Construction Corner is a Q&A column committed to answering reader-submitted questions regarding construction and development. Inquiries may be sent to [email protected].

The fire department is requiring me to put a Knox Box on the outside of each of my gates. What are they and why do I need them?
WILBUR IN CHANTILLY, VA.

A Knox Box is a key switch or box that is usually mounted to the entrance keypad, fencing or wall of a facility gate and is used in case of an emergency at your site. The fire department, not having a gate code or key to your entry gate, uses these boxes to gain entry.

The key-switch variation is nothing more than a bypass wire to your gate motor. The fire-department personnel uses a special key that works with all Knox Boxes to open the gate. Sometimes it is just an empty box, similar to what realtors use, which holds a key to a padlocked gate. These are usually only used at facilities that do not have keypad-controlled access.

Make sure all low-voltage wiring is included in the architects blueprints. Have each of your low-voltage vendors supply a CAD or plan page for the architect to include in the bid plans. This ensures the electricians and other contractors properly plan for the right amount of conduit, electrical outlets and junction boxes. Do not wait until the last minute to call your low-voltage vendors.

Tony Gardner is a licensed contractor and installation manager for QuikStor, a provider of self-storage security and software since 1987. For more information, visit www.quikstor.com.

Renters of Caughlin Ranch mini warehouse and RV sin Reno, NEV., often ask co-owner and onsite manager Bob Ryan if they can have his job. From the cascading waterfall surrounded by verdant landscaping to the posh three-story managers home, the entrance to the 7-acre facility looks more like a luxurious hotel than self-storage. The opulence doesnt end there. Theres also a 120-foot-deep-by-30- foot-wide underground cave for wine storage and ample boat and RV covered parking.

The $5 million facility, which opened Sept. 1 and was 20 percent leased in three weeks, garnered prestige from the self-storage industry, as well. Mini-Storage Messenger magazine named it Facility of the Year for 2003.

Caughlin also has the honor of being the only self-storage facility in its area. The Caughlin Ranch area is sort of the Beverly Hills of Reno, Ryan says. The master-planned community has very strict CC&Rs that forbid driveway RV and boat storage. But unlike many facilities forced to fight neighbors and planning boards, this storage center was welcomed with open arms. The master plan, written some 20 years ago, even called for a self-storage center. We really fill a need for this particular community, Ryan says.

The Caughlin Ranch Mini Warehouse is the creation of Ryan and business partner Gary Sabatini, a partner at Sierra Management, which also serves as the property-management company for another Reno facility. Two years ago, Sabatini, a longtime friend, approached Ryan and his wife, Lonae, about the business venture. Although the couple had no experience in the self-storage industry, they took a leap of faith, selling their house and Ryans business, and moved to Reno.

Were both in our sixties, and its sort of a retirement-type of job, Ryan says. With Garys background in investing, we felt fairly competent. Mike Crom, the general contractor as well as an investor, also joined the team.

Construction began in June 2002 but was met with some delays while obtaining proper permits from the city. The partners broke ground in December 2002 and completed construction in just under a year. The facility encompasses 360 storage units of various sizes, including 10 15-by- 60 units, 77 indoor RV/boat units and 50 canopy-covered units. The managers living quarters totals 1,880 square feet with a 1,280- square-foot garage. The 680-square-foot office is detached from the house. The home even has an impressive view of Reno.

The 35-foot waterfall greets customers as they drive up. Next to it is the entrance to the wine storage cave. Landscaping totaled a whopping $100,000. The care and expense in detail can be greatly attributed to the community. Homes range from $200,000 to $3 million. The facilitys façade needed to blend with the surrounding neighborhood.

Being that it is such an affluent community, building a high-end wine storage facility seemed a no-brainer. The first 80 feet of the cave is designated for valuables such as furs, fine art or furniture. The remaining area is for wine. There are 275 wine lockers of various sizes, holding as little as nine cases or as many as 70. Ryan is also taking orders for custom lockers. The wine cave, which opened in October, has been well received. Were getting a lot of calls. And Ive already rented out one of our large units to the International Wine and Food Society of Lake Tahoe. They have about 100 local members, and well get involved in their wine-tastings, Ryan says.

Security is also a top priority. In addition to having on-site managers, 24 hours a day, seven days a week, the facility has video surveillance and control gates with limited access. We feel this is without doubt the premier facility in Reno, and one of the premier facilities in the United States, Ryan says.

For more information, call 775.826.8777.

In 2001, several key people from City Self-Storage and I visited Poland and the Czech Republic to scout for possible places to open more facilities. The owners of the company had been evaluating Warsaw, Poland, as a potential market. One owner, The Selvaag Group, had already opened an office there to observe the market closer, and so we visited.

Warsaw seemed like a world of concrete buildings, and since the weather was bad, we had an unusually poor first impression of the city. There were lots of buildings for sale, but the prices were sky high after several years of boom in the real estate market.

The day after, we visited Prague, the capital of the Czech Republic. This city is a little bit smaller than Warsaw, and we received a very different impression from it. It was sunny when we arrived—about 90 degrees—and our hotel was in the middle of the old town. We wanted to move there immediately. When we met with brokers the following day, they told us the type of real estate we were looking for was plentiful and cheap. We thought we were in self-storage heaven.

Four months later, after more studies on the disposable income of the local residents, and after looking closer at the large group of Americans and Germans living in Prague, we decided to open several self-storage facilities in the city. But because we had no connections there, I wasn’t sure where to begin. I had heard horror stories about Western companies being robbed by the mafia or their own employees. One company told me that when it visited its local office in Prague, everything was gone—the people, furniture and cash in the bank. They lost more than $100,000. We were going to transfer nearly $2 million to cover expenses. What if it all disappeared?

The solution was close to home. I called my brother, Christian, who had successfully turned around another of our small companies in Oslo, Norway, in the totally unrelated field of gas stations and quick car lubes. I asked him to oversee the operations in Prague. After some negotiations, he was on his way.

In the former communist countries, everything is difficult. Just to rent an office takes forever, and getting phones and other equipment is a hassle. I suggest using a hotel-office provider, such as Regus, a worldwide operator of business centers. It is much more expensive, but it will probably be cheaper in the end.

We quickly found a property to buy, an old factory just five minutes from the city center with fantastic frontage off the street. It was 75,000 square feet, ready to be converted into the first self-storage site in Eastern Europe. We figured the purchase transaction would be quick. Four weeks later, we still had not met with the seller. When we finally reached him, nailing down a selling price was difficult. Rather than giving us an asking price, he wanted to know how much we were willing to pay. We were told this is how it works in the Czech Republic. The maximum price a buyer can pay is the starting point for negotiations. Clearly, it was not the way we do things at home in Scandinavia.

Unfortunately, the day we were supposed to meet with the seller was Sept. 11, 2001. When we walked into the meeting room, everyone was pale. We were told of the terrorist attacks in New York and Washington, D.C. Our problems seemed very small, indeed. It was strange to negotiate while wondering if World War III had begun. But we were able to complete the transaction.

The next phase of the project was to get the needed permits to convert and operate the facility. It was much harder than we ever imagined. I participated in a meeting with one of the technical departments of the city, and I could not believe my eyes. The meeting room was full of beer bottles, and there was even a canary in a cage! The people were friendly enough, but I understood why things took time. After seven months and many, many meetings, we finally got the permits to open.

One positive experience we had was the hiring process. Young professionals in this city speak English well and are interested in working for foreign companies. The work morale is high, and it was easy to find a dynamic, friendly and driven staff.

We finally opened the facility in May 2002. We had a high number of calls to our office, so we thought the site would fill up in record time. That did not happen. Our marketing plan had been successful in reaching the middle class, but they could not afford self-storage, even if the demand was huge. We turned to businesses and more affluent populations, and the site filled at an increase of 15 units per month.

Then came the flood. It was reportedly the worst flooding in Europe in more than 100 years. Our property was just 30 yards from the Vltava River. All the tenants’ possessions were destroyed, and we had to rebuild the site. It was a major setback.

Several months after the flooding, we reopened. The rent-up is going well, and we just recently opened another site in Prague on the D1 motorway just south of the city. Well armed with the knowledge from our first selfstorage opening, this one took just three months to open. If you ever visit Prague, look for City Self-Storage in the Yellow Pages.

Carl August Svensen is the founder of City Self- Storage, one of the biggest self-storage operators in Europe, with 25 sites in five countries. Svensen is the chairman and majority owner of Cron Industries, an investment company based in Oslo, Norway, which also owns City Self-Storage with the Selvaag Group. For more information, visit www.cron.no; e-mail [email protected].

Throughout the month of November and December, the storage facilty at the end of my street displayed the following message on its changeable frontage sign: Hide those holiday gifts with us! Half off December rent. This was good. What was better was the change in sign for January: Out with the old, in with the new? Dont throw it away! Store it with us! Now thats marketing.

Our January issue has traditionally included our State of the Industry Report, in which we interview 10 to 15 of the biggest players in self-storage, and ask them to summarize their observations of the current market as well as make predictions for the upcoming year. Its lack in this years edition is not an oversight; neither should it be construed to mean this feature is extraneous or unattainable. It is quite simply that after years of supplying alternate versions on a similar theme, it seemed more useful to tell readers what to do about the state of the industry rather than recapitulate it.

What we know about the condition of self-storage is there is increasing rivalry over market share and suitable sites. The product becomes sophisticated as facilities encroach upon residential over industrial areas, but also as consumer requirements grow more refined and diverse. Operators ferret out inventive ways of attracting prospects, securing their business, and extracting information on how to keep them satisfied. And developers exploreand attemptinternational progress more than ever before.

In October, we discussed ancillary products and servicessuch as wine, records, mobile and vehicle storage, as well as truck rental, shipping services and the sale of retail products as ways for facilities to remain competitive and increase revenue. But not all operators have the means or inclination to provide these offerings, nor should they necessarily need them all the time in every locale. This issue addresses the least every facility needs to be public, prepared and profitable.

Were talking about advertising, marketing and promotions; and thats a jungle of confusion for many managers who have no training in these areas. Theres more to publicity than a Yellow Pages ad, but with the glut of advertising options provided through technology and human innovation, how do you know what works? What gives the best return on marketing dollars? To which approaches do consumers best respond?

The articles you are about to read will help you decide on a marketing budget; plan special events to draw prospects; and rival even the most savvy competitor. Yes, clever signage, such as the example cited above, can be part of that super strategy. So heres a sign for you: Lost in the marketing maze? Read this issue of Inside Self-Storage! (Shameless, I know. But it had to be done.)

Happy holiday wishes to all,

Teri L. Lanza
Editorial Director
[email protected]

Large operators spend countless hours planning their advertising activities, hence their (generally) more impressive incomes and sales numbers. Every facility, regardless of size, can effectively plan and execute basic marketing strategies. This article discusses the steps needed for successful marketing of todays self-storage operations:

Step 1: Understand the program goal

Step 2: Cover the basics

Step 3: Establish a budget

Step 4: Understand the unique cost per lease and set targets

Step 5: Assess the situation

Step 6: Learn to meet and greet

Step 7: Take action

Step 8: Measure results

Step 9: Compare performance

Step 10: Create awareness

Understand the Program Goal

The primary goal is to create marketing programs that accomplish the following:

• Create total service-area awareness. This means defining on a map, based on traffic flows and boundaries, the stores service or market area. This is sometimes not a 3- or 5-mile ring, but an egg-shaped area due to major thoroughfares or natural boundaries. (Remember the customer perceives convenience as a 10-minute travel time.)
• You will want to know as much as possible about this target area: businesses, residences, single- or multifamily complexes, major employers, universities, military bases, etc. The goal is to target this area for your marketing messages and actions. This allows you to focus specifically on consumers most likely to use your service, and denotes the area of focus for advertising and marketing expenses. Note where competitors are on the same map.
• Increase traffic and sales by targeting the above area. When the need for storage arises, you will be the one prospects choose to visit.
• Create more accurate sourcing and demographic information by gathering specific data and accurately accounting for customers buying patterns, sources, location, preferences, etc. Use the data to frequently update your marketing programs. This way, youll be able to create programs and services that have maximum effectiveness.

Cover the Basics

When handled correctly, these basic functions and features are responsible for the bulk of our rentals:

• The attributes and location of the store
• The salesmanship of the team or manager
• Customer service and conveniences
• Advertising and promotions
• Friendly and motivated managers
• A complete set of knowledge

The first thing you must realize is marketing is a normal manager function and should be discussed in the hiring process. A facility manager or team should understand basic customer- service dynamics and how important the development of awareness and community participation is to the success of the store.

Advertising and marketing expenses are normally 3 percent to 6 percent of income for stabilized stores of average size, and will be needed pre-opening as a cost of start-up. Lack of planning has caused hardships for many managers and owners. Plan adequately for marketing in your annual budget, which should address 16 key areas. These allocations are unique to each store location and market area:

• Membership in your local chamber of commerce. Attend as many functions as possible on a regular basis, and use the membership list to send fliers, broadcast faxes or e-mails.
• Membership in the national Self Storage Association. This is the voice of the industry and an important connection to industry activities and actions.
• Membership in your state association. This is important for the obvious reasons of local involvement, legislative support and peer networking.
• Subscriptions to industry publications.
• Printed materials, such as brochures, fliers, invitations, postcards, business cards, referral cards, mailers or any other items needed to complete your plan.
• Yellow Pages ad(s). Identify how many books you will want to be in for your market area and how large an ad is needed, along with the cost for color, etc., necessary to compete or gain attention.
• Internet ads and/or website. There are several industry-specific providers of website design and online reservations and payments.
• Uniforms/nametags. These are a must so you and your team members can always be identified. Rentals come from contacts made everywhere!
• Promotional items. This could include anything from coffee mugs to nail files to candy jars or key chains with your facility name, phone number and website printed on them.
• Postage. Include adequate postage to complete monthly and mass mailings.
• Local events/sponsorships. Owners sometimes sponsor local school sports teams as part of their ongoing community participation and goodwill, or participate in community flea markets, carwashes, wine-tastings, etc.
• Referral programs. Referrals are the most sought after of all rentalstheir cost is the lowest, they are presold before arriving, and they can account for a significant percentage of each months rentals.
• Curb appeal. Your curbside view needs to change weekly, as drive-by traffic ceases to notice the same old message. Consider balloons, street-side signs, curb paint, landscape changes, pennants, banners, etc.
• On-site signage. Make sure your facility is easy and convenient to navigate. Consider keypad signs that welcome and instruct, gate signs with office and access hours, building numbers/letters, rules and regulations, marketing messages in models and restrooms, thank-you signs at the exit, etc.
• Ongoing training and education of employees. This is often neglected, but it is critical. Hire for attitude, train for skill. Budget accordingly.
• Miscellaneous. A well-thought plan, properly funded and staffed with motivated, know edgeable employees is the goal. Miscellaneous items will, from time to time, be necessary. Keep these to a minimum and include any reoccurring items in next years plan.

Establish a Budget

Usually, two six-month plans are easier than an annual plan and allow for updates from the prior periods results. Remember to include a six-month supply of promotional items, printing and postage in each plan. Allow for a nominal amount of extras in the budget and then stick to it. In addition, be sure you understand all the costs associated with each action or item, e.g., labor, cost for renting mailing list, etc. I suggest tracking not only what percentage of income is used for advertising and marketing, but also the cost-per-foot expenses. Involve managers in this process and provide them expense feedback.

Understand the Unique Cost Per Lease and Set Targets

This leads us to another of our goals: to have a lower cost per lease (CPL). I have frequently witnessed experienced operators who have no idea what they are paying for each lease. In many cases, they are unknowingly spending several hundred dollars for each rental. The CPL is found by dividing all leases into all advertising and promotions costs. An effective CPL in the Southeast, for example, would be $50 or less. At this rate, expenses would remain within normal parameters.

Compare your store with others and weigh the unique attributes of your location, drive-by traffic, percentage of repeats and referrals, etc. Set a goal, track the number and work to improve with continued lower costs each year. Technology is a great assistance in this goal.

Assess the Situation

Summarize your current situation. What are your best traffic sources? Which programs are most effective? Drive-bys and the Yellow Pages are the two most common sources of prospect traffic. Ask yourself what percentage of your total traffic each source represents. What does each cost, in total and per lease?

Understand your teams effectiveness at converting callers to visits and visits to leases. Know who your best customers are and why, how they found you, and what products or services they like best. Gauge the effectiveness of each marketing program and team member, and define what skills and actions are needed to meet targets youve set for traffic, callers and leases. The resulting conversion numbers may indicate more training or traffic is needed.

Learn to Meet and Greet

Your facilitys success starts with you. Know the difference between marketing and sales. Marketing is creating awareness, while sales is the actual production of or taking of an order.

Below are the steps for a successful marketing visit, one that allows you to leave customers feeling good about having met and interacted with you. This is the goal of any cold call. If youve made a good impression, you can begin developing a rapport and start to get referrals or direct business. You can accomplish 15 to 20 of these calls in an hour or two. If you are a single store manager without other team members, stop to make one call each day on the way to or from the bank or post officeby the end of the month, you will have visited 20 to 25 new prospects.

• Prepare for successhave all materials planned and ready ahead of time. The goal is to have a well-groomed person with great attitude visiting a targeted group and distributing a clear message.
• Before your hand touches the door, put a smile on your face.
• Take the lead on each call. Go directly to the first person with whom you make eye contact.
• State your business in specific terms: who you are, the company you represent, why you stopped by and what materials you brought with you.
• Timing is everything, so plan who youll visit (apartment managers, real estate agents, retailers, etc.) and when (time of day and day of week).
• Make a favorable impression and leave. You should be in and out within a few minutes.
• Follow up as agreed, then call, mail, visit and repeat on a consistent basis.

Take Action

Set specific goals and take action. I suggest using a personal marketing-goals form on which results can be reported each month. Managers set their goals for a six-month period, indicating what actions are needed during each month. These include target numbers for personal visits, follow-up phone calls, marketing faxes, marketing e-mails, letters or fliers mailed, or any other type of marketing messages. The actual number achieved is measured against the goal number, and the percentage achieved is shown as the marketing-goal score for each month.

Some stores may not be able to e-mail or fax, but each store can and should take some action each month to assist in achieving a consistent marketing message at all times. Great, creative ideas and plans are nothing without action.

Measure Results

You can measure the traffic sources for all your rentals using a software program. Keep in mind, however, the information gained is only as accurate as the person providing the input. Be sure all marketing and advertising programs are listed as choices in the software; for example, if you are using ValPak mailers or a broadcast-fax program, make sure these choices are available. Set a goal number for each category and measure results. Inform all team members of each program and how you want to track the activity. Adjust each years budget based on this information.

Compare Performance

Track the results and changes of your traffic sources. I suggest tracking six major areas: drivebys, Yellow Pages, referrals, repeats, direct marketing and other, which includes billboards, the Internet, hotlines, ValPak, etc. If you have multiple locations, youll want to compare results within your group. Youll also want to compare with other industry data. The results will bear out the true effectiveness of each program and the changes made over time.

Create Awareness

Creating awareness is what marketing is all about. Make contact frequently and consistently to ensure your impact and success within your targeted market area. Managers need to be adept at meeting and greeting, and getting the word out about their unique stores and the services they offer. Follow these easy steps, create and implement a simple and effective plan, measure your success and have fun.

Anne Ballard is the founder and president of Universal Management Co. as well as the president and executive director of the Georgia Storage Owners Society. Universal manages more than 30 facilities in Georgia, North Carolina, South Carolina and Virginia. For more information, call 770.801.1888; visit www.universalmgmntco.com.

As we begin the new year, our roundtable of real estate experts discusses the national self-storage market. Lets hear what they have to say about their respective cities and regions. Joining us in our survey this month are: C. William Barnhill, Omega Properties, Mobile, Ala.; Clifford Crowe, Lee & Associates, Carlsbad, Calif.; Dale Eisenman, Midcoast Properties Inc., Hilton Head Island, S.C.; Larry Hayes, Larry Hayes & Associates, Missoula, Mont.; Richard Minker, Richard D. Minker Co., Fort Worth, Texas; and Joseph Mendola, The Norwood Group, Bedford, N.H. I will also contribute some comments on the national marketplace.

DESCRIBE HOW YOU SEE THE RECENT CAP-RATE TRENDS IN THE SELF-STORAGE INDUSTRY. DO YOU SEE CAP RATES CONTINUING TO MOVE UP? HOW FAR DO YOU THINK THEY WILL GO?

Barnhill: It is obvious cap rates have been trending downward due to combined pressure of property demand and low interest rates. Because cap and interest rates are sensitive, it is unlikely cap rates will vary substantially until interest rates significantly rise. The status of the economic recovery will ultimately be what drives the increase in cap rates. It is unlikely we will see them exceed the 10 to 10.5 range in the immediate future.

Crowe: There is a big rush of investors in California trying to move the equities from other property types that have lower yields (for example, apartments in the 6 percent cap range) to storage properties. Where the cap rates were 9 percent to 9.5 percent last year, they are now nearly one point lower due to high demand. The storageproperty owners are holding, creating a further move to find development sites. These, too, are in short supply. With the huge move, in due time, the pendulum will eventually tilt to over supply, but not today.

Eisenman: I think they are fairly stable. No, I dont think they are moving up.

Hayes: Cap rates are moving down or stabilizing, not going up. As interest rates increase, there should be a corresponding upward movement of cap rates. Unfortunately, there will probably be a lag, creating a time when buyers will refuse to purchase until the upward adjustment is real.

Mendola: Cap rates should remain relatively low, in the 9.5 percent range, for properties that are not in the all-cash category. As long as investors can achieve a 10 percent cash-on-cash return going in and the mortgage constant is under 10 percent, sellers and buyers should benefit from this positive interest-rate market.

Minker: We are finding the use of cap rates as a guide, since each buyer makes his own adjustments and has his own interpretation of the net operating income (NOI) to which to apply his cap rate. Therefore, while one investor may arguably be paying a 9.5 percent cap, another could only be paying a 10 percent cap at the same price because the NOI is different. With that said, we are seeing better quality properties selling at a sub-10 cap rate, while older properties are in the 10.5 to 11.5 percent range.

As others have noted, these are truly remarkable and historic times in self-storage for cap ratesremarkable, but are they sustainable?

IS THERE MORE OR LESS 1031 MONEY IN THE MARKETPLACE? THERE SEEMS TO BE QUITE A BIT. DO YOU SEE THIS CHANGING? IF SO, WHY?

Barnhill: Although the capital-gains tax rate has been lowered to 15 percent, investors still are inclined to defer whatever tax they can with 1031 exchanges. Some, however, elect to pay the tax and reinvest. There is a substantial benefit to starting with a new tax basis, due to the benefits available through cost segregation and the 50 percent bonus depreciation available to new property with a depreciable life shorter than 20 years.

Crowe: In California, there is an abundance of 1031 money waiting for replacement property.

Eisenman: Possibly, as interest rates rise, there may be fewer sellers of other product types, generating less exchange money. Also, if alternative investments look attractive (securities, other real estate product types), they may move money away from self-storage.

Hayes: There has been a glut of 1031 money in relation to available properties for reinvestment. Many people are making the decision not to sell because they are concerned about finding replacement properties.

Mendola: There seems to be plenty of 1031 money looking for a home in self-storage. Investors realize there is a sunset provision to the Bush 15 percent tax on capital gains. Also, the gain on the recapture portion of the increase is still at 25 percent. There are a lot of savings to be had with a 1031 exchange.

Minker: There appears to be more 1031 money in the market as investors of all kinds of real estate try to maximize gains in existing properties and seek different types of investment products to purchase in a somewhat favorable financing market. They are of the mindset that higher interest rates could make future sales/purchases more difficult.

At the same time, with capital gains rates at low levels, should an investor not find a replacement property, the tax burden wont be as great as it was in the past.

Barnhill makes some very subtle and valuable observations on paying the tax. I think running the math against the new depreciation laws may yield a surprising answer.

WHAT WERE SELF-STORAGE RENTAL RATES AND OCCUPANCIES LIKE IN 2003? HOW DO YOU SEE THIS CHANGING IN 2004?

Barnhill: Rental rates have been fairly stable in our area, but we still are seeing cost incentives available. Overall, occupancies should remain stable in our region during 2004.

Crowe: The rates in California range from $1 to 1.60 per square foot, with occupancies averaging in the 90-plus percent range. There are some pockets that are different, but the market should be strong in 2004.

Eisenman: It varies by market but, generally, occupancy was high. I cannot predict, but we may see occupancy rates decline unless the economy improves.

Hayes: Rental rates and occupancy have remained stable with only a few rental increases. New facilities coming on the market will absorb most of the potential to substantially raise rents or increase occupancy.

Mendola: In 2003, occupancy came down to 80 percent from 90 percent for well-positioned properties in our market. We are missing the increase in job formation along with the moves and housing formations, as well as consumer confidence that accompany them. With Bushs tax plan now in effect, job formation should increase significantly in 2004 and 2005.

Minker: Self-storage rental rates in much of the North Texas market were almost flat. In fact, owners who were keeping rates flat had to increase discounts to maintain existing occupancy levels in the face of increasing competition. Therefore, even if unit occupancy remained stable, economic occupancy, in many cases, fell. As to occupancy in mature properties, owners struggled to maintain existing levels. Overall occupancy rates declined throughout the market.

It is clear more product and a slower economy are having some impact. It is amazing that occupancies and cap rates can go down at the same time; eventually the trends will be parallel.

ARE BUYERS CONCERNED ABOUT VACANCIES OVER 10 PERCENT? GENERALLY, HOW IS THIS CONCERN HANDLED DURING THE SALES PROCESS?

Barnhill: Some buyers view a significant vacancy factor as a buying opportunity, since they would hope to buy existing rental occupancy and enhance income through more effective operation.

Crowe: There is always concern with vacancies! More service for less money is what happens when the supply exceeds the demand.

Eisenman: Yes, particularly if vacancies are significantly greater than 10 percent. It causes the buyer to look much harder at the market and the facility. Rarely will a buyer ignore large vacancies as solely a management issue. Purchase price reflects all factors: market, management, occupancy, facility condition, rental rates, etc.

Mendola: Yes, buyers are concerned about greater than 10 percent vacancy rates in the Northeast because we are used to 90-plus percent occupancies. I talk about our missing customer coming back in 2004, the high-tech and financial-industry job formation the stock market is pointing to this year.

Minker: Buyers seem to have come to expect occupancy to be less than 90 percent. They are less willing to capitalize income that is not currently there. Buyers are looking at the current overall market condition and trends. If they view the vacancy as an opportunity, they may be willing to factor some incremental amount in their offer to reflect it. However, if they view the occupancy to be flat or in a declining market, they might, in fact, submit a reduced offer to offset the market risk.

Significant vacancies are a classic issue of the glass being half full or half empty. The opportunity or problem is in the eyes of the beholder but for sure they wont pay an 8 percent cap on the vacancy.

ARE YOU SEEING MANY DISTRESSED SELF-STORAGE PROPERTIES AND/OR FORECLOSURES?

Barnhill: The availability of distressed self-storage properties is extremely limited in our area at this time. Foreclosures could certainly become a factor as new construction continues and given an environment of rising interest rates.

Crowe: Not in California.

Eisenman: No, not in my territory.

Hayes: None here.

Mendola: No. In the Northeast, properties are in strong hands and excess supply is temporary in most markets.

Minker: We are not currently seeing distressed self-storage properties or foreclosures coming to the market. Owners with troubled properties are somewhat putting their head in the sand, anticipating the market will get better and enable them to sell their properties under more favorable conditions. Unfortunately, it may be some time before these favorable conditions exist.

We are following a couple of recently built projects that are leasing very slowly in predominately soft areas. The numbers do not look good, but there is still some time left on the loan.

Michael L. McCune has been actively involved in commercial real estate throughout the United States for more than 20 years. Since 1984, he has been owner and president of Argus Real Estate Inc., a real estate consulting, brokerage and development company based in Denver. In January 1994, he created the Argus Self Storage Real Estate Network, now the nations largest network of independent commercial real estate brokers dedicated to the buying and selling of self-storage facilities. For more information, call 800.55.STORE or visit www.selfstorage.com.

I have never been a big fan of New Years resolutions. My viewpoint is probably colored by the fact I have never been able to keep resolutions beyond the first week of January. In retrospect, my failures were mostly due to trying to immediately give up bad habits I had spent a lifetime cultivating, or solving complicated problems over which I really had no control. I suppose it didnt help that I frequently made these resolutions after a half-dozen martinis. In any event, this year may be different.

As I write this, it is just before Halloween and it appears to have snowed. That would not be unusual for many of you, except here in Southern California it is 85 degrees and hasnt actually snowed in the last hundred years. What looks, at first glance, to be off-colored snow is actually ashes, one-quarter-inch deep in places. Of course, I already know it is ashes because I watched for several hours as flames approached to within 150 feet of my house. I know somewhere in these ashes are what remains of several hundred homes and all the worldly possessions of thousands of people. I also know that in these ashes are, in part, the remains of 13 of my fellow human beings.

This year may be different because my resolutions will be simpler. This year, I resolve to truly appreciate what I have in this life and how fortunate I am to have it. If just one of you joins me in this resolution, all the work I put into getting this months article written will have been well worth it.

Anyway... When the fire broke out, I was putting the finishing touches on what surely would have been a Pulitzer Prize winning piece on how to eradicate the world of all vermin and pestilence using only water and sawdust. Unfortunately, an ill-timed power failure fried all my unsaved documents, so it will have to wait for another issue.

In the meantime, I am resorting to the old fallback we know as answering readers questions. Usually, those of us who write dont resort to doing this unless we have completely run out of ideas or have waited until an hour before the deadline to begin writing. You never want to use this journalistic mulligan this early in your run. Ideally, you would save it for when you spent your last week of deadline at the Craps table and main lounge at the MGM Grand. Fortunately, I have received a number of e-mails with some questions that bear being answered here.

Are those plastic owls I see at the garden shop effective in keeping pigeons away? If not, do you have any ideas?
FROM B.C. IN NASHUA, N.H.

Its interesting that three of the questions I received were about pigeon control. As a rule, visual devices like plastic birds of prey, foil streamers and such offer brief relief at best. It doesnt take pigeons long to figure out whatever you are trying to scare them off with wont actually eat them. Sometimes, just to show us who really runs this planet, they will cake the fake owl with poop and leave the surrounding area spotless. OK, maybe its a stretch to assume they are doing it to mock us, but after a day or so, the plastic bird is just another thing to sit on.

The same holds true for just about any device you might use to chase pigeons off. A number of large airports spent a pile of money on noise cannons, literally large gun-like devices that emit a loud boom-type noise to scare away pigeons and seagulls. After a few days, the birds would merely jump a few feet at the sound of the cannon firing. Soon, birds that frequented the area learned to ignore the sound. Worse yet are those so-called ultrasonic devices. The only chance of gaining any control using ultrasonic bird repellants is if the pigeon laughs itself to death.

As with many pests, the best way to keep pigeons away is to eliminate nesting places and roosting spots. Eaves and gables can be relatively easily covered with some sort of netting. Anti-roosting devices come in several forms, the most popular being a spike strip that can be attached to any surface a bird might sit on. Spike strips can be easily installed by the property owner and cost roughly 45 cents per linear foot.

Finally, controlling birds with chemicals or poison should be done only as a last resort and is best left to someone who is licensed. In many places, it is illegal for an unlicensed person to use poison in the control of nuisance birds.

A few years ago, there was a lot of stir about the impending killer bee invasion. Was it much ado about nothing or are we still doomed?
S.M.C. IN BREMERTON, WASH.

Africanized honey bees were first reported in the United States in 1990 and, by the beginning of 2003, had spread to most southwestern states. There have been a few fatalities due to attack by killer bees and a few dozen other incidents resulting in injury to humans. The big concern was Africanized bees would mate with the native honey bees and genetically infect them with whatever evil genes make the African bees so nasty. It would appear the opposite has happenedgood winning out over evil, so to speak.

Make no mistake about it, Africanized bees are dangerous creatures, and if you I live in an area where they have been reported, dont mess with anything that looks like a swarm of bees. (Good idea, Captain Obvious!) Chances are, if you live in a warm southern state, they are on their way. Are you doomed? Yes, we all are. But even if you live in an area with a known Africanized bee population, your chances of being stung to death are pretty slim.

I dont know if this is a pest-control question, but I have several stray cats that prowl around my facility. They do occasionally catch rats and mice, but some of my tenants have complained about smelling cat urine and feces. My local animal-control office hasnt been much help. Is there anything I can do to humanely rid my property of this problem?
FROM C.G. IN HENDERSON, NEV.

Feral cats are very much a pest-control problem. While they may have some minor value as a method of rodent control, they will introduce more pests than they will consume. In addition to carrying diseases that can be transmitted to domestic pets, they carry parasites, like ticks and fleas, which can transmit disease to humans. In addition, there is undoubtedly a percentage of your customer base that is allergic to cats.

Your best bet is to use live-catch traps. These devices are cage-like traps baited with cat food, with a spring loaded door that closes behind the animal when it enters to take the bait. While you can purchase them, many animal- rescue organizations will let you borrow them at little or no cost, and take the cats off your hands for a small fee. With a little luck and a lot of patience, you should be able to handle this situation without shelling out a pile of money. In the interim, make sure they dont have any alternative food sources like open dumpsters or trash cans.

Thank you all for the questions and comments. Your feedback goes a long way in determining what I discuss here. If you have any ideas on subjects for future columns, Id like to hear from you.

Ken Berquist is a field representative at R&D Pest Services in San Diego. For more information, e-mail [email protected].

There are many vehicles that can carry the message about your facility. Almost daily, you see newspaper ads, Yellow Pages, fliers, direct mail, websites, and dozens of other means proclaiming a product or service. This article outlines several methods of garnering customer attention and making the most of it.

Designing Your Ad

If you choose to use display ads, it is important they are designed for maximum impact. An ad need not be large to convey your message and grab readers attention. When designing your ad, pay careful attention to the following:

The Headline. You must first motivate prospects to read beyond the headline. This is crucial, especially if you consider 70 percent to 80 percent of consumers do not read beyond the bold type at the top of an ad. Successful headlines present news or promise specific benefits. Keep heads simple and direct. Do not use language that confuses readers.

The Body. The body must clearly and concisely help prospects understand the advantages of responding to your ad. Be specific and use attention-grabbing phrases. Let prospects know the benefits your facility offers. If your most attractive feature is climate control, keep that foremost in your mind while developing your ad. If your wish is to emphasize a state-of-the-art security system, your approach will be different. The body of your ad must clearly reflect your objective in serving the customer.

The Five Ws. Always cover the basics of who, what, when, where and why. Make sure the ad clearly states the purpose and function of your business. Include your address and any nearby landmarks, such as a shopping mall, as well as your phone number and business hours. The more specific your text, the easier it is for readers to grasp. For example, do not say you have high ceilings. More effective text clearly states, 12-foot ceilings available. If you are advertising security, make sure your ad clearly specifies what features you offer, such as lighted, 12-foot, razor-wire fencing.

Use Endorsements. Nothing attracts prospects like the endorsement of a distinguished hero or respected celebrity. But, to be effective, endorsements or testimonials must be believable. Dont overdo it, or you will lose credibility.

Guarantees. Guarantees should be expressed prominently in your ad; but be careful about using ambiguous or misleading text. Use disclaimers if necessary.

Coupons. A coupon at the bottom of an ad offering 25 percent off the first month for a limited time attracts prospects to your business and provides important feedback on which printed ads are most effective. Develop coupon-code numbers to track your ads efficiency.

Design to Stand Out. You must use a design strategy that grabs a readers attention. For example, a unique or bold border can help an ad pop. If you are including a photo or illustration, make sure it is a clear portrayal of your primary message without a lot of frills or clutter. If you are using a sale or contest coupon, make it large enough for prospects to easily write their name, address and phone number.

Once your ad is designed, it is time to consider where it will be used. There are several ways to advertise your storage business.

Yellow Pages

Although the Yellow Pages tends to be expensive, its the best source of advertising, says Mary Briggs, a writer for Kevin Howard Real Estate. The bonus is people who pick up the directory are already in the process of selecting a facility; you dont have to sell them on storage. You do, however, have to sell them on your facility setting yourself ahead of the competition.

Keep in mind larger ads tend to attract more attention. Make sure you match or beat your competitors ad size. If you decide to save money and go with a smaller ad, you may end up losing a lot of business in the long run. In some areas, larger Yellow Pages ads garner preferential placement in the directory, says Briggs. If you have two or more facilities, you might afford a larger space by listing them both in one ad. Most areas have more than one directory available. Before buying space, check the circulation of each, when they are published, and if the listings are accurate, complete and up-to-date.

According to Fred Gleeck, a self-storage consultant, there is no research or evidence to support the assertion that being first in a Yellow Pages section generates more calls. Dont rely on image advertising in your ads. You only need to concern yourself with one thing: renting units. To make this happen, Gleeck says you need to include:

A great headline. Do not use the name of your facility at the top of your ad. Use a headline that combines your biggest benefit with your customers greatest need.

A list of features and benefits.

A storage hotline. Every facility should have a number people can call with a recorded message of its features and benefits.

Maps. Every ad should have a small map with major cross streets to make your facility easy to find.

Websites. Always include your web address in your ad.

Direct Mail

More than 50 percent of U.S. recipients of direct mail read it immediately, and of those, more than 40 percent found the information they received useful, according to marketing bureau Crest Services of Torrence, Calif.

Direct mail can be a very cost-effective marketing technique for storage operators, Gleeck says. What you print at the very top of your mail piece is crucial to its success. Take your biggest benefit and match it with your potential renters greatest need. If peoples attention is not grabbed at this point, theyre lost, he says.

Owners can use two types of direct mailing: Send out a solo piece or participate in some kind of co-op mailer. The second category would include things like Val Pak or Money Mailers, where your piece is included with a group of coupons from other vendors. You have one shot, so make it your best one. Make sure you have a code number or numbers on each direct-mail piece you send out.

The beauty of postcards is they are cheap and easy to create. You can make a decision to do a postcard mailing and in less than 48 hours. If you choose to test a letter over a postcard, remember some key elements: First, never use labels, as they scream junk mail. Instead, use plain white envelopes with stamps (not metered mail), and have letters hand addressed. Gleeck has seen response rates jump more than 800 percent just by following these simple steps.

Special Community Events

Briggs suggests participation in community activities is especially advantageous in keeping the facility visible in your area. Participation in special events works exceptionally well in small, rural areas, but can also work well in larger cities through neighborhood organizations or local business associations. (For more information on special-event marketing, see this months article on Drawing a Crowd.)

Fliers

Fliers are often used for short-term campaigns, such as a grand opening or a promotional special, says Briggs. Fliers can be distributed by the manager (or other sources) in specific geographical areas, such as parking lots and apartment complexes. Keep flier advertising simple, specific and trackable. Keep headlines to less than seven words and body copy to no more than 50 words. Readers tend to have very short attention spans, so give the message quickly.

Tenant Referrals

Word-of-mouth is rapidly becoming a viable source for new tenants, according to Briggs. In some areas, tenant referrals are rivaling Yellow Pages in percentage for sources of new customers.

Stuff It coupons can be included in move-in packets and/or distributed as tenants pay their monthly rent. Offering a discount to current tenants gives them a greater incentive to pass on the coupon, and it also serves as a thank you for their business.

Business Letter

Commercial-and business storage tenants are still a relatively untapped source of new customers for self-storage, according to Briggs. The business letter is an inexpensive method of promoting your facility and services to them. The letter can be targeted toward specific businesses or services, i.e., seasonal inventory storage. It should offer some type of discount or giveaway to track the response, such as 10 percent off or three free file boxes.

The letter can be sent by the manager on a monthly or quarterly basis, or used as an introduction for additional services or a specific event, such as storage of dead and year-end files. It should always be followed with a phone call or visit from the manager to further promote your services.

Cynthia Perun, president of Creative Communications, suggests these seven tips to writing more effective sales letters:

1. Imagine yourself as the reader of your letter as you write.
2. Organize your letter with a beginning, explaining why youre sending the letter, the body, telling the reader why your offer is irresistible, and the ending, where you briefly bring your points together and ask him to take advantage of the offer.
3. Write so the letter is easily read in simple language or a conversational tone.
4. Capture the readers attention by telling him something he wants to know.
5. Get the reader interested.
6. Have the reader desire your service by answering the question, Whats in it for me?
7. Ask your reader to take action.

Internet

Gleeck offers a strategy any storage operator can use to get traffic to his website. By listing your website on a pay-per-click search engine, you can keep track of how many people search for your facility. Then, by purchasing domain names that complement your original and forwarding traffic, you can capture would-be-lost surfers. For example, Gleeck suggests purchasing domains that include your citys name and the terms self storage or storage. If you live in Portland, for example, purchase www.portlandselfstorage.com or www.portlandstorage.com.

Michael Zervas of Michaels/Wilder Group says banner advertising is a cost effective, attention-grabbing, online mode of communication, typically found on commercial or search-engine pages. It allows you to track impressions to learn how many times the banner has appeared in front of a potential customer.

In addition, website owners can track click-throughs to learn how many times a customer has actually been driven through to their specific sites. Facility owners can choose between commercial sites, search engines and reciprocal placements with compatible sites. Consider demographics (education, income levels, number of adults vs. children, number of men vs. women, etc.), targeted mapping (geographic locations of homework and play) and psychographics (attitudes and beliefs), Zervas says.

Signage

Your facilitiys sign is one of the most important advertising methods you have, says Jim Chiswell of Chiswell & Associates LLC. Choosing a facility name that ties into the community is an effective advertising tool. Keep the design simple, with an easyto- read typeface, a limited amount of information and concise message. Make sure the sign is coordinated with the same information a customer will find when browsing the Yellow Pages.

Pamela Alton, owner of Mini-Management, says although zoning regulations dictate where a sign should be placed, the key is to put it on a visible street front where it can be easily seen by drivers. For a facility located nearbut not ona main drag, consider negotiating with a local business owner on the main street to post a directional sign on his property with the name of your facility and an arrow to lead traffic in the right direction.

The right color can make the sign stand out, Alton says. The wrong color can fade into the rest of the neighborhood. Generally, yellow is a standout color, but only if the rest of the streets signs are different colors. Stick to primary colors; pastels are too pale and earth tones too mundane. To make the lettering stand out, consider using contrasting colors, such as black or red letters on a white background.

Conclusion

As technology expands, new modes of advertising are born. Fax and e-mail blasts slowly replace telemarketing, websites become preferable to billboards, and direct mail ousts door-to-door canvassing. Marketing becomes complexmore economical and expensive all at once. As competition in the marketplace heightens, storage owners and managers will scramble to deliver their message to prospects. Though there are ever more options, sometimes the best ones are the tried and true methods of old. Dont be afraid to experiment, but remember your trusty fall-backs.

Let me share with you an incident that makes my point. Barb, a colleague, was standing in line at a retailers customer-service desk, waiting to return an item. The woman in front of her was returning several items, taking each one out of a bag, placing it on the counter, then slowly looking through a large envelope filled with receipts as she searched for the appropriate one.

Occasionally, the woman would hand a wad of receipts to the employee and ask him to look through them for her. Some of the items she was returning had no price tags, which added to the confusion. Meanwhile, the line of customers behind her continued to growas did their impatience.

The stores employee, however, never lost his cool. He calmly and methodically tried to help the disorganized woman. While his efforts to assist her were admirable, the other customers quickly became angry. Was he caught between the proverbial rock and a hard place? Not really. He could have better served all of his customers by asking the woman to step aside and organize her receipts while he assisted the customers waiting behind her.

Too often, companies instill in their employees such a focus on customer servicedoing whatever it takes to satisfy the customer as quickly as possiblethat common sense flies out the window. This particular companys customer-service training apparently had been effective in that the employee was doing his utmost to help the customer. What that training apparently lacked, however, was the flexibility to assess a situation and determine the most appropriate action.

Let me put it this way: Customer-service training programs, like any other training programs, must include an element of common sense. The clerk described here did indeed provide good service to that disorganized woman, but in the process, he frustrated the seven customers standing in line behind her.

It goes without saying that employees who have contact with customers will occasionally be faced with a disgruntled one. My recommendations for dealing with that customer are these:

• Listen actively. Make responses that show you hear what the customer is saying to you.
• Empathize. Comments such as I dont blame you for being upset can do much to diffuse the situation.
• Ask questions. This not only clarifies what the customer is saying but gives him time to calm down.
• Dont become emotionally involved. Remember you, personally, are not the target of the customers anger.
• Identify the problem as quickly as possible. If a job wasnt completed on time, for example, find out why and ascertain the current status of that job.
• If you are at fault, take the blame immediately. Then apologize and thank the customer for being patient.
• Make a sincere, positive statement. You might conclude the conversation by saying, Mr. Smith, you have been doing business with our firm for several years, and we are going to take care of you.
• Solve the problem. Tell the customer how you are going to solve the problem, then do it.

If you want to know how effective your employees are at providing the type of service customers want, there are several tools you can employ. One is a mystery shopper, a person hired to act as a customer who has a problem and anonymously evaluates an employees performance in solving it. That evaluation will help you to identify areas in which further training is needed. Provided that you supply the additional training, it will result in increased sales.

You also can solicit comments from customers at large. Two tools for doing so are telephone surveys and customer-feedback cards. I caution you, however, that when you ask customers for their opinions, you had better acknowledge them. There is nothing more frustrating than taking precious time to respond to a survey and getting no feedback from the company. Remember: If you dont take the necessary steps to satisfy your customers, your competitors will.

John Tschohl is an international management consultant and speaker. Described by Time and Entrepreneur magazines as a customer-service guru, he has written several books on the topic, including The Customer is Boss, Cashing In and Achieving Excellence Through Customer Service. As president of the Minneapolis-based Service Quality Institute, he has developed more than 26 customer-service training programs that have been distributed and presented throughout the world. You can contact him at 800.548.0538 or [email protected].

The most important component in the operation of a commercial records-storage facility is the standard storage agreement. It ensures permanency and a lifetime relationship with your client. There is an industry-standard contract form with features that ensure your long-term success in the business. This article discusses the contract and those standards.

The commercial records-storage industry trade association, PRISM International (formerly ACRC, the Association of Commercial Records Centers), has, for many years, advocated the use of a contract form promulgated by the association for its members. That contract has become the most common storage agreement used by records centers worldwide. PRISM does not guarantee the accuracy or legality of the contract and requires a signed liability waiver from the members who use it.

There are two critical factors important to understanding the function of the contract:

1. No contract, no businessThe contract locks the client to you and makes it very difficult for him to leave you in the future. If you have no contract, or one that is not written with the standard penalties, the client can walk away from the agreement, leaving no value to your hard-earned storage revenue.

2. The price list may differ from client to clientSchedule A is referred to in the contract and is the price list. There should never be a standard list. It should vary based on volume and service levels, and never be published under any circumstance except within a proposal.

Agreement Attributes

The standard agreement form has several very important attributes it should always include. Lets review each of these.

Limitation of liabilityArguably the most important attribute relates to your protection from liability. This specifically ties the records-storage unit (whether a carton, file or specific media) to a flat stated value. Generally, the value is set at either $1 or $2 per unit. Since business records may have varying valuesfrom very low to quite high depending on their importanceit is imperative to limit the value. No one can compute the potential value of a record or the potential cost of recovering a box or file.

Contract termAlthough the contract term for a records-storage agreement is normally one or two years, it can be extended up to five years if negotiations are necessary. We always want the longest term possible so volume can build. The penalties for early withdrawal include payment for the entire term of the agreement. Generally, any outsource contract is limited, by common convention, to five years.

Evergreen clauseEvergreening a contract refers to its automatic renewal at the end of a term. The wording refers to a 30- or 60-day period during which the client has to cancel the contract. Without positive action, the contract simply renews for the next term. Even though the contract reaches its completion, the retrieval and permanent-retrieval charges continue to be enforced.

Permanent removalRecords may be retrieved at any time during the term of the agreement. A retrieval fee plus a delivery fee is assessed on any unit requested from storage. Units out of storage continue to accrue charges for rental, since the tracking requires continued maintenance and review.

When a carton is retrieved permanently, either for destruction or relocation, there is a second retrieval charge called the permanent removal fee. There is no standard for permanent-removal fees; however, a charge that approximates the fee for regular retrieval is customary. Recently, some companies at the high end of the industry have changed this charge from being based on the unit of storage to the cubic foot. This is a major shift in pricing strategy, since boxes tend to be larger than one cubic foot. I have seen unitretrieval fees that exceed $10.

Periodic price escalationYou have the right to increase prices on storage and service as long as you stipulate the escalation period and the methods of increase. Although there has been a troubling trend in the industry to make the escalation unlimited, I recommend you fix it to something tangible, such as the regional cost of living increase as published by the U.S. Government. The price increase may be applied at an interval during the term of the contract or at the end of the cumulative term of the agreement. There may be a maximum increase stated as well.

Schedule AThis refers to the price list. I recommend this never be published, since it can vary from one client to another. Additionally, the list should only cover those services you offer. A description of these should be written on the reverse side of the Schedule A. This ensures the client fully understands the service as you have defined it, and it is clearly stated and agreed to by his signature. There can then be no doubt the client understands the levels of service and prices you offer. It is wise to have him initial and date the Schedule A as well.

Addenda to the agreementThe agreement may be added to at any point during the term of the agreement as long as both parties agree and document it in writing. The appropriate form of an addendum refers to the original agreement and either adds, deletes or changes services, prices or terms.

Client for Life

The issues addressed above must be included in the agreement to ensure you have a client for life. Records-storage volume from existing clients should grow at a rate of 7 percent to 25 percent annually depending on the age of the account. Newly outsourced companies have a tendency to grow at faster rates and decrease to about 7 percent compounded annually after they mature.

If you want to review several versions of the PRISM storage agreement, request a proposal from an existing records-storage center in your community to receive a copy of its contract. It is widely available from PRISM members who are interested in acquiring your business. Of course, I urge you to join PRISM and sign its waiver form prior to using the contract for your storage center. Visit www.prismintl.org for more information.

Regular columnist Cary McGovern, CRM, is the principal of FileMan Records Management, which offers full-service records-management assistance for commercial records storage startups, marketing assistance, and sales training in commercial records-management operations. For assistance in feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail [email protected]; www.fileman.com.