Self-storage is getting a new look. As has happened in other asset classes, self-storage customers are starting to demand better quality facilities and better design. This has led to increased investment activity of self-storage to bring more quality product to the market, particularly in areas with a vintage supply. 1784 Capital Holdings is aiming to lead innovation in this asset class. The developer has recently acquired 2 acres of land in Goleta to build a class-A self-storage facility.

“1784 Capital Holdings is driving innovation in the self-storage industry through the exterior and interior design of our buildings, often combined with a retail or other commercial use,” Shane Albers, the chairman and CEO of 1784 Capital Holdings, tells GlobeSt.com.

The features of a high-end self-storage facility include hotel-like design and lobbies and climate-controlled units. “High quality self storage centers today have enhanced exterior and interior designs, which include upgraded materials for the lobby, bathrooms, and polished concrete hallways,” says Albers. “The storage center may offer automated door lock systems, mobile apps for selecting and renting units, pleasant music playing in the hallways, wine storage, customer conference rooms, advanced security systems, oversized elevators, climate controlled loading and unloading areas, and bright, clean hallways.”

Today, these amenities are innovative and new, but in the next five years, they will become commonplace in the self-storage market. Operators will need to adjust to stay competitive. “A high quality asset, which is staffed with dynamic managers should consistently out perform a dated/older asset on every metric,” explains Albers. “We believe older assets will be functionally obsolete in five to 10 years as a result of the Generation 5 self storage properties being built today.”

These amenities are becoming popular in more high-income markets and urban centers. 1784's most recent purchase in Goleta is located on 2 acres outside of Santa Barbara. It has focused on building quality product in similar markets. “We focus our development activities in high rent, high barrier urban markets which are accompanied by high land and construction costs,” Albers says. “We believe the rent premium for our assets are most importantly reflected in our durable NOI and rent growth combined with low cap rates.”

The Goleta self-storage project will be a fitting example of what is to come in self-storage. It will include wine storage, smart technologies and quality communal areas. “Our enhanced exterior and interior design will be primarily focused on our female customers experience,” adds Albers. “Our secure building will have a beautiful lobby, bathrooms and polished concrete hallways. We will also offer highly secure and appropriately climatized wine storage. We will also offer advanced technology for security, ease of access, and a mobile app for the renting a unit in addition to our helpful staff.”