By Kevin Bledsoe

Over the last 25 years, the self-storage industry has experienced amazing growth, and it's more important now than ever for facility operators to get creative in their product offerings and differentiate their facility from the competition. One add-on business model gaining momentum is the pack and ship store concept.

A traditional pack and ship store is usually in a shopping plaza near a large anchor or grocery store. The anchor store helps generate business for the smaller stores in the plaza and can drive revenue for these smaller enterprises. A downside for store owners operating in a high-traffic plaza is the cost of rent, which can be very high and create difficulty in turning a reasonable profit. This is where adding a pack and ship store to your self-storage operation can be very lucrative.

Most operators probably have no idea how to run a pack and ship center. I had the same problem when I began looking at the concept. At first, I had very little desire to bring the pack and ship store to the self-storage facilities my company manages. But with time, practice and training, I embraced the concept and now believe this business model is one of the best to enter the industry.

This article will provide insight to the pack and ship model and help operators identify the various profit centers associated with this type of business. At the very least, it will give you something to think about and possibly research further to see if this is the right fit for your and business acumen.

Providing Services

A pack and ship center offers shipping services through providers like UPS, FedEx, United States Postal Service (USPS) and DHL. Store operators use these carriers to offer shipment services such as ground, express, international and freight. In addition, most stores generate revenue from the cost of packaging items for customers.

Most consumers are unaware of the difference between an inexpensive box from a local retailer and an approved shipping box that will keep the contents safe during shipping. As the store operator, its your job to educate the customer and offer to pack all shipments in an approved, secure manner. The shipping process will help you generate revenue through the sale of boxes, packaging materials, labor charges, shipping costs and any additional coverage purchased to guarantee the value of items in transit. You can offer the same products and services on international, express and freight shipments, which offer the highest profit margin.

Additional Profit Centers

Most pack and ship stores also offer a variety of other profitable services. For example, a good store will offer a number of digital printing and copying options. Why do you think Staples transformed a large portion of the front of its stores into a digital print shop? They make a huge profit!

Your print-shop offering can be as simple as a copy machine customers can use or as complex as design services. Most operators fall somewhere in the middle. The majority of locations offer to print a wide range of products for customers, for example postcards, business cards, brochures, letters, fliers and posters from pre-designed files.

mailboxes for rent is another profit center you can include as part of a pack and ship center. You can purchase a bank of mailboxes for a one-time fee that will pay for itself for years to come. A small mailbox will cost customers approximately $20 to $25  per month. A medium or large mailbox would increase in price from there.

Most stores offer a variety of add-on options for mailbox services such as text or e-mail notification and large-package storage for customers who rent a mailbox. These services save customers time and money, eliminating the need for them to check their mailbox every day.  Most pack and ship stores will have 75 to 150 mailboxes available for rent.

Other offerings to consider including in your pack and ship store are notary services, passport services, fingerprinting, greeting cards, fax services, computer workstations, shredding services, digital scanning, impulse items, office products, binding services, laminating services, stamps, electronic postage and money orders.  All of these items help drive traffic to a well-equipped pack and ship center and increase the bottom line.

The pack and ship concept isnt for every storage operator, but it can greatly benefit facilities in high-traffic areas. At my company, the model has tripled our in-store traffic counts and benefited the self-storage side of the business. To get more information, you can start with several reputable franchises that specialize in this industry, including The UPS Store, Goin Postal, Safe Ship, The Mailbox Stores and Postal Connections. I wish you the best of luck with your research and hope this information will point you in the right direction when choosing your differentiating factor.

Kevin Bledsoe is a district manager of York, Pa.-based Storage Asset Management Inc., which provides full-service management, consulting and website-development services to self-storage owners on the East Coast. For more information, call 717.779.0044; visit www.storageassetmanagement.com .

Strategic Storage Trust Inc., a publicly registered, non-traded real estate investment trust (REIT) that operates self-storage properties, has purchased two facilities in Mississippi for $10.7 million. The properties were bought from several investors using a combination of cash, existing debt and operating partnership units through Internal Revenue Service Section 721 exchanges, company officials said.

A 721 exchange allows a taxpayer to exchange rental or investment real estate for shares in a REIT, according to the Paladin Registry of Financial Professionals, a website that helps match investors with financial planners, advisers and money managers. The exchange is also known as an umbrella partnership real estate investment trust or upREIT.

The facilities are in the Madison County communities of Canton and Ridgeland and comprise 149,000 square feet in 900 storage units. They will be rebranded under the SmartStop Self Storage trade name.

We targeted these self-storage facilities due to their high occupancy levels and solid locations, said H. Michael Schwartz, chairman and CEO. Both the Ridgeland and Canton sites will be top income-producing assets for [the company].

The Canton facility was built in 1996 and underwent an expansion in 2004. It has an occupancy rate of about 85 percent and offers 510 climate-controlled units. The 12-building site is on 5.3 acres.

The Ridgeland facility is approximately 88 percent occupied and is comprised of approximately 55,690 rentable square feet and 380 units on 1.1 acres. It was built in 1989 and also underwent a renovation in 2004.

Strategic Storage Trust also owns a third Mississippi facility in Biloxi. The companys portfolio includes 110 facilities in 17 states and Canada that are branded as SmartStop Self Storage. The portfolio includes approximately 70,000 self-storage units and 8.8 million square feet of rentable storage space.

Self-storage operator StorageMart has launched a Pinterest-based sweepstakes to capitalize on a goal many people often have at the beginning of each year: to get organized. The  Pin to Win: Organize It 2013 Sweepstakes will award one winner a grand prize of $500 and a copy of the companys book, 75 Great Storing and Moving Tips.

The sweepstakes asks entrants to build boards to encourage more organization in the new year. A survey conducted by Harris Interactive found the No. 1 new years resolution of those polled was to get more organized. StorageMarts Pinterest boards aim to inspire organization in the home and office, and also includes helpful tips for using self-storage space.

There are four steps to enter the sweepstakes. Entrants must:

1. Follow StorageMarts Pinterest account (pinterest.com/StorageMart).
2. Create a board that helps inspire organization in the new year. The board must consist of at least 10 pinned items, with at least five being re-pinned from the StorageMart page.
3. Tag pins with #OrganizeIt and #StorageMart.
4. Submit a link to the completed board via the entry form on the StorageMart website.

The grand-prize winner will be chosen randomly from entries received before 9 a.m. CT on Feb. 6. A number of second-place winners will receive a copy of 75 Great Storing & Moving Tips.

Pin to Win: Organize It 2013 is the latest giveaway from StorageMart Gives, the charitable arm of StorageMart. Past contests included the recently concluded Draw My Favorite Teacher to benefit public elementary schools in Oakland, Calif., and Brooklyn, N.Y. StorageMart Gives has also conducted giveaways for tickets to concerts and sporting events as well as the biannual ScholarSmarts scholarship giveaway.

Headquartered in Columbia, Mo., StorageMart has more than 130 self-storage locations across the United States and Canada. 

Copenhagen-based real estate fund manager Nordic Real Estate Partners (NREP) acquired the Swedish self-storage company SelStor from London-based venture-capital firm Smedvig Capital. NREP plans to merge the company into its Pelican Self Storage group.

Founded by NREP and M3 Capital Partners in 2009, Pelican is focused on the development, redevelopment, acquisition and operation of self-storage facilities in Scandinavia. It already has 12 self-storage sites operating in Denmark and Finland, with another five openings planned for 2013.

SelStor was founded in 2006 by Michael Fogelberg, former European head of Shurgard. The company has eight self-storage sites operating in Sweden, with two planned for opening in 2013. Smedvig Capital first invested in Selstor in 2008 and has been closely involved in the business.

According to NREP, the combined entities will become the second largest self-storage operator in the Nordics, with an expected 27 sites operating by the end of 2013 and strong ambitions to continue its profitable growth strategy.

"Establishing Pelican in Sweden is a natural extension of our business. SelStor has a strong position in Sweden and a very competent and experienced management team. We are now even better positioned for further expansion," said Pelican CEO and co-founder Claus Mathisen.

We have strong faith in our ability to deliver superior risk-adjusted returns through identification and focused execution of niche investment strategies in the Nordic real estate industry," added NREP CEO Mikkel Bülow-Lehnsby. "We are naturally pleased that we now have one more data point to support and validate this notion."

We are pleased with the outcome of this exit, which delivered attractive IRRs and a substantial capital gain, even more so when achieved through such troubled capital markets," said Smedvig CEO Johnny Hewett. "Whilst our intention was a longer term hold, it was immediately clear when we were first approached that Pelican was a strong partner for Selstor. They can now use their combined strength to expand the business into the wider Scandinavian market.

To date, NREP has focused primarily on modern logistics, necessity-driven retail, self-storage and, to a lesser extent, residential property. It has raised 600 million in capital for these strategies across six funds, through which it has completed close to 100 transactions with a total transaction value of around 1 billion. NREP employs 30 professionals across three offices in Copenhagen, Helsinki and Stockholm and is fully owned by its partners.

Smedvig was founded in 1996 and has invested more than £500 million of internal capital. The company invests £2 million to £10 million in fast-growing U.K. and Nordic businesses. Its model is to invest in a small number of businesses each year and work closely with management, providing advice and hands-on support.

A new U.K.-based self-storage service targeting couples who are downsizing, landlords and people between permanent homes is about to go national following a six-month pilot scheme. The LoveSpace "mail storage" concept is aimed at consumers who want to declutter but avoid the minimum costs associated with traditional self-storage.

The company sends customers boxes and packaging free of charge. The consumers pack and fill them in their own homes, and LoveSpace picks them up and transports them to its secure regional warehouse, also free of charge. Customers can store as little or as much as they wish since the space is measured by the box rather than storage area.

One of the key attractions is that customers do not have to make long-term commitments to pay for storage spaces that may be larger than needed. They only pay for the actual boxes they store rather than a whole storage room which may be only half full. In this way, customers can make substantial savings," Brett Akker, chairman of LoveSpace and co-founder of Streetcar car club, told the source.

Britain has more than 800 self-storage facilities. The Self Storage Association of the United Kingdom estimates the average length of stay is now 38 weeks, compared with 22 weeks in 2007. The association estimates that one in 100 U.K. households uses self-storage.

Among the LoveSpace board of directors is Phil Murphy, who operates Next Door Storage facilites in the United States and launched U.S. enterprise Storage By The Box, a very similar business to LoveSpace.

By Amy Fuhlman

As many self-storage owners will attest, the decision of whether to add wine storage to a facility must be considered carefully. Demographics should play a major role, but also the cost of customizing part of your facility to the unique features widely desired, even required, for wine storage.

There are two primary reasons to include wine storage as part of your self-storage operation. First, the monthly revenue per square foot can be exponentially higher than typical climate-controlled storage. Second, it broadens the market appeal and quality perception of a facility while bringing another market segment through the doors. Both are great reasons to consider this add-on service, providing your facility is in the right demographic landscape.

For the most part, wine storage is better used in major metropolitan areas. These areas tend to offer:

• Clientele with a larger expendable income (upper-middle class)
• Clientele who have less space for storage (often high rise/downtown dwellings)
• Five-star restaurants or bars that lack space for wine storage
• Wine distributors or wholesalers servicing local bars, restaurants and high-end liquor stores that need easy access to stored stock

An Urban Case Study

Consider Rick McClish, a self-storage owner and the founder of Facility Development Corp., which provides construction services throughout Northern California, Nevada and Oregon.  McClishs urban location, Rose City Self Storage in Portland, Ore., features wine-storage lockers ranging in size from 12 to 160 cases, and walk-in storage for larger collections such as those stored by retailers, restaurants or collectors. A hospitality and tasting room, computer-controlled access, and delivery acceptance are also included.

But while Rose City passed the initial checkpoints for determining if wine storage would be a good fit for his market, a few factors affected the growth of his business. Despite all of the facilitys perks, pre-existing competition impacted his ability to rent wine-storage space.

Unless youre the first guy in your market with wine storage, its going to be a slow rental process, says McClish, whos seen about a 20 percent annual occupancy increase since the doors opened two years ago. He attributes much of the success to his management teams aggressive marketing efforts. McClish created a unique website to market his wine storage, and his staff spends 20 percent of their week to promoting the service.

McClish also found that not all collectors are open to storing wine in a traditional storage facility. There was a pre-existing mindset that wine needed to be stored in a more upscale environment. His solution: The installation of French Oak-laminated wine lockers with a wood-like façade, which provide a more discerning visual appeal.

The wine-storage customer base at Rose City is expanding, although it's sometimes in an unexpected manner, McClish says. A wine distributor recently toured the facility's accommodations. After viewing the standard self-storage units in the basement, he determined they held the correct temperature for wine storage and opted to rent a regular 10-by-10 space rather than pay for the more expensive wine storage, which can cost $20 to $25 more per square foot. I didnt see that one coming, laughs McClish, but Im happy to have the rentals.

Adding wine storage to an existing self-storage facility can bring in new customers and higher revenue per square foot than traditional self-storage. However, operators must first evaluate whether the profit center is ideal for their location, then be prepared to aggressively market the service. While wine storage continues to be a niche market, it can be well worth pursuing given the right demographics.

Amy Fuhlman manages the marketing communications programs for Janus International, a manufacturer of self-storage doors, hallway systems and building components. For more information, visit www.janusintl.com.

Storage Post Self Storage has purchased a facility in New York City from a local developer. The company had managed the property under its brand name since March 2012. Financial terms were not disclosed.

Located at 979 Brook Ave. in the Bronx, the facility is comprised of 83,000 square feet and 770 storage units.

"Our executive team is excited to add the Brook Avenue self-storage facility to Storage Post's portfolio. We believe our internal operations, paired with our industry expertise, allows us to maximize the property's operational value, said Dylan Delaune, chief investments officer. Our platform gives us a competitive advantage, allowing us to pass favorable economics on to owners looking for an exit."

Headquartered in Atlanta, Storage Post has more than 20 locations throughout Georgia, Louisiana, New Jersey and New York. The company is actively pursuing growth opportunities through the acquisition, redevelopment and management of existing self-storage properties. The company targets both single property and portfolio transactions.

The Amsdell family of companies has acquired a self-storage facility in Bloomfield, N.J. The facility has more than 90,000 net rentable square feet and will operate under the Compass Self Storage brand name. Financial terms were not disclosed.

The purchase marks the second Amsdell property in New Jersey. The company entered the market last August when it bought a facility in Neptune. The latest transaction was the 14th self-storage acquisition Amsdell completed in 2012.

We are thrilled to continue to grow and expand our business in this market, said Todd Amsdell, president.

The Bloomfield facility is located just off the Garden State Parkway and offers climate-controlled units, four covered exterior loading docks, and a full line of moving supplies and services. The former Peerless Tube Building was converted to self-storage in 2005.

Linda Cinelli, a certified commercial investment member with LC Realty, represented the seller. Cinelli is a broker affiliate of the Argus Self Storage Sales Network, a nationwide network of real estate brokers specializing in self-storage.

The property was sold at a 7 percent cap rate in an all-cash transaction, according to Argus.

Headquartered in Cleveland, the Amsdell Cos. draws its roots from the family-owned construction company founded in 1928. The company, which owns and operates self-storage properties in Florida, Kentucky, Michigan, Mississippi, New Jersey, Ohio, Pennsylvania and Tennessee, has since been active in several billions of dollars worth of real estate ventures with a primary focus in self-storage.

Based in Denver, Argus was formed in 1994 to assist owners and investors of self-storage. The firm has 36 broker affiliates covering nearly 40 markets.

PTI Security Systems, manufacturer and distributor of the Digitech and PTI brands of self-storage access-control and security systems, has presented its National Reseller of the Year Award for 2012 to Site Safe Security, which has offices in Baton Rouge and Shreveport, La., and Prairie, Texas. Site Safe specializes in all aspects of security for the self-storage industry.

The award is presented each December one of the companies that resells, installs and services PTI and Digitech systems. For 2012, the award was presented to Site Safe Security Owner Scott DeRanger. Operating the company for more than five years, DeRanger has more than 11 years of experience in the security-installation business.

There are things that are important to our end users that go into helping us make our decision. Since were a high-tech security company, technical competence ranks high on that list," said PTI President Lance Comstock. "In addition, a commitment to ongoing training, customer service, responsiveness, salesmanship, and other factors are all considered in making a selection like this.

Scott does a tremendous job in working with customers and coordinating his staff to plan and implement a custom-tailored solution for security, added Rick Stumpf, PTI security systems territory manager.

Comstock, the founder and former owner of PTI Integrated Systems Inc., purchased the PTI and Digitech International Inc. brands from Chamberlain Access Solutions Inc. in late 2011. The security products are now sold through PTI Security Systems, which has more than 20,000 product installations worldwide.