The team at Legacy Built learned many decades ago what others in the commercial real estate industry are just now discovering. There are countless advantages in self-storage facilities that far exceed the perks of other real estate investments. Since 1979, Legacy Built has been enjoying 3, 4, and 5x performance results on self-storage facilities around the city. They were the industry’s visionaries over four decades ago and knew then that today’s numbers are still proving to be correct. Self-storage is a better choice than other real estate investments.
Initial Investment Costs For Commercial Properties
The cost to build a self-storage facility is typically less than other forms of commercial real estate construction. Building a self-storage facility will cost approximately half the cost of a similar-sized warehouse. The construction cost per foot of a warehouse will top out at $90, while the self-storage facility’s max cost per square foot comes in at $42. The specialized features, intricate mechanical needs, and larger open spans found in the warehouse all increase the construction cost dramatically as compared to a self-storage facility. When examining the cost of more specialized commercial projects like an office building, that cost per square foot increases to as much as $390, while multifamily housing can reach $800 per square foot.
Operating Cost Comparisons In Commercial Real Estate
Thanks to the automation of lighting that is motion activated, the use of added insulation and quality construction, computerized security and monitoring, and online rental processes and management system, the cost to run a self-storage facility is only a fraction of what it takes to keep a warehouse, retail facility, or multifamily residential property operational. New self-storage facilities are often run by one or two staff members overseeing a group of facilities compared to older business models with multiple employees working full time at the facilities to provide service and security. There is no fair comparison in the operating cost of any other commercial real estate facility that is as reasonable as self-storage.
Rental Occupancy Averages Across The Nation
The national self-storage rental occupancy across the nation in 2023 was over 91%. While this might sound like an outlier that is particularly high for the year, the historic average since 2015 shows the occupancy to have remained above 90% for the entire decade. The occupancy for warehouses is competitive, with self-storage facilities at 90 to 92% for the past year. However, when you get into more costly commercial real estate, such as office spaces, occupancy drops dramatically to about 80% in the country. Retail space is more evenly matched to the self-storage facilities, with a five-year high in occupancy at about 88%. Currently, multifamily living space is boasting a 94% occupancy rate. However, with new home construction increasing, experts predict multifamily housing occupancy rates will drop as more people move into single-family homes.
The Ultimate Money Maker With No Headaches
Self-storage facilities win every comparison when you are looking for reasonable construction costs, great cash flow, minimal operating costs, and trouble-free tenants. No one brings guests to a storage facility, is too loud for the neighbors, or calls the manager because of a plumbing issue. These are only a few of the reasons the team at Legacy Built saw the potential of the self-storage industry decades ago and has never looked back.
