Once you decide to build a self-storage facility, the next step is to figure out where the property should be located. To do this, you must create a demand analysis. If you're not working with a design-builder, we recommend using a spreadsheet to conduct the following operations.
Step 1: Determine Market Supply
- List all the competitors, from closest to farthest.
- Add the square footage of each competitor in the column representing the radius the competitor is found within.
- Total all the competitors by each radius and the three combined.
The result is the actual square footage supply that exists in the market area.
Step 2: Determine the Market’s Potential Demand
- Determine the footage/person “Forecast Demand” included in the last Self-Storage Almanac.
- Determine the population within each radius.
- Multiply the “Forecast Demand” by the population of each radius to determine “Demand Based on Population.”
Step 3: Determine the Market’s Net Demand
Subtract the existing square foot supply in Step 1 for each radius from the “Total Combined Demand” for each radius. The result is the “Net Demand.”
Your “Demand Analysis” is now finished. If there’s a negative demand, you can stop here. If your demand is positive, you’ll need to conduct a rental demand analysis.
Of course, you can help dramatically simplify this process by working with a quality design-builder, like Metrolina Builders. You can check out our self-storage portfolio here.