One developer believes so much in Denver's need for storage that it has three projects totaling hundred of units underway.
With hundreds of people moving to the city each month -- and apartments and homes having only so much space -- VanWest Partners said it sees storage units as a good long-term investment. The company isn't alone, at least 30 storage projects are in the city's planning pipeline, according to plans submitted from 2014 through April 2017.
"You've got a lot of people moving into these dense areas and particularly with the movement toward smaller apartment units the demand increases," said Wade Buxton, a principal at VanWest.
The Denver metro is currently in a sweet spot where the storage supply is in line with storer demand, according to a 2016 CBRE Research report.
Denver ranks right about in the middle (20 out of 38 metros) in terms of square footage of storage per person — 6.57 square feet per person. On the top and bottom ends of the spectrum, New York is undersupplied with 3.52 square feet of storage per person and Oklahoma City is oversupplied with 10.12 square feet per person, the report states.
"Well the market as a whole is pretty well supplied, there are still some pockets that are a little bit undersupplied," Buxton said. VanWest sees an opportunity in denser neighborhoods like Arapahoe Square, Capitol Hill and Clayton.
The company has started on a five-story self-storage facility at the northwest corner of Champa Street and West Park Avenue in Arapahoe Square and a seven-story storage project at the northeast corner of East 9th Avenue and Grant Street in Capitol Hill. Construction on another storage facility is expected to start soon near the southeast corner of East 39th Avenue and Steele Street in Clayton.
In October, the Kentro Group put forward a plan to build a grocery store at a site near the southwest corner of South Leetsdale Drive and South Holly Street in Washington Virginia Vale. But a co-founder of the Denver-based firm, Dimitrios “Jimmy” Balafas, told Denverite last month, "The grocery store is not happening, and we have pulled out of the deal."
It's possible the former site of the Dillon Dairy on Leetsdale Drive could become a three-story Greenbox Self Storage facility, based on a plan submitted last year.
"At this point plans for the site are all tentative," said Josh Fine,
executive vice president and general counsel of Focus Property Group.
"We are still putting together our programming mix for the property and do not have definitive plans to announce."
Focus Property Group owns the site. Greenbox Self Storage is an affiliate of the Denver-based real estate firm.
Companies are having to get creative with their storage facilities, Buxton said, because if neighborhoods could choose which businesses opened in their area, their first choices would probably not be storage facilities.
"Self-storage isn’t an asset class neighborhoods are particularly excited about, and it's an asset class that cities are not excited about," he said. "'What you’re seeing is stricter requirements and in order to get projects completed developers are coming up with a mixed-use of storage and retail more often. It's probably going to continue to happen particularly as you try to develop in downtown urban environments."
For VanWest's project in Capitol Hill, the ground floor is expected to have a local brewery, winery or distillery tasting room, coffee shop or other retailer fill the space. The upper floors will have roughly 800 storage units.
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Business & data reporter Adrian D. Garcia can be reached via email at [email protected] or@adriandgarcia on Twitter.
