In the world Self Storage Development, understanding the lay of the land goes beyond the bricks and mortar of a potential piece of dirt. Savvy investors usually like to assess the level of vehicular traffic that passes by a chosen location, known as car traffic counts. These figures can significantly impact the viability and potential profitability of your next facility.
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What are Car Traffic Counts?
Car traffic counts represent the number of vehicles that pass a specific location during a set time period. They can be counted in hourly, daily, weekly, or even annual increments. Traffic counts provide useful information about the volume and flow of traffic at a location, including peak and off-peak periods, directional flows, and the potential number of passers-by who could become customers for a business situated there.
Importance of Traffic Counts for CRE Investors and Brokers
Why count traffic?
- Customer Volume: Locations with high traffic counts typically translate to high customer volume and potential increased foot traffic - if your facility is close to other Retail properties.
- Marketability: Properties with impressive traffic counts are generally more marketable, serving as a persuasive selling point for future investors when negotiating your Self Storage Investment.
- Trade Area Analysis: Car traffic data is integral to trade area analysis, defining a 'drive time' trade area ( Pressing “D” if you’re on the Radius+ Platform) which indicates how far (and how long in terms of time) customers are willing to travel to get to and from your specific facility.
Site Selection and Analysis
Choosing the right location for your facility. Car traffic counts are a potential indicator of customer volume, making them vital in site selection and analysis. Here’s how car traffic data can inform key decisions:
- Estimating Customer Volume: High car traffic counts typically indicate a higher potential for customer walk-ins. This data helps estimate the number of potential customers who might visit the retail location.
- Drive Time Considerations: Depending on the retail business model, understanding how far customers are willing to drive is essential. Analyzing traffic patterns can help determine the optimal distance customers are likely to travel.
- Traffic Congestion Analysis: Comparing traffic patterns across different locations can reveal potential congestion issues, which might negatively impact customer experience. Heavy traffic congestion could deter customers from visiting the store, affecting sales and overall customer satisfaction.
Key Traffic Count Metrics
- Vehicle Miles Traveled (VMT) or Vehicle Kilometers Traveled (VKT): The total distance traveled by vehicles over a specific period, providing a sense of the overall traffic volume in a certain area.
- Average Annual Daily Traffic (AADT): The total volume of traffic on a road over the course of a year divided by 365 days. AADT provides an average daily traffic estimate, helping identify roads with high and low traffic flow.
- The K Factor: The proportion of daily car traffic occurring during the peak hour. The K Factor is calculated by dividing the maximum number of vehicles on the road over the peak hour by the AADT and is expressed as a percentage. It helps to understand how well a location can handle traffic volumes at specific times.
