There are many factors that go into self-storage facility design, but not all properties are created equal. Sometimes, what looks good on paper doesn’t work functionally or practically once it’s built. In addition, market dynamics and customer needs can change, prompting the need to rethink facility amenities and curb appeal. Let us know what the most nagging area of your facility is by participating in this special Inside Self-Storage poll:
Janus International Group LLC, a manufacturer of self-storage roll-up doors and building components, has appointed James Carter, Pete Frayser, Josh Rolland and Craig Watkins to business-development positions in its R3 (Restore, Rebuild, Replace) Division, according to a press release. Carter will focus on the Central Region, Rolland on the Southeast and Watkins on the Southwest. Frayser will oversee the Northeast in addition to leading the company’s international sales. All four have extensive experience in business development and sales management, the release stated.
The R3 group focuses on revitalizing older self-storage facilities, targeting mid-sized and independent operators to upgrade the properties’ and brand image. "We are excited to have these gentlemen join the R3 business-development team as we continue to expand our strategic vision to offer turnkey solutions to our industry," said Troy Bix, president of the R3 Division. “The genesis of R3 is to add value to the site. It’s taking 30 to 40 years of self-storage building and bringing them up to market relevance, and adding value to them.”
“The experience and industry knowledge this team will bring to R3 make them a key addition to the Janus family,” added Roc Hughes, vice president of R3.
Janus was recently acquired by private investment firm Clearlake Capital Group LP, which has interests in the energy and industrial, food and consumer services, and software and technology sectors. The move is a part of a broad strategy to infuse Janus with resources to pursue product development and company growth, including acquisitions, according to company officials.
Headquartered in Temple, Ga., and founded in 2002, Janus is a global manufacturer and supplier of roll-up and swing doors, hallway systems, and re-locatable storage units for the self-storage industry. It operates 10 U.S. locations as well as manufacturing facilities in Europe and Mexico.
Self-storage operators know that a huge part of their job involves providing superior customer service. When faced with a tenant who’s fuming about a late fee, they must smile and stay calm. When a new customer is signing a lease while his three-year-old runs circles around the office and knocks over merchandise, again, they must smile and stay calm. And when a customer enters the office and shares waaaayyy too much information about a fight with a spouse, they’ll nod their head in the appropriate places and offer words of encouragement.
Wearing many “hats” is just part of the gig. And nearly every cap, bonnet or fedora usually contains some aspect of customer service. Even so, your skills can be stretched, tested and even be nonexistent on a bad day.
Self-Storage Talk (SST), the industry’s biggest online community, recently presented a few instances in which flexing your customer-service muscles was a must. In the thread, “Yes. I Am Really Going to Ask This Question,” SST Moderator MusicCityGal introduced the topic of smelly bathrooms after use by a tenant or guest. Others quickly chimed in to share their own revolting tales and discussed how to handle not just the stench left behind, but gently deal with the customer who made it. It’s a delicate customer-service situation that no one wants to be in, but it does happen.
SST threads about late fees also demonstrate how often self-storage managers must activate their customer-service prowess. The thread “What to Do. Renter Pays but Still Behind” contains several instances in which managers were faced with tenants angry about fees and overlocks, and some who had to move forward with a lien sale after listening to one too many sob stories from customers who were behind on the rent.
As you can imagine, a hallmark of good customer service is patience. Another is being an excellent listener. Finally, you need the ability to communicate well with your tenants. If your customer-service skills are a bit lacking, however, don’t fret. These can be learned and improved any time. In the ISS article “4 'Stupid-Simple' Tricks for Elevating Your Self-Storage Service Skills,” author Rick Beal offers strategies you can adopt to ensure the next time you’re faced with a “tricky” service situation, you’ll know how to handle it. He also introduces the concept of “infusive service,” which goes beyond just your words and actions to include everything about your property, from signage to curb appeal.
In the age of technology, customer service often gets left behind. And while offering your customers a number of ways to interact with your facility—via a kiosk or online billpay, for example—is necessary, it’s still critical to keep that “old-school” customer-service philosophy intact. People who seek self-storage are often in some kind of life transition. It could be a family move, divorce, death, downsizing, job loss or any other high-stress event that rocks someone’s world. They’re likely already on edge, so it’s up to you to make moving into a storage unit as pleasant as possible. You don’t have to be Polly Positive every day and in every situation, but keeping your cool when faced with one of those “tricky” situations is a must.
How do you handle difficult customer-service situations? Add a comment below or on Self-Storage Talk, the industry’s biggest online community.
In this video from investment bank and advisory firm CapStack Partners, CEO David Blatt offers insight to self-storage buyers on successfully securing a loan. He discusses the total-return levers lenders examine when considering a loan and offers insight on how to turn negotiations in your favor to get the best terms for your deal.
Update 3/14/18 – Adding to its list of industry partnerships, StoreLocal has teamed up with E-SoftSys LLC to offer Self Storage Manager (SSM) software to its members. The SSM API (application program interface) will allow StoreLocal members to facilitate customer relationship management (CRM), lead conversions, online reservations and move-ins through their own business websites, according to a press release.
"We are excited about the partnership with StoreLocal. Our development team has worked very closely with the StoreLocal team for more than a year in developing a tight integration between our management software and StoreLocal's platform of products and services,” said Kat Shenoy, president and CEO of E-SoftSys. “Since then, we have successfully transitioned several Self Storage Manager clients to the StoreLocal platform. Our joint offering helps self-storage operators maximize occupancy while increasing revenue and customer-lifetime yield. We expect this partnership to be a win-win for both companies, and we will continue to promote the benefits of StoreLocal membership to our clients."
"By partnering with E-SoftSys, we are able to provide affordable enterprise-class technology services to our members," added Watkins. "Our goal is to provide a scalable platform of products and services, and ensure that our products meet and exceed the expectations of today's storage customer. Self Storage Manager's advanced API offers a tight integration between the management software and StoreLocal's Web platform."
E-SoftSys, a Microsoft Gold Certified Partner and ISO 9001:2008 certified company, provides software products for the self-storage industry, including Self Storage Manager, e-CRM and SSM Text Messenger. The company also offers add-on modules such as the INSOMNIAC kiosk interface, online payments, online reservations and rentals, the QlikView Business Intelligence and Analytics interface, and the Android-based Site Walkthrough and Work Order Management module.
11/20/17 – StoreLocal, a cooperative created by independent self-storage operators to offer member benefits with economies of scale, has partnered with storEDGE to offer management software to its members. The storEDGE API (application program interface) will allow StoreLocal members to use the software in conjunction with the co-op’s platforms for facilitating online reservations and move-ins, billpay, and lead tracking, according to a press release.
“Although we provide overlapping services with StoreLocal, we are proud to open our technology to their members, letting mutual customers choose the best platform to run their business,” said Dan Miller, CEO of storEDGE. “We’re looking forward to working with StoreLocal members to provide better software integration and business-intelligence tools.”
StoreLocal expects more than 100 of its members to migrate to storEDGE software initially, with more than 200 making the move by the second quarter next year, according to Lance Watkins, CEO of StoreLocal. “StoreLocal believes that co-op members should have freedom of choice to make the best business decisions for their companies,” he said. “We are excited to expand this philosophy with a deep, unrestricted integration with storEDGE facility-management software.”
storEDGE is a provider of software and other technology for the self-storage industry. Its products include management software, website-creation services, online rental-center tools, business intelligence and other integrated services.
StoreLocal leverages the combined strength of its membership for services such as customer acquisition, financing, marketing and technology. The coop also owns online self-storage directories StorageFront.com and SelfStorageHounds.com. Its total membership includes more than 700 self-storage facilities through 21 founding-member companies.
Source:
Markets Insider, E-SoftSys and Storelocal Announce Partnership to Offer Management Software and Web Platform to Self-Storage Operators
NorthPoint Development opened a new Beyond Self Storage facility last month in Maplewood, Minn. It’s the fourth project from the firm since it launched its multi-facility development initiative in February 2016. The company also operates two Beyond Self Storage facilities in Chesterfield and McCausland, Mo., and Joco Self Storage in Overland Park, Kan.
The property at 1315 Cope Ave. E. took a year to build. It comprises more than 100,000 square feet of drive-through storage space as well as a business/conference center that includes workstations, a printer and copier, and Wi-Fi. It also features access-controlled entry, a self-serve kiosk, motion-detection lighting, video cameras, and a retail store that sells moving and packing supplies. Customers can make online reservations.
“We are really excited to open the first of multiple projects we have planned for the Minneapolis area,” said Ben Hagedorn, director of operations. “There are no facilities currently offering the same kind of modern amenities in the surrounding area, and Beyond Self Storage will be one of the only drive-through facilities with 100 percent climate control to serve residents and businesses.”
NorthPoint has several self-storage projects under development or construction in Michigan, Minnesota and Pennsylvania. Additional properties are under contract in other markets, the release stated.
Based in Riverside, Mo., and founded in 2012, NorthPoint is a development, management and leasing firm that’s principally focused on the industrial, multi-family, senior living and self-storage markets in the Central United States. The company has $2.1 billion in raised capital and operates 28 million square feet of industrial properties, thousands of multi-family apartment units, and numerous developed or managed senior-living communities.
Phoenix-based U-Haul International Inc., which operates more than 1,300 self-storage facilities across North America, has purchased a former Macy’s department store in Monaca, Pa., with plans to convert a portion of it to self-storage. The company paid $1.5 million for the space, which spans two floors inside Beaver Valley Mall at 570 Beaver Valley Mall Blvd., according to the source.
The department store, which opened in 1970, comprises 200,000 square feet of space. Macy’s vacated last year. U-Haul plans to add self-storage units to the second level and turn a portion of the first floor into a showroom, which it hopes to open this month. It will then lease out the remaining space, according to Bob Bourgeois, president of the U-Haul Co. of Pittsburgh.
“With the revitalization going on downtown, we wanted to give people the opportunity for convenience,” said Todd Schnitzer, president of the U-Haul Co. of Western New York. “The conversion of existing buildings into mixed-use and residential property downtown is growing, and people are moving back into the area.”
The 1.15-million-square-foot shopping center is “evolving dramatically,” said Tim Mascari, general manager of the Beaver Valley Mall. Farm-supply store Rural King moved into a two-story anchor spot after a Sears store closed in 2016. Department stores JCPenney and Boscov’s are still a part of the shopping center, which is seeking other tenants to fill additional empty spaces, the source reported.
U-Haul has several conversion projects underway, including sites in Arizona, Indianapolis and Utah. It’s also repurposing a former Kmart store in Lancaster, Calif., and a factory in Erie, Pa., to self-storage. All the projects are a part of the company’s corporate sustainability initiatives, which support infill development to help local communities lower their carbon footprint.
Established in 1945, U-Haul owns more than 51 million square feet of storage space at owned and managed facilities in North America.
Source:
Pittsburgh Post-Gazette, At the Mall: When Macy's Moves Out and U-Haul Moves In
The self-storage market continues to be robust, and we’re seeing many new investors, large and small, enter the space for the first time. With so many buyers in the marketplace being new to the industry, here are some of the steps one must take to ensure a smooth transaction and successful closing.
When it comes to identifying opportunities, selecting the market in which you’d like to invest is the first step. You can start by looking at desirable demographics such as:
After you’ve identified several markets that meet your criteria, break each into several submarkets—typically four per small city and six to eight per each mid-size to large city. This will allow you to narrow your search. To correctly evaluate your submarkets, plan to spend a day or two touring each city so you have a good understanding of the area. Conducting this type of due diligence will help you better evaluate opportunities and give you the confidence to move quickly when they arise.
It’s important to remember that mid-size and large cities are often inundated with sophisticated self-storage investors, so if you’re new to the business, you might be well-served to look at smaller markets. Investors have uncovered some strong opportunities in secondary and tertiary markets where the competition from other buyers is less significant.
When visiting a target market, meet with a knowledgeable, local broker and appraiser who have experience in self-storage to discuss the nuances of the area, see potential development sites, and understand what terms will be expected when you make an offer on a property. You’ll be surprised how much they can vary from area to area, and when submitting a letter of intent (LOI), you want your terms to be in line with the market. Price isn’t the only consideration. Other important items include:
Be prepared to move quickly when you see an opportunity. I’ve seen several buyers miss out on deals that fit their investment criteria because they were too slow in submitting an LOI. It’s important to realize it’s still a seller’s market!
Whether buying a self-storage property, it’s vital to understand that the structure of the deal can be as important as the purchase price. It’s critical to identify your investment goals and horizon before making an offer so you can structure your LOI and purchase contract to maximize profitability. Parties too often focus on the purchase price and glaze over the structure of the deal without considering the implications of the non-financial aspects of the transaction.
There are two main structures that are typically used when selling or purchasing an entity or its assets: an asset purchase (real estate contract) or an entity purchase (limited-liability company or stock purchase). Let’s examine some of the pros and cons of both. (Note: I’m not an accountant or attorney, so please seek tax and legal advice from your counsel when structuring a deal.)
Asset purchase. There are two significant advantages to the buyer when structuring a deal as an asset purchase. First, he maintains a “step up” cost basis for tax treatment for all assets, which allows him to enjoy full depreciation. Second, he can choose the assets he wants to buy and avoid contingent and unknown liabilities, which are often costly and burdensome.
The main disadvantage to the buyer is an asset purchase may trigger a reassessment of real estate taxes after the sale is complete. With the very aggressive valuations self-storage properties have been receiving, this reassessment can be detrimental to the investment’s ongoing yield.
Entity purchase. The overriding benefits when structuring a deal as an entity or stock purchase are simplicity and convenience. However, this type of structure isn’t the norm in self-storage real estate. The buyer receives all the company’s assets and liabilities, eliminating the need for title transfer, reducing the number of third-party consents (except where there are change-of-control restrictions) and minimizing the vast transactional costs associated with an asset purchase.
The two main disadvantages are increased exposure to liability and the loss of tax benefits. Although a thorough corporate and contract review can help buyers mitigate the go-forward liabilities, they have to be OK with an increase in obligation. Additionally, they’ll need to talk with their accountants to see what tax strategies can offset and mitigate the loss of tax benefits.
There are many factors to consider when structuring a deal. Prior to drafting a purchase agreement, it’s crucial to consider all aspects of a potential transaction. Early planning and preparedness can prove to beneficial and can substantially cut transactional cost and attorney fees.
Note: The information provided above is generic and shouldn’t be construed as advice for any specific deal. If you’re a potential buyer or seller of a self-storage property, seek advice from a trusted real estate broker, attorney and tax professional.
Ben Vestal is president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to buyers and sellers via an extensive marketing platform for self-storage properties. Property listings and informational resources can be found at www.argus-selfstorage.com. For more information, call 800.55.STORE; e-mail [email protected].
Self-storage auction platforms SelfStorageAuction.com and iBid4Storage.com have merged. The combined entity will promote industry lien sales in Australia, Canada, New Zealand and the United States. “The new company will bring efficiencies and significant cost savings to self-storage facility owners worldwide, who no longer need to experience the inconvenience of onsite storage auctions,” company officials said in a joint press release.
Both websites use an eBay-style format that allows self-storage operators to post pictures and videos of units up for auction, along with descriptions of unit contents. Buyers can search and place bids via desktop or mobile devices. The platforms even enable buyers to bid on units outside their immediate area and pick up items within days of winning.
“Together we create a significant client base and substantial infrastructure, a really good consolidation of talents, resources and market share,” said James Grant, CEO of SelfStorageAuction.com, who previously headed StorageBattes.com and StorageTreasures.com.
“We are excited to join forces with Jim’s company. Both iBid4Storage and SelfStorageAuction have our distinctive strengths and, as a joint collaboration, will enable us to deliver a better online product and experience for our users,” added Leon Benghiat, CEO of iBid4Storage.com.
Both companies have been active in expanding service to international markets. Launched in February 2017, SelfStorageAuction.com expanded beyond North America in August to include Australia and New Zealand. It also announced its intention to offer service in the United Kingdom. Based in Toronto, iBid4Storage expanded to the U.S. in 2014. It partnered with Australia-based auction website iBidOnStorage.com.au in January 2017 to expand services to Australia.
Update 3/13/18 – Wentworth has sold its newly converted self-storage property in Chula Vista to Strategic Storage Growth Trust Inc. (SSGT), a public, non-traded, self-storage real estate investment trust sponsored by SmartStop Asset Management LLC. The three-story property at 2380 Fenton St. sits on 1.5 acres and comprises 86,000 square feet of space in 900 climate-controlled units. The building is bisected by a covered-loading area and also contains drive-up units lining its exterior.
“The Eastlake location is in a high-growth, high-income area of Chula Vista, in close proximity to major retailers and residential developments,” said Wayne Johnson, chief investment officer for SSGT. “An excellent fit for our strategic acquisition strategy, this newly constructed facility was acquired by Strategic Storage Growth Trust from its developers following the issuance of a Certificate of Occupancy and should add significant value to our portfolio.”
SSGT focuses on the acquisition, development, redevelopment and lease-up of self-storage properties. Its portfolio currently consists of 24 storage facilities in 10 states comprising approximately 1.8 million net rentable square feet in 16,000 storage units.
It’s sponsored by SmartStop Asset Management, a diversified real estate company with a managed portfolio of 112 self-storage facilities in Canada and the United States. Its managed properties comprise approximately 8.2 million rentable square feet.
11/4/2016 – Commercial real estate firm Wentworth Property Co. LLC has acquired two industrial properties in Chula Vista, Calif., and San Diego, for $27.8 million with the intent to convert them to self-storage. The facilities are expected to open next year, according to the source.
The property at 12340 World Trade Drive in San Diego’s Carmel Mountain Ranch was purchased for $14.5 million. It includes an 81,980-square-foot building. The second site at 2391 Fenton St. in Chula Vista’s Eastlake neighborhood, acquired for $13.3 million, consists of a 90,000-square-foot building. Both structures will be converted to climate-controlled self-storage with approximately 100,000 net rentable square feet.
Wentworth Property has closed on more than $140 million worth of self-storage projects in the last year, the source reported. It also has 1 million square feet under evaluation or contract.
Based in Phoenix, Wentworth Property has developed more than 7 million square feet of commercial office and industrial space. Its portfolio includes build-to-suit, conversions and ground-up developments.
Source:
San Diego Business Journal, Phoenix Firm Plans New Self-Storage Facilities After $27.8M in Building Purchases
