You still have too much or too much: the luxury storage condo concept is taking hold in the Spokane area
After commercial real estate broker Chris Bornhoft’s Trent Avenue warehouse was acquired by the Washington State Department of Transportation to make way for the North Spokane Corridor freeway project, he had to find a new building to storage.
He scoured Spokane and northern Idaho looking for potential warehouses and garage storage condos to buy.
“I started to see that none of them were reselling and if they did, they were going very, very fast,” he said.
Bornhoft and his wife, Marianne, a real estate agent and broker with Windermere Manito, decided to develop Garage Lodge, a 23-unit luxury storage condo complex at 1551 S. Deer Heights Road on the West Plains.
Each storage condo is sold as a shell, which means owners can customize it for warehouse, store, or other uses. The units will have 18 foot high walls, leaving space for a mezzanine or loft.
Garage Lodge will be closed and will include a clubhouse with a kitchen, bathrooms, conference room, large television, mailboxes, business center and patio.
The project, slated to launch in April, aims to foster a sense of belonging and community.
“It provides pride of ownership and it becomes a community where you have other people who are enthusiastic about RVing, boating, motorcycles — whatever it is,” Bornhoft said.
The Bornhofts are among the few people building luxury storage condos in the area, although the concept is quite common across the country.
Garage Lodge storage condos have generated interest with nine units booked by potential owners, some of whom are business owners and RV and classic car enthusiasts, Bornhoft said, adding that he and his wife will have two units.
Garage Lodge condos are available in four sizes with prices ranging from $149,000 for a 750 square foot unit all the way up to $279,000 for a 1,400 square foot premium unit.
“Most people who buy a unit pay cash. What drives demand is that you have this incredible amount of money in reserve to invest – whether they have sold a house and are coming in with cash or they like to invest in the property” , Bornhoft said.
A growing industry
Across the country, people are paying more than ever to store extra stuff and are filling up spaces fast, with storage unit rents hitting all-time highs in 2021.
In February, nationwide rental rates for 10-foot-by-10-foot non-air-conditioned units averaged $128 per month, surpassing the highest monthly amount of $127 recorded in 2016, according to Yardi Matrix, a California-based property management company. commercial real estate data and research firm.
The national average monthly rental rate for air-conditioned units was $145 in February, according to Yardi Matrix.
While some of the short-term demand has waned since the summer, the long-term need for storage units continues to be bolstered by distribution companies looking for more space, retirees who are looking to downsize and people moving to mid-sized cities like Spokane.
The industry also continues to benefit those seeking RV and boat storage with more people gravitating to outdoor activities during the pandemic.
The Spokane area has seen quite a boom in self-storage construction in recent years.
In 2018, some 116 permits were issued for self-storage buildings in the region. Permits fell to 40 in 2021, according to data from the Construction Monitor and Avista Corp., both of which track permit data.
Spokane’s average monthly storage rental rate for all unit types rose 4.67% to $112 in February from $107 in February 2021, according to Yardi Matrix.
Spokane has drawn attention in the self-storage industry for the “staggering” number of installations built over the past three to four years, said Ryan Daley, president of ABC Mini Storage and board member of administration of the Washington State Self Storage Association.
Self-storage supply in Spokane is up about 70% from five years ago, he added.
ABC Mini Storage operates seven facilities in the state, including three in the Spokane area. In February, the company’s average occupancy rate for its self-storage units was around 80%, Daley said.
“The pandemic has not hit us as hard as most industries. We were lucky that the state called us an essential business.
“We were able to stay open during the worst, but we still took a hit. 2020 was our first year of decline since 2008,” Daley said. “But we bounced back well. The housing market helps a business like ours.
Bornhoft thinks the self-storage boom could be partly because facilities are easier to build with fewer utilities needed compared to multi-family projects.
Daley said the self-storage industry is attractive to business owners because it has a high success rate and project financing is fairly easy to obtain.
“Spokane is on the map as one of the hottest real estate markets in the country,” Daley said. “People like to follow the path of growth. (The self-storage industry) is always trying to find the next place to grow, and there’s no doubt that Spokane is that.
Because the storage industry is complementary to the real estate market, it makes sense that Spokane has seen an increase in self-storage permits along with growing demand for housing and population growth, said Grant Forsyth, an economics economist. chef for Avista Corp.
“We’ve had a lot of people move here and of course that increases the demand for a lot of the goods and the services that go with it,” Forsyth said.
“An increase in demand for housing from people moving here is also likely to increase demand for storage.”
Fat Spokane Cat
Tri-Cities company, Tricia Jarrett Developments LLC, is building the Fat Cat of Spokane, a 29-unit condominium garage complex with seven commercial spaces at 9014 W. Hilton Ave. on the West Plains.
The condo-garage complex, when built, will span a total of approximately 50,000 square feet. Insulated, climate-controlled garage condos will range in size from 1,100 to 1,500 square feet.
Rental rates will likely start at $1 per square foot, while buy-to-let units can start at around $200,000.
“We’re not going to sell them all,” said Tim Bush, who is developing Fat Cat of Spokane with his daughter, Tricia Jarrett. “Our plan is to sell 18 and keep 10 or 11 for high-end rentals.”
Garage condos will include electrical service and could be used for vehicle, boat and RV storage, while commercial spaces are ideal for offices, warehouses or manufacturing uses, Bush said.
Commercial suites will start at 1,500 square feet with rental rates starting at $2,500 per month.
Bush also operates Fat Cat Garage Condos in the Tri-Cities with his sons, TJ and Blake.
Spokane’s Fat Cat is expected to start in about 45 days, with the first phase expected to be completed by September, Bush said.
The decision to build a condo complex with a garage was primarily driven by demand from people needing RV storage and space to work on project cars amid a lack of available land, said Jarrett.
Jarrett said she has already received inquiries from people interested in the condo complex with a garage.
“Lots are getting harder and harder to find every year, and I think a lot of people have been buying RVs (during the pandemic),” she said. “There are a lot of people who don’t have property or (additional) shops.”
Bornhoft aims to complete the construction of the first phase of this project by the end of the year.
Bornhoft said there is potential to build 33 more storage condo units on a site he owns east of Garage Lodge, which is close to Spokane International Airport, Amazon’s distribution center and the Selkirk Pharma manufacturing facility currently under construction.
“It’s in the absolute center of what’s going on in the West Plains,” he said.