As self-storage operators continue to grapple with concessions and fight for every rental dollar, honing their sales skills has become paramount. Self-storage industry expert Brad North will show self-storage newcomers and seasoned operators how to close more sales in a special two-hour seminar at the  Inside Self-Storage World Expo, March 14-16, in Las Vegas.

The Super Sales Mini Clinic will teach operators how to lead with a sales and retail mentality. Attendees will learn how to build trust with customers, increase rental rates, turnaround customer objections and outcompete market rivals through product differentiation. In addition, North will demonstrate how to assemble a lead-generation program to immediately improve facility occupancy.

As president of Advantage Consulting & Management, North has trained and consulted with thousands of self-storage owners and developers throughout the world. He produced a DVD and workbook training tool, "Maximizing your Sales and Marketing Program," and is a frequent speaker at the ISS Expo as well as a contributor to Inside Self-Storage magazine.

The ISS Expo at the Paris Hotel & Resort will feature 38 seminars, four intensive workshops, two days of product and service exhibits, and multiple peer-to-peer networking events. Details are available at www.insideselfstorageworldexpo.com. Pre-registration discounts are available through March 9.

The Florida Self Storage Association (FSSA) recently elected new officers and board members. As Jan. 1, the following officers have assumed their roles:

• President and Legislative Chairperson: Mike Mele, Marcus & Millichap Real Estate Investment Services
• Vice President: Lew Pollack, StoreSmart Development
• Treasurer: Howard Pryor, Westport Properties

The 2012 board members are (in alpha order):

• David Blum, Best Management Services LLC
• Stan Bullington, Champion Self Storage
• Mike Cabak, Sunshine Self Storage
• Dennis Hofmann, Wells Fargo Insurance Services
• Travis Lawhorne, Accountable Management
• Danielle Toms, Mindful Management
• Matt Van Horn, Cutting Edge Self Storage
• Rick Yonis, Sentry Self Storage

The FSSA is a non-profit organization of businesspeople involved in the self-storage industry in Florida. Its members include facility owners, operators, vendors, developers, investors, property managers and suppliers. More information can be found at FloridaSSA.org.

I'm often amazed at the things self-storage owners or developers do when designing their self-storage projects. During a recent self-storage sale, a potential buyer thought he could achieve a particular upside since the facility was only operating at about 70 percent occupancy. The building was bigmore than 100,000 square feeton a terrific four-lane urban street with lots of traffic and high visibility. But upon closer inspection, we discovered the office was inside the gate, and there was no parking, not even a place to pull off of the road and into the property. The developer/owner had made a crucial mistake that might forever limit the asset's potential: terrible access.

In designing a self-storage project, an owner of developer can shoot himself in the foot by trying to maximize square footage or unit mix while forgetting that his intention is to maximize his investment. Whether you're building a self-storage facility from the ground up or looking to buy one, it's important to understand the market and create the right investment strategy.

The Market Drives Design

A greater number of units always makes a project look better on paper. Of course, on paper, we can be tempted to make big assumptions about demand, lease-up and future potential. However, bigger is not always better.

Developers often ask questions like, How many units can I get on a three-acre site? Thats a loaded question with no definitive answer. In a project's infancy, the temptation is to use a ballpark estimate for what can be built; if that looks satisfactory, maybe the developer proceeds. This is the wrong approach.
Facility size, development phasing and investment should be based on facts and data, not estimates and ambitions. Rules of thumb are almost always wrong. You might be able to get a 70,000-square-foot facility on a three-acre site, but it doesnt matter if the market is only demanding 40,000 square feet. Even if the market demands a larger project, the key elements of access, visibility, convenience, security, parking and office space should not be overlooked in the design phase.

Some developers approach projects with a target square footage in mind. I often hear 80,000 square feet stated as if thats a reasonable target. Keep in mind as you design that not all markets will absorb that much store. A lot of newer, larger facilities fail to reach target occupancy because the project is just too big. If only 30,000 people live within five miles of your site, a 60,000-square-foot facility is probably pushing the envelope.

It always comes down to supply and demand. We need complete market analysis and reasonable investment modeling before we even begin to consider project size. The actual demands of the market should drive the key surface elements of facility design including size, unit mix, curb presentation, office, climate/non-climate, access and signage.

Construction Phasing

Phasing a new project is, in most cases, the right decision. Every market is unique in consumer demand, seasonal trends and economic incentives that influence rental velocity. When you understand market demand on these levels, you can make better decisions about when and how to launch your new product. While market demand isnt the only consideration in construction phasing, it should be pretty high on the list. If you over build your first phase, you may never recoup the lost interest cost. If you under build, you risk losing competitive traction or leaseup speed.

For example, in one particular market, monthly move-ins average 25 per month, and the average tenant rents for six months. During the summer months, rentals may be as high as 40 or more per month. During off-peak months, the market leader uses an incentive, offering the second month for free and discounting street rates at about 10 percent. This information helps you understand what to expect from leaseup and can help you develop a reasonable phased approach to building.

In this example market, its prudent to expect net rentals in year one of operation to reach or slightly exceed 180 units. This type of information can help guide your design process and investment strategy. If you know your market will only net 150 units in the first year, 200 to 250 units might be a reasonable phase one, even if the overall, long-term expectation is the market will absorb 500 units.

Im not trying to oversimplify the decision-making process. Developers create and attract many incentives to build more units in their first phase: price of steel, economies of scale in construction, and finishing a project. But if you know your market will only absorb 150 units the first year, you have to weigh the economic cost of over buildingand there is a cost.

When you sit down to pencil out the costs and benefits of phasing a project, dont lose sight of the development as a whole. Are there site-work items you can more easily absorb in phase one? How can you keep the future construction of additional phases from hurting your ongoing business? What are the key triggers and considerations for moving ahead with the next phase?

For all you investment nerds, dont get paralyzed in all the details and never move. Just know that when you understand how demand moves and how it will drive our business, and then plan to respond to that demand, you create sound strategy for maximizing your investment, not just your site.

Lipstick on the Pig

Self-storage buyers often ask questions like, What are some of the better markets for self-storage? and What is the best way to invest in self-storage businesses? Well, heres the big secret: There is no secret. Its hard work, and it takes a lot of time.

Finding good sites or acquisition opportunities can be grueling and overwhelming, especially without the right focus, team and tools. Maximizing investment in an existing self-storage business is asset- and market-specific. For the small operator to make a good investment in an older self-storage operation requires taking a comprehensive look at the physical site, specific micro-market dynamics, and the prevailing business model and financials. With these details, you can determine the overall investment picture and identify the risks and possible upside of acquiring and managing the asset.

As I go from market to market, I see a lot of older sites, often in good locations, with a poor operations and management profile and obsolete physical features. It was easier 20 years ago to find a quality location for self-storage. Some of these operators, while innovative in bringing their product to the market, have been surpassed by current customer demands. This can create an opportunity for buyers who can develop and implement the right vision.

Often it doesnt take a whole lot to improve a self-storage acquisition. In almost every U.S. market, I see stores lagging behind their true potential. When facility managers are complacent and the necessary site maintenance is overlooked, the asset begins to die. But some of these dying assets could be opportunities for buyers interested in doing the work and breathing life back into the business.

Every asset is different and every market unique. But its not uncommon to see weaker stores in healthy markets charging lower rates. These stores often lag behind the market leaders in achievable rental rates and occupancy, and yet customer demand trends toward the leaders. A $10 rental rate difference between the market leaders and weaker stores isnt unusual. For a potential buyer, though, this might represent a huge upside.

Seizing Opportunity

With an acquisition, youre not always stuck with the mistakes of the previous owner. In fact, it may create some opportunities. Renovating an office, repairing driveways, creating better access, training a good manager, replacing signage, or adding a move-in truck, landscaping, a security display, exterior lighting, or other aesthetic or management enhancements to an older property can make it more attractive to the demanding customer, and enable older stores to achieve stronger rental rates and higher occupancy.

Todays customer demands a better product than what was built 20 years ago. But again, it doesnt take a whole lot more to do things right.

For example, take a 400-unit store operating at 75 percent occupancy and charging, on average, $80 for a 10-by-10 unit. Lets assume the average unit size is 100 square feet and actual monthly rent is averaging $24,000 (300 occupied units at $80). Also, well put this asset in a market whose leaders report 85 percent occupancy. Using some reasonable assumptions (8.5 percent cap rate, 38 percent operating expenses), perhaps we can acquire this asset for $2.1 million.

Our due-diligence reveals a $200,000 renovation budget might realistically allow us to achieve a 5 percent increase in rental income. If our upgrades allow us to boost occupancy from 75 percent to 80 percent, we achieve an increase in asset value of nearly $400,000. If our improvements enable us to reach 85 percent, which isnt unrealistic, well see an increase in asset value of about $600,000a pretty good return on investment.

And the quality and longevity of our investment increases as we sharpen our competitive edge. When I run long-term, hold investment returns on these types of scenarios, its not uncommon to see the internal rate of return increase by 3 percent to 5 percent.

Getting into this type of asset, however, takes a lot of work. Its work to find it, work to analyze the opportunity, and its work to make it better. But it can be worthwhile when youre committed to doing things right. We have to understand how the demand in our specific market guides our investment strategy for moving an asset up the competitive ladder.

Whether you build or buy a self-storage project, develop your vision, pay attention to the details, understand your market, and then commit to the necessary work that will get the most out of your self-storage investment.

Benjamin Burkhart is a professional self-storage consultant who provides developers and owners with detailed market and financial analysis and helps them create sound investment strategies. To reach him, e-mail [email protected] ; visit www.storagestudy.com .

AAAA Mini Storage in Tukwila, Wash., was recently honored with an award from the local chamber of commerce.

The storage company was named the Small Business of the Year by the Southwest King County Chamber of Commerce. The award was bestowed upon businesses with 10 or fewer employees that demonstrated community involvement. Family-owned AAAA Mini Storage supports education for its employees and others in the community.

The award was given at a Jan. 13 membership luncheon. Several companies were recognized for their commitments and achievements in the Burien, Des Moines, SeaTac and Tukwila communities. The chamber also introduced new board members for 2012 and provided an annual report.

The Arizona Self Storage Association (AZSSA) will host its 14th annual conference and tradeshow, May 7-9, at the Phoenix Marriott Mesa, in Mesa, Ariz. This years conference theme is Back to Basics, focusing on business fundamentals for self-storage owners, operators and managers. Topics to be covered will include:

• The 3- to 5-mile micro-market surrounding facilities
• Customer service and superior maintenance as the first line of marketing
• Attention to bottom-line challenges
• Marketing investments that lead to closed leases, merchandise sales and other revenue-growth tactics

Self-storage managers can also sharpen their sales and marketing skills at an interactive workshop with Brad North, president of Advantage Consulting & Management. While managers are attending the workshop, facility owners can attend sessions on legal issues, financing and a 2011 market survey.

In addition to seminars and product and service exhibits, this years AZSSA conference will feature more than a dozen roundtable discussions as well as a virtual, interactive tour of several self-storage facilities nationwide. More information can be found at www.azselfstorage.com.

Founded in 1996, the AZSSA was created to strengthen the self-storage industry in Arizona, promote professional standards and quality, and present a unified voice on issues affecting the local industry. Today the association has more than 500 facility and vendor members.

StorageClicks.com, which provides online-marketing and website-design services to the self-storage industry, launched its new Mobile Site Platform, which helps self-storage operators create mobile websites for their customers. Using smart device detection technology, the new platform seamlessly connects mobile devices to a company's mobile-optimized website. Mobile Site Platform is compatible with Apple iOS, Google Android and Blackberry Mobile OS, plus many other mobile devices.

With mobile Internet users set to exceed desktop Internet users in the U.S. by 2015, we are excited that StorageClicks.com is providing this Mobile Site product to our customers so that their experience with their customers will be rewarding, said Izzat A. Dajani, company partner and director of marketing.

Based in Coral Springs, Fla., StorageClicks.com specializes in website design development, search-engine optimization, lead tracking, pay-per-click advertising, mobile-website design and local search marketing.