To grow your self-storage business in 2011, youre going to need information and education, tools to help you understand, analyze and expand your operational performance. The upcoming Inside Self-Storage World Expo in Las Vegas, March 14-16, brings together the industrys top authorities with the brightest facility owners, managers, investors and builders to create a dialogue and exchange that is inspiring and altogether unprecedented.

Join us at the Paris Hotel & Resort to see what the ISS Expo holds in store. Attendees should prepare for three action-packed days of seminars, workshops, peer-to-peer networking, product and service exhibits, and specialized interactive events.

Exceptional Education

Five comprehensive tracks:

• Hot Picks
• Day-to-Day Operation & Facility Management
• Facility Marketing & Sales
• Construction, Development, Real Estate & Finance
• Technology

Seminar superstars include:

• John Traver
• Linnea Appleby
• Brad North
• Mario Feghali
• Jeffrey Greenberger
• John Gilliland
• Tom Litton
• Ben Vestal

Hot topics:

• Creating a Mindset for Business Growth
• Free Ways to Get Self-Storage Tenants Online
• Cash Isnt Always King: Manager Compensation and Incentives
• Design-It-Yourself Marketing: Making Printable Promos for Self-Storage
• Using SBA Financing for Self-Storage
• Self-Storage Facility Valuation: Understanding the Worth of Your Investment
• A Guide to Selling Self-Storage in Todays Real Estate Market 
• Creative Self-Storage Marketing: Real-Life Case Studies

Wonderful add-on workshops:

• Legal Learning Live
• Developers Seminar
• Online Marketing Workshop
• Management Workshop

Networking / Interaction

Collaborate with industry peers and experts:

• Roundtable discussions
• Self-Storage Q&A
• Cocktail reception
• Buyers & Sellers Meeting
• Technology Marketplace

Exhibits

Visit with vendors in all key aspects of the biz:

• Software
• Security
• Third-party management
• Building components
• Marketing and Web services
• Insurance
• Financing
• Rental Trucks
• Retail product
• Consultants
• And much more!

Accommodations

The Paris Hotel & Resort delivers opulent amenities at an affordable price. Register by Feb. 18 to take advantage of our special room rate of $139 per night for single/double occupancy. Rates are applicable March 12-17, 2011, and based on availability. To make reservations, call 877.603.4389 and mention the ISS Expo to secure the discount rate. To view hotel details, visit www.parislasvegas.com.

Be Part of the Action!

Dont miss the self-storage industrys largest conference and tradeshow. Come to the Paris Las Vegas during March 14-16 for the best education and information exchange in the business. For details about the expo agenda including seminars, speakers, exhibitors and events, visit www.insideselfstorageworldexpo.com.

Self-storage industry professionals Michael Schwartz and Christian Sonne recently published an article focusing on the history and strength of this asset class in The Real Estate Finance Journal. Titled "Redefining Core Real Estate: Investing in the New Reality, the article suggests that investors of commercial real estate would be wise to add self-storage to their portfolios to achieve optimum balance and success. A full copy of the article can read at www.selfstorageeconomics.com/reprints.htm.

An appraiser and real estate economist by training, Sonne is a senior managing director at Irvine, Calif.-based Cushman & Wakefield and the specialty group manager of the companys Self Storage Industry Group. SSIG, an international real estate consulting team specializing in the self-storage asset class, was born on 2006 from Self Storage Economics, a venture launched by Sonne in 2002. SSIG publishes an annual Self-Storage Investor Survey as well as other industry-relevant resources.

Schwartz is CEO and chairman of the board for Strategic Storage Trust Inc., a publicly registered, non-traded real estate investment trust targeting the self-storage market. Since its launch two-and-a-half years ago, Strategic Storage Trust has expanded its portfolio of wholly-owned properties to include 39 properties in 15 states.

The Real Estate Finance Journal is produced by Thomson West, a Thomson Reuters business. It examines the opportunities and pitfalls facing real estate owners, developers, investors and lenders, focusing on financing, liability, investments, taxes, and asset management.

Industry professionals planning to attend the Inside Self-Storage World Expo, March 14-16, in Las Vegas, can save big on the shows education offerings by purchasing the Premium Package, which includes access to 36 seminars as well as a choice of two specialty workshops.

Priced at a deep discount rate of $595 until Jan. 15, the Premium Package offers a savings of $300. It also includes access to the exhibit hall, cocktail reception and all networking events, including the popular Self-Storage Q&A, Technology Marketplace and Buyers & Sellers Meeting.

Self-storage owners, managers, developers and investors will have access to four comprehensive education tracks covering all of the industrys hottest topics, including collections, lien sales, online marketing, sales skills, manager incentives, facility design, tech tools, and much more. The expos four add-on workshops delve deeper into the critical areas of marketing, legal issues, development and site operation.

The ISS Expo, held at the Paris Hotel & Resort, will also feature more than 100 exhibitors from all areas of the industry including finance, construction, software, security, retail, insurance and more.

Attendees can take advantage of discount room rates through Feb. 15 by calling 1.800.HARRAHS and mentioning the expo.

Details about the industrys largest conference and tradeshow can be found at www.insideselfstorageworldexpo.com. Interested parties can also register by phone by calling 800.230.2311.

After a rash of self-storage break-ins in August, Ga., operators are fighting back by forming the South August Alliance.

Hollywood Storage in Columbia County had the most recent break-in. Two units were burglarized Dec. 13. Earlier this month, video surveillance recorded three men breaking the locks off more than 50 self-storage units at Gate 5 Self Storage. And last weekend, thieves made off with Christmas gifts and a gun from a unit at McBean Self Storage.

The operators claim the thieves have the same method: cutting the fence, breaking off self-storage locks then stealing items inside the units.

Lt. Tony Walden from the Richmond County Sheriff's said the alliance is a positive step. He also said quality surveillance footage goes a long way in identifying and prosecuting perpetrators.

The South Augusta Alliance members plan to meet this month to discuss how they can help police stop the break-ins and find the burglars. 

By Jeffrey Supnick

With credit availability increasing, property performance stabilizing and interest rates at their lowest in decades, its no surprise self-storage sales-transaction volume is increasing. Here are some guidelines if youre intending to list a self-storage facility for sale. They will help you prepare for the transaction and build more value into your asset.

In large measure, buyers and sellers are beginning to once again find common ground on pricing. Sellers feel theyre receiving appropriate value for the cash flow generated from their self-storage assets, and purchasers are paying prices in which theyre comfortable and can still realize upside potential on their investment.

While market fundamentals have improved, a prospective seller should understand todays self-storage buyer is more disciplined and sophisticated than in past years. In addition, buyers continue to be very reluctant to overpay for properties as they may have done in the past. Former Federal Reserve Chairman Alan Greenspan, in referring to the days of the dot-com stock market bubble era, coined the phrase irrational exuberance. This could have also been applied to the self-storage investment market during the period prior to recent financial crisis.

During that exuberant period, there was a great deal of competition for self-storage acquisitions. Escalating operating results made up for mistakes on the part of purchasers, who were willing to pay premium prices to win deals. Banks were feverously doing whatever it took to make loans, and were willing to overlook more rigorous underwriting criteria to maximize loan production.

While loan availability is now up, banks are by no means taking their eyes off of the ball. In todays market, if a buyer is overly aggressive on pricing, his banker will be more reluctant to loan on such a mispriced transaction. For this reason, its imperative that a potential seller has a professional, unbiased valuation of his self-storage property.

A valuation analysis should be prepared by a knowledgeable broker or appraiser familiar with self-storage, one who provides a prospective seller with a basis for gauging buyer offers. The valuation will give you an idea of what you can reasonably expect to net from a sale. It will also reveal your business market position, financial situation, strengths and weaknesses, which you can hopefully correct prior to putting the property on the market.

Planning Ahead

Since self-storage properties are purchased for their cash flow, the most appropriate method of calculating valuation is based on capitalization rate. The cap rate is expressed as a fraction or percentage which, from the purchasers point of view, predicts the return hell derive from operating the storage business, based on a particular purchase price to be paid.

To determine that rate of return, an investor needs to fully comprehend the expected income and expenses that are likely to be generated from your business. The difference between the income and expenses before consideration of debt-service payments, depreciation and income taxes is what is known as the net operating income (NOI). A great deal of confusion arises from the use of cap rates because its possible to state operating expenses in ways that do not fairly address true costs of operation.

What a particular owner spends to operate his property may not be equal to what a typical purchaser might spend.  Normal expenses should include actual repairs made on the property, a consideration of a  reserve fund for future replacement of building components based on expected remaining years of service, all maintenance expenses including do-it- yourself items such as minor repairs or lawncare, and a reasonable management fee.

Its never too early to plan and implement operation procedures that will increase the bottom-line results of your balance sheet, even if you dont have plans to sell your facility in the near future. The process of improving revenue often takes time to accomplish. An owner needs time to make the accounting and operational changes that will put his self-storage operation in the best financial light.

Building the Bottom Line

The rewards can be great. Assume a cap rate of 8.5 percent will be an additional increase in your stores NOI of $8,500 and result in an overall increase in the value of your self-storage asset of $100,000. Lets examine some steps in which you can begin today to create more value in your facility.

Rental-rate management. Most purchasers want to see a trend of increasing revenue to be certain such improvements are long-lasting. For example, theres a difference in the mind of a purchaser between rental-rate increases that were put into effect last month as opposed to a year ago.

Percent occupied vs. total revenue. What many self-storage operators have come to find out lately is their physical occupancies have maintained fairly well, but there has been some pressure on rental rates and concessions to maintain such occupancy. Remember that what the sophisticated investor is purchasing is cash flow, not physical occupancy.

The hotel industry uses a standard called REVPAR, which stands for revenue per available room. This metric is obviously different from a standard of percentage occupancy. As operators, we must continually review our operations to focus on rent per available square foot. This can be accomplished by managing rental rates to either encourage the renting of problem-sized or excess spaces in inventory, and maximizing profit on space categories and sizes in short supply. Again, advanced planning is called for since this process requires time for maximum impact.

Delinquent tenants. Owners are sometimes reluctant to conduct auctions on delinquent units and eviction of deadbeat tenants, fearing that the decrease in physical occupancy will put their self-storage facility in a poor light. Instead, we encourage owners to think about how they will maximize rent per available square foot.  Is a particular tenant paying you a little at a time on a large delinquency? Could such a tenant be replaced with a well-paying one?

Property-tax appeals. Inappropriate tax assessments on self-storage properties are perhaps the single largest expense item that can adversely impact your NOI and the price youre likely to receive. In recent years, local governments are experiencing extreme financial pressure. At the same time, assessors from taxing authorities have taken notice of the very handsome prices paid for self-storage facilities. The assessors have often used that information in assessing self-storage at ever-increasing value, resulting in higher property-tax bills.

Many self-storage buyers have discovered after a sale that taxes on their properties have gone up significantly and, consequently, their anticipated ROI has turned out much lower than expected. Whether or not you determine a property-tax appeal is in order, you should fully understand your assessment and whether a sale of the property at a given price will have adverse or perhaps even favorable tax consequence to the new owner. Many prospective purchasers will automatically project higher real estate taxes where such assumptions are unwarranted or, even worse, where a strong argument could be made for a reduction in taxes, which would actually add value to a sale.

Once you have actively started the sale process, keep your eye on the ball. Don't let your operating performance decline because you're too focused on the sale of your facility. Many purchase and sale contracts have a provision for purchase-price adjustments or cancellation if operating performance declines during the period between contract execution and closing. 

Jeffrey Supnick is president of Supnick Real Estate Co. and a 25- year veteran of the self-storage industry. He has formerly served as a real estate officer for Public Storage Inc. and Storage USA. During his career, hes been responsible for the development of more than 30 self-storage sites. Supnick Real Estate is a full-service firm devoted exclusively to self-storage brokerage, consulting and property-management services. For more information, call 856.722.1414; e-mail [email protected]; visit www.supnick.com.

I-5 Self Storage LLC in Tustin, Calif., partnered with Divine Choices, a California-based non-profit organization that provides sexual-abuse prevention education, to host this years "Scoop the Season, a holiday craft fair.

I-5 Self Storage provided advertising in local media to promote the event, and a diverse array of local vendors participated by offering crafted goods and services to hundreds of local attendees. Music, food and a bounce house accompanied the market atmosphere and provided an opportunity for attendees to fulfill holiday gift lists.

Divine Choices staff and volunteers were available to "raise the awareness of sexual abuse, its impact into adulthood, the ability to discuss it, and teach the prevention of it," said Claire Heath, president of Divine Choices.

Door to Door Storage Inc., a national provider of portable self-storage and moving services, is partnering with Graebel Denver Movers to store customers goods. The Door to Door Denver-area storage operation will be co-located at the Graebel Denver Movers' warehouse, a large household-goods storage center.

Door to Door delivers portable-storage containers that can be filled at the customer's convenience. The loaded containers are then transported to a secure storage facility or the customer's new location.

"Graebel is a well-known and respected company in the moving and relocation industry. We are honored and excited to have this opportunity to work with them serve the Denver market. We see significant potential for growth and to serve more customers with greater efficiency while maintaining the highest levels of service," said Paul Reed, CEO of Door to Door.

Founded in 1996, Door to Door Storage Inc. is a wholly-owned portable-storage and moving company that is not franchised. The company operates in more than 20 U.S. metropolitan markets.