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Still have too much or too big of stuff: Luxury storage condo concept taking hold in Spokane region

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 highway project, he was faced with finding a new storage building.

He drove around Spokane and North Idaho looking at potential warehouses and garage storage condos to purchase.

“I started to see none of them were reselling and if they did, they were going very, very quickly,” he said.

Bornhoft and his wife, Marianne, who is a Realtor and broker at 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, meaning owners can customize it for a warehouse, shop or other uses. The units will have walls 18 feet tall, allowing space for a mezzanine or loft.

Garage Lodge will be gated and include a clubhouse with a kitchen, bathrooms, conference room, large television, mailboxes, business center and patio.

The project, slated to break ground in April, is intended to foster a sense of ownership and community.

“It provides pride of ownership and it becomes a community where you have other people enthusiastic about RVing, boating, motorcycles – whatever it might be,” Bornhoft said.

The Bornhofts are among just a few people building luxury storage condos in the region, although the concept is fairly common nationwide.

The Garage Lodge storage condos have garnered interest with nine units reserved by potential owners, some of whom include business owners, and RV and classic car enthusiasts, Bornhoft said, adding he and his wife will own two units.

The Garage Lodge condos come in four sizes with prices starting at $149,000 for a 750-square-foot unit up to $279,000 for a 1,400-square-foot premium unit.

“Most everyone buying a unit is paying cash for them. What’s driving demand is you have this incredible amount of cash sitting on the sidelines for investing – whether they’ve sold a house and are coming in with money or are people who like to invest in ownership,” Bornhoft said.

A growing industry

Nationwide, people are paying more than ever to stash their extra stuff and are filling space rapidly, with storage unit rents reaching historic highs in 2021.

In February, national rental rates for 10-foot-by-10-foot nonclimate-controlled units averaged $128 per month, surpassing the greatest monthly amount of $127 recorded in 2016, according to Yardi Matrix, a California-based commercial real estate data and research firm.

The national average monthly rental rate for climate-controlled units was $145 in February, according to Yardi Matrix.

While some of the short-term demand has declined since the summer, the long-term need for storage units continues to be bolstered by distribution companies seeking more space, retirees looking to downsize and people relocating to midsized cities such as Spokane.

The industry also continues to benefit from those seeking RV and boat storage with more people gravitating to outdoor activities during the pandemic.

The Spokane area has experienced somewhat of a self-storage building boom in recent years.

In 2018, some 116 permits were issued for self-storage buildings in the region. Permits dropped to 40 in 2021, according to data from the Construction Monitor and Avista Corp., both of which track permit data.

Spokane’s monthly average storage rental rate for all unit types increased 4.67% to $112 in February, compared to $107 in February 2021, according to Yardi Matrix.

Spokane has gained attention in the self-storage industry for the “staggering” number of facilities built in the past three to four years, said Ryan Daley, president of ABC Mini Storage and board member of the Washington State Self Storage Association.

Self-storage supply in Spokane is up about 70% compared to five years ago, he added.

ABC Mini Storage operates seven facilities in the state, including three in the Spokane area. As of February, the company’s average occupancy for its self-storage units was about 80%, Daley said.

“The pandemic didn’t hit us as hard as most industries. We were lucky the state labeled us as an essential business.

“We were able to stay open through the worst of it, but we still took a hit. 2020 was our first down year since 2008,” Daley said. “But we’ve bounced back pretty good. The housing market helps a business like ours.”

Bornhoft thinks the self-storage boom might be partly because the facilities are easier to build with fewer utilities needed when compared to multifamily 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 housing markets in country,” Daley said. “People like to follow the path of growth. (The self-storage industry) is always trying to figure out the next place for growth, and there’s no doubt Spokane is that.”

Because the storage industry is complementary to the real estate market, it makes sense that Spokane has seen an uptick in self-storage permits along with increasing demand for housing and population growth, said Grant Forsyth, chief economist for Avista Corp.

“We’ve had a lot of people moving here and, of course, that raises demand for a lot of goods and services that go along with that,” Forsyth said.

“A rise in housing demand from people moving here is also probably going to increase the demand for storage.”

Fat Cat of Spokane

Tri-Cities-based company Tricia Jarrett Developments LLC is building the Fat Cat of Spokane, a 29-unit condo 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 about 50,000 square feet. The insulated, temperature-controlled garage condos will vary in size from 1,100 to 1,500 square feet.

Lease rates are likely to start at $1 per square foot, while units for purchase may start at about $200,000.

“We are 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.”

The garage condos will include electrical service and could be used for vehicle, boat and RV storage, while the commercial spaces are ideal for office, warehouse or manufacturing uses, Bush said.

Commercial suites will start at 1,500 square feet with lease rates to begin at $2,500 a month.

Bush also operates Fat Cat Garage Condos in the Tri-Cities with his sons, TJ and Blake.

Fat Cat of Spokane is slated to break ground in about 45 days, with the first phase to be complete by September, Bush said.

The decision to build a garage condo complex was primarily fueled by demand from people needing storage for RVs and space to work on project cars amid a lack of available land, Jarrett said.

Jarrett said she’s already received inquiries from people interested in the garage condo complex.

“Land is getting harder to find every year, and I think a lot of people bought RVs (during the pandemic),” she said. “There’s a lot of people that don’t have (additional) property or shops.”

Bornhoft aims to complete construction of that project’s first phase by the end of the year.

Bornhoft said there is potential to build another 33 storage condo units on a site he owns east of Garage Lodge, which is close to the Spokane International Airport, Amazon’s fulfillment center and the Selkirk Pharma manufacturing facility currently under construction.

“It’s in the absolute center of what is happening on the West Plains,” he said.

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