Aurora East Self Storage

Aurora East Self Storage

Marcia C. Romero

Regis University

Executive Summary

This business plan describes a proposed self-storage facility to be established in Aurora, Colorado and involves the purchase of a parcel of land and the construction of the Aurora East Self-Storage facility east of E 470. The Aurora East Self-Storage is a service company that will provide a variety of storage units sized for both commercial and residential use.

“In the fourth quarter of 2005, reported outliers in the equity universe by the real estate investment trust (REIT), was the small self storage sector, which gained 26.6%. Private institutional investment in the self-storage sector on this scale is new, but self-storage has been part of the public institutional real estate for more than two decades.” (U.S. Quarterly Market Perspective, 2006)

As shown above, the market of the self-storage industry is one of the smaller sectors of the real estate market but has continued growing over the past two decades. By making a move at the onset of a developing new community, the potential for economic growth of the facility is exceptional. As added incentive for potential clients, there will be state of the art security with cameras positioned strategically throughout the grounds and in the buildings, pass word protected gated entry, and individually owned locks on the units.

Aurora East Self-Storage is a start up business with a projected opening date of January 1, 2007. The purchase of land, paving of the recreational parking area, construction of the storage units, office, living quarters, and pre-opening expenses are estimated at $3,754,168. “Based on current and projected strong demand for self-storage units, rental revenue is expected to grow rapidly as units fill up from the first year’s target of $475,797 to $734,086 in the third year.” (Sonne, 2006a, p. 34) By the fifth year the revenue is expected to reach the one million mark.

INTRODUCTION

I. Type of business

The type of business is a self storage facility with office and living quarters for the owner/manager. “The self storage operator is primarily engaged in renting or leasing space for self storage. Rooms, lockers, compartments, containers or outside space is provided where clients can store and retrieve their goods.”(North American Industry Classification System, 2002) This is a service related business that offers the community the option of having a secure area where their belongings can be stored and easily accessed as needed.

The legalities of building and operating a self storage facility are many. From the zoning issues, eminent domain, unit size litigation, disability access to the site, homeland security, marketing, and tenant issues that involve related risk, bankruptcy and even death. (Inside Self Storage, 2005) These issues are handled on a daily basis by the self-storage community and have not affected the industry growth or the income generated by these facilities.

The services offered by the self-storage industry are many and varied. Boat and RV storage, mail services, mobile storage, records storage, retail and merchandising, truck rentals and even wine storage. Wine storage and records storage are