The Real Reason the Best Deals Never Hit the Market
Self-storage has been one of the hottest commercial real estate asset classes for years, but most investors leave a tremendous amount of value on the table.
In this week's episode, I walk through a real self-storage project we're actively expanding and show how adding units—not just raising rents—can dramatically increase a property's value and cash flow. Alongside self-storage operator and designer Jamie from Storage Designer, we break down the numbers, site planning, and strategy behind turning unused land into a high-return investment.
What you'll learn:
• Why adding units can create far more value than simply increasing rents
• How to identify underutilized land at existing self-storage facilities
• The economics behind modular storage containers and phased expansions
• Real-world examples of creating 5x returns on capital improvements
• How to evaluate access, layout, customer experience, and site design
• The difference between serving residential customers and small business tenants
• Why storage operators should think carefully about unit mix, sizing, and expansion strategy
If you're evaluating self-storage opportunities—or already own facilities with excess land—this episode will show you how experienced operators think about maximizing value through expansion rather than waiting for appreciation.
Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Central: www.crecentral.com
Key Takeaways:
The biggest value-add opportunity in self-storage isn't always raising rents—it's adding units. Expanding a facility can create significantly more value than operational improvements alone.
Look for excess land when buying self-storage. Vacant land, truck parking, RV storage, or underutilized areas can often be converted into additional storage units.
Modular storage containers allow you to expand in phases. Instead of investing heavily upfront, operators can add units as demand grows, reducing risk and vacancy.
Simple site designs often outperform maximized layouts. Customer experience, ease of access, safety, and traffic flow can be more valuable than squeezing in a few extra units.
Small business customers are often the best tenants. Contractors, HVAC companies, home stagers, and other service businesses tend to stay longer and expand into additional units over time.
Unit mix matters. Offering a combination of different sizes can help attract a broader customer base and maximize occupancy.
Appearance affects leasing. New, well-maintained units create a better customer experience and can command stronger demand than older, worn containers.
Run the numbers before expanding. In Tyler's example, a relatively small capital investment in additional units had the potential to create hundreds of thousands of dollars in additional property value.
Think beyond cash flow. Every dollar of NOI created through expansion can dramatically increase a property's value through cap rate compression and future refinancing opportunities.
The best self-storage deals often have hidden expansion potential. What looks like excess parking, RV storage, or unused land today may become the highest-return portion of the investment tomorrow
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
Episode Transcript:
Tyler Cauble 0:05
This episode of the Commercial Real Estate Investor Podcast is brought to you by my CRE Accelerator Mastermind, where you'll get access to my step-by-step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you, you'll get personalized coaching and feedback from me every step of the way. Go to www.crecentral.com to learn more. Self storage is one of the hottest asset classes today. It has been for years, and it still continues to be. And if you are looking at buying self storage facilities, one of the best ways that you can create value on them, instead of just raising rents, operating them better, which is certainly a great way to increase the net operating income. The next best way, and probably the best way, is to actually add units to the site, so if you're looking at buying self storage, you want to look for sites that have additional land, maybe there's some industrial outdoor storage, maybe there's some truck parking on it, where you can eventually add some more self storage units to it, because the cost to the revenue that you're able to generate is really, really outsized, and you can get some pretty phenomenal returns by doing so. So that's why today we are sitting down with Jamie of Store. Oh my god, all right, we'll cut that out.
Speaker 1 1:30
We got a fire truck in the background.
Tyler Cauble 1:32
Yeah, I don't know if you could hear that, ridiculous. And that's why today we're sitting down with Jamie from Storage designer.co.uk to walk you guys through what we are designing, what we are adding to our site, a 105 unit self storage facility that we acquired about a year and a half ago to add 2030 units, that's the question,
Speaker 1 1:55
yeah, that's the question. How many and what size
Tyler Cauble 1:58
and what's going to make sense? So, Jamie, thanks for joining us today. Tell us a little bit about yourself and what you guys
Speaker 2 2:04
do. Oh, good. Yeah, listen, thanks. Thanks for having me on today. So, yeah, so storage designer, essentially I am a self storage operator over here in the UK, so I've been doing that for I pivoted into the industry about three or so years ago, my previous, in my previous chapter of life, I was in hospitality, and specifically sort of restaurant design. So, what I offer in storage now is a fully comprehensive and sort of operator-led storage site design, fully optimized, with focus on sort of driving revenue. Yes, our design philosophy is that every square effort counts, and that's that's of course based on sort of getting the maximum, maximum lettable value out of your site, but also providing excellent customer service in terms of access and turning space, so that's essentially what I do. And in the UK, we're sort of, we have a lot of dedicated shipping container self storage sites, and as well as sort of hybrid sites as well, and I know that is something that is emergingly becoming extremely popular in the US as well, so that's essentially what I do in a nutshell, and it would be good to, yeah, I guess sort of talk you through some of the designs that we've been working on, so we've been working with you guys on a site that you have in Nashville, that's
Speaker 1 3:38
just right outside Nashville, in Madison, which is an up and coming little area.
Tyler Cauble 3:45
Yeah, it's funnel spot. So, it's.. we're sitting on, you know, a little under two acres of land. We've got some permanently built self-storage units that are there already, like I said, about 105 units. We have some truck parking, and we also have a vacant lot on the side that we have already graded and gotten ready for storage units to be dropped, so what we're exploring now is what these more modular units would look like that could be semi permanent, so instead of us coming in there and necessarily building an entire structure, we're actually just able to bring in shipping containers or prefabricated self storage units and just drop them in place. So, Jamie, will you pull up the site that we've been working on and kind of walk us through maybe your initial thoughts on what we could design there?
Speaker 2 4:39
Yeah, yeah, absolutely, so here, so there's a few where we're at, is there's a few different options, and it would be good to get you guys feedback on which ones you're edging towards, which ones you prefer, because there's ways to optimize a site, but ultimately it's not to the operator and what they come. To pull with, in terms of like access, and what access has been left for for for vehicles, etc. But I guess just to go back on, you know, the the approach of using shipping containers or purpose-built self-storage units is the fact that it is modular and it can be deployed in phases, so you know, five containers at a time, 10 containers at a time, you know, lease up to 70 80% occupancy, and then go for your next, so you're sort of, you're sort of phasing your lower capital, as opposed to, you know, like you're describing, you know, building an entire facility straight from the get go, so hopefully you can see these designs, and this is somewhat familiar. Let me pull up the satellite image, which should make things a bit clearer.
Tyler Cauble 5:53
Yeah, that's pretty cool. So, if you're, if you're following us on the podcast, what we're looking at right now is a basically a CAD design of the existing structures with the additional self storage units on the right hand side and the top left hand side, where we can, you know, basically get, you know, okay, here's the thing, some of y'all have followed a couple of my self storage videos so far, so y'all probably know Jacob, he's with Sixth Man Movers. He owns a moving company here in Nashville that is growing quite rapidly. And if you want a really great self storage hack, go partner with a moving company, because they have clients that need storage constantly. And so that's one thing that we're looking at here, is we've essentially maxed out our occupancy with our existing units, and we need a way for Jacob, and also just third-party clients that find us, you know, online or whatever, to be able to add more units. So, what we're looking at here on the right-hand side is essentially a drive-in aisle that is designed with a moving truck in mind, which you should do regardless of whether or not your partner is a mover, because that's likely how goods are going to be showing up to your space, and so what Jamie's talking about right now is, do we maximize the amount of units or do we make sure that the truck can actually turn around without having to back out.
Speaker 1 7:17
Yeah, it's definitely thoughtful to do so. I think a lot of, lot of our trucks are 2426 foot, if we were to bring it in like ourselves, and then a lot of the customer trucks are a little bit smaller chassis, like 20 feet, 16 feet, Jamie, I don't know what that is, and in British meters, but thank you for putting them in feet and inches for us today.
Speaker 2 7:44
I've got it, I've got it in, I've got it in feet and inches, but it's, it's a strange one. In the UK, in commercial real estate, land is always talked about in square foot and acres.
Tyler Cauble 7:58
Ah, interesting.
Speaker 2 7:59
Yeah, but then when it comes down to design, millimeters, just to make things,
Speaker 1 8:08
yeah, even weirder,
Tyler Cauble 8:09
make it easier,
Speaker 2 8:11
exactly that. So, yeah, we've got it in feet for today,
Speaker 1 8:16
yeah.
Speaker 2 8:17
So, yeah, so I guess this is, I guess, we're looking at sort of option number
Speaker 1 8:24
one, right?
Speaker 2 8:26
Very simple. So, I guess straight from straight from the back, we've got - we've got - I wouldn't say irregularly shaped plot of land, but definitely has its limitations, in that it's quite long and it's relatively thin in width, so I think that's the biggest challenge that we're looking at on this site, in particular. Now, this, this, this layout is very straightforward, as you literally in a row, right? So, we've got 24 shipping containers, which leaves an access way of about 25 foot across, so from an access point of view, very comfortable. You can have multiple vehicles in here, pulling up to each unit with drive-up access, passing each other effectively. You could have most of these customers, you know, visiting their unit at one go. Chances of that happening are fairly slim, you know. You guys, you guys will probably know that with the existing units that are on this side, all depends on how your customers are using the units and how often they're, they're sort of visiting them, so essentially, here, yeah, we've got the 2024 20 foot containers all in a row, we've got some space down this side for turning if necessary, but there is always the option to sort of squeeze another couple in, should, should you. It's sort of applicable, but that would mean a smaller size, you know, car SUV would be able to do an about turn up here, sort of a three point turn, and then come back out again. A larger vehicles, you know, like this, a larger truck, you're probably looking at reversing out, so that's or the
Tyler Cauble 10:18
infamous Austin Powers 3000 point turnaround.
Speaker 1 10:21
Yeah,
Speaker 2 10:22
yeah, that scene that lives rent through my head. That's right.
Tyler Cauble 10:27
Yeah, I mean, I think, like, just looking at it on the renderings here, and also thinking through code, because there are, you know, some codes that would apply in this instance for turnarounds. I think we would have to go without those two end units for now.
Speaker 1 10:42
Sure,
Tyler Cauble 10:43
simply so that we have an actual turnaround there at the end. It also makes it far more customer friendly to be able to do that, and at one point, too, I mean, Jacob, we haven't really talked about this at all, but I mean, at some point it might make sense for us to delete that building.
Speaker 1 10:58
Sure, yeah. And what is
Speaker 2 11:01
this building doing?
Tyler Cauble 11:04
It's storage, right now.
Speaker 1 11:04
Yeah, it's.. it's being used as storage. It was originally a switch building, like for the phones back in the day, like the ladies would sit there and move the switchboard, so it's a.. it's an odd building. It's kind of a windowless brick.
Tyler Cauble 11:18
It's cool,
Speaker 1 11:19
big space, but it's on, yeah, and I mean, your, your point is valid, right? Like, okay, as we look at maximizing even that plot, is that, is that six more, seven more units that we could place on the on on the lot, yeah, because
Tyler Cauble 11:38
technically, how many, how many customers do we have in that building right now?
Speaker 1 11:41
Three, yeah. So it could,
Tyler Cauble 11:43
so I mean, we could probably double the amount of storage, but then you get into, okay, it's probably gonna cost $20,000 just to demo the building out.
Speaker 1 11:51
Yeah, then we'd
Tyler Cauble 11:51
have to grade it out again, put more gravel down, so it all just becomes a numbers game to see, okay, is it worth the additional NOI to spend this capital now, but the nice thing about the way that we're approaching this, and this is how I recommend any investor really consider their self storage add-ons, is don't build everything all at once.
Speaker 1 12:11
Yeah,
Tyler Cauble 12:12
right. Go out and add units as you need them, because especially when you're doing a modular approach like this, it's not really any more cost-effective to do 100 units as it is five.
Speaker 1 12:23
Yeah, so
Tyler Cauble 12:24
make sure that you don't create too much vacancy, because then that can also become a problem.
Speaker 1 12:30
Yeah, one of the things Jamie that was kind of thinking around is, you know, if these are commercial type clients, like your HVAC, your small business clients, it also may be like good to have a parking space, like have two units parking space, two units parking space, and I think that would be something that also could be dictated by, well, what kind of client is inquiring, and it does give us that flexibility, because if they have two HVAC vans, let's say, and they're going to report there every day to get their equipment out, or their parts, or whatnot, that may yield the same income, just function a little better for that customer, so it's just something I've been thinking about, of, you know, if we put them all in this first setup, it does enable us to be able to make that decision on the fly.
Speaker 2 13:28
Yeah, yeah, that's it. You got to think like, you know, in terms of your customers using the storage, it's like, how do we want to optimize? Do we want to optimize for those, you know, moving customers that are there, you know, you're going to have a higher churn rate, you know, three to four to six months, or are you looking for those really sort of sticky customers, which are your, yeah, your, your small businesses, your, yeah, we call them tradies in the UK, you know, your, your builders, your construction, that's a much
Speaker 1 13:57
cooler word for that, is a lot cooler word,
Tyler Cauble 14:00
tradies,
Speaker 2 14:01
yeah, yeah, that's it, but yeah, that's, that's, you know, that's what we find, is that they're the really sticky customers, they're the ones that, like, you know, they're not going floor warehouse, but they're going one container, and then they're expanding, and then they need two, and then all of a sudden they need three, and then they're sticking around, and then this becomes this is a business expense for them,
Speaker 1 14:21
yeah, so yeah, a lot of the sticky customers that we actually acquired that did not turn over when we took over the property are your tradies, right? You got your like an HVAC company here locally, there's a caterer that houses a lot of their event type equipment in there, yeah, and it's, it's been interesting to think through, like, what they're also willing to pay to have that dedicated access, and yeah, it's just something that, if we, if we had our choice, that is a little bit easier to service, because you, you know, those expectations could be met. As opposed to the general public, the wide variety of expectations that come with that.
Tyler Cauble 15:05
Yeah, I mean, the interesting thing about those types of costs, like, you'll get, you know, people that are staging homes, right? Well, in between staging, they need somewhere to store everything. They typically are pretty sticky tenants, and, and, so, that, you know, that's one thing to think about as you're going out and buying self storage facilities is that you're not just going to be renting to, you know, residential or your typical off the street owners that just need to store furniture in between moves, or just, you know, they inherited mom and dad's stuff and need to put it somewhere, of course, that'll be a part of your customer base, but you also want to figure out how you can get these stickier, you know clients like the home stage or the HVAC technician that you know don't really need to pay for a space, they're working out of a truck and they still need somewhere to store all their stuff.
Speaker 1 15:49
Yeah, I think it's a gap in the market, you know, I think that's what I've found. At least we're on the like outskirts, let's call it of Nashville proper, and as our city grows, you know, folks are finding it harder to find leasable space for their, for their small businesses that, you know, can't keep up with our property tax increases and things like that, so, and they don't want to keep it at their house, you know, and there's rules against that in certain areas too, so I think this is just, you know, kind of something we didn't know as we got into it, but as we've served our client base, we've started to find out, like, this is something they value.
Tyler Cauble 16:31
Yeah, so Jacob, we've, we've gone ahead and graded this side lot, we've dropped down gravel minutes, it's ready for units to be installed. So, what are we thinking here so far? Are we.. I know we've got the 20 units planned. Are we going to start with five? Are we going to start with 10? What are your thoughts there?
Speaker 1 16:48
Well, the unique position I'm in is because we get a client with a need ahead of time, you know. I really am in an awesome position to say, hey, I've got a customer that's coming in in 30 days, and we're going to need two containers, so we're able to project out a little bit. It's not like any further than 60 days, but I think with this design here, the one that's all in a line operationally, I do like the idea of not complicating things as far as a grade or the guys that come in and install and actually drop the containers, you know, they, they come in on a truck with this space, it's going to be too tight to directly drop it, so they actually have to bring this kind of crane or boom lift out to line them up in this fashion, but I'm already thinking operationally it would be really, hey, let's see what the demand is, bring in two for that customer, bring in three for that customer, and then all those are pretty temporary, you know, it's usually my builders finishing up the project, so I only need it for 90 days or I only need it for six months, so I think we're in a pretty unique position where we get to let the demand dictate the quantity, but I'm already looking at here we are right at the precipice of our moving season in Nashville, which is usually like March to October, and we've got customers are already in line that will be in need, and that's why I reached out to Jamie, telling him, really, hey, I know we talked, and we, we initially thought this might be pushed out further, but I'm sitting here a little bit crunched, because we're almost out of space, and we're gonna, we're gonna need to add some containers quickly, but also didn't want to just like start dropping them without any, you
Tyler Cauble 18:44
want to, you want to think about it a little bit. I mean, especially because we'll probably have to pull permits to make sure that we're doing everything the right way here,
Speaker 1 18:49
right?
Tyler Cauble 18:50
So I'm assuming we would start with the units towards the back. I mean, if they're going to be bringing in a boom, it's going to be way easier for them to continue lining them up,
Speaker 1 18:56
sure,
Tyler Cauble 18:56
that way. So, I mean, walk us like, where are you getting these units from? Like, how are you sourcing those storage containers?
Speaker 1 19:05
Yeah, well, Jamie actually put me in touch with a good, a good vendor. And then there's, you know, what I've found is there's a bunch of, let's call it mom and pop container brokers, and we're, we're in the midst of, let's say shopping, because what I'd like to have is one vendor that knows the overarching goal of our plan and can give us, you know, the service and the volume pricing that we are looking at over the next 24 months, you know, instead of just saying to a company, "Hey, we're we need two containers, and then go to another company, and say we need three. I'm really looking for somebody that understands the vision here, and you know, is coming along as a stakeholder, and under understanding that, you know, we're a multi-unit buyer, and we intend to do it a few at a time. So, I haven't really identified who we're going to. Work with just yet, but we definitely have a variety of options, anywhere from like the big, let's call them big box companies. Jamie, what was the one that we connected on that you use over there? That's a national international company, they're
Speaker 2 20:16
called First Containers. So, yeah, so we've been working with First Containers for, for quite a while, and yeah, all of our units come, come from those guys, and yeah, that you know, definitely the market leader in in the UK, and they operate, you know, in Europe and in the US as well. Lenny, you guys from from the discussions you've been having, and the thoughts you've been having, you guys thinking of having brand new units, used units. Well, that, that was
Speaker 1 20:46
the, that was the question I pose to you, is like, what, what should we be thinking about as we go selecting our type, because obviously there's quite a variety of categories for those that don't know, containers come in different, you know, you have your used, you have your watertight, wind tight, you have your brand new, you have your one trip, it can be a little overwhelming, so even bouncing these ideas off you has been kind of eye opening. What would you say about the categories and how you think about it.
Speaker 2 21:21
Yeah, there's there's a number of them. You've listed them well. And then, if I flick over, we'll talk about this in a bit more detail as well, in terms of alternative design. But we've got different size types. This is a 10 foot container. You've got this is a standard 20 foot container, and you can go, you know, up to 40 foot as well, depending on again, customer base, demand, demographic, that kind of thing, but in terms of the type of container, yeah, you're right, you've got you've got brand new or one trip, or you've got used, used typically look, they could be 10 years old, normally sold with a watertight and wind tight guarantee still a considerable investment once you know everything is all added up, and especially when you're talking about, you know, volumes like this, and then you've got your, your brand new or one chip containers, which is essentially containers that have either been purpose built for storage purposes, like exactly like this, or the one trip in the sense that they've been filled with goods, have come from the Far East, and then you know they've sort of landed in a depot, goods have been offloaded, and then they go on to the open market as a one trip container, like I think from a self storage perspective, I would always sort of, you know, advise people that I work with to go with brand new, because you've got longevity, you know, you're talking, you know, 1515 years plus of of use out of these at these containers, like I said, plus, because there's also certain things that you can do to maintain them, particularly on the roofs, if they're high rainfall areas, and things like that. Used is a bit of a gamble, because essentially you're not, you're purchasing a unit that is of a certain standard, and you kind of don't know what you're going to get, and you've got to think about the appearance of your site as well, you know, your customers are going for they're coming to you because they're trusting you with their belongings, which obviously has super high value to them, you know, to walk into a site, the stark difference between walking into a site that has a bunch of containers that, yes, they might be watertight and windproof, but they're rusted, and you know, they look like 10 or so years old. You flip that to a site of brand new containers, in they come in all sorts of different colors nowadays, as well, even as you know, when, when we first launched our self storage business, which is about three or so years ago, you can only really get them in blue or dark green, potentially a sort of like a beige camel sort of color, but now you can pretty much, because of the sort of rise in the popularity of container storage, you can get them in pretty much any color you know that you want. You can suit it to your brand colors, and then you've got a thing you can also apply branding, you know, vinyl stickers to each unit, right? You know, number the unit, you know, put a little instruction of how to open a container, how to lock a container, all these things that add to the sort of customer experience is going to make your customers feel a lot more safe and secure that you are taking care of their goods,
Speaker 1 24:52
yeah, yeah, matters
Speaker 2 24:54
exactly 100% So, I mean, that's my sort of take on it, yeah,
Speaker 1 24:59
yeah, is the. Well, I think you know, obviously it comes down to cost, right? But also, if you're thinking about this long term, I think it's pretty quickly you're - it's easy to justify going with a new one, and I think the gamble is something too that I would love to avoid, just the idea of, like, some rusty, you know, whole hole in the corner container coming over while you have goods you're ready to place, that just kind of really makes the hair stand up on my neck. Yeah,
Tyler Cauble 25:33
becomes a bit of a problem.
Speaker 1 25:34
Yeah.
Tyler Cauble 25:34
So, so before we dive any further into the design, one thing I want to talk about real quick are the numbers. So, for, I mean Jacob, for grading the site, what was our cost? I mean, how much lane is that that we actually graded? Do you know,
Speaker 1 25:48
Jamie, what's the measurements there from I think you had it up, it was like about 250 feet or so by,
Speaker 2 25:59
yeah, so where are we at? We're about this entire, including the building, so I can cut, I can cut that off. Actually,
Tyler Cauble 26:09
the graded
Speaker 2 26:09
area is up to here, right?
Speaker 1 26:11
Yes, sir. Yeah, we've got a couple foot setback already. I wonder what that would be.
Speaker 2 26:18
There's this small area here that I can rough, roughly exclude, so that's about 10, almost 11,000 square foot.
Speaker 1 26:32
Yeah, so all in on the gravel and the grading, it was about 25,000
Tyler Cauble 26:39
Okay, so like roughly two bucks a flood, so 25,000 that was gravel and everything.
Speaker 1 26:46
Yep, great operating
Tyler Cauble 26:47
gravel, everything. So that was $2.27 a flood, so pretty inexpensive. And then how much does a 20 foot container like, how much does that run?
Speaker 1 27:00
Well, if we went new, I mean, that, that would probably be here. It, it varies, right? You could probably get away with 2500 to $3,500 on a 20 foot. Not sure, sure what it costs over in the UK in, in pounds, but what do you guys and
Speaker 2 27:23
around sort of 1800 to 2000 pounds before tax,
Tyler Cauble 27:32
yeah. So, roughly 2500 bucks. So, if we run the math, $2,500 is that installed or is that just the container? Yeah,
Speaker 1 27:39
a lot of them include delivery.
Tyler Cauble 27:41
Okay, so 2500 times 20 units, that gives us $50,000 in just the units, plus the 25,000 for the site work. That's about 75,000 for the 20. So you're roughly all in at about 3750 a unit. And how much do you think these would rent for?
Speaker 1 28:00
I mean, I think in our market, 20 foot, we could easily get 200 to $300 Let's just say,
Tyler Cauble 28:07
let's just say, even 200
Speaker 1 28:08
sure.
Tyler Cauble 28:09
So, 200 bucks a month, and you're probably running what, 30-5% operating expenses on those?
Speaker 1 28:16
Yeah, just under,
Tyler Cauble 28:19
so that's $1,560 a year on a 3750 investment, right. So, I mean, if we multiply that times 20, again, remember our all-in costs were $75,000 give or take, right? I mean, there's also going to be permit fees, there's design fees, there's all sorts of stuff like that, but if we add $31,000 a year in NOI, even at a seven and a half percent cap rate, that's $416,000 in additional equity that we've created just by doing this.
Speaker 1 28:48
Yeah, I think that's what you know makes it exciting, because it was just a lot, right? It's just sitting there, and we've already got the branding, the customer base, the, you know, the operating team behind it. So, obviously, there will be some learning curves around,
Tyler Cauble 29:09
sure,
Speaker 1 29:10
the units, and I think Jamie spoke on having some collaterals that folks can get when they check in, and that's the type, or.. and I also think there's a customer base that's just not going to want a shipping container, and that's okay, but the diversity is what I do like about this opportunity, too, is just having a variety of different types of units.
Tyler Cauble 29:31
Well, and even so, I mean, we could push all of the regular market customers to the typical units and push all of the moving customers into the self-container units, because they're not going out on site. I mean, you're picking that up, storing it, moving it all for them.
Speaker 1 29:46
It's very short term as well.
Tyler Cauble 29:47
Yeah, exactly. And so, you know, I mean, you're 5x in your money, you know, which is a pretty interesting thing. Well,
Speaker 1 29:55
an exciting part is this is only one of the lots, you know. Yeah, yeah,
Tyler Cauble 29:59
Jay. Me, show us the other
Speaker 1 30:01
one. Yeah, you got what? What did you set up? You've got about three different options for us on,
Speaker 2 30:10
yeah, we've got three different options on on this, let's call it the main lot. And then we have a secondary secondary lot over here, which is, I believe, you're currently using RV space and vehicle, vehicle rental space,
Speaker 1 30:25
couple of boats and RV. It's about a dozen parking units.
Speaker 2 30:31
Yeah, and we're seeing if we can maximize that space into into similar, similar shipping container based units. I think so. For lot one, there's a should we go into? You want to go into the variation of these designs?
Speaker 1 30:49
Yeah, let's do that, because obviously we've got the simplicity of the first one there that you shared with us. It's going to have 2420 footers. Yeah, you know the idea. Maybe, maybe there's lighter install and less of a, let's call it grading challenges with that one, and then these other two, it's adding a handful of more units,
Speaker 2 31:13
yeah, that's right, so these, these are maximized, I would say, so what we're looking at here is, you know, a slightly different configuration that has got us up to 2820 foot containers and four smaller 10 foot containers, you know, which, which is also good to sort of diversify what you're offering, you know, you like, like you're just mentioning, you'll have customers that will prefer, you know, the sort of regular indoor storage units, you'll have customers that will absolutely prefer a shipping container as well, because what we find, so our site's a hybrid as well, so we have indoor self storage and we have shipping containers, and the shipping container, the shipping container option always it provides the best value for money to the customer per square foot, you know, to 160 square foot indoor storage unit will cost over double than a, you know, an outdoor unit,
Speaker 1 32:24
yeah,
Speaker 2 32:25
you know, purely, but well, basically, on based on everything that we've been discussing, about, you know, it's ready-made, they're extremely accessible in the open market, they're the ones that are used most, they've manufactured the most, you know, according to sort of, you know, global shipping, right? So, yeah, it, but it's good to have the option of smaller units, because some people might want all unit, you know, yeah, and even
Speaker 1 32:50
mention, like, dropping a 40 foot, or maybe is something else to think about. If we tucked it into, if we went with this type of layout, it would give us that ability to wear maybe the middle two or 40 foots, and then we have some 10 foots and some 20 foots, that's it, but it definitely opens up the possibilities there.
Speaker 2 33:08
Yeah, yeah, there's, there's, you know, these, these could be swapped out for a single four, you know, 40 foot unit, and probably did get a
Speaker 1 33:15
little tighter on the layout, maybe speak to that, just in terms of it does change up the application here,
Speaker 2 33:24
it does, so, so that's a bit of a visual to see of where we're at, same same truck as before, so we're looking now, we were at 25 foot access, we're now at about 16 across,
Speaker 1 33:39
okay,
Speaker 2 33:40
so, so still very accessible, especially for sort of truck, you know, sort of pickup truck SUV size, and we've reduced these, these sort of lanes here to about 15 foot across, so it's bigger than, yeah, it is bigger than it looks. You got, you think these are four foot doors that are swinging out, you've, and you can comfortably, you know, comfortably fit a vehicle in there, so you're still the customer's still getting that drive up access that makes shipping container really popular is the fact that you can drive back straight up to it, and then load your, load your goods in. You're not going through any doors, you're not going through down corridors, the vacuum
Speaker 1 34:28
systems, and yeah, the Fort Knox security that some of these places have. Yeah, my movers cannot stand the indoor facilities because of just the door dance that has to happen, the
Tyler Cauble 34:43
codes,
Speaker 2 34:46
yeah, that's it exactly, that's why these are so popular, right? So we've still, we've still got that element, you know, we're still, we still got that element for the customer, and what I guess what we're doing is what we're sacrificing in this, this. Space in the main access way, we're then gaining in turning space, you know, there's not really a scenario where a regular car would have to drive all the way up here, you know, if they're in this unit here, for example, they've got a turning space here, you've got a turning space here, and you can, you can, you know, exit the site the right way around,
Tyler Cauble 35:21
yeah, and this really becomes a balance between, you know, how do you maximize the site, how do you maximize customer experience, how do you make sure that you're adhering to code, you know, even if, even if this design passes code, it still makes it tougher from a customer experience standpoint, and so it makes it to where, you know, one, either we start to really rely on the moving company to utilize the majority of these units, just because you got to be careful with people backing up and having a 16 foot drive, like the people are just going to start hitting stuff, but two, you know, do people really want to have to pull in, and then not easily have an exit, other than having to completely do a three point turn in relatively narrow areas, and so in my opinion, like if we had another four feet on the drive aisle, I'd say, "Hell yeah, this is the one that we should absolutely do, because we're getting four more units out of it, but you start thinking through, like, the user experience, is somebody going to want to rent a unit there if they pull in and they have a hard time getting to their unit, or whatever that is.
Speaker 1 36:33
Yeah, quick, quick, like knee-jerk reaction to this layout is, is doing, I'm doing the math on, well, what if we knocked out the the first aisle and it becomes the pod layout, but you know those eight that are nearest the drive could be removed, and yeah, exactly what you're doing here, that'd
Tyler Cauble 36:56
be the easiest way to do that, and then, and
Speaker 1 36:58
then what I also like about what you just did with that is now it's almost made the decision of, hey, there's six at a time, and we do phase A, phase B, phase C, phase D, and then we're done with this portion, we just work our way out of the property,
Tyler Cauble 37:14
but we've got fewer units now than we did in that original design, is that correct? Because we just, if we just deleted eight, then we're down to 20 compared to the 24 in the other one,
Speaker 2 37:24
that's right, yeah. So we had 24 on that one, so we're now at what we at 18 should be at 21 there.
Speaker 1 37:32
Yeah, I think the only thing it does for us is opens up the ability to bring on some 40 footers,
Tyler Cauble 37:39
yeah.
Speaker 1 37:39
You know, and, and it is a decision on how
Tyler Cauble 37:43
popular would, would a 40 footer be? I mean, because we don't have anything like that currently, but
Speaker 1 37:47
for, for if it was for be moving company use, it's highly useful because it can, you know, big challenge of storing goods is inventory management, and it really does, it makes it easy, right? It just goes into 140 foot and you wait till the builder's done with the project and exit.
Tyler Cauble 38:08
So then probably the best way to look at the design from that standpoint is the first block there is all the 40 footers, so that your truck doesn't have to pull in too far, and you put all the smaller units in the back because those are going to be people pulling up in cars, and they're going to be able to maneuver through all that far easier.
Speaker 1 38:25
I do know that, like, if we, if we reached out to our, our tradies, as you say, and said we made some 40 foots that came available, I think they would be sold before we even placed.
Tyler Cauble 38:35
Yeah, very popular,
Speaker 1 38:38
yeah, but it would only be to that sector, I think,
Speaker 2 38:42
yeah, and also, if we're doing 40s, let's say you know that, or so, it would be this side, like that, let's say those are 340s then they're also, you don't need to access from both sides either, so they're going there,
Speaker 1 38:56
so it does open up a little bit,
Speaker 2 38:58
opens up, and then if you did the same this side, you know, you're pushing it all the way up to here, which opens things up a little bit more.
Speaker 1 39:06
Yeah, yeah,
Speaker 2 39:07
those, those little gains could be, you know, could be true, because you
Tyler Cauble 39:12
could push the two middle buildings together, you can push the, the end buildings further out, and now that actually becomes far more usable,
Speaker 2 39:22
yeah, and then these,
Speaker 1 39:23
so cool. I mean, just to think through this operationally, yeah, it's, it's there's some flexibility at Lynn's if we do diversify. I think the, the, that idea, where it's a mix, a healthy mix, for some reason that's appealing to me.
Tyler Cauble 39:43
Yeah, and so maybe those middle units are the ones that are the smaller units now, and it's the two end units that we're pushing further out that would make more sense, because I mean, if you do that, I mean, you look at those drive aisles that that Jamie was able to create, like you could get a moving truck into those drive aisles now,
Speaker 1 39:59
right?
Speaker 2 40:00
Yeah, if these were pushed out,
Tyler Cauble 40:03
yep, yeah, like if you push that to the edge, you push the middle two together, now you've actually got a pretty decent interior alley, in addition to that primary drive aisle to where you're pulling up to your units a little bit better,
Speaker 2 40:18
yeah, yeah, there's there's loads, you know, if we just sort of centralize that,
Tyler Cauble 40:22
so this is the nice thing about working with the designers, that you could just start to visualize all sorts of different scenarios that make sense, depending on what your use is, right? So I mean, if Jacob goes out and you know all these small businesses say, "Yeah, absolutely, we want, you know, we want 40 foot containers. Now we've got multiple different ways that we could actually approach this and have more certainty in what we're releasing, instead of just bringing some vacancy online and hoping that somebody gets interested.
Speaker 1 40:50
Correct. Yeah, yeah, I think too, like the, you know, if we went with some of this, it does lower that customer count as well, right? It's now a dozen or 16 customers, as opposed to 28
Tyler Cauble 41:05
pros and cons.
Speaker 1 41:06
Yeah, yeah, right. Well, you know, sometimes less customers is okay. Yeah,
Tyler Cauble 41:12
yeah, yeah. The only hard part about being in business is having customers. That's right,
Speaker 1 41:20
Jamie. My, this really goes back to like my Lego days. I mean, you've got to have fun with this, right? This is kind of, this is kind of a cool gig you got.
Speaker 2 41:32
It's, yeah, that's a really, it's a really good way to describe it. It's like it's like building blocks,
Speaker 1 41:40
right? So
Speaker 2 41:41
that's sort of how my brain works, is like, it, you know, it's sort of, you know, tinkering and moving around, and it's, it's like a puzzle, that's why, that's why, yeah,
Speaker 1 41:51
we're trying to, we're trying to figure out the site in real time, it's really neat.
Tyler Cauble 41:55
Yeah, what was,
Speaker 1 41:57
what was the third, was it just a mix of units, the third position you put together
Speaker 2 42:03
there, the third was more a variation on. Okay, let me just snap this back to where it was. Sure, so, so this this variation was 20 foots with the additional of these 10 foot, yeah, yeah. Then, but what it did is at the end it created a, it was a bit tight, so let me put the doors back in. It was a bit tight, so essentially in these end sections would probably not often drive up access, it would be sort of the customer back up to here, and then walk, walk their, you know, their items in, which, which could, could present, present an issue, so the third variation just sort of eliminated that. Okay, so brought
Speaker 1 42:47
in a couple more, 10 foots,
Speaker 2 42:49
10 foots on the end to create that space on the end.
Tyler Cauble 42:53
Yeah,
Speaker 2 42:53
but we, you know, we could apply exactly what we were just talking about before in the same way, like these ones could come out, you've, you know, then you've created, you know, the runway, then you can, you know, pushing things to 40 foots and making variations and things. Yeah, I like
Tyler Cauble 43:14
that. I mean, from a, from a safety standpoint, I think I still like the first one better,
Speaker 1 43:20
yeah,
Tyler Cauble 43:21
like it's fun,
Speaker 1 43:22
yeah.
Tyler Cauble 43:23
It's funny how, like, the simplest version is oftentimes the better one, even if you're not necessarily getting the maximum amount of units, because, like, you can see everything that's going on in here, you know, because all of the units are in a line, so if you're driving by or you're pulling up, there's everything's there.
Speaker 1 43:41
Yeah,
Tyler Cauble 43:41
you know what I mean. And this isn't going to be a super well lit lot, and not that anybody's going to be going there in the middle of the night, but it is stuff that you like to think about, of like, okay, well, you know, is there, you know, by having these little nooks that we're creating in between units, because it's not, it's not going to be as gate controlled as though it
Speaker 1 43:58
is Madison. So, yeah, you know, I mean,
Tyler Cauble 44:00
it's not going to be as gate controlled as the rest of, because I mean, like, having an electric gate is one of the worst things in the world, but you have to have probably not going to add another one here, so being able to delete those nooks,
Speaker 1 44:14
right,
Tyler Cauble 44:15
and remove any potential spots to deal drugs, or whatever it is, yeah, you know, it's something to consider.
Speaker 1 44:21
No, it's, it's a real, it's a real thing. We're out there like Sheriff of Nottingham, just trying to keep our sight, you know. Jacob is
Tyler Cauble 44:29
the man in tights, I feel that way.
Speaker 1 44:33
The let's, let's switch gears and look at the ancillary site, let's call it site two, right? So smaller
Tyler Cauble 44:40
units, the
Speaker 1 44:41
smaller units, this, this really was kind of derived out of my desire to have smaller units, but let's say less container cost, and they do. Make 40 foots with four doors, they make 20 foots with two doors. I mean, there's a lot of variations, but that's what this would show, and you put them in a way in which access was was kind of thought of as well. I mean, maybe talk through that just a bit.
Speaker 2 45:18
Yeah, I think so. You know, just looking at the sort of satellite image of of this space, yeah, so you've got a little bit of an odd shape where you know it's almost like triangular, and I think I think, yeah, you were really along the right lines, Jacob, with what you were thinking here, you know, to kind of maximize with, I think it was like a couple of 40 foots,
Speaker 1 45:42
yeah, that would mean 240 foots and 220 foots on that back line, yeah. We could go the other route where you just line up 20 footers, but
Tyler Cauble 45:53
it's nice to have a variety of units,
Speaker 1 45:55
yeah,
Speaker 2 45:56
that's right, yeah. So these, these, I guess, so these are the 20 foots that split into, with four sort of roller roller shutter doors, and you've got the 20 foots here, just to sort of maximize, you know, because we can, that fits quite snugly in there, that the same with this,
Speaker 1 46:14
you want to raise numbers on this real quick,
Tyler Cauble 46:16
yeah, we can, we can definitely do that, and the other thing is, to like, so, so the way that, like, this is inside the actual gate today, and it's currently being utilized for truck storage. I think there's a boat over there, you know. So it's your traditional just parking, you know, paid parking per month. And the thing that I like, you know, there's nothing wrong with that. You can make good money, you don't have to invest a whole lot into it. The thing that I like about going and removing all of that and putting these units in is that it just makes the property look nicer.
Speaker 1 46:48
Yeah,
Tyler Cauble 46:48
you know, sometimes even if people are taking care of their vehicles when there's just a bunch of vehicles parked at a self storage facility, it just doesn't look as nice. So, you may not be able to command as high of rents as you might be otherwise. Yeah, and so coming in and bringing in these smaller units to add to our existing portfolio of smaller units, there makes a lot of sense, and so we're looking at what is it, 123, 440 footers, and 1205 540 footers and 320 footers, so yeah, what's like, what would your estimate on cost be too? We could probably rent
Speaker 1 47:25
them out for 100 and $140 is kind of in line with our other pricing. Back to his point of like, well, where's the value, right? If it, if it's close to $180 inside with an air conditioned well, obviously we need to price this a little bit lower.
Tyler Cauble 47:46
Yeah, so it's 26 units at 140 bucks each.
Speaker 1 47:49
Yeah,
Tyler Cauble 47:50
so times 65% times 12, that gives us $28,392 a year in NOI. And again, you guys, when we're running these numbers, we're assuming 100% occupancy, that may or may not happen, right. Traditional self storage in this area, 90 to 92%
Speaker 1 48:07
Yeah, pretty
Tyler Cauble 48:08
realistic. Sometimes we can game it, of course, because Jacob has a moving company. But again, if you know $28,392 in NOI on a seven and a half percent cap rate, that's another $378,000 in value,
Speaker 1 48:21
yeah,
Tyler Cauble 48:22
right. So, just by going through and adding these roughly 46 units to the property, we could add almost a million dollars in value.
Speaker 1 48:35
The cost on that, those 40 footers with the doors are about 7000 and the 20 footers with the doors are about three and a half, so you know it's going to be a little bit less of a capital lift too, so you know just 45,500
Tyler Cauble 48:54
in units,
Speaker 1 48:56
yeah,
Tyler Cauble 48:57
and then probably what, another 25,000 a grade, and gravel that,
Speaker 1 49:00
yeah,
Tyler Cauble 49:01
so again we're sitting at 70,500 on the cost there, and over $300,000 in value added. So again, I mean that one's actually, yeah, it's about a five times return on your investment there as well.
Speaker 1 49:16
Yeah, I mean
Tyler Cauble 49:16
that's how you really start to juice this, because at the end of the day, like if you buy a relatively stabilized self-storage facility, even if you raise rents by 20% you're still not going to be able to get to a 5x return. It's tough, but by spending the money to come in here and add 46 units, we're adding almost 40% more, give or take 40% more units to the property at a relatively low cost. Keep in mind we bought the property for 1.7 give or take, for another, you know, $150,000 give or take. We're able to add 40% more, so you start to think about that like now your land basis is substantially lower and your NOI. Is substantially higher per unit, just makes all the sense in the world.
Speaker 1 50:04
Yeah, I think this is what got us excited about this deal. Honestly, it's just the potential to maximize and know that these two lots have a lot of, I mean, they may just look like boat storage to somebody who's driving through right now, you know. You can get eight parking spaces in there, but from from a vision standpoint, when we came upon this property, it was the vacant, vacant lots that had me kind of, you know, foaming at the mouth a little bit of like what is possible. Jamie, you guys said you had a hybrid site, what is that kind of how you came into your site? You, you added some storage, and just it started from there,
Speaker 2 50:43
I think, from from our perspective, so it was predominantly for container self storage, so looking for land open storage land for the containers to be the sort of primary business model. Yeah, you know, I think, I think, and then actually we expanded into indoor self storage, so with a sense we've done the
Speaker 1 51:12
reverse, yeah,
Speaker 2 51:13
it's the reverse, because I think here in the UK, and especially in like populated areas, like the land is hard to come by, like we don't have, we don't have lots of space here, so, so, so the demand for land is really quite high, you know, but, but there is, there is definitely opportunities, especially with, so, in the UK, it's more sort of rural and like farming businesses that are typically wanting to diversify and convert, you know, rural land in, you know, storage land, so, so more along the lines of this model of what you guys are doing here, where it's maximizing on sort of traditionally dead space,
Speaker 1 52:06
yeah, yeah, junk land, whatever you want to call it, yeah. I mean,
Tyler Cauble 52:10
for sure,
Speaker 1 52:10
I find it curious that, like, America is the north star of storing, because of just how much stuff we have. Too
Tyler Cauble 52:19
much stuff, I mean, we also have more retail square footage per capita than any other country in the world, so that makes sense. Yes, people are buying a lot of stuff. So, Jamie, as you're going through this, I mean, what should self storage investors keep in mind as they are going through and considering adding units like this to their sites?
Speaker 2 52:40
I think things that we've talked about is, is access for sure, you know, like the options that we've just presented, and, like I said, sometimes the simplest way is the way forward is the best way to go. Think about, really think about your layout and and what it's going to look like, I think, like you said earlier on in the call, best to have an idea of where the units are going to go before you know, before the truck with the with the boom starts coming, dropping them, because you don't, you don't want to be moving them with with people stuffing it, but yeah, yeah, yeah, I mean, it's been
Speaker 1 53:21
super, super helpful to have just this session with you. I mean, I can't stress enough, because it does, it puts the visualization to all these thoughts that come flooding in of the what ifs, and once you see it, it becomes a little more real, you know, so the process you're running is, is tip top, as they would say over there. Yeah, that's
Tyler Cauble 53:50
for, yeah, go ahead.
Speaker 2 53:53
No, that's.. I was just going to reiterate, you know, it's sometimes it's good to just be able to see, you know what's achievable, both visually, and you know, just as you've been doing, Tyler, running the numbers, you know, which is the really exciting part, right? Like, the returns on a business model like this is wild, and that's, you know, that that's why I'm in the business, and that's why, you know, I'm also in the business of designing and helping others do the same kind of thing, so yeah, I think it's a really interesting and exciting sort of time for the storage industry. I think regular people normally sort of glaze over when I start talking about storage, but so it's been really, it's actually been really nice to sort of just chew the fat with you guys, and talk storage, and ROIs, and talk numbers, and super exciting.
Tyler Cauble 54:46
Yeah, it's fun, man. I mean, I, you know, that's why we've got this podcast in the YouTube channel. I nerd out on commercial real estate, so going through this design stuff is, you know, it's incredibly helpful for people that are considering getting into self storage, or those that already own some that are thinking through, like, how do. I go ahead and add even more value to this, because again, guys, like the more NOI you create, the more your property is worth, the more you can either sell it for or you can refinance, pull some cash out, and go buy another property. Jamie, thank you for joining us today and walking us through how to actually lay out these sites, how to design, what to keep in mind as you're going through and adding units to the site. If anybody listening or watching on the YouTube channel is interested in following you or reaching out to have you help them design their additional units on their self storage facilities, where can they find you?
Speaker 2 55:36
Just on my website, so storagedesigner.co.uk there's a whole bunch of things on there. I've got some handy guides, I've got a completely free downloadable playbook, which is 27 pages of my thoughts on everything we've just talked about, and more, including the 50% rule, which is how to quickly and effectively sort of assess the financial viability of a site in two sums, so stuff like that, and you can find my email address, which is on the website.
Tyler Cauble 56:09
There we go, storage designer.co.uk Jamie, thanks for joining us, man. Guys, if you're interested in getting your self storage facilities designed, reach out to Jamie. He's been super helpful as we've been going through this process. Appreciate you all for joining us, and we'll see you guys in the next one. This episode of The Commercial Ealate Investor Podcast is brought to you by my CRE Accelerator Mastermind, where you'll get access to my step-by-step investment blueprint, essentially a library of resources on how to invest in commercial real estate, you'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way. Go to www.crecentral.com to learn more.