You’ve probably heard of storage condos. They follow the same general concept as traditional self-storage but operate on a different business model. They also attract a unique clientele. Read how two developers have tackled this niche segment and why they believe there’s plenty of room for growth.
You’ve probably heard of storage condominiums. In essence, they offer unique solutions for the storage of cars, boats and RVs, with spaces ranging from luxurious “man caves” to more utilitarian options that are comparable to traditional self-storage units.
The distinct difference between storage condos and self-storage is the target customer generally owns rather than rents their space (though there are some instances of leasing or subleasing). They can then outfit the unit however they like, often furnishing it with features like a wet bar, mezzanine, pedestrian access door and restroom.
Condo Characteristics
Monte Carlo sells storage condos that include a loft or mezzanine and a bathroom, but the company also works with customers to meet specific needs. “We’ll do as little or as much as they want us to,” Looney says. “Some people will have me finish it completely, while others want to do it themselves; so it’s just a mixed bag. But that’s all on top of the base purchase price, which ranges from $150,000 to $575,000 per unit.”
‘Strategic Guessing’
Of course, it’s difficult to know what consumers want and need when you’re first to a market that’s unfamiliar with your product and service. As such, arriving at a profitable storage-condo size takes some strategic guessing,” Pakes says.
“If you go too big on too many [spaces], people don’t want to spend that much money. I don’t know if we’ll ever be able to get it right [initially]. I know that you’re not going to be able to hit 100% of people’s goals. We take that data and all of it goes into our analytics. Again, we’ll never get it right, but we’ll get better at hitting those metrics and absorbing in those product categories faster. That’s the goal.”
A sports car at LuxeLocker in Lake Havasu, Arizona
A lack of market intelligence resulted in Monte Carlo taking a mostly uniformed approach to its unit sizes, opting for 20 feet tall, 50 feet deep and 25 feet wide. Looney says the company originally intended to build only this size, but when they didn’t sell as well as planned, they decided to dedicate half the property to smaller garages.