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ISS Blog

Got Storage News?

Article-Got Storage News?

With some regularity, we editor-types like to key “self-storage” into a Google news search and see what pops up. Some of the time, it’s all old news—stuff from months ago, even years long gone. But today I did the old rigmarole and—bingo!—I got lots of bites.
 
First up, from just hours ago: Globalpensions.com announces, “The $155bn New York Common Retirement Fund (NYCRF) has acquired a majority stake in Public Storage’s Shurguard Europe self-storage business.” Not long before that, Middletownjournal.com in Ohio reported that a business proposal for self-storage was to be re-reviewed at a city council meeting Tuesday night. Looks like the facility might just get a green light this time. North of the border, Newswire.ca reveals, “Discount Car and Truck Rentals, the largest Canadian-owned truck rental provider, today announced a new strategic alliance with InStorage Real Estate Investment Trust.”
 
So far, so good. But then someone has to rain on my parade, and maybe the news is not as good as it seems. In fact, there’s been a “sector snap.” According to CNNmoney.com, “Shares of self-storage companies tumbled Tuesday after Extra Space Storage Inc. and Public Storage Inc. were downgraded by several investment banks.” Still, every cloud has a silver lining. This one comes with further quotes by experts who predict increased home foreclosures may bode well for the storage industry, but it’s too soon to tell for sure.
 
Some folks are putting the brakes on storage; for others it’s full steam ahead. The news of the day that I like best says it all: “Storage businesses expand to keep up with 'our stuff’” (from Bendbulletin.com of Oregon).
 
It used to be I’d have to look for hours just to find stuff about the industry. Now stuff is everywhere. It’s in people’s houses and in self-storage ... news is about stuff and stuff is about news. Life is good!

Leukemia Victim Gets Help From Simply Self Storage, KOB Foundation

Article-Leukemia Victim Gets Help From Simply Self Storage, KOB Foundation

Michael Treinen, who suffers from Acute Myeloid Leukemia, is getting a little help from his friends at the Kurt O’Brien Foundation (KOBF), a charitable organization dedicated to educating children and young adults about cancer prevention and healthy living. The organization, founded last year by the CEO of OB Cos./Simply Self Storage, is helping to raise awareness for Michael’s cause.
 
Michael beat the cancer in December but went into relapse in January. He is now in need of a bone-marrow transplant but is at his lifetime limit for insurance. His family needs to raise $500,000 by April 3. For more information about Michael including photos and a journal of his experience, visit www.caringbridge.org/visit/michaeltreinen. Donations can be sent directly to the family at:
 
Michael Treinan Medical Trust Fund
c/o Sid Loomis
Harris Bank
107 W. Logan St.
Noblesville, IN 46060

The KOBF was founded in September 2007 by cancer survivor Kurt O’Brien. The organization provides educational materials to help children understand the causes and treatments of the various forms of the disease and provide a positive influence for avoiding related risks.

ISS Blog

Stress-Free

Article-Stress-Free

OK, there’s no such thing as a stress-free life. When I sat down to my desk this morning, with my to-do lists (yes, that’s plural), I had a moment where it all seemed like too much. You know the feeling ... there’s so much to do you’re not even sure where to start. I usually need a few minutes to organize my day before jumping in.

When you're a facility owner or manager, your to-do list is neverending. Whether its repairs or a new marketing campaign, there’s always something on the agenda. And while that may never change, how you manage stress can greatly affect your job, your health and your relationships.

I came across this article about how executives handle stress. The article’s headline, "Top execs stress out, too, just in different ways," caught my attention. I’m not running a multi-million dollar company, never fly around the world to meet with a board of directors and, thankfully, my job security isn’t dependent on how my company’s stocks are doing on Wall Street. So I was curious how a person who does all this deals with daily stress.

Turns out, there’s one thing these top execs typically have in common: They’re problem-solvers. So when an issue arises, rather than an end-of-the-world proclamation and a string of curse words, these guys and gals get to work.

So the next time you’re dealing with a chronic later payer, a broken door that’s been fixed... and fixed again, or an employee that just isn’t cutting it, try looking at the situation in a different light. Keep your blood pressure in check and adopt a problem-solver attitude. Now, where did I put those to-do lists?

Deciding on Outsourced Management

Article-Deciding on Outsourced Management

A third-party management company has experience in property management, including finding, hiring, training and placement of onsite management staff and accounting and maintenance services. It will set up and handle all day-to-day operations and interaction with onsite personnel, marketing programs, facility inspections and audits, deciphering of facility software reports and reporting to the owners on a weekly or monthly basis. Sound like the help you need?
 
For services provided by a management company, a self-storage owner will be charged a fee, which will vary depending upon the quantity of services needed. Some offer full-service management only; others provide management, customized training of owners and staff, and consulting. Let's dig a little deeper, weighing out all the findings to decide if a management company is right for your self-storage business.
 
First Time for Everyone

If this is your first facility, some lending institutions may require that you utilize a third-party management company because, while lending you millions of dollars, the lender wants to make sure the investment is secure. A third-party management company has the expertise and a support foundation to manage a new project and the lenders know this! It gives a lender peace of mind.

It may also give you an advantage when it comes to securing a loan if you already have a management company consulting with you during development. You might even get a lower interest rate if youve already lined up a third-party company for the first two years of operations.

You may say, Well, I have opened and operated my own business before, how hard can a self-storage facility be? To that, self-storage veterans would reply, If it was only that simple!

If you have a small operation, less than 200 units, you didnt need to borrow a lot of money to build your facility, and you have a bookkeeper already doing your accounting and payroll, then perhaps you dont need a third-party management company. You may elect to consult with one just to establish management systems, and to train you and your staff in operations, facility inspections and interpreting management software reports. Some companies offer short-term services such as this and this may be all that you need.

However, if you have a partnership, then I highly recommend hiring a management company, particularly because a third party is neutral and will have all of the owners best interests in mind. The management company will report to all owners and handle all accounting, unless an outside accountant is hired to do the bookkeeping. Some management companies offer full-service accounting; others offer operations management only while utilizing an outside payroll service and accounting service.

If you have an existing facility not experiencing the potential income you assumed you would, then perhaps a management company is the answer for you. Many times a management company will receive calls from a distressed owner who has managed the facility by himself or left his manager to manage the facility with little or no direction due to the lack of expertise. Perhaps the owner had a management company but did not receive the quality of service necessary to make the facility profitable. This is when the owner begins looking at different management companies to come bail him out of a bad situation.

Dont expect miracles from the management company; it took you a while to get the facility into the mess it is in now, so give a company time to fix the problems. If you do choose this route, make sure your site management knows there is a new sheriff in town. Your managers should no longer call you with their questions or problems, but communicate through the management company.

You may have to remind your managers of this more than once. But dont interfere. It only causes staff confusion and delineates from progress. Let the management company do the job you hired it to do.
 
Finding a Fit

Are you opening a new facility? Do you need to turn around a distressed facility? Has your lender required a management company be onboard? Do you have partners and would it be advantageous if a management company was hired? Once you have determined your needs, then its time to investigate management companies, but how do you find a good one?

Begin by getting involved: ask questions, get referrals, call the Self Storage Association, attend tradeshows, ask venders and inquire with other self-storage owners. Using these suggestions, make appointments to meet with representatives from the different management companies. Come prepared to this meeting with a list of questions to help you make an informed decision:

  • Expertise: Have they opened a new facility. What is their track record of turning around distressed properties? What would their game plan be to help you and your situation?
  • Current status: How many facilities do they manage now? Is there enough personnel to cover existing management contracts in addition to your property?
  • Communication: How often do they conduct site visits, inspections and audits? Do they communicate daily with the site personnel to answer questions and solve problems? What types of reports do they prepare and how often will they send them to you?
  • Marketing: Do they set up all marketing programs and materials?
  • Documents: Will they provide all facility forms such as leases and daily management forms?
  • Personnel: Do they provide employees or work with your staff?
  • Pricing: Besides the monthly management fees, are there any other costs? Are fees flat or based on a percentage of the gross?
  • Services: Can you pick and choose various parts of their management program: short-term solutions, training, audits, inspections and the like?
  • Length of service: How long is the agreement and can you cancel it anytime, or is there a fee for early termination?
  • Comfort level: Do you feel comfortable communicating with the company and letting it take over operations?
  • References: Ask for current and previous owners references, and then be sure to call them.

The fee for the full-service management company ranges between 4 percent and 6.5 percent of the monthly gross, perhaps slightly higher in the Eastern states. A minimum monthly fee, which is probably higher than the percentage of the gross, may be charged for a new facility startup or for turning around a distressed property. At some point the percentage fee will be higher than the minimum monthly fee.

Most companies will ask for at least a two-year management contract, which is a reasonable allotment of time to start up or turn around a property. As an owner, you should think of the management fee as an investment in your business, not as an unnecessary yet required cost by a lender.
 
Letting Go

Management companies can be very successful if self-storage owners step back and give them the authority to manage. One of the biggest problems is an owners unwillingness to let go and let someone else manage his facility.

If youve conceived and delivered a brand-new storage facility, you must let go and turn your baby over to the professional daycare provider to help this child grow into the profitable adult it can become. It is not always easy for a parent to let go, but to achieve the desired goal of profitability, you must let the professional management company take over.

Remember, before you decide to use the expertise of a management company, you must have a realistic idea of what your goals are for choosing a management company in the first place. Do your research into various management companies qualifications and the services they offer. Weigh the pros and cons of each, and then settle on the best fit for you. Only then can you sit back, relax, and let them do your work for you.
 
Pamela Alton is the owner of Mini-Management Services, which offers feasibility studies, facility management, consulting, training, seminars and management placement nationwide. She can be contacted at 858.926.9039.

Need Professional Help? A Guide to Third-Party, Outsourced Management

White-paper-Need Professional Help? A Guide to Third-Party, Outsourced Management

Managing a self-storage site takes a great deal of know-how and skill, particularly in today's sophisticated markets. Thanks to competition, a more demanding customer base and technological tools, facility operation is increasingly complex. For this reason, many owners and operators are considering third-party and automated management options. This book serves as a guide to fee-based management: why to use it, what you should get, what it costs and more. It also highlights a few remote-management methods for those interested in running unmanned sites.