What’s happening within the self-storage market in Colorado paints a picture of what’s happening in many other parts of the country. Nationally, the Compound Annual Growth Rate (CAGR) of the self-storage market is expected to register more than 8% through the year 2024. Considering how simple these types of businesses are and how easy it is to get started, many small business owners are leaping at the chance to stake their claim in this booming vertical.
Colorado has seen a sharp rise in the construction of steel-built self-storage facilities. What’s causing all this growth, and why is steel so popular as the construction material of choice? Moreover, what can be learned about this trend and applied to your local area?
Wherever you look throughout Colorado—from Pueblo to Fort Collins—the self-storage industry appears to be thriving. In the 2018 calendar year alone, 37 new self-storage facilities opened up just within the Denver metro area. Whether storage space is needed for those moving from one residence to another, or for small businesses needing a place to stock their inventory, one thing is certain: there’s big money to be made in self-storage.
So, what’s driving this trend in the Rocky Mountain state? And, more to the point, why are steel buildings being used so commonly in the construction of new self-storage facilities?
In this article, the steel building professionals at Capital Steel Industries are offering some perspective on the ever-growing self-storage trend in Colorado, and we’re giving some things for you to think about if and when this kind of development starts ramping up in your area.
On the list of great reasons why the self-storage business is booming, near the top is the ease of management. Because self-storage businesses are so simple and easy to manage, they make for great investments. What’s more, many larger, nation-wide self-storage chains operate a franchised business model, which makes getting in on the ground floor easy for first-time business owners. As long as there is a market of people who need a place to put their stuff, there’s going to be a need for storage units.
If there was ever the ‘perfect’ building type to be used in the construction of a self-storage facility, steel would be it. In Colorado, the need for strong, long-lasting, and easily maintained storage facilities has been met by modular steel buildings being erected in seemingly every corner of the city.
So, why is steel chosen first among all of the other commercial building options? There are three principal reasons.
Many larger self-storage companies actually require their customers to carry insurance on the valuables that they store in each unit. Insurance coverage rates are almost always lower when the building in question is made of structural steel. Why is this? There are many reasons, but chief among them is the fact that steel doesn’t burn down. And, it’s impervious to pests like rodents and termites. Therefore, because steel storage facilities pose a lower risk of catching fire or being compromised in other ways, the cost to insure them is substantially lower than, say, a wood-framed building of a similar size.
Compared with a wood-framed or brick-built structure, steel is superior because of how quickly the building can be erected. What might take multiple months to build with wood framing or bricklaying can realistically take just a few weeks when steel is used. And, if you’re a self-storage business owner who is looking to start getting revenue in the door as soon as possible, you don’t want to have to wait those extra few months before the money starts rolling in.
Colorado has some pretty harsh weather. Throughout the course of a given year, the snowfall can be overwhelming in some cases, and the summers are often downright sweltering. This presents a challenge for self-storage companies who want to be able to provide climate-controlled storage options for their customers. Thankfully, steel buildings in Colorado offer excellent insulation capacity. Thanks to the deep-channel walls that are often a feature of most steel buildings, sufficient insulation can be added so that heating and cooling bills stay manageable.
Another reason why steel is the go-to building type for many Colorado self-storage facilities is that they have excellent resale value. If and when the time comes to exit the business and sell the facility, the business owner is going to have a much easier time, thanks to the ability of the steel building in question to be easily converted into an entirely different business operation. While Colorado is definitely on the forefront of states that are experiencing a spike in new steel self-storage businesses, the same phenomenon is being seen in metropolitan areas throughout the country.