Several million dollars’ worth of self-storage projects will be under construction this year in the Tri-Cities as demand for places to stash stuff soars.

“This industry is just going crazy. The secret’s out,” said Ryan Daley, president of ABC Mini Storage.

He’s building a new mini-storage facility on Richland’s Wellsian Way, on a strip of land between Goethals Park and Harbor Freight Tools and Tri-County Partners Habitat for Humanity’s store.

More self-storage projects are in development near Dallas Road and Interstate 82 at Badger Mountain South, and at Leslie and Reata roads.

Daley’s Spokane-based company bought the 1.8-acre Richland property for $595,000 in 2017. He’s been trying to get the facility open for years, but it’s been a challenge working through the site requirements, he said.

ABC Mini Storage plans to build five buildings, a project totaling $7.5 million, according to building permits filed with the city of Richland.

The project includes vacating Davenport Street and extending Comstock Street.

The end result will offer 63,000 square feet of rentable space between 385 units. It’s scheduled to open in September.

Record performance

Self-storage properties have delivered record performance over the past two years as lifestyles adapted to the pandemic by renting storage when people turned their spare rooms and garages into home classrooms, offices and gyms.

“Because units are generally rented on a monthly basis and operators can respond quickly to changing market conditions, the property type is considered one of the strongest inflation hedge options in commercial real estate,” according to a recent self-storage investment report from Marcus & Millichap, a California-based company providing real estate and mortgage brokerage and research.

Daley has spent 18 years in the self-storage business and serves on the board of the Washington Self-Storage Association, so he’s seen the trends over the years. He followed his dad, Joe, into the industry. “He built a couple stores when I was born, and I’ve been building and buying these stores since then,” he said.

Daley said the Richland project will be his eighth in the state, with most in the Spokane area. Another is under construction in Big Bear, California. ABC Mini Storage employs 15 people.

“It’s one real estate sector that hasn’t taken a dip when other ones do. Fifteen years ago you had to fight to get construction loans, but now banks are clamoring for these loans,” Daley said. Wheatland Bank is financing his project.

Mini-storage occupancy tends to go hand in hand with tight housing markets, according to the investment report. Multiple indicators show a clear connection between competitive residential markets and places with abundant self-storage needs.

And it holds true for Daley’s business in the Tri-Cities.

“We saw record occupancy,” he said. “It’s been a good couple of years for us.”

ABC Storage bought the mini-storage business on 701 Aaron Drive in 2012 and added a two-story building in 2014.

“It’s more full than I like it – I like it at 93%. It’s 97.5%. It’s full,” Daley said.

The Wellsian Way property will be an unmanned facility featuring an automated kiosk system, though it will be staffed a few times a week on busy days, Daley said. The kiosk will work like an ATM and dispense a unit and a lock like a vending machine.

MH Construction is the general contractor.

Badger South

The growing Badger South development on the west side of Badger Mountain off Dallas Road soon will see its first self-storage facility in the growing neighborhood, a $4 million project expected to unlock more land for commercial development.

“Geographically there’s no other storage project over in this area. With all the rooftops going in on Badger Mountain South and some in the county – Steeplechase and Badger Canyon – there’s no other storage project in this area. People are looking and needing one and asking when there’s going to be storage here for homeowners,” said Darrin Sweeney, a developer with Badger Developers.

Site work has started at South Richland Storage at 2325 Dallas Road, near the Interstate 82 interchange. The project involves building a private street and extending infrastructure across Dallas Road to the six-acre site.

Sweeney said the first phase of the project will have 10 buildings, two of which will be climate controlled, with 298 units of varying sizes, from 3-by-4 to 10-by-15.

A second phase could see 10 more buildings.

Sweeney said once the building permits are approved, which he expects within the next month, construction will begin, with a spring 2023 opening planned.

“If we’re really lucky, we’ll see pavement this year on the project,” he said.

The site’s private road, which will be built to city standards, will loop through the area west of the Dallas property owned by Nor Am Investment, opening up lots for destination retail, Sweeney said.

Sweeney said his company has submitted plans to the city for 23 commercial lots on the east side of Dallas. “A lot of those spoken for,” he said.

Sweeney’s development group plans to move 890,000 cubic yards of dirt for 473 residential lots on the west flank of Badger Mountain. Up to 5,000 residential units are planned at full buildout. About 950 homes are there now.

“As rooftops continue to grow, the interest in commercial continues to grow,” Sweeney said.

Goodman & Mehlenbacher Enterprises is the contractor. Heritage Bank of Tacoma is financing the project.

A stable investment

Developer Nathan Croskrey and his twin brother David plan to build a self-storage facility on 20 acres near Leslie and Reata roads in Richland.

The brothers behind Croskrey Properties LLC hope to start construction this summer.

This will be their fourth mini-storage project. “They’ve just been proven over time to be a real stable financial investment,” Nathan Croskrey said.

He said if you’ve got a three-tenant strip mall and one tenant moves out, a third of the income is gone. “With storage units, you’re diversified over 500 units, so you don’t see that kind of volatility if something changes. It’s a real stable long-term type of investment,” he said.

Over the years mini-storage facilities have improved their appearances so they don’t detract from their surroundings and there’s not as much theft with improved security features, Croskrey said.

“They used to be looked at as so negative and an eyesore and everything, but now I think that the value of them increased because of the improvements,” he said.

With building costs going up, housing sizes have to go down, so mini storage offers cheaper square footage for storage. “Instead of having storage in the house, you have it in a storage unit,” he said.

Not here, says West Richland

But not everyone is a fan of this kind of development.

The city of West Richland currently doesn’t allow any mini storage.

The city is focused on providing prime commercial lands first to businesses that will generate daytime jobs and retail sales tax, said Community Development Director Eric Mendenhall, pointing out that self-storage facilities fail to provide either.

“When you’ve got an opportunity where so much growth is happening, you don’t want those prime commercial land” gobbled up by mini storage, he said.