OUT WITH THE OLD AND IN WITH THE NEW--WHAT A GREAT BOOST TO THE NEW YEAR'S FILL-UP RATES, especially if everyone keeps the old and sticks it into storage! It's already 2003, and we wonder if the incredible growth of storage phenomenon can match last year's. Oh, yes, it can—and then some. Just the known sites due for development by the large developers indicate this year's potential is exciting. Everyone is still moving forward and increasing their portfolios.

The end of 2002 witnessed what was probably the first major competitive acquisition in the United Kingdom, when Spaces Personal Storage acquired Aardvark Self Storage Ltd. and Rent-a-Space. This made Spaces the largest self-storage operator in the country. Could this pave the way for other major companies looking to buy sites and lessen the gap in the facility-numbers game? Or is the market potential still so vast no one really cares who owns the most facilities in the widest geographical net?

Many feel the general lack of competition means anyone who owns even one facility is more than happy with his income and potential. The question is, are the major operators concentrating efforts more in developing new facilities in prime locations or purchasing existing self-storage sites?

I believe all the above is happening. Surely, everyone is watching everybody else. If you can afford to buy a good portfolio from one operator, why not? There will be no faster way to expand your empire. And if you're the operator being acquired, is this not one of the main reasons you started this business? To build a successful company, make some money, have some fun and sell for the big bucks?

Hopefully, all this growth will have a positive effect on potential investors who now see an appealing exit strategy. Anything that gets investors and banks interested and excited about the industry must be good, especially for the guy trying to get his first facility off the ground.

However, new financial avenues for the small, individual operator may not be good for older, well-established companies trying to keep this little gem of an industry all to themselves. Overall, 2002 was a great year for self-storage in the United Kingdom, and 2003 looks just as promising, regardless of the size of your business. Good luck to you all.

Graham Lomax is a founding director of Rabco Europe Ltd., based in Essex, England. Rabco Europe opened in August 2001 to expand The Rabco Corp.'s Orlando, Fla.-based operation into the European market. For more information, visit www.rabcoeurope.com.

WHEN DOROTHY GALE RUNS AWAY FROM HOME IN THE OPENING SCENE OF THE WIZARD OF OZ, SHE ENCOUNTERS PROFESSOR MARVEL, a benevolent charlatan who professes to see all in the gaze of his crystal ball. He foretells an illness befalling the famed Auntie Em, which prompts Dorothy to return to the security of farm life. Though the character was an adaptation to L. Frank Baum's original novel, his role is pivotal, adding depth to the Kansas sequence and foreshadowing his later role as the menacing Wizard who, supposedly, has all the answers.

This month, we asked some of the biggest names in self-storage to report on the state of the industry and make predictions for the upcoming year. Will their forecasts have an impact on the actions of established developers? Will newcomers be discouraged by tales of overbuilding and competition? Do the gurus have all the answers, or are they making their best guesses from behind a curtain of doubt? Well, that remains to be seen.

In keeping with the Oz theme, I recently picked up a novel by Gregory Maguire titled Wicked: The Life and Times of the Wicked Witch of the West. It's the Oz story told from the perspective of the villain. As one would expect, it paints her as a sympathetic character with dimension, motivation and even feelings. It lends new meaning to the fairy tale as we know it--a very interesting read. The reason I bring it up is it demonstrates how a story changes depending on the teller's perspective. So if you read something in these pages you find questionable or even disturbing, remember it's only one possible outcome, based on the perception of a few.

I've been visiting an online self-storage discussion forum at selfstorageguide.com, hosted by e-commerce Holdings LLC. Reading through comments posted by owners, operators and managers all over the country, it's clear the story on overbuilding--and the subsequent future of the industry--is not as plain as some might think. One operator in Louisiana claims his markets are getting quite saturated, that the "bloom is off the rose." Another insists it all depends on your specific location.

The bottom line is, look at your source. And remember predictions only come to fruition when no endeavor is made to change a present course of action. You'll read a lot in this issue about rental rates, and the importance of maintaining a sound pricing structure--even in the face of competition. This month's writers also emphasize the value of research and investigation prior to building. All these efforts combined can do much to change the landscape of the self-storage future. Overbuilding does not have to be a self-fulfilling prophecy.

Best regards,

Teri L. Lanza
Editorial Director
[email protected]

THIS IS MY FIRST COLUMN OF THE NEW YEAR. WHAT THOUGHTS CAN I SHARE TO INSPIRE AN OWNER OR MANAGER? What new insights can I provide readers into problems they may be facing?

Let's begin with the state of the self-storage industry. I specifically want to discuss the issue of pricing in today's economic climate. Our industry faces a much different business environment than it did at the beginning of 2002 when America and the rest of the world were still reeling from the Sept. 11 tragedies. I am not convinced the nation's economy has recovered from the recession that started in March 2001. As I have traveled the country this past year, I have seen firsthand how much more competitive many cities have become for self-storage.

Self-storage appraiser Charles (Ray) Wilson recently spoke at the Texas Mini Storage Association's annual tradeshow in San Antonio. He pointed out the financial results of the three self-storage REITs from their 10Q SEC filings for the second quarter of 2002. Public Storage, Shurgard and Sovran all reported drops in occupancy levels compared to the same period of the prior year. Occupancy rates in the 84 percent range were the norm, reflecting a higher vacancy factor than in the prior year's period. Public Storage actually reported a negative NOI result compared to the prior year. This is a different result than many people expect from these giant companies.

It appears a number of factors combined to produce these results, and the message is clear: Our industry is not immune to ups and downs in occupancy and rental rates. I see many owners across the country reacting to competitive pressures and downturns in occupancy. Cutting rental rates appears to be the first strategic solution owners are adopting--it is no longer a last-resort option.

The discounting of units is a critical decision that should not be made until all other options have been exhausted to stabilize or increase occupancies. I am seeing some owners slash their street rates or offer to meet or beat any competitor's prices. If you are dealing with fierce competition, first put everything in your business under a microscope before dropping your rates.

You need to look objectively at what might be the real causes of a drop in occupancy. Price alone is generally the fourth or fifth reason a customer selects a specific store. Ask yourself, what has happened to your inbound-call volume? Have your employees' closing ratios changed dramatically? What is the average length of stay for your customers? Are credit-card sales increasing or decreasing? Have you maintained curb appeal? Do you have a positive, customer-service approach to every potential and existing customer? Are your employees' skills as sharp as they need to be? Is your staff working each telephone call like their jobs depend on it? (Surprise--it does!) Do the skills of your part-time and assistant managers measure up to the levels necessary to provide a competitive edge over competition?

Until you can adequately answer these various questions, do not lower your rental rates, because if you cut your rates, I'll lower mine. If you start to give free months of rent, I'll let people move in for free. Where does it end? And just as important, how long will it take to climb back up the rental-rate scale? Every owner should conduct a self-audit of his entire operation and get back to the basics. Many owners need to get reinvolved in their businesses and ensure every employee is participating in the process of the store's audit.

If you have been historically averaging 30 to 40 calls per month from potential customers and that call volume is down to 15 or 20, you must ask yourself why. What changed in your overall marketing efforts in the past six months? Are you still generating the same number of monthly move-outs or has that figured increased? One thing I have learned over the years is, for many owners, their biggest competitor is not another store but the dumpster or Salvation Army. So ask yourself, are you making the entire storage experience a positive one?

Setting rates is not a science but an art. The only rules are the ones you establish for your own store. There is no law that says the rental rate per square foot of a 10-by-10 has to be less than that of a 5-by-15. You don't even have to rent by the month. You could establish a weekly rental program that provides a premium rental rate per square foot over a monthly rental--we all know people tend to stay longer than they think they will. You could also try selling everyone on prepaying for a two- or three-month minimum with no discounts. As a final closing technique, you might offer to freeze a new customer's rates for a period of six months or a year. I know that could hurt a little down the road, but not if it gets your surplus units filled today.

A few owners have started to price their units like upscale hotel rooms. You always pay more for an ocean-view room than one that overlooks the dumpster. In this pricing scheme, the 10-by-10 near the elevator commands a higher monthly rate than the one 200 feet away. The average rate for all 10-by-10s ends up achieving the desired income rate for the square foot budgeted.

Sometimes the pressure of competition is too great and your team is trying to do everything it can, but cutting rates should be the final straw in an effort to maintain market share. Whatever you do, do not lower your stated street rates. Instead, produce a discount coupon that gives new customers the rate you feel is necessary to be competitive. If existing customers learn you have cut your street rates, there is nothing to stop them from demanding to receive that same rate on existing rentals. You might be forced to cut rates on a substantial number of rentals instead of just the 40 or 50 new ones you needed to get back to the 80 percent or higher occupancy range.

Don't put yourself further behind your financial goals for the year by hasty action. Above all else, make sure your entire management team understands the pricing strategy you are establishing for the store.

Good luck this year. And if you happen to be an owner or manager with a 90 percent-plus occupancy and a goal of 6 percent to 8 percent rent increases this year, keep that good news to yourself. Everyone is out there looking for their next site.

Jim Chiswell is the owner of Chiswell & Associates LLC, which has provided feasibility studies, acquisition due diligence and customized manager training for the self- storage industry since 1990. In addition to contributing regularly to Inside Self-Storage, Mr. Chiswell is a frequent speaker at Inside Self-Storage Expos and various national and state-association meetings. He has just introduced the new LockCheck^TM inventory data-collection system to the self-storage industry (visit www.lockcheck.com). For more information, cal 434.589.4446 or visit www.selfstorageconsulting.com.

FORTUNATELY FOR ME, I'VE ALWAYS HAD A TWO-WEEK BREAK over the holidays, as my main business is not a retail operation such as a self-storage facility. So this festive period has always been a great relaxing fortnight, spending time at home with my family. During this time, I've always managed to reflect on the last year's business achievements and think about objectives for the coming year.

For the European self-storage industry, 2002 was another exciting growth year; although the "City" (the U.K. financial world) lost some of its appetite for our offering as the listed players continued to rack up store-opening losses in the immature marketplace. The 30 percent growth in facility numbers continued, thanks in part to more independents entering the market. But most of the bigger players slowed their store-opening campaign to appease the doubting City.

In 2001, two notable U.K. acquisitions provided industry models for self-storage funding in the United Kingdom and Europe. Mentmore PLC (now trading as Spaces UK) acquired the nine-site Aardvark Self Storage Ltd. for $46.5 million (£30 million) and the three-site Rent-A-Space chain for an undisclosed sum. Hopefully, these two cases will help grease the hinges of the funding doors for existing and future independent operators and ensure the future of European self-storage growth.

The U.K./European self-storage market looks set for another year of double-digit growth. This growth will come from the vast majority of new conversions. The top seven operators look like they're going to make up 50 percent of the future market, with single-site independents and small-chain operators of two to five sites making up the other half.

The market is gradually changing as income streams become more easily accessible to entrepreneurs with proven track records. I believe quite a number of small-chain operations will be developed and quickly sold to the big boys that need to satisfy their growth targets with acquisitions and reduce their new-store opening losses.

How can the last 12 months be surpassed? It may be a challenge, but Europe's self-storage industry promises to be robust. Set your yearly ambitions high. Establish business goals now, if you haven't already done so. I wish you the best of luck. Just remember, the harder you work, the luckier you get.

Andrew Donaldson is the founder and chief executive of Active Supply & Design (CMD) Ltd. of Cheshire, England. He is also the founder of the Self Storage Sentinel newsletter, Rent-A-Space Limited (now a multi-site operator) and selfstorage.uk.net. For more information, e-mail [email protected]; visit www.askactive.com.

MANY SELF-STORAGE FACILITIES USE PRICING STRATEGIES THAT DON'T MAKE SENSE. RECENTLY, a self-storage owner told me he priced his services by surveying the competiton and setting his prices comparatively. To set your fees using this system alone is folly. If your goal is to maximize revenue (and it should be), a variety of factors should be considered when setting and changing price. Properly charging for units will also help prevent competition from entering your area. This article addresses the 14 biggest pricing errors self-storage owners and operators make. Avoid these mistakes and you'll make a lot more money and reduce the number of potential competitors you invite.

Pricing based on occupancy in a particular unit size.

Most operators base price increases on overall occupancy levels. Every year or so, they raise prices by a certain percentage across the board. This is a bad idea, and here's an example to illustrate. Let's say a facility's occupancy is 90 percent. Most operators come up with a percentage, like 6 percent, and increase prices on all unit sizes by that amount. But if your 5-by-10s are only 60 percent occupied, the price on those units should probably not be increased. On the other hand, if your 10-by-10s are 98 percent occupied, you should raise the price on that unit size. In fact, it should have been raised before this point. Look at your occupancy levels at least once a month and make sure you're examining them by unit size. Start raising prices when occupancy rates hit 90 percent.

Not offering ultra-low prices on some units.

If you're not offering $9.95 mini units, you're missing the boat. Offering a small, locker-style unit at less than $10 gives you a marketing edge. Advertise it in your Yellow Pages ad and the phone will ring off the hook. You will obviously only have a small number of units at this price, but the purpose of these units is to get people to call you. Once they call, get them to visit. Once they are at your facility, upsell them to bigger, more expensive units--if their needs demand it. If you don't have any of these small units, go out and find some old school lockers you can pick up dirt cheap.

Not using a variable-pricing strategy.

There is no law saying you must charge everyone the same price for the same size unit. Think of an airplane. How many people are paying the same price for their seats? Very few. There is nothing illegal about pricing units differently. The main thing is for managers to understand pricing should be flexible. If your manager is sharp and given the power to price units as he sees fit, your store's profitability can sore. Let's face it: If someone walks in the door to rent a unit and lets you know he is a pharmaceutical rep, there's no reason you shouldn't charge him your "corporate" rate, which is obviously higher than your standard.

Displaying your prices.

You should never display your prices. Pricing needs to be flexible, based on a variety of factors. Instead of posting set rates, have a sheet of paper that lists all unit sizes with blank spaces to write in prices. A lot of facilities don't do this because 1) it takes more effort and 2) it requires some thinking and flexibility. The sharper your manager, the easier it will be to make this system work.

Not using a premium-unit strategy.

When a customer walks into your facility set on a particular unit size, this is your opportunity to use the premium-unit strategy. Here's how it works: When someone comes in requesting a 10-by-10, ask him whether he wants one of your "premium" units. He will naturally ask what that is. If all you have left are units in the back of the site, tell him these are premium because they are more private. If you have units at the front of the site, these are premium because they are quicker and easier to access.

When asked how much your premium units cost, let the customer know they are only $5 or $7 more than the standard units. Even if only one in three people go for this line, your revenue will be substantially higher than that of a facility that doesn't employ this strategy.

Not increasing prices by the right increments.

Many operators make mistakes when they raise their prices in terms of the amounts. The most popular way to raise prices on all units is to increase by a set percentage across the board. But in reality, some unit prices should be raised, others lowered and others left alone. It all depends on market demand.

Not increasing prices differently for new and existing customers.

There is no reason you have to increase prices the same way for new and existing customers. When you increase prices for existing customers, make the price hike large enough to generate more cash, but not so big as to cause people to move out. Let's say that you have 100 10-by-10s and most existing customers are paying $79 a month for them. If you increase that price to $84, it will be considered by most tenants to be a nuisance raise. The increase isn't enough to make them move, but it is enough to significantly impact your bottom line. Price increases for new customers will, in most cases, be higher, based on market demand and other elements discussed above.

Not raising prices frequently enough.

It is much better for you to raise prices by a small increment two or even three times a year than to do one fat price increase annually. One owner in an affluent Chicago neighborhood sends out a letter to new tenants thanking them for renting and preparing them for price increases that may occur as often as every 90 days. That's right--he lets tenants know their prices may go up four times a year.

For most storage operators, this sounds scandalous. It's not. It's all based on market demand. Pricing should be a nonemotional decision based on numbers. If the numbers dictate you can raise prices every two months, do it. Most owners raise prices only once a year out of sheer laziness. Check your occupancy rates by unit size and make new pricing decisions monthly. You'll have a lot less move-outs and increase your profits if you raise prices by a smaller amount twice or more a year than a larger increase once a year.

Not having an automated system to raise prices.

Price hikes should happen automatically. The right software should be programmable to raise prices once occupany hits a certain level for each unit size. This frees your manager from having to think about pricing. If your software can't do this, ask your vendor when this feature will become available.

Using "hard" numbers.

Avoid using hard numbers like $90 or $65. Instead, set your prices at $77 or $93. This philosophy is based on years of research on price testing in a variety of industries. Stick with prices that end in one, three and seven. For some reason, these numbers appear "softer" to customers.

Feeling reluctant to raise prices.

I sometimes hear owners say they are scared to raise prices because they think they will upset tenants. In most cases, those fears are unwarranted. If the problem is reluctance on behalf of your managers, tell them to get over it. This business is about making money, not friends. Do you think your local gas stations only increase prices when they know customers won't be upset? The decision to raise prices should be a nonemotional one. Don't be scared to increase them if it makes sense for your business.

Not lowering prices when appropriate.

The price equation works both ways. There are some unit sizes on which prices should be increased, but other prices should be reduced. Don't be scared to fill up your slow-moving units by lowering prices. If your 5-by-5s are priced at $45 and the occupancy rate is 50 percent, you need to cut your price. You can always raise it again when occupancy changes. That's the beauty of operating on month-to-month leases--nothing is set in stone.

Not bundling ancillary products when renting.

Offer people a deal for buying boxes, locks and other items when they rent. This is the time to sell them other products you offer. Bundling gives you the chance to get a big bump in revenue at the time of rental. Use this technique to generate a big cash-flow surge.

Not running specials during certain seasons.

If you're in a college town where students are a big portion of your mix, adjust your prices to deal with this reality--offer a package price at a great rate for the summer. One owner I know gives students a better price for putting down a deposit in the spring. Those who wait until the last minute end up paying more. You can always offer a three-month deal at a great rate when you have seasonal customers. It's better to having a unit filled making some revenue than empty generating none.

Conclusion

Can you believe there are this many issues relating to pricing? Most operators don't give pricing a lot of thought. The intelligent operator is looking for clever and creative ways to extract every additional dollar he can out of a facility. Pricing is one way to make this happen. Improperly pricing units will lower your total revenue and invite competition. Use the above strategies and you'll make more money and virtually ensure your storage success.

Fred Gleeck is a self-storage profit- maximization consultant who helps owners/operators during all phases of the business, from feasibility studies to creating an ongoing marketing plan. Mr. Gleeck is the author of Secrets of Self Storage Marketing Success--Revealed! as well as the producer of professional training videos on self-storage marketing. To receive a copy of his Seven-Day Self-Storage Marketing Course and storage marketing tips, send an e-mail to [email protected]. For more information, call 800.FGLEECK; e-mail [email protected].

A question I am frequently asked by self-storage operators is what they should do if a tenant passes away. Before society became so litigious, I used to recommend having co-tenants, if possible, on each space. For example, if the person renting was married, he would name his spouse as co-renter so she could have right of access to the unit. In recent years, however, I have changed my position. I now recommend allowing only one person to be listed as tenant. However, this creates a problem when the tenant dies.

The general proposition is when a renter dies, it is not up to the self-storage operator to decide who gets the property stored in the unit. If you accept rent from someone other than the deceased, you may be improperly impacting the decision as to who gets ownership. While laws are different in every state, there are some general concepts of which you need to be aware. Most important, when your tenant dies, and you do not have a spouse or other co-tenant listed on the unit, you cannot simply turn the contents over to anyone who comes to collect.

The most common mistake I see is an operator accepting payment from a friend or family member. Accepting payment—at least in the form of a personal check—may, in theory, validate the argument you have accepted this person as the new tenant. The preferred way to be paid is by check from the probate estate. The check would be written by the estate of the deceased tenant, rather than another individual.

When any person dies, his estate may or may not go through probate. Probate is normally determined by the type and size of the assets left behind. Often, if the deceased has minimal assets--no real estate, stocks, bonds, etc.—and is married, the estate does not probate because none of the assets need to be transferred via the court to the surviving spouse; they transfer automatically by the way they are titled. Further complicating the process is not everyone has a will naming an executor or an administrator.

When a tenant dies, several questions should be asked of the person listed as the emergency contact on the lease: Did the deceased have a spouse? Did he have a will? Is that will being probated? That is, are there sufficient assets that the court will open a probate case to dispose of the assets and manage the deceased's debts?

Probate

Probate is the best situation for the self-storage operator. If the estate is probated, you need only find out from the court the name and address of the administrator or executor of the estate. Most probate courts issue what is called a certified letter of authority, which puts the world on notice a particular person is the authorized executor or administrator to act on behalf of the estate. If someone tells you he is the administrator or executor of your tenant's estate, you need only ask for the certified entry. A copy in your file is sufficient to allow that person to pay rent, remove possessions, or enter a new lease agreement.

Do not be surprised when, in some instances, the probate estate cannot pay rent immediately after it is opened. Sometimes it takes time to martial assets, and the probate court needs to approve certain expenditures. If you have a certified letter of authority and the rent cannot be paid immediately, you should contact an attorney to help you file a claim against the estate, to be paid before the estate is closed. Depending what state you are in, that could be six months or more; but you can at least have reasonable belief you should be paid.

Insufficient Assets

The next situation is one in which the deceased had a will naming an executor or administrator, but the assets are insufficient or not of the character that would require, under normal circumstances, the estate be probated. The best solution here is to request the heirs open a probate estate anyway. It is unlikely, but it could happen that a relative arrives to take claim of property you have already turned over to another. If the heirs have opened an estate, you have the protection of the probate court and a letter of authority.

Your second option is to open a probate estate yourself on behalf of the deceased. This is a less attractive option because of the cost to the self-storage facility. The best you can do in this situation is obtain a copy of the will and a release with indemnification from the executor/administrator and as many of the relatives as you can. Ask the people who come to the facility looking to get into the unit to provide a list of all of the deceased's relatives.

If you are forced to collect such releases, obtain them from as many relatives and others who might have lien interests in the property. Relinquish the property to whomever the releases indicate. Get a receipt, and check proper identification. Be sure you understand the risk of litigation when proceeding with this alternative and, if possible, have an indemnification provision in your release. Under this option, you are always at risk. There can be claims from relatives, friends or creditors that possessions in the facility belonged to them and you had no right to release them. The best you can do is obtain as many releases as possible and proceed with caution.

You will want to open the unit and see if there is any property that appears to belong to anyone other than the deceased—for example, mail, a car or some other item that obviously belongs to someone else. That person would need to be notified, if possible. Please keep in mind, however, that proceeding without actually opening an estate does not offer you any protection from all possible claims. The only failsafe way to proceed—especially where assets have value—is to open an estate.

Your third and final option exists when there is no will, no executor/administrator, and no assets to be probated. In this situation, you'll need to force the opening of a probate estate on behalf of the deceased or obtain releases with indemnification agreements from as many people as possible.

By this point, many of you are asking, "Why don't I just send out the notices required by my state's self-storage statute and sell the goods?" There are several problems with this line of thinking. First, a relative may have tried to pay rent, which means it isn't actually delinquent. It just means you weren't able to accept rent without the inference of entering a lease agreement with the new party. Second, most state statutes require you send certified-mail notice to the tenant. If you know that the person is dead, by most statutes, you have not effectuated service such that you can proceed with a lien sale. If you proceeded with a sale, it would be at great risk of a lawsuit.

The better the documentation you have now, the fewer problems you will have later. Gather as much information about your tenant as you can: who your tenant is, who his relatives are, emergency-contact information, who may have liens on the property, and who may store property in the unit. The more information you have, the better armed you will be to release property in the event of your tenant's death, and the less likely you will be sued for doing the best you can.

Jeffrey Greenberger practices with the law firm of Katz Greenberger & Norton LLP in Cincinnati, which primarily represents owners and operators of commercial real estate, including self-storage. Mr. Greenberger is licensed to practice in the states of Ohio and Kentucky, and is the legal counsel for the Ohio Self Storage Owners Society and the Kentucky Self Storage Association. He is a regular contributor to Inside Self-Storage magazine and the tradeshows it sponsors. For more information, call 513.721.5151.

Crowded markets and a lagging economy over the past year tested the myth that self-storage is recession-proof. Some stores faired well. Others saw occupancy levels plummet. Many dropped rental rates. Overall, it was one of the toughest years the industry has yet faced.

Like the rest of American businesses, the self-storage industry was still reeling from the 9/11 tragedies when 2002 began. The last quarter of 2001 proved to be damaging for many self-storage operators. "We certainly saw a slowdown of new business immediately following this tragedy and never totally recouped those lost rentals," says Ken Myszka, president of Buffalo, N.Y.-based Sovran Self Storage.

The plunge in rates and occupancy levels can also be attributed to the recession the country was already experiencing. Sept. 11 simply brought it to the forefront, says RK Kliebenstein, owner of Coast-of-Coast Storage in Boca Raton, Fla. "A lot of people still blame their woes on Sept. 11 or even use it as a benchmark in time," he says. "But if they looked at it realistically, they really had those issues before the Sept. 11 time frame."

In fact, most agree the current recession began as far back as March 2001. It has been a boon and a burden for the self-storage industry. While some self-storage owners squeaked by--and some were forced to sell--those looking to get into the business or expand an existing one found readily available capital--and lots of it. Some markets saw good rental-rate increases. Many, including a few big-name companies, watched rates hit an all-time low.

"We had a very difficult year," says Jim McNamee, regional vice president for Shurgard Storage Centers Inc. The Seattle-based company, which lowered rental rates in several markets, was hit especially hard in California, where it experienced erosion in occupancy and rate levels. "We were down about five percent across our system," McNamee says.

Although occupancy did bounce back somewhat during the first and second quarters of 2002, some say the self-storage market has softened. "Rental rates and occupancies have dropped below historical stabilized levels, and some analysts are concluding there are some overbuilt markets," says Michael Kidd, president of the Self Storage Association. "The good news is the pace of new construction nationwide appears to be slowing down. However, when there is a concentration of new starts in a specific market, existing facilities are experiencing a more severe impact as those markets become more saturated."

Another factor that changed the market in 2002 was the May acquisition of Storage USA by General Electric. With the multimillion-dollar name tag, GE brings even more attention to an already overcrowded industry. "It's certainly driving a lot of new money into the industry," says Len Kosar, the company's president and CEO.

The Law of Supply and Demand

Overbuilding was one of the biggest issues for self-storage in 2002. "A lot of markets around the country are generally overbuilt," McNamee says. "If you're going to be the 10th guy on the same street, I don't know what purpose that serves. We see that happening all over the place." Kliebenstein adds, "It used to be there were just pockets of overbuilding, and now it seems there are just pockets of real opportunity."

One of the reasons for the overbuilding in some markets is available capital. "So long as lending institutions make construction money available, developers will build--whether it's apartments, offices, industrial buildings, retail stores or self-storage. The lack of demand and an oversupply matters little," says Ray Wilson of Charles R. Wilson and Associates, based in Pasadena, Calif.

Another reason is some developers are still not doing feasibility or demographic studies before setting up shop, says Jim Chiswell of Palymra, Va.-based Chiswell and Associates. "If the person had spent a little bit of time and a little bit of money to really research, he would have realized it wasn't a sufficient market to justify building another 70,000-square-foot store in that micro-market." What you end up with is three or more self- storage facilities within a 3- to 5-mile radius. This quickly fills up the needs of a market.

"Now it appears we have reached a point, in certain markets, where 'pent-up' demand has been satisfied and change in demand is not occurring," says Kidd, who attributes this partially to the change in disposable income. "Many consumers have less to spend today, and consumer confidence is declining. The economy may be limiting disposable income to such a degree that where self-storage was previously used for convenience--that is, to just store unwanted property--customers no longer opt to use it that way, at least not at rates paid in the past."

Wilson agrees. "The prolonged recession has caused a lot of uncertainty among the general public, and consumers' disposable income is shrinking," he says. "For some, who have been storing their goods out of convenience rather than out of need, the time has come to either throw them away or bring them home. Using self-storage is no longer an option because they cannot afford it."

The change in demand can also be defined by geography, says Ken Nitzberg, president of the Emeryville, Calif.-based company. "If you're in major markets where there isn't high unemployment or low-wage jobs, you'll probably weather the storm better than someone who's in an area that suffered huge unemployment or has relatively low-paying jobs."

In some markets, however, demand has increased. Chiswell attributes this to more customers using self-storage as a lifestyle choice. "In many of the Northern markets, during this time of the year, people are putting their lawnmowers and backyard furniture into storage and out of the unit come snowmobiles and snow blowers," he says. "Instead of storing these items in their garage, they're integrating self-storage into their lifestyle."

And there are still a number of markets with only a handful of self-storage facilities. "A best guess from some of the largest operators is only 50 percent or so of the general population has ever used self-storage," Wilson says. "If that's true, then we still have room for growth. We still have room for better-designed facilities in better locations with better management."

Kidd agrees. "There is no doubt some markets are overbuilt, and the industry is experiencing a retrenching. However, other markets are still very attractive. It will just require more development experience and management expertise to stabilize and excel than it did a couple of years ago."

Falling Prices

Having too many self-storages in one market can eventually lead to a decrease in rental rates. Several self-storage owners, including Glendale, Calif.-based Public Storage Inc. and Shurgard, two of the biggest players in the industry, were forced to drop rates in 2002 because of increased competition and a decrease in demand. "Last year, we saw a tendency for operators in older, first-generation products to discount more heavily than current-generation stores that were just trying to compete on an even basis," Kliebenstein says.

That holds true for Shurgard, say McNamee. "We particularly get impacted at our older stores, and that makes it more difficult for us in the overall total. In our newer stores, we've learned from 20 years of development. We do a better job of site selection and generally ride those out better. But our competition tends to come in those areas where it's easy to develop. They're usually competing against some of our 10-, 15- or 20-year-old properties."

Storage USA also moved rates in some of the bigger markets--Chicago, Los Angeles and New York City--in its battle with competitors, Kosar says. "Overall, our rates are holding this year."

Some markets have simply hit the ceiling, Wilson says. "And now owners can only sustain the same level of occupancy by lowering rents or offering more discounts. In some markets, increasing discounts hasn't been enough; physical occupancy is continuing to decline."

How the industry weathers the supply vs. demand storm will test the theory that self-storage is recession-resistant, says Mike Burnam of Columbia, Mo.-based StorageMart, which was able to maintain rate and occupancy levels in 2002. "In the super-strong markets, where there isn't a lot of competition, we haven't seen that much fall-off. What has affected this business more are new competitors."

On a positive note, new development continues to be on the decline. One reason is tighter loaning restrictions. "The lenders are afraid to loan," Nitzberg says. "They tend to look at self-storage as just another piece of real estate and part of a national market. A lot of lenders are increasing their loan requirements and their requirements for security-collateral guarantees, and that's choking off some of the supply of cash."

Banks are also more discriminating when it comes to their lendees. "Banks are being more selective on the experience factors of their borrowers and the amount of equity they have on their projects," Kliebenstein says. "It is a little more difficult for folks getting into the business for the first time who don't have development or management experience. The banks are looking a little more critically at how they get that experience, and because they don't have it, they may be thinking more equity should be required in the projects."

Surviving and Thriving

How does a self-storage operator--big or small--survive in today's market? "Everyone is looking for the magic answer," says McNamee. One way is through site selection. "Our strategy is to go into markets that have significant barriers to entrance for the traditional self-storage operator," Nitzberg says. "They require more capital. There are extensive zoning issues. There are extensive building-permit issues. It makes everything more difficult, more expensive, more time consuming. In those markets, you tend to have less facilities, lower saturation and higher demand. And in those markets, you can sustain your rental rates and your occupancy."

One trick up Storage USA's sleeve is simply the GE brand name. "It is a recognized brand that has tremendous awareness. Can that help us in the self-storage game? We have some compelling evidence that it can," Kosar says. The company is also pickier about where it develops. "We are sticklers for data and modeling in this industry. We know we can explain 80 percent of self-storage success with two topics: demographics and competitors within 3 to 5 miles. Are there still opportunities for development? Absolutely. You just got to be a lot smarter than you were five years ago."

Another way to succeed is simply by being the best on the block. "We're finding a much more difficult sales environment," McNamee says. "We're focusing on treating those individual opportunities like gold and making sure we close them. You have to convert a lot more customers in fewer opportunities. You have to hire and train staff exceptionally well when it comes to welcoming incoming customers or answering the phone."

Dropping rental rates should be the last option, Chiswell says. "Price is not the No. 1 issue people think it is. Are there certain markets where price is the determinant for the percentage of the market? Sure. But this idea that the only way to compete in a market is to lower your rent is a mistake."

Instead, owners should focus on improving customer service and the overall look of the facility. That includes having a quality retail area with boxes, locks, tape and other supplies. Store owners are also eliminating high counters in the main office. "People don't feel comfortable standing at a counter filling out a rental agreement," Chiswell says. "Offering a comfortable setting--a place for them to sit--creates a whole different atmosphere between that potential customer and the manager."

Customers are on the lookout for more services and amenities when they shop for storage, Myszka points out. "There are--and always have been--two types of customers: those who shop price alone and those who look for value. I believe you will continue to see new products and services added throughout the industry in response to more educated consumers."

Good customer service has become crucial in today's competitive market, Burnam says. "We know more about our customer and our business than we've ever known before because of some of the things we've been doing and researching." That includes how calls come in and from where; how managers answer phones, and handle and follow-up the calls; and the use of phone centers. "I can't imagine operating this year without access to a phone center," Burnam adds. "We can attribute almost 1,000 rentals that we would never have received had we not been a part of a phone center."

Foreign Affairs

While the U.S. self-storage industry has weathered stormy waters, the foreign market is making huge waves. "There is no question international development is getting a great deal of attention here in the United States," Chiswell says. Shurgard and Devon already have presence in the United Kingdom and Europe. Others, including Storage USA, are looking to enter the market.

"Over the next several months, we're looking at what would be our potential entry strategy into Europe. We are keenly interested in the European market," Kosar says. GE has a 35 percent equity position in a self-storage company called Access, which has operations in Europe and Australia. Also, GE already has enormous presence in Europe, owning real estate and several factories.

"It's just still a very immature market, but at least it exists and it's growing," Kosar says. Europe has a population of roughly 292 million and less than 500 self-storage facilities. Compare that to Florida, one of America's most crowded markets, where there are more than 2,000 facilities and a population of about 15 million. "We see the numbers. We see big companies who are really blazing the trail for what looks to be a growing, viable industry, and we want to be a part of it."

However, there are several obstacles standing between American self-storage companies and the European self-storage customer. "The European lenders are still learning this business and financing remains an area that needs to be overcome," Chiswell says. The public also needs to be educated on what the product is and how to use it. One way Devon has done this is through pictures. "In Europe, all of our advertising consists of pictures that show people using self-storage," Nitzberg says.

Another barrier is available land. "Ground-up projects are even more difficult to build than here," says Nitzberg. "It's very difficult to buy land, especially near a city, or find open space near the people. Houses are tiny. Stores are tiny. They're all packed wall-to-wall. Land is very precious. They just don't have the kind of space we have here."

Lease-up is also much slower than it is in the United States. "Because people have to figure out what self-storage is," Nitzberg says. "But what happens is, when you hit about 30 to 40 percent occupancy, it tends to take off and the leasing goes almost vertical. The tenants you do have start telling their friends and associates about the new, neat thing they found."

Americans interested in foreign markets are encouraged to have strong foreign contacts so they have someone with local market, language and custom experience and knowledge, Kliebenstein says. "To try and do it from Des Moines, Iowa, and penetrate Amsterdam is very difficult." He points to Shurgard as an example. "Gaining the local expertise is probably the biggest challenge. We don't know all the customs and the rituals. There are some things we just don't understand from here that are very natural to them. And they don't understand things we do as well. It's a very different environment, and that's why you need local, experienced people to do that."

One niche opportunity for successful U.S. self-storage operators is to provide their expertise in joint ventures or invest in overseas companies. "Many of the companies currently engaged in self-storage expansion in the United Kingdom are publicly traded. I see an opportunity for direct investment in some of these companies through stock purchase," Chiswell says.

Budding Markets

Another arena in which self-storage is booming is the Australia and New Zealand market. "The industry in Australia and New Zealand has experienced strong growth over the past two years, fueled by high levels of consumer confidence and a buoyant housing market that has been underpinned by historically low interest rates," says Paul McFadzien, the immediate past president for the Self Storage Association of Australasia. "This has lead to continuing industry expansion that has been most noticeable in the main cities of Sydney, Melbourne, Brisbane and Auckland."

While self-storage has existed in Australia for a few years, the Asian market is entirely new. "Based on existing and known new projects, this market is slowly developing," McFadzien says. "Having said that, Singapore-based StorHub Self Storage is soon to open that country's first two facilities and apparently has a strong growth strategy."

Although in its infancy, many companies are keenly interested in the Asian market. "Self-storage can work in a place like Hong Kong or Tokyo," Kosar says. "The housing costs are so high. The housing is so tiny, and yet you have consumers over there who crave Western-type lifestyles. A lot of people are constrained by the fact they don't have a place to put the bicycle they want to ride on the weekend."

Steel Storage Group, a major player in Australia and New Zealand, has also turned its attention to the Pacific. "Asia has suddenly become interested in self-storage with many large real estate companies and developers now either entering or looking to enter our industry," says Brian Perry, managing director of Australian and Asian-Pacific operations. Steel Storage is currently building several major facilities in Singapore and has more in the planning stages in Singapore and Hong Kong. The company has also completed a new eight-story complex in Tokyo, with eight more in some stage of development.

The key challenge facing the industry in these foreign countries is education. "We need to ensure that whether it's potential customers; local, state or federal government agencies; insurers; or the legal fraternity, they all know our industry, the services it offers and its difference from traditional warehousing," McFadzien says.

The Canadian market is also seeing resurgence. The country currently has roughly 1,500 facilities, according to Gerry Gotfrit, president of StorageMaxx Canada Inc., the real estate company leading the revival of self-storage in Canada. StorageMaxx's first acquisition was Checkerboard Self Storage, a 60,000-square-foot property in Burlington, Ontario, Canada. The goal is to acquire 40 more properties in the next 18 months in major markets including Toronto, Calgary and Vancouver.

"The Canadian self-storage market is unique. Ownership of facilities is fragmented. There are few significant players. Growth potential is substantial--a minimum of 5 percent a year," Gotfrit says. "We're under-stored, and we're also going into a vertical population. People are going into condos and retirement homes that require storage."

Like in Europe, land is at a premium and Canadian investors are hesitant about self-storage. "Our Canadian banks are not in love with the storage business because they view it as month-to-month leases," Gotfrit says. "They don't underwrite it like they do in the United States. They're quite timid about the business and investing in it." However, StorageMaxx has secured financing through a GE Capital and Deutsche Bank. "We just think it's a great opportunity to consolidate the business in Canada. We see a real opportunity to add more stock into the population," says Gotfrit.

Although the foreign market is growing, everyone agrees it will not surpass the American market anytime soon. "There is still too much opportunity in our own backyard," Kliebenstein says. "It is very expensive, and the risk profile is much higher for growing this business in Europe and the rest of the world. U.S. capital may find its way overseas, but there are so many barriers to entry that I do not see the independent owner-operator--the backbone of our industry--packing off to Europe to build self-storage operations. It is amazing how many owner-operators do not want to develop beyond a 25-mile radius, much less 2,500 miles!"

The self-storage industry may have had a rocky year, but everyone interviewed for this story remains positive about its future. "Self-storage continues to be one of the best entrepreneurial opportunities in America," Chiswell says. "One thing for all developers to keep in mind is getting the store built is the easy part. Successfully starting the store and achieving stabilized occupancy is where the 'heavy lifting' comes in but, in many cases, it gets the least attention."

Everyone loves package deals because they provide extraordinary value and a feeling people are getting a better deal than everyone else. A storage facility can purchase a package that includes an entry-access keypad, exit keypad, management software, real-time integration, lightning protection and toll-free technical support, all at a very reasonable cost. I'm talking about cutting-edge, durable products with no restrictions on the number of tenants or access codes. Package deals are nothing new, but the secret is knowing how to find bargains.

Travel agents have always offered special-combination hotel and airfare deals. Lenders offer attractive credit-card merchant rates to their construction-loan clients. Construction companies offer package deals when you use their preferred architect because they know he will use cost-saving designs compatible with their work. There are hundreds of other examples of packages in various industries. This business strategy makes sense, since administrative and support fees are consolidated with compatible products. The vendor offers lower prices and everyone comes out a winner. Now, let's see how this same cost-saving strategy applies to self-storage.

In every area of self-storage, there is fierce competition for the savvy shopper, especially in the field of security and management products. Management software is available from dozens of companies, including innovative leaders, aging brand names and struggling newcomers. Their products range from modified accounting programs to enhanced contact managers to specialized industry software. Loyal readers of this column are already familiar with the newest advances in management and security products. It's time to talk value.

Not all brands of security and management software are compatible. Thus, the costs of integrating these products will have a signif cant effect on purchase price and maintenance costs. There are three types of integration offered in self-storage:

Universal Interface

About 15 years ago, professionals in the self-storage industry developed a generally agreed upon set of standards that defined how management software and security products should share information. The standards were officially labeled "universal interface." Unfortunately, it was a voluntary system, and it did not take long for dozens of variations to appear.

Eventually, universal interface became little more than a marketing term. Over time, other standards have tried to take its place, all with varying degrees of success. Contrary to its name, universal integration does not mean you can mix any access system with any management software. Instead, you have to ask each company with which systems it integrates and what special products you must purchase. Typically, the hardware and software required adds cost to your purchase and may restrict you to specific versions of each company's products.

There are also a few hidden costs. For example, major updates to your management software may require an expensive update to your access security. Furthermore, the support agreement with the security company may not cover support for your management software, even when the issue relates to your access codes. If you are determined not to replace existing management software or access products, universal interface may be your best choice.

Preferred Integration

With a preferred integration, software companies each choose a preferred security vendor. Their recommendation may be an unbiased desire to satisfy your security needs, or it may serve as payback to a company that recently helped close a sale. There is no way for you to determine the motives of your sales agent.

The costs associated with a preferred integration can be lower than that of a universal interface, but not all preferred deals are good for the consumer. A preferred-integration package deal may be a savvy way to bundle outdated products or a desperate attempt for financial survival. Finally, even if two companies have a good relationship in the present, there is no guarantee they will maintain a cooperative relationship for years to come.

Turnkey Integration

During the last 10 years, software companies have been developing their own lines of security products. Likewise, security companies may have introduced their own brand of management software. As a result, administrative costs were reduced and the combined retail costs of both product lines were reduced. As an added benefit, the consumer has only one number to call for support on either product line. The most powerful features of turnkey integration are pay-at-the-gate rent collection, individual door alarms, remote management, and real-time viewing of surveillance cameras. In addition, the cost savings of turnkey integration can be significant.

Over the next few years, more companies will be moving to turnkey integration. In turn, package deals will become increasingly popular. Saving money is only a matter of knowing what to look for and who to ask.

Writer's note: An upcoming issue of TechTalk will suggest products and gadgets that improve manager efficiency and tenant convenience. Please e-mail me if you use an item you would like included in that column.

Doug Carner is the vice president of marketing for QuikStor Security & Software, a California-based company specializing in access control, management software, video surveillance and call-center products for the self-storage industry. For more information, call 800.321.1987; e-mail [email protected]; visit www.quikstor.com.

One of a self-storage manager's worst fears is entering his facility one morning to face an angry tenant waiting at the front desk. The tenant is extremely upset because some electronic equipment he had stored in his unit has disappeared, and he wants to know what happened to it. When you check the scene, you find no broken lock or kicked-in door to indicate there was a break-in. What could have happened to his equipment? You know it didn't get up and walk away, but there is no physical evidence proving there was a crime.

THIS SCENARIO, AND ONES SIMILAR TO IT, CAN OCCUR AT ANY STORAGE FACILITY, no matter how well managed or secure. If you are a storage owner who retains copies of your tenants' keys, this type of incident can seriously impact your liability. As a self-storage owner, you do not take bailment of your tenants' property; therefore, goods are stored at tenants' own risk--as long as you are not negligent. When you maintain keys for the units, however, you change that situation, since you can enter a unit at any time. In this situation, you assume liability for the goods stored.

Burglary, robbery and theft are very common and can be committed by strangers, tenants and acquaintances in the area--even your own employees. There are legal differences among these three criminal terms, and it is important to know what they are.

Robbery occurs when an intruder accosts a victim for the intent of stealing from him. The assailant may be armed and usually targets a victim when he is least expecting it. A tenant may be robbed when he is accessing his unit and not paying attention to his surroundings. For this reason, it is good to have security cameras for surveillance.

Burglary happens when items are stolen because of a break-in; unlike robbery, there is no confrontation between the victim and the perpetrator. Burglaries are usually discovered because of physical evidence left behind. A manager may come in to work one morning to find a few storage units opened or damaged and their contents missing.

Should a burglary or robbery occur, the tenant is responsible for insurance to cover the loss or damage. Hopefully, he has a tenant-insurance policy. Some tenants may try to hold the owner liable for their stolen goods and pursue litigation.

Theft, also known as mysterious disappearance, happens when items are taken without evidence of forcible entry and no victims were confronted by the perpetrators. The scenario at the beginning of this article is a perfect example of theft because there was no broken lock or damaged door, and items from the unit were taken without the tenant's knowledge or consent.

When someone is robbed and there is no evidence of forcible entry, it would be natural to assume the person who stole the items had a key to the unit. There are an unlimited number of ways someone with the intent to steal can get a copy of a key. It's as easy as a tenant losing her purse--with a key and information about her unit--and a stranger with bad intentions finding it. A friend or acquaintance might steal the key from her home or office, eventually helping himself to items in the unit. Copies of keys could be stolen from the management office during a burglary, putting tenant units at risk. The worst-case scenario would be a disgruntled employee who steals the keys, makes copies, returns them to the office and later robs tenants after he quits working for you.

Why would a manager keep copies of tenants' keys? Some owners ask managers to inspect for hazardous materials or other criminal activity; copies of keys are kept so managers can make their rounds whenever necessary. This is not a safe business practice. If you are concerned about criminal activity, alert the police and have them handle the problem. Another reason would be in case a tenant loses his key. However, if a tenant loses his key, it is his responsibility to call a locksmith. Some facilities keep keys to accept packages and deliveries on tenants' behalf.

If you are about to renew your insurance policy and your insurance company finds out you retain keys, don't be surprised if it requires you to sign a form stating you no longer retain keys before it will renew your coverage.

It is understandable that a manager may have reasons to retain keys; but when it comes down to the risks associated with this practice, the odds against you are too great. Find alternative ways to inspect your units and assist your tenants with lost keys.

Universal Insurance Facilities Ltd. offers a comprehensive package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, write P.O. Box 40079, Phoenix, AZ 85067-0079; call 800.844.2101; fax 480.970.6240; e-mail [email protected]; visit www.vpico.com/universal.

A self-storage manager can be courteous, meticulous about paper work, one of the nicest people in town and maintain a spotless facility, but if he doesn't understand how to use the most important tool in the office--the telephone--you end up with an empty facility that houses a really friendly maintenance person. While all the mentioned traits are important in a manager, strong sales skills are the most crucial. And yes, sales skills can be learned. Just as someone is not born a doctor or attorney, you are not born a salesperson, necessarily. With training and repetition, even the most timid manager can be great at sales.

With storage facilities built next to each other, it is even more important for managers to have strong phone and sales skills. Almost 90 percent of prospective customers will call a facility before visiting the site; they will typcially make two to seven calls before making a decision. When the phone rings, the manager has one chance to convince the caller his facility is special and the best choice for the customer.

A tremendous amount of money is spent getting the phone to ring. An exceptional manager will be excited about the phone ringing, assuming it is a new customer. The main purpose of the phone call is to get the customer to visit the facility. A great phone presentation will determine a sense of urgency--get the caller to visit the site immediately or as soon as possible, no matter when they need it. Remember, they are calling because they need storage. People don't call around to get prices because they are curious about storage rates. Managers prepared for the phone call have the best ratio of calls to visits.

The customer may initially think he is shopping for the best price, but the manager needs to redirect the conversation toward educating him about the facility and how it will best serve his needs. You are the storage professional, and while the customer may think he needs a particular size or type of unit, you have special knowledge that will assist him in getting what he really needs and will probably save him money, making that customer very happy.

If the person answering the phone at the facility is new to the industry, a phone script may provide some assistance. Just be sure to keep the script flexible enough to allow employees to reinforce the strong points of the facility without simply rattling off the features. The customer needs to feel the manager really knows the facility, is proud of it and can relate the product and services to the customer's needs. Be careful choosing the words and language used. Try to communicate on the customer's level, understanding that technical terms storage employees use on a daily basis don't mean a thing to the caller.

Good business practices require you document each phone call and mentally review it to determine if all issues were covered. This will create a good habit and ensure the next phone call received addresses every key point.

With training, time and repetition, everyone answering the phone at the facility can become a great salesperson. It's not enough to just quote prices and be nice on the phone--you must know your product, be proud of it and truly want the caller to rent his unit from your facility. When you convince the customer you are the best person to handle his storage needs, not only will you get the sale, but you will have started a great relationship with the prospect that leads to referrals, better collection and an overall better business.

WHEN PREPARING FOR THE PHONE CALL, HAVE A NOTE PAD, SCRIPT OR LIST THAT PROMPTS YOU TO INCLUDE THE FOLLOWING ISSUES IN THE PHONE PRESENTATION: 1) Ask the caller's name and give him your name. Use his name several times during the call to build rapport. 2) Ask how the prospect heard about the facility. This is very important for future marketing. 3) Give detailed directions to the facility, including important landmarks. 4) Ask questions to determine the prospect's needs. 5) Add value to the property by explaining facility features and how they will benefit the customer. 6) Quote more than one unit size. 7) Ask for the sale. Create a sense of urgency by inviting the customer to visit the facility today to view the unit, then either assign the unit at that time or prelease it. 8) Offer ancillary products--boxes, locks, truck rental, etc. 9) Finally, bring up any other unique features or benefits of the facility that will help you convince the caller to close the phone book and drive directly over.

Rebecca McMahan is president of Management On Site Training Inc., which specializes in training, consulting and property management in the self-storage industry. For more information, call 713.838.2339 or e-mail [email protected].