storage facilites

Five Key Considerations for Developing a Storage Facility on Vacant Land

Turning vacant land into a storage facility can be a lucrative venture, but it requires careful planning and consideration of various factors. If you have vacant land “burning a hole in your pocket,” it may be worthwhile to investigate the feasibility of the land turning a profit. Here are five areas to assess if you’re thinking about embarking on developing a storage facility:

1. Location Assessment

The first step in developing a storage facility is to assess the location. Is there a demand for storage facilities in the area? Consider the local population density, median household income, recreational activities, and proximity to bodies of water or outdoor attractions. Understanding the need in the area will help determine the potential success of your storage business.

2. Topography

The land’s topography is crucial for determining its suitability for a storage facility. Ensure that the land is situated above flood zones and is dry, especially considering the potential for water damage to stored vehicles if your facility will have outdoor storage. Evaluate the terrain for hills, rocky areas, or other development obstacles. Additionally, confirm that the land is suitable for construction and development according to local regulations.

3. Financing

Assessing financing options is essential for any real estate development project. Determine whether the land is owned outright or financed through a mortgage or loan. If financing is required and you partner with S3 Partners, we will provide a bank package. Securing financing early in the planning process is crucial for moving forward with development. After financing is researched, don’t forget to create a business plan. Is a business plan necessary for securing a loan? While responses may vary among lenders, the answer should invariably be “yes.” A business plan is essential, it will allow you to outline the required funding, its purpose, and its rationale.

4. Land Basis Calculation 

Understanding the land basis is critical for determining the project’s overall cost. The land basis refers to the total cost of acquiring the land. Conduct a thorough cost analysis to calculate the land basis accurately and ensure that it aligns with your budget and financial projections. Learn more about land basis calculation.

5. Zoning and Regulatory Considerations

Before proceeding with development, understand the zoning regulations and land use restrictions that apply to the property. Verify that the land is zoned appropriately for a storage facility, and familiarize yourself with any easements or zoning requirements that may impact development plans. Engage with local planning departments or zoning boards to ensure compliance with regulations and obtain necessary permits.

In conclusion, conducting due diligence upfront is crucial when considering the development of a storage facility on vacant land. By asking the right questions and thoroughly assessing factors such as location, topography, financing, land basis, and zoning, you can identify opportunities and challenges early in the process, ultimately setting the stage for a successful development project. S3 Partners provides guidance and feasibility studies for those interested in exploring the development of vacant land for a storage facility. Contact S3 Partners to set up a consultation.