Building a new commercial building is never a task to be taken lightly. Fortunately, we are here to help you figure out what you need to keep in mind in order to meet your needs at an appropriate price point.
The main question you are going to be asking yourself each step of the way is: “How much will this cost, and how much will I make once it’s all done?”
Our guidelines can help you figure out exactly what you want, whether the investment is worth it, and what a fair total cost should be.
How much it will cost is the most important question most builders have. It will determine how long the business takes to recoup the investment. It will also decide if the building is feasible at all. Organizing and tallying your costs if of utmost importance.
Land and Building Size
Location is one of the most important factors in choosing your facility. This goes for any commercial building, and storage is no exception. Location determines ease of access for customers as well as loading/unloading capabilities.
Ideally, land should be about one-quarter to one-third of the total cost of construction. Obviously, land in densely-populated areas is going to be more expensive.
Multi-story units will of course use less land. They will be more expensive per square foot. Single story units are anywhere from 25-50 dollars per square foot, while multi-story buildings can cost $70 per foot. As supplies, labor, and laws change, so will prices.
Supplies, labor and more will go into this facility. Make sure you have a good idea of the following:
- What materials you need to build and their costs
- Labor Costs
- Licensing/permit costs (usually fewer costs in rural locations)
Send us a message if you’d like to get a current detailed estimate for your proposal.
- Who is your competition?
- Can you meet the demand in your location?
- Is there high enough demand in your location?
- Can you supply the right services in your facility? Requirements for cold storage, vehicle storage, and other specialized storage facilities are highly varied.
- What is your maximum occupancy? You can’t figure out your ROI without it.
Return on Investment (ROI)
Add all your costs and figure out how much revenue you will need before you break even.
- Construction labor
- Operational costs
- Site maintenance
- Operational labor
- Licensing and fees
- Income from total occupancy
- Income from maximum occupancy
- Required occupancy to recoup operating costs monthly/yearly
- Things to consider when figuring your revenue from occupancy:
- Sign-on discounts, referral bonuses, etc.
- Amount of time it will take until your occupancy makes the facility profitable
- How long will it be before you reach maximum occupancy?
- Other services. Storage facilities for boats, for example, might offer cleaning or preparation services. If you offer specialties, you will have to balance their income vs. payroll. Other costs might also pop up for supplying such services.
Finding the Right Construction Company For the Job
Once you’ve figured out as much as you can, calculate out how many years it will take the storage facility to be profitable. Cross-compare this info to your market analysis. If competition is on the way, you can count on your yearly revenue decreasing when a new facility gets built. You might find that you will be better off building on other land. It may be that the facility isn’t worth it at all right now, so it’s best to scrap your plans. You might also be looking at a tidy ROI. The most important thing is to carefully look at all of your costs and income, plus the market in-general. This way you can get the most accurate ROI prediction possible. If you forget about a legal change in the area, taxes might skyrocket on you, or permit fees might drown before building is even complete.
If you complete the steps mentioned above and it looks profitable, it’s time to start building! Just kidding. Once you have a good idea of your costs, you are going to need to contact a professional construction contractor. A quality contractor will be happy to assist you in planning, budgeting, and giving you down-to-Earth details that you might otherwise overlook.
One important thing to remember is that commercial construction companies do this for a living. They know the nuts and bolts of construction. A contractor will be happy to help you find any costs you may have missed, or potential pitfalls to look out for.
Here’s a great list of common mistakes and misconceptions made when building a new storage facility.
If you are looking for a construction company with experience, especially in building a storage facility, then look no further. Reliable Construction has over 35 years of building experience, and specializes in storage units.
With 35 years of experience under our belts, we’ve seen every mistake that new — and experienced — builders make. We’ve seen timelines grow beyond control due to bad planning, costs spike thanks to shortages, and much more. If you’d like assistance in budgeting, planning, and figuring out the feasibility of your facility, just get a hold of us.
Reliable’s commercial contractors have extensive experience building storage facilities. Check out our work here. Our team of over 200 can build massive facilities withing tight deadlines, and with top professionalism. If you have a project in mind, we can help you with everything from feasibility to budget. We know current costs on square footage, materials, labor, permits, and much more. When building a storage facility, you want the best — and that’s Reliable Commercial.