More than 60 years ago, during World War II, the U.S. Navy built the ultimate storage facility. It was naturally climate-controlled without needing external power, camouflaged from the neighborhood, and impervious to external threats including hurricanes and bombs. The depot consisted of 140 bunkers dug into the sides of Kipapa Gulch just west of Waikele Center in Oahu, Hawaii. The Navy used the caves until 1987, then cleared them out and sealed them.
Approximately 10 years ago, legislation was passed to make the 500-acre property available for commercial use. Although unused for more than 20 years, the caves were in pristine condition with no corrosion of the copper grounding wires or rust on the metal ceiling components. Each cave still has a separate, secure entrance with the original iron doors, heavy-gauge steel walls, concrete floors and a loading dock.
Peter W. Cannon, owner of a publishing company named Hawaiian Resources, heard of the availability of the site while searching for storage. Although he had no prior self-storage experience, he quickly realized an unusual opportunity existed in the caves. “At the time, Hawaii was lacking in self-storage,” he says. He leased 22 of the units with the idea of opening Waikele Self Storage.
Cannon knew he needed experts to help him develop and manage his new venture. “Every source I contacted kept referring me to the same two people, Carol and Thomas Krendl of E.I.M. Group,” he says. Although the couple was originally retained to develop and manage the property, Cannon has been so impressed by their performance that he has made them partners in the business.
The Krendls conducted a thorough feasibility study of the local storage market including surveys within the military community on Oahu. The site is close to three bases and a major residential area. “We felt the military community was underserved, and the high prices associated with Hawaii made self-storage for armed-forces personnel a difficult product to afford,” Thomas says.
Caves of Steel
The business evolved one cave at a time. Installing 422 units took about 20 months as Janus completed one cave approximately every two to three days. “Almost every inch of each cave is used,” Cannon says. One of the biggest challenges was making the steel connect with the uneven surface of the walls. Janus custom-fit the steel partitions to the natural contours of the rock formations.
The storage areas are 16 feet wide and 250 feet deep. Because light and space were issues, E.I.M. chose all-white doors. “They give an atmosphere of openness to the corridors, which is important when attracting renters to this environment,” says Krendl.
The floors have remained the original 1940s concrete, and black and grey paint echoes the site’s historical roots. Each cave is named after an aircraft carrier or other military vessel based in Hawaii during World War II. A small museum of war memorabilia and photos is also on site.
Opening for Business ... Sorta
Waikele opened for business in August 2005 without the normal utilities taken for granted by most facilities. Until a few months ago, electricity was supplied by generators. A cell phone was used to answer customer calls, and a laptop served well to process credit-card transactions. The printer was powered by a car’s cigarette lighter. The facility’s office was a 30-foot construction trailer.
Despite the challenges, the first cave was rented quickly, and occupancy for the entire facility is at 82 percent. Now the facility has a new office, telephone lines and power, Cannon says. Plans are also in place to add approximately 50,000 square feet on the open land this fall.
One reason for the facility’s high occupancy rates is pricing, Cannon says. “We will always be the lowest cost provider in Hawaii.” Prices run 15 percent to 20 percent lower than the Honolulu average. Customers pay $96 per month for a 5-by- 5 up to $875 for a 50-by-10. Active-duty military personnel and senior citizens receive a 20 percent discount.
Amenities include the caves’ natural climate-control—the temperature remains at 76 to 78 degrees and will never be subject to power failure. In addition, the facility offers a full complement of moving and packing supplies for customers and free dollies and carts for easy loading.
There are positive and negative aspects to the property’s hidden placement. Its near-zero visibility is offset by the fact that it’s not an eyesore to the nearby neighborhood. To reach customers, Waikele relies on word-of-mouth and media. “We do guerilla marketing,” Cannon says. Contrary to the norm, the facility publishes its rates in its Yellow Pages ads and will match the rate of any equal competitor minus 10 percent. The facility also advertises on the Internet, in local and military newspapers, and via direct mail.
More Than a Good Neighbor
Guidelines were established by the Navy to preserve the integrity of the caves’ natural environment. It is required that developers leave the property in its natural state as much as possible and maintain the landscaping along the roads and around the caves.
The lush Hawaiian vegetation, including the koa tree, will take over any property if left unchecked, Cannon says. Crews spent weeks cutting back and grinding vegetation into compost.
However, once the area was cleared, the grass began to grown in abundance, especially in the security area between the double rows of fencing around the property. Waikele took a suggestion from the military and uses goats as “living weed eaters.” In addition, horses on other areas of the property mow down fast-growing grasses. A fire break has also been created around the site to protect nearby residences.
“No one has ever seen storage like this before,” Cannon says. “It is the most logical use of the site, and we have developed it to not only provide secure storage for our customers but to honor its historical significance,” he says.
For more information, visit www.waikeleselfstorage.com.