Compass Self Storage, a member of the Amsdell family of companies, has opened a new facility in Sewickley, Pa. It’s the company’s second location in the Greater Pittsburgh market, according to a press release. The development was backed by separate affiliates of Amsdell Group LLC and Compass Self Storage LLC and will be rebranded under the Compass name.

The property at 2404 Nicholson Road comprises more than 51,688 net rentable square feet of storage space in climate-controlled and drive-up units. It includes access-controlled entry, truck rentals, and a retail center that sells moving and packing supplies.

"Our newly constructed self-storage center in the Sewickley/Franklin Park area offers our new customers all the top modern amenities they would want for their self-storage experience,” said Todd Amsdell, president. “We’re proud to expand our service area further in this market and to make moving and storing with Compass Self Storage an easy process.”

Headquartered in Cleveland, the Amsdell Cos. draws its roots from the family-owned construction company founded in 1928. Since its inception, the company has been active in several billions of dollars of real estate ventures, with a primary focus on self-storage. It has owned and operated more than 500 storage centers under various trade names in more than 27 states. It currently owns and operates 78 properties in 15 states.

One day, while discussing the self-storage facilities they co-own, Bill and Joe wound up debating why some assets outperform others. They’re interested in developing more properties, but they begin to realize that traditional metrics don’t seem to explain what causes extraordinary performance in some properties over others.

Figuring out if a plot of land will work well for self-storage is an inexact science, but there are data tools that can help determine if a property is financially viable based on local customer attitudes, aspirations and other psychological criteria. Welcome to the world of psychographics.

What the Heck Are Psychographics?

Historically, self-storage developers and operators have relied on feasibility studies to determine where to build and forecast future success. While such a study is helpful in deciding whether a site will be viable, it doesn’t get into the heads of the potential customers within a local market or reveal anything about their buying habits.

A feasibility study typically includes a breakdown of demographics, traffic counts and patterns, competition in the area, market demand for space, and market rents and occupancy. It also provides a recommendation for unit mix, an analysis of amenities and climate-controlled space in the market, a pro forma income analysis, and a go or no-go recommendation. That’s a lot of valuable information, but it lacks a psychographic analysis.

Demographics are comprised of statistical data related to a market’s population, providing insight to the number of people in the area and their ages, family status, level of education and income, as well as housing types, the average age and value of property, and more. In contrast, psychographic data classifies the people within a market according to their attitudes, aspirations and other psychological criteria. While demographics are invaluable in determining the financial feasibility of a site, psychographic data helps differentiate between a good location and a great one.

The key difference is understanding who’s residing within your market besides factual population data at an aggregate level. For one, psychographic data describes the personalities, values, opinions, attitudes, interests and lifestyles of potential customers. Second, the information is available at the household level. It’s possible for demographic information from two areas to be similar, while the psychographics and purchasing patterns within them can be vastly different. A great starting point is to compare the tenants at existing self-storage properties with the population in the area.

Psychographic Profiles

Depending on the data provider, there are 60 to 80 psychographic profiles. In addition to location type (rural vs. urban), these vary based on income, education, socio-economic group, age, children at home, and other factors. Different groups have distinct purchasing and spending preferences, as well as varying political preferences.

A good starting point for existing self-storage operators is to compare tenant information against the psychographic profile types of the area population. You’ll find that certain groups are far more likely to use self-storage than the average household.

To understand how this works, let’s consider five hypothetical psychographic groups and their propensity to rent self-storage:

• Type A: 500%
• Type B : 200%
• Type C : 100%
• Type D: 50%
• Type E: 20%

These are just for illustrative purposes. In real-world scenario, there would likely be about 70 profiles. However, the range of 500 percent above average to 20 percent below average is typical of household propensity to use a product or service within a geographic area.

The household with an average propensity to rent self-storage is Type C, with a ratio of 100 percent. Conversely, Type E households are only 20 percent as likely to rent self-storage as the typical household. Being aware of the concentration of psychographic profiles that more likely to rent self-storage provides insight to site selection.

Analyzing Current Tenants

Let's get back to Bill and Joe. To determine why some of their properties outperform others with similar demographic profiles, they hire a consulting firm to evaluate and compare tenants from all 10 of their properties against other households in their areas of business. The firm takes their list of tenants and compiles an index with the tendency for each psychographic profile to rent self-storage vs. the overall population.

Bill and Joe have two properties that are exceptional performers, six that are good performers and two that are laggards. The demographics for all 10 facilities—site quality, visibility, level of competition and traffic counts—are similar. The consultant reports that the two exceptional performers are in areas where there’s an exceptional number of Type A and Type B psychographic profiles. The two laggards are in areas with an above-average number of Type D and Type E profiles. The practical implications of the data make it easy for Bill and Joe to see that when investigating new areas in which to build, it makes sense to look for those with a high concentration of Type A and B households.

Scouting a Great Location

Like many storage operators, Bill and Joe have always started the development process by looking for a prospective site and then getting a feasibility study. Psychographics enable a different approach. The partners ask their consultant to identify geographic areas with high levels of Type A and B households. They can then evaluate the level of competition in those areas, identifying which have an average, above average or below average number of storage facilities. They can begin searching for prospective sites after they’ve identified the locations with above-average levels of households likely to rent self-storage coupled with a low or reasonable level of competition.

Using psychographic data doesn’t negate the value of a feasibility study. After all, one bad deal can offset the benefits of five or even 10 smart real estate investments. A feasibility study is cheap insurance against building a poorly performing property, even if the psychographic profile of the area is excellent.

The use of psychographics is just the latest in a long series of innovations since the inception of self-storage. Though it’s not critical to use psychographics to determine if a site is suitable for a successful project, the insight gleaned can increase your number of exceptional performing facilities and minimize the potential for laggard sites.

Patrick O’Connor is co-author of “Big Data in Real Estate—Be a Millionaire,” and president of EnrichedData.com, a U.S. real estate database that provides data and consulting services. He also owns O’Connor & Associates, a U.S. property-tax appeal firm that offers cost segregation, federal tax reduction and appraisal services. He’s been a business entrepreneur since graduating from Harvard Business School in 1983. For more information, e-mail [email protected].

A self-storage facility that’s already under construction in Albuquerque, N.M., is now facing opposition from several residents and a city councilmember. The four-story building at 4100 Central S.E. in the Nob Hill neighborhood is on the former site of the Pulse Nightclub, which was demolished in 2015. Approved by the city in September, the project will include retail space on the ground floor, storage on the top three, and 33 covered parking spaces.

The Nob Hill Neighborhood Association (NHNA) contends the project shouldn’t have been permitted before a public meeting was held. It was expected to file a formal appeal last week to request a public meeting, according to the source. “We contend that the planning department made an incorrect decision,” said NHNA President Adrian Carver.

The property at the corner of Central Avenue and Montclaire Drive is in the city’s “C2” commercial zoning, in which the “transfer or storage of household goods” is considered a conditional use. As such, a public hearing would be required under city code, the source reported.

Councilmember Pat Davis also believes a public hearing should’ve been held before the project was approved. “I want to know what happened to the process, because the process was designed to say if your project doesn’t meet the standards that we all agreed to, just set up a public meeting,” he said.

City officials disagree, noting the proper procedures were followed. “The determination was made that this current proposal was not a conditional use, but it was a permissive use. It was allowed by right, as a ‘customer service’ provision within the C2 zone, and that’s why it was allowed to move forward,” said Brennon Williams, deputy director of the Albuquerque Planning Department.

The code-enforcement staff denied the project twice this year due to problems with the site plan, Williams said. However, the issues were resolved and the plan was later approved. “Some of those concerns related to parking and landscaping, and those sorts of things just needed to be clarified on the plan. Once those were corrected, then the plan was approved,” he added.

The storage developer plans to meet with residents to discuss the project. Even so, Davis contends the facility doesn’t belong in the Nob Hill community. “If you look at the plans, it’s a pretty decent way of doing public storage; it just doesn’t belong there,” he said. “It interrupts the idea that you can walk from one end of Central to the other and have a full day of activity.”

After living in the United States for 18 years, I decided to return to Colombia in 1997. My plan was to invest in real estate and work in the flooring industry, because that was my trade. However, my Colombian family were pioneers in the moving business dating back to the 1950s; and in 1978, I was offered the chance to purchase one of our established companies in Cali, Colombia.

After a couple of years of learning the legal and operational aspects of the moving business, I saw another opportunity—to offer furniture-storage services to existing customers. Initially, we used one big space inside our warehouse to store clients’ belongings. Then in 2005, we built our first self-storage units inside a 4,000-square-meter warehouse and opened them as Bodehogar Storage.

At the time, self-storage was an unknown service to most of our customers, except to those who had traveled to the United States. To spread the word about this new offering, we began attending real state conventions. Demand grew, and investors opened additional storage facilities in other parts of Colombia, which helped self-storage become more widely known by the public.

In 2007, we opened a second branch in Cali, and in 2013, we opened facilities in Bogotá and Barranquilla in 2013. We opened our fifth site in Medellín last year. The demand has been so great that we’ve begun adding more units to our existing properties. We’re also building another large site in Bogotá that will contain 150 units.

A New Model

The U.S. concept of self-storage doesn’t completely resonate with Colombians, even today. Those looking for storage aren’t interested in the do-it-yourself model of packing their own belongings, transporting them to a facility and loading them into a unit. Most would rather pay someone to pack and move their belongings into a mini-warehouse.

One reason this model is so successful is because it offers the security of traditional self-storage with the convenience of packing and moving services. Our climate-controlled units are available in a variety of sizes, and our facilities include several security measures, including central alarms and video cameras.

Another reason many people choose our mini-warehouse model is most traditional self-storage facilities have restrictive hours. They might be closed on Sundays and holidays, offer limited access on Saturdays, and operate only during normal business hours Monday through Friday.

Some of our customers never visit our facility at all. Unit selection payments are completed via phone or through our website. The average tenant stay is about six months. When the lease ends, the customer pays to have his belongings moved from the storage unit to his new address. We have our own trucks, and personnel is available at an additional cost to complete the task of packing and moving.

Challenges

Our main obstacle to growth is the high interest rates and short terms offered by the banks. Also, the high cost of land obligates us to build our facilities at a distance from higher-income neighborhoods, though we’re still in the main cities. This can sometimes make reaching our potential customer base problematic. To attract tenants, we rely on a strategic marketing program that includes the purchase of Google AdWords and organic search engine optimization.

The four major cities in Colombia—Bogotá, Barranquilla, Cali and Medellín—have a combined population of 45 million people. While there are several traditional storage facilities and mini-warehouses in the area, there’s a rise in demand for both. Bodehogar Storage and others are adding more units and new properties in these large towns. In addition, Colombia’s 20 mid-sized cities have a great need for self-storage, presenting an opportunity for those looking to invest in an untapped market.

Carlos Cardona is the owner and general manager of Bodehogar Storage. The company operates five storage facilities in Bogotá, Barranquilla, Cali and Medellín, Colombia, and has another under development. For more information, visit www.bodehogar.co.

Real estate developer Ed Drummond of Integrated Properties LLC received zoning approval on Tuesday to convert a former medical center to self-storage in the Crestwood South neighborhood of Birmingham, Ala. The city council agreed to rezone the 4.7-acre site at 720 Montclair Road from a health and institutional district to general business. Drummond is under contract to purchase the 50,000-square-foot structure, according to the source.

The medical building housed offices and an orthopedic-rehabilitation facility associated with Trinity Medical Center. "We are going to update the exterior some, but otherwise it will be much as it has been," Drummond told the council, adding that there’s demand for more self-storage due to high occupancy at locations serving the Crestline and Crestwood areas.

Though Drummond indicated the remainder of the property could be developed in the future, he wasn’t sure what local demand would be. The Crestwood South Neighborhood Association supported the rezoning effort, but councilmember Valerie Abbott, who represents the neighborhood, said residents are against restaurants and retail at the Montclair location. “They don’t want it to turn into a retail strip center,” she said.

One of the reasons the neighborhood is supportive of the self-storage project is the expectation of low traffic volume, the source reported. The property is immediately east of the Levite Jewish Community Center and School.

Steven Hoyt was the only council member to vote against the rezoning, calling the storage project a “train wreck.”

Financial-services firm The Bancorp Inc. has hired two new vice presidents to help expand its small-business lending to the funeral-home, self-storage and senior-living industries. Teresa Carlson and Kelly Isley join the company with significant experience in Small Business Administration (SBA) loans, according to a press release.

Carlson will serve as vice president, SBA business development officer, focusing on the funeral-home industry as well as general small businesses nationwide. She brings more than 24 years of experience in SBA lending to the position. She previously served in the same capacity for Mission Valley Bank.

Isley will serve as vice president, SBA new markets. In this role, she’ll work with the bank’s small-business lenders to expand market share into a broader range of industries. She has more than 17 years of financial-services experience including SBA expertise, the release stated. She previously served as chief operating officer for a national lender-service provider.

“This is an exciting time for The Bancorp,” said Jeff Nager, executive vice president, head of small-business lending. “Kelly and Teresa are key additions who will add greater depth and expertise to our team as we take our first steps into expanding our offerings across new markets.”

The Bancorp specializes in providing private-label banking and technology solutions to non-bank companies ranging from startups to Fortune 500 enterprises. The company has traditionally focused on health-benefit banking, institutional banking, payments and specialized lending. Its subsidiary, The Bancorp Bank, is a merchant-sponsor bank, Automated Clearing House (ACH) originator and prepaid card issuer.

StorageMart, which operates more than 190 self-storage properties across Canada, the United Kingdom and the United States, has launched a Rockin' With StorageMart giveaway in which musicians can win one year of free band-rehearsal space at a company facility and a one-year subscription to music-distribution service DistroKid. Entries are being accepted through the StorageMart blog until Dec. 16, according to a press release.

Those interested in entering the sweepstakes must visit the promotion page on the StorageMart blog, sign into a social media platform of their choice and choose how they want to enter. Registrants must be 18 years of age and a United States citizen. No purchase is necessary to participate. Multiple entries will be accepted. The winners will be selected on Dec. 16 and contacted via e-mail on Dec. 19.

In addition to the free year of rehearsal space, which begins on Jan. 1, the first-place winner will receive a one-year subscription with DistroKid, an independent distribution service that promotes music on streaming services such as Apple Music, iTunes and Spotify. The second-place winner will receive a $50 eGift card from Sweetwater, a retailer of music technology and instruments. A $25 eGift card from Spotify will be awarded to the third-place winner.

The promotion is part of StorageMart's charitable-giving program, “Store it Forward,” in which the company finds ways to give back to the areas it calls home, the release stated.

"We might be an international company now, but what got us there was the great people who live and work in the same communities we do,” said Cris Burnam, president. “We haven't forgotten that, and the Rockin' With StorageMart contest is just another way we can say thank you.”

Founded in 1999 and based in Colombia, Mo., StorageMart is privately owned and operated by the Burnam family, which has been in the storage industry for three generations. Its portfolio consists of more than 12 million square feet of storage. It serves more than 75,000 self-storage customers, and operates in Chinese, English, Punjabi, Quebecois French and Spanish.

PTI Security Systems, a provider of access-control and security solutions for the self-storage industry, has redeveloped its EasyCode mobile app, which allows self-storage renters to open a facility’s gates and doors using a mobile device. The technology also enables users to view their access history, get notified of alarms and access activity, and choose up to four favorite access points.

The latest version includes one-click door, gate and elevator entry and exit; one-click access to a renter’s access code; and one-click payment links to the operator’s mobile-friendly website. It also features an improved renter sign-up and onboarding process, according to a PTI press release.

“During our beta testing with the first-generation EasyCode app, we saw such high demand for this technology that we knew we had to pursue it,” said Jeff Flowers, chief operations officer. “Our customers asked for all the features that the second-generation app provides, and we’re thrilled to deliver this technology to our industry.”

The technology is fully integrated with PTI door alarms and compatible electronic locks. Multi-unit and -facility renters can use one account to view and store all access data. Operators can also customize the app and add a logo.

“Providing our customers with industry-leading security solutions and new technology is our No. 1 priority, and the all-new EasyCode app is the first of many innovative solutions we will bring to the industry this year,” said CEO Franklin Young. “Everything we’re developing at PTI began with one simple goal—to help our customers create a world-class experience for their renters.”

Inside Self-Storage (ISS) and PTI Security Systems released a case study on the mobile app earlier this year. The free, downloadable publication details how EasyCode helped SpaceMax Storage of Stone Mountain, Ga., increase customer convenience and property value. It also shows examples of three return-on-investment scenarios for using the app. The PDF can be downloaded from the Whitepapers page of the ISS Resource Center.

PTI manufactures technology-enabled access-control and security solutions. Its product line includes access-control hardware and software, wired and wireless door alarms and mobile-access solutions. The company has installed more than 35,000 systems in 30-plus countries. It operates through two U.S. locations as well as distributors in Asia, Australia and Europe.