Downtown project part of national self-storage boom
A developer is planning to convert a downtown Dayton building on East Third Street into self-storage, a trend that has seen a national boom in recent years.
Coda Management Group bought a vacant building on 535 E. Third St. and Scott Krone, a managing partner, said the company is aiming to file a permit by the end of the month for the project to convert the building.
Krone said the new housing in downtown Dayton created new demand for self-storage downtown and businesses are also interested in self-storage units, which are cheaper than other types of real estate.
“There’s good demand in urban settings,” Krone said.
In recent years, developers have turned several long-vacant buildings into self-storage. This includes U-Haul turning 360 S. Main St., just south of downtown near McDonald’s, into self-stor
age. The owners of 804 E. Monument Ave. converted part of the building to indoor storage. Trotwood also cut the ribbon in October on Storage of America, which opened in a former Target at 2800 Shiloh Springs Road.
Self-storage facilities are an attractive investment for most developers because they are typically cheap to build and require relatively little maintenance or staff compared to other developments such as apartments.
Thomas Gustafson, national director of a self-storage group at Colliers International, said self-storage is a solid investment that gets better returns for investors than any other real estate type.
Over the last three years, he said there have been about 800 to 850 self-storage properties built in the U.S. each year. While some areas are currently overbuilt, other areas like Dayton still have demand.
Looking at the specific project planned on East Third Street, Gustafson said with limited competition and nearby new housing, he thinks the development will be successful.
The 535 E. Third St. building on track for self-storage will need renovations such as a new roof, windows, fire suppression and electrical systems, Krone said.
The company, based near Chicago, bought the vacant building for $1 million in a sale recorded May 10.
Matt Sauer, a Dayton architect who has worked on adaptive reuse projects around the city, said self-storage is a low foot traffic use of a building, which is disappointing since it will be out of character with other projects that increase people activity in downtown.
“In a downtown area, I think you want to cultivate a real walking ethos and walking ecosystems,” Sauer said.
The building is in the Webster Station neighborhood and close to new housing, amenities and office projects in the works, including the Avant-Garde building at 607E. Third St., a mixed-use project by Woodard Development that’s under construction. It’s also not far from the 444 Building, which is an expanding tech hub at 444 E. Second St., and Center field Flats, which is under construction across from Fifth Third Field.
Self-storage might not generate jobs like an office project might, but it can mean a vacant property once again generating property taxes, said Dave Dickerson, president of Dayton construction, sales and development at Miller-Valentine Group, which has been building climate controlled self-storage facilities and is pursing a couple of new projects in the region.
Dickerson said self-storage projects also support multi-family projects and the developments are often built where there is lots of multi-family housing.
“In most cases, it is taking a dormant piece of real estate and putting it on the market,” Dickerson said.