Self storage environmental due diligence: what to check before you buy
Storage buildings are clean to run, but they are often built on old industrial and trucking land, and next door to it.
Why self storage facilities carry this risk
Self storage gets built where land is cheap and zoned for light industrial use. That is the same land that held truck yards, fuel depots, machine shops and small manufacturers for decades before the units went up.
The units themselves rarely cause a problem. The risk usually comes from what the land was before, and from neighbors whose spills can travel under the property line.
What usually turns up
Fuel releases from neighbors
Often seriousTruck terminals, freight yards and gas stations next door often had leaking underground tanks. A plume that reaches your parcel can bring vapor and lender questions even if the source is not yours.
Past industrial use of the site
Worth checkingMany facilities sit on land that was a shop, yard or small plant before the 1970s. Historical aerials and old maps show what stood there.
Tenant storage of chemicals
Worth checkingLeases ban hazardous materials, but units still collect paint, solvents, fuel cans and drums. Outdoor RV and boat storage adds oil and fuel drips on gravel.
Flood zone on low, cheap land
Worth checkingStorage is often built in low areas other uses avoided. A 1% annual-chance flood zone means required flood insurance for most loans and wet inventory claims.
What the pre-screen checks for a self storage facility
- Historical aerial photos and old topographic maps of the parcel and its neighbors, to see what stood there before the units.
- State tank and cleanup lists within a quarter mile, with the open or closed status of each case.
- Federal records (EPA RCRA and ECHO) for hazardous waste handlers nearby.
- The FEMA flood zone for each building on the parcel, not just the lot.
Pre-screen a property before you spend on a Phase I
A desk review of one address: past uses from historical photos and maps, federal and state environmental records, and flood risk, ready usually within the hour. $100 for one report, or $100/month for 3.
Questions to ask the seller
- Has any tenant been evicted for storing hazardous materials, and what was removed?
- Is there an onsite fuel tank, wash bay or maintenance shop?
- Do you have any prior Phase I or environmental reports, and from what year?
- Has the property ever flooded, and which buildings took water?
When to order a full Phase I
Order a full Phase I if the pre-screen finds an open fuel or solvent case within about 500 feet, or past industrial use on the parcel itself. Most lenders will require one for a storage loan anyway.