Louis and Phyllis Friedman of Stack & Store Mini Storage sponsored a reading room at a middle school in Maryland.

Students at Southampton Middle School in Bel Air can now relax and read in a jungle-themed room located near the schools media center. The room includes chairs, bookshelves and lamps to encourage students to read.

The Ben Carson Reading Room is named for Johns Hopkins pediatric neurosurgeon Dr. Benjamin Carson, who along with his wife, Candy, created the Carson Scholars Fund in 1994. One of the initiatives is to fund nurturing reading environments for children.

Southampton Middle School is the eighth Harford County public school to receive a Ben Carson Reading Room. The Friedmans have sponsored nine rooms. There are currently 58 Ben Carson Reading Rooms in seven states.

Stack & Store Mini Storage is a family-owned and operated business with more than 25 years in the self-storage industry. In addition to sponsoring the Ben Carson Reading Rooms, the self-storage owners also sponsor the Harford County Boys and Girl Club, the Bel Air, Emmorton and Edgewood Little Leagues, and the Havre de Grace Activity Center.

California self-storage provider A-1 Self Storage is funding four corporate internship programs for students at San Miguel Cristo Rey High School in Tucson, Ariz.

The school began offering internships to create a learning community for students and help them meet their financial needs.  San Miguel Cristo Rey is in Tucsons economically depressed south side where 50 percent of adult residents dont have a high school education and 42 percent of San Miguel Cristo Rey neighbors earn less than $25,000 per year.

At San Miguel Cristo Rey, students take a full college preparatory course load while simultaneously holding internships, working in corporations and earning nearly 60 percent of their school tuition. The Corporate Internship Program gives students the opportunity to form new identities as citizens and professionals who have a bright future. Internships are arguably the most influential in inspiring young minds to aspire to do and be great, said Brian Caster, president and CEO of A-1 Self Storage.

A-1 Self Storage has 16 locations in the San Diego County area and more than 40 locations statewide. It is the self-storage division of the Caster Cos., a third-generation, family-owned company headquartered in South California since 1959. Caster Cos. develops and manages A-1 Self Storage, A-1 Car Storage and other commercial properties in California. Its portfolio includes more than 4 million square feet of real estate.

By Carol Krendl

Embezzlement is often labeled as a white-collar crime because it refers to the nature of the criminal (a person of respectable status) and the environment in which the crime occurs (a professional setting). White-collar crimes are typically non-violent and intended for personal financial gain. Embezzlement qualifies, incurring all levels of financial loss.

Embezzlement affects thousands of self-storage properties every day. Although its not violent, it can cause serious suffering to those involved. The damage is not just financial, its personal because theres a violation of trust. While the punishment for this crime is matched to the value of the property misappropriated, its more difficult to make amends for the emotional damage. To eliminate instances of this crime, its this interpersonal aspect that must be addressed.

Danger Signs

There are signs of theft and embezzlement for which self-storage owners should be on the lookout:

Employees who never want to take a vacation. The employee doesn't want anyone else at the store to see whats going on with the computer, physical inventory or customers.

Managers who cannot seem to keep assistant or relief employees. Keep an open line of communication with relief employees. They will often tell you about problems or issues if something doesn't seem right at the property.

Inadequately trained relief personnel. In embezzlement situations, relief employees are often not asked by the manager to make deposits, call delinquent customers or do weekly inventory of the space.

Employees who tell customers theyre the facility owner. This may sound strange, but when an employee wants a complaining customer to go away and not cause any undue attention or problem, he simply says hes the owner. Its important that customers have a way to call your home office and make complaints. This keeps a line of communication open between upper management and tenants.

A change in the manager's lifestyle or behavior. Watch out for changes in the way employees live and their buying and spending habits. Managers with medical or IRS problems have extra stress on their personal finances. They may choose to make up the money from funds at the property.

Employees who never complain. Most employees have some complaints about the property, pay, petty cash, etc. In general, embezzlers don't complain because they know that behavior will only bring attention and disrupt their system.

Low cash deposits. As an owner or property manager, its a good idea to trend the monthly cash payments and income at the property. If the cash payments change dramatically, you may have a problem.

Delays in making timely deposits or deposit errors. Deposits should be made daily in the order they were received. Once per week, track the daily deposits and when they were actually deposited to the bank. Ask managers to submit their daily close from the computer, with a detailed deposit slip and bank receipt. Also, check each month's bank statement carefully for any deposit corrections.

Overage or underage in the daily cash-drawer counts. Check the petty cash and cash drawer when youre at the property. Most embezzlement begins with petty cash. Each receipt should be carefully reviewed. If you find something unusual or personal on the receipt, discuss it with the employee immediately.

Managers who dont move a customer out of the computer when the unit is vacated. This is a way an employee can take a credit in the computer and either use it for that space or transfer it to another space. Rent credits are now the most common form of embezzlement. Theyre difficult to track since managers give credits for a variety of reasons.

Employees who are too eager or never want to have auctions. Basically, these embezzlers are taking money from customers who are often required to pay in cash.

A disorganized office. Employees may just excuse missing contracts and mystery space as errors because theyre so busy, under staffed, or their relief managers are idiots.

Personal problems. This can include suspicions of marital discord, employees who love to gamble, addictions, and employees with dependents who live with them. Their personal problems put them in a situation where theyre tempted to embezzle funds from the storage property. 

Suspicious and unexplained break-ins. Some employees love to take things from customer spaces. Typically, theyll pilfer from customers who are in lien status, but many also target current customers. If you have customer who complains about this problem, investigate everyone.

Excessively high delinquencies. Be wary of extremely high delinquencies and pay careful attention to lien-related activities. You may notice that postage at the store is low based on the number of delinquent spaces. This is because employees didnt send delinquent notices when they were supposed to. You may find employees weren't even calling delinquent customers. Many delinquent customers make partial payments in cash, which can go directly into the embezzlers pocket.

Employees who fail to overlock. Embezzlers commonly do not use the company's overlocking procedures for delinquent tenants. Often its because the customer is not really delinquent or the employee doesnt want complaints or problems from tenants who may alert other employees or the owner.

The use of generic, manual receipt books. Its too easy for employees to give those receipts and not put the payment in the computer or credit the customer's account. Watch for missing carbon copies in manual receipt books or more than one receipt book in the office. Do not allow employees to use the receipt book for every customer transaction before entering the payment in the computer. Ideally, avoid generic receipt books, though you may need them if your computer or the Internet goes down.

Use of both a computer and manual bookkeeping system. This may sound strange, but there are storage properties still using the aforementioned accounting systems at the same time. This is a huge red flag for embezzlement. Having two accounting systems makes it too easy to steal.

An Atmosphere of Deterrence

Just the fact that self-storage properties have little supervision leaves owners vulnerable to employee theft. Another problem is owners often give employees administrative rights in the computer, enabling them to manipulate data including credits, concessions, deletions, etc. A system of checks and balances should be in place to know when you have someone embezzling. Here are several suggestions:

• Have a person from the home office complete a unit inventory of every storage space.
• Inventory the merchandise for sale in the office.
• Check deposits daily for accuracy and consistency in depositing.
• Require employees to send a unit inventory to the home office on a weekly basis.
• Require monthly paperwork from the manager, including the move-in and move-out ledgers accounting for all rental agreements and credit and adjustment forms

Create a policies and procedures manual for the property and give a copy to every employee. When you visit, don't hesitate to discuss procedures and how managers should be operating the store. This type of manual will also help prevent legal liability.

Every day, embezzlers create more inventive ways to steal from employers. However, if you implement internal controls and monitor software transactions, you should be able to quickly find anyone who is stealing from your self-storage facility.

Carol Mixon Krendl, an industry expert and owner of SkilCheck Services, has been involved with the self-storage industry since 1984. Shes written many articles on a variety of self-storage topics, including a quarterly newsletter on self-storage sales and customer service. Lodi, Calif.-based SkilCheck provides customized training seminars, educational products and mystery shopping. For more information, call 800.374.7545; visit www.skilcheck.com .

LifeStorage, a ChicagoLand operator of self-storage facilities, has purchased a property at 333 W. Ohio Street in Chicago to convert into the companys seventh self-storage location in the city. The other 11 sites are in Chicago suburbs.

Construction on the new location, a seven-story loft building, begins shortly, with an expected open date of March 1. Space plans will be available online in October 2011 for customers who wish to reserve space in advance.

Amenities to be included in the new site include conference space, WiFi, indoor loading, truck docks and Starbucks coffee brewed daily. In addition, the building will offer 30 covered parking spaces for rent, an amenity that is highly sought after in Chicago.

This location is perfect to reach a wider area while still providing convenient access, said co-owner Jean Jodoin. It helps bridge the gap between our other Chicago-area locations, too. Our goal is not just industry-leading services and affordability, but also wide-spread availability.

LifeStorage is always looking at opportunities to expand when and where it makes sense, added Christoper Barry, co-owner, who founded LifeStorage with Jodoin in 2002. Were situated with a healthy market position, an excellent product, and are constantly searching for ways to bring our brand to new customers. Once the facility is renovated and repurposed, we feel area residents and business owners will really see the LifeStorage difference, he said.

StorageVault Canada Inc. has entered an agreement to acquire the Totom Storage Park self-storage facility in Kelowna, British Columbia, Canada, for $3 million. If all conditions of the purchase agreement are satisfied, the acquisition is scheduled to close on Nov. 30. The purchase price includes a $50,000 initial refundable deposit, a second $50,000 deposit (refundable in certain circumstances) to be paid upon removal of due-diligence conditions, and a final cash payment of $2,900,000 at closing.

Totom Storage Park is a 261-unit facility with approximately 24,816 square feet of rentable self-storage space as well as 56 outdoor spaces for vehicle storage. The total size of the site is approximately 1.6 acres. StorageVault intends to develop and operate a PUPS portable-storage business in conjunction with facility.

StorageVault owns and operates standalone self-storage facilities as well as Canadian PUPS portable-storage operations. Its businesses include B&B Self Storage in Cambridge, Canadian PUPS in Saskatoon, Kenaston Self Storage in Winnipeg, Parksville Mini Storage in the Regional District of Nanaimo and Trans Can Mini-Stor in Regina

StorageVault also manages five self-storage facilities in southern Ontario and intends to

grow through the acquisition of self-storage properties and the development of portable-storage facilities. Its common shares are listed on the TSX Venture Exchange.

In mid-September, U-Store-It Trust, a real estate investment trust focused on owning and managing self-storage facilities, announced it was changing its brand and company name to CubeSmart. The $8 million change will roll out by market, with all facilities expected to be re-branded by mid-2012. Inside Self-Storage caught up with company CEO Dean Jernigan to discuss why a change was in order, what it means for the company, and CubeSmarts plans for the future.

What motivated the brand and name change?

The name U-Store-It is so descriptive that we had a lot of confusion in the marketplace. We did a survey in our largest markets and found that about 60 percent of our properties competed with another property we didnt own but had a similar name. Sometimes it even had the exact spelling of our name. We had no protection from the U.S. Patent and Trademark Office or even at the state level. If someone wanted to use our name or something similar to our name, we couldnt do anything about it.

As we rely more on capturing business through the Internet, we lost a lot of business. We quantified it to the point that we think we were losing up to $2 million a year in business because of the name confusion. Customers would go online and make a reservation with us, and not show up. Wed follow up and find out they rented from a facility with a derivation of U-Store-It in the name. It was maddening.

There were other times where wed have a U-Store-It facility right down the street from us, and we knew for sure people would be trying to get to us but find the other facility. We have one in Tucson, Ariz., thats right next door to us. The name is spelled exactly as ours. Their manager thanks us all the time for sending business his way. He has no marketing budget and captures nothing on the Internetwe do, and he ends up with the rental.

Weve been focusing on a lot of changes for this company. In the last five years, weve had a massive overhaul of people, systems and properties. Weve sold about $240 million in properties and bought another $350 million. Weve been all about improving the quality of our assets. In June, we rolled out our Superstore concept. With all of that, it was time to get the name changed.

How will the company roll out the new branding?

We have a very detailed process. We will roll out the new brand by market. The most important markets will go first. In the Chicago market where we have a lot of properties, all of the signs will go up at the same time. It will take us between now and next March to get all of the new signs up around the country.

Whats the approximate total cost of the rebrand?

Eight million is the cost of our re-branding across the country. The majority of that is in our signage. That will all be invested by the end of first quarter next year.

What does the name CubeSmart mean to the company? The word storage is absent from the new name. Why remove it?

There was a whole lot of thought put into that. We used three different consulting firms to help us with this. Of course, we used focus groups and interviews. We went through this very long and complete process. Everything was put on the table and considered. The answer kept coming back: customers know what business were in, we dont have to tell them what the storage business is. In the 70s, it was worthwhile to say were in the business of storage or storage space and say it in your name. Thats no longer the case. People are very aware of what storage is and how its to be used.

Were going to start renting cubic footage instead of square footage. For the next couple of years, well use both. Its important our customer can stack their goods in our storage units. So we think its important to let them know how high they can stack and what the cubic footage is.

The term unit is interesting. A unit can mean any number of things. The customer doesnt really understand what a unit is. Many of our friends in the business use the word rooms. Thats a more descriptive to me than unit. We look at the shape of our rooms, or our units, and for the most part, theyre in the shape of a cube, especially our most prevalent-sized unit, a 10 by 10, which is roughly 10 feet high. We think its interesting to start talking about cubes rather than units.

As far as smart, thats our direction with our new Superstore concept and all of our new additional services. We want to get away from passive storage. We dont think thats what our customers want nowadays. We want to be considered the smart provider of storage spaceand that being active space with nice amenities and features.

How are competitors reacting to the new name?

We announced it at a storage conference. The immediate reaction was extremely positive. I had many competitors tell me they liked it and understood the need for it. So many operators in our business are entrepreneurs and real estate developers, and they havent thought a lot about marketing over the years because they didnt need to. Things have changed in the last few years.

We no longer need to tell our customers what business were in. Sixty percent of our customers shop with us on our website before they come rent with us. The other 40 percent are referrals or people who are returning or drive-by customers. Of course, we will have storage in our taglines, but we felt it was really important to get away from hitting the consumer over the head with what business were in. So far, our competitors are saying very nice things. 

Whats your plan to attract more commercial customers?

Twenty percent of our list of customers rent 30 percent of our space. We want that number to be higher. We want to take the seasonality out of our business where we ramp up in the summertime and do our best to hold on for the rest of the year. With a higher concentration of commercial customers, we will take the seasonality out of the business. Those customers are far more valuable than the person storing for a short period of time during a move. Were certainly going to go after people who are moving, but we also have our eye on the longer-term customer, that being the commercial customer. 

What about other future plans for the brand?

We believe our CubeSmart brand supports our strategic objective of providing innovative solutions to satisfy our customers ever-changing needs and requirements.

What advice would you give other operators in todays competitive climate?

I would encourage them to seriously consider ways to distinguish their facilities from the guy down the street. With the advent of the Internet and most of us putting our pricing online, totally visible to the consumer, were quickly becoming a commodity. If all we do is compete on price, then we become nothing better than the gas stations down the street. Thats a very slippery slope.

When its all about price, your margins deteriorate, your profitability deteriorates, your return on your investment deteriorates. As an industry, we dont want to go there. We need to focus on providing better customer service with more services and really steer clear of being a provider of passive storage space. Then youll distinguish yourself from the competitor down the street, and you can afford to get better pricing than the competitor down the street. Its an important message we need to consider in our industry today.