My grandparents traveled to their new home in South Dakota in a covered wagon. My daughter has never seen a day when a cell phone was not readily available to call almost anywhere on the planet. What a dynamic world we live in. Even in self storage, generations of change have taken place. Though it remains a comparatively austere business venture, the complexities of building in today’s world require knowledge of the process and players involved in bringing a project to fruition. Delving into it for the first time can be daunting, but an overview of the process will help keep things in perspective.

 

Relationships between owners and the professionals they work with vary according to the skills and resources each bring to the table. In a first time venture, the owner may not have a complete understanding of everything that needs to take place, or “who does what” to make it happen. Most construction projects have the same basic components, follow a particular flow of progression, and incorporate professionals to work with each other and the owner in pre-defined capacities. Once that concept is set in the mind, it becomes easier to envision ones own project in the process.

 

There are five phases in the life of a self storage venture: feasibility, design, construction, operation and exit. Development encompasses the first three. The developer may be the owner or professionals hired by the owner to oversee the project. Although there are specific disciplines involved in each phase there are few definitive separations in the structure. For example, it is common for the civil engineer, who is an integral part of the feasibility study, to report to the design architect, who may also be responsible for the construction contractor’s compliance to plans. In our industry the general contractor often assumes responsibility for both design and construction, reporting directly to the developer or owner. 

 

The guiding principle for the first time builder is to possess a solid understanding of the elements in each phase and the progression of events, then to select service providers with the qualifications and experience required to cover all the bases. Feasibility concerns the determination of whether or not the desired business can be viable in the desired location. Design envisions the desired product and brings the necessary talent together to create a plan to build the product. Construction builds it. The development processes of feasibility, design & construction get the business ready to go.

 

The feasibility study is a discovery phase to find the true costs of pursuing the project and to verify that anticipated income makesit worthwhile to go forward. These duties can be conducted by the owner or professionals; most frequently it will be a combination of both.

 

In assessing potential income, the feasibility study determines the type of unit the community is likely to need and the rates they will be willing to pay. This determination is made by assessing the environment in which the business will operate. Some key factors are land size and location, population density, age, income, and travel patterns. Typically, the more dense the population, the more likely individuals are to rent small units or use multi-story storage. And, the best locations are on streets that people use to travel to and from work, or near popular businesses. These types of considerations, as well as the competition’s proximity, square footage, unit mix, occupancy, and rental rates, influence the rentable square footage and unit mix that will be most profitable. 

 

This hypothesis of optimum square footage and unit mix is the starting point to design the project to generate maximum potential income. A simple chart of the number of each type of unit and their rental rates can be used to determine gross income. A 10% vacancy allowance for turnover is typically deducted in financial calculations. Rents plus anticipated ancillary income from product sales etc. is the basis for income estimates.

 

Determination of project costs start with cost of the land, to which is added all costs associated with the use of the land. Back in the olden days land cost, site work, design and construction presented a pretty close estimate of total project cost.Alas, that is no longer true. Now there can be tens of thousands of dollars required for surveys, studies and fees. An endangered turtle species was found on one of our construction sites in Florida. This particular turtle type (gopher turtle) required a $1,500 survey of turtle territory and carried a $3,369 permit fee. The turtle was not ever actually relocated; fees were just assessed.  (For $4,869 the turtle should have received his own private condo! But…I digress.)

 

Costs such as turtle fees, city fees (which may be zoning, building permits, tree mitigation, etc.), county fees (flood plane, school, fire, road and environmental impact, etc.), jurisdictional fees (Municipal Utilities Districts, etc.) and state fees (Dept. of  Transportation permit, etc), all impact project cost.  Local civil engineers or other professionals are frequently employed to determine who has jurisdictional authority over the property and what fees may be assessed.

 

The third substantial cost associated with land is site work.  Tying into existing sewer, water, gas and fire lines, importing and exporting fill, rock excavation, soil conditions, underground springs, and hitherto undiscovered dump sites all fall within the parameters of “site work” and can be very costly. This is why contractors quote “slab and above” prices. 

 

The developer must also estimate building costs, start up costs in opening the business, operating expenses, and cash to carry the business until it is self supporting. They often prepare a bank package and assist the owner in obtaining financing. Developer’s fees are usually contracted separately and negotiated with the owner based on the extent of services required.

 

All expenses must be determined up front to calculate whether or not the income the owner expects to receive is sufficient to carry the burden of building and operating the project and still make sufficient profit. IF that determination is “yes”, design goes forward. Design has already been a part of the development process by incorporating the desired unit mix into the style of building that works best on the land.  From this point, design brings together all of the players that work together to create the project. Design fees can be contracted separately by the owner, or included in either the developers or general contractor’s contract.

 

The Architect collaborates with the developer or general contractor to design buildings and layout in accordance with the owner’s wishes. They generally oversee other design professionals.

 

The site plan is an overview showing how the project lies on the land. It illustrates boundaries, adjacent streets, buildings, drives, etc.   It is drawn by the architect.  The civilengineer is usually hired locally, either by the developer, general contractor or architect, because they are familiar with local governing authorities and restrictions on land use. They are responsible for location of utilities, building set backs, zoning, easements, ingress and egress, land elevations, watershed, etc.  

 

In addition to the site plan, Architecturals include (1) Floor Plans displaying the walls and partitions for each floor (2) Elevations of exterior faces (what buildings will look like), (3) Cross Sections, to clearly indicate floor levels and details of footings, foundation, walls, floors, ceilings and roof construction, and (4) Details, large-scale detail drawings exhibiting construction details.

 

The Structural Engineer details the proper material allowances to accommodate vertical loads and lateral stresses in the building. They make sure that the design of the building, materials used, and the way they are put together, are strong enough to withstand their own weight, the weight of any use they may be put to, and all internal and external forces that may be applied to the building.

 

“MEP’s” refer to Mechanical (air conditioning), Electrical and Plumbing drawings. They are often drawn by one engineer. In smaller projects, construction or shop drawings that are provided by individual trades may serve instead.

 

Landscape drawings may or may not be required. They specify ground coverage and plant materials as dictated by local ordinances. They are typically provided by the landscaping contractor.

 

The general contractor or architect coordinates getting all necessary approvals from governing authorities and assuring that necessary revisions are carried through consistently at all levels.

 

Plans in hand, construction contractor’s takes over.  A General Contractor is responsible for construction of the project in accordance with design specifications. The GC may provide labor and materials themselves, use sub-contractors and vendors, or a combination of the above. The most two important functions that general contractors provide are construction coordination and quality control. It is the general contractor that weaves all of the workmanship provided by trades into the completed project.

 

As a rule, the general contractor has a preliminary budget based on estimated costs. They then bid out the project to qualified subcontractors and vendors, and select those that will work on the job, contracting directly with them for the work. On a simple self storage project trades and costs may include:

The general contractor also creates the job schedule indicating the path of construction, what trades follow each other, and how to complete the project in the shortest possible time. They are responsible for quality control for all trades, and have fiscal responsibility for the project. Typically the general contractor bills the owner once each month on documents approved by American Institute of Architects which detail the progress of the job. The owner then submits billings to the institution financing the project. That institution verifies progress as detailed on the AIA draw documents before issuing payment. The General Contractor receives payment, and then pays all Subcontractors and invoices for work completed-to-date. The general contractor also holds responsibility for assuring that its subcontractors pay their job related invoices and expenses so that there is no outstanding debt against the project.

 

In today’s service provider market the trend is for everybody to offer everything. Project development is complex, companies may be stronger in some areas than in others.  First time builders should not hesitate to ask probing questions, and expect straight forward solid answers. Armed with a basic understanding of the elements included in a project package, and taking time to investigate the qualifications of the individuals they consider working with, the first time builder can proceed with confidence in assembling the team that complements their own skills and resources to create the project of their choice.