Climate controlled storage holds units within a temperature range, and sometimes a humidity range, with heating, cooling or dehumidifying. It is worth building when your local tenants will pay enough extra per month to repay the added construction and utility costs. A payback calculation and calls to competitors will tell you.
Building codes, energy and moisture questions vary by site. This is general information. Talk to a contractor, an HVAC engineer and your lender.
What climate controlled can mean
There is no universal standard. The climate controlled definition covers a range of setups.
| Type | What it does | Typical use |
|---|---|---|
| Heated only | Keeps units above freezing | Cold climates, paint, plants, some electronics |
| Cooled only | Reduces peak heat | Hot climates |
| Heated and cooled | Holds a temperature range year round | Furniture, documents, instruments |
| Humidity controlled | Dehumidifies to reduce moisture | Wet or coastal areas, records, wood |
| Unconditioned interior | Inside a building, no HVAC | Cheaper; not climate controlled |
Be exact. If you promise 55 to 80 degrees, check that your system can hold it, and put the promise in the lease and ad. See interior units.
Temperature versus humidity
Temperature is easy to understand, but humidity often damages stored goods: mold, warped wood, rust, musty smells and paper damage. A unit can be cool and still damp.
- Ask a mechanical contractor about dehumidification for your area.
- Seal the building envelope: doors, walls, floor and roof.
- Plan drainage and keep water away from the slab.
- Place a thermometer and hygrometer in a few units to confirm.
Who rents climate controlled units
Typical tenants store furniture, antiques, wood and leather, electronics, documents, musical instruments, wine, art and business records. A tenant who has had a mold problem will pay for the fix.
Your market decides how many of those tenants you have. Ask:
- How full are nearby climate controlled units, compared with standard ones?
- What climate extremes do owners face where you are?
- Do you have people moving in from elsewhere who store household goods?
What it costs you
You pay in four ways:
- Construction. Insulation, HVAC, ductwork, interior walls, finished floors and doors. Climate controlled buildings are usually more expensive than drive-up buildings.
- Utilities. Heating and cooling run all year.
- Maintenance. Systems wear out and need service.
- Space. Interior corridors and mechanical rooms take rentable area.
Get written quotes. Do not guess. Read self storage conversions if you are thinking of converting an existing building.
The payback test
You need three numbers: extra cost, extra rent, extra operating cost.
Worked example (illustrative)
Say you are deciding on a 10,000 square foot building. You get a quote of $60 per rentable square foot more for climate control than for a standard building, which is $600,000 more in total. Say your market premium is $0.30 per square foot per month (competitor calls told you a 10x10 climate controlled unit rents for $30 more than a standard 10x10; $30 / 100 sq ft is $0.30).
- Extra rent at full occupancy: 10,000 x $0.30 x 12 = $36,000 a year.
- At 88 percent occupancy: $31,680 a year.
- Extra utilities and upkeep say $8,000 a year.
- Extra NOI: $23,680.
- Simple payback: $600,000 / $23,680 is about 25 years.
That would not work. Change one input and it might: if the premium were $0.80 per square foot, extra rent at 88 percent is $84,480, less $8,000 is $76,480, and payback is about 7.8 years. The lesson is that the premium in your market decides everything. Verify the premium with competitor calls, and ask a broker or lender for local data. Run your own numbers in the feasibility calculator and unit mix calculator.
How to set the price
- Gather competitor prices. For each size, record the standard price and the climate controlled price within your market.
- Calculate the premium in dollars and in percent.
- Set a starting premium that is competitive, not the highest.
- Watch occupancy. If climate units fill first, test a higher price. If they sit empty, check the premium and the marketing.
- Review each quarter. Use your own pricing strategy.
Make sure your listings say what the climate control is. Spell out the temperature range and the unit location. See how to market a self storage facility.
Build, convert or skip
| Option | Good when | Watch for |
|---|---|---|
| Build new climate controlled | You have strong premium rents and land | Highest cost, long fill-up |
| Convert part of an existing building | Building is insulated and well sealed | HVAC, moisture, electrical upgrades |
| Add heated-only units | Cold market, lower budget | Tenant expectations in summer |
| Stay standard | Premium is small, tenants are price-sensitive | Competitors may take the premium tenants |
Operating a climate controlled building
- Service the HVAC on a schedule.
- Keep a log of temperature and humidity readings.
- Plan for power loss: what happens to tenants' goods? Your lease should say.
- Review your insurance for water damage and equipment breakdown.
- Do not allow tenants to store food, plants or hazardous items. Spell out prohibited items in your lease.
- Train tenants not to prop doors open.
Checklist before you build
- Competitor premium measured by phone calls
- Written quote for added construction cost
- Utility estimate from your power company
- Payback calculated at three occupancy levels
- Lender consulted on how they treat the added cost
- Lease updated to describe what you control
- Moisture plan reviewed by a contractor
Choosing a system
Several system types exist, and the right one depends on climate, building size and budget. Ask for written proposals from at least two mechanical contractors for the same scope.
| System idea | What to ask |
|---|---|
| Ducted heating and cooling | Energy use, noise, service access |
| Mini-split units | Number needed, maintenance, coverage in long corridors |
| Unit heaters | Cold-only, cost to run |
| Dehumidifiers | Capacity, drainage, power |
Also ask how the system is controlled, what happens during a power outage, and who services it. Ask what temperature range it can really hold on the hottest and coldest days where you are.
Lease and marketing language
Be specific and honest. A promise like "climate controlled" with no range can cause disputes when a tenant finds a unit warm. Describe it, for example: "heated and cooled to a stated range, not guaranteed during power outages or equipment failure." Have your attorney review the wording. Add a clause about prohibited items such as food, plants and flammables, and about keeping doors closed.
Show the unit location in your listing. Interior units with no outside access are the usual choice, and tenants like knowing the building is clean and well lit.
Mixed approach for small owners
You do not have to go all in. Many small owners start with a few interior units, test the premium and occupancy over a year, and expand if the data supports it. That limits risk and gives you your own numbers instead of someone else's average.
A step-by-step decision
- Call five competitors and write down standard and climate controlled rents for the same unit size, and how full each says it is.
- Compute the premium per square foot per month.
- Get two construction quotes, one standard and one climate controlled, for the same footprint.
- Ask the power company for a typical monthly cost for a building like yours.
- Run the payback at 75, 85 and 95 percent occupancy.
- Ask a lender how they view the added cost and whether they will lend against it.
- Decide only after the numbers hold at the middle case. If they only work at 95 percent occupancy and a high premium, wait or start smaller.
Common mistakes
- Copying a premium from another market
- Forgetting that interior corridors reduce rentable area
- Underestimating electric bills in extreme weather
- Promising a temperature range the system cannot hold
- Mixing prohibited items, such as food or plants, with valuable goods
- Not budgeting for HVAC replacement in year 10 to 15, which your contractor can estimate
This is general information. Building, energy and moisture decisions depend on your site, so verify with qualified professionals.