As the use of technology has blossomed in the self-storage industry, more owners have shifted to operating unmanned facilities, using self-serve kiosks and even mobile leasing with electronic contracts. All this has been great for operators and their tenants, making the rental process easier and more efficient. One unique element of these automated properties is they often use credit card processing rather than cash to collect payment from tenants.

Initially, establishing the use of a credit card as a “condition of tenancy” was accepted and not challenged. But recently, with a flood of state legislation, self-storage properties that are limited to credit card payment processing may be facing fines and ever greater liability for not allowing tenants who prefer to pay in cash or otherwise don't have access to credit.

Three states—Massachusetts, New Jersey and Pennsylvania—have recently enacted laws related to discrimination against cash buyers. They provide that retail establishments (arguably including self-storage facilities) must accept cash payments from customers. If they offer goods and services for sale, they must accept legal tender when offered as payment by the buyer. The Pennsylvania law goes so far as to state that it was unlawful for any person to “refuse to rent or sell property or services to any individual for the reason that the individual does not possess a credit card.”

Cash laws are also popping up in local jurisdictions and can be found in new city ordinances such as one recently passed in San Francisco. The law explains that “Millions of Americans do not hold bank accounts or otherwise fall outside the non-cash financial system,” referencing that “17 percent of all African-American households and 14 percent of all Latino households in the U.S. have no bank account.” As such, the law seeks to protect citizens who are limited to the use of physical cash as payment for goods and services. It also places a restriction on charging any additional fees for those customers that choose to use cash.

Moving Forward

These laws will have a direct and significant impact on the developing growth of unmanned self-storage facilities that rely on credit card processing for payments as well as those that have elected to make the use of a credit card a condition for tenancy. It appears that, notwithstanding the practical application of credit card use for self-storage rentals, more pressure may arise against owners to provide for a cash-payment option.

How will this affect storage businesses that don't have a physical office but otherwise operate as a brick-and-mortar site? The current cash laws don’t address those unique circumstances at all. As such, they might end up being tested in situations where a cash-paying tenant complains that the unmanned facility using only a kiosk or virtual/online payment system is alleged to be in violation of the law, even though it doesn’t have a physical office where rentals can be transacted.

Operators with onsite managers will definitely need to reconsider any restrictions they might have against operating with cash. A manned facility might not have any choice but to accept cash based on the language of these new laws. The pressure being mounted against retail businesses suggest that denying cash customers is another form of economic discrimination.

Note: This article was originally published in the author’s “Legal Monthly Minute” Newsletter.

Scott I. Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber P.C. and has been practicing law since 1987. He represents self-storage owners and managers throughout the country on legal matters including property development, facility construction, lease preparation, employment policies and tenant-claims defense. He also provides, on a consulting basis, advice to self-storage companies in the areas of foreclosure and lien sales, premises liability, and loss-control safeguards. To reach him, call 404.364.4626; e-mail [email protected].

A woman fought off a knife-wielding attacker at an Orlando, Fla., self-storage facility on Sunday after he threatened her, according to authorities. The woman was in her unit at Extra Space Storage at 3501 S. Orange Blossom Trail when Jose Rojas, 60, came up behind her. He pointed a knife at her and demanded she remove her clothes or be killed, according to the Orange County Sheriff’s Office. He said that if she screamed or didn’t do as told, he’d stab her, the victim told police.

The woman pleaded with Rojas to leave, then fought back. She grabbed the knife and pushed him out of the unit. Rojas then grabbed her by her hair and tried to pull her into the space, but she broke free and ran to the facility lobby.

Once she escaped, the victim realized Rojas had taken her phone. She found him outside the facility, where he demanded she pay him $20 for its return, which she paid. She later flagged down deputies and directed them to Rojas, who had walked down the street. He was arrested on charges of robbery and attempted sexual battery. He’s being held without bond.

Authorities aren’t sure yet how Rojas gained entry to the property, as both the gate and building require an access code.

Headquartered in Salt Lake City, Extra Space is a self-storage real estate investment trust that owns or operates 1,797 self-storage properties in 40 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 1.3 million units and 138 million square feet of rentable space.

Source:
WESH, Woman Grabs Knife From Attacker Who Threatened to Stab Her, Deputies Say

Laws governing site accessibility for disabled persons don’t only apply to your physical self-storage property. You also must comply with regulations for your facility website. In today’s market, you must know and understand these digital principles as well as how to evaluate your website and design it accordingly. Failure to do so could have serious legal repercussions.

In this video filmed during the 2019 Inside Self-Storage World Expo, Chris Eckert guides viewers through “Digital Accessibility: Guidelines and Legal Considerations for Your Self-Storage Website.” The chief technology officer for G5 shares insight to why this issue is so critical and which Web standards apply to self-storage operations. He explains when you’re at risk of a lawsuit and how to protect your business.

The session is available at the ISS Store in DVD and on-demand formats. Bring your website up to legal compliance today!

The Inside Self-Storage (ISS) Store, an e-commerce website providing research and education products for industry owners, managers, investors and developers, has released four new Self-Storage Mastery DVD sets, offering insight to digital marketing, facility design, investing strategies and risk management. Each set includes five DVDs, packaging choice seminars recorded during recent ISS World Expo events.

“Like our first release of Mastery DVDs, these sets serve as a best-of education series. The hand-selected sessions cover evergreen content relevant to succeeding in todays’ competitive environment,” said Tony Jones, ISS Store Manager. “Each set stems from a popular theme and provides valuable, in-depth knowledge from industry experts on highly requested topics of interest—all at significant savings compared to buying each individual session.”

The latest Mastery DVD sets are:

• Digital Marketing: Addresses online visibility, content strategies, Web design, technology trends, paid search and more
• Facility Design: Offers insight to modern building options, site layout, municipal demands, case studies, conversions and more
• Investing Strategies: Focuses on value-add deals, equity partners, capital raising, opportunity zones, lending options and more
• Risk Management: Addresses lease language, lawsuit prevention, liability, disaster management, site audits, insurance coverages and more

Priced at $129, the DVD sets are available for purchase at iss-store.com.

Conceived as a central hub that allows 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 29 years. The brand also includes ISS Magazine, insideselfstorage.com, the Self-Storage Talk online community and ISS World Expo, the industry’s largest conference and tradeshow.

As a self-storage operator, you may find it challenging to create and maintain a positive work environment, but there are real benefits to doing so. Businesses that focus on positivity outperform others. Employee engagement and retention is higher. Customer retention and average lifetime value are also higher.

On the other hand, a negative workplace is terrible to work in and operate. It can even breed hostility. Customers don’t want to do business with a place like that. Think of movies like “Horrible Bosses” or “Little.” A sour work environment may be fodder for great comedy, but it certainly doesn’t breed staff productivity or customer satisfaction.

The question is, if a positive workplace is more pleasant and profitable, why don’t more owners and supervisors strive for it? If your goal is to crank up the positivity of your self-storage operation, here’s some guidance.

How Positive Are You?

Before we get into how to create and maintain a more positive self-storage workplace, let’s first determine where your business falls on the positive/negative spectrum. You know you have a positive workplace when:

• You look forward to going to work and feel good when you’re there. You find it a refuge from the worries in your life. You’re glad to see employees as well as customers.
• Your four- and five-star online reviews mention your staff. Customers feel well-treated, cared for and valued.
• You have a hard time relating to and understanding other owners and supervisors who complain about how much they dislike their employees.

You know you have a negative workplace when:

• You feel bad when you’re there. You find it stressful, and you avoid going into work.
• Your one- and two-star reviews are about your employees. Rude, unempathetic staff are a sign your workplace is negative or the reason it is.
• You’re the owner or supervisor whining about how you wish you didn’t have employees.

Don’t make the mistake of believing your workplace is fine just because you haven’t been sued for harassment. Harassment is a severe situation. You might still have a negative or even a hostile work environment in the absence of formal charges.

Pay attention to your employees. People who feel degraded, disrespected, unsupported and confused will often show physical and emotional symptoms. If you have people calling in sick a lot, you see employees becoming visibly upset, or you see staff bicker with each other, you have a problem.

How to Make and Keep Things Positive

Even if you fall into the positive category, are there areas where you fall a little short of ideal? Think about how you might be able to improve your work culture and atmosphere. Here are eight ways to cultivate and accentuate the positive.

1. Be clear. Have clear expectations and work rules. Short of a complete list of do’s and don’ts, every employee should at least know the five things one must never do and the those that are always great to do. For example, don’t just tell your staff to “Keep the front door clean.” Be specific: “You must clean the front door and ensure the glass is clean and free of hand prints and smudges by noon each day.”

2. Continuously develop your employees. Every day is an opportunity for training and encouragement. Be a cheerleader and a coach for your employees. Praise them when they make good decisions. Praise them even when they make questionable decisions if their reasoning was sound. If they make a poor decision, as long it isn’t on a “never do” list, use it as teaching moment and help them learn. Nearly every mistake is fixable and a learning opportunity. Your employees should become more confident and capable every week. Be as specific in your praise as you are in your corrections.

3. Demonstrate value. Tell your employees, “It was nice to see you today,” “It was good working with you today,” or “I’ll be glad to see you when I come by again next week.” Little gestures like this indicate you value them as people, and being valued as a person is one of the best experiences anyone can have during a workday. Of course, for this kind of behavior to have a positive impact, you have to mean it honestly.

4. Have social time. If it’s slow in the workplace for a while, announce, “OK, let’s put our work aside and visit for 15 minutes.” Socializing is super important. It helps reduce stress and increases staff rapport.

Consider scheduling social time. This isn’t a break—it’s on the clock. If you don’t make it clear that you want staff to socialize, and you don’t make time for them to do so, you’ll force them to do it on the sly. One of the easiest ways to destroy a positive environment is to tell people who are socializing to “Get back to work.” Instead, if you say, “Hey, it’s slow. Let’s take 15 minutes to visit before the next rush,” you’ll have a very different work culture.

5. Lead by example. Be kind to employees. Be kind to customers. Be helpful and supportive. Offer encouragement. (Note that I didn’t say to be a pushover.) When you have clear rules and procedures, you don’t have to stress. You’re free to show empathy and compassion to people with whom you work and who make you money.

6. Show backbone. Support employees when a customer is clearly wrong. Make it clear that you know customers aren’t always right. If a tenant is out of line, rude or abusive, support the employee. Correct or fire the customer. Back your employee 100 percent if he was following the rules.

By the same token, never allow employees to talk disrespectfully to or about customers. Correct that behavior quickly and forcefully. When an incident occurs, create a success story about customer engagement to share with others.

7. Fire employees with bad attitudes. Encourage your self-storage staff to be honest with you and call you out when you’re in the wrong. They should have a vested interest in protecting your interests and helping others be better at their jobs. They should also “train” customers to behave correctly. Of course, all this must be done respectfully and with kindness. If you have an employee who’s quick to lash out, acts disrespectful or is always causing tension, release that employee from his duties and do it now.

8. Check yourself. What are you complaining about? If you’re a self-storage owner or supervisor, you’re probably viewed as successful and accomplished by almost everyone you meet. So, get happy about that and don’t let the pressure of day-to-day business hassles bring you down. Take a walk. Go jump in a lake. Play with your dog. These distractions will help you reset your attitude and go about building a positive workplace for yourself, your staff and your customers.

Tron Jordheim is managing partner of Self Storage Strategies, a joint venture with Store Here Management that provides market studies, feasibility reports and consulting services to the self-storage industry. He’s a consultant in sales, marketing, call-center practices, lead creation and management. He’s also the author of three books, a regular speaker at industry events and a frequent contributor to trade journals. For more information call 573.268.5217; visit www.selfstoragestrategies.com.

In today’s technology-driven economy, the most valuable resource is data. Across industries, leaders are increasingly recognizing it as a business asset and scrambling to maximize its value to their organizations.

The self-storage industry is ideally positioned to reap big benefits from data. Operations of all shapes and sizes generate massive amount of information every day—particularly from their security systems—which they can use to improve top- and bottom-line business performance. But unlocking the value of this data can be challenging, especially if you don’t know where to begin. By understanding the sources of data available in your operation and learning how to convert it into useful insights, you can lay the groundwork for more informed decision-making and better business outcomes.

Why Data Matters

In the past, business data was captured manually across a few limited sources. Technology simply multiplies the amount of data available and allows you to more easily identify actionable insights from the information you collect. Given the growing importance of technology in self-storage, the expanded use of data holds the potential to benefit your operation in several important ways:

• Better decision-making: Knowledge really is power. The data-based insights that emerge from operational activities allow you to make decisions based on real-world facts rather than intuition or gut instinct.
• Improved processes: Data captured from access-control systems and other security devices often shine a light on vulnerabilities and process inefficiencies. You gain visibility to opportunities for improvements, resulting in better business performance and tenant experience.
• Tenant behaviors: Data gives you a window into tenant behavior and preferences. Using information captured from your access-control system, you enjoy a better understanding of your customers and how they interact with your business.

Data-based insights are rapidly becoming table stakes in self-storage. As more operators leverage data to make smarter decisions, improve processes and create better tenant experiences, those that fail to optimize data use are at a significant disadvantage.

Sources of Security Data

A typical self-storage operation has many sources of security data. The implementation of advanced technology and the growing popularity of smart-connected facilities have exponentially increased the amount of information available. Some of the most common sources include:

Access-control systems. First-rate access-control software aggregates data points captured from keypads, door alarms, electronic smart locks and other hardware devices. The best solutions create customizable reports that highlight opportunities to improve your operation.

For example, every time tenants enter and exit the facility or change locations by building or floor, they create data. The system automatically feeds it into the software, where it can be analyzed and used to produce insights about traffic, tenant behavior and other activities. With this information, you can make operational changes that lead to cost savings and additional revenue opportunities.

Security video. Most self-storage operations feature multiple types of security cameras, all of which generate data. While pinhole cameras can capture images at keypads and access points, surveillance systems and smart cameras are used to monitor an entire facility, creating a video record of incidents and events.

Video data is critical for identifying security vulnerabilities and behavioral patterns. Camera systems enabled by artificial intelligence allow you to drill down even more to see things like when and how often individuals or vehicles enter specific area. This allows you to adjust staffing levels for improved security and cost efficiencies.

Internet of Things (IoT) platform. This combines data from various devices and services in an easy-to-digest format. But unlike traditional monitoring devices, IoT devices in a smart-connected network can create automated responses to insights, making it possible to react to incidents and events in real time.

For example, suppose the data shows that a delinquent tenant is more likely to visit the facility in the middle of the day. Rather than unsuccessfully trying to connect with the person by phone or e-mail, the network can staff the facility during that time and notify a team member when the tenant attempts to access the facility. The employee can then meet the customer at the gate and encourage him to pay his outstanding balance.

Once captured, the data created by these sources can be used in a number of ways. Ideally, you should have the ability to import the data from other sources as well, such as your property-management system, to gain a deeper understanding of your facility and tenants.

Turning Data Into Actionable Insights

Data is only valuable when it leads to understanding that improves your operation. Although your business captures mountains of data on a daily basis, you need to determine how to use it in a practical, results-focused way. There are countless insights to be gained from security data in self-storage. Here are several essential applications to help you get started:

• Site activity by day of week and time of day: Site traffic and facility-staffing levels go hand-in-hand. By using access-control data to identify ebbs and flows in traffic, you can adjust employee schedules to avoid over or understaffing based on time of day or day of the week.
• Frequent site visitors: The people who visit your facility most frequently are likely loyal tenants and candidates for upselling. Using real-time data points captured by your access-control system, you can reward them with discounts, gift cards, thank-you notes or offers for additional services.
• Loitering reports: These show the length of time specific individuals spend on site. If you discover that certain tenants are spending inordinate amounts of time in their units, especially after hours, it could indicate they’re living or working in their unit, or performing other prohibited activities.
• Health-check reports: System maintenance is a time-consuming but vital activity for facility operators. Health-check reports constantly analyze security-system devices to identify malfunctions or maintenance issues. So, if you’re having connectivity issues or recurring issues with problematic devices, you can intervene before a critical failure occurs and your customer experience is impacted.

Additional Considerations

Growth-conscious self-storage operators recognize the value of data and constantly look for new ways to leverage it as a driver of business improvement. With the help of sophisticated technologies designed for this industry, operations of all sizes can take advantage of data-based insights. As you expand the use of data, there are several things to consider:

Make sure the data you collect is relevant and actionable. The most obvious data points may or may not offer the most value to your business. Useful ones must be relevant to your operational goals. They must also be actionable. If you can’t act on a data-based insight or metric, why bother to analyze the data in the first place?

Evaluate data and metrics in a timely manner. Old data has limited value. While some insights (e.g., incident reports) should be reviewed immediately, other data-based reports (e.g., after-hours visit logs, loitering reports, etc.) can be reviewed weekly or even bi-weekly. To reduce the potential for stale data, consider implementing a cloud-based solution that offers real-time insights and anytime, anywhere access.

Limit the number of metrics you analyze. Analysis paralysis is real. If you don’t limit the number of metrics you analyze, the sheer volume of data collected can easily overwhelm you. Start by identifying the areas in which insights can provide the most value to your operation. From day one, you need to understand what you’re measuring, why you’re measuring it, and what actions you’ll take based on what the data generates.

Finally, continue to look for new ways to capture and analyze data. For example, access-control data may uncover patterns that allow you to reduce churn by identifying when tenants are about to move out. Or maybe the data will show that walk-ins are less likely to use mobile access-control features, creating an opportunity to educate those customers about the value of your operation’s mobile-access app.

Going forward, data insights will separate winners and losers in self-storage. To stay ahead of the curve, go the extra mile and select security systems that not only enable required security activities but provide the data insights you need to grow your business.

Chadwick Macferran is director of marketing at PTI Security Systems, a global provider of access-control technology solutions for the self-storage industry. For more information, call 800.523.9504; e-mail [email protected]; visit www.ptisecurity.com.

A woman who recently lost her home was found living in a Virginia Beach, Va., self-storage unit with 20 cats. It’s unclear how long ago the woman had taken residence in the space. The cats were taken into custody by the city’s Animal Care and Adoption Center where they were “understandably scared” but in otherwise good health, according to a source.

The cats are being housed together at the center while they await adoption. The city doesn’t have a limit on how many cats a resident can own, according to Megan Conti, animal control supervisor, though it limits the ownership of dogs to four, unless the resident has a kennel license.

The self-storage facility wasn’t identified. It’s unclear if any charges will be brought against the woman who brought the cats to her unit.

Sources:
The Virginian-Pilot, 20 Cats Surrendered in Virginia Beach After Found Living in a Storage Unit With Woman
The Washington Post, 20 Cats, Owner Found Living in Virginia Beach Storage Unit

NexPoint Real Estate Finance Inc. (NREF), a real estate investment trust (REIT) specializing in middle-market loans for hospitality, multi-family, office and self-storage properties, announced its intent for an initial public offering (IPO) of up to $115 million in a Dec. 23 filing with the Securities and Exchange Commission. The REIT will be managed by NexPoint Real Estate Advisors VII, a subsidiary of its sponsor, NexPoint Advisors LP.

Founded last year, the Dallas-based company plans to list its shares on the New York Stock Exchange under the NREF symbol. No pricing terms for the IPO were disclosed in the filing. Its primary emphasis will be on properties within the top 50 U.S. Metropolitan Statistical Areas.

NREF’s connection to self-storage stems primarily from NexPoint Advisors affiliates, which have invested or loaned approximately $211 million in the sector, including a $125 million preferred-equity investment in Jernigan Capital Inc. (JCAP), a publicly traded REIT that provides capital to private self-storage developers, owners and operators. Affiliates have also placed approximately $77.4 million of equity investment directly into self-storage developments, according to the filing.

Prior to closing the IPO, NREF intends to build an initial portfolio of commercial real estate loans, bonds and investments, including “structured real estate investments” within the multi-family, single-family rental and self-storage sectors, the filing states.

At the close of the IPO, the company will operate under a five-member board of directors comprised of Edward Constantino, James Dondero, Scott Kavanaugh, Arthur Laffer and Brian Mitts. Dondero will serve as president, while Mitts will be chief financial officer. Dondero is president and co-founder of investment adviser Highland Capital Management LP, an affiliate of NexPoint Advisors. He’s been a member of the JCAP board since 2016, when the merchant bank signed a stock-purchase agreement with accounts managed by NexPoint Advisors. Under the agreement, Highland committed to purchase $100 million of series A preferred stock from JCAP at $1,000 per share over a two-year period.

Laffer, an economist, is a notable board member. The 79-year-old is a former member of President Ronald Reagan’s Economic Policy Advisory Board. He received the Presidential Medal of Freedom in June 2019, according to a source.

Sources:
Securities and Exchange Commission, Form S-11
SpareFoot Storage Beat, Self-Storage Lender NexPoint Real Estate Files for IPO

New federal overtime regulations that went into effect on Jan. 1 could affect self-storage operators. The U.S. Department of Labor (DOL) issued its final rule update for overtime pay in September. An additional 1.3 million American workers are now eligible to collect overtime pay, according to the DOL.

Under the Fair Labor Standards Act (FLSA), the new overtime rule raises the pay threshold for exempt workers to $35,568 per year or $684 per week, from the current level of $23,660 per year or $455 per week. In addition, employees must be paid a salary of at least the minimum salary threshold and meet certain duties tests to be exempt from overtime under the FLSA. If either the salary threshold or the duties test isn’t met, an employee must be paid overtime at time-and-a-half pay for hours worked beyond 40 in a single work week.

There are four situations in which employees with a minimum salary can be exempt from the overtime rule. Staff who manage two or more people and whose duties are primarily managerial are typically exempt, as well as professionals such as doctors, attorneys and certified public accountants. Likewise, administrative professionals working in information technology, human resources and finance could be exempt. This doesn’t include administrative assistants, who are almost all non-exempt and eligible for overtime. Lastly, outside sales representatives will qualify if the majority of their work is done outside an office.

Changes to the federal minimum salary threshold for overtime pay haven’t been made since 2004. Although this is a federal law, individual states can set limits beyond the minimum standards. California’s new overtime law also went it effect on Jan. 1. The minimum salary exemption is $49,920 for employers with 25 employees or less, and $54,080 for those with more than 25.

Sources:
Gov Docs, FLSA Update: Department of Labor Issues Final Rule on Overtime Pay
Inc., 2020. Are You Ready?