How Much Does It Cost To Build A Climate Controlled Storage?

Owning a climate control storage business is always better than any other business. As a storage business profit margin is up to 11% per year, where the capital intensive business profit ranges between 3%- 5%.

Wait, don’t be over-excited by knowing this higher return rate. Since the self-storage business opens the high return door, it also needs a massive investment.

How much does it cost to build a climate controlled storage?
The average cost of building a climate control storage is $35-$70 per square foot. It may also cost around $8- $10 million for a 2.5 acre landed storage. This figure represents almost all costs, including land, land development, construction, permits, insurance, materials, labor, etc.

Indeed, it is a rough estimation. The actual cost may vary depending on your location, the material you use, the type of building, and so many things. This guide has put together all the steps, where you have to spend your bucks and how much it may require. So let’s get started.

 

How Much Does It Cost To Build A Storage Unit Facility?

 

When you plan to build a climate control storage, you have to ensure a good temperament controlling system in that space. Otherwise, people can’t store any perishable goods there. You have to maintain a temperature range between 50° to 80° to your storage space.

Here’s the storage facilities cost breakdown

Table: 1

Soft Cost Variables Per Square Feet Cost Total Cost
Land $8.50 $622000
Insurance $0.29 $30000
Permit allowance $0.33 $35000
General conditions $2.46 $258000
CM/OHP $2.62 $275000
Soft cost contingency $2.62 $275000
Total soft cost $16.82 $1,495,000

 

Table: 2

Hard Cost Variables Per Square Feet Cost Total Cost
Site work $7.25 $760000
Concrete $6.67 $700000
Masonry $3.95 $415000
Metals $18.02 $1892000
Woods, plastic, composites $0.29 $30000
Thermal and moisture protection $0.81 $85000
Openings $1.14 $1200000
Finishes $1.77 $1855000
Specialties $0.28 $29000
Elevators $1.81 $190000
Mechanical $4.38 $460000
Plumbing $0.61 $64500
Electrical and lightning $4.29 $450000
Hard cost contingency $3.81 $40000
Total hard cost $55.06 $8,170,500

 

Table: 3

Total cost calculation Per Square Feet Cost Total Cost
Total soft cost $16.82 $1,495,000
Total hard cost $55.06 $8,170,500
Development fee $3.28 $266160
Total construction cost $75.16 $9,931,660

 

These tables are just an overview of the cost. You have to consider so many things elaborately to define your project cost. For example

 

Location

You have to be very careful when choosing your business location. And the cost will vary depending on the facilities of the location.

According to the Self Storage Association reports, suburban areas are the most popular areas to build a climate control storage unit. Around 52% of storage units are built in suburban areas, where 32% and 16% are built in urban and rural areas.

So you can understand that the location has a significant impact on your cost estimation.

 

Land

Now let’s talk about land. You have at least 2.5 acres of land to build storage space. Because you can use only 40% of the spaces, that’s why you can’t choose land that is less than 2.5 acres. If you do, there will be less chance to make a profit from that business. At that time, it needs a lot of time to reach the break-even point.

 

Land development

However, besides land purchasing costs, you also have to keep your budget for land development. After purchasing land, you have to excavate, clear the garbage, level up the soil, and do many other things to prepare your land for construction. Land development may require at least 40% of your land cost.

Related: How much does it cost to build a hospital?

 

Engineering Costs

How much space you can use mostly depends on how you design your storage business. And here comes the engineers who will develop your building structure plan. The more skilled and experienced engineers you appoint, the more charge you have to pay.

Besides engineers’ skills, their location is also a factor that can increase your cost margin. You have to spend around 0.72 per square foot on engineering costs.

These factors are most important and involve higher cost. That’s why we have discussed them besides table estimation.

 

FAQs

 

How many storage units per acre?

One acre of land means approximately 43560 square feet of area. The storage unit size will define how many units you can manage in an acre of land. If your storage unit size is 10×20, one unit requires 200 square feet of space. So you can arrange 43560÷200=217 units in your entire storage building.

Is a storage unit a good investment?

Sure, the demand for storage units is increasing day by day, and the market of this business is growing gradually. Even building storage facilities are less expensive than houses but offer you a higher return. That’s why investing in a self-storage business can be a wise decision.

Is a storage facility passive income?

Absolutely, yes. Any tangible property or business is one of the leading and valid passive income sources. It can be a nice passive income stream to your life. But, the income ratio depends on many things, especially location, your business size, customer demand, and your operating system.

How long does it take to build a storage unit?

If the construction process continues from scratch, it takes almost 3-4 years to build 85% of the project. But the time may increase in case any unwanted problem arises.

Is it cheaper to build or buy a storage unit?

Yes, it is cheaper to build a storage unit than buy one. But it is always true that buying any property is faster than building. However, you have to find a good deal to win the game for buying. On the other hand, though it is less expensive, it takes a lot of time to complete the construction.

 

Wrap up

We have come to the endnote of our discussion; how much does it cost to build a climate controlled storage. The amounts that we will describe here are the average and rough calculations. That’s why we suggest you use a storage building cost estimator to determine your project cost. Or you can also consult with a real estate company that is appropriate for this kind of project to tell you the accurate cost.

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