Affluence. That’s most likely the one word that comes to mind when talking about south Miami Beach, Fla. Upscale art deco buildings, giant yachts docked in the nearby harbor, fine dining, and celebrity sightings in the winter.
Those affluent visitors and residents also have a penchant for fine wine, a fact that didn’t go unnoticed to father and son partners Mike and Ken Endelman and Alan Potamkin when they decided to develop a prime piece of real estate into self-storage.
“There’s a significant number of high end collectors here,” says David Blum, president of Better Management Systems, a consulting firm and management company that works with self-storage facilities around the world. “There was a very strong belief this market could support that type of storage.”
As the partners began researching the possibility of adding wine storage to the already planned self-storage business, they realized there really wasn’t anything like it in south Florida. “We found there was one that had a walk-in cooler, but the humidity isn’t controlled, and everyone is just taken in to retrieve their wine, which is stored right next to other people’s wine,” says Ken Edelman. “With the demographics in Miami Beach, we thought this was a great market to offer full-service wine storage.”
So far, the venture has been proven successful. Sobe Self Storage has 140 temperature and humidity controlled wine lockers with space to build custom units on demand.
The $1.5 million self-storage facility opened in May, after a staggering eight-year approval and construction process.
Long Road To Approval
To understand the approval process for the project located in one of the few prime building spots in south Miami Beach, one must understand that the entire area is designated as a historic district.
In the 1970s, as some of the historic art deco buildings in South Beach were being razed for parking lots and commercial buildings that would bring more tax revenue to the city, a band of local activists sought to protect some of the historic buildings from demolition by seeking designation on the National Register of Historic places.
In 1979, they were successful. It’s said to be the first in the nation that protected only buildings constructed during the 20th century. That designation led to the creation of the Historic Preservation Board. As well, local neighborhood associations were created to work with the board for any new development.
In 2009, Potamkin and another partner approached Blum about consulting on a self-storage project at 633 Alton Rd. in Miami Beach. “Initially, there were two lots and it would have doubled the size of the facility,” says Blum.
The site is located on a prime parcel in South Beach, at the foot of a flyover (an overpass) from the city of Miami, meaning anyone coming to South Beach from Miami will pass by the site. “That site is really considered the gateway to Miami Beach,” says Blum.
“The approval process was a very tedious process,” says Blum. “It was a four-year process.” There is one other self-storage facility near the site, but the city didn’t want to open up the entire area to self-storage. The first round of the process included getting the planning and zoning board to open up just that area for zoning for self-storage.
The P&Z board decided that they could carve out a six-block area between 5th Street east of Alton Road to 11th Street east of Alton Road that is bordered by Lenox. Since no buildings could be demolished in the historic district, this would ensure that Sobe Self Storage would be the only self-storage facility in that six-block zone, even if the zoning allowed for it.
After meeting with the P&Z board several times, Blum said the developers then had to meet with the Flamingo Park Neighborhood Association. Although the neighborhood association only occupies one square mile, the group represents residents and business owners of 1,200 historic buildings, most of them in the Art Deco or Mediterranean style. There is a mix of a few new commercial and residential homes, but the group, like many in historic districts, is very cognizant of its heritage and goals to preserve the historic nature of the neighborhood.
“We had two meetings with the neighborhood association and then three more meetings with the planning and zoning board, which gave us the recommendation for the planning and zoning commission,” says Blum. “We had several hearings with them, which took almost a year.”
By the time planning and zoning recommended it to the full city council, it took four years. At some point the other developer eventually pulled out, which left the project only with one lot. “I approached Ken and he was interested in the project; he and Alan formed a partnership,” says Blum.
Edelman said the project was very attractive to him. Based on population, the high density area can support at least 225,000 feet of storage; this area only had 22,000 square feet of existing storage, which is almost always at 100 percent occupied, with an additional 22,000 square feet proposed with this project.
At that point, the project was presented to the South Beach Historic Preservation Board. Although the name sounds ominous in that some people may think that historic preservationists shun all new development, the board really is credited by some to having helped revitalize South Beach, preserving the historic buildings in the area while allowing quality new development that will bring people and tax revenue to the area. “They coached us on the design elements,” says Blum.
Because the site sits at the bottom of the flyover from Miami Beach, the design was very important. “It really had to be a landmark design,” says Blum. “It had to have street side activation that provided a classic South Beach pedestrian experience.”
Manny Gutierrez, an architect with Gutierrez and Lazano Architects, P.A., in Fort Lauderdale, Fla., who had worked with Edelman on other projects, was hired for the job. It might have been easy to be intimidated just by the location. “In South Beach, you see architectural works by architects from around the world,” says Gutierrez. “The city sees this all the time, so this is what they demand, high-end architecture. We’re a small firm; we’re not a national, much less an international firm, but we were up to the challenge.”
Still, Gutierrez describes the demands by the city as “humungous”. Gutierrez says, “They didn’t want to have the connotations of self-storage at all, which is awful due to the image most people get in their mind of a box with blank walls. It’s the last thing they want. Miami Beach is very urban, very cosmopolitan, with a lot of foot traffic.”
But, with the local historic designation, did the local historic board and neighborhood association want something art deco or maybe Mediterranean to match some of the local historic buildings in the area?
“Just because it’s in a historic district doesn’t mean they want buildings that look like their historic buildings,” says Gutierrez. “They don’t want to replicate what is. It isn’t like New Orleans, where you have to do a French design. They wanted a very modern design.”
It took two to three renderings for the design to be approved, but what resulted was indeed a very modern design with certain Art Deco pieces incorporated. One of the main challenges was designing a building that was pedestrian friendly and incorporating all of the elements of the inside storage facility on only a 15,000-square-foot lot.
Code demanded the building be only 22,500 square feet with a 40-foot-high height limitation. Gutierrez had a vision to create a very modern looking building with a lot of aluminum that brought to mind the heyday of the large hotels and the last Miami Beach Golden Age.
He added an aluminum grill with circles at the top of the building; it’s his favorite design element, and he feels brings the feel of South Beach to the building. “It’s an interpretation of the glamour that is the area,” says Gutierrez.
In addition to the aesthetics, the building had to have pedestrian friendly walking spaces in front and be alluring to people walking by in both the daytime and nighttime. It was designed with ample ambient lighting that may resemble more of a lit museum at night than a self-storage facility.
“I had a competition with the staff in my office to see if they could tell me what the building was designed to be,” says Gutierrez. “People guessed a night club, a health club, they guessed all kinds of things, but no one guessed it’s a storage facility.”
The parking lot, which was in the back, also had many restrictions and rules placed on it by the city. Sobe Self Storage may be the only self-storage facility in the country that has a mandated bike rack. “It’s the first time I’ve ever known of it to happen,” Edelman laughs.
Edelman explains when they went through the planning and zoning process no one requested special consideration for parking. As a result, the city attached the industrial zoning to the facility, requiring it to have 16 parking spots, which is excessive for self-storage. By agreeing to install a bike rack for 14 bikes, the city agreed to reduce the amount of parking required to 11 spots.
Sobe decided to offer those bike slots for rent, although no one has rented them as of yet.
To make the project work financially, Edelman knew the interior design also had to include lockers stacked one on top of the other. This is typically done in smaller storage facilities in urban areas, which allows them to charge by the cubic foot. There is a mix of 844 full size and stacked units. Blum says this provides a potential monthly gross income of more than $110,000. The facility is currently 18 percent occupied, but they haven’t had a chance to market the facility to the snowbirds, which is high season in Miami. They hope, like their competition, to be 100 percent occupied by next year. Rents on Miami Beach typically are 30 to 40 percent higher than on the mainland.
The interior is sleek with shiny floors and white and light-colored units with bright lighting. Janus International provided the interior systems. Richard Lillie, southeast sales manager for Janus says the project was unique in its design due to the stacked units. “The loading of our materials into the building provided a challenge because the site is so small,” Lillie says. “We loaded from the ground, roof top stair cases, and elevator in order to get out materials in place.”
Edelman says construction on the project had all of the challenges of building in an urban area, including making sure all of the subcontractors and equipment were coordinated, but Sobe ended up with a solid building that evidently was able to withstand the recent power of Hurricane Irma. “When we came in after the hurricane, there was a light on in the elevator and we were afraid we had a flooded pit,” says Edelman. “We called the guy and he was there in 30 minutes. Turns out, it was just an alarm. There was no water; our flood panel and all of our systems worked great. The guy couldn’t believe it. He said he was getting calls from all over about floods.”
PTI Security Systems was hired to install the security system, which includes more than a dozen cameras in the facility, as well as seven keypads, intercoms, and PTI’s fully integrated software on the doors and gates. “Using PTI’s fully integrated software, Sobe is able to grant their customers 24-hour access to their possessions while still keeping the facility completely secure,” says Christine DeBord, marketing and reseller manager for PTI. “Sobe also understands how important visual displays of security are both to thwart crime and attract new renters. As such, they’re utilizing site graphics from PTI to display unit status and facility layout to renters.”
All About The Wine
Many self-storage facilities have tried wine storage in the past with little to no success. So, what makes Sobe Self Storage unique? The affluent demographics in Miami Beach. “You have to have the right demographic for wine storage to be successful,” Blum says.
South Beach has an affluent demographic, so Sobe can tap into the people who park their yachts in the nearby harbor, as well as high-end restaurants who don’t want to pay their premium rents for wine storage. “We are next to the highest volume selling wine store in Florida,” says Blum. “The store has bottles that sell for $12,000.”
Blum says Sobe has been very successful marketing the wine storage. “We have a client who has a $6 million collection,” notes Blum. “He doesn’t have it all here yet, but we’ve built him a custom room, and he pays $100,000 a year to store with us.”
For that type of collection, Sobe knew it had to provide the ultimate wine storage experience, which includes climate and humidity control that has back-up generators (which also didn’t fail during Hurricane Irma), as well as state-of-the-art security.
Self-storage customers cannot access the wine storage area. It has a triple secure system with biometrics. “Even if a restaurant has someone come in to get wine, their employee must be matched to the biometric system,” Blum says. The security system includes a “man trap”. After entering through the first door, the customer has to enter another door through security glass that cannot be broken.
Edelman says the wine storage business has been so successful that they will likely later add more wine storage by reducing the amount of 22,000 square feet of self-storage.
Facility Owner: EP Sobe Storage, LLC
Management Company: Better Management Systems, LLC
Architect: Guitierez and Lozano Architects, P.A.
Builder: Edelman Development Corporation
Security System: PTI Security Systems
Doors & Hallway Systems: Janus International
Management Software: SiteLink
Kerri Fivecoat-Campbell is a freelance journalist based in the Ozark Mountains. She is a regular contributor to MiniCo’s publications. Her business articles have also appeared in Entrepreneur, Aol.com, MSN.com, and The Kansas City Star.