Self storage feasibility study: what it covers

By [AUTHOR NAME] · Reviewed by [REVIEWER NAME], [ROLE] · Review date [YYYY-MM-DD]

A feasibility study tells you whether a self storage facility can succeed at a given site. Lenders often ask for one before they fund construction. A study is only as good as its assumptions, though. This guide explains what a study covers, who prepares one and how to read it critically.

What a feasibility study is for

A study supports one decision: should you build this facility, at this size, on this site? It also shapes the unit mix and the rents you plan around.

It follows the same logic the SBA uses for any market research: demand, saturation and location. The difference is depth. A storage study turns those questions into a rent roll and a lease-up schedule.

Your lender will likely read the study alongside your business plan. The SBA notes that a traditional plan includes market analysis and financial projections. The study usually feeds both.

A study is not an appraisal. An appraisal estimates value. A feasibility study asks whether the project works at all. Your lender may order both.

Trade area and demographics

The trade area is where most of your tenants will come from. Studies usually draw it as a ring or a drive-time zone around the site. Ask which method was used and why.

Demographic data usually comes from the Census Bureau. The American Community Survey publishes yearly estimates on population, income and housing. Housing type matters for storage. Renters and people in apartments often have less space at home.

Population and households, now and projected
Share of renter-occupied housing
Household income
New housing planned or under construction nearby

Check that the trade area matches real roads. A river, highway or rail line can cut a ring in half.

Supply and competition

The study should list every competing facility in the trade area. For each one it should show rentable square feet, unit types, climate control, rates and estimated occupancy.

It should also list projects that are planned, approved or under construction. Ask the local planning office yourself. New supply can arrive while you build.

Studies often express supply as rentable square feet per person in the trade area. Use it as a comparison, not a rule. No single number marks a market as full. [SOURCE NEEDED: authoritative source for any supply-per-capita benchmark]

The Census Bureau's County Business Patterns counts establishments by industry each year. It can show trends, but it only counts businesses with paid employees.

Rental rates and occupancy

Rates usually come from calling or visiting competitors and checking their websites. A good study records the date of each survey and separates street rates from promotional rates.

Occupancy is harder to get. Operators rarely publish it. Studies estimate it from visits, phone calls and available-unit listings. Ask how each figure was gathered.

Make sure rates are compared by unit size and type. A 10x10 climate-controlled unit and a 10x10 drive-up unit are different products. See physical vs economic occupancy for why the two occupancy measures differ.

Financial projections

The projections convert the market findings into revenue, expenses and cash flow. The most important input is the lease-up pace.

Worked example (example inputs)

Testing a lease-up assumption

These are example inputs, not market data.

Example inputs
Input	Study assumption	Slower case
Rentable square feet	60,000	60,000
Stabilized occupancy	90%	90%
Net square feet rented per month	2,000	1,200
Average rent per sq ft per month	$1.20	$1.20

Stabilized rented area is 60,000 x 0.90 = 54,000 sq ft.

Study case: 54,000 / 2,000 = 27 months to stabilize. Slower case: 54,000 / 1,200 = 45 months.

Stabilized monthly revenue is 54,000 x $1.20 = $64,800 in both cases. The slower case takes 18 more months to reach it.

Ask your lender whether the project still services its debt in the slower case.

Check the expense side too. Property tax, insurance, payroll, marketing and software should each be a separate line, not one combined percentage.

Doing a first-pass screen yourself

Before you pay for a full study, run a quick screen. It takes a few days and costs little beyond your time. It tells you whether a site deserves a paid study.

Draw a rough trade area on a map, following the main roads to the site.
Pull population, households and renter share for that area from data.census.gov.
List every storage facility in the area. Note size, unit types and whether they offer climate control.
Call each one and ask for current rates on a 5x10, 10x10 and 10x20. Record the date.
Ask the planning office about storage projects that are filed, approved or under construction.
Drive the area at different times. Note traffic, visibility and how full competitors look.

Write down what you find in a simple table. If most competitors have few vacancies and rates are holding, the site may be worth a full study.

If competitors advertise heavy move-in specials, or several new projects are planned, be careful. Those are signs of new supply or weak demand.

A screen does not replace a study. It cannot estimate lease-up pace or build a financial model. Use it to decide where to spend money on a study.

Who prepares one and what it costs

Studies are usually prepared by firms that specialize in self storage market research, or by appraisers. Some lenders keep a list of firms they accept. Ask your lender before you hire anyone.

Prices vary by firm, scope and market. We have not found an authoritative published figure. [SOURCE NEEDED: study cost range from a primary source]

The Self Storage Association sells industry research and runs a vendor directory. You can use those to find firms, but check references yourself.

Some owners do a first-pass study themselves with free Census data. That is a reasonable screen before paying for a full study.

Questions to ask about any study

Read every study as if the author were wrong. These questions find the weak assumptions fast.

How was the trade area drawn, and does it follow real roads?
Which competitors were left out, and why?
What new supply is planned or approved, and was the planning office checked?
Are rates street rates or promotional rates, and when were they collected?
How was competitor occupancy estimated?
What lease-up pace is assumed, and what is it based on?
Does the project still work if lease-up is 30% to 50% slower?
Are expenses itemized, including property tax at the post-construction value?
Who paid for the study, and does the author benefit if you build?

Once you trust the study, move to the budget. See cost to build a self storage facility and the start or buy section.

Frequently asked questions

Does a lender require a feasibility study?

Many construction lenders ask for one. Requirements vary, so ask your lender early. [SOURCE NEEDED: lender documentation]

Can I do my own feasibility study?

You can do a first screen with Census data and competitor calls. A lender may still want a third-party study.

How long is a study valid?

Markets change as new facilities open. Update the supply and rate sections if months pass before you start building.

What if the study says the market is full?

Take it seriously. Look at a different site, a smaller building, or buying an existing facility instead.

Is a feasibility study the same as an appraisal?

No. An appraisal estimates value. A study tests whether a proposed project is likely to succeed.