LifeStorage Centers LLC has acquired a self-storage facility in Mokena, Ill., bringing the companys portfolio in the region to 17.

The former American Secure Storage, 8531 191st St. along the I-80 commerce corridor, features 717 storage units, office space and a retail store with boxes, packing and shipping supplies. It also features climate-controlled and drive-up storage, and RV and boat storage. LifeStorage plans to add a U-haul truck rental center this spring.

This facility was so beautifully constructed by its original owners and has so many amenities, said Michelle Wight, district manager. The lobby features granite countertops and looks kind of like a bistro. Plus, there is a wine-storage center and full conference room for rental with AV, Wi-Fi, and free Starbucks coffee.

As a special welcome promotion, the Mokena location will offer 50 percent off storage rent for the first two months.

LifeStorage was founded in 2002 by Jean Jodoin and Christopher Barry.

By Michael Regina

These are extraordinary times for commercial construction. Highly volatile market conditions and ongoing uncertainty are a challenge for the industry and its trade partners. Amid the economic downturn, now may not seem like a good time to build, especially in the commercial sector.

However, there are many benefits of building in a bad economy, which can present unique opportunities. The key is knowing what to look for and maintaining a forward-thinking visionary mentality. 

In any tumultuous period of change, the doom and gloom set will always find reasons to postpone building projects. But those who actively seek the silver lining and closely assess timing-based opportunities can gain significant advantages. Here are four favorable reasons to pull the trigger on a commercial construction initiative during an economic downturn.

Deeply Discounted Real Estate

Property values for commercial real estate in the United States have dropped 20 percent to 45 percent across the board. In the western states, the decrease has been even deeper. A good example is a deal on a piece of land that was under contract in 2007 for $1.5 million. That deal eventually fell apart in the development process for the previous buyer. Now the price being paid for that same parcel is $800,000. New office buildings that sold for $2.4 million in 2008 are now selling for $1.6 million.

Landlords are doing everything possible to protect their portfoliosfrom offering free rent for a year to dropping rental rates to 2001 levels. Owners are looking to reduce their losses. This puts more power and control in the hands of buyers. Additionally, given the fact that real estate owners are cash poor and looking to convert their assets, theres a large supply of land and existing buildings on the market.

Rock-Bottom Interest Rates

It may be difficult to remember the last time commercial interest rates were this low. It was, in fact, about 20 years ago. Comparative analysis on new commercial interests in certain markets shows that its cheaper to own a building than to rent today, opting to forego paying someone elses mortgage when rates are so low.

Like home ownership, commercial real estate should be viewed as a long-term investment in which it doesnt make sense to throw money at a landlord each month. In todays market, its a great time to buy and build. 

Streamlined Approval

Despite downturns, one thing thats full steam ahead is streamlined approval processes. Even just five years ago, it seemed to take a lifetime to get any new project approved through various local, county and state governing agencies. This is not the case today. Now it appears these same agencies are starving for fees and desperate for new projects.

Its not uncommon for townships to call construction firms inquiring about new submissions. These agencies need to support the departmental staff that process project paperwork and are eager to know whats in the minimized pipeline. The combination of technological efficiencies and eager reporting agencies has swung the pendulum back in the favor of construction companies that used to be at the mercy of the paperwork bottleneck. In a slow economy, theres a greater ability to control more parts of the process in relation to agencies, which makes it a great time to build. 

Reduced Cost of Labor, Materials and Services

The law of economics states that when theres an excess supply of goods or services, the cost of those goods or services will drop. This is the case today with construction labor, goods and professional services. Various trades are seeking work from any projects that can be generated during this downturn. Things were quite different in 2006 when these same companies were turning down work just as fast as they were growing business with the surplus work they already had. Today, companies are willing to cut their prices to keep their employees, resulting in decreased labor and services costs.

While many remain cautious about building these days, there are others forging ahead and taking advantage of todays available real estate, reduced labor and material costs, and low interest rates.

Michael Regina is the co-founder and owner of Big Sky Enterprises, a commercial real estate developer, design/builder and finance firm that strategizes, executes and oversees every aspect of a project development lifecycle to provide clients with single professional contact-point control. For more information, visit www.bigskyllc.com.

Most storage operators want to be the best at what they do. Often they hire the best in the industry to develop their business plan. Its interesting, however, that many fail to apply this approach to the sale of retail merchandise at their facilities.

With the right strategy and location, retail sales can comprise 3 percent to 5 percent of a facilitys revenue. But how do you get there? To truly maximize retail your return on investment, consider consulting with a retail expert.

Supply Side USA has developed retail-merchandising programs for the self-storage industry for more than a decade. On average, its clients show improvement from 20 percent to 50 percent and more over their current retail plan. These results are consistently accomplished because the company takes a different approach to managing the retail business for and with its customersit focuses on a multi-tiered strategy to get the job done.

Managing Inventory

Supply Side USA focuses on many strategic retailing elements for every customer it serves. Its extremely important to make certain all the components of retailing are addressed for maximization to be achieved. Offering merchandise alone is only one part of the equation. For example, its equally important to manage inventory levels so products turn over more quickly.

Overstocking is a real concern in self-storage. Many distributors know customers will buy more if they can save a little, and they exploit that. Saving a dime on a lock when you must purchase 100, or saving 20 cents when purchasing 500 may seem like a good idea, but you may be tying up cash for a year just to cash in on the savings. When that same buying strategy transfers over to mattress covers, tape, bubble wrap or other items that take much longer to sell, this purchasing and display strategy is counterproductive.

Supply Side USA specifically designed its product case packs to be smaller so operators dont have to purchase more than they need. These are the kind of details the company is always thinking about.

Retailing in the self-storage industry is a convenience for your customers. This bulk-purchase discount approach to retailing isnt the best way to maximize retail ROI. Research tells us the main reason most storage owners spend so much time and energy buying something for 5 percent to 10 percent less is so they can sell it cheaper than their competition. Assuming a typical retail markup is 100 percent and you buy an item for a quarter less, by adjusting your retail price to beat competitors, you actually hurt yourself in gross profit dollars. Instead, dont worry about the quarter; improve the retail environment and sell 30 percent more of that same item and others.

The Supply Side USA website ordering platform is designed to control inventory. The company gives you a customizable order-approval system that limits the product assortment managers can choose, and processes orders with management approvals before orders are submitted for fulfillment. This has been a tremendous tool for companies large enough to have district managers and for those with one or several facility operators who may have administrators overseeing the ordering process. The system is designed to notify the approver via e-mail that orders are awaiting approval and they can act at their earliest convenience.

A Retail Partner

From the marketing approach to inventory management, Supply Side USA dissects every aspect of the current retail environment and recommends the necessary adjustments to maximize retail revenue. Additionally, the company is known for its creative merchandising techniques to optimize the presentation of products. It will organize your display to offer a variety of price points without overstocking your store and use location-specific product assortments to capture the opportunities of local demand. With this strategy, the company improves the odds that each customer will find something to purchase, which increases impulse sales.

The final piece of the maximization puzzle is sales training and product-education support. This is vital to the retail maximization effort. In 2001, Supply Side USA was the first retail distributor in the self-storage industry to introduce a retail-sales training and product-education program for storage operators and managers. Its needs-based sales training helps managers develop the skills necessary to uncover customer needs for supplies. A well-trained and well-informed storage professional will separate himself from the competition and gain confidence with every customer he assists.

Developing the best possible retail plan with clients commitment and oversight will continue to be Supply Side USAs main focus. The company always begins its conversations with potential clients by determining ways to help sell more products. It constantly seeks ways to impact your business with a positive constructive approach to building a mutually beneficial and profitable business relationship.

Mark Petro is the national account manager for Supply Side USA, a supplier and marketer of retail merchandising for the self-storage industry. For more than 20 years, he has been engaged in sales and service of retail merchandising programs across several industries. For more information, call 800.305.6110; visit www.supplysideusa.com.

South African self-storage operator Stor-Age will develop a new purpose-built self-storage facility in Bloemfontein in the Free State. Bloemfontein is one of South Africa's three capital cities and is in the central part of the country.

The new store will be financed by Nedbank Corporate Property Finance and built by the Madison Construction Group in two phases. The facility will have two floors more than 22,600 square feet of self-storage space and contain more than of 500 self-storage units ranging in size from 9.8 to 90.8 square feet. It will be located within an eight-minute drive of the city's central business district and a three-minute drive of the city's airport.

Based in Cape Town, Stor-Age completed its first self-storage facility in late 2007. The company now has more than 255 million rand (just more than $38 million) of property under management, with six new stores coming to the market this year.

Inside Self-Storage magazine today released its 2011 Top-Operators List, ranking 100 of the self-storage industry's foremost operators based on total net-rentable square footage. The list, now available at InsideSelfStorage.com, ranks dozens of facility and brand owners, independents, developers and property-management companies. The data also features number of locations and units, expansion plans and contact information.

The top five self-storage companies participating in the survey include:

1. Public Storage Inc., Glendale, Calif. Founded in 1972, the storage operator owns and operates 2,233 facilities in 39 states. The companys total square footage is 139 million

2. Extra Space Storage. The Salt Lake City company was founded in 1977. It currently operates 821 facilities with a total square footage of 59 million.

3. Phoenix-based U-Haul International Inc. Founded in 1945, U-Haul is one of the oldest companies in the industry. The company currently owns 1,110 facilities across the nation.

4. Founded in 2004, U-Store-It Trust of Wayne, Pa., has 29 million square feet of self-storage space in 470 facilities in 29 states.

5. Sovran Self Storage Inc., Buffalo, N.Y. Founded in 1982, the company has nearly 25 million square feet of self-storage space in 377 facilities.

The ISS Top-Operators list is featured in the April issue of Inside Self-Storage magazine, and is available online now at www.insideselfstorage.com. To find list, click on Industry Directories in the navigation bar. To ensure consideration for the 2012 Top-Operators List, complete the online form at http://topoperators.insideselfstorage.com/BGWebForm_login.asp?gid=12.

ISS is a dynamic-services company that provides resources and services to the self-storage industry including a monthly magazine, bi-annual tradeshows, an information-packed website, several e-newsletters, and educational seminars and materials. ISS is also the owner of the Self-Storage Training Institute (www.selfstorageeducation.com), an online education portal for managers and owners, and Self-Storage Talk (www.selfstoragetalk.com), the industrys largest online community.