Updated May 12, 2025
Through both good and bad economic times, the self-storage sector has proven to be a steady performer. That’s why so many investors want to get a piece of the action. To do so, you can either buy an existing self-storage facility or develop a new one.
If you go down the development path, one key question is: How much money will you need? There’s no simple answer to that question, as the cost can vary based on several factors, such as location and the number of self-storage units.
How much does it cost to build a self-storage facility?
Generally, you can count on a self-storage facility costing $50 to $120 per square foot to build, according to Mako Steel, whose specialties include making steel buildings for self-storage facilities.
That range can vary greatly. For instance, the cost of steel may go up or down at any given time, or the area where you’re building the facility may be experiencing a labor shortage. And, of course, you’ll certainly face higher costs in a major metro area than you would in a small community.
Finding the right site to develop a self-storage property
When you’re looking to develop a self-storage facility, you obviously must decide where to build it. Be prepared, finding a great site for storage can be tricky. You’ll need to find a site for the right price, with the right zoning, and the right demographics to support your business.
How much land do you need? You’ll typically be hunting for 2.5 to 5 acres to accommodate a self-storage facility.
In the early 2010s, a common rule of thumb was that land should make up about 25–30% of total development costs. But today, that’s no longer a reliable benchmark. The economics of development have become more complex, and what’s profitable depends heavily on local market conditions and project specifics.
Now, developers must focus less on fixed ratios and more on feasibility analysis—understanding how land cost, debt, unit mix, and expected rental income interact. The goal is to ensure that land costs don’t eat too far into profits, especially after paying off loans. In short, land can be a smaller or larger percentage, as long as the overall numbers still work.
Because of the modern complexities involved with building and running a self-storage business, it is highly advised that prospective operators hire a self-storage consultant to conduct a feasibility study and devise a proposed budget for a new facility before purchasing a site.
What if you already own a property? You’ll still want to hire a consultant to evaluate market demand and determine the costs of rezoning the land—which can often be a challenge.
Determining the scope of your self storage project
Before closing on a piece of land, you should figure out the scope of your self-storage development project. Will you build a single-story or multistory facility? How many self-storage units will the facility maintain? What’s the total square footage you want to build?
Mako Steel says construction of a single-story facility usually costs $50 to $65 per square foot. Construction of a multistory facility typically costs more — $90 to $120 per square foot. These figures don’t include land or site improvement costs.
Estimating a construction budget for your self-storage business
Here’s an example of how the construction costs might pencil out. You’re building a 60,000-square-foot facility, and the construction budget winds up being $60 per square foot. Based on those numbers, construction would cost $3.6 million.
Again, that scenario excludes site improvement costs. Site improvement encompasses items like parking, landscaping and signage. The Parham Group, a self-storage consultant, developer and manager, says site development costs for a storage facility normally range from $4.25 to $8 per square foot. So, let’s say your facility measures 60,000 square feet and the site development costs total $6 per square foot. In this case, the development costs would add up to $360,000.
Keep in mind that a climate-controlled facility will increase the cost of construction significantly more than it would to build a non-climate-controlled self-storage facility. However, the owner of a climate-controlled facility generally can make up much if not all of the cost difference because they can charge more for units with climate control.
“Today, there are almost unlimited options in designing a self-storage building that will blend into the area you plan to build. The architectural details and finishes can significantly impact cost,” Mako Steel says.
Building the right size self-storage facility
Investment Real Estate, a self-storage brokerage firm, emphasizes that smaller isn’t always better when it comes to building a storage facility.
Sure, a smaller facility likely will have lower building costs than a bigger one. However, the firm notes that a facility measuring less than 40,000 square feet typically isn’t as cost-effective as a facility measuring 50,000 square feet or more.
Why? In large part, it’s because the investment returns for the smaller facility normally fall far short of the investment returns for the larger facility.
Amid an environment of rising construction costs and declining self-storage rents, building the right size storage facility is critical to success. When the housing market picks up again demand for self-storage facilities is expected to rise, and along with it prices.
Funding your self-storage development project
Unless you have piles of cash, you’ll need a plan to fund your self-storage development deal. Securing debt service for your self-storage project is often easier with a track record in the business, but not impossible if you don’t.
A capital advisor with a specialty in the self-storage industry may be able to help. A number of lenders provide funds for new construction of self-storage facilities including commercial banks and life companies.
Keep in mind that it can take up to 36 months for a 50,000 square foot self-storage facility to reach a stabilized occupancy of 85%. In other words, it may be a while before the property generates steady income—so it’s important to assess how much debt you can realistically manage while covering construction and carrying costs during the lease-up period.
Now what?
Once your facility is completed and you receive a certificate of occupancy, you are ready to open for business. Before your facility is completed you’ll need a business plan in place for self-storage operations. You may choose to manage the facility yourself.
Self-managing your own facility is not as hard as it used to be thanks to tech tools like facility management software and marketing platforms. You may also wish to hire a third-party manager to operate your facility. Once your new storage business is off to a solid start, you’ll be ready to focus on your next self-storage development project!
