Self Storage - How To Improve A Class C Facility To A Class B

For many people who are in commercial real estate, the question that always comes up is whether or not a property is worth it. There are many things to think about, and keeping up with what is desirable when it comes to commercial real estate and what signs tell you that a property is going to be worth your time is something that every investor and buyer should think about. When you are taking a look at buying self-storage facilities, you'll find that you have many choices ahead of you. When you are going to make a decision, you'll find that there are a few rubrics that you need to keep in mind.

The first thing to think about when you are considering commercial real estate, especially when it has to do with self-storage is thinking about what class the facility is to be considered in. A Class A facility, for instance, is a self-storage facility where everything is ideal. This is a relatively expensive property and for good reason; it has a good location, it has had good upkeep, and it will command fairly high rates. This is the sort of property that is above average in terms of finishing work, construction and good layout.

After the Class A properties, you'll find the Class B commercial real estate properties. Class B commercial real estate properties offer less robust benefits than those found in Class A. While they do not have any real problems, they may lack a good design or layout, or they might feel unfinished or incomplete. You may also find that they are below a certain standard when it comes to mode of operation or technology. While they will command fairly average self-storage rental fees, they simply do not have as much to offer as Class A properties.

Finally, Class C commercial real estate properties can be thought to have the bare minimum when it comes to functionality and there is a chance that they may have problems in their past when it comes to maintenance and upkeep. You'll find that they may be located in less desirable areas, and overall their facilities tend to be smaller than the ones kept by Class A or class B self-storage units. You'll often find that Class C properties are known to be a bit problematic when it comes to getting steady clients.

With this in mind, it might surprise you to note that if you are new investor, Class C commercial real estate properties might be the ones that you start out with. While it is true that they are perhaps the least desirable self-storage options when it comes to the three grades, the big thing draw is the price. These properties tend to be a great deal less expensive than Class A or Class B properties, and because of this, they are significantly easier to get a hold of. You'll also find that they are frequently being held by private people rather than companies, which can make getting a good price and the business transactions go a great deal faster. When you are just getting started in the commercial real estate business, this is definitely a great place to start.

The important thing that you need to keep in mind is that just because you buy a Class C property, doesn't mean that it has to stay a Class C property. Though the leap from a Class B property to a Class A property is difficult, you'll find that the jump from a Class C property to a Class B property is quite simple, and with a very small amount of work and investment, that you can turn this self-storage property around and make an impressive profit.

When you are thinking of ways to upgrade your Class C commercial real estate property into a Class B property, remember that the changes that you put in don't necessarily have to be major. Take a look around with a critical eye and see what can really improve the place. First, look at the basic color of the place. Are all of the buildings weathered to the point where they look decrepit, or is the paint simply an awful refugee from the seventies? You'll find that a new coat of weather-resistant paint can make everything open up, so think about what a color change can do for your self-storage facility.

Similarly, think about what you can do with the land. One thing that smart investors will do is figure out what the land is actually good for and think about how much they have. While you don't want the buildings to look crowded, you'll find that there is probably space for a few more modern storage facilities on your new commercial real estate. This can act as a draw that pulls in people looking for self-storage facilities, and even if they don't end up going with the newer ones, there is a chance that they will look at the older ones as well.

If you are looking to really open up the self-storage commercial real estate property that you have purchased, don't forget to look into cosmetic changes that are more structural in nature, like real floor to ceiling retail windows. This is a good way to advertise your presence and to let people know what it is that you do.

There are many reasons that you might be interested in a self-storage commercial real estate property, so make sure that you have all the facts, and look into how easy it is to get a Class B return on a Class C investment!

By: Tony Seruga, Yolanda Seruga and Yolanda Bishop

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Tony Seruga, Yolanda Seruga and Yolanda Bishop of specialize in commercial and investment real estate. As of May, 2006, they and their partners are managing over $600 million dollars worth of new projects.
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