Sheet C-08CalculatorRev. Sep 2026

Self-storage expansion calculator

Adding rentable square feet creates value when the new space's yield on cost is well above the cap rate its NOI will be valued at. Enter the space, rents, cost and timing to see by how much.

Expansion yield on cost

12.67%

+5.92 pts vs. a 6.75% cap rate

Stabilized NOI added: $111K$158,400 revenue
Total cost: $875K$73 per SF
Value of new NOI: $1.64M
Value created: +$768K
Stabilized: Month 34
Profit margin: 88%Value created ÷ cost

See it inside the whole deal. Storage Underwriter adds the expansion to the acquisition's sources and uses, NOI bridge and IRR, and flags returns that lean on it.

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Expansion NOI by year

Construction → lease-up

No income during construction; occupancy then rises in a straight line to 88% over 24 months, as in the app.

How it works

The math

Stabilized revenue = added SF × rent/SF/month × 12 × stabilized occupancy Stabilized NOI = revenue × (1 − expense ratio) Yield on cost = stabilized NOI ÷ (construction + soft costs) Value created = stabilized NOI ÷ cap rate − total cost

These are the app's expansion formulas. Only incremental expenses belong in the expense ratio: the new space adds utilities, insurance, maintenance and card fees, but usually no new manager.

The calculator's default: 12,000 SF at $1.25/SF/month, 88% occupied, 30% expense ratio, $875,000 all-in, valued at a 6.75% cap.
Line	Amount
Stabilized revenue	$158,400
Stabilized NOI	$110,880
Yield on cost	12.67%
Value of the new NOI at 6.75%	$1,642,667
Value created	$767,667

Timing matters as much as yield

No revenue arrives during construction, and the new space then leases up. In the example it completes in month 10 and stabilizes in month 34, so it contributes almost nothing in year 1 and about $39,000 in year 2 before reaching its run-rate in year 4. If the acquisition's returns depend on that income, check whether you can carry the cost until it arrives. The Deal Analyzer and the app put the expansion inside the full projection.

What to verify before counting on it

Entitlements: zoning, setbacks, coverage limits, stormwater and permits for the added buildings.
Demand for the sizes you add: use the rent roll analyzer to see which sizes are full.
Local construction bids with a contingency, rather than a national cost-per-square-foot figure.
Lease-up competition from new supply delivering at the same time.

Results are estimates based entirely on the figures you enter. They are not investment, lending, tax or legal advice.

FAQ

Questions

What is yield on cost for a self-storage expansion?

Stabilized annual NOI from the new space divided by everything it cost to build: construction plus soft costs. $110,880 of NOI on an $875,000 project is a 12.67% yield on cost.

What is a good yield on cost for expansion?

What matters is the spread over the cap rate the new NOI would be valued at. A spread of zero means you spent a dollar to create a dollar of value and took construction and lease-up risk for nothing. Many developers look for a spread of 150 to 200 basis points or more, but set your own threshold for your risk.

How do you estimate the rent for new storage space?

From the facility's own street rates for the same unit types, and competitors' rates for comparable climate-controlled or drive-up units. Use per-square-foot rents for the sizes you will actually build, not the facility average.

What costs should be included?

Hard construction costs plus soft costs: design and engineering, permits and impact fees, site work, utility connections, financing costs and a contingency. Get local bids; costs vary widely by region, building type and site conditions.

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