For developers of self-storage facilities, finding a great site is essential. But where do you even being to look?
Paul Dacus, a software engineer in Portland, OR, is seeking to answer that question with cold, hard data and color-coded maps. Dacus soon will unveil a web application at Illustorage.com that lets subscribers obtain his analysis of which places in the U.S. can support more self-storage facilities.
“My goal is to predict the five- to 10-year total return for existing and potential locations,” Dacus told The SpareFoot Storage Beat.
Dacus has analyzed more than 50 local variables tracked by the U.S. Census Bureau to predict the attractiveness of U.S. markets. He then takes into account the number of existing facilities in each place to determine which locales are overbuilt and which ones are underserved.
All of that data is crunched to create an IllustorageRank for each county and ZIP code in the country. The rankings are on a scale of 1 to 100, with 100 being best.
“It is my general idea that locations with high rankings will outperform all the others,” Dacus said.
Dacus’ interest in self-storage goes back to his time as a software engineer at G5, a digital marketing agency that serves the self-storage industry.
“I always thought self-storage was really fascinating for some reason,” said Dacus, who earned an MBA from the University of Missouri.
Dacus was drawn to the hard-data aspect of the business and started building a unit-price comparison tool after leaving G5 in 2011. That evolved into his current project, as he saw an opportunity to improve how locations are chosen for self-storage development.
“If you can put a self-storage facility in a good location, you can make a million dollars. If you put it in a great location, you can make 4 or 5 million dollars,” Dacus said.
Hot and cold markets
Based on his analysis, Dacus said the most attractive place to build in the U.S. is Los Angeles County, CA.
“Despite the fact that there are 800 distinct locations in our database, the population and income and all the other data we look at points to the idea that Los Angeles County could support as many as 1,500 or 1,600 locations,” Dacus said.
On the other end of the spectrum is the Dallas-Fort Worth, TX, metro area, which Dacus’ data has found to be oversupplied.
“Dallas-Fort Worth has more locations than we expect the demographics can support,” Dacus said.
Dacus said it would take about four or five years for Dallas-Fort Worth to reach market equilibrium, assuming no new facilities are built there in the meantime.
As Dacus puts the finishing touches on Illustorage, a launch date hasn’t been set for the product. For now, he’s promoting his data on Twitter.
Illustorage will sell data sets for certain markets and offer access to its web application for a subscription fee. The price for data sets will vary by market, based on attractiveness.
“California, Texas and New York will cost more than Maine or Alaska,” Dacus said.