Private investment firm New State Capital Partners LLC and affiliated self-storage builder Mako Steel Inc. have acquired a majority stake in Rabco Enterprises LLC, a Winter Garden, Fla.-based provider of self-storage building systems. Under the move, Mako and Rabco will become a combined business, according to a press release.

Caesar Wright, Mako’s CEO, will serve in the same role for the new entity. Rabco President Emmett Buster Owens III will continue with the merged company, though his role wasn’t defined in the release. Rabco owners Larry Cox and Ron Raboud will stay on in advisory roles.

“The storage industry has only grown over the past year, and we see that trend continuing,” said Shaun Vasavada, vice president at New State. “As leaders in their respective markets, both Mako and Rabco have a high-touch, asset-light approach that improves the experience for its customers. In fact, the combined company derives north of 80 percent of its business from repeat customers, a testament to the strong service they provide and the lasting relationships they have built.”

Mako designs, supplies and installs self-storage and boat/RV-storage buildings nationwide. Both Mako and Rabco build single-story, multi-level and custom facilities, managing the process from engineering to contracting to onsite installation, the release stated.

“Most self-storage facilities are owned by independent developers, and they will continue to be the core of our customer base,” Wright said. “A recent industry study notes that developers and general contractors are clamoring for a nationwide player in the storage-facility-solution space. With a collective involvement in over 4,000 storage facilities, we are excited to partner with Rabco to become the first nationwide, one-stop solution for our partners all across the country.”

“We look forward to a powerful partnership with New State and Mako,” Owens said. “The financial and operational resources they offer will be instrumental as we add services and expand geographically to achieve our next-level potential.”

Founded in 1988, Rabco has also built agricultural steel buildings, airplane hangars and sports facilities. Its services include site planning, unit-mix analysis, installation and customization options for roof and framing systems, insulation, gutters, doors and hallways.

Founded in 1993, Mako has built self-storage facilities in 44 states, Canada and Mexico. The Carlsbad, Calif.-based company specializes in boat/RV storage, multi-story and custom buildings. It has multiple plants to offer service nationwide.

New State acquired a majority investment in Mako in 2019. The company targets companies with $8 million to $30 million of earnings before EBITDA (interest, tax, depreciation and amortization) that serve the business-services, healthcare and industrial sectors. It can commit more than $50 million of equity capital per transaction through affiliate New State Capital Partners II LP. New State and its affiliates have invested in 26 companies, the release stated.

Source:
PR Newswire, New State Capital Partners and Mako Steel Take Majority Stake in Rabco

The benefits of installing solar panels at your self-storage facility far outweigh the few complications you’re likely to incur. Though payback periods average about seven and a half years, taking advantage of programs like the Solar Investment Tax Credit (ITC) and the Rural Energy for America grant program offered by the U.S. Department of Agriculture (USDA) can reduce the time to get a return on your investment.

In our case, we’ve experienced financial, marketing and property-value benefits by investing in a solar program. Let’s take a closer look at how this initiative has positively impacted our self-storage business and underscore some important hiccups and considerations.

Benefits

As self-storage owners, we’re always looking for ways to increase revenue and reduce expenses. Energy costs have been among our largest line items every year. Though Arkansas tends to have low energy rates, we’d often have bills of more than $1,200 per month.

Financial assistance. In 2018, we learned we could take advantage of the ITC and USDA grant to install solar panels at Deer Creek Mini Storage in Cabot, Ark., so we jumped on it. Our 80-panel project was estimated to replace about 75 percent of our power requirements for around $65,000. With our tax credit at $18,000 and grant at $16,000, our out-of-pocket cost came down to $31,000. We financed the project through GreenSky LLC at 5 percent interest. Factoring in our monthly savings, we expect to have a seven-year payoff on the project.

Energy/carbon savings. Since completing the installation in June 2019, our panels have generated 50 MWh of power, which is equivalent to planting 580 trees. From another perspective, we’ve reduced our carbon footprint by 76,705 pounds of CO2. That's a contribution to the community we couldn’t have made without pursuing the project.

Positive publicity. As the first self-storage business in our area to pursue such an installation, we’ve received significant media play. Our installer's public-relations firm issued a press release about the project, and as a result, we received complimentary social media mentions from the local Chamber of Commerce. Our newspaper, “The Cabot Leader,” published an article recognizing our facility for its innovative leadership. We also received coverage from “Arkansas Business,” a statewide business magazine, and Inside Self Storage.

Marketing. We mention our environmental-leadership status in signs around the property, on our website and in our social media posts. Unfortunately, we didn’t put a process in place to track how our solar status has impacted customers’ decisions to rent with us. Occupancy is up, but we don’t have the data to tie it directly to the solar installation. If nothing else, we maintain bragging rights for being the first self-storage operator in Central Arkansas to install a solar-energy system.

Valuation. Storage facilities are typically valued based on their projected ability to produce recurring revenue, and buyers often base their offers on net operating income (NOI). Anything that increases NOI should have a positive impact on the sale price. This is also a metric we use when determining an offer price on a potential acquisition. Using our math, every dollar of NOI increases the offer price by $10 to $13, depending on the capitalization (cap) rate.

In our case, NOI increased by $5,000 as a direct result of the solar-panel installation. The increased value combined with the tax credit and USDA grant gives us an expected one-time profit on the project between 29 percent and 48 percent (depending on cap rate) should we decide to sell the facility. Calculating the reduction in energy costs over time drives that profit even higher.

Rooftop solar panels at Deer Creek Mini Storage in Cabot, Ark.

 

The Installation Process

When it came time to pick an installer, we chose a company owned by a fellow female executive, based on a personal connection. While this worked quite well for us, for most self-storage operators, it makes good sense to interview three service providers, conducting thorough due diligence on each. Look for experience, clear explanations and an estimated price.

Whoever you choose should have substantial experience working with your local power company and be prepared to make the paperwork simple for you. Your installer should also have considerable technical expertise. Get references and call previous clients to ask for recommendations and information about how well the vendor handled their projects.

Our vendor provided a thorough, understandable quote, including project cost and details about our solar panels and energy-generation projections. When collecting estimates, request that vendors provide either long-term access to the proposal online or the ability to download the document.

Once we accepted the quote, our installer helped us secure financing, installed our panels and handled the paperwork necessary to connect to the grid. The funding was so easy that we completed it over the phone at a Starbucks. Our installation was quick—done in two days. Our vendor even set up SolarEdge for us, so we could track our energy production via an iPhone. The installer also completed the two agreements required by our utility—an interconnect agreement and a net metering aggregation form—providing them to us signature-ready.

Challenges

Our two most significant obstacles in completing the project involved the federal government and our local energy provider.

Name recognition. The USDA Rural Energy for America grant requires your business to have an identification number registered with the federal System for Award Management (SAM). Once you’ve completed the SAM registration process, the government will provide you with a Commercial and Government Entity (CAGE) code, which is a five-character identifier for your business.

Registering with SAM is a straightforward process using an online system, but confirming your identity requires matching the company name to your Dun & Bradstreet (D&B) registration. The USDA grant program also requires that you provide your power-utility statements and power-production numbers annually for three years following your award.

Our registration erred out on the first try. In SAM, our business name included an LLC on the end, but not in D&B. Correcting that error took time and many phone calls. So, be sure to check the name on your D&B account before you start your SAM registration.

Though we ran into this hassle, the time invested was entirely worthwhile to get the tax credit. As of this year, according to Energy.gov, the Solar Investment Tax Credit rate is 26 percent. That rate is advertised to drop to 22 percent starting in 2023. The year in which construction begins on your project determines the rate offered.

It turns out our business name was also a problem for our interconnect agreement. Our utility account used our parent-company name, while the interconnect agreement had the name of our storage facility. Though correcting the issue was a simple matter of refiling the agreement with the correct name, discovering the root cause wasn’t nearly as simple. Our net metering was delayed by about four months because of the name difference on the form. It took customer-service representatives that long to identify the cause. We ultimately had to escalate the issue to the support manager to resolve the issue.

Utility issues. Unfortunately, the issue with the name on our interconnect agreement turned out to be the least of our power-utility problems. Though we expected to balance the energy produced by our panels with what the utility received, it turns out our chillers pull power from whichever source (solar or grid) is available. No report indicates how much energy each source provides. Absent that connecting information, there’s no way to balance our production to the utility’s receipt numbers.

We also expected that the net-metering figures would be exact on our power statements. Our facility has four meters and, therefore, four statements. Under our net-metering agreement, any power generated that isn’t used by Meter 1 should be passed to Meters 2 through 4, and then to the subsequent month.

Our early statements didn’t clearly illustrate the netting. We spent six months working with customer support to no avail. Finally, a complaint filed with the Public Service Commission garnered some attention. A year later, we’re still auditing our statements every month, and they’re wrong as often as they’re right. Be prepared to work closely with your power utility. We recommend you get a direct phone number to the department head responsible for solar net metering.

Solar equipment at Deer Creek Mini Storage in Cabot, Ark.

 

Additional Considerations

Property insurance. This is one expense that’s likely to go up. Most major insurance carriers accept solar-panel coverage, but we’ve found the pricing is similar to coverage for high-end roofs. You can expect additional cost, but not an exorbitant amount. How much depends on the type of solar panels used and the overall rating on your roof.

Check with your insurance provider before launching your project to be sure you understand the impact on your property insurance. If you’re shopping for coverage, you'll want to make sure the policy doesn’t include a separate deductible for the solar panels. It’ll probably be in the fine print.

Cameras. Solar-powered Ring cameras are a nice amenity. Not only do they run on “free power,” you can put them in places where power isn’t readily available.

Maintenance. Panels will require occasional maintenance. Our vendor monitors the condition of our panels. If one isn’t functioning correctly, they drop by to repair it. Otherwise, cleaning your panels once a year should help them continue to function at peak capacity.

Lighting. Our utility doesn’t allow net-metered solar power to offset our Night Watchman, which is the primary source of nighttime lighting for our facility. We didn’t factor this into our original planning.

Weigh Your Options

Adding solar power to our self-storage facility has been financially helpful, but it’s also included some surprises and frustrations along the way. Do your homework and see what assistance programs may apply to your situation. If the numbers work and you decide to move forward, I hope you learn from our minor stumbles and enjoy similarly positive impacts on your business.

Disclaimer: All recommendations, numbers, opinions and experiences described in this article are the author’s own. The reader’s experience may not match. Nothing in this article constitutes an investment recommendation. The reader is strongly encouraged to perform independent research and speak with qualified professionals before making any solar-panel installation decisions. Any government program and rates mentioned are subject to change. The reader assumes responsibility for any action(s) taken as a result of this article.

Alese Stroud is managing partner at Purple Moon Properties, an Arkansas-based investment company that specializes in self-storage, and founder and CEO of issac.ai, which offers a due-diligence system designed for angel investors. Alese is a frequent speaker for organizations including the Arkansas Association of Subcontractors, Arkansas Society of CPAs, Arkansas Society of Human Resource Managers, Little Rock Chamber of Commerce, Little Rock’s Tech Fest, Rotary Club 99 and The Venture Center. To contact her, email [email protected] or connect with her on LinkedIn at www.linkedin.com/in/alese/.

The Storage Group (TSG), a marketing and technology company serving the self-storage industry, announced two staff promotions. Jody Mann was named director of operations, while Kevin Calim is now a production team manager. Both joined TSG in 2015, according to a press release.

Mann has held various positions at TSG including SEO specialist, search marketing manager, director of search marketing and, most recently, director of client digital marketing. In her new role, she’ll oversee every department and bolster the company’s marketing, search and client-side efforts. She earned a bachelor’s degree from the University of Central Florida (UCF).

“I believe in our products and services,” Mann said. “I’m dedicated to The Storage Group’s success and the success of our clients. And it’s not just me. Working for this company for as long as I have, I’ve seen us build an incredible and diverse team of people who believe in what we offer as much as I do. We’re doing something special here, and I’m excited to help us keep growing in whatever way I can.”

Calim has been in the customer-service industry for more than 15 years. Under his lead as production manager, his team has launched hundreds of successful websites to meet client needs. Calim streamlined TSG’s production, as efficiency and efficacy are his most touted talents, the release stated. He also earned a bachelor’s degree from UCF.

“We have great things on the way,” Calim said. “To say I’m used to this success would be a lie. Every day I come into work, and I’m surprised at how many businesses we’re reaching and how much our product has changed since 2015. The projects on the way are indicative of how we’ve been able to adapt with the latest trends.”

“Kevin and Jody are two of the best minds in the business, exemplifying the quality of our team. Their drive alone has pushed the industry forward,” said Steve Lucas, CEO and managing partner. “It's humbling to think about the level of success we’ve been able to have. Part of it comes from the family we’ve built here. You have to hire the best to be the best, and we’ve taken our hiring process worldwide. We’re going to keep upping the ante, staying ahead of industry trends.”

Based in Altamonte Springs, Fla., TSG provides online tools and marketing solutions including local-listing management, mobile websites, online rentals, pay-per-click advertising, search engine optimization, social media marketing, and software and website development.

Update 3/17/2021 – Self-storage properties are constantly changing hands, and Inside Self-Storage is regularly notified of these market transactions. Here’s an overview of additional activity happening in March 2021.

Andover Self Storage in Andover, Mass., sold. Built on 1.5 acres at 17 Dundee Park Drive, the facility comprises 65,836 net rentable square feet in 470 units. The seller was represented in the transaction by Ryan Clark, director of sales, and Richard Riddle, senior vice president, of SkyView Advisors, a Tampa, Fla.-based commercial real estate brokerage firm that specializes in self-storage.

The five-property Bestco Storage portfolio in Knox, Ind., sold. The properties comprise 42,580 square feet and were 100 percent occupied, with a waiting list, at the time of sale. The buyer and seller, both LLCs, were represented in the transaction by Sean M Delaney, senior vice president, for M&M.

Cherokee Self Storage, a two-property portfolio in Franklin, Ohio, sold to an LLC. Located less than two miles apart, the facilities total 51,165 net rentable square feet in 272 units. They also contain four offices for rent, two rental homes and vehicle-storage spaces. The seller, also an LLC, was represented in the transaction by Gabriel Coe and Brett R. Hatcher, investment specialists for M&M.

Creative Self Storage in Brentwood, N.H., sold. The facility at 321 NH-125 comprises 58,064 square feet in 391 units, four offices for rent, and 23 vehicle-storage spaces. The property comes with approval to build 18,820 additional square feet in 166 units. The seller was represented in the transaction by Nathan Coe, Coe and Hatcher. They were assisted by fellow broker James Koury.

Strategic Storage Trust VI Inc. (SST VI), a public non-traded REIT sponsored by an affiliate of SmartStop Self Storage REIT Inc., acquired a CubeSmart-managed facility in Phoenix. Opened last May, the property at 4715 E. Baseline Road comprises 84,240 net rentable square feet in 812 units. The acquisition was the first made by the newly formed SST VI. It’s the fifth property owned or managed by Smartstop in the Phoenix area. The seller, VLC Enterprises LLC, was represented in the transaction by Norman Herd, president of Quantum Property Advisors, a Phoenix-based real estate services firm that specializes in self-storage brokerage.

Cypress Gardens Self-Storage in Moncks Corner, S.C., sold to a state-based investor who rebranded the 6-acre property as Extra Room Self-Storage. Opened just over a year ago at 1505 Cypress Gardens Road, the first phase comprises 21,650 square feet in 145 units. The seller was represented in the transaction by Michael Morrison, a broker with Midcoast Properties.

Elite RV & Boat Storage in Fort Myers, Fla., sold. Built on 7.5 acres at 16461 Domestic Ave., the facility comprises 143,037 net rentable square feet in 255 units. The seller was represented in the transaction by Clark and Riddle of SkyView.

Self-storage real estate investment trust Public Storage acquired two facilities in Durham, N.C., for $26.1 million. Previously managed by Extra Space Storage, the facilities at 1003 N.C. 54 and 3724 Durham-Chapel Hill Blvd. comprise 107,000 square feet and 100,608 square feet, respectively. Both opened in 2019. The seller was an affiliate of Stackhouse Management LLC. Based in Glendale, Calif., Public Storage has interests in 2,548 self-storage facilities in 38 states, with approximately 175 million net rentable square feet.

Highway 43 Self Storage in Elkhorn, Wis., sold in a 1031 exchange. The facility at 801 E. Centralia St. comprises 40,566 net rentable square feet in 290 units. It also has 39 spaces for outdoor vehicle storage. The seller, an LLC, was represented in the transaction by Gabriel Coe and Hatcher of M&M. Tony Sanicola of M&M worked with the buyer, who was making his first self-storage acquisition.

Hudson Self Storage in Hudson, N.H., sold for $4.8 million. The facility at 193 Central St. comprises 39,825 net rentable square feet in 321 units. The seller was represented in the transaction by Joseph Mendola, senior vice president of NAI Norwood Group, an Argus affiliate.

Life Storage acquired a facility it managed in Jamaica, N.Y., for $36.4 million from SNL Development Group. Built in 2017, the property at 134-31 Merrick Blvd. comprises 70,000 square feet. Based in Buffalo, N.Y., Life Storage operates more than 900 self-storage facilities in 31 states and Ontario, Canada. Its portfolio of owned and managed facilities comprises more than 67.7 million square feet.

Rainbow Storage in Lexington, Ky., sold. The facility at 767 E. 7th St. comprises 43,200 net rentable square feet in 236 units. The property was 80 percent physically occupied at the time of sale. The deal was brokered by The Hatcher Group of M&M.

Saco Self Storage in Wichita Falls, Texas, sold to an out-of-state buyer in an off-market transaction. The facility at 2616B Southwest Parkway comprises 57,000 square feet. The seller was represented by Chad Snyder and Tyler Trahant of Dominus Commercial, an Argus affiliate.

Simple Storage in Fort Oglethorpe, Ga., sold. Built on 6.34 acres at 2292 Battlefield Parkway, the facility comprises 82,650 square feet in 581 units and 20 vehicle-storage spaces. The deal was brokered by Luke Sauls of Sauls Storage Group LLC/Commercial Realty Services, an Argus affiliate.

Development and real estate firm InSite Property Group, which operates the SecureSpace Self Storage brand, purchased Statewide Self Storage in Piscataway, N.J. The facility at 1635 Stelton Road comprises 66,000 square feet. The property is near an existing SecureSpace as well as a development the company has underway. Based in Redondo Beach, Calif., InSite is an integrated developer, builder and operator of commercial real estate. SecureSpace operates 12 self-storage facilities in six states.

Wanco Mini Storage in Granbury, Texas, sold. The facility at 601 Cleveland Road sits on 3.5 acres and comprises 7,400 square feet. The seller was represented in the transaction Snyder and Trahant.

Snapbox Self Storage, which operates more than 40 facilities in eight states, acquired a newly completed conversion project in Philadelphia that was previously a Walmart. It’s unclear whether the facility had a name at the time of purchase. The property at 1 Franklin Mills Blvd. comprises 105,000 square feet in 1,100 units.

---

3/4/2021 – Self-storage properties are constantly changing hands, and Inside Self-Storage is regularly notified of these market transactions. Here’s an overview of activity happening in March 2021.

A-1 Storage in Lawrence, Kan., sold in a 1031 exchange to Oak View Capital Partners. Built in 1983 on 2.9 acres, the facility at 1717 W. 31st St. comprises 22,000 rentable square feet. Oak View intends to expand the property to 66,000. Strickland Construction will serve as design/builder for the project, which will have two stories and an enclosed, drive-up loading area. The seller was represented in the transaction by Larry Goldman of Goldman Investment Advisors, an affiliate of Argus Self Storage Advisors, a Denver-based network of real estate brokers who specialize in storage properties.

A two-property portfolio in Georgia comprising Brown Road Self Storage and Storage Village of Augusta sold to an unnamed real estate investment trust (REIT). Built on 4.68 acres at 2241 Brown Road in Hephzibah, the Brown Road facility comprises 53,695 rentable square feet. Built on more than 27 acres, the Storage Village property at 3531 Peach Orchard Road in Augusta comprises more than 139,000 rentable square feet in six buildings. Both properties include a sheriff’s substation and use billboards for facility signage that could be leveraged for additional revenue. The seller was represented in the transaction by Dale C. Eisenman, president of Midcoast Properties Inc., a commercial real estate brokerage focused on self-storage in Alabama, the Carolinas and Georgia.

Columbia Storage Group, which operates 20 self-storage locations in Connecticut, New Jersey and New York, acquired a CubeSmart-managed facility in Rochelle, N.J. The property at 120 W. Passaic St., formerly an AT&T data site, was acquired in 2018 by Tulfra Real Estate, a N.J.-based real estate development, investment and management company. Built by Tulfra, the four-story self-storage facility comprises 113,000 square feet in 816 units. It’s part of the 7-acre mixed-use Village Center of Rochelle Park, where Tulfra is also developing luxury apartments, retail and a park. The transaction was brokered by Brian W. Schulz, managing director, and Kevin Welsh, executive managing director for real estate firm Newmark-Capital Markets.

Leon Capital Group sold a newly built self-storage facility in Portland, Ore., for $22 million to Buchanan Street Partners in an off-market deal. The three-story building at 6191 S.E. Powell Blvd. comprises 102,450 square feet. Previously managed by REIT Extra Space Storage Inc., it’ll now be handled by Westport Properties Inc., which operates more than 130 self-storage facilities under the US Storage Centers brand. The acquisition is Buchanan’s first since launching its investment platform last year. Based in Newport Beach, Calif., Buchanan is a real estate investment-management firm that manages commingled investment funds, institutional separate accounts, and individual institutional and high-net-worth investment vehicles.

Barker Pacific Group acquired three self-storage facilities in Phoenix and Gilbert, Ariz., for $39.5 million. Previously managed by Extra Space, they contain a combined total of more than 2,100 units. The properties at 670 Gilbert Road and 1965 E. Ray Road in Gilbert, and 34995 N. Valley Parkway in Phoenix will now be managed by REIT Life Storage Inc. The sellers, Titan Development/TDREF I and WDP Partners, were represented in the transaction by Devin Beasley, Luke Elliott and Mike Mele of the Self-Storage Advisory Group for Cushman & Wakefield, a provider of real estate services including consulting and appraisal, debt and equity financing, and sales and acquisitions.

Andover Properties LLC, which operates the Storage King USA brand, acquired Kyle Premier Storage in Kyle, Texas. Built in 2018 at 19580 I-35 off Interstate 35, the facility comprises 82,000 net rentable square feet. It’s the company’s first location in the Austin metro area and 15th acquisition in Texas. Founded in 2003 and based in New York City, Andover owns or manages 71 self-storage facilities in 16 states, totaling more than 5.3 million rentable square feet.

A three-property Muddy Man Storage portfolio in Branson, Mo., sold to out-of-state investors. Built within 4.5 miles of each other, the locations comprise 41,540 square feet in 351 units. The buyers and the sellers, local owner-operators, were represented in the transaction by Marla Čolić of the Williams Storage Group of Marcus & Millichap (M&M), a commercial real estate investment services firm with offices throughout Canada and the United States.

Bluebird Self Storage, which operates facilities in six Canadian provinces, has acquired two Premiere Self Storage properties in Dartmouth and Truro, Nova Scotia, for $16.2 million. The facility at 610 Wright Ave. in Dartmouth is in a high-traffic retail corridor and has room for expansion. The Truro facility at 158 Parkway Drive offers climate-controlled storage. Since 1983, the Bluebird executive team has developed and managed nearly 100 facilities across North America. Headquartered in Toronto, it operates locations in Burlington, Calgary, Hamilton, Mississauga and Montreal.

Rainbow Storage in Lexington, Ky., sold to a limited liability company (LLC). Built in 1997 on 3.29 acres, the facility at 767 E. 7th St. comprises 43,200 net rentable square feet in 236 units. The seller, also an LLC, was represented in the transaction by Gabriel Coe and Brett R. Hatcher, investment specialists for M&M. Coe and Hatcher, along with M&M investment specialists Nicholas Andrews, Jordan Dickman and Tim VanWingerden, also secured and represented the buyer.

Renegade Storage in Murphy, N.C., sold to an investment partnership. The nearly 7-acre property at 1369 Blairville Highway includes eight buildings containing 36,100 net rentable square feet in 237 units. The seller was represented in the transaction by Bobby Moss, a broker with Midcoast Properties.

StorSafe Storage at 7825 Tower Ave. in Milwaukee sold. Though the listing price was $2.4 million, the final sale price was not disclosed. The facility contains 431 drive-up units. The buyer and the seller, a self-managed family partnership with assets in multiple states, were represented in the transaction by Jesse Luke, a partner with EquiCap Commercial, a Saint Charles, Ill.-based brokerage specializing in self-storage.

New Sources:
Boston Real Estate Times, Marcus & Millichap Arranges the Sale of a 58,064 SF Self-Storage Facility in New Hampshire
Commercial Observer, Life Storage Picks Up Queens Self-Storage Site for $36M
PR Newswire, InSite Property Group Acquires Statewide Self Storage in Piscataway, NJ
PR Newswire, Strategic Storage Trust VI Inc. Acquires 810-Unit Storage Facility in Phoenix, AZ
PR Urgent, Sale of Cypress Gardens Self-Storage, Moncks Corner, SC
REBusiness Online, NAI Norwood Negotiates Sale of 321-Unit Self-Storage Facility in Hudson, New Hampshire
SpareFoot Storage Beat, Crescit Capital Ready for More Deals After Funding $16M Philly Storage Purchase
Triangle Business Journal, Big Name in Self Storage Pays $26 Million For Durham Properties
WIS Business, Marcus & Millichap: Arranges the Sale of a 40,566-Square-Foot Self-Storage Facility

Previous Sources:
RE Journals, EquiCap Commercial Sells 431-Unit Self-Storage Facility in Milwaukee
RE Journals, Marcus & Millichap Sells 43,000-Square-Foot Self-Storage Facility in Lexington
PR Urgent, Midcoast Properties, Inc. announces the Sale of Renegade Storage, located in Murphy, NC
EIN Presswire, Bluebird Self-Storage Expands in Nova Scotia
Real Estate Weekly, Tulfra Completes $60M in Self-Storage Trades With Columbia

Is it chilly in here, or is it just me? When a self-storage facility is rated poorly or makes a bad impression, there’s a problem with the customer experience (CX). Folks will give you a cold reception and express their displeasure in all kinds of ways, from low-star reviews to negative social posts with angry-face emojis. Sometimes, it’s unavoidable. After all, we’re expected to accommodate such a wide range of customer types and opinions. But if you do things right, it should be easy to keep your CX “temperature” in just the right range.

You don’t want your operation to run excessively hot or cold. If you pay too little attention to your customers’ needs, you’ll leave them feeling ignored and frustrated; too much may make you seem overly aggressive or presumptuous. Finding that “sweet spot” is often about reading a person’s expressions and body language. This can go a long way in establishing good rapport and ensuring customers have a great experience with your facility and company.

To have a healthy self-storage business, you must maintain the right temp. The goal is to avoid both hypothermia and fever. Here are some ways to do it.

Make a Lasting, Positive Impression

The self-storage CX is much different today than several years ago. With all the ways a modern consumer can communicate with you, voice an opinion about you and make an informed decision, all while remaining anonymous, the challenge isn’t only to make a positive first impression but a lasting one.

Simply being a smiling face behind a desk isn’t enough. Facility managers need to be counselors, gardeners, chamber-of-commerce members, janitors, concierges, tour guides, repair technicians and more. I’m not saying you have to be all those things, but it helps to be able to fill several roles and know where to go for the others. Going above and beyond for customers has become routine for small, independent self-storage storage operators who need to keep up with the “big boys.” It’s hard work, but in the end, it’s worth it.

Be Engaged and Helpful

One way to maintain an ideal CX temp is to be present and obliging with your customers, regardless of how they found you. Our digital footprints are all over the Internet, and it’s never been easier to reach current and future self-storage tenants via an online presence. The key is to be involved. Being able to rent a unit with a click of a button is a great convenience for customers, but what happens after the sale?

Don’t be one of those “We got their money, so there’s nothing left for me to do” kinds of places. A customer may have never used self-storage before and isn’t entirely sure how things work. He may have questions about the property, or how to use the gate, or where his unit is located. Even if he doesn’t need assistance, reaching out and asking if he does can positively impact your CX.

Even a repeat customer or someone adding a second unit can use some help. Can you put his new unit near his existing one? Does he want rent charged to the same credit card every month as the other unit? Can the billing dates be synchronized? Perhaps he needs moving boxes, or help contacting a moving or rental-truck company.

The goal is to create a “You won’t believe what my storage place did for me last week!” moment for your tenant. It can be the result of a grand gesture, but often it’s the effect of lots of little things. Here are a few simple ones you can do to get that CX temp right where you want it:

• Offer new tenants a bottle of water, or a juice box for their kids.
• Keep coloring books and crayons on hand to help keep the little ones engaged while working through the lease with the parent.
• Keep some old-fashioned printed brochures around to help answer common self-storage rental questions.
• Offer a local map that includes area attractions and businesses. You can often get these from your local chamber, or make one of your own.
• Keep business cards around from local movers and charitable organizations just in case a customer needs help moving or wants to get rid of some stuff.
• If you don’t offer use of a moving truck, keep referrals handy.
• Follow up with new tenants to see how their move-in went, or if they have any questions about facility policies or their rental agreement. Ask if they have any feedback about the experience they’d like to share.

Get an Outside Perspective

It may sound a little sneaky, but mystery shopping your own self-storage property isn’t wrong. Gaining a true perspective of what it’s like for customers to interact with your business can be a great learning experience.

If you already have shoppers in place, their reports can be immensely helpful in exposing weaknesses in your CX. If not, have a friend or relative stop in and play a potential renter who poses a few challenges. Maybe he needs a specific move-in date, has a strict budget, or has lots of questions because he’s “new to the area.” If your team can handle someone like that, it’s excellent training. Keep the review notes handy, positive or negative, to discuss and help guide improvements. The ability to adapt, adjust and progress will serve you well moving forward.

Help, Don’t Hinder

You don’t have to rely on technology to perfect your CX temp. The factors that lead customers to use self-storage can be incredibly stressful. Every measure we take to lessen their anxiety and headaches helps put our facilities and industry in a better light.

In addition to the above, stay up to date with service and industry trends, which will help your team appear knowledgeable. Know the modus operandi of your competition to show customers you’re paying attention and that you want their business. Being able to refer tenants to the right local partners for help with their non-storage needs contributes to an atmosphere of calm and confidence. All these steps will demonstrate that you’re working to provide a rewarding CX. Is it me, or did it just get a little warmer in here?

Kevin J. Edwards has been in the self-storage industry since 2015. A licensed property manager in South Carolina, he’s worked as a site manager, traveling trainer, facility auditor and auction coordinator. His previous experience in the restaurant, specialty-retail and petrochemical industries has proven useful in self-storage organization, scheduling, site safety and security, and maintenance. For more information, call 843.422.3461; email [email protected].

The “check is in the mail” might be a snarky punchline, but self-storage operators are actually still dealing with customers who say it—and mean it! Some tenants are part of an older generation that still loves to write paper checks, while others are simply uncomfortable with providing their payment information via a digital means, whether online, over the phone or at a kiosk. Whatever the reason, the result is a faction of renters who are sending their rent in the mail. And between harsh winter weather and ongoing postal delays, well, you can see the potential for problems.

In this thread on Self-Storage Talk, the industry’s largest online community, members are sharing their woes and worries over paper rent payments. Read about their policies for accepting checks and what they do about those that arrive late. Are you still contending with snail mail at your operation? If so, jump in and share your viewpoint.

By far, the rental agreement is one of the most important tools you have for protecting your self-storage business; so, it’s critical to ensure the document you’re using is up-to-date and effective. That can sometimes be tricky, as the industry and state laws are constantly evolving. Over the past year, for example, facility operators have faced significant challenges due to the coronavirus pandemic, and those obstacles have made it even more crucial to pay attention to the accuracy of your lease. Make sure it addresses the following.

Termination

A hot-button legal topic that comes up frequently in self-storage is the whether a facility operator can terminate a rental agreement based on tenant conduct. Many leases state that either the operator or renter may end the lease with notice to the other party of at least 10 or even 14 days before the end of the monthly term. Based on what I’ve heard recently, however, I recommend altering your agreement to shorten that time. In the case of an unruly tenant, you want the ability to terminate the lease quickly.

It’s also wise to add language that allows for immediate termination of the tenant’s occupancy due to certain behavior, such as criminal or illegal acts or improper use of the space. You can also include a provision allowing you to deny gate access to the tenant once his occupancy has been terminated, thus forcing him into the office and allowing you to escort or monitor him during his move-out. This can help prevent an unhappy customer from damaging the facility in retaliation.

Your rental agreement should also include a provision that specifically addresses the conduct of the tenant and his guests while on site, particularly how they treat employees and other customers. Failure to comply should result in immediate termination.

Emergencies

During the onset of the health crisis, there were a lot questions about whether self-storage facilities could stay open during shelter-in-place orders. This reinforced the need for your rental agreement to address situations in which tenants can be denied facility access. Accordingly, your lease should contain a provision that tenants can be refused entry if there’s a local, state or national emergency, or severe weather. It should also state that the facility operator isn’t liable for denial of access in these situations.

Electronic Communications

Many states now allow self-storage lien notices to be sent by email. It’s important to follow state laws and ensure your rental agreement contains a provision in which the tenant consents to receiving notices via email.

Additionally, more operators want to text their customers. While texting lien notices is only allowed in West Virginia, you may be able to text account statements and facility information. Just bear in mind that text messages to tenants are governed by federal law through the Telephone Consumer Protection Act, which has multiple requirements. You must get written consent from tenants before sending any texts. You must also notify them that they can opt out at any time, and that consent to receive texts isn’t required as a condition of rental.

The past year has shown us that the ability to communicate with tenants electronically is especially important when emergencies occur and you need to get information to them quickly. But if you wish to email and text tenants, make sure your rental agreement contains the correct language to comply with applicable laws.

Security

Another issue popping up more frequently relates to the security of the self-storage tenant and his stored property. Your rental agreement should clearly state that neither the owner nor any employees have made any representations as to the safety of property or persons at the facility, and you aren’t required to provide any security to the tenant or the stored belongings.

The provision should also state that any security you maintain at your facility is for your use and convenience only, that it may be discontinued at any time without liability or notice to the tenant, and any video-recording devices aren’t monitored. This can easily be tied into the provision in which the tenant agrees there are no express or implied warranties regarding the storage space or the facility.

Arbitration

At the start of the pandemic, we saw shutdowns of state and federal court systems. Most cases that were in progress came to a grinding halt, and new claims could barely get off the ground. In the end, few cases were adjudicated, and there a backlog was created. Many cases may still be pending, and may not be heard for months or even years. Some involve disputes between self-storage tenants, employees and owners.

However, some self-storage legal cases have been able to proceed due to a mandatory-arbitration provision in the rental agreement, which can also be used as a defense tool for companies facing class-action lawsuits brought by tenants or employees. By adding this language to your lease, you can move disputes out of the public arena and into a private process, bypassing long court dockets and seeking private administration and resolution.

Additional Provisions

In addition to the above legal provisions that have become more critical in response to the pandemic, following are a few cornerstone items that must appear in every self-storage rental agreement. Of course, you should include any provision required by your state law, as courts likely won’t uphold your lien-enforcement rights if you haven’t complied with statute requirements.

• No bailment: Your lease should include an explicit statement that the self-storage operator isn’t a bailee of the tenant’s property and there’s no warehouseman relationship between the parties. This is important, as a bailee is held to a much higher standard of care than a landlord.
• Lien-sale rights: This provision notifies the tenant of the operator’s right to lien and sell his goods should he fall into default.
• Limitation of liability: This is one of the most important provisions in a self-storage rental agreement. It should state that the value of the property to be stored can’t exceed a certain amount, commonly $5,000, unless previously approved in writing by the facility operator.
• Release of liability: This releases the operator’s liability for damage to stored property and personal injuries at the facility.
• Insurance: Tenants are required to obtain their own insurance to protect 100 percent of the value of the stored property. Failure to obtain such insurance is a breach of the agreement.
• Indemnification: Tenants agree to indemnify and hold the self-storage facility harmless for property loss, damage or personal injury caused from their use of the facility.

No lease is perfect, nor does it have to be. What a good agreement must do, however, is certain language that complies with applicable laws and addresses unique industry issues. If you haven’t done so in a while, take some time to read your self-storage rental agreement and test it to see whether it needs updating.

Ashley Oblinger is an attorney in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber, P.C., where he specializes in business and self-storage law, advising operators nationwide on all legal matters, including lease preparation, lien enforcement, tenant issues, tenant-claims defense, and employment policies. To reach him, call 404.760.7434; email [email protected].

Development and real estate firm InSite Property Group, which operates the SecureSpace Self Storage brand, has received $140 million in construction financing to expand its development pipeline. The company has 40 projects planned nationwide that comprise about 5 million square feet. The floating-rate loan from ACORE Capital LP also gives InSite the flexibility to expand the credit line to as much as $215 million, according to a press release.

“The self-storage asset class has seen significant demand from institutional capital investors, as it has been one of the strongest performing asset classes through the COVID-19 pandemic,” said Bill Fishel, senior managing director with the Markets Debt Placement team of JLL Capital Markets, which arranged the loan. Other JLL team members that helped secure the financing were analyst Chad Morgan from the markets-debt group, senior director Griffin Guthneck, and managing directors Steve Mellon and Brian Somoza from the national self-storage group.

“We appreciate the creativity of both the JLL and ACORE teams in helping us structure a truly unique facility, which will provide us the flexibility to execute on our development pipeline,” said Chip Brown, chief financial officer for InSite.

Based in Redondo Beach, Calif., InSite is an integrated developer, builder and operator of commercial real estate. SecureSpace operates 12 self-storage facilities in six states.

ACORE is a commercial real estate finance company and debt-fund manager with approximately $17 billion of assets under management. It specializes in originating, acquiring and managing first mortgages, B-notes, mezzanine debt and preferred equity throughout the United States.

JLL is a global provider of capital solutions for real estate investors and occupiers. The firm has more than 3,700 capital-markets specialists in about 50 countries. It has operations in more than 80 countries and a global workforce of more than 91,000.

Source:
JLL Capital Markets, InSite Property Group Scores $140M Construction Facility for National Self-Storage Development Pipeline

My company opened its first self-storage property in 2012, incorporating the latest technology and security features available at the time. A few years later, we acquired another property and began to update it with a kiosk, gate controllers, security cameras, etc. Tenants were thrilled, and we achieved high occupancy. With that success motivating us, we decided to introduce the next generation of self-storage to our market.

In 2018, we began construction on Stockwell Road Storage in Bossier City, La. It’s a fully enclosed, climate-controlled facility with more than 86,000 square feet in just over 560 units. While in the planning stage, my eye was drawn to a new piece technology—the smart lock—and was impressed from the start. A few years ago, I became intrigued by the hotel industry’s switch from key cards to app-based software to unlock rooms; so I couldn’t wait to see what smart locks could do for self-storage.

We liked the security and benefits the new locks offered. Not only do they include a motion detector, they notify you when a tenant is on the property and how long he stays. They allow the tenant to share a key code with another person and set a time frame for that code to function. There are also other features. The icing on the cake is we can generate additional revenue by selling technology upgrades!

New Money

When debating whether to invest in smart locks, we considered the loss of ancillary sales from not selling cylinder or disc locks. Then our sales rep told us other self-storage operators have been charging an additional $8 to $12 a month for units with smart locks. You can only sell your customer one physical lock, at the time of rental. But a smart lock can generate regular monthly income, which is a definite bonus. Why leave money on the table?

Still, we didn’t know if our tenants would embrace this technology. We decided to give it a try, choosing to add a $10 monthly fee to smart-locked units. This helps cover the cost of maintenance, the app and software support.

Our tenants have been excited about the new offering! They like the app and ease of access, from the front gate to the unit itself. At our Stockwell Road location, 60 percent of our units have cylinder locks, while the other 40 percent have smart locks. More than 96 percent of our tenants choose a smart-lock unit. Now, we’re looking to install the technology on other units at this facility.

Author Kevin Seiple demonstrates the use of a smart lock.

Why Make the Change?

Making the transition to smart locks can be a defining but difficult decision for your self-storage operation. After all, you have a system that’s been working fine for years, so why change now?

Tenants are becoming more tech-savvy. Being connected and using apps are now part of everyday life. Smart locks not only bring in additional revenue, they increase the level of trust tenants have for the security we offer. You can market them as a premium offering and charge a fee for their use.

For years, we’ve built our industry with the personal touch in mind. We all have storage units, but it’s customer service that sets each property apart. Using smart locks opens the door to more opportunities. We can still give tenants a human experience but also cater to those who want a contactless solution. Smart locks are a great way to adapt to our present environment while generating data that yields valuable insight to how our tenants are using our properties. Change can be scary, but with the correct tools, it can be a boom for our bottom line.

Kevin Seiple is an operations manager for Shield Storage Centers, which operates four facilities in Louisiana. After working in the casino industry for 20 years, he entered the self-storage business in 2012 to open the company’s flagship facility in Bossier City. For more information, email [email protected].