A self-storage developer is planning to enlarge his Ocoee CubeSmart by building a 25,000-square-foot addition to store large recreational vehicles.
"There is a real high demand right now for RV storage," said Richard Beavers, whose Cubebuilders II LLC has submitted plans for the expansion to Ocoee.
"Everybody is full," he said, adding that a large internal RV storage development in Winter Garden is fully leased, as is another one right off of the S.R. 429 north of S.R. 50.
"The economy is a little better right now," he said. "We are going for the market that is probably the $500,000 and up motor home. These people have no problem paying $7 a foot a month." That would make the monthly fee $280 for a 40-foot RV.
The new CubeSmart spaces will have garage doors for each 15-by-50-foot bay. And all the bays have electrical hookups so the refrigerators can stay running.
Beavers is in the process of building seven self-storage units around the state including Jacksonville, Miami, Clermont, and Fort Lauderdale, but most of those are multi-story climate-control units. the Ocoee one is unique, he said.
With the new City Center West Orange project on its way next door with condo development as well as retail, he thinks demand will be strong for his product.
He said the RV development won't be as lucrative as climate-control, but it will still bring in a tidy profit.
Beavers hires CubeSmart to manage his investments.
His company acts as its own general contractor for the build. The project is budgeted for $2.5 to $3 million.
The project is in permitting review in Ocoee, and Beavers expects to be finished with that process in 50 to 90 days. He said construction should take nine to 10 months. Since the site is already zoned for the use he expects, there won't be much trouble with approvals.
This will be Beavers' 28th storage facility.
"It's the highest return in real estate that there is," he said. "It has grown from Ma and Pa land banking, where the owners figured they were something inexpensive to build until eventually something else more profitable could be built on the property."
Storage turned out to be more profitable.
Marcus & Millichap recently released highlights of its predictions for self-storage investments in 2016:
-- The self- storage expansion cycle remains sound, as steady growth supports demand and occupancy and rent levels are both expected to rise in the coming year;
-- Demographics sustaining multi-family demand will help boost the sector;
-- However, even as the demand remains in place, occupancy rates will begin to face challenges because of new developments coming on line;
-- Property operators are aggressively growing rental rates with an average asking rent predicted to move to a five-year high in 2016.