Business of clutter: 4 new self-storage facilities planned in Lakeland amid national surge

LAKELAND – There has been a surge of self-storage projects in Lakeland and throughout Polk County as their construction numbers climb to record highs nationwide.

In the past 12 months, there have been blueprints for at least four self-storage projects on the desk of Lakeland's chief planner, Matthew Lyons, in various stages of construction – from one project under construction to another just starting talks with the city, he said.

A self-storage facility is currently under construction just north of Sam's Club on Lakeland Highlands Road, Lyons said in an email. Another near Kathleen and Knights Station roads was recently approved by the Planning and Zoning Board but still awaits site plan and building permit review. It is planned for just west of the Walgreens and McDonald's just northwest of the intersection.

Another self-storage facility, which went before the city Planning and Zoning Board last week for first public hearing, is proposed at 2575 Harden Blvd., which is just north of the Azalea Park retirement community, east of the Muirfield Village condominiums and south of Beacon Terrace Mobile Home Park, he said.

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A self-storage facility proposed for the northwest corner of East Memorial Boulevard and Lake Parker Ave will require a land-use amendment and modification of the Planned Unit Development zoning to move forward, Lyons said.

For a countywide view, Polk County Property Appraiser's Office records show, there are 149 parcels designated as mini-warehouses (or self-storage), but some parcels can include parking lots and office buildings, as well as the metal buildings that comprise a self-storage facility.

In Lakeland, within the city and unincorporated areas, there are 49 parcels dedicated to self-storage and paying Polk County property taxes based on their site location, county records show.

U.S. Census data showed the construction of self-storage centers set a record last year, according to SpareFoot.com, a website that lists self-storage statistics.

In a 2016 article, Consumer Reports said one in 10 Americans rents a self-storage facility, which indicates people do not like to get rid of their things – from old couches to textbooks. They pay dearly for not decluttering.

Alexander Harris, in a Jan. 4 post on a SpareFoot Storage Beat blog, said the average monthly cost to rent a self-storage unit is $89.12. That adds up to $1,069 per year. They're higher in some places, such as $2,500 in Los Angeles or $3,700 in New York City.

From bust to boom during pandemic

Commercial real estate brokers have known about the growth in this segment for some time.

“Florida is growing as we know," said David Hungerford, a senior adviser at SVN Saunders Ralston Dantzler Real Estate. "Moving is the number one reported reason for needing a storage unit.

"Another life moment that often requires storage is during a home renovation project, and home renovations have been ubiquitous since the onset of the pandemic,” Hungerford said.

“A hot trend right now is the growing RV market, and many new storage facilities include an RV and/or boat component,” he added.

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According to Nick Malagisi, national director for self-storage at SVN Commercial Realty, said the pandemic originally had a hard effect on the self-storage industry, and many facilities closed because they couldn't find employees to work and people weren't renting new spaces.

"However, it soon became apparent that no one was moving out of the facility either," he said.

Then came new renters who needed additional space at home in order to work remotely.

"This unprecedented wave of new users has stimulated occupancies and helped new facilities to reach stabilization much faster than their pro formas anticipated," Malagisi said. A pro forma is a document prepared for an investor to determine a property's potential for profit.

"In addition, the red hot residential real estate market has contributed additional demand with the millennial generation coming of age as buyers," Malagisi said. "Labor shortages and higher cost of materials has contributed to developers building more 'affordable' smaller homes and homes without basements."

Is it a good fit?

Self-storage sites aren't created on a whim.

There are very specific site-selection criteria for self-storage according to Larry Hanks of Summit Construction Management Group in Orlando.

The project team reviews demographic "data of the population within a one-, three- and five-mile radius and also we consider drive times,” Hanks said in an email response to questions.

“From this data, we extract quantitatively if the location is right for self-storage given industry standards of supply and demand metrics,” Hanks said. Other considerations include "factors like exposure, traffic patterns, accessibility, signage opportunities and more."

He said then they research the competition and the standard rental rates for the area. From there, they can project how much the property will make once it's completed and leased out to 85% or 90%.

Once open, the management of the facility is tasked with achieving profitability as quickly as possible, he said. This can take several months to a few years.

"Faster lease-up is better obviously due to the cost of capital on a multimillion-dollar loan," he said.

Lyons said he is unsure about the economic value in the growth of self-storage. Other than property taxes, self-storage does not have the economic impact of a retail development.

“They are not something you would want to have a lot of,” Lyons said.

This article originally appeared on The Ledger: Trying to unclutter? 4 new self-storage facilities planned for Lakeland