Knowing the population of Asian countries to be the highest in the world, you might expect self-storage would take off in these markets and experience explosive growth. This is true in some areas, but not all. It’s a truly diverse assembly of nations and cultures.

The Asia self-storage market is also dealing with some dynamics that were never faced by U.S. industry professionals. For example, a devastating fire at a Hong Kong facility in 2016 has led to extremely regulated conditions. As a result, some stores have closed, and year-over-year growth is down in number of facilities and overall square footage. This is just one of the obstacles the local business faces.

After attending the Self Storage Expo Asia in Bangkok in May, I came away with a fresh perspective of this emerging market. Here’s a quick overview of the industry and my observations of its challenges and achievements.

By the Numbers

Below is a summary of the Asian self-storage market, based on survey conducted this year by Self Storage Association Asia (SSAA) and Ipsos Business Consulting. Association members receive the full results, which contains more data and trends than I’ve shared here. It’s invaluable to collect and disseminate this information and support smart growth and standards for a growing industry. The SSAA is to be congratulated on its ability to provide such a valuable tool.

Average occupancy in the region is 76.5 percent. Monthly rents per square foot range from $2.05 in Malaysia to $6.25 in Hong Kong, so it’s easy to see there’s limited competition. As the years pass and new operations are established, rents will no doubt fluctuate as they have in other international markets. According to the survey, roughly 54 percent of Asia operators plan to expand their business in the core markets in which they currently operate.

Mainland China showed the best performance in the 2018 survey, with an impressive 122 percent year-over-year growth (from 170 to 378 facilities). As Asia's leading market, Japan reported a slow but steady 8.9 percent growth, which was consistent with the last eight years of 8 percent to 10 percent growth.

Industry Challenges

According to the survey, the top five challenges faced by Asian self-storage operators are:

• Government compliance
• Suitability of available space
• The high cost of converting an existing building to self-storage
• High startup costs
• Availability of space to build

Local operators also face the challenge of industry awareness. The key to growing a customer base in new markets is educating the populace about the product, including benefits to consumers and small businesses and how self-storage differs from warehousing or other more traditional storage methods. Asia’s operators need inexpensive but highly effective means to tell their story and grab consumers’ attention.

The industry associations can lead the various countries in establishing laws that determine how self-storage is leased and governed. This will be challenging in such diverse cultures, but it’s easy to see how monumental these issues will be to the success of the industry.

Expansion

Operators in this region of the world will likely continue to expand and have plenty of room to grow. One would expect to see a rising sophistication in their operations as they complete the education portion of the development curve and move into refinement of management and customer-service programs.

As in many other self-storage markets of the world, there will be pioneers in Asia willing to set the stage and endure the learning curve, applying technology to enhance the business and teach the population, then graduating to a more state-of-the-art product, using differentiation of service and amenities to exceed customer expectations and grow brand loyalty. Some will choose to sell on price alone as they have done in the U.S., while others will aim to attract “the cream of the crop” through more upscale offerings. The great news is there’ll be room for everyone willing to fight through the challenges of these formative years.

M. Anne Ballard is president of training, marketing and developmental services for Universal Storage Group and the founder of Universal Management Co. She’s past president of the Georgia Self Storage Association and has served on the national Self Storage Association’s board of directors. She’s also participated in the planning, design and operation of numerous storage facilities. For more information, call 770.801.1888; visit www.universalstoragegroup.com.

If you’re a facility manager looking to perfect your skills, it’s time to take the plunge! The 2019 Inside Self-Storage World Expo is the education deep dive you’ve been waiting for. Whether you’re just learning to swim or ready to compete, you’ll find your starting platform at the industry’s biggest and best show of the year.

Full Immersion

Come to The Mirage Hotel & Casino in Las Vegas, April 1-4, and immerse yourself in all things self-storage. With two days of comprehensive workshops and another two days of seminars and other learning events, you’ll do a lot more than get your feet wet.

On April 2 and 3, those who purchase the All-Access Pass or Seminar-Track Package will get access to six education tracks, three of which are specifically tailored for facility operators: Management Track, Marketing Track and Technology Track. Each containing seven sessions, these lineups are teeming with guidance to help you improve your skills, achieve your goals and ensure your facility is the best on the block.

This year, many of our seminars are led by facility managers like you. Being “in the trenches,” they know their stuff! Here’s a sample of the sessions they’ll present:

• Operational Efficiency: Setting a Standard for Self-Storage Excellence
• Let's Get Physical! Self-Storage Safety and Site Maintenance
• Making More Money With Self-Storage Profit Centers 
• Turning Tenants Into Walking Billboards With an Exceptional Service Experience
• Magic Revenue Finder: Unlocking Hidden Profit in Your Self-Storage Operation
• Cost-Effective Marketing Strategies for Small Self-Storage Operators

On April 1 and 4 is when you’ll take the truly deep dives. Workshops come included with the All-Access Pass, or purchase them a la carte! Each four-hour practicum is taught by the industry’s top experts, those with firsthand experience in operational challenges and solutions. If you’re ready for an intense descent into manager-focused learning, consider these options:

• Management Mastery Workshop: Increased competition, rapidly changing technology and more demanding customers means you can’t simply freestyle. You must master more complicated strokes! This session will teach you how.
• Digital Marketing Workshop: If the pool of online marketing knowledge sometimes feels too fast and deep, this workshop will help you breathe easier and keep afloat. It’ll combine real-world examples and hands-on exercises to elucidate search engine optimization, Google Ads, online reputation and much more.
• Advanced Legal Workshop and Legal Learning Live: Every manager should be current on the industry legal landscape. These two events bookend the show, with one on April 1 and the other on April 4. They’ll provide a wealth of information on the riskiest issues facing facility operators today.

Syncing Up

One of the best things about the ISS World Expo is the chance to learn from and share ideas with your peers. You’ll meet other storage professionals from all aspects of the industry and around the world! Take advantage of the overflowing expertise at the show through these and other networking opportunities:

• Overtime With the Experts: Ever attend a really good seminar and wish you could ask the speaker questions or keep the conversation going without having to rush the stage? Now you can! We’ve designated a room where you can meet with our speakers after each seminar for 30 minutes of “overtime.”
• Self-Storage Q&A Sessions: We’ve expanded our popular open forum into three topic-focused events: Investing & Development, Management & Marketing and Technology & Innovation. Hosted by hand-picked experts with proficiency in these category verticals, these sessions will allow you to get more questions answered on the topics that really matter to you, no matter your role or area of interest.
• Legal Q&A With Jeffrey Greenberger: Who doesn’t want free time with an attorney? Everyone in the storage business has some legal questions. Now’s your chance to get them answered in a no-holds-barred arena.

Stop floating around and get serious about self-storage. C’mon, the water’s fine! Learn more about the show’s manager-focused offerings at issworldexpo.com.

The Mele Group, a self-storage investment team led by Michael Mele, has joined real estate firm Cushman & Wakefield (C&W) and will be based in the company’s Tampa, Fla., office. The group had been the predominant self-storage advisory team for commercial property-investment firm Marcus & Millichap (M&M).

In addition to Mele, the 16-person team includes real estate brokers Devin Beasley, director in Tempe, Ariz.; Robert Bloch, senior director in Bethesda, Md.; Luke Elliott, executive managing director in Tampa; Brian Fulton, senior associate in Tampa; Trey Hammond, senior director in Tulsa, Okla.; and Noah Obuchowski, senior associate in Washington, D.C. The remaining nine employees are supporting staff.

The group will work closely with C&W self-storage brokers Paul Boyle, executive director in Phoenix; Jim Lewis, senior director in Portland, Ore.; and Greg Wells, senior director in San Diego; as well as Kate Spencer, a managing director in Dallas who’s also part of the firm’s Valuation & Advisory group.

The Mele Group’s client base consists of individual property owners, real estate investment trusts, and private institutional-level funds and firms. Since its inception in 1999, the group has closed nearly 350 self-storage transactions totaling more than $3.5 billion. In 2018, it closed 48 deals involving 63 properties in 16 states, according to the source.

“Self-storage is a high-demand market that has grown exponentially since our team started out two decades ago,” Mele said.

Mele joined M&M in 1999 as an agent specializing in the self-storage sector. He rose to senior associate in May 2002, vice president of investments in January 2008, senior vice president of investments in 2014, senior managing director of investments in February 2017, and executive managing director of investments in September 2018.

He ranked among M&M’s top 20 agents five times and was the No. 1 National Self Storage Group agent on six occasions. He earned four “Chairman's Circle of Excellence” awards, five “Chairman's Club” awards, 15 “National Achievement Awards” and 17 “Sales Recognition Awards.”

Founded in 1917, C&W offers a complete range of services for all property types including consulting and appraisal, corporate services, debt and equity financing, investment banking, leasing, and sales and acquisitions. The company employs 48,000 people in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services.

Source:
GlobeSt.com, The Mele Group Makes a Move

OpenTech Alliance Inc., a Phoenix-based provider of self-storage kiosks, call-center services and other technology, announced several leadership changes this week. The company appointed a new president and hired three new employees to its engineering, marketing and sales teams, according to a press release.

Mike Connolly, who previously served as OpenTech’s chief operating officer, has been named president. “Over the past 15 years, Mike has played a major role in OpenTech’s success and growth as an investor, board member and leader. Mike has been my professional and personal mentor for over 35 years. Without him, OpenTech would never have gotten off the ground,” said Robert Chiti, CEO and chairman. “As our business expands and gets more complex, Mike is the perfect person to keep it running smoothly. At the same time, my job will be to shake things up, growing our business through internal innovation, acquisition and partnership. I expect the next 15 years to be even more exciting than the first.”

Roy Pierson has joined the company as vice president of engineering. He has experience in product and solution delivery, with a focus on cloud computing, security, big data, and technology transformation and innovation, the release stated. Pierson was previously employed at Microsoft for 15 years, working in global-reservation systems as well as leading the effort to create industry standards for data sharing in the hospitality industry.

Kristi Adams-Gubbels, with 13 years of self-storage experience, was hired as vice president of product marketing. She was the founder of USstoragsearch.com, a third-party directory for the self-storage industry, and worked on the marketing team for self-storage real estate investment trust CubeSmart.

Bill Hoffman joined the team as senior vice president of sales and marketing. He has more than 20 years of strategic sales, marketing, channel and customer-service experience with a focus on team-building and customer-relationship-management strategies. Under Hoffman’s direction, OpenTech has begun to ramp up its operational tools and implemented focused marketing and sales programs, according to the release.

“Having talented people is a great thing, but the best part about our team is they all share our core values and commitment to doing it right. I have always heard that growing a successful company is all about people, so I am very optimistic about our team and where they will take OpenTech in the future,” Chiti said.

OpenTech provides several models of INSOMNIAC self-serve kiosks as well as a range of self-storage rental solutions including the INSOMNIAC Live! Call Center, INSOMNIAC Online Web and mobile applications, LiveAgent! software products, and the INSOMNIAC ILock Security System, all available through the company's self-storage cloud.

Source:
PR Web, OpenTech Appoints New President and Recruits Domain Experts

Have you considered hiring a third-party management firm to oversee of your self-storage property? Whether you’re just breaking into the industry or a veteran, outsourcing facility operation can help you optimize performance, maximize revenue or simply be more hands-off with the business.

As in marriage, the secret to success is choosing the right partner for your specific needs. Not all providers are the same. For a thriving alliance, it’s important to feel comfortable with the company you choose.

Following is advice for vetting potential management firms. First, I’ll discuss the benefits of hiring such a company and the services it can provide.

The Benefits

First, a third-party management firm may have more capabilities and talent to raise the value of your asset than you have on your own. A company that focuses solely on self-storage operation can act quickly when the tides change in your market. Often, it has proven, data-driven strategies it can implement through proper tools and resources.

In addition, a management company will consistently monitor all your expenses and compare them to those of similar properties to help increase everyone’s cost-savings. These firms often use economies of scale to decrease expenditures across the portfolio for utilities, advertising, marketing, call-center services and other necessities.

The Services

There’s a broad spectrum of services a management firm can offer. In addition to general property management, a full-service company handles facility marketing, revenue management, training, financial reporting and accounting. Specific items it might handle include:

• Assisting with design and layout of the front office
• Adjusting unit mix
• Developing rental agreements and forms
• Establishing policies and procedures
• Establishing and executing a marketing plan
• Integrating computer software and hardware
• Setting and managing rates for new and existing customers

The firm will also take responsibility for human resources, which includes staff hiring, firing and development. It often has a network of storage managers and a team of experts to support and train them. A management company may keep your current employees or could bring in its own trained staff. This is a question you should always ask during the selection process.

There are management companies that provide à la carte services as well, which allows you to simply fill in knowledge gaps where necessary. Consider the full scope of services required.

The Selection Process

Your choice of management firm should be based on the level of engagement you desire and the fee structure that works for your budget. It must be a good partnership for both sides. Some companies don’t allow the owner to make decisions or have any involvement after signing the contract. Others permit the owner to be involved in some day-to-day operation and will consult on major decisions.

Consider how often you want information about your business. Some firms will provide details, others just an overview of important items. Some will send data on a set schedule. These things are usually based on your preferences.

You’ll also need to decide if you want to keep your brand name or operate under the management company’s brand. Some firms will give you the choice, others won’t.

Here are some additional things to learn during the vetting process:

• Does the company have a clause in its contract that prevents it from managing other facilities within a certain distance of your property?
• How is the organization structured?
• Does the managers’ direct supervisor make regular visits and stay in constant communication?
• What reports will you receive?
• What’s are the cost structure and management fees? Are other fees directly passed through?
• What marketing strategies does the company employ?
• Are operational strategies tailored to your occupancy and demographics, or is it a one-size-fits-all approach for all facilities in the company’s portfolio?
• What kind of staff training does the company provide?

Research each company’s track record and speak to references. Often, a candidate will provide case studies of managed facilities as well access to previous and current clients.

Being open and honest about expectations on both sides of the partnership can lead to great success. Understanding the scope of services involved and the level of engagement you can have as an owner is also essential to making the right choice. Whatever your needs and preferences, a third-party management company can help improve the value of your asset.

Melissa Stiles is director of marketing for Storage Asset Management Inc., where she’s responsible for the direction of marketing for the company and its 120-plus managed facilities. This includes the development and execution of local marketing plans, digital marketing, social media, advertising, public relations, and special events. She’s been a frequent presenter at state and national industry tradeshows. For more information, e-mail [email protected]; visit www.storageassetmanagement.com.