This weeks Inside Self-Storage World Expo in Las Vegas offers self-storage owners, managers, developers and management companies a chance to meet with more than 120 self-storage suppliers providing a wide range of industry products and services. Starting on Wednesday at the Paris Hotel & Resort, the event showcases building manufacturers, real estate brokers, finance companies, general contractors, marketing consultants, retail suppliers, and many other vendors.

This years exhibit hall includes 17 first-time ISS Expo exhibitors. New companies include Coast Commercial Credit, Green Country Lights, Temperature Retention Systems and Bottoms-Up Water Resistant Storage Platform.

The exhibit hall will be open Thursday from noon until 5 p.m., and again on Friday from 9 a.m. to noon. Immediately following the first set of exhibit hours will be the evening cocktail reception, where exhibitors and attendees can mingle in a relaxed, informal setting. The two-hour event is sponsored by Sentinel Systems Corp., a provider of self-storage management software and security systems.

This is the chance for attendees to meet with all kinds of companies and learn about new products and services, said Troy Bix, publisher of Inside Self-Storage. Some of these companies have been in the industry for decades. They offer  wealth of information on all things self-storage.

The ISS Expo also features four comprehensive education tracks covering the industrys most relevant issues, four workshops and multiple networking events. Registration can be completed online at www.insideselfstorageworldexpo.com. Interested parties can also call 800.230.2311 or register on site.

As we move through 2012, a great feeling is moving through the self-storage industry. Racked in recent years by the financial crisis and increased supply, self-storage has come back extremely strong. Capital markets are starting to work again. Facility occupancies are higher, and net income has been solid. Self-storage has continually been ranked one of the best commercial investments available. Inc. magazine placed it among the best startup businesses in 2010.

Now that the industry's day-to-day operations have begun to stabilize, its time to take a look at the processes used to run the business. Are you using the best techniques to reach customers? Are you using modern methods of accounting? Do you have remote access to your operation? Can you find your facilities online? Lets review five technology-related initiatives you can implement now at a reasonable cost to improve your self-storage operation.

1. Your Facility Website

The future of self-storage marketing is on the Internet, and facility operators must be prepared. In 2010, for the first time ever, more advertising dollars were spent online than on print and newspaper advertising. In addition, adults now spend an average of 18 hours per week on the Internet. These two facts alone show where the trend is heading.

Creating a solid website with features customers want should be at the top of your list. Your self-storage facility must be found online. A website will cost some money to develop, but it will be well worth the expense.

2. Cloud-Based Software

There are technological developments that revolutionize the way we do business. In the 80s, it was personal computers and cellular phones. In the 90s, it was the perfection of personal-computing software and the birth of the smartphone with the first Blackberry. This decade will be remembered for the implementation of cloud-based software. This is simply applications and services offered via the Internet from data centers all over the world.

One example of cloud-based software is QuickBooks online. This tool enables you to review the accounting information for any self-storage facility at any time as long as you have an Internet connection. It can be done from a desktop computer, laptop, smartphone or tablet. Another excellent cloud-based program is Evernote. This is a note-taking program similar to Microsoft One Note. Evernote can be accessed from a computer, smartphone or tablet. Its like having a dynamic legal pad at your fingertips.

Consider finding a self-storage management software you can access online. Its nice to be able to access all your operational data while on vacation or a business trip.

3. Social Media

We hear a lot about this marketing tool, especially since Facebook decided to go public. The nice thing about social media is its mostly free. All thats needed is an Internet-connected device and a little time. The primary platforms are Facebook, Twitter, Google+, YouTube and LinkedIn.

The question is, how do self-storage operators get prospects and customers from this medium? Theres no direct answer. Ive not found one social-media strategy that has brought in a steady stream of potential customers to the self-storage facilities I manage.

However, social media allows you to keep in regular contact with your customers and prospects. Operators once had to rely on tenant events or direct mail for this. Now the possibilities are endless. You can post an interesting article, video, community event or organize a contest. Your existing social-media followers are most likely your current customers. Consider using this medium to interact with them, and theyll likely send referrals your way. Remember, people store their belongings where they feel comfortable. The more they interact with your facility the better.

An interesting social-media platform that recently launched is Pinterest, which allows a user to upload pictures or pin pictures from the Internet to an online bulletin board. Can this be used effectively in self-storage? Its too early to tell, but if you have some spare time, its worth a look.

4. Revenue Management

If your facility is 100 percent occupied and youre not raising rates, you're losing money. Technology is not only great for marketing or using social media, its phenomenally adept at helping operators make more revenue and track expenses. Consider using self-storage management software that allows you to program automatic rent increases.

Using this automated feature allows rent increases to be sent out automatically, without having to decide how much the increase should be for each customer or which customers get the increase. Do it across the board on at least an annual basis, and then work with individual customers if theres an issue. Expenses such as utilities, property taxes and property insurance increase on an annual basis, so must your revenue.

5. Technological Hardware

If you walk into your local Best Buy or office-supply store, you can be overwhelmed with the technological options available. As much fun as it may be to purchase the newest tablet or leading smartphone, you have to decide what you really need. Every self-storage facility should have a computer (laptop or desktop), a high-speed Internet connection, and a printer/scanner. These are just day-to-day tools you need in a modern office. I would also consider a digital camera or small video-recording device to document situations that can arise at a self-storage facility. Once you have these items, what else do you need?

If youre an owner, investor or operator of multiple stores, youll most likely need at least a laptop, Internet-connection device, a recently released smartphone, and some cloud-based software/applications. These items will help you conduct business remotely.

Does the onsite manager need a smartphone or tablet? Probably not, unless he has other duties that require such a device. Does it look neat for a manager to show a tenant to a unit using a tablet? Well, yes, I would be impressed. Is it cost-effective? Probably not. A decent tablet will be north of $350 or more if you include an annual data plan from a mobile-phone company. A clipboard costs $1. As much as technology can help us, it has to make sense and be cost-effective, too.

We live in interesting times. There are so many technological ideas being developed, its hard to keep up. I follow 31 technology blogs just to stay informed on a daily basis. The best way to learn technology is to test it, play with it and, most of all, dont be afraid of it. Some day computers will be a thing of the past and something else will take over. For now, you need to review your self-storage technology at least annually. As former IBM executive Andrew Heller once said, Technology is like fish. The longer it stays on the shelf, the less desirable it becomes.

Matthew Van Horn is vice president of Cutting Edge Self-Storage Management, a full-service management company specializing in management, feasibility studies, consulting and joint ventures within the self-storage industry. Van Horn is well-known for finding hidden profit centers in self-storage operations. For a complimentary copy of Hidden Profit Discovery Session, send an e-mail to [email protected] . For more information, call 866.970.EDGE or visit www.cuttingedgeselfstorage.com . Follow the company on Twitter at Cuttingedgemgt, and on Facebook at Cutting Edge Self-Storage Management.

By David Smyle

While the economy is by no means out of the woods yet, the lending industry has seen significant improvement, with the easing of credit and capital flowing back into the market. This is good news for self-storage owners and investors, who can take advantage of the advantageous lending environment.

As the FDIC winds down its closure of failing banks, were starting to see new community banks spring up, and the continued merger of banks into stronger institutions is allowing lending to flow again. Thanks to the Small Business Administrations (SBA) recent inclusion of self-storage as an acceptable property type and USDA lending programs for rural properties, those self-storage owners with high loan-to-values (LTV) see some light at the end of the tunnel. They can possibly refinance a maturing loan or improve their interest rate.

At the time of this writing (mid-January), the one-, five- and 10-year Treasuries are at .1 percent, .86 percent and 1.99 percent respectively. Compare this to January 2007 when the rates were 5 percent, 4.68 percent and 4.68 percent (inverted yield curve). This has led to unbelievably low interest rates for some lenders; others have chosen to keep rates near 6 percent for five-year deals. In metro areas where banks are forced to compete, a five-year fixed rate can be less than 4 percent.

Life-Insurance Companies

While most lenders, including life-insurance companies, sat on the sidelines in 2008 being very selective on funding decisions, everyone is back in the game now. A limited number of life-insurance companies will lend on self-storage, but typically on larger deals of $5 million or more. Some smaller life-insurance companies will go down to $500,000 and, preferably, $1 million minimums.

The life-insurance companies prefer lower-leveraged transactions (60 percent or less). If you can live with a self-amortizing or shorter-amortized loan program, youll find rates as low as 3.5 percent on 10-year fixed and 4 percent to 4.5 percent on 15-year fixed rates. The whole range of programs exist with amortization up to 30 years, fully amortized fixed rates up to 25 years, and everything in between. Interest-only is possible, and non-recourse is standard on most programs.

The downside on life-insurance company lending is the high cost of entry, with borrowers needing to put up a deposit of 2 percent of the loan amount during the application processrefunded shortly after closingin addition to approximately $8,000 to $10,000 of third-party reports and another $5,000 to $20,000 in lender legal fees. Despite the higher costs, the overall financial gains on interest savings far outweigh the initial outlay.

Closing time is also longer at 60 to 90 days, but rates are locked for 90 days up front. In some cases, forward rate locks are available for six to 18 months in advance of funding.

Life-insurance companies also prefer buildings built of wood frame, steel or concrete block vs. all-metal. In addition, they favor larger metro areas and well-located properties with good access and visibility.
Most life-insurance companies lend through a network of mortgage-banker correspondents who not only originate but service the loans. If desiring this type of loan, youll need a commercial mortgage banker who is able to fund loans nationwide.

Conduits

After a dismal couple of years with no saleable product or market, the conduit programs, while still tenuous, are making a comeback. Because the life-insurance companies are cherry-picking most of the better, low-leveraged properties, the conduitstypically with minimum loan amounts of $5 million to $10 millionhave begun looking at secondary and tertiary markets for product on which to lend. Theyre also funding higher LTV properties the life-insurance companies wont touch, satisfying the non-recourse appetite for storage owners. Rates can be in the low to high 5 percent range for a 10-year fixed-rate loan with 25- to 30-year amortization.

Expect legal fees to approach $15,000 to $20,000, with early rate locks not as prevalent. Defeasance prepayment is still the penalty of choice on these programs, but for those long-term holders, it may not be an issue. Most conduit loans are funded and some serviced through the mortgage banker/broker network.

Banks

Banks continue to be the loan option for most borrowers due to the size, costs, market or flexibility required. Most are recourse lenders. Relationships also play a key role for ease of a transaction and certainty of execution. However, it seems most banks (except those in the West) prefer shorter amortizations of 15 to 20 years vs. 25 years, and sometimes 30 years for many lenders in the western United States.

Bank lending rates can be all over the board, but most institutions prefer to limit fixed-rate terms at five years and will lend that money out between 4.75 percent and 6 percent. This is not to say you cant find a seven-, 10- or even 15-year fixed rate at banks, but it's just not the norm.

Banks are also still one of the few construction lenders out there. But unless your self-storage project is the diamond in the rough, dont expect it to be easy to find funding. There are loans getting done, especially for project expansion, but only for deals with strong sponsorship, good operating histories and market demand.

Again, this is a good opportunity for an SBA loan option. Many borrowers choose the bank option for the prepayment flexibility and lower costs of origination, even with the shorter fixed-rate term and shorter amortization.

Credit Unions

Just like banks, credit unions had their share of commercial real estate problems and curtailed lending while they assessed their portfolios and licked their wounds. Theyre also back in the game, offering borrowers the flexibility of little or no prepayment penalty, a competitive rate and amortization, and varied products.

Not every credit union lends on commercial property. Also, theres usually a membership eligibility requirement that must be met to obtain a loan. This is typically where you live, work or worship in the credit unions lending or branch geography. Theyre also a recourse lender in nearly all scenarios, but a definite option to consider when weighing your financing choices.

Three- to 10-year fixed rates are usually the programs offered, with amortization from 20 years to 25 years and sometimes even 30 years. Rates will be competitive, ranging from high 4 percent to high 5 percent. Credit unions can be state or federally chartered, with federally chartered institutions typically being able to offer a larger geographic lending area, possibly even national.

Mortgage Bankers and Brokers

While most mortgage bankers and brokers do not originate from their own funds, they still play an active role in the lending arena, helping borrowers find loan programs not available through local banks and credit unions. With at least a dozen conduit options and a similar number of life-insurance company lenders actively providing self-storage capital, mortgage bankers and brokers offer access to these funds in an efficient and cost-effective manner. They can also locate bank and credit-union programs from institutions not in your area.

Rates will be going up because they cant get any lower. I said the same thing in 2004 when the 10-year treasury was at 3.33 percent. Oh, well. I dont think I was the only one wrong on that, but I think Im pretty safe on that comment now. Heres to a profitable 2012!

David Smyle is the vice president and managing director for Churchill Mortgage Capital, which originates or services loans in 14 states. He specializes in financing options for self-storage and other commercial property types nationwide. To reach him, call 619.956.986; e-mail [email protected] .

Chicagoland self-storage provider LifeStorage is hosting a Blood Drive and Merchant Day event at its Hermosa store at 4500 W. Grand Ave. in Chicago from 10 a.m. to 4 p.m. tomorrow, March 10.

Partnering with LifeSource, Chicago's Blood Center, LifeStorage Hermosa managers Yecy Morquecho and Mario Alequin decided to combine the blood drive with Merchant Day, where business tenants will exhibit at the facility with posters, promotions. and merchandise.

Morquecho and Alequin hope people will stop by the LifeStorage facility, donate blood, peruse what the merchants have on display, and see what LifeStorage facilities offer. The managers have been promoting the combined event though word of mouth, fliers, e-mails and social media. They said the combination event serves three purposes: giving back to the community, helping existing tenants and attracting new business.

"We wanted to include Merchant Day because we have a few tenants that have small businesses and wanted to help them out and also generate new business," Morquecho said. "As for the blood donation, LifeSource is a great organization, and we can't overstate this enough: Donating blood really does make a difference. It really can save a life."

LifeStorage was founded in 2002 by owners Jean Jodoin and Christopher Barry. The operation currently has 17 locations in Chicago and its suburbs, with two more opening later this year.

Executives from self-storage real estate investment trusts (REIT) CubeSmart, Extra Space Storage Inc. and Sovran Self Storage Inc. will participate in separate presentations next week at the Citi Global Property CEO Conference at The Breakers in Palm Beach, Fla.

CubeSmart CEO Dean Jernigan will participate in a roundtable discussion beginning at 1:35 p.m. EDT on March 12. President and Chief Investment Officer Christopher Marr will also be a part of the presentation. Audio is available by dialing 877.211.0500 in the United States or Canada, or 201.984.1145 internationally. The pass code is 7494482. This dial-in information can also be used to hear audio from the presentation of Extra Space Chairman and CEO Spencer Kirk, who will be presenting on the same day at 4:55 p.m.

Sovran CEO David Rogers will participate in a different discussion at 10:50 a.m. on March 13. Audio is available by dialing 719.785.5595 in the U.S. or Canada, or 201.984.1145 internationally. The pass code for this listen-only presentation is 109841.

In its 17th year, Citi's Global Property CEO Conference will include property companies from around the world, with more than 100 expected to attend the three-day event. Each companys CEO, along with a Citi research analyst, will conduct a 35-minute roundtable discussion.

CubeSmart owns or manages 477 facilities across the United States and operates the CubeSmart Network, which consists of approximately 825 additional self-storage facilities.

Headquartered in Salt Lake City, Extra Space owns or operates 882 self-storage facilities in 34 U.S. states and Washington, D.C. The company's properties comprise approximately 585,000 units and approximately 64 million square feet of rentable storage space.

Sovran is a self-administered and self-managed equity REIT in the business of acquiring and managing self-storage facilities. The company operates 445 properties in 25 states under the name Uncle Bob's Self Storage.

As of March 15, the self-storage industry will be required to follow the Americans With Disabilities Act (ADA) regulations passed in 2010, unless a property already meets the original ADA standards written in 1991. Any renovations or development of new facilities must be designed to meet the new regulations.

Specifically stated for self-storage, 5 percent of the first 200 units must to be wheelchair accessible. Two percent of the remaining units must also be wheelchair accessible. These accessible units should be dispersed among the different types of units the facility provides. However, owners are not required to add additional accessible units to have one in each type. If the space is needed for another renter, it doesnt have to be held for a disabled customer. ADA regulations do not clarify on the use of roll-up doors.

Other regulations that will affect self-storage facilities include enlarged turning spaces for wheelchairs in restrooms, changes in reach ranges, and space requirements for handicapped employee work spaces. The new regulations also provide more protection to disabled persons with service animals.

"While the March date has significance, it doesn't change the landscape that much," said Carlos Kaslow, general counsel for the Self-Storage Association. "From an operator's standpoint, you want to be in compliance. A lot of ADA is easy for self-storage to comply with just because of the nature of the business. Most storage facilities already have wide hallways because people are navigating stuff down hallways. We have an advantage over many other commercial-building types."

ADA regulations are part of the U.S.'s civil right laws. Not following the regulations could lead to private lawsuits against building owners. "Any person denied access because of their disability can bring a lawsuit under Title 3 of the Americans with Disabilities Act," Kaslow said. 

Argus Self Storage Sales Network and Professional Self Storage Management LLC (PSSM) have formed a strategic partnership, combining their expertise and personnel to enhance the resources they provide to the self-storage industry in real estate and management services. 

The new partnerships management services will be operated under Argus Professional Storage Management and will work hand in hand with Argus broker affiliates to help assist storage owners with third-party management needs and enhance the value of their facilities.

Ben Vestal, president of Argus, and Mel Holsinger, president of PSSM, said theyre confident their combined resources will be an added value for their respective clients, as well as offer many benefits for individual self-storage owners. The companies' experts have more than 40 years of combined industry experience and are highly respected in their respective fields.

Holsinger and Vestal are both presenters of the upcoming Inside Self-Storage World Expo in Las Vegas, March 14-16. Vestal will lead a seminar on the self-storage transaction market. Holsinger will participate in several expo events, including the Self-Storage Q&A and the Management Workshop. Information about the companies and their new partnership can be found at the Argus booth, No. 506, during exhibit hours on March 15 and 16.

Based in Denver, Argus was formed in 1994 to assist owners and investors of self-storage. The firm has 36 broker affiliates covering nearly 40 markets.

PSSM manages self-storage facilities for individuals, corporations and partnerships. In addition to manager hiring, training and supervision, the Tucson, Ariz.-based company provides complete marketing programs, operations policies and procedures, accounting services, insurance administration, site audits, and more.

Flagship Investment Group LLC, a private real estate investment company focused on self-storage and other ventures, named Steve Hryszko as senior vice president, acquisitions. Hryszko will lead the companys national acquisition activity in self-storage.

Before joining Flagship, Hryszko was national director of the National Self Storage Advisory Group at C.B. Richard Ellis. Hryszko formerly served as vice president of acquisitions for U-Store-It Inc. (now CubeSmart), where he was directly responsible for self-storage acquisitions and dispositions. During his career, Hryszko has led more $1 billion dollars of self-storage acquisitions and dispositions.

We are delighted to have Steve join us," said Chip Headley, president and chief investment officer at Flagship. "He is an experienced self-storage acquisition expert who adds strength to our executive team, as well as a man of character. We look forward to his leadership as we continue to grow our self-storage portfolio."

Flagship Investment Group is a Central Florida-based developer, owner and operator of self-storage facilities.

Self-storage operator Storage Express has acquired a 60,000-square-foot facility in Indianapolis from Simply Self Storage. The facility, which has more than 500 units, is on the northeast side of the city, near the intersection of Interstate 465 and Pendleton Pike.

Storage Express plans to upgrade the property with new security technology, personalized access-control features, a 24-hour rental center and other amenities.

Based in Bloomington, Ind., Storage Express owns and operates 75 self-storage properties in secondary markets across Illinois, Indiana, Kentucky, Tennessee and Ohio. The company has opened six locations over the past two years and has plans for further construction in new markets this year.