From wine to cars to man caves, luxury storage is big opportunity for host of players
One industry expert cautions there's a risk of seizing on demand for luxury storage and going too far with it.
| 6:10 a.m. February 28, 2020
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Commercial Real Estate
Luxury storage projects are springing up across the west coast of Florida.
Some cater to people with specific passions, like wine or cars. Others take a broader approach, appealing to people who have a variety of high-end items to store or who want to create a space where they can spend time with their favorite items surrounding them.
Tony cities in the area such as Naples are experiencing big demand in some luxury storage categories, with waiting lists for wine storage lockers to become available, for example. Up the coast, in 2018, Brett and Paula Laurvick opened Cellar Fifty-Five, a wine storage company in Sarasota that also caters to that niche demand. Another luxury storage project, Wheel Base Premium Garage Condos, is also coming to Sarasota. The 54,000-square-foot facility, now under construction, will offer 46 units from $150,000 to $490,000 for people to store car collections.
Amid the surge, one industry expert, Cushman & Wakefield Vice Chairman Mike Mele, signals a call for caution before it becomes what often happens to a real estate trend in Florida: it gets overcrowded.
Mele, based in Tampa, says luxury storage developers and owners need to to make sure income levels in the area match the aim of their projects. “You need to be where the wealthiest population is,” says Mele, who heads Cushman & Wakefield's national Self-Storage Advisory Group. If not, it’s difficult to get the numbers to work.
There’s also a risk of seizing on the demand for luxury storage but going too far with it. “It doesn’t take much for this to be overbuilt,” Mele says.
At least the wine side, says Mele, somewhat makes sense: owners can get higher rent for wine storage and it makes a facility stand out in a sea of options. Mele spoke with one client recently about converting 500 square feet of his storage facility to wine storage. Mele thinks we’ll see other self-storage facilities incorporating wine storage, too. “There’s a little bit of a glut of self-storage right now,” he says. “Smarter guys are going to figure out a way to fill theirs.”
High-end boat and RV storage is another piece of the luxury storage pie. “It’s in very high demand in this area, but it’s extremely hard to build,” Mele says, because parcels have to be large and close enough to where clients live. Despite the challenges, he says it presents the biggest opportunity because the customer base includes the widest pool of people.
In South Florida, art storage is in the luxury storage mix, too. “That could be something that might work its way over here,” he says. “We tend to trail the east coast in terms of these higher-end projects.”
The people behind Mac Exotic Car Storage in Sarasota saw the luxury demand several years ago, opening the Sarasota facility for storing valuable vehicles in 2015. Operations Manager and part-owner Vinny Binstock says it's been growing ever since.
“We’ve got a really great following of clients,” he says. About 70% of Mac’s clients are snowbirds, Binstock says, with the other 30% including people whose houses are under construction, people who have run out of room at their houses and people with car collections.
The busiest time of year is when snowbirds start leaving in the spring to head north. Mac was at capacity during the high season in 2019 — and that was after the company had moved into a larger building to accommodate demand.
During its first two years of business, Mac Exotic Car Storage rented space. After it sold out one season and then the next, the company decided to expand. It built a new building about two years ago with 16,000 square feet of climate-controlled space. “We’re all about automotive preservation and keeping cars in pristine condition,” he says. “That’s what we’re known for. We care for our clients, and we keep our clients very happy, and they come back, year in and year out.”
Because of its success, Binstock says the future might hold an expansion to other area cities. “Naples would be a very logical place to do,” he says. “It has similar demographics with the snowbird population and high-end clients.”
Tampa is on the list of possibilities, too. Binstock also says he was approached by someone in West Palm Beach who wanted him to put a location there. But Binstock echoes one of Mele’s concerns —saying that moving into an area like that could be tricky since land there is more expensive.
Another location consideration relates to a different form of transportation — flying. “We’ve got to be very close to the airport,” Binstock says. Clients bring their car to him two hours before their flight and he takes them to the airport. Then, when they return, he brings them back to their car. If they have a storage commitment with Mac, it’s no charge, just another perk of the high-end service.
Scott Allan has also tapped into people’s love of cars — and a lot more — with his own twist on luxury storage.
A resident of Fort Myers, Allan talked to members of his social club and others in the area and discovered something. “I realized a big void these homeowners have,” he says. They didn’t have enough space for their car collections, RVs, campers and other items.
“I’ve been in this community for nearly 20 years,” he says. “I had a really good hunch. I determined it was going to be very popular with higher-income retirees. People thought I was crazy.”
‘This is the Cadillac community of man caves.’ — Scott Allan, Allan Development Group
Despite the naysayers, Allan, president of Fort Myers-based Allan Development Group, persisted. Tapping into what appeared to be a gap in the self-storage market, he built a facility of oversized garage units.
The Fort Myers development, between McGregor Boulevard and Summerlin Road, is called Island Storage Suites. Most refer to it more simply, and fondly, as “man caves.”
“It’s really evolved into an exclusive club,” Allan says. The most common items owners keep in their units are car collections, with vehicles ranging from 1920s classics to trucks from the 1970s.
Allan isn’t a car guy himself, but his personal unit has an office, weight area and place for playing ping-pong and pool. Upstairs, there’s a mezzanine with a theater room and full bar. It’s a good place to watch the Super Bowl, he says, smoke cigars and just hang out.
Island Storage Suites is the first project of its kind Allan has developed. “I bet my life on the development,” he says, adding that he invested $10 million in the venture. “It was extremely successful.”
Allan broke ground on the first phase of 24 units in March 2018, and sold out well before it was finished. Within six months, he sold another 24 units. Now, he’s building phase three, with 14 more units. Within a week, four of those units had pre-sold.
More than half of the buyers came to him via word of mouth. The facility also hosts charity events, which has helped build recognition in the community. During events, owners open up their units, and Allan says people regularly come up to him asking if they can buy one.
There are two sizes of units at Island Storage Suites — 25 feet by 55 feet and 30 feet by 55 feet. They range from $230,000 to $290,000, plus a $150 a month fee for maintenance, insurance and security. “A lot of owners, they’ll spend $50,000 to $150,000 in build out,” Allan says. Owners add mezzanines, electronics, car lifts, bathrooms, decor and more. “This is a very popular investment for baby boomers. These people are investing in a storage unit that can really enhance their lives. This really excites them. The phrase I’ve heard the most is, ‘This has changed my life.’”
Like Mele, Allan has some concerns about how many units the area can handle. “I don’t want to saturate the market,” Allan says. But the pace of sales remains brisk. “I get surprised every week at how quickly it’s selling.”
He’s thinking about building a similar development about five miles away. He’s also looking at Punta Gorda, Naples and Sarasota.
To be successful, Allan says projects like this have to be within bike-riding distance of higher-end communities. Real estate brokers are sending him many land opportunities, but if it’s not in the right territory, he won’t gamble on it. The key, says Allan, a former residential and commercial real estate agent, is to study each area’s population, income and even drill down to how many people have classic cars in their garage. He says, “I have been a demographic nerd for quite some time.”
He’d also adapt the concept to the demographics of that area. In Punta Gorda, for instance, he would scale back amenities to make units more affordable. The price point there might be $185,000 to $225,000.
There’s also another consideration with future developments — the proximity of someone like Allan to make owners are taken care of. “The biggest thing I’ve learned is that if you’re a developer of man caves and you can be on site with them and make sure all their needs are handled, you can sell a thousand of these.”
Allan says he’s been asked by investment groups and people in the community to take the concept national. But one of his biggest fears is not being there full time for the buyers. “I would have to get someone who could replicate what I do here,” he says. “This is the Cadillac community of man caves.”
In the vault
A bit further south, in Naples, husband-and-wife real estate developers Dana Sjostedt and Rachel Keller are building another type of storage facility — Carl’s White Glove Personal Storage & Wine Vault.
The three-story, 97,000-square-foot project is under construction now and expected to open May 1. Keller declines to disclose the cost.
The first two floors will offer personal storage, and one-third of the third floor, about 11,000 square feet, will be dedicated to wine storage. If there’s more demand, it might expand into a larger portion of the third floor. “The need in Naples is very great,” says Keller.
Carl’s, named after Sjostedt’s father, will have a diesel generator, solar backup and tight security. Keller’s background includes handling security for wealthy families, an experience she’s brought into the development of Carl’s. “I’m very familiar with the various details of what makes up a good security plan,” she says.
Security and weather preparedness are two ways the facility will set itself apart. It’s also near several luxury home developments, providing a potential built-in customer base.
Bruce Nichols is Carl’s wine consultant who will be offering concierge services to clients storing wine at the facility. He also owns The Wine Store in Naples and manages private wine collections for 20 to 25 clients, so he understands the area’s wine scene. “The demand far outweighs the supply,”for wine storage he says. “There’s absolutely pent-up demand on the consumer side.”
Nichols says 90% of the facilities with wine storage in Southwest Florida are at capacity at all times and often, there’s a waiting list.
Temperature and humidity-controlled wine lockers at Carl’s will be offered in several sizes. Prices will range from about $125 to $500 or $600 a month.
Carl’s plans to target four customer groups — individuals, restaurants, distributors and wine auction houses. “On the consumer side, we’re also doing very high-level concierge services,” Nichols says. It will offer wine pickup and delivery, inventory management and appraisals for probate and divorce cases. “Anything that deals with wine and wine collections, we have a solution for.”