Denver-based Q 5000 Properties LLC recently purchased Safeway Mini Storage in Riverview, Mich., for $650,000. The property at 11781 Longsdorf St. encompasses 27,400 square feet of storage space in 157 units.

Built in 1984 on 1.65 acres, the facility is in a suburb of Detroit and 20 minutes from downtown. The property has several deferred maintenance issues, according to a press release from Pogoda Cos., which brokered the transaction. The seller, Safeway MiniStorage LLC, had been trying to sell the property for several years, the release stated. Q 5000 intends to replace the unit doors, update the office, overlay new asphalt and complete other property improvements.

Mark Floria, a commercial real estate advisor for Pogoda, represented the seller in the transaction.

Based in Farmington Hills, Mich., Pogoda Cos. is a self-storage operator with 38 facilities and approximately 3 million square feet of space in Michigan and Ohio. The firm also provides brokerage, management, investment and consulting services to the self-storage industry through Pogoda Group Inc. and Pogoda Management Co.

Self-storage developer Mark Phillips is waiting on a decision from the Dover, N.H., Planning Board to determine if he will be allowed to build a barn-themed facility on a challenging, 32-acre parcel at 385 Sixth St. The Storage Barn LLC would be constructed in three or four phases and ultimately offer up to 1,200 storage units, according to the source.

The front of the property would feature a two-story office and manager’s apartment designed to look like a New England barn. The storage buildings would be designed to look like horse stables and set back about 500 feet from the street. They would be obscured from view by the barn building and landscaping, the source reported.

The parcel has proven to be a challenge for previous development ideas because it stretches for nearly half a mile from Sixth Street, with a 500-foot width at the front and narrowing to 200 feet at the back. It also contains wetlands and is bisected by a 40-foot utility easement running to a nearby park. The land has been on the market for 17 years, Phillips told the source.

The property is surrounded by other businesses and land zoned for hotel, office and other commercial uses. Phillips received a zoning variance in February, but city planners have spent several months reviewing the project. Among possible issues with the project is drainage, planner Steve Bird told the source.

Phillips previously owned Eagle Self Storage, which operates four facilities in New Hampshire. He sold the company in 2005. He has partnered with Jessica Smith, owner of local real estate firm Winsor Brook Property Advisors, on the Storage Barn venture. Smith will serve as resident manager of the facility if it is approved, the source reported.

The planning board is expected to revisit the project on Nov. 18

As we look ahead to 2015, self-storage operators should be reviewing their 2014 profit-and-loss statements. That’s right … It’s budget time! Time to start planning for next year’s success. That includes income and expenses.

There’s no rest for the weary. Facility owners are under constant pressure from vendors to pay out a higher percentage of their income. Whether it’s for utilities, marketing, insurance, repairs or office supplies, vendors want as much of a facility’s revenue as possible.

As a self-storage manager, you’re the first line of defense in the protection of your facility’s net operating income (NOI). You might say, “Well, I don’t make decisions about spending.” That may be true in regard to final decisions on certain items, but as the person who manages the day-to-day operation, you’re mistaken if you think your opinion and actions don’t matter.

Every self-storage manager is a gate-keeper. You know which of your vendors do a good job and which don’t show up on time. You know which have great customer service and those that act like you barely exist. You know the vendors that inflate their invoices and the ones that treat you fairly. The point is you’re the one who knows, and that should be very important to the final decision-maker.

3 Ways to Help

So what can you do to help? First, know your numbers. Remember, “In God we trust; everyone else must bring numbers.” With a vendor relationship, one of three things should be true: The vendor makes your life easier; loss of the vendor’s service would cause absolute havoc for your business (for example, utilities); or use of the service helps you increase your facility’s NOI.

Next, be willing to put your personal feelings aside when evaluating vendors. You might like some of them, but you have to judge them based on the service they provide.

Finally, take the initiative to research and re-bid all of the services used at your facility. You’ll often be surprised at the savings you can find by just picking up the phone or sending an e-mail.

Now that you know what you can do to help, let’s pick a few expense categories to attack.

Marketing

Marketing is one of those ambiguous types of expenses that can eat up a significant part of your budget. To address this expense, you need to understand what marketing is and the individual items to which you allocate money. To me, marketing is an overall plan that includes advertising, sales, customer service and curb appeal, with the end goal of driving customers to use your service.

A majority of the money operators allot to marketing goes toward facility advertising. Is the money you’re spending on advertising giving you an acceptable return on your investment? If you haven’t tracked the number of leads that come from an ad campaign and the percentage of those leads that converted to rentals, you really have no idea. This analysis should apply to your website, Web marketing, print marketing, Yellow Page ads, referral program or any other advertising plans. If something isn’t providing an adequate return, cut it out of your budget swiftly and mercilessly.

Service Contracts

Most self-storage facilities have a number of service contracts. The more bells and whistles your property has, the more services you’re likely to use. Any contracts for landscaping, snow plowing, security monitoring or maintenance, computer service, HVAC maintenance, etc., should be regularly reviewed and put out to bid.

One word of advice: It’s notoriously hard to find a good service provider, so don’t make changes lightly. There are usually only a few good options in any given market. When considering a change, you have to weigh the value of your current provider against the possibility that the next one will give you an ulcer. Sometimes the best approach is to talk to your current provider and try to negotiate a lower price or better terms.

Office Supplies

Office supplies are another area where self-storage managers tend to have a lot influence, so you have to be careful. It’s extremely easy to be afflicted with “shiny-toy syndrome” when in an office-supply store or shopping on Amazon. Of course you need the newest printer, scanner, software, office chair or that Bluetooth-enabled paper-clip dispenser! Most of the time, you don’t need any of this stuff. You also don’t need 4,000 multi-colored Post-It notes, 55 types of pens, 3 million thumb tacks, 85 highlighters, or a Staples “easy” button. These items add up quickly and increase costs needlessly.

Be Diligent

Expense management is an exercise in diligence. As you and your facility owners go through the budgeting process this year, take into account your intimate knowledge of the property. You may find you’re over budgeting in one area while another is suffering. Just a few minor changes can have a huge effect on your operation in 2015.

Matthew Van Horn is vice president of Cutting Edge Self-Storage Management, which specializes in facility management, feasibility studies, consulting and joint ventures. He’s also president of 3-Mile Domination, a full-service self-storage marketing and strategy company. For more information, visit www.cuttingedgeselfstorage.com and www.3miledomination.com, where you can download a free e-book.

One of the most frustrating and stressful concerns for self-storage managers is collecting rent from delinquent tenants. And it’s no wonder, since very few owners provide their staff with high-quality, high-impact, effective collections training. Telling managers, “Here’s the past-due list. Call these folks. Good luck,” is not program. It’s unfair for supervisors to expect managers to maximize collections without giving them the tools to succeed.

You’d think collections would be relatively easy, since the facility operator has all the leverage. We have their stuff! We don’t have to go chasing down merchandise or get into “Repo Man” mode. So why do so many managers fail to maximize collections, and why are so many of you frustrated with this all-important task? You don’t have an effective system.

Some folks are born salespeople, but very few are born to collect money. It’s not a natural skill. No one likes to do it, and no one really should. Who wants to call people about paying a bill? But with an effective system, anyone—well, almost anyone—will increase revenue and decrease the frustration of constantly dealing with the same past-due customers.

While this article doesn’t roll out a complete, comprehensive collections system, it contains nine tips and techniques every self-storage manager can use to improve his collections and reduce stress.

1. Greet Potential Customers Professionally

Know how to answer the phone, or stand up and shake hands with visitors. Be welcoming. A great collections system begins by creating rapport with potential customers. People have to make decisions about who to pay, and you’re more likely to be on their list when you’ve taken the time to establish a relationship.

2. Get the Facts

Ensure the tenant-information sheet is complete. A lot of managers don’t complete these forms. Often, there are missing phone numbers, inadequate addresses, no extension for a work phone number, etc. Also make sure the information on the sheet is correctly entered into the computer. There are far too many instances where the “phone disconnected” notes could have been cleared up if someone had the good sense to ensure the number was correct in the first place.

3. Clearly Explain the Lease

Too many managers are shy about explaining what the lease says, particularly in reference to the late-fee structure and lien process. Customers must understand—and managers must ensure they understand—that the expectation is the customer will pay on time, and there are consequences if this doesn’t happen.

4. Never Waive Late Fees

If you want to clean up your past-due accounts, quit waiving late fees. If you’re the manager, own that policy: You don’t waive late fees. Don’t blame it ownership and say, “They won’t let me.” Professional managers take responsibility.

Remember, you have customers’ stuff; you have all the leverage. So enforce the lease, and do so consistently and fairly—no favorites, sexism, racism, ageism or other “isms.” Everyone pays late fees or no one does. The same goes with overlocking past-due units and cutting locks.

5. Follow-Up With Every New Rental

Send a thank-you card, make a thank-you phone call and send a thank-you e-mail to every new customer. First, this is just good customer service. Just as important, it’s a great way to make sure the customer gave you correct contact information. Don’t wait until he’s past due to find out the phone number, address or e-mail is incorrect.

6. Push Your Auto-Pay Program

How much of a collections issue would you have if most of your customers were on auto-pay? Quit asking new tenants if they want to sign up for it. Instead, make it part of the sales presentation. For example, you can say, “Our customers love the convenience of our auto-pay program. Do you want to use your Visa or MasterCard?” More auto-pay customers means fewer past-due customers.

7. Never Accept Partial Payments

Again, we have their stuff and we have all the leverage. Too many managers are asking, “How much can you pay today?” Instead, you should be telling the customer how much is owed and accepting nothing less. Once you start taking partial payments, it’s as if the customer gets on a gerbil wheel he can’t ever get off.

When a manager tells the customer what’s owed and sets the expectation that nothing else will do, more often than not, the customer has the entire amount. You wouldn’t accept a partial paycheck, so why accept only partial amounts of the rent due from customers?

8. Set Up and Document a System

Your collections system should indicate on which days calls are made and at what time, which customers are called on which days, etc. That system should be documented so anyone involved in the collections process knows what’s going on. Too many past-due customers fall through the cracks because there’s no system to ensure it doesn’t happen.

9. Follow Up on Broken Commitments

Of all the negligent acts committed by self-storage managers, this is the most common: They fail to call customers who lied about paying yesterday. It’s inexcusable that a manager would note on an account “Customer will be in on Friday,” and then fail to call the customer for several days or weeks when he doesn’t show up.

No manager would accept not being paid his salary on time, so why is it OK if customers don’t pay the business on time? By not making those follow-up calls immediately after the broken commitment, you’re letting tenants know you really don’t care if they pay. That’s not a good message to send.

The most professional and successful self-storage managers take their collections responsibility seriously. They have a system, implement policies fairly and consistently, and understand that without effective collections a facility will struggle. The best owners ensure their managers have the tools to succeed. Learn to improve your revenue and profit with effective collections procedures.

Bob Copper is the partner in charge at Self Storage 101, an industry consulting firm that assists facility owner/operators and managers in developing more effective and profitable operational systems. The company also aids in conducting performance reviews and providing the necessary tools to perform at higher levels in a competitive industry. To reach him, call 866.269.1311; e-mail [email protected]; visit www.selfstorage101.com.

Representatives of CubeSmart, a self-storage real estate investment trust (REIT), offered the West Roxbury Neighborhood Council an update last week on its proposed conversion project in West Roxbury, Mass. The project would involve converting the existing warehouse at 99 Rivermoor Road into a two-story storage facility with 1,100 units and outside parking for RVs.

CubeSmart’s legal representative, Joe Hanley, an attorney with McDermott, Quilty and Miller, told the council the development would have minimal impact on the area. Bruce Jordan of Jordan Architects Inc., who’s designing the facility, said it will include state-of-the-art security and landscaping, and have minimal traffic.

Adding a second story to the existing building will create a project that’s encompasses more than 100,000 square feet, putting it under Article 80 and requiring review for large projects by the Boston Redevelopment Authority, Hanley told the council. This will involve an Impact Advisory Group (IAG) comprised of various stakeholders.

Council members decided to table the proposal until after they hear from the IAG, the source reported.

CubeSmart owns or manages 562 self-storage facilities across the United States and operates the CubeSmart Network, which consists of more than 800 additional self-storage facilities.

Uncle Bob’s Self Storage, the operating brand for real estate investment trust Sovran Self Storage Inc., has signed on as a corporate sponsor for HarborCenter, a $172 million hockey-themed, mixed-use development in Buffalo, N.Y. The storage operator will have sponsorship and signage representation throughout the complex.

Additional sponsors include ADPRO Sports, BlueCross BlueShield of Western New York, Coca-Cola, First Niagara Financial Group Inc., New Era Cap Co., New Wave Energy, Sahlen's, Seneca Resorts and Speed Global. Terms of the marketing pact were not disclosed.

The project, which is being developed by HarborCenter Development LLC, broke ground in April 2013 and covers 1.7 acres. It features two National Hockey League regulation indoor ice rinks, retail stores and restaurants. The rinks and many of the businesses opened this fall. A 205-room Marriott International hotel operated by Shaner Hotels is expected to open in May 2015. The project is being financed by Buffalo Sabres owner Terry Pegula.

Uncle Bob's Self Storage operates 506 facilities in 25 states.

Stormax USA, an Albuquerque, N.M., self-storage facility that has filed bankruptcy, will be sold during a live auction on Nov. 24. Written bids are due Nov. 21. The property will sell to the highest bidder per the court order.

The property at 100-106 Mescalero N.W. encompasses 52,887 square feet of storage space in 59 large units with ceiling heights of 14 to 20 feet. It also includes a 7,200-square-foot warehouse. Stormax USA is currently 90 percent occupied.

Louis B. Fisher III of Sperry Van Ness (SVN) Auction Services is handling the auction efforts. He earned the assignment from the U.S. Bankruptcy Court for the District of New Mexico, according to the source. David Laney of SVN RealStar Advisors LLC is assisting with the event coordination and marketing.

SVN Auction Services provides date-specific sales and special-asset solutions. It encompasses local and regional auction advisors who specialize in foreclosures, tax sales, multi-properties and bankruptcies. The company is supported by SVN International’s 800-plus commercial real estate advisors nationwide.

Update 11/7/14 – The St. Paul, Minn., City Council has rejected Premier Storage’s plan to convert a former Schmidt Brewery warehouse to self-storage. The proposal narrowly passed the city’s zoning committee and full Planning Commission last month.

Todd Jones, founder and principal of Premier Storage, was unable to convince the council that the facility would be an asset to the area, which is undergoing redevelopment, including the addition of artist loft apartments. The warehouse has been vacant for five years.

The council unanimously upheld an appeal filed by a neighborhood group called the Fort Road Federation against the planning commission’s October approval.

"We've got a gem, and just weeks after the ribbon was cut on the Schmidt [Artists Lofts], now as we approach the rest of the way down towards the river, we have this facing us—something that's totally inward-looking that has no outside excitement or invitation for people to become involved in the community,” said council member Dave Thune. “It's just dead storage, literally."

The council’s decision drew a scathing, released statement from the St. Paul Area Chamber of Commerce, which said “businesses that want to invest in St. Paul are held hostage by unelected district councils.”

"The City Council's decision makes it clear that when you follow process and conform to city rules, the future of your business will be determined not by the jobs you create or the vitality of your business, but by the haphazard assessment of unelected district councils that claim to represent the interests of the entire community," chamber officials said in the press release.

---

10/6/14 – Premier Storage’s proposal to convert a warehouse in St. Paul, Minn., into a storage facility has narrowly passed votes by the planning commission’s zoning committee (4-2) and the full commission (9-8), and will be reviewed by the city council, according to a blog post by commissioner Bill Lindeke.

Lindeke voted against the proposal and wrote an article explaining his dissention and the issues surrounding non-conforming use permits, which is required for the self-storage project. At issue is whether storage is the best use for a structure that has sat vacant for five years but sits in an area experiencing an uptick in development.

“No matter what happens, this site offers an interesting test case for how planners view change in neighborhoods. Looking at its recent history, a good case can be made that this building and site lacks much potential,” Lindeke wrote. “It’s a huge, industrial, low-value building with high ceilings, sitting in an area that’s been economically marginal for decades. It been vacant for five years and, in that light, any re-use of the site would be beneficial.

“On the other hand, if we focus on the recent activity around the Schmidt Brewery, the site sits right on the Mississippi River bluff. (Randolph is one of rare streets that actually connects the river to the neighborhood.) And the site is located directly adjacent to a brand new 600-unit, mixed-use development. From this perspective, this is a prime piece of land that could have any number of (conforming) uses.”

To Lindeke, self-storage is not the right fit for the space. “I don’t think St. Paul should settle for a development proposal that doesn’t even come close to fitting with existing zoning in one of the few places where investment has changed the neighborhood dynamics,” he said.

---

8/21/14 – Premier Storage LLC, a Minneapolis-based self-storage operator, has submitted a proposal to convert a 67,000-square-foot warehouse in St. Paul, Minn., into a storage facility. Located near a new apartment complex featuring artist lofts, the structure has previously been used by an electric-utility company as well as a brewery and restaurant, according to the source. The conversion would require a special-use permit, and the St. Paul Planning Commission's zoning committee is expected to address the project on Thursday.

The former Schmidt Brewery warehouse at 543 James Ave. would feature all indoor, climate-controlled storage units. Neighboring developments have been supportive of the plan because of the low impact self-storage facilities have on noise and pollution, Todd Jones, founder and principal of Premier, told the source. “We think it’s a good use of the building,” he said.

Premier has an agreement to acquire the site from former brewery owner Bruce Hendry, the source reported. Premier has previously developed or owned about 40 self-storage facilities in Arizona, California and Minnesota. It currently operates seven Minneapolis Storage Centers locations in the Minneapolis area.

A fire that killed a man and damaged 23 units at a self-storage facility in Bismarck, N.D., last week is being ruled as arson and an apparent suicide. Kelly Saude, 54, was found dead inside the unit he rented. Investigators say they found a melted gas can and gasoline-soaked rag near Saude’s body. An autopsy revealed he died from smoke inhalation.

The fire, set on Oct. 28, was contained within three storage units but caused smoke damage to 20 others, according to the source. Saude’s body wasn’t found until Oct. 30, when an insurance inspector discovered it among the debris.

“Normally the fire department searches areas that might be expected to be occupied,” Fire Chief Joel Boespflug told the source. “Due to this fire occurring in a cold storage unit, and in consideration of other circumstances, there was no expectation, nor was it evident, that any victim was inside.”

Saude was reported missing to Bismarck police by family members on Oct. 28, after their last contact with him was on Oct. 26.