StorQuest is opening its newest class-A self-storage facility in Thousand Oaks, Calif. The four-story facility features more than 57,000 rentable square feet of regular and climate-controlled self-storage.

The facility provides access seven days a week, with drive-up units, month-to-month rentals and packing and moving supplies. StorQuest also offers a free truck and driver to service its customers.

StorQuest is the operating brand name of storage facilities developed and operated by The William Warren Group Inc. The company owns or operates 48 self-storage properties in Arizona, California, Colorado and Hawaii.

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Self-Storage Talk: Real Estate Listings and Investment Opportunities

Strategic Storage Trust Inc., a publicly registered non-traded real estate investment trust targeting the self-storage market, acquired Augusta Ranch Self Storage in Mesa, Ariz.

“We're excited to build our own growing brand here," said H. Michael Schwartz, chairman and CEO. "This newer class-A storage property is well-located next to a large intersection in Mesa and provides convenient access to its latest generation amenities."

The 570-unit facility was developed in 2002 and contains 75,600 net rentable square feet in six single-story buildings on 4.62 acres. The facility, which has an occupancy of 81 percent, will be renamed under Strategic Storage's SmartStop Self Storage brand. It features drive-up units, interior climate-control units, RV/boat parking, a large retail office and a truck rental dealership.

The property is located 20 miles east of the Phoenix Sky Harbor International airport in the south eastern portion of metro Phoenix.

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Self-Storage Talk: Real Estate Listings and Investment Opportunities

The users of Self-Storage Talk (www.selfstoragetalk.com), the self-storage industry’s largest online community, broke a record on Friday for the most users ever online at one time. Topping out at 560, the new record shatters the previous mark of 362, which was set on Jan. 8.
 
The old record was first defeated mid-morning on Friday after the delivery of SST’s monthly e-mail newsletter. New records were set throughout the day as site traffic surged. Previously registered users flocked to the forum to read and discuss active discussion threads, while new visitors investigated the site for the first time. A notable number of inactive users began posting on the forum again after staying dormant for varying lengths of time.
 
“I'm thrilled with what the Self-Storage Talk community has accomplished,” said John Carlisle, community manager. “The site has shown continuous growth over the past few months, due to an audience that is committed to connecting with one another online. Everyone from the site's first users, who registered back in 2008, to the newest members should be proud.”
 
SST is the official online forum of Inside Self-Storage, the producer of self-storage publications, conferences and tradeshows, and the Self-Storage Training Institute, an online education portal for industry managers and owners.
 
SST currently contains more than 20,000 posts, 2,560 discussion threads and 2,765 registered users, with a goal to reach 3,000 members by July 4. Those who have not joined the community and would like to register may do so for free at www.selfstoragetalk.com/register.php.

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In September 2009, Ontario, Canada, led the North Americans in approving a FIT (feed-in tariff) Program under the Green Energy Act. If you own a self-storage facility in Ontario, this may be the answer to generating income from your roof space, or making your business more environmentally friendly, by generating solar power. This article is a financial analysis of the related investment decision. 

The FIT program is designed to encourage property owners or renewable-energy investors to invest in the capital amount of photovoltaic (PV) systems. The Ontario Power Authority (OPA) will sign a contract with the system owner to purchase all the energy produced at a pre-determined price for 20 years.

System owners will be paid based on the amount of electricity produced and fed into the grid. For a solar PV system between 10 and 250 kilowatts (kW), the FIT price is 71.3 cents per kilowatt hour (kWh). Solar PV receives the highest price of all renewable-energy sources. Currently, energy consumers in Ontario generally pay 6 to 8 cents per kWh to the local utilities.

So how can self-storage owners benefit from this program? Given a rectangular rooftop space of 5,130 square feet, a storage operator could install a solar PV system up to 50 kW. Depending on the location, the system will generate annual FIT revenue of $50,000 to $59,000, or $9 (Toronto) to $11 (Thunder Bay) per square foot. The actual area required may be slightly larger, to allow extra space between panels for service and cleaning purposes.

The Income Tax Act of Canada also created asset class 43.2 to allow investors to accelerate the write-off of renewable-energy equipment at 50 percent per year (declining balance). The claim is, however, subject to the limit of the revenue it generates that year. 

Cost Considerations

The first cost consideration is the technology deployed. Solar panels are available in two forms, conventional photovoltaic crystalline wafer and thin film. Thin film is a newer technology that’s cheaper per watt, as it requires much less silicon. However, its lower efficiency may necessitate twice as much space.

Bigger systems will cost less on a per-watt basis, but the domestic content requirement of the FIT program may cause the system to cost a little more. The inverters have to be replaced after their 10-year life warranty.

As a PV system can sometimes last for up to 40 or 50 years, it’s more convenient to replace the old roof before the system is installed. 
  

Note: The numbers used and reported in this analysis are for reference only. They are not designed for exact and accurate measurement. The Income Tax Rate may be different for each business.

Revenue and Cash Flow

Different areas of Ontario generate different levels of solar electricity, as shown in the accompanying chart. Taller buildings or trees in the surrounding environment will create shading and reduce the production of electricity. If a roof is sloped, only the south facing surfaces are preferred for solar-electricity generation.

Technology and design will help maximize system efficiency. Generally, the performance of solar panel may degrade by 0.5 percent each year.

As an example, let’s consider the previously mentioned 50 kW system in Toronto. For the sake of prudence, let’s say it may cost about $400,000, or $78 per net square foot. The payback period will be around 9 years, with a 6.5 percent internal rate of return per year, on an after-tax basis (assuming a 30 percent tax rate). It will generate net cash inflow of $299,000 (or $131,000 discounted to today’s value).

When financed with debt, the payback scenario can be quite different, depending on interest rates and loan terms. For example, a loan of longer duration usually has faster payback but a smaller cash inflow. Investors should note the dynamic relationship between loan terms and payback.

The accompanying charts show the trends of after-tax cash-flow accumulation, before discounting, for two scenarios: owner financing and loan financing (70 percent loan, 10 years, at 8 percent interest). The analysis shows that investing in a PV is financially viable. In the case of other Ontario locations, or lower system costs, the return may be even better.

Financing Strategies

A self-storage operator is recommended to approach his own bank first, providing it with relevant technical and quality financial information. If a lender’s concerns on various risks are addressed, there’s good chance an operator can arrange a longer-term loan with a good rate.

Finance lease is a feasible option. The embedded interest rate tends to be higher than that of conventional bank loans, and it demands full repayment in a shorter timeframe. Several investors could pull together for joint investment. The challenge is the exit clause has to be carefully drafted beforehand.

Leasing the space is a prudent approach, as long as the property owner is satisfied with the lease terms, and the responsibilities during and after the lease period.

Environmental Considerations

Among the various renewable-energy sources, solar PV is the simplest, and small enough to integrate into buildings. It also has significant impact on greenhouse-gas reduction. For example, a 50 kW system reduces more than 1,300 tons of carbon dioxide over 25 years. Having a PV system on the property is a statement of support to a sustainable future. It creates a green image for the self-storage facility.

The FIT program aims to motivate the early adopters with a reasonable return. With careful financing arrangements and the service of a suitable system developer, it can be an opportunity for self-storage owners to capture the return and the intangible benefits of installing a PV system on their property.
 
Isabel Chan is a certified management accountant of Canada and was the director of finance for a self-storage group of companies in British Columbia. Prior to that, she was the financial controller for iCable Communication Group and Xerox Corp. She is the co-founder of SIS Solar Ventures Ltd. in Toronto, an Ontario-based developer of solar photovoltaic systems, offering complete solutions to property owners. For more information, e-mail [email protected]; visit www.sissolarventures.com.

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Toronto, Canadian-based Modern Access Systems Inc. is opening its U.S. headquarters in Los Angeles. The location will encompass light assembly, sales, service, and a training center.

The company has been manufacturing access-control systems, parking systems and storage solutions in Canada for more than 30 years. The U.S. expansion enables Modern to extend its reach and better service its dealers and customers, the company said.

“It’s a natural progression in Modern’s growth strategy to support its 100-plus dealer network in the U.S.A.,” said President and CEO Grant Furlane.

Modern chose Los Angeles to better support one of its dealers, Parking Technical Services Inc., which is fulfilling a multi-million dollar contract with Jamison Properties to automate 40-plus facilities with Modern systems. The Modern plant is expected to be fully operational by September.

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The Texas Self Storage Association (TSSA) will host two Storage Showcase events as part of its education series, April 22 in Dallas and June 27 in San Antonio. These full-day seminars, created for self-storage facility owners, managers and developers, will teach attendees proven industry techniques to increase the return on their investment.

The sessions are taught by well-known industry experts Anne Ballard, president of Universal Management Co., Tom Litton, president of Litton Property Management Co., and Jim Chiswell, president of Chiswell & Associates LLC. Speakers will coach students in sales and marketing techniques, ways to improve revenue, and tactics for succeeding in a changing self-storage environment.

Those interested in attending a Storage Showcase can register online at www.txssa.org or by phone at 888.259.4902.
 
TSSA, established in 1986, is a non-profit trade association dedicated to enhancing the quality of the self-storage industry in Texas. The association provides opportunities for members to increase their knowledge of the business through education, research, discussion and exchange of information.

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A former cotton mill in the United Kingdom was converted into a self-storage facility by Alligator Self Storage.

The historic building, called Egyptian Mill, in Bolton, England, was a working cotton mill for more than a century. Since the mill closed in 1960, the building was considered for other possible uses, including residential apartments and a boarding school.

The five-story facility will include climate-controlled units a variety of sizes, extensive security, tenant insurance and packing materials.

Alligator Self Storage operates 17 self-storage facilities in the United Kingdom. This is the company’s first facility in northwest England.  

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Self-Storage Talk: Conversions: Share Your Story

As one of the fastest growing online communication platforms, Twitter can give self-storage operators a way to become known and trusted in their communities. It’s a free service that enables registered users to send “tweets,” text-based posts up to 140 characters to every one of the author’s followers.

There are already hundreds of self-storage operators on Twitter, but the vast majority are still sitting on the sidelines. For those currently using this social-media outlet or considering it, here are four simple guidelines to help you get the most business benefit from the time you invest.

Be Human

Twitter falls into a category of online communication tools generally referred to as “social media.” The operative word here is social, and to be social, you have to be human. People connect with other people, and so you want your Twitter presence to have a human feel. Here are recommendations to help you accomplish this objective.

Your profile description should clearly indicate there’s a human at the controls. Your profile description and photograph are the first things people consider before choosing to follow you. The mantra “to be human” should flow through to your tweets.

When a potential follower sees your account, he’ll also look at what you tweet. Tweet about events in your community, yourself or your business, but keep self-promotion to a minimum. If all you ever broadcast is your current move-in special, people in your target market will ignore you. They don’t want to read ads on Twitter.

Small Talk Makes the World Go 'Round

Twitter and other social-media communication platforms have been criticized because users share too many details about day-to-day life. The criticism is merited in many cases, but that doesn't mean you should avoid sharing some of your activities. 

If you think of Twitter as similar to a networking event or chamber mixer happening online, it becomes clear why this type of sharing is appropriate. Relax and just accept that small talk is OK, and it's just a corollary to the first recommendation to be human.

Listen to Your Target Audience

Most self-storage operators are missing the biggest benefit of Twitter because they’re not listening. You listen by following people in your target geography. By listening to your target customers, you’ll learn how the Twitter community works and how to fit in. Those who read your tweets will see you as “one of them,” rather than a clueless business to be ignored.

Listening also helps you find leads. Because most people are not currently shopping for storage, your tweets about move-in specials are likely to be irrelevant to the majority of people in your target market. However, if a Twitter user in your market is talking about moving, packing boxes or needs a moving truck, he may be in the small percent primed and ready to hear about your move-in specials. Twitter gives you the power to find him.

To find people talking about their need for storage or other related activities that may lead to the need for storage, you can use Twitter's advanced search tool,  http://search.twitter.com/advanced. This allows you to search for keywords like “storage,” “moving” or “packing” and confine your search to a certain geography.

When you find someone in your target geography who mentions something that indicates he might need a storage space, you can send a direct message through Twitter called an @reply. In this way, you can begin a dialogue online about whether you can help. 

Finally, listening gives you something to talk about other than yourself. You’ll hear about community events and the successes of the people you follow. Listening also allows you reply to the people in your target market and turn Twitter into a relationship-building tool, not just a one-way broadcast medium.

Put Down Roots

It takes time to learn the norms on Twitter, one of which is to be human. The other norms you’ll pick up by listening and interacting. People (your target market) won’t take you seriously or pay attention to you until you have earned their trust. David Meerman Scott, author of New Rules of Marketing and PR, calls this relationship building “putting down roots.”

Just like with a plant, putting down roots doesn't happen overnight. Twitter gives you access to hundreds or thousands of people in your target market, but it takes a while to build relationships, so don't give up too early. You must plant and cultivate before you can harvest.

Slow and Steady Wins this Race

Some storage operators worry that Twitter will become a big time-waster. One of the beauties of Twitter is everything outlined in this article can be done in 20 minutes or less a day. It doesn't matter if you only find four relevant people to follow the first day.

Invest 20 minutes, then come back to it tomorrow. Send a few tweets, find a few people to follow, reply to a few interesting comments, then come back the next day. There’s no need to continually monitor what’s happening on Twitter. Not only would it be difficult, other Twitter users don't expect it. Small consistent actions are much more important than massive action on an infrequent basis.

Twitter is a free tool that gives you access to people in your target geography and allows you to begin building relationships with them. It allows you to become known, liked and trusted by the people who you hope will rent from you when they have a need for storage.

You'll fit in and find new renters and admirers when you approach Twitter as a human representing a business, engage in small talk, listen and converse, and take the time to learn the ropes and gain trust.

Kenny Pratt is president of Crescendo Properties, a self-storage investment and fee-management firm operating 15 properties in the western United States. For more information, e-mail [email protected]; visit www.sellingstorage.com.

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American Buildings Co. (ABC) promoted Toby Anderson to sales manager for the company’s southern division. He will be responsible for managing 11 district managers from South Carolina to Florida, from the East Coast to Texas. Anderson began his career with ABC in 2001 as a design engineer in the Eufaula, Ala., office. Later appointed to district manager of the North Carolina territory, he was awarded the Atlantic Division Sales Excellence Award in 2005 and 2006.

The company also hired Steve Maxwell as district manager for North Texas. As a registered architect in the state, Maxwell has worked in various aspects of the architectural trade. His experience includes design, building and zoning-code analysis, preparation of construction documents, construction administration, coordination with permitting and zoning officials, and dispute resolution. He previously ran his own architectural practice, working closely with clients and numerous construction trades.

Headquartered in Eufaula, Ala., ABC has been designing, manufacturing and delivering metal-building systems and roofing systems to the industrial and commercial industries for more than 50 years.

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