SMD Software Inc. released SiteLink 2009, the largest upgrade for its PC-based self-storage management software to date. The update includes hundreds of new features including PCI-compliant features such as data encryption and password protection. It will run on Windows XP,
Researchers analyzing the DNA of a family of viruses linked to the common cold could one day lead to a cure.
The rhinoviruses that cause colds have been elusive targets for drugs. Studying the genes of all 99 known strains of the germ have helped uncover sections of DNA that consistently appear and may be vulnerable to medications, according to a report in the journal Nature.
Colds and their complications, such as asthma attacks, cost as much as $100 billion annually in care and lost work, said Stephen Liggett, a geneticist at the University of Maryland School of Medicine’s Institute for Genome Sciences in Baltimore, who led the study. Only eight rhinovirus genomes were sequenced when he started the study, Liggett said.
Liggett said he is conducting a nationwide sampling of rhinovirus infections to find more genomes and further expand the list of known rhinoviruses.
Source: Bloomberg.com, Cure for Common Cold May Result From Virus DNA Search
When the warehouse-turned-A+ Storage was originally built, one of its owners was touring with Frankie Valli and the Four Seasons. The other was preparing for his future role as the singing voice of Winnie the Pooh. Today, the duo is making melodies in Nashville’s self-storage market with a warehouse conversion that has won the attention of the historic community.
Owners Tim Stone and Tommy Pierce first hooked up in “Music City” when they were both active members of the entertainment industry. Decades later, they decided to make a new sound in self-storage. They formed A+ Storage of Tennessee and have since completed nine self-storage facilities including this one, the duo’s first conversion project.
A+ Storage opened in an area known as “The Gulch” in May 2008. Once a generic, aging downtown Nashville warehouse, the facility now boasts more than 600 multi-sized climate-controlled storage units, 34 rentable parking spaces, class-A office space and additional space for lease to the residents of the famed Music Row.
“We were looking for a conversion opportunity for quite some time when we found this warehouse in this special area,” Stone says. “This property sits right next to a premier condominium development that Magic Johnson has invested in called the Terrazzo, and its right across the street from another building, the Icon, that is also getting a lot of attention. This was a miraculous opportunity.”
For the storage system design, the developers worked with U.S. Door & Building Components. To pull off the second-floor strategy, U.S. Door’s Access A-Deck mezzanine system was chosen because it doubles the net rentable space and resulting income.
U.S. Door’s project team helped the developers customize the system to fit their unique building design using the Virtual Design Studio that demonstrates unit mixes and expected income with a few keystrokes. The demonstrations took place over the Internet.
The mezzanine flooring system is made from Tradex, a high-density, high-impact subfloor with a polymer top. It is superior to plywood, can accept higher weight loads and take impacts with less chance of damage. Because Access-A-Deck flooring weighs considerably less than concrete, it allowed U.S. Door’s structural components to be placed directly over the existing concrete slabs without additional footers. The system is manufactured completely from hot-dipped galvanized steel and is engineered to utilize load-bearing walls and horizontal partition panels. This was an important feature for the A+ Storage conversion because of the addition of a second floor to the existing one-story warehouse.
From Cordes’ perspective, designing a unit mix that fit the shape of the building and adhering to the height restrictions of the building’s exterior corners was a hurdle demanding keen problem-solving skills. Even though A+ had an advantage with the Access-A-Deck mezzanine system, capitalizing on operational efficiencies by yielding more rentable storage without additional management or utilities costs, the fact that the project was a conversion added some bumps.
“The entire layout was unique,” says Cordes.
The article was written and developed by Self Storage Promotions and Mary Ann Diehl, director of marketing for JanUS Door, a supplier of roll-up doors and related products. For more information, call 407.859.6770; visit www.usdoor.com.
How many times have you heard the Yellow Pages aren’t used anymore ... that it will be an extinct medium in five years? And how many times have you heard those who track Yellow Pages advertising on a regular basis say, “If you cut your Yellow Pages budget without measuring the response and return on investment (ROI), you’ll be throwing out the baby with the bath water”?
Let me begin by acknowledging the relationship of self-storage and advertising in the Yellow Pages has shifted. Yes, things are different. In a nutshell, the days of “if you build it, and advertise it in the Yellow Pages, they will come” are gone.
Usage of Yellow Pages directories by consumers seeking storage may have dropped, but not nearly as dramatically as Web-bloggers and Internet-dependent techies will have you believe. Let me clarify this in numbers: 20 years ago you may have gotten 85 percent of new customers from Yellow Pages. Now the average is closer to 60 percent. More important, the average ROI is still about 3 to 1. As an average, that means some directories and/or markets may not even deliver a break-even; others may bring in a 6-to-1 return. The only way to know conclusively is to measure the performance of an ad with call tracking.
In the old days of Yellow Pages advertising, the publishers would charge full rate, rarely offer discounts, and those rates would go up at least 5 percent every year. Advertisers might not have liked it, but they grudgingly paid whatever was necessary because the medium delivered.
Now publishers are offering discounted rates and many are investing in phone numbers that track the ad performance in order to prove value to the advertiser. They are providing these phone numbers free of charge, along with a monthly (or even online real-time) tracking report. As a storage owner or manager given the responsibility to protect a very large investment, it is incumbent upon you to know what marketing and advertising programs work.
You can take advantage of this climate of economic alarm and misinformation by negotiating with your Yellow Pages rep. Don’t count on getting the same size ad at a renewal rate lower than you are currently paying because that rarely happens. However, you should ask YP reps to put their money where their mouth is by providing a free tracking number to prove the value (or lack thereof) of an ad.
Ask for a larger ad at the same rate as the current one; ask for free ads in the same heading if there are a lot of ads in that book. Statistics show that a second ad farther back in the heading delivers excellent returns.
Another suggestion: Ask for free color and/or a white knockout to make the ad “pop.” You will likely be much more successful today than you would have been 10 years ago negotiating for free color for your ad. Statistics show that color ads do get more phone calls than those in black and yellow. On the other hand, the price of color is so high that you could end up with more calls yet a lower return due to the highly increased cost.
During this strapped economic dip, you would be surprised at how much more quickly publishers will offer free color enhancements if you maintain current advertising. Here is something else that can boost call volume: Ask for a “print-Internet” bundle. Some publishers will give you a free dollar-for-dollar print match when you buy their Internet Yellow Pages program. A number of your customers are using the Internet to search for storage. All of the Internet Yellow Pages (IYP) sites partner with major search engines, so you may get double exposure–whether your customer is searching through an IYP site or a search engine.
Studies conducted by the American Association of Advertising Agencies have tracked advertising spending during every recession and tallied the results. “Those who reduce spending usually lose market share and sales. Furthermore, they then take longer to recuperate than those who maintained their level of spending,” studies conclude. “The bottom line? The advertiser who does not cut back can move ahead during the recession and afterward, capturing share from those who, hesitant and unsure, do cut back.”
Needless to say, you don’t want to bring your advertising to a complete halt. Moreover, rather than sitting back and complaining about the economy, the savvy storage owner will look for opportunities to outdo the competition. It may mean working a little harder to find those opportunities, but working smarter is really the key to thriving during downtimes.
Sue Weinman is vice president, Yellow Page Services, of Michaels Wilder Inc., an advertising agency specializing in Yellow Pages, Internet marketing and talent recruitment for the self-storage industry since 1989. For more information, visit www.michaelswilder.com.
The Japanese may be looking for its own economic stimulus plan as the country's economy falls to its lowest state since the first oil crisis in 1974.
Japan has not suffered much directly from the bursting of bubbles in U.S. credit and housing markets, but its heavy dependence on exports and persistently soft domestic consumption has led to a sharper contraction than other major economies. As the rich world faces its worst downturn in decades, the Group of Seven (G7) policymakers pledged at the weekend to do all they could to combat recession.
With exporters cutting production and laying off staff and many retailers reporting sharp falls in sales, economists saw little hope of a bounce back for Japan.
Source: CNBC.com, Japan's Economy in Biggest Dive Since 1974
The Horry County Police Department in Conway, S.C., is investigating a series of break-ins at a local self-storage facility. According to a news release, officers responded Friday to Extra Room Self Storage in the Myrtle Beach area in reference to burglaries of storage units. When the officers arrived they found 21 separate storage units had been burglarized after someone cut the locks off the units. Investigators are still working to identify and notify the people who rented the units.
Source: SCNow.com, Horry County Police Probe Storage Unit Burglaries
A couple months ago, I had a lot going on. In my frenzy, I forgot to pay a couple of credit card payments on time. When I realized I missed the deadline on the first one, I made a call and pleaded with the company rep to not hit me with a huge late fee. I was normally super responsible, always on time, had a good track record with the company, etc. Surprisingly, she gave me a pass.
I wasn't so lucky the second time. The bill was on my desk, but ended up under a pile of stuff. It was missed until the day after the odd due date. Again, I made the call, but the rep wasn't feeling it.
While it's true that everyone misses a bill now and then, there are many who are simply chronic late-payers. You know the type. They always seem to have a reason.
Deb T initiated an interesting discussion on Self-Storage Talk about late fees—specifically how much should you charge and when. While a few facilities overlock on the 6th day after a missed payment, many wait 30 or more days. The fees also run the gamut, from the simple $10 late fee to the more expensive $50 auction fees.
Autodoc writes about California's strict rules regarding late fees:
Of course, this will vary by state so you should check with your attorney to make sure you're on the right side of the law. ALL your fees should also be CLEAR in your rental agreement to avoid any squabbles with tenants claiming they didn't know.
Join the Self-Storage Talk discussion and share your thoughts.
While President Obama is expected to sign historic legislation tomorrow, earmarking billions to jumpstart the failing American economy, many Republicans still believe the stimulus package will fail to do its job.
Obama's advisors, on the other hand, are kicking the public relations campaign into high gear with a two-day swing through the West beginning tomorrow.
Source: MSNBC.com, Politically, Stimulus Battle Has Just Begun
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Senate, House Reach Agreement on Stimulus Bill
What is a self-storage facility worth? As the old adage suggests, it is worth what a buyer will pay and a seller will accept.
In these challenging times, even if a buyer and seller agree on the value of a self-storage facility, unless the buyer can pay cash at the agreed upon price, there may be a third party to consider into the equation—the lender. So maybe we should say a property is worth what a buyer, seller and lender all agree what it is worth.
What methodology can be used to determine a value that all the parties can accept? The two methods in this article are called the “snapshot” and “holding period.”
The snapshot is really the capitalization rate scenario in which annual net operating income (NOI) is capitalized at a rate the buyer/investor finds acceptable. In commercial real estate, investors are seeking an investment vehicle they believe will provide a risk-weighted return that is superior to alternative investments. Real estate is unique in the eyes of the law and in the eyes of buyers and sellers. Each commercial property offers a distinctive risk-reward ratio. Just like junk bonds offer a higher return but carry more risk than U.S. Treasury Bonds, so might one property over another.
In other words, a relatively new property in a growing area may present less risk and a lower capitalization rate than an older property in a declining area. Accordingly, the buyer, seller and lender must see that ratio or capitalization rate in a similar manner or there will be no agreement as to value and no sale. In the case of a refinancing, there may be no buyer but the valuation process is similar.
How do we determine value by using a capitalization rate? The first step is to look at the property, compare it with other similar property types, examine alternative investments and their associated returns, and look to the market place to determine an applicable capitalization rate is. Historically capitalization rates for self-storage properties have moved in direct relationship with long-term interest rates and the perceived risk associated with the investment.
Often, professionals can disagree as to their perception of the applicable capitalization rate and, ultimately, the marketplace determines the true capitalization rate. As of this writing, often-used capitalization rates fell between 8 percent to 10 percent.
To determine the value of a self-storage facility using the cap rate method, an investor must first determine the income the property will generate after the payment of all operating expenses. In other words, the investor has to determine the NOI of the property, which can be calculated using the following equation: Gross potential income (the amount that would be generated at 100 percent occupancy at market rents) less vacancy and credit loss equals gross effective income.
The next step is to subtract from gross effective income all operating expenses to calculate the NOI. Operating expenses include items such as real estate taxes, payroll, utilities, repairs and maintenance, management and other expenses. An abbreviated calculation would be:
For the purpose of example, let’s assume the buyer, seller and lender all agree the annual NOI of a property is $180,000, and the appropriate capitalization rate is 9 percent. (By the way, lenders often include items such as reserves, management fees, etc., that owners don’t always consider when calculating NOI.) We can determine value by a simple formula: Income divided by capitalization rate equals value.
Calculating value•IRV = income / cap rate x value•NOI = $180,000•cap rate = 9%•value = $2,000,000
Therefore, a self-storage property with an NOI of $180,000 will have a value of $2 million at a 9 percent cap rate based on a snapshot in time.
The capitalization rate method is based on a short period of time, usually 12 months or less, and is, therefore, a snapshot. It does not take into consideration the value of a property owned over a longer period. Accordingly, another method to determine value is one that evaluates revenue and costs a property will generate over time of ownership, including the proceeds from a sale.
This holding period method uses a measurement entitled internal rate of return (IRR), which is defined as the rate of return on each dollar that remains in an investment. It is a methodology that considers the purchase price of a property, the NOI of the property over the holding period, and the sale proceeds generated from the property at the end of that period.
By way of explanation, consider two luxury cars from different manufacturers. Both may have similar purchase prices but one may include a maintenance program, offer greater safety, cost less to operate and attract a higher price upon resale. One may cost less over the period of ownership and be a better value, which would not be apparent looking just at the purchase price.
In a similar manner, two self-storage facilities may seem equally attractive and be offered for sale at the same capitalization rate, but one may offer a higher return over time than the other and, therefore, a better value. If one focuses solely on the capitalization rate method, that difference may not be apparent.
Let’s use the same self-storage property that generated a NOI of $180,000 this past year. Assuming one could buy the property for $2 million and hold it for seven years we can calculate an IRR based on a few assumptions. If we assume that revenue and vacancy grow at 4 percent per year, expenses increase at 2 percent annually and the property is sold at the end of the seventh year at a 9 percent capitalization rate with a cost of sale of 5 percent, the IRR equals 14 percent.
The very same property valued at a 9 percent cap rate as a snapshot could provide the buyer with a 14 percent return over the time the property was owned assuming our hypothesis is correct. That return could be even higher if the buyer borrowed part of the purchase price.
While this is an over simplified example for the purposes of this article, many more factors such as loan parameters, cost of capital, changing occupancy, changing expenses and revenue can be factored into the analysis. A commercial real estate professional should be able to provide a specific analysis for your property.
There is no one right way to determine the value of any property or product, but these two methods offer insight into the rationale and approach used in the commercial real estate industry. Of course, no sales transactions will occur until a buyer and a seller agree upon a value. The two mathematical methodologies discussed above should help bring together a meeting of the minds.
Dale C. Eisenman is president and broker in charge of Midcoast Properties Inc., and is a licensed real estate broker in Georgia, North Carolina and South Carolina. He specializes in the self-storage industry as an investor and a member of the Argus Self Storage Sales Network, a national brokerage organization specializing in marketing self-storage facilities. To reach him, call 843.342.7650; e-mail [email protected]; visit www.midcoastproperties.com.
With 16 years experience in the development of professional software products, Tom Smith and Jeff Power know what is needed to design an intuitive graphical user interface that supplies vast amounts of information to the user quickly and easily.
Empower Software Technologies Inc. emerged on the scene in1998 with a software package aptly named Storage Commander, designed to take full advantage of Windows 32-bit graphical user interface and introduce to self-storage an exclusive first with its interactive sitemap. With the debut of a customizable sitemap, self-storage managers could view the unique layout of each facility and indicate each individual unit size and occupancy status.
The map also links to the database for an exceptional portal of visibility to each customer’s information. The user need only put the curser over a virtual unit, and tenant information is quickly identified in the Storage Commander’s Customer Information Panel, making it quick and easy to manage transactions and provide convenient, fast customer service. Staples advertises its “easy” button, but Storage Commander has always had it’s own version, called “end of day,” which allows the manager to press one button to close out the day’s activities, batching credit card payments, and printing all invoices, late letters and reports.
Leading the way with technology features, Storage Commander introduced the self-storage market to application-specific scanning, enabling users to insert customer information from driver’s licenses and banking information from credit cards and checks.
Although Storage Commander has enjoyed great success with the ushering in of various new technology, it does have a price. Finding the right technology option to meet the industry’s need takes timing and thoughtfulness. Such is the case when the company introduced its photo ID Kit, allowing photos to download into the program, instead of making a paper copy to put into a file. This tool enables managers to put a face to a name when looking at the Customer Information Panel. Plus, they can easily download additional photos such as pictures of tenants’ RVs, vehicle identification numbers and unit contents going to auction—all stored in one convenient place.
Over a decade, Empower has continued to foster numerous other program capabilities, featuring the ability to produce concise, accurate and meaningful reports that support a variety of management styles. Net Commander made it’s début in 2002 as another industry first when it enabled owners and management companies to remotely access and manage facilities, not just from a home office, but from anywhere they could connect with an IP address.
While Net Commander provided the ability to manage and produce reports without interrupting the facility, it also provided the functionality to implement rate changes, create or delete fees and discounts, establish and modify security settings for onsite managers, add notes to customer accounts and review tenant history.
In 2004 the company stepped into the spotlight again when it offered clients the ability to make online payments; now, self-storage tenants could click on the facility’s website to access their own account information 24/7 as well as make online payments at anytime without manager intervention.
Fingerprint scanning brought a new level of security and convenience for verification of managers and customers identity, allowing the system to locate accounts or authorize adjustments. The fingerprint scanner also paved the way for Storage Commander’s latest innovation: Quick pay, PayStation. This new system allows customers to process their own payments in less than 60 seconds. With a touch of a finger, the fingerprint scanner recalls tenants’ accounts, prompting them to choose the number of payments they want to make with a credit card. Once a card is swiped, a receipt is printed immediately. The process is quick, easy and fun for the customer, and fast, safe and secure for the owner.
Software plays an important role in running a storage facility successfully, providing thorough recordkeeping and tenant status information, but it must always re-invent itself to meet the ever-changing requirements of management companies, multi-facility owners and individual owners/managers. Under the Empower Software Technologies’ umbrella, Storage Commander continues to bring new technology to forefront, featuring ease of use and convenience, and promising success for its end-users throughout the self-storage industry.
For more information, visit www.storagecommander.com.
