spotlight: Secure Pack Storage, Client Spotlight: The Self Storage Vault, and How to choose the right self storage contractor for your new build.