Sadly, thieves target self-storage facilities, and too many criminals succeed at breaking into tenants' units. The reaction by a recently victimized facility operator was to beef up security, installing products such as an electric fence to prevent future crime. But in some cases, this type of fencing is illegal or dangerous enough to cause a facility's liability insurance rates actually to go up.

A recent discussion on Self-Storage Talk, the official online forum of Inside Self-Storage, has broken out on the topic of how to react to a break-in and what to consider before installing electric fence. Member Gina6k shares that electric fencing makes her nervous and she would rather explore other means. The thread-starter, member CrazyDave, responds by pointing out that most thieves are using bolt-cutters to get into units, meaning they can also easily get through traditional fence. Member Madman suggested perimeter wire censors, though CrazyDave's experience with them has been spotty. He says they are easily affected by weather.

Another member, phillipc, says he would eschew a real electrified fence in favor of numerous signs that say, "Caution! Electric Fence!" A fake electric fence can't hurt anyone but might scare off would-be criminals.

If you have opinions on the merits and risks of electric fencesor other theft-prevention techniqueslog on to the discussion thread and share your thoughts. You must be one of Self-Storage Talk's 3,700-plus registered members to post, but if you're not a member, don't worry. Registering takes only a few minutes and is free.

U.K. self-storage operator Big Yellow Group Plc released operating results for the six months and the second quarter ending Sept. 30. Highlights include:

• Occupancy growth of 209,000 square feet across all stores in the period, compared to occupancy growth of 96,000 square feet in 2009.
• Revenue was up 8 percent compared to the six months to March 31, 2010 and up 7 percent from the same six months last year.
• Store revenue was up 10 percent from March 31, 2010 to £61.4 million.
• Adjusted profit before taxes is up 26 percent.
• Cash inflows from operating activities (after finance costs) increased by 50 percent.

"The business is experiencing the usual seasonal slowdown, but as in previous years, we look forward to an improvement in demand from early 2011 as we enter our more buoyant spring and summer trading periods," said Nicholas Vetch, executive chairman.

Big Yellow operates 61 self-storage facilities and has nine under development. To read the full financial report, visit www.bigyellow.co.uk and click on the Investor Relations link at the top of the Web page.

Preparing for and completing a closing are the most detailed and frustrating parts of the self-storage real estate sales process. The best way to make this tedious task easier and more efficient is to start early and work with a qualified team of experts.

The preparation for a closing should begin before you list your property for sale. Deal points dont usually become problems at the closing. Many are recognized earlier, but simply postponed or ignored. Any issues that might arise at the closing should be addressed long before the parties get to the table. If youre able to identify them early, youll be able to come up with complete and well-planned solutions you can share with prospective buyers. This will increase the probability of a closing and also allow you to sleep better during the transaction.

The Team

Get your closing team together even before you list the property and ask them to help with the entire selling process, not just the closing. People who should be on your team include your facility manager, accountant, banker, broker and lawyer. Youll also want to use an escrow agent. When you first think about selling, assemble this group and identify all the functions necessary to get the property sold. The accompanying value realization process chart outlines a general plan of attack and helps determine who needs to be involved in each step of the process.   

Once you have your team in place, assign priorities, responsibilities and appropriate deadlines for each of the detailed functions. Monitor your schedule and plan for issues that will arise every two weeks throughout the selling process.

Theres a massive amount of information, especially financial, required to persuade a buyer, convince the buyers lender and complete the due-diligence process. Your manager and accountant are going to be very busy, so get them started early. Attorneys should be invited to the party early as well; not only will they prepare the documents for the contract and closing, but they can give you some good ideas and balance during the negotiations.

Accountant

Make sure you meet with your accountant prior to listing the property for sale. Its important to understand the tax implications of selling your facility, especially if you have 1031-exchanged into that property. Its easy to lose track of your basis in the investment, and that will have a major impact on your tax situation when you sell it.

The IRS changes the tax laws on a yearly basis, so its imperative to have a clear understanding of you situation and any time frames that must be met. Its every investors objective to put as much money as possible in his bank account and as little as possible in Uncle Sams.

Banker

Bankers today seem to be the most unpredictable part of the real estate team. This is largely due to the FDIC regulators who have been looking over their shoulders for the last couple of years. Its important to discuss your sale plans with your banker, as he may be less flexible on a prepayment penalty than he was three years ago when he made the loan.

He may also bring to light other issues that may have slipped your mind, such as the assumable nature of your loan or the banks willingness to allow a potential buyer to assume your loan, even if this is not stated in your loan documents. With the commercial-lending environment slowly starting to thaw, the terms of your existing loan may be attractive to a potential buyer, not to mention the possible cost savings on third-party reports in which a buyer may benefit.

Broker

The brokers primary duty during the closing process is to make suggestions as to how to solve last-minute problems, such as handling delinquent tenants and dealing with prepaid rent. The broker will also help coordinate the flow of information. Certain documents will need to be signed by both parties and information will need to be passed back and forth. This is when an experienced self-storage broker can really help smooth the transaction. His experience will allow him to get the paperwork going early, and his ability to explain the need for each document will put both parties at ease.

Make sure your broker reviews the closing statements. Hes been involved in the negotiations of the transaction and will have a good understating of deal-specific issues, such as who pays certain closing costs, loan-assumption fees and if the buyer is to receive a credit at closing for any deferred maintenance negotiated during the due-diligence process.

Lawyer

A note on attorneys: Many are quite willing to help you, but they believe a small real estate transaction is simple and they can handle it even if real estate is not their specialty. I encourage you to use an experienced real estate attorney. During negotiations, hell understand the subtle motivations of all the parties, such as the buyers, lenders and public agencies, because they work with them every day.

A real estate attorney will also have creative solutions to problems, not only because hes probably seen them before, but they have in-depth knowledge of the law and mechanics of transactions. This isnt a place to be cheap or let your friend do it.

Escrow Agent

This escrow agent knows the closing business well. Most of the time, he really streamlines and organizes the actual process. However, though most escrow agents are the greatest people on earth, they are human and, therefore, make mistakes or have bad days. For these reasons, have your team review everything they do and be sure you understand all thats happening at the closing. Remember, its your money theyre moving around.

The Closing

Before you go to a closing, make sure all issues are resolved. Going to the table with open issues generally means the seller will have two choicesto forego closing or cave to buyer demands. Also, be sure you know what every piece of paper means to you. If all the planning and preparation has been done right, all that remains is to have a very good lunch and move on to your next deal!

Ben Vestal is president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to self-storage buyers and sellers and operates SelfStorage.com, a marketing medium and information resource for facility owners. For more information, call 800.55.STORE; e-mail [email protected].

The national Self Storage Association (SSA), which recently expressed opposition to the purchase of a Boise, Idaho, self-storage facility by the state, received a response from George B. Bacon, director of the Idaho Department of Lands (IDL).

In August, the state of Idaho bought a 400-plus-unit Affordable Self Storage facility in a Boise suburb for $2.7 million as a means of investing for a public-schools endowment fund. In response, the SSA and Idaho Self Storage Association sent a letter to the IDL and Idaho Department of Land Commissioners expressing concerns about the state competing with the private business sector. In the letter, SSA President and CEO Michael T. Scanlon Jr. stated that the purchase of the facility by the state creates an unfair competitive advantage over other local self-storage operators and requested that Idaho divest itself of the property.

Last week the SSA received an official response from Bacon, who said the states practice of purchasing and managing properties including office buildings and parking lots helps mitigate taxes for Idaho citizens and supports public schools and other institutions. He further said the states followed a traditional investor path in purchasing the self-storage facility and local citizens enjoy certain ancillary benefits generated by the trust, such as hunting, fishing, hiking, berry picking, and limited camping and motorized activities."

In response to the self-storage associations request that the state of Idaho refrain from future purchases of self-storage facilities, Bacon said that while no prudent investor would divulge his specific business strategy, the trusts asset-management plan does articulate the desire and need to bring more diversification to the current portfolio.

Bacons full response can be read at www.ssaglobe.org/newsarticles/SSAResponse.pdf.

The Mobile Self-Storage Association (MS-SA) elected new directors and officers during its 2010 Annual Business Meeting, held Nov. 8 in Orlando, Fla. Three members were elected to complete a partial term or re-elected to a new three-year term on the board of directors.

Robert Vespa, national director of residential services with Suddath Relocation Systems, is the new association president. He has more than 15 years of experience in the moving and storage business. He previously worked for with UniGroup Inc. (formerly Store and Move) as well as PODS (Portable On Demand Storage). He will complete a term expiring in 2012.

Michael Ruge, owner of Eco Self Storage in British Columbia, Canada, and a veteran of the storage business, was elected as a director with a term expiring in 2012. He is the first Canadian member to serve on the MS-SA board.

Meisha Wilson, who served an incomplete term on the board, was re-elected for a three-year term as a director and \board secretary. She is vice president and director of Marketing activities for Hide-Away Storage Services LLC, in Sarasota, Fla.

Randy Weisman president of Storage Banc in St. Louis and one of the associations founders, will continue as a director. Nathan Petty, owner of Macho Mobile Storage in Dallas, will continue as a director and was elected board treasurer.

The MS-SA, founded in 2002, serves independently owned and operated mobile-storage businesses with educational and other programs, including an annual conference and exposition. The association has provider and partner members in Australia, Europe and North America.

Three copper wire thieves were caught Nov. 7 after police responded to a call about a suspicious vehicle parked at Liftlock Self Storage in Peterborough, Ontario, Canada.

When police arrived, they discovered the beds of two pickup trucks loaded with copper wire and cutting tools. The copper wire was stolen from Lakeside Utilities compound in Cobourg between Oct. 29 and Nov. 1, according to police.

Police arrested Andrew Alfred Couch, 24, Michael Carl Cowen, 24, and Jessical Alisha Clement, 20. Each is charged with two counts possession of property obtained by crime.

About 50 units at an Uncle Bobs Self Storage facility in Bessemer, Ala., were broken into last Thursday. The burglary happened sometime during the night, police said.

The burglar cut the locks from the units, including a unit rented by a contractor of DirecTV, a provider of satellite television. Some of the boxes in the unit were torn open, but nothing was taken. A lawnmower was stolen from another unit. The burglary is still under investigation.

Several cars erupted into flames early Thursday morning after a driver crashed into the parking lot of a self-storage facility in Orlando, Fla. A trailer and a limo were on fire when firefighters arrived at the facility. The driver narrowly missed crashing into the facility office.

A witness said the driver, Natasha Persaud, 20, was in a BMW and traveling at least 100 mph on Old Winter Garden Road. The car hit a ditch, became airborne then crashed, with the car landing on its roof.

Persaud was taken to Orlando Regional Medical Center. Her injuries were not life-threatening. The accident is under investigation.