By David Lucas
After acquiring a Class-C self-storage facility in San Antonio, the new operator was faced with a decision about what to do with a sloping, underperforming parking lot that had been used by the previous owner for RV and boat storage.
With an expansion of new storage space on the land that would better target the demographic needs of the area, the operator could offer units that would be most profitable for the facility. But traditional ground-up construction takes a significant investment of time and money.
The solution: installing relocatable storage units. This solution allowed for faster installation with limited municipal approvals and an immediate return on investment.
Wentworth Property Company chose Janus International’s Moveable Additional Storage Structures (MASS) units. The mobile solution added 7,700 rentable square feet with 82 drive-up units with a Class-A product.
These units easily accommodated the sloping land with their adjustable bases, saving Wentworth significant time, money, and resources in comparison to renovating the area with traditional ground-up construction.
Instant Income
More and more operators choose MASS units because of their ability to generate additional income within weeks of order placement. Relocatable self-storage units are technically classified as equipment, which usually helps operators bypass the lengthy permitting and zoning processes, depending on the county of residence.
Plus, relocatable storage units are ideal for irregular or sloping areas of a property where traditional construction may not be viable. Most self-storage facilities have open air sections around the property that may be dedicated to boat, RV, or auto parking, or other uses that produce low rental rates.
In recent years, self-storage facilities have enjoyed high occupancy, which has limited the availability of many popular unit sizes. Relocatable storage units give operators the ability to replace low producing exterior areas with traditional storage units that have the potential to generate much higher income.
“With the use of the MASS product, operators can maximize their property footprint with drive-up storage, which produces higher returns,” says Blake Robinson, national sales manager for Temple, Ga.-based Janus International.
Wentworth was able to charge a higher rental rate for their relocatable storage units, which helped to quickly increase the facility’s revenue stream. In just four months after opening the renovated site, the CubeSmart-managed facility’s units were rented at 85 percent occupancy.
Another profitable use of MASS units is at conversion facilities, where large abandoned retail or industrial buildings are transformed into self-storage. These “exterior conversions” involve placing relocatable storage units around a large parking lot.
“Most interior conversions have a huge parking lot affixed to it,” Robinson notes. “We’re seeing a lot of developers converting the retail building into climate-controlled storage and using MASS units on the exterior parking lot to create a full-service facility with both drive-up and interior units.”
Drive-up storage has become increasingly more popular for customers, especially during a pandemic. With drive-up storage, the customer can typically access the unit without making contact with other customers or facility staff. Plus, many tenants are willing to pay a premium for drive-up storage.
Rugged Construction
MASS units are built from the same durable components designed for Janus self-storage, with features like diamond plating, customized color options, and insulated roofs to withstand extreme heat and cold. Common problems such as rusting and leakage issues usually found with portable containers are avoided.
MASS units are constructed with 26-gauge corrugated door curtains found on most roll-up doors in self-storage and are manufactured from full hard galvanized grade-80 steel. This high grade of premium steel translates to greater door strength and minimized curtain damage. Given a higher quality product, tenants’ possessions are more secure and therefore command higher rental rates to protect their belongings.
MASS units are designed to seamlessly blend into a facility’s current storage setup both functionally and aesthetically.
“MASS is a Class-A type product, unlike many of our competitors, built of a solid, galvanized steel base, and from there up we use all the materials of a traditional self-storage building including structural piers/headers and standing seam roof system,” Robinson says. “The end product has the look and feel of traditional storage. When these buildings are lined up in the field, customers cannot discern that these are portable buildings.”
MASS modules range in size from 10-by-10 up to 10-by-30, with most customers choosing the 10-by-20 because of its flexible size. The modules can be subdivided into 5-by-10s and 10-by-10s, each with individual doors.
Tax Advantages
Since MASS units are classified as business equipment, operators who purchase this product are eligible to take advantage of Section 179 of the tax code, which allows an immediate expense deduction of 100 percent of the material cost for the tax year the equipment is put into use.
This means owners can take a sizeable write-off in the first year while generating new revenue as the units are occupied. Additionally, the portable units depreciate over seven years in lieu of the usual 39 years for real estate.
Instead of taking out a traditional construction loan, the products can be leased through financial institutions over multiple years and eventually take ownership of the units.
“Owners can get into the product without paying for everything up front,” Robinson says. “They are able to pay for the units monthly while generating income quickly, and that can go a long way in paying off the lease.”
Janus Support
Janus provides turnkey service with layout and installation. Janus works with surveys or even Google Earth to produce the most efficient and profitable use of the land. Owners can determine the number of units and sizes to order as well as their return on investment.
Units are assembled in the field by seasoned installation crews. Janus also has regional construction managers and project managers to help oversee projects. “Customers can feel assured from start to finish that the Janus team is taking care of them,” Robinson says.
Owners typically are up and running within eight to 10 weeks from the time of order. Most units pay for themselves in two to three years or less just on the additional income generated.
Benefits Of MASS Units
- Same look and benefits of traditional storage
- Quickly generate additional income
- Easy to expand and adaptable to odd lots or slopes
- Virtually no maintenance
- Units can be depreciated over seven years
- Often allowed where permanent structures are prohibited
Relocatable storage is the fastest way to strategically expand a self-storage facility at a fraction of the cost when compared to traditional construction. The MASS solution limits the work operators have to do to get additional storage units up and running quickly for additional income.
What Customers Are Saying About Janus MASS Units
“We added $1 million in MASS buildings from Janus to three of our properties in San Antonio. We will receive considerable tax incentives as a result. Going beyond the tax advantages, we were able to add 25,000 rentable square feet to these properties with a very durable and great looking product, and we didn’t have to pour slabs or pull permits.”
– Travis Morrow, SPMI: President of the Self Storage Division
“We added 7,700 rentable square feet of portable storage units to our CubeSmart facility. In this market, you can rent them around $1.30 per square foot. That’s a much higher rental rate and you’ll quickly see the potential to double your returns.”
– David Brown, Director of Self-Storage, Wentworth Property Company
“Our RV spaces were roughly getting us $0.44 per foot, we put beautiful MASS units in their place and can now accumulate $1.30 per foot. Mathematically, it’s a no brainer.”
– Daniel Higuera, COO, Storage Star
Company: Janus International
Headquarters: Temple, Georgia
Product: Moveable Additional Storage Structures (MASS)
Telephone: (866) 562-2580 / (770) 562-2850
Website: Janusintl.com
Email: sales@janusintl.com