Building contractor Jack Guerrieri is battling officials in Rock Falls, Ill., over the definition of self-storage. Guerrieri intends to build an office building and storage facility on land he owns at 307 W. 16th St., but while he has clearance to pursue the office component, the city contends he must file for a special-use permit for the storage facility because warehouses aren’t allowed in the zoning district along most of the U.S. Route 30 corridor, according to the source.

Since the parcel is zoned for business, Guerrieri believes self-storage should be an acceptable use. "The definition of a warehouse is a place where you store things for retail sale, and I don't do that," he told the planning and zoning commission during a January meeting. "This is self-storage. It's a business, but I belong in a business services category."

The issue was tabled last month so the commission could get clarification from the city attorney; however, during a meeting last week, building inspector Mark Searing told commissioners, “The interpretation from the attorney is that special use is needed for storage units in B-1.” Guerrieri didn’t attend the meeting, according to the source.

To get approval for the self-storage facility, Guerrieri will have to apply for the special-use permit, but Rock Falls has historically kept self-storage out of its prominent retail areas, according to Searing. Also working against the contractor is the city’s recent hiring of Retail Attractions LLC, an Oklahoma-based consulting firm, to market key areas of the community, including U.S. 30, the source reported.

Guerrieri has already torn down an old house that was on the property. If he pursues the storage permit, the process will include a public hearing.

The contractor has another self-storage facility in an east-side industrial park. He wants to include storage in the 16th Street project because he doesn’t have room to expand his current property, according to the source.

Safeguard Self Storage, which operates facilities throughout the eastern states, has opened a new facility in the Hermosa neighborhood of Chicago. The site is the company’s 15th in the city and 71st in the nation, according to a company press release.

The property at 4534 W. North Ave. is nine miles west/northwest of the downtown area. It comprises 58,400 rentable square feet of storage space in 861 climate-controlled and drive-up units. Security features include controlled access, individual unit alarms and video cameras.

This opening represents the company’s fifth Chicago addition in the past three years, according to Jim Goonan, executive vice president of development. Safeguard developed one facility in the region in 2014, another in 2015, and two last year.

“We have been in the Chicago market since opening our first self-storage facility there 17 years ago on South Wabash Avenue,” added Ken Finlay, executive vice president of operations. “This opening culminates a 50 percent expansion of Safeguard’s portfolio in Chicago that was started three years ago and is providing the company with great name and brand recognition in the market.”

Safeguard also has three more facilities under development in New York and six in Florida, Goonan said.

Founded in 1989 and headquartered in Atlanta, Safeguard operates facilities in Florida, Illinois, Louisiana, New Jersey, New York and Pennsylvania. The company is owned and operated by Morgan Stanley’s Prime Property Fund.

By Kristin Cooke

Is your self-storage business reaching its true potential? Online marketing has changed the way successful companies build their reputation, attract new customers, make sales and keep customers loyal.

To find out what storage companies need to do to get ahead online, I recently interviewed Scott Jensen, vice president of digital and meta at Salt Lake City-based marketing and technology incubator Partner Fusion. As a former senior director of marketing for Extra Space Storage Inc. (2007 to 2014), Jensen has extensive experience in online marketing for storage businesses. He offered up these eight essential tips. If you’re not following them, you’re letting cash slip through your fingers.

Tip 1: Claim Your Business Listings

“If your business listings aren’t claimed on search engines like Google, Bing and online Yellow Pages, you’re missing out on a lot of customers,” says Jensen. You can claim these listings for free by learning a bit and doing it yourself, or you can pay a company to do it for you. “Listings go in and out all the time, so if you’re doing this yourself, you need to stay on top of it and check all listings regularly. The more closely listings all correspond—with the same business hours, phone number and other info—the better for your company. It’ll help you rank higher. Google doesn’t trust single sources.”

Jensen says that on average, if you have 10 properties, one out of 10 business listings are showing inaccuracies. If you don’t correct these, you’ll look less credible and rank lower in search engine results.

Tip 2: Track Your Results

“Google Analytics is a free tool, but a lot of people don’t realize this,” Jensen says. “A lot of companies that outsource their website will also outsource the analytics. That’s fine, as long as you have your own login and you’re checking it regularly. To make sure no one is scamming you, you’ve got to own your results.”

Tip 3: Use SEO and SEM

According to Jensen, search engine optimization (SEO) and search engine marketing (SEM) are still the backbone of online marketing. They’re usually outsourced or assigned to someone at your company who specializes in these tasks. They’re going to help your potential customers find you online. Without them, you’ll only have drive-by customers, and in a competitive market, that’s like trying to run a business on the scraps.

Tip 4: Go Mobile

Most self-storage companies haven’t thought about the big shift in desktop to mobile use, and that gives you a big advantage if you’re paying attention. Make sure your website is designed for mobile first. “The majority of customers are now finding you through mobile. They may still prefer to call you and talk to you in person, but they’re finding your company on their cell phone,” Jensen says.

Tip 5: Track Mobile Conversions and Phone Calls

Jensen says there are a ton of different systems for tracking these things. “You want to know where your customers are coming from. You can use a piece of java script to track calls on a phone number you put on your website, and you can use the same number and track it different ways. Thirty to 40 percent of customers are still using phone numbers to reserve storage units they find online, so I really discourage companies from hiding the phone number on the website or not using it much.” The phone will continue to play a critical role in conversion and acquisition in the next five years, he adds.

Tip 6: Create Great Content

Content is going to help with SEO and will assist your customers in deciding your company answers their storage problem. This means keeping up with search engines and your customers’ need.

“Two years ago, we were still seeing keyword stuffing,” says Jensen, “but that’s no longer helpful. The two most important things today are that your content speaks to your customers and that it’s localized.” For example, in a hot climate like Arizona, RV-storage customers want to know how to protect their vehicle from extreme heat and what products they can use to keep the dashboard from cracking. A customer in a cold climate needs different local information. Jensen says a good piece of content can keep pulling in customers for years to come.

Tip 7: Follow Up

One thing that irks Jensen is when self-storage companies complain about not filling their units when they aren’t following up on people’s calls and messages. “Remember that people aren’t shopping for a storage company the same way as they are shopping for a new pair of shoes that they may not really need. Often a major life event has happened and they suddenly need someplace to store their belongings—they’ve had a move, a divorce, the death of a family member, or they’re going off to college. That means they’re shopping for a storage unit with a problem mentality. Once you can convince them you’ll solve their problem, they’re sold and they’ll move in. Follow up on those ‘contact us’ forms; and the quicker you follow up, the more likely you’ll be to get their business.”

Tip 8: Get on Social Media

Right now, social media isn’t where customers will be finding you, but it’s where they’ll connect and stay loyal, Jensen says. And keeping current customers is much cheaper than getting new ones. “Your customers are on social media, and if you’re not there, you’re missing out on building trust and keeping customers loyal.” Customers might not remember how to contact you, but if they’re connected to you on Facebook, they can easily find you.

“Keep things up-to-date, and keep your customers informed,” Jensen says. “Checking you out on social media is how your customers can see that their stuff is safe. If they’re living out of state and they hear there’s a fire in your city, they’ll check your social media to see if everything’s secure.”

If tackling all these strategies seems arduous, take it one step at a time. Start with claiming your business listings and move down the list from there. Make it a goal to implement one new strategy per month. In eight months, you’ll be on top of things and miles ahead of your competition.

Kristin Cooke is a regular blogging contributor for Value Store It, a Miami, Fla.-based self-stoage operator with facilities in Connecticut, Florida and New York. For more information, visit www.valuestoreit.com.

As the self-storage industry evolves into a more retail-style business, it’s only natural that facilities expand their offerings beyond unit rentals. Although some properties have employed ancillary profit centers for many years, more and more operators are putting emphasis on business extras. Rather than simply stocking boxes and locks, many are dedicating prime office space to create a robust retail store. The end result is twofold: more profit and a greater customer experience.

“A retail store provides multiple benefits. The major one is it’s an opportunity to provide potential renters that ‘just right feeling,’ which will lead to more rentals and profit. It can be the factor between renting now and checking with another facility, which often leads to a lost rental,” says Marc Goodin, president of Storage Authority Franchising and the owner of three facilities. “Also, many people who come in just to buy boxes will remember you when they need self-storage. Of course, product sales will add profit to your bottom line as well.”

If you’re thinking about adding a new, bigger or better retail area to your storage facility, there are several factors to consider. Whether you’ve dedicated 80 or 800 square feet to this venture, the key to success is a well-rehearsed sales approach and the quality and quantity of inventory. Read on to learn how to bring in more bucks and become the moving and packing shopping destination for your community.

Shopping Experience

Of course, the primary objective behind any retail store is to make money. However, most retailers also aim to provide the ultimate shopping experience. Think about your favorite store. It probably has artful displays and signage, perhaps streaming music and soft lighting. The idea is to create an inviting atmosphere that leads shoppers to linger and buy. The same can be true for a self-storage store.

“As with any retail setting, the No. 1 benefit is building customer rapport. Having retail merchandise in your facility will not only benefit the property’s sales and profit, but also give the customer more time in the office, thus creating more opportunity to build the relationship between the customer and the employees,” says Danielle Campbell, district manager for North Carolina and Virginia for Storage Asset Management Inc., a self-storage management company. “Creating a memorable experience will increase the chance of the customer remembering that instance and sharing it with others as well as create customer loyalty.”

Part of creating this “ultimate” experience is anticipating customers’ needs. Someone who’s moving needs supplies. With your business, he now has a place to store his belongings as well as buy the products that will help him transport and store them safely. It’s one-stop shopping at its best.

Store Size

Facilities built 15 or more years ago generally don’t have large offices, while more modern sites sport large lobbies complete with lounge areas, spacious workstations and ample retail space. “The larger, the better,” says Goodin, noting that a 1,200-square-foot office devoting half of its space to retail is ideal.

Even so, a property with a smaller footprint can still capitalize on product sales. “A tiny office can simply display a photograph of moving boxes and supplies and store them in a unit,” says Nancy Martin Wagner, vice president of Chateau Products Inc., a supplier of locks as well as moving and packing supplies. Some operators have even retrofitted a small unit near the office into a retail store. Shelving, baskets and bins can easily be added. Campbell suggests using slat walls and peg boards, the wall behind the manager’s desk, or another small spaces to promote products.

Product and Displays

What should you stock in your store to generate the best return? Your No. 1 seller will likely be locks. “More than 80 percent of my tenants buy my lock. I have somewhere between a 200 percent and 300 percent mark up on them depending on the model,” says Kevin Leebrick, area manager of Advantage Self Storage in Indian Trail, N.C. “In any given year, that’s about 320 locks with a profit of about $10 a lock. Do the math … It’s not bad. They’re also the thing that take up the least amount of room.”

The easiest way to make a lock sale is at the beginning of the rental process. “Let them know the lease requires their unit to be locked at all times and most renters choose a self-storage specialty disk lock,” Goodin says. “With a pair of scissors and a lock in hand, we simply say, ‘Would you like me to cut it open for you?’” 

Basic moving and packing supplies are also a must, including boxes in all sizes. Wardrobe, mirror and dish-pack boxes are great, Leebrick says. However, think beyond boxes to other items such as permanent markers, tape, mattress and furniture covers, and moving blankets. “Other items like moving straps, plastic wrap, lights, shelves, tubs, etc., can be provided to give the office a retail feel, as long as the area doesn’t become cluttered,” Goodin adds.

The key is to marry similar products and catch customers’ attention with artful designs. For example:

• Display tape and dispensers in baskets or on a slat wall.
• Place a tape/dispenser combo on top of each box stack.
• Create a “packer’s pack” consisting of tape and dispenser, a utility knife, and a marker.

“We’ve developed a combo-box package of 10 boxes and one tape dispenser with one roll of tape wrapped together,” Goodin says. “It’s perfect for people who can’t decide on what box to buy. They fly out of the office with the right promotion.”

Also demonstrate how various products will be useful. For example, hang some clothes in a wardrobe box, or put a dish-packing set on display using some inexpensive dishware.

The objective when building your displays is to always think “retail.” Displays should be eye-catching but easy to access. Keep your signage professional, clear and concise. Always have your customer’s needs in mind. Finally, keep the displays super clean. If the product appears dusty, damaged or dirty, sales will suffer.

Pricing

When it comes to pricing, think generous markups. You have a captive audience, so they’re willing to pay a few dollars more for the items they need instead of traipsing all over town looking for a better deal. “Nearly all product can have a high markup. On average, our stores can mark up at a minimum of 100 percent,” says Diamond, adding that you must consider your market and how readily available the products are from nearby retailers.

Pricing for your products will ultimately depend on what the market will bear. For example, Leebrick pays less than $4 for a standard disk lock but resells it for $17.49. He also enjoys a generous markup on packing tape, which he buys for 61 cents a roll and sells for $1.99.

Inventory Levels

One of the biggest mistakes many operators make when launching a new retail center or revamping an existing one is purchasing more product than they can successfully sell. “Overstocking is a big pitfall. When introducing a new product, start with low stock … test the waters as they say,” Campbell says. This ensures you’re not stuck with 50 vehicle de-icers or 30 pairs of moving gloves.

Understocking your store will also be a customer turn-off. No one wants to see empty pegs and bins. “Never run out of key items,” Martin advises. If you do find yourself without product, tell the customer you’ll custom order it and offer him a small discount. He’ll appreciate the effort.

While a retail store offering a variety of choices is ideal, don’t go overboard. There’s no need to sell eight types of locks, 12 colors of permanent markers or 10 box sizes. “Providing too many choices can actually reduce sales. People typically only make one or two major choices a day and don't always have the energy to decide between too many options once they’ve decided to rent a unit,” Goodin says.

“Make sure your store is clean and well-stocked and prices are clearly marked,” advises Wagner, adding that the best way to do this is with a large and easy-to-read menu board. Customers who have to hunt for a price will usually go without rather than ask how much something costs.

Sales Techniques

In addition to presenting an attractive display, you need to drive the sales. “Good sales folks won’t say, ‘Is there anything else you need?’ Instead they’ll say, ‘What else do you need today?’ Simply assuming they need something is more likely to make them buy,” Leebrick says.

Goodin suggests you create a well-written script and then practice what you’ll say and when. You can also share moving and packing knowledge during the presentation, for example: The average home move takes 30 boxes.

“There are a ton of ways to double and event triple retails sales,” Goodin says. “Self-storage operators need to learn from the retail world. Go to the mall and notice what signs they have, and what the great managers are doing and saying.”

Finally, include information about your retail store in your marketing collateral. “When you market the facility, you should market the retail products as well. In turn, this will increase sales and profit,” Diamond says.

A self-storage proposal from JHM Hotels is being considered in Greer, S.C. The company, which primarily runs a portfolio of hotel properties, wants to build a 100,000-square-foot facility on 2.7 acres at 1408 Boiling Springs Road. The Greenville County Planning and Development Committee recently sent back a rezoning request to the planning commission with requested project changes, according to the source.

The building site contains a single-family residence and vacant wooded land. It’s near a church, gas station, retirement home and townhomes. The rezoning request is part of a previously approved flexible review district, but some local residents have objected to the project amid concerns of increased traffic, the source reported.

Though planning staff indicated self-storage is an appropriate use for the property and wouldn’t generate much traffic, staff members objected to the scale of the structure and said architectural elements were “out of character” with the aesthetics of the community. Planners recommended the height of the building be reduced from 45 to 40 feet at its peak and 23 feet at its lowest elevation.

Jay Burnett, vice president of real estate for JHM, told committee members the developer is willing to lower the height and soften the color scheme to better fit the area. As originally proposed, the building’s design was to include brick, stone, metal panels and aluminum, according to the source.

Planning staff will review JHM’s final revisions and make a recommendation to the planning commission, which will in turn issue a recommendation to the planning and development committee. Commission members had earlier recommended the project be denied, the source reported.

Based in Greenville, S.C., JHM owns and operates more than 40 hotels in six states. Its portfolio includes Comfort Suites, Hyatt Regency, La Quinta, Marriott, Sheraton, Westin and several other brands. It has several properties under development and also owns a five-star hotel in Surat, India, according to the source.

Store Here Self Storage, which operates 32 facilities in nine states, has acquired Jennings Station Self Storage in Jennings, Mo., a suburb of St. Louis. The facility was previously managed by Extra Space Storage Inc., a publicly traded self-storage real estate investment trust and third-party management firm. It will now be managed by Store Here Management LLC, a property-management and investment company, according to JLL Capital Markets, the commercial real estate and finance firm that represented the seller in the transaction.

The property at 8319 Jennings Station Road is at the intersection with W. Florissant Avenue. It was constructed in 1985 and converted to self-storage in 2016. The facility includes a two-story building comprising 64,315 square feet of storage space in 629 climate-controlled units. The facility also features electronic access, an elevator and goods-only lift, video cameras, and a retail-oriented office.

JLL Managing Directors Steve Mellon and Brian Somoza represented the seller, Jennings Storage Solutions LLC. “Located at a major retail intersection in a growing community, this property is positioned to benefit from strong surrounding demographics and excellent exposure,” Mellon said. “The facility’s state-of-the-art design provided Store Here Self Storage with a turnkey opportunity to acquire a high-potential self-storage property.”

The Store Here portfolio totals more than 2 million square feet of storage space in Alabama, California, Colorado, Georgia, Indiana, Kansas, Louisiana, Missouri and Texas.

Store Here Management has an acquisition and analysis division focused on the self-storage industry. Its operating partner, RHW Capital Management Group, was founded in 2012 by industry veterans with more than 70 years of combined experience to provide a stable source of funding and management.

JLL is a full-service global provider of capital solutions for real estate investors and occupiers. The firm completed $140 billion in investment sale and debt and equity transactions globally in 2015. The firm’s Capital Markets team comprises more than 2,000 specialists globally.

 

By David Blum

I’ve had the amazing opportunity to attend almost every self-storage tradeshow around the world this past year, including ones in Brazil, Europe, Southeast Asia and the United States. As a result, I have a global perspective on our industry. Over the past several years, I’ve explored this business and its development in as many parts of the world as possible. Though there are many similarities, it’s the unique differences and challenges I find fascinating and full of opportunity.

The industry associations have done a great deal to promote education, awareness and support, allowing people to learn how, where, why and what it takes to get started in self-storage. I recently attended the Self Storage Expo Asia in Singapore, hosted by the Self Storage Association Asia (SSAA). The show perfectly exemplified the industry’s worldwide expansion. The association put on an amazing event that was well-attended by existing operators and interested parties from all over the region. Some of the countries represented were Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, Sri Lanka, Thailand and Vietnam.

“The introduction of technology and the great work being done by the Self Storage Association Asia will ensure that the market in Asia continues to rapidly grow to become the size of the Australasian market in the foreseeable future,” says Joe Morrell of Aon Corp., a global provider of insurance, risk-management services and human resources solutions.

Demand Drives Growth

Though only about 10 years young, the Asian self-storage market has experienced huge growth. However, the numbers must be somewhat tempered. In the denser urban markets of Hong Kong and Singapore, the model is unique, with more leaseholds and smaller properties (fewer than 20,000 square feet). So when we see that Hong Kong has grown from a single facility twelve years ago to more than 450 sites, the total square feet per person remains low. As the accompanying table indicates, the level of penetration is well below one square foot per person throughout the region.

What I’ve found fascinating is this cycle travels, and when one country’s economy slows, another picks up. Even though the same “recession-resistance” applies to self-storage in Asia as in the U.S., when market awareness is limited, the result isn’t always the same. As the industry expands throughout this region, the explosion of innovative concepts still needs to adapt to local cultural needs.

“The definition of the industry itself is undergoing change. The broad definition is becoming ‘storage’ as consumers experiment with other models like valet, on-demand, etc. Therefore, we need to become more broad-minded about its constituents,” said Pooja Kothari, managing director of StoreMore Storage Solutions Pvt. Ltd., which operates five facilities in India.

“The e-commerce boom, together with rising affluence and rapid urbanization in Asia, especially in developed markets like Hong Kong and Singapore where living and retail space now commands a premium, will help drive industry growth,” adds Helen Ng, CEO of General Storage Co. Pte. Ltd., which operates Lock+Store in Malaysia and Singapore, Store Friendly in Singapore (12 facilities acquired last year), and The Store House in Hong Kong (four facilities purchased in 2014).

As in any market, one of the main drivers to expansion is the growth of the middle class. With this comes the similar demand drivers we experience in the U.S. and other storage markets worldwide. According to a July 15, 2015, article published by CBRE, “The Four ‘Ds’ Behind the Surge in Demand for Self-Storage Space in Asia,” those drivers are death, divorce, density and dislocation. Generally, we see the customer base is similar to that in the U.S., with 60 percent to 75 percent coming from the consumer segment. While rental rates are strong, occupancies have room for improvement.

New Markets

So where is the Asian self-storage market headed? Kevin Chan, founder and chairman of Store Friendly Self Storage Group, which operates more than 100 facilities in Hong Kong, Macau and Singapore, thinks China offers the natural next step. He also sees India, the Philippines and Thailand as presenting development opportunities. In addition, Chan believes there will be more opportunities for mergers and acquisitions.

The development cycle is much faster in Asia, with site selection taking two to three months and development of a 300-unit facility completed in six months. At the end of the day, based on my observations from visiting markets around the world, the Asian market is quickly becoming the next big thing in self-storage.

David Blum owns and operates Better Management Systems LLC, a consulting practice he launched in 2003 to assist self-storage professionals worldwide with issues of development and management. He’s worked in Europe, Greece and Israel, and currently has clients in Mexico, South America and the United States. Since entering the industry in 1996, he’s worked as a district manager for Storage USA and vice president of operation for Budget Mini-Storage in South Florida. He helped co-found the Florida Self-Storage Association in 1998 and is a frequent contributor to industry publications. He can be reached at 954.255.9500 or [email protected].

The Inside Self-Storage (ISS) Store, an e-commerce website providing research and education products for industry professionals, has partnered with real estate firm Colliers International Valuation and Advisory Services LLC to provide a series of custom data reports for the self-storage industry. The first reports on offer will be the “Self-Storage Custom Expense Report,” which provides analysis on operational expenses in specific markets and against national metrics, and the “Self-Storage Custom Cap-Rate Report,” which addresses applicable capitalization (cap) rates for specific properties and regions based on the Colliers Rating System. The reports are expected to be available for purchase within the next few weeks.

“Adding Colliers International as a partner is an exciting development for ISS; but more important, the company’s real estate prowess and understanding of the global self-storage market will prove to be a valuable asset to the industry,” said Troy Bix, vice president of ISS. “Through these custom reports, ISS Store customers will be able to glean detailed information about properties and geographic markets of interest. It’s a home run for current self-storage operators, developers and investors.”

The “Self-Storage Custom Expense Report” will be produced on demand based on a specific U.S. address. Colliers will use property information provided by the customer to research and analyze the typical expenses of comparable self-storage facilities in that market. The report will offer a comparison against national data as well as expenses from actual facilities within the region. Expenses are broken into nine categories including advertising, general and administrative, repairs and maintenance, offsite and onsite management, property insurance, real estate taxes, utilities, and reserves.

The “Self-Storage Custom Cap-Rate Report” will also be produced on demand based on a specific U.S. address supplied by the customer. Colliers will analyze comparable self-storage assets in the region as well as applicable cap rates based on the company’s own rating system, which uses eight performance and property metrics to rate a facility as class A, B or C. The report includes a table reflecting an appropriate cap-rate range for the subject property as well as sections on comparable sales, investor surveys, a band of investment analysis, and a summary of findings.

Both reports are expected to run eight to nine pages in length. Customers will order directly from insideselfstoragestore.com. Due to the customization involved, buyers should allow up to three business days for fulfillment. Finished reports will be delivered in PDF format to customers via e-mail.

Colliers International Valuation and Advisory Services is a division of Colliers International Group Inc., a global commercial real estate services firm employing more than 16,000 professionals across 554 offices in 66 countries. The company offers a variety of services for investors, business owners and developers. These include consulting, market research, real estate intermediation for sale and rent, mortgage lending assistance, project management, property management, and valuation.

Conceived as a central hub that allows self-storage owners, operators, developers and investors to obtain cutting-edge information and resources, the ISS Store is owned and operated by ISS, a dynamic services provider that has served the self-storage industry for more than 25 years. The brand includes ISS magazine, the ISS Expo and Self-Storage Talk, the industry’s largest online community.