Barriers to Entry for New Self Storage Development
The word is out, there’s money to be made in self-storage. Some even consider it to be recession-proof, driven by life-changes including downsizing, divorce, death, and more. What are some of the challenges developers of new storage facilities face today?
- City Requirements.
Some cities are making it harder to develop self-storage, forcing owners to employ the use of more retail-like architectural details, masonry, lighting control, etc. Some municipalities have outright banned the development of self-storage. In cities where self storage development is allowed, building codes may require that expensive sprinkler systems be installed. Always check with the municipality where you intend to build to find out what their requirements are where self-storage is concerned.
- The Dreaded Downturn.
We keep hearing it’s coming, and some say it’s already here, but not everyone is feeling the pain. While self-storage owners have enjoyed great returns for many years, in some areas developers are creating a surplus of rentable square footage by overdeveloping, forcing all facilities to drop rates to remain competitive and creating longer times for facilities to rent up to capacity, particularly in larger metropolitan areas. The secondary and tertiary markets are still very active however, and many owners are turning their attention toward these areas to up their odds of success.
- More Stringent Lender Requirements.
With the construction cycle slowing due to the amount of “storage lending” that has already taken place, lenders are becoming more cautious regarding their requirements of new self-storage construction projects. Lenders want to make sure that there is enough equity in a project that the project will cash flow even if it takes a little longer than anticipated to fill a facility with renters.
- Who Will Win the Race?
New self-storage projects seem to be popping up everywhere. How can you be sure that an area that appears to be underserved will stay that way long enough for you to finish building your facility? Contact local government to see if there are any other self-storage facilities being planned for construction in your area. See if applications have been submitted and/or approved for sitework or building permits for self-storage within a five mile radius of your potential project. Be sure to follow up with them regularly to keep a finger on the pulse of this.
A-Lert Building Systems is a self-storage contractor that engineers, manufactures and installs self-storage facilities for Austin-area developers, entirely in-house. Our plant in New Braunfels is about 50 miles down I-35, so components come from our own shop, not a supplier across the country. In a market where land is expensive and demand keeps growing, getting the site, unit mix and build right the first time matters. 40+ years in construction, backed by Centurion Industries.
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Local expertise in the Austin market
High land costs push new construction inside the core toward infill and multi-story projects, while suburban submarkets such as Round Rock, Cedar Park, Pflugerville, Georgetown and the Hutto/Taylor corridor, where the semiconductor expansion is bringing new development, still have room for single-story, drive-up builds. Projects here follow I-35, the metro's north-south spine; MoPac (Loop 1) and US 183 on the west and north sides; US 290 and SH 71 toward Southwest Austin and Dripping Springs; and the SH 130 and SH 45 toll roads carrying growth east and north. We design to City of Austin zoning and permitting requirements and to Texas code, from North Austin and the Domain to South and East Austin and the outer suburbs.
Self-storage building types we design and build
- Multi-story climate-controlled facilities for high-cost infill sites in the urban core.
- Single-story drive-up facilities for suburbs such as Round Rock, Cedar Park, Georgetown and Hutto, where land is still available.
- Boat and RV storage serving Lake Travis, Lake Austin and the Highland Lakes.
- Pre-engineered metal buildings for fast, cost-controlled builds.
- Building conversions that turn underused retail or industrial space into a producing facility.
- X-tra Storage HD heavy-duty units for oversized, high-value tenants.
Turning Austin retail and industrial space into storage
In a land-constrained market, converting an existing building is often the fastest route to an infill location you could not buy as raw land. A-Lert evaluates the structure, access and zoning, then handles the reconfiguration, structural upgrades and code-compliant retrofit end to end.
Building for Austin's growth
Austin has been one of the fastest-growing large metros in the U.S., and much of that growth comes from people relocating. New arrivals often rent before they buy and need storage during the move. A-Lert builds for that trajectory: the right unit mix for each submarket, and phased designs that let a facility expand as the surrounding neighborhoods fill in.
Why developers choose A-Lert in Austin
- Our own 40,000 sq ft manufacturing plant about 50 miles away in New Braunfels.
- Single-source: engineering, in-house fabrication and installation, with the build managed end to end.
- Licensed as a general contractor for 30 years, with 40+ years in construction.
- A division of Centurion Industries, for financial strength on large projects.
- Built for ROI: the right unit mix and footprint for expensive Austin land.
Frequently asked questions
Is multi-story worth it in Austin?
Inside the urban core, usually yes. With land among the most expensive in Texas, vertical construction produces far more rentable space per acre. The right answer comes from modeling single-story against multi-story for the specific site and submarket.
Can you convert an Austin retail or industrial building into self-storage?
Often, yes, and in a land-constrained market it is frequently the most cost-effective path. It starts with evaluating the structure, access and zoning, then retrofitting the shell into a code-compliant facility.
How do Austin land costs change the build?
They push most core projects toward multi-story and conversions, which need real structural engineering: reinforced framing, elevators and fire suppression. A-Lert does that engineering in-house, so the design fits both the site and the budget.
Do you handle Austin permitting and code?
Yes. We design to City of Austin zoning and permitting requirements and to Texas code, and our single-source team keeps the schedule moving through review.
