U.K. self-storage operator Big Yellow Group PLC released its operating-performance results for the third quarter of its fiscal year, which ended Dec. 31. The company reported revenue of £17.9 million for its 54 wholly owned locations, up 6.5 percent from the same quarter a year ago. Revenue was down 2.7 percent from the previous quarter.

Occupancy for the wholly owned facilities was 67.7 percent during the quarter, up 4.4 percent year over year but falling from 70.5 percent the previous quarter. Company officials attributed the quarterly decline to the period being seasonally weaker than other times during the year. Move-ins were up 14 percent during the quarter.

Net rent per square foot was £25.73, an increase of 4.4 percent from the quarter ending March 31. Average net rent per square foot during the quarter was £25.61 compared to £25.43 for the same quarter last year. Revenue per available square foot was £20.78 during the quarter, a 7.2 percent increase year over year.

"The growth in rental yield we reported at the interim stage has continued through this quarter, with net rent per square foot increasing by 4.3 percent over the nine months, said James Gibson, CEO. This occupancy and yield performance has resulted in a pleasing return to year-on-year revenue growth in the quarter of 6.5 percent.

The company also reported progress on the development of its 70,000-square-foot facility at Gypsy Corner in West London. The external shell of the facility has been completed, and work has begun on the interior. The location is scheduled to open in April, officials said.

Within our core market of London, we note the very significant number of large-scale residential developments currently being announced on a daily basis, Gibson said. Although not all these projects will get built, we suspect that the prospective increase in supply will dampen down house price inflation in the medium term. The corollary is that we might expect housing activity to increase, and we can imagine that this might not be unhelpful to Big Yellow.

Big Yellow Group operates 66 self-storage locations in the United Kingdom under the Big Yellow Self Storage brand name, with most concentrated in Greater London. The portfolio comprises 4.2 million square feet.

By Missy Henriksen and Dr. Jim Fredericks

Most self-storage operators know they must invest in protecting their facilities and storage units from threats such as fire, flooding, theft and vandalism. However, many fail to give the same attention to the danger of pest infestation. Some think infestations aren't a serious problem. Others believe pest management is too complicated or costly, or that they can handle any problems themselves.

Yet self-storage can be especially susceptible to pest infestations, which can cause extensive damage and be costly. It's important for facility operators to separate the myths from the truths when it comes to professional pest management. Here are a few popular misconceptions.

Myth: Pests are not a problem in self-storage facilities.

Truth: Self-storage facilities can be especially attractive for pests.

Unlike homes and businesses, storage units can go for long periods of time without being opened and checked by renters, giving pests free run of the place. As pests are experts at stowing away in items and infesting new locations, self-storage units, which typically contain cluttered items and boxes, are the ideal infestation targets. A few pests that find their way into a box brought into a storage unit can quickly reproduce and lead to a major problem in a short amount of time.

Once a pest has found its way into one storage unit, it needs only a very tiny entry point to get into and infest nearby units, too. Of course, one of the main reasons self-storage is at risk is because operators usually have little control over whats being brought into the property. They should be aware of certain items that are attractive to pests, such as food, live plants and even bags or boxes of paper.

Myth: Self-storage operators can control pests on their own.

Truth: Facility size and the variety of pests make the task nearly impossible.

When evaluating the need for professional pest-management services, business owners and operators usually weigh the risks and rewards, benefits and costs before employing a third-party service. Many may come up with a list of reasons why they should address pest concerns on their own.  Perhaps they feel they know whats best for their facility when it comes to the treatment of pest problems. Possibly they view pest management as an expendable line item in their budget or feel they can easily handle any problems that arise with a quick trip to the nearest home-improvement store.

However, professional pest management often involves much more than just treating an infestation. Proper control of pests requires training, knowledge and understanding of pest biology as well as the types of methods to properly implement a pest-management program in a commercial facilityskills only available to pest professionals through proper training and continuing education.

Myth: Professional pest control is too costly.

Truth: Damage from pest infestations is costlier.

Pest infestations cause actual damage to storage units, ruining the items contained within and, by extension, the facilitys reputation. No business would welcome the associated costs. Termites cause approximately $5 billion of property damage each year. Rodents can chew through wires, causing electrical fires. Cockroaches can ruin stored personal property. As renters typically pay little attention to their storage areas, any infestation can easily get out of hand, resulting in higher remediation costs.

The cost of employing professional pest services is a business necessity. A self-storage facility requires effective action. By acting quickly, operators can stem the infestation and show theirs is a responsible business acting on customers best interests.

Choosing a Pest-Control Company

Not all pest-management companies are the same. There are several recommendations to keep in mind when choosing a provider, including:

• Evaluate companies that are members of national, state or local pest-management associations. Typically, companies that actively participate in these associations view pest management as an important part of protecting public health and property and are better prepared to use new technologies and implement cutting-edge treatment techniques.
   
• Ask other facility operators for recommendations. Word-of-mouth references are usually honest and believable evaluations. Operators should feel comfortable with the pest professional they select, and prior experiences from other business owners count.
   
• Research, research, research . Before you sign on the dotted line with a pest-management company, first check online resources to evaluate the companys reputation and services. For example, pestworld.org is a comprehensive site that addresses all pest-related topics and provides a ZIP-code locator to find qualified and licensed professionals.
   
• Compare offers. The best way to determine the right pest-management partner is to compare estimates from several companies. It can be unwise to hire the company offering the lowest price because there are many other factors to consider, such as company reputation, experience in treating pests in self-storage and guarantee of work, among others.

Commercial pest management requires skills and scientific knowledge of pest biology, proper use of pest-treatment products, and an understanding that a one-size-fits-all approach is not possible. By being able to provide a comprehensive assessment of current and potential threats to a self-storage facility, pest professionals can help operators prevent problems before they even begin.

Although self-storage operators may attempt to limit or forgo the use of professionals to help prevent and treat pest infestations, failing to implement a prevention program can be costly to the facility and the property within, as well the business reputation. Since many customers are storing valuable belongings in these facilities, operators should give them a peace of mind by protecting their goods from damaging pests in addition to other elements of nature.

Missy Henriksen is the vice president of public affairs and Jim Fredericks is the director of technical services for the National Pest Management Association, a nonprofit organization with more than 7,000 members. The organization was established in 1933 to support the pest-management industry's commitment to the protection of public health, food and property. For more information, visit www.pestworld.org.

CLICK TO NEXT PAGE FOR SIDEBAR: TOP 4 SELF-STORAGE PESTS

Top 4 Self-Storage Pests

Termites

• Termites have been around for more than 120 million years.
• There are 3,000 species worldwide, with about 50 of them found in the United States.
• Each year, termites cause more than $5 billion in property damage.
• They eat 24 hours a day, seven days a week and are called the silent destroyers.
• They live in colonies with as many as 2 million members.

Cockroaches

• A cockroach can survive a week without its head and in freezing temperatures.
• Cockroaches spread 33 kinds of bacteria including E. coli and salmonella, six parasitic worms, and more than seven other types of human pathogens.
• The saliva, droppings and decomposing bodies of cockroaches contain allergen proteins known to trigger allergies and increase the severity of asthma symptoms.
• Approximately 70 species of cockroach are found in the United States, with the German cockroach being the most common.
• Cockroaches spend approximately 75 percent of their time in their preferred hiding spots such as cracks and crevices.

Bed Bugs

• Bed bugs are not found only in beds.
• Nearly 100 percent of pest professionals have treated for bed bugs in the past year.
• They can live for several months without eating and can withstand a wide range of temperatures from nearly freezing to 122 degrees.
• 76 percent of pest professionals say bed bugs are the most difficult pest to treat.
• Female bed bugs lay one to five eggs per day, or an average of 540 eggs in a lifetime.

Rodents

• Mice and rats spread salmonella and carry disease-causing pests such as ticks, fleas and lice.
• Rodents can chew through wood and electrical wires, increasing risk of fires.
• A female mouse can lay as many as 12 young every three weeks.
• Rats can squeeze through openings the size of a quarter; mice the size of a dime.
• Mice urinate constantly and are capable of dropping up to 25,000 fecal pellets each yearthats an estimated 70 times each day for one mouse!

Source: National Pest Management Association

SpareFoot, an online marketplace for the self-storage industry, has released its Storage Trends Quarterly report for the fourth quarter of 2013, focusing on industry acquisitions, development, rental rates and more. Posted on the company blog, the report includes data from surveys with customers of SpareFoot's 6,500 member self-storage facilities. Report highlights include:

• Six of the largest self-storage acquisitions of 2013
• Areas demonstrating the widest disparity in storage-rental prices
• Why storage customers are moving
• How SpareFoot facility clients determine their unit pricing
• 20 counties with the fewest storage facilities per capita
• Top 10 military boom towns
• 10 fastest growing college towns

This is our best edition yet of Storage Trends Quarterly, said John Egan, editor in chief. Weve collected a rich set of data that self-storage professionals wont find anywhere else. The report can be viewed at http://blog.sparefoot.com/storage-trends-quarterly-q4.

Founded in 2008, SpareFoot.com helps consumers find and reserve self-storage units, with comparison shopping tools that show real-time availability and exclusive deals. With a network of more than 6,500 storage facilities ranging from mom-and-pop operations to real estate investment trusts, the company reaches prospective storage renters though partnerships with brands including SelfStorage.com, Apartments.com and Penske Truck Rental.

SpareFoot has been the recipient of several prestigious designations. In 2013, it was named one of the "Best Places to Work in Central Texas" by the "Austin Business Journal," one of the country's "Best Young Companies to Work For" by office-furniture company Turnstone, and a top workplace in the Austin area by the "Austin American-Statesman."

A spreadsheet and other materials seized nearly three years ago from a Big Yellow Self Storage unit in London is helping investigators close in on billions of dollars that disappeared from BTA Bank JSC, a commercial lender in Kazakhstan. A team of lawyers, financial crime consultants, investment bankers and private detectives working on behalf of the bank is trying to recover more than $6 billion in what Bloomberg News says could be the largest financial-fraud case since Bernard Madoffs $17 billion Ponzi scheme.

The spreadsheet lists hundreds of interconnected offshore shell companies, many of which investigators believe former BTA bank chairman Mukhtar Ablyazov used to misappropriate bank assets and shield at least $6 billion in stolen funds, according to a Bloomberg report. The shell companies stretch from Russia to the British Virgin Islands.

In addition to the spreadsheet, 25 boxes of documents and data tapes as well as a computer server were recovered from the storage unit.

After five years of investigation, the investigative team has recovered several hundred million dollars, according to Pavel Prosyankin, a former investment banker who is overseeing the asset recovery. He believes only $2 billion to $3 billion of the missing money will ultimately be recovered, according to the report.

Ablyazov, who is currently in jail near Marseilles, France, has testified in British civil courts that he didnt embezzle the $6 billion or commit fraud. He also has denied fraud charges brought against him in Kazakhstan, Russia and Ukraine. In a statement to Bloomberg News, Ablyazov admitted to using shell companies to hide his majority stake in BTA and manage bank assets, but he denied defrauding depositors and creditors. He was chairman of BTA from 2005 to 2009.

Auditors first discovered a $10 billion hole in BTAs balance sheet after Kazakh regulators took over the bank in February 2009. In an effort to recover $6 billion of the missing money, lead attorney Chris Hardman, a fraud litigator at Hogan Lovells International LLP, established jurisdiction in the United Kingdom for 11 separate lawsuits. The move was based on a 2008 transaction in which BTA transferred $295 million to a British shell company called Drey Associates.

Private detectives were ultimately led to the Big Yellow Self Storage facility while conducting surveillance on Salim Shalabayev, the younger brother of Ablyazovs brother-in-law, Syrym Shalabayev. In December 2010, they watched Salim and another man transport 25 boxes between the storage unit and an accounting firm for Eastbridge Capital LLC, a supposed London investment firm linked to the Ablyazov shell companies. Eastbridge Capital was managed by Syrym Shalabayev.

In February 2011, Hardman secured a warrant to search the storage unit and recovered the spreadsheet and other materials. Hardman said the spreadsheet links Eastbridge Capital to the shell companies.

Ablyazov was found in contempt of court in February 2012 by British judge Nigel Teare but fled the country before receiving a 22-month prison sentence. The Shalabayev brothers were also found in contempt and fled the U.K. In March 2013, Teare ruled Ablyazov had defrauded BTA and ordered him to make restitution. He was apprehended in France in July. As of Dec. 9, he still owed the bank $4.1 billion, Bloomberg reported.

Robert A. Chiti, president and CEO of self-storage technology company OpenTech Alliance Inc., has been appointed to the board of directors of the national Self Storage Association (SSA). Chiti's company is an SSA member and has sponsored and attended association events for more than a decade.

"I look forward to contributing to the success of the self-storage industry, not only as a vendor, but now as a member of the SSA Board. I am excited about the opportunity to work with and learn from the SSA staff and active board members," Chiti said.

Chiti founded OpenTech in 2003. He has 25 years of technology and business experience and is responsible for meeting the company's profit goals, overseeing daily operation, long-term strategic planning and the continued development of the company culture. He also serves on the board of directors for the California Self Storage Association.

"Robert and I served on the SSA Conference Committee together for several years, and I am happy to have him on the board during my term as chairman," said J.R. Clisham, chairman of the SSA Board of Directors and owner of CT Self Stor, which operates four self-storage facilities in Connecticut. "Over the past 10 years, he has demonstrated a strong commitment to the SSA and the industry. I am certain he will bring valuable perspective to our board."

Phoenix-based OpenTech provides several models of INSOMNIAC self-serve kiosks as well as a range of self-storage rental solutions including the INSOMNIAC Live! Call Center, INSOMNIAC Online Web and mobile applications, LiveAgent! software products, and the INSOMNIAC ILock Security System, all available through the company's Self-Storage Cloud.

Founded in 1975, the SSA serves self-storage owners, managers and vendors, representing approximately 3,000 direct member companies. It also represents an additional 3,000 indirect member firms through its affiliation with 19 state and international associations. Its members range from individual facility owner-operators to multiple-facility operations to real estate investment trusts.

Dillsburg Rent-A-Space, a 17,040-square-foot self-storage facility in Dillsburg, Pa., recently sold for $650,000. Dillsburg is in York County, about 10 miles south of Harrisburg. The storage facility at 107 N. Second St. is off Route 15 and partially visible from the highway. It opened in 1984 and was built in several phases, with the last one completed in 2002.

The facility currently has six buildings on 1.3 acres of commercially zoned land. The main building houses the management office as well as one extra-large unit for RV storage. The property is accessible to tenants 24 hours a day.

Improvements to the property were recently completed, according to the source, including upgrades to the single-story metal buildings, metal roofs, gravel driveways and exterior lighting, and a refurbishment of the onsite rental office.

Investment Real Estate LLC (IRE) of York, Pa., brokered the transaction. This is a neat transaction in that we sold the property to the current seller many years ago, and now they have made their money and are moving on, said John H. Gilliland, IRE President and CEO. The buyer is a first-time self-storage investor who is poised to take this property to the next operating level, making a great return over time as well.

IRE is a property-management and consulting firm specializing in the self-storage industry. Since its inception in 1998, the company has provided brokerage, construction, management and development services to facility owners and investors.

US Storage Search Inc., owner of USstoragesearch.com and various other self-storage websites, has reached a licensing and marketing agreement that will transfer company operation to the management and control of B2 Interactive, a firm specializing in Internet marketing, website design and software development for the self-storage industry. The company will also end its self-storage call-center services, and many of its staff will be inherited by B2, according to the source.

Founded in 2003, USstoragesearch.com is a search-and-compare directory website for the self-storage industry. Consumers can search for storage by city, ZIP code, facility name, or specific unit sizes and amenities. The website counts more than 14,000 U.S. storage locations as members and has helped millions of consumers find, compare, and reserve storage units over the years, according to a company press release.

B2 Interactive was formed in 2012 by Bill Hipsher and Brandon Taylor, two former US Storage Search executives. The company has retained USstoragesearch.com, Storage.com, StorageUnit.com, and hundreds of other websites as clients since its founding. It employs a staff of more than 20.

The B2 Interactive team has so many innovative ideas, efficiencies and long-term plans for the site that just made perfect sense for the ownership group and the USstoragesearch.com members alike, said Mike Kucera, president and CEO of US Storage Search Inc. What the B2 Interactive team presented will bring our storage facility clients more new tenants and even better online visibility from their USstoragesearch.com membership.

One of the first operational changes made by B2 Interactive was to end the US Storage Search call-center service. For the past several years, USstoragesearch.com has operated a full-service call center that answered calls on behalf of its members around the clock.

B2 Interactive and USstoragesearch.coms ownership team agreed during negotiations that, to reach the goals for the site, we would have to get back to the basics and focus on our core services, Hipsher said. Our focus will be on lead generation and re-energizing the sites performance as a truly great shop-and-compare website for consumers. We jointly decided that being in the call-center business wasnt necessarily the best move for the loyal USstoragesearch.com members.

The call services will end on Jan. 31, and the companies are helping clients transition to alternative call centers. B2 Interactive will continue to operate a sales center at its Omaha, Neb., offices, booking storage-unit reservations by phone and online for all the industry websites it operates.

We are excited about the new direction we will be able to take USstoragesearch.com and the other storage websites we assumed operation of as a part of this agreement, Hipsher said. Members should look for big improvements and innovative ideas to start being implemented in the next 45 days, which will really benefit them right before the busiest time of the year for the storage industry.

B2s services include website design and development, search engine optimization (SEO) and marketing, social media marketing and campaign management, content marketing and management, paid-search advertising management, website, SEO, and social media analytics and optimization.

 

Inside Self-Storage (ISS) has released its 2014 series of instructional Guidebooks focusing on self-storage ownership, management, building and investing, marketing and add-on profit centers. The five digital publications are available on demand individually or in a discounted bundle through the ISS Store, an e-commerce website providing research and education products for self-storage professionals.

Created for facility owners, managers and investors, the 2014 series includes:

• Add-On Profit Centers Guidebook: Examines key ancillary products and services including retail sales and merchandising, pack and ship centers, boat and RV storage, mobile/portable storage, truck rental, cell-tower leases, and more.
• Building/Investing Guidebook: Designed to help those interested in self-storage investing as well as those who want to establish or expand an operation. It addresses real estate, finance, development and construction.
• Facility-Management Guidebook: Addresses key aspects of a self-storage managers duties and provides insight on optimizing collections, handling legal issues, improving sales, service, money management and more.
• Marketing Guidebook: Provides a substantial overview of key marketing techniques for self-storage facilities, covering Web marketing, mobile marketing, social media, community marketing, print ads and more.
• Ownership Guidebook: Provides guidance to help single- and multi-facility self-storage owners maximize their investment, covering profit enhancement, expense management, auditing, staffing, insurance and much more.

The books are designed in an easy-to-read, PDF format that makes them ideal for viewing via a computer screen or tablet. They contain no advertisements.

Priced at $115, the package containing all five Guidebooks provides a savings of nearly 25 percent on the cost of buying the books individually. Details can be found at www.insideselfstoragestore.com. Choose "Guidebooks" from the left-hand menu.

Conceived as a central hub allowing self-storage owners, operators, developers and investors to obtain cutting-edge information and resources, the ISS Store is owned and operated by ISS, a dynamic services provider that has served the self-storage industry for more than 20 years. The brand includes ISS magazine, the Inside Self-Storage World Expo, the Self-Storage Training Institute and Self-Storage Talk, the industrys largest online community.

Madison Development LLC, a New York-based self-storage developer, plans to convert an 11-story storage building into a high-end facility catering to the luxury residential market as well as art galleries along the 57th Street corridor in New York Citys Upper East Side. The company is partnering with investment firm EMS Capital LLC, which purchased the building in December 2012 for $28 million.

The facility at 305 E. 61st St. is comprised of 72,000 square feet.

Its going to be a totally revolutionary brand of storage that will never have existed before, said Adam Gordon, managing partner of Madison Development. This will be an extension of a personal closet or gallery space or wine storage, especially after what happened with WineCare Storage and that whole debacle. You could only pull this off with a unique piece of real estate on the Upper East Side.

Chelsea, N.Y.-based wine-storage specialist WineCare Storage LLC went bankrupt last year after sustaining heavy damage from Hurricane Sandy, according to news reports. The company reportedly has been unable to return thousands of cases of wine to its clients.

If someone has a bottle of Lafite or a Mondrian, it would be as comfortable here as any place they might keep it in their apartment, Gordon told the source.

Michael Graves, a residential broker for real estate company Douglas Elliman, said the project may be attractive to residents of luxury complexes because many like to rotate their art collections, and storage inside their buildings is inadequate for art, wine, jewelry and other valuables.

If the facility were high-tech, high-security and engineered to protect the life span of specific valuables, there will be high demand by collectors of art, wine and other valuables requiring special care, Graves said. But the security and service level will need to be extremely high.