By Elaine Foxwell

Janus International Corp.s West-Coast operations has experienced such significant growth that it increased its workforce fourfold. Janus, a Temple, Ga.-based manufacturer of steel roll-up doors and other storage-facility components, opened its Arizona manufacturing plant in Surprise, a Phoenix suburb, in June 2003. The 43,000-square-foot facility is a smaller version of the companys Georgia plant.

Seeking to reduce freight costs to its West- Coast clients, Janus announced its expansion plans in 2002, the year the company was founded. Once company leaders settled on the metropolitan Phoenix area, it was the building, industrial park and quality of life that attracted them to Surprise, says Raymond Siciliano, general manager of West-Coast operations. We care about where we go to work and where we bring our customers. That area is so suited for industry; but its not your typical industrial park. Theres no doubt where this city is going, and we want to be part of it.

The People

The divisions continued expansion has led to the addition of several experienced industry professionals. Were exceeding our expectations and being proactive about staying ahead of our growth, Siciliano says. Janus was established to improve storage-industry products and service, and you simply cannot do that without the right people in the right positions.

Janus is about being progressive with both its products and people, adds Lisa Black, West-Coast regional sales manager. Since weve structured the management of projects through one person, from the initial quote to completion, the process is much more effective. I can concentrate on selling the product.

Janus increased its Surprise workforce from 10 to 40 employees, and expects to have a staff of around 70 by the third year of operation. At least 60 percent of the companys workers are hired locally. Recent additions to the West-Coast team include:

• Todd Nelson (Western-region technical sales manager) Nelson has 26 years of experience in installation, production and technical sales.
• Jean Albillar (Northwest-region sales representative) Albillar opened a Janus office in Northern California. He has 32 years of industry experience in product development and sales management.
• Fermin CalvilloCalvillo opened the companys Southern California distribution center in February. He has 27 years of industry experience in customer service and distribution-center management.
• David Troiani (Western-region commercial sales manager)Troiani has eight years of industry sales experience.

Door Design

inherent deficiencies in storage products. Among the quality issues addressed were: broken springs, shipping damage, dents, nonbearing friction, unequal spring tension, and door curtains dragging against the door guides. The foundation of the Janus door is the spiral tube that encloses the entire axle assembly. This enclosure accomplishes two things. First, it adds a structure to the door no other product has. Second, it allows the tension-set device to accurately adjust the springs on both sides of the door. The added structure of the axle, combined with the equal tensioning, forces the door on a straight travel path.

In addition, Janus has re-engineered its door packaging to eliminate shipping damage and made tension-set devices and bearings a standard, not an option. Company President David Curtis, who has 24 years of experience in the business, holds four patents for his roll-up door design. Janus also specializes in self-storage hallway systems.

Self-storage accounts for about 70 percent of Janus business, although commercial buildings and manufacturing plants also use its products. In addition to shipping doors all over the United States, the company has customers in Canada, Central and South America, and Puerto Rico, and is aggressively pursuing the European market.

For more information, call 866.562.258; e-mail [email protected]; or visit www.janusintl.com.

By Gregg Salkovitch

In 1914, Edward John Noble came up with a clever idea. His product, Life Savers, was a struggling brand; but he believed if it was placed in front of a drug-store cash register, it could sell well at a nickel. Noble saw this as prime real estate in the retail world. The location was idealwhere there is change, there are nickels! His small company grew rapidly because he recognized a need for an inexpensive item customers could easily add to their shopping cart without much thought. In other words, he saw a place for impulse items in small businesses.

Last month, I went to an electronics store to purchase a CD player. After 15 minutes of looking at various brands, I found one I liked for $79.99. While waiting in line at the register, I saw a pack of blank CDs in a compact display for $7.99. As someone who likes to mix his own CDs, I added these to my order without hesitation.

The store had an entire aisle containing several brands of CDs. Why did I purchase them at the counter instead? Three reasons: First, they were visible. I hadnt considered purchasing blank CDs; but since they were conveniently located at the register, I thought, I could really use these. Second, it was easy. I was in line and only had to pick them up. Finally, they were inexpensive. An additional $8 was not a major purchase.

The objective with impulse items is to boost sales volume on products customers want more than they need. The characteristics of most impulse buys are low price, marginal need, self-service and small size. These were the exact characteristics of the CDs I purchased. As a result, the store increased my sale by 10 percent.

Like drug and electronics stores, your self-storage facility should offer impulse items. Locks are a necessary item and sell well at most facilities. A customer who stores with you is likely to buy a lock from you. Therefore, locks do not qualify as an impulse product. Choose instead a product that might get lost in your retail display and has a reasonable price point, for example, carton markers or cutters, and moving labels. These products are lowcost, and many customers will buy them without wavering. They are ideal precisely because they do not call attention to the fact they are being purchased.

Sixty percent to 70 percent of consumers make whimsical buying decisions while in a retail store. This is why it is essential for you to display impulse items. Boxes and locks are easy salesmany customers who walk into your retail-sales area are ready to buy them. Put impulse items in front of them so you can build on those sales. Your customers want these items; they just do not know they need them!

Gregg Salkovitch is an account manager at Supply Side, which distributes packaging as well as moving and storage supplies. The company has developed merchandising programs for many leading companies, including Storage USA, the U.S. Postal Service, Kinkos and Mail Boxes Etc. For more information, call 800.305.6110 or 216.738.1200; e-mail [email protected]. 

By Fred Grauer

The whole issue of security has become pretty frightening. It wasnt long ago that I, like a lot of guys, was convinced I shared many traits with Supermanyou know: invincible, able to leap over tall buildings, faster than a speeding bullet, able to handle almost any threatening situation. But in the last few years, my mental awareness has sure undergone a course correction.

Most weeks, you can find me at the airport- security check-in area getting ready to board another plane. To those who dont travel very often, this may sound glamorous and fun. But Im here to tell you: After 9/11, this is most certainly not the case. That fateful day changed the American lifestyle forever. But for me, the fun of travel is sharing the details of my business with those interested in the car-wash industry.

With the ownership of any business comes added awareness of security. As defense is such a broad-based, billion-dollar business, how do you sift through all the hype and boil it down to those items you need most? As business owners, we face the unknown every day. Many events occur over which we have absolutely no control; but once in a while, we come face to face with terrifying situations we can do something about.

Types of Threat

First, lets look at the economy, which represents a financial threat. On a national level, we have little control over it; but locally, we can do something to secure the future of our businesses. In a crisis situation, the government mobilizes its SWAT teams. When your livelihood is being threatened, you can use a similar strategic advantage: In business, we call it SWOT analysis. You bring your team together to list and review your companys strengths, weaknesses, opportunities and threats. Afterward, you have the makings of a tactical initiative that will secure your position and allow you to go on the offense rather than the defense.

In business, we deal with other types of threats. Internally, they take the form of breaches in security. Sometimes violations are caused by human intent, other times by accident. Often they occur because significant safeguards or disciplines do not exist. In the lucky event you have not experienced a business lossemployee theft, a break-in, other criminal activitycount your blessings; and then call in experts to ensure you have all the proper defenses in place for the future.

In a retail environment, security takes a different twist. Here we (including our customers) are exposed to many different risks. What can you do to ensure the safety, performance and quality of your business? Every time I meet a client to build a new car wash, the question of personal, property and equipment safety enters the discussion. How do you design the facility to minimize risk? What products can guarantee customers get what they pay for and we receive our return on investment?

The Role of Technology

Fortunately, the electronics industry and the expansion of technology has lead to the launch of some very cool, exciting products. Not only can we monitor all the activities of our businesses, we can do so remotely and from great distances. For example, I was recently introduced to a web-based management tool that allowed me to enter a URL, type in a password, and watch in real time what was occurring at a car-wash location. This kind of access brings tremendous peace of mind. In addition to tracking activity at your sites, think of the comfort you provide customers when they know they (and their goods) are on camera.

In the coming months, more data-collection and security products will become available at affordable prices. New point-of-sale systems, wireless devices, cameras and camera phones will enable us to track, manage and minimize our business risk. As the car-wash and self-storage industries become more mature, they will have more sophisticated technology available to maintain security at a reasonable cost.

Fred Grauer is the vice president, distributor network, for MarkVII Equipment LLC, a car-wash equipment manufacturer in Arvada, Colo. He has made a life-long career of designing, selling, building and operating car washes. He can be reached at [email protected].

By Michael L. McCune

This month, I gathered real estate experts to discuss the state of self-storage in the Southeast. Lets hear what they have to say about their respective cities and regions. Our panel of brokers includes: Bill Barnhill, Omega Properties, Mobile, Ala.; Dale Eisenman, Midcoast Properties Inc., Hilton Head Island, S.C.; Kathleen OBrien, Wexford/OBrien Associates, Arlington, Va.; Chuck Shields, Beacon Commercial Real Estate, Conshohocken, Pa.; and Frost Weaver, Weaver Realty Group Inc., Jacksonville, Fla. These are unique economic times, so I asked our brokers some straightforward questions every owner will find pertinent. I have also added my own comments and observations.

1. While interest rates have remained relatively low, have you noticed more interest from investors new to self-storage? Who is actively buying in your market?

Barnhill: We have had numerous contacts from new investors wanting to get into the self-storage business. There are a lot of real estate investors wanting to transfer their assets from other real estate types into self-storage. The buyers in our market have been primarily regional owners with some larger storage companies who are looking for acquisitions.

Eisenman: The low interest rates have benefited buyers of all typesthose new to the business and those actively involved. They have benefited sellers by attracting more buyers who can pay reasonable values. Additionally, we are seeing local and out-of-state buyers considering self-storage properties.

Shields: In general, my territory has seen new investor interest. On average, I see one new investor call per week. The Delaware market seems to be a little lighter; though most investors, new and old, are willing to consider the majority of locations (most likely due to the lack of overall product).

OBrien: There has been consistent interest in my market from investors new to selfstorage. The low interest rates have not changed that. I have seen existing owners want to expand portfolios and add locations. However, there is still diligent attention to the basicseither location, location, location for new facilities, or an analysis of the operating history of an existing one. I have also seen an interest in underperforming locations, those facilities that would benefit from more diligent and competent management, where an upturn in profit can be anticipated.

Weaver: We continue to have inquiries from investors new to self-storage, but have not seen a change in their level of interest because of lower rates. There is continued attraction, but this is based on more investors becoming aware of the benefit of self-storage ownership as compared to other types of properties. While there is growing attention from potential new investors, active buyers still tend to be those already in the business. They are more knowledgeable about the physical product and, more important, what it takes to improve the bottom line to increase the value of an investment.

Generally speaking, historically low interest rates are making geniuses of buyers and sellers. These are unique times.

2. In other parts of the country, we are seeing buyers become more selective and price-conscious. What is the attitude in your area?

Barnhill: Buyers are indeed more selective in that they are seeking quality properties with good demographics.

Eisenman: All of the buyers I encounter want reasonable value but, for some, if their buying criteria are too conservative, no properties qualify. Not all buyers have the same objectives or goals. Some are looking for properties with well-established and stable net operating income and high occupancy. Others seek properties that may have a lower occupancy or NOI, thinking they can affect and improve them, thus providing an upside opportunity.

OBrien: These are always the basics: Location and historical performance are always important. I think self-storage investors have always been price-conscious, and this is reflected in the examination of the actualnot the pro formaoperating statements. The numbers are what they are.

Shields: To date, investors are telling me they are willing to consider anything, anywhere, at any price, just so they can have the opportunity to be exposed to a property. After they get more details and have a chance to evaluate the property, they become more selective. I believe this show me everything attitude is due to the lack of product in the market.

Weaver: Regarding buyers becoming more selective and price-conscious, we dont see a change in Florida. There is such a scarcity of product that decent properties are acquiring significant attention very quickly. We recently listed a property on a Friday, and I had a contract on the following Monday.

Since most buyers are either current selfstorage owners or experienced in other forms of real estate, they are sophisticated and know what property values are within a very narrow range. There are not any greater fools here, just rational buyers in a good market!

3. What are the most important things a seller should keep in mind when deciding to sell a property?

Barnhill: Most sellers should engage a knowledgeable broker seasoned in selfstorage acquisitions. There are numerous aspects and caveats to consider that an experienced broker would recognize.

Eisenman: A seller should recognize that, with the proper representation and marketing, a property will attract a buyer who will pay a fair and reasonable price. He should keep in mind active buyers are successful businesspeople and, often, self-storage owners. Accordingly, they are sophisticated buyers who understand the underlying concepts that drive values. The key is to present the property to a large universe of potential buyers to attract one or more who will make serious offers on terms and conditions acceptable to the seller. In preparation, the seller is well-advised to provide his representative good records that demonstrate a net operating income to support the value he seeks.

Shields: This assumes the seller is actually a seller! It is the most important underlying factor, because unless a seller is committed to make the sale, he might not be receptive to the realities of the marketplace. These are some of the considerations to which a seller should be sensitive:

• PriceThis is probably the most important consideration, because it must be based on real value and cash flow of the property.
• Exposure and MarketingHow is the property entering the marketplace? In what light is it going to be shown, and who is going to do it?
• Evaluating the MarketplaceWhat are the conditions of the economy? Where are interest rates? Is your market overbuilt?

OBrien: I think the most important thing a seller should keep in mind is the importance of good historical records.

Weaver: When considering selling, curb appeal through proper maintenance is important. However, the most significant issue is good and accurate, historical, financial information. Most private investors dont keep very good records. In most cases, they have personal expenses that have to be filtered out. This can be very time-consuming and create misinformation that is hard to correct. We have taken a position that until we have good, accurate information, we wont proceed with listing or marketing a property, as it obviously impacts the value and sales price.

I think that the two most important things for a seller to know are 1) selling is his objective and 2) having good records is imperative.

4. How would you describe your market in terms of benefiting buyers, sellers or both?

Barnhill: There are many more prospects than there are properties for sale. Since the Southeast has the best economic outlook in the United States, many buyers are looking to locate here. There is a great deal of demand in the Florida coastal areas.

Eisenman: This market is one in which buyers and sellers can benefit from solid properties and low interest rates. I approach all potential property sales as win-win situations. Both parties canand shouldbenefit from the transaction and the relationship.With capital gain rates at all time lows, coupled with low interest rates, buyers are able to secure good value with excellent financing; and sellers can enjoy converting a nonliquid asset to cash at historically low tax rates.

OBrien: My market is a strong growth market. The five-year projected growth in one county is 35 percent. Obviously, this will create demand for self-storage facilities. This, in turn, will benefit the seller and buyer.

Shields: This is a sellers market. The fact there is limited product in all classes enables sellers to ask very aggressive prices. Buyers, on the other hand, are able to buy these facilities because of the favorable interest rates. Development in many areas is also strong, because several markets are not overbuilt, and there appears to be a need for more units.

Weaver: This is a good time for sellers, because there is strong demand and lower interest rates provide attractive leverage. For buyers, Florida is a growing market that will generate considerable upside potential over the long term.

5. In general, have you noticed a change in REIT activity in your area? Which, if any, REITs are active in buying or selling self-storage properties?

Barnhill: We have not recently noticed any change in REIT activity in our market. Reportedly, Sovran is interested in expanding in Florida. Most of our work has been with regional and local buyers.

Eisenman: The REIT activity we see is Storage USA spinning off its secondary locations.

OBrien: REITS are very active in my immediate market in every sector of commercial real estateoffice buildings, multifamily communities, industrial and self-storage. This is true of Baltimore, Md., Richmond, Va., Washington, D.C., and other major urban areas. REIT interest diminishes as the urban areas transition to a more rural landscape, where the population density cannot support large facilities.

Shields: Some REITs are actively developing in selective areas, and others are thinning their portfolios in certain markets. In general, there has been little change with most of them. REITs have the capital and management to continue developing in certain markets, and they will eliminate those facilities that are less profitable.I have noticed All Seasons Storage and United Storall have been somewhat active in developing additional sites, whereas Storage USA has marketed a few of its sites for sale.

Weaver: We have not noticed a change in the activity of the REITs in our area; they have been here before and are still in the market. However, in some cases, they have become more aggressive for properties they really want. A property in south Florida that sold for a 9.5 percent cap less than two years ago recently sold to a REIT for a 7 percent-plus cap rate.

Nationally, the REITs have recently tended to develop more and buy less. In some cases, they have been very active sellers of properties, but mostly for repositioning purposes.

Michael L. McCune has been actively involved in commercial real estate throughout the United States for more than 20 years. Since 1984, he has been owner and president of Argus Real Estate Inc., a real estate consulting, brokerage and development company based in Denver. In 1994, he created the Argus Self Storage Real Estate Network, now the nations largest network of independent commercial real estate brokers dedicated to buying and selling self-storage facilities. For more information, call 800.55.STORE or visit www.selfstorage.com.

I recently acquired a new employee who has been extremely proactive in learning as much as she can about the self-storage business. We spent one afternoon discussing trends in the industry and the politics of storage development. Then the conversation came around to one of my favorite subjects: public perception of the industry.

For the past year, Inside Self-Storage has included a monthly section titled Media Monitor, with the intent of tracking and summarizing coverage of self-storage and related news in mainstream media outlets. Sources range from national newspapers to online broadcast reports to small-town periodicals. In the beginning, headlines were few and far between, or simply representative of financial reports in business journals. These days, news stories are so frequent and varied, we can hardly keep up.

The ongoing steel crisis, crime, and battles with planning and zoning boards top the charts of media coverage. Once in a while, an article will shed a positive light on the industry, assumed by much of American society to be industrial, uninviting and full of corruption. And who can blame the public? My employee chuckled when I told her news coverage of storage often regales with tales of murder victims and drug rings. But I wasnt kidding. Take, for example, the following sampling of headlines from this months Media Monitor:

• Proposed Storage Raises Concerns About Terrorism
• Piles of Stolen Goods Found in Pacific Self-Storage Units
• Thieves Hit Mini-Storage Facility
• British Raids Foil Possible Terror Attack
• Missing N.Y. Women Found in Storage Unit
• Storage Break-Ins

Storage owners take their security efforts to heartnot only because of their vulnerabilities to white bread crimetheft, vandalism, hazardous-waste disposalbut now also due to more sophisticated offenses, such as ID fraud, terrorist activity, and implication in plots subject to the U.S. criminal-justice system. But lets face facts: Security is as much about marketing as it is about safety. All other things being equal, tenants will flock to the facility that appears to have greater defense measures, which is why youll read in this issue about the basics as well as revolutionary technological advances in the field.

Security isnt just for breakfast anymore; its now a staple of the self-storage diet. That being said, owners should be cautious to offer a balanced security regime. In the advent of digital video, biometric ID scanning and computerized access, there is still no reason to scoff at gates, fences and good, old-fashioned managing by walking around. I arm my home with a security system; I also keep a baseball bat handy on each floor. It isnt that I dont trust technology to do its job. But when theres a glitch in the system, I prefer to carry a stick, and a big one. Vigilance and responsibility will be the key. Be armed, but not uninformed. Defend your business from criminals and poor media alike.

Best wishes,

Teri L. Lanza
Editorial Director
[email protected]

By Doug Carner

What is your concept of self-storage security? While a measure such as razor wire will deter criminals, its presence implies a crime issue that can make your facility uninviting. Wrought-iron fencing around a propertys perimeter is a strong barrier but is cost-prohibitive. Fortunately, technology can fill the gaps in a facilitys security system. But if your security can be easily defeated, you lose more than protection; you lose the secure image you promote to prospective tenants. You should have a clear understanding of your systems vulnerabilities and options to avoid false claims and criminal incidents.

Surveillance Cameras

Traditional surveillance cameras are shoebox-sized units that rest atop a mounting arm. These cameras are the easiest security measure to defeat. The shape of their housing makes their location and view obvious, making it easy to stay out of their sight. A thief needs one good swat with a stick to forcibly redirect a camera toward a wall and render the system useless.

Over the last few years, weve witnessed a return to the Old West as criminal entrepreneurs lasso and pull facilities cameras for quick resale income. J and U-shaped camera brackets have made it easy for even the clumsiest thief to secure his rope on the first try. Eliminate this offense by choosing flush-mounted wall domes that do not provide grab points. Dome cameras are economical and include a coating to disguise their direction of view. A minor drawback is the potential for glare when the sun approaches the dome cameras field of view.

Critical camera wires should always be protected. High-resolution surveillance means nothing when the video signal can be defeated using a pocket knife. You can either bring conduit to the camera or mount the cameras 20 feet high, well beyond the reach of someone with an 8-foot ladder or standing on top of a car.

Access Control

Unfortunately, all video-surveillance systems can be defeated with a $2 party mask. The police cant do much to find an unidentifiable suspect. This is why you need to keep the bad guys off your site in the first place. The primary line of defense is a mechanical gate operated by an electronic access control.

Access-control points are commonly called access keypads, even when a numeric keypad is absent. Unless you rely on face-to-face tenant verification, these are the true guardians of your facility. You need security sentinels that stand up to time, weather and abuse.

Access keypads are only as secure as the housing that surrounds them. Twenty pounds of industrial steel is useless if the keypad cover is attached with nothing more than a few screws. Even the application of security screws only requires a thief to spend a few dollars on a specialty screwdriver from the local hardware store. Once the keypad housing has been opened, so has your facility; and the keypad itself is likely to be vandalized. Your security vendor should offer a locking enclosure, preferably one that uses an uncommon barrel or dimple key.

Most access-control systems rely on each tenant having a unique, numeric gate-access code. The tenant enters his personal code each time he seeks access to your facility. Some of your tenants are business owners, and several of their employees may share their access code. Any one of those employees could use the code after they have been fired from the business or share it with an unscrupulous friend. Your tenant may not learn of the unauthorized code use until several days or weeks later. To stop this problem, you need better controls.

Access Technology

Fingerprint identification has been around for a hundred years. Since fingerprints can be easily marred with dirt or scratches, experts recommend all five fingers be matched to verify a persons identity. However, biometric access keypads can only read one finger. If a thief lifts a tenants fingerprint from the keypad housing or a door knob, he may be able to assume the tenants identity. Furthermore, fingerprint readers can become confused when it rains, because wet fingers are hard to scan. In the future, biometric keypads may become more practical, perhaps in the form of iris scanners.

A more pragmatic access technology to consider is a proximity card-reader. Proximity keypads work in all weather and a tenant never touches the reader. He simply waves his access card or keychain tag near the receiver. Active proximity cards work from several feet away, so the tenant may not even need to roll down his car window. However, this convenience is expensive, as active cards cost about $10 a piece.

A fantastic balance between proven security and system cost is the use of magnetic card-access codes. These are inexpensive to implement and difficult to clone. Tenants can use items already in their wallet or purse as a gate code, such as a drivers license, club-membership card, credit card, or just about any card that has a magnetic stripe. Furthermore, most magnetic access keypads support pay-at-the-gate. This adds a convenient method to collect delinquent rents.

Unit Alarms

While keypads control who is allowed access to your facility, adding an alarm sensor to each tenants storage door goes straight to the problem by protecting unit contents. Since a tenants individual unit alarms are only disarmed when entry is granted through the accesskeypad system, someone who manages to sneak onto the premises will have to otherwise disable the warning system.

Because each storage door is individually armed, wires must connect to every unit. Not only must these wires be protected from vandals, they must be saved from legitimate tenants who carelessly use exposed wiring as a clothes line as well as chew-happy rodents. If you live in a lightning-prone area, storms can create voltage differentials across door-alarm wiring and damage the electronics that monitor the doors. Protecting against all these hazards, or dealing with their aftermath, will dramatically increase the cost of a wired security system.

To overcome wiring issues, most major security vendors offer a wireless alternative. Being wireless, their sensors must be located on the exterior of each storage door. This is a major advantage, as it provides a visual crime deterrent, and unit access is not required for installation or servicing. Unfortunately, it also means the sensor itself may be vulnerable to attack.

Each wireless sensor has a tiny computer and transmitter within a protective shell. The shell is often made of plastic so the internal radio transmitter can communicate with the security controller, usually in the managers office. These systems can be easily destroyed with a cigarette lighter or common nail-polish remover. Systems with nylon housings will have greater protection and longevity.

With a wireless door-alarm sensor, the housing is mounted to the door frame using screws. To prevent vandalism, the housing cover should latch over the mounting screws, thereby preventing anyone from attempting wall removal. Be wary of systems that still use the old boxy housings with exposed screws. To be truly secured from tampering, the sensor needs a case-open and wall-removal detection switch.

System Extensions

All door-alarm systems can activate sirens and tie into your phone system so the outside world is alerted to the intrusion. Sirens should be mounted beyond reach, preferably in bell boxes or cages. Your phone lines should be protected so they cannot be easily cut from outside your building. Phone companies normally drop lines at the highest point of your perimeter wall.

Door-alarm systems generally allow for the inclusion of comprehensive office security and perimeter beams inside your fencing. These become additional zones that are armed and disarmed according to their own access keypad codes and special conditions.

You can also add controls so your lighting system responds appropriately, highlighting every nook and cranny. Your exterior lighting should be safe in protective housings to prevent breakage. Metal lighting cages present a good, inexpensive solution.

Your camera-recording system should have Internet access for off-site monitoring. You may also want to consider hiring an armed response service. It can access your surveillance cameras and determine if an alarm event is a real emergency or just a loose door-alarm wire.

Does your facility have an automated attendant kiosk? These kiosks provide 24/7 customer service like a bank ATM. They are usually placed in a well-lit location outside of a facilitys access-control gate. Although a kiosk is monitored by lights and video surveillance, it still needs to be well-protected from direct attack. This is especially true if it accepts cash payments. For the greatest protection, the kiosk should be mounted into an exterior wall.

Look at your site as a thief would, and protect it accordingly. Exterior doors should be made of steel. Large access panels should be protected by locking bars. Trees should be kept far from perimeter fencing to prevent them from being used as ladders. Your entire electronic security system should be protected from failure with an uninterruptible power supply.

The end result is a complete security system that works in concert. Access codes are automatically assigned by the kiosk or management software. Individual door alarms trigger sirens and/or activate lights whenever unauthorized unit activity occurs. Video surveillance begins hyper-recording when the alarm system triggers. As all the elements of your security system work together seamlessly, you gain a barrier against crime and a rapid response should it occur.

Doug Carner is a former member of Self Storage Associations Westernregion board of directors. He is also the vice president of QuikStor Security & Software, a California-based company specializing in access control, management software, digital video surveillance, kiosk and corporate products for the self-storage industry. For more information, call 800.321.1987; e-mail [email protected]; visit www.quikstor.com.

By Amy Brown

In addition to access controls and alarm systems, self-storage owners are increasing their use of video surveillance for added security and protection. Surveillance cameras can ensure the safety of staff and customers and deter crime. Videotapes have proven successful in identifying intruders, uncovering employee dishonesty and documenting accidents that occur on the premises. Facilities that use video surveillance have a visual record of events, which assists in identifying fault or negligence in liability claims, aiding the claims-handling process and, when necessary, court proceedings.

Maintenance

Merely having surveillance cameras on a premises can sometimes discourage criminal activity; but if cameras are hidden or an intruder isnt threatened by their presence, their ability to prevent misdeeds is limited. In that case, their biggest advantage lies in recording criminal activity and assisting in identification of offenders.

To achieve the maximum benefit from video surveillance, equipment maintenance should be performed regularly and tapes retained appropriately. Perform routine inspections on security cameras and equipment to ensure they are functioning properly. And take care when monitoring and storing security tapes; otherwise, the surveillance system may lack credibility.

When your security system was installed, the manufacturer should have provided a set of instructions about its use, maintenance, cleaning and repair. Adherence to these directions is strongly advised. If you do not have them, call and request a copy. Cleaning, repairing or using your security equipment in any way that contradicts the manufacturers recommendations could damage it or make it less effective. If your system is not functioning properly and you have adhered to the guidelines, inquire about warranty coverage. If the system needs repair, have the manufacturer recommend someone familiar with its line of products.

Tape Retention

Surveillance tapes should be saved for at least 90 days, especially in the event of an accident or crimewhich means having enough tape available to accommodate this time frame. Recycling the same few tapes limits your documentation to only a couple of weeks. Some crimes, such as employee dishonesty, arent immediately noticeable.

For example, at one facility, employees retained copies of tenants keys and used them to access units after hours and steal stored goods. Because there was no evidence of forcible entry, the theft went unnoticed for a few months until the tenants complained of items missing from their units. Since the facility owner retained his security tapes for 90 days, he was able to view the tapes, identify the culprits and turn the evidence over to authorities.

Most people prefer to recycle tapes to limit space needed for storage and minimize costs. This is understandable and practical; however, overuse of tapes can result in their destruction or demagnetization. After reusing a tape for the fifth or sixth time, the qualityalong with the credibilityof the tape deteriorates, and it becomes virtually useless for the purposes of identification. Do not reuse a tape more than four times in one calendar year. If you retain tapes for an average of 90 days, you lessen the chance of overusing them.

If there is a criminal incident, the tape on which it was recorded should be retrieved and saved, no matter how slight the occurrence may seem. Storage owners should also save tapes that recorded any accidents for insurance reasons and proper claims handling. Taped surveillance can be beneficial when determining fault and negligence in liability claims by giving the claims adjuster video documentation of what actually occurred.

Backing Up

No matter how well your surveillance system is cared for and maintained, it is important to make regular, reliable backups of your video. The data on tapes can never be guaranteed safe if it exists in only one place (consider, for example, tape theft or a fire that destroys a tape collection). Tapes should be stored in a secure cupboard or cabinet, not only so their integrity can be maintained but to avoid the possibility of accidental damage or use. It is best to store a set of back-up tapes safely away from the facility.

There are many reasons facility owners and managers neglect the important task of making back-ups. First, they do not understand how important they are, because they have not yet had a disaster occur. Second, they do not know how to make them and will not take the time to learn. Third, they forget to make back-ups because they dont have a routine for doing so; or performing the backup is a time-consuming chore and they cant be bothered.

To ensure a security-surveillance system is an effective tool for deterring crime and recording possible incidences at your facility, care should be taken when handling and maintaining the equipment. Retaining tapes for an adequate amount of time will help you avoid overuse and make documenting more credible. Storing tapes in an appropriate space and creating back-up copies ensures data is readily available when needed. Keeping track of your facility with surveillance is a great way to give you and your insurance company peace of mind.

Universal Insurance Facilities Ltd. offers a comprehensive package of coverages specifically designed to meet the needs of the selfstorage industry. For more information, or to get a quick, no-obligation quote, call 800.844.2101; e-mail [email protected]; visit www.vpico.com/universal.

By Fred Gleeck

No matter how much you invest in marketing your storage business, you need to spend intelligently. But before you expend a dime, its important to understand the value of your customers. In other words, you should know what youre getting for your marketing dollars.

Here is a way to compute how much each customer is worth to you. Take your average length of stay in months (the national average is approximately seven months for residential customers). Multiply that number by the rental rate for the average unit rented (the national average is $80). In this example, you get a total of $560 (your gross revenue). If you are in an area with higher rental rates, substitute your own numbers. Dont be overly concerned with the precision of your figuresits more important to understand the principle.

Next, subtract your hard costs of doing business. To make things easy, lets say they comprise 50 percent of your gross revenue, or $280. If youre fairly regular about generating referrals, every fifth customer will win you another rental, so you can re-add $56 (20 percent, or one-fifth, of $280) to your total, leaving you $336. This is the number you will work with for the sake of the exercise. In reality, it may be slightly higher or lower.

Choosing Your Marketing Method

Now its easy to determine whether a certain method of marketing makes sense. If the cost of acquiring a customer is more than $336, look to another approach. If the cost is lower, consider it. In an optimal environment, you want to put all of your marketing dollars in the area that provides the greatest return for your effort.

There is only one wrench in the works. Some groups can only be attracted through specific marketing methods. For example, some will only look through the Yellow Pages; others will only respond to direct mail. Still others only do business with you if they are referred by someone they know. For this reason, you must employ a variety of marketing techniques. Different target markets require various approaches, which come with varying costs. Use those methods that are the most cost-effective, but realize some customers cannot be captured using inexpensive marketing. You may need to spend more to attract select groups.

Understanding this, you cannot fall back on lazy marketing as practiced by the vast majority of self-storage operators. Many owners simply place a Yellow Pages ad and wait for the phone to ring. Anyone who does this and complains about how tough the business has become is deluding himself. I dont know of any other businesses in which owners feel they dont have to work to be successful.nIf you got into the self-storage business thinking you would not have to work at marketing, think again. Lack of attention to promotions will make your long-term survival very questionable.

ROMD

Every marketing-related activity you do should be based on this key premise: Spend the least amount possible to get the greatest in return. You should always be looking for a return on investment. The trick with marketing is to spend very little and have the net payback in terms of rentals be substantial. This is your ROMD (return on marketing dollars). I coined this phrase because few people in the industry had thought about it before. The old-guard, elite operators had been operating on a dumb and happy philosophy.

What do I mean by this? For years, the storage industry was bursting at the seams. Owners threw up a building, tossed a so-so ad in the Yellow Pages and watched their bank accounts grow with little or no marketing effort. Dont get me wrongI applaud the pioneers in this industry for their foresight. They built early and deserve credit for seeing an excellent opportunity. However, the rules of the game have changed. They are now competing in a completely different marketplace. So are you!

It is getting considerably more difficult to make a bundle of cash in this business. Competition is increasing daily. The big REITS are building in towns we thought they would never touch. I recently visited a facility in the San Diego area where there were 13 storage facilities within 1 mile of each other. You think you have it bad! And it will get worse. Investors now know what a great business self-storage is. This can only mean one thing: decreased profits and more competition.

There are lots of different ways to market your storage facility; but the top seven ways in terms of ROMD are:

1. Generating repeat customers
2. Encouraging referrals
3. Using a storage hotline
4. Cultivating centers of influence
5. Implementing direct mail
6. Maximizing free publicity
7. Running Yellow Page ads

I have touched on each of these methods in past columns. Advertising in the Yellow pages is not even in the top five in terms of ROMD. Does this mean you should not use them? Absolutely not. All it means is there are other methods with much higher leverage ratios. Your marketing efforts should be a balanced mix of different techniques. Concentrate on those which give you the best bang for your buck!

Look at every method of marketing you use and assess its cost vs. its benefits. Understand that certain techniques will have much higher return rates than others. Use them allas long as they are profitableto maximize your chances for success in this ever more competitive storage marketplace.

Fred Gleeck is a profit-maximization consultant who helps self-storage owners/operators during all phases of the business, from the feasibility study to the creation of an ongoing marketing plan. He is the author of Secrets of Self Storage Marketing SuccessRevealed!, available for purchase at www.selfstoragesuccess.com, as well as the producer of professional training videos on self-storage marketing. To receive a copy of his Seven-Day Self- Storage Marketing Course and storage marketing tips, send an e-mail to [email protected]. For more information, call 800.FGLEECK; e-mail [email protected].

By Jeffrey Greenberger

Many self-storage operators offer the use of a truck at move-in as an incentive to prospective tenants. There are certain pitfalls and issues of which owners should be aware before deciding to offer this service. This column does not discuss whether you should offer trucks from a national rental company such as U-Haul, Budget, Penske, etc., but whether you should make a rental truck available to your tenants. The most important issues to consider are how to handle promotions, liability and insurance.

What Are You Offering?

One of the most important issues involved in offering truck rental is clearly defining what you provide. I am reminded of a story industry-consultant Jim Chiswell uses as his cautionary tale. Jim discovered one facilitys Yellow Pages ad that read, Free truck with move-in. Some smart-aleck went to that facility, rented a space, and started giving specifications for the type of truck he wanted in exchange for his move-in. Therefore, the first lesson is to be extremely careful in how you phrase your truck offer.

The second important lesson is to make sure your rules and regulations regarding use of the truck are clear and in writing, and that you follow your own rules at all times. Because rules apply to the use of the truck, you must include the following statements in any advertising: Certain rules and restrictions apply. See management/facility office for details and This offer is subject to withdrawal or change without notice. These are basic tenets of any advertising that addresses the issue of truck rental.

Issues of Liability

The problem with the average move-in is people tend to trade beer and pizza in exchange for assistance with their moves. As an owner, you give your truckwhich is likely three to four times bigger than anything the average tenant has ever drivento someone who has probably consumed a six-pack while moving furniture. At the same time, it is impractical and inadvisable to provide any driving instruction; because the more responsibility you undertake to ensure a tenant can drive the truck, the more liability you assume in the event of an accident.

While state law generally says the liability for operation of any vehicle follows the driver, not the owner, there are legal concepts, such as agency and negligent entrustment, any lawyer may raise in a lawsuit to imply the self-storage owner, operator, manager, etc., is responsible for giving the truck to someone who did not know how to drive it or may have been impaired during its use. Therefore, it is important to ensure you have the best possible insurance, with the highest possible limits and the fewest exclusions, to protect yourself and your business.

Follow the rules set by your insurance provider, for example, confirming the operator of the vehicle has a valid drivers license. Also, the size of the truck you may lend varies from state to state and, in all states, certain truck sizes require a commercial drivers license. Therefore, make sure the truck you have purchased or leased is legally operable by someone with a standard automobile license.

Insurance

Unfortunately, there appear to be few companies that will insure rental trucks on behalf of self-storage operators, even though the liability follows the driver. Nevertheless, insurance is available and, as long as you can afford its costs (plural intended), you should generally be well-protected.

When shopping for insurance, you will need to ask the following questions: What type of documentation does the insurance company require you, the operator, to review and keep about the driver? Does the insurance company require a photocopy of a drivers license, motor-vehicle background check and/or proof the operators license is in good standing with the Bureau of Motor Vehicles? By the way, these issues become extra-complicated when you are dealing with tenants from out of state.

You also need to understand how insurance deductibles apply. There may be more than one. The deductible normally applies to the collision-damage portion of a claim. Most insurance is set up similarly to that of a car-rental company, which has insurance to protect itself from liability arising from operation of the vehicle, including damage to property and injury to others.

A second component of the insurance covers collision damage to the actual rented vehicle. This coverage is designed to be secondary to the drivers personal automobile insurance; but unlike with a car rental, it appears approximately 90 percent of all personal auto policies now exclude collision and/or liability coverage when the insured rents or operates a truck. Therefore, the secondary insurance coverage you think you are buying for the operator/tenant often becomes the primary collision insurance, even if the tenant has good, valid automobile coverage for his own car.

What does this mean to you? There is a deductible that applies to these collision policies. You certainly should be aware of it, because at the end of the day, if your tenant causes collision damage to the truck, the first some-odd dollars in repairs (whatever the amount of the deductible) must be paid by your tenant before the insurance will cover any portion of the claim. If the tenant is not solvent enough to pay for that damage, the responsibility falls back on you. It becomes your problem to recoup this money from the tenant.

If the truck is a complete loss or severely damaged, the collision coverage will cover its replacement or repair, minus the deductible. If the tenant cannot pay the deductible, you will have to. Then there is the $300 damage to a side panel, $500 damage to the roof and $850 damage to the lift-gate that quickly become your expenses if the tenant is not willing to pay. This has caused many operators to become creative in their policies regarding free truck use at move-in.

Some operators charge an insurance premium in the form of a collision-damage waiver to reduce (not eliminate) the tenants alleged collision deductible. In theory, this fee builds up a reserve against which you can pay for damages caused by tenants who are unable or unwilling to pay. Keep in mind: This may be the unlicensed sale of insurance. An operator should check with his own legal counsel and insurance broker to determine if this plan is possible.

Other operators have changed their policies so their truck rental is free for a limited number of hours, then they impose a per-hour rental charge. Usually, unless a large-dollar lease is being signed, the free period is two to four hours, which is often insufficient for the job. In this case, the truck provides revenue in hourly charges, which helps defray the costs of the insurance, loss and damages.

In Practice

I discussed this column with Kirk Nash of Texas-based On The Move Inc., a supplier of trucks and insurance for this type of business. Nash says 90 percent of collision-damage claims actually result from operation by the facility owner or managers or their family members, not tenant use.

Because employees are accustomed to driving the vehicleunlike novice tenant drivers who are cautiousthey tend to be more careless. The majority of damage they cause is to truck roofs and sides; therefore, operators must be certain the collision policy they purchase does not have exclusions for damage that occurs from problems with height or width clearance.

The standard insurance policy from a company such as On The Move provides $5 million worth of liability coverage for damage or injury to property or people while the vehicle is being used by a tenant. This insurance solely protects the owner/operator of the facility. Again, ownership should generally not be liable for injury or property damage; however, it would be foolish not to have coverage for the facility in the event the storage owner is sued and somehow held responsible.

As for collision coverage, the amount you need depends on the value and condition of the truck you are renting or lending. There is no set recommended amount; however, it should be enough to cover the truck in the event it is substantially damaged or lost.

Final Considerations

You must understand all the costs involved in lending trucks to tenants. First, you will have a lease or purchase payment on each truck, as well as monthly liability-insurance payments. You also assume the risk of a tenant causing damage for which he cannot or will not pay. Determine whether the cost of these expenses can be absorbed into money received for use of the truck, or if the trucks marketing value makes it financially viable. From a legal standpoint, as long as you have excellent insurance and follow the requirements of your insurance company, you can provide this service to tenants without too much concern.

Consistency will be the key to success. Every customer must be offered the same terms and conditions of use as any other using the truck. I am not suggesting you cannot run occasional specials; I am saying everyone who qualifies for a special should be subject to the same rules. You must know the requirements of your insurance policy and follow them. Make sure tenants properly complete all rental forms provided by your truck-leasing company or attorney, and that they receive a full disclosure of all costs. If you do all of the above, you should be able to safely lend trucks to your tenants.

This column is for the purpose of providing general legal insight into the self-storage field and should not be substituted for the advice of your own attorney.

Jeffrey Greenberger practices with the law firm of Katz, Greenberger & Norton LLP in Cincinnati, which primarily represents owners and operators of commercial real estate, including self-storage. Mr. Greenberger is licensed to practice in the states of Ohio and Kentucky, and is the legal counsel for the Ohio Self Storage Owners Society and the Kentucky Self Storage Association. He is a regular contributor to Inside Self-Storage magazine and the tradeshows it sponsors. For more information, call 513.721.5151.

By Julia P. Shih

In the age of post-9/11, various industriesself-storage includedare finding it necessary to implement heightened security measures, if not for their own protection, then that of their clients. Specific to self-storage, one simple yet extremely effective means of tightening security is requiring tenants to provide official documents (drivers license, passport, immigration card, etc.) to verify their identity and provide a record of information. As more self-storage managers implement this requirement, they find the practice beneficial in terms of security; but it can also minimize losses when it comes to collecting delinquent payments.

The Value of ID Checks

Storage operators have the right to require photo identification from tenants during the application processas long it is required, without discrimination, from all customers. This is a valuable right that should be exercised. Everyone in this country legally should be able to obtain and present some form of photo ID, be it a drivers license, state- or country-issued identification card, passport or immigration card.

By asking for photo ID during the initial application, a manager can ensure the information on the application or lease matches the information on the card. If the information is incongruous, you could have a suspicious candidate. Checking ID will deter applicants from providing false information and allow facilities to run more accurate and comprehensive credit and criminal-record checks.

In addition, the more information you have about a tenant, the more figurative insurance you will have against future problems, such as delinquent rent. While most facilities ask tenants for a name, address and Social Security number, it is also a good idea to ask for home and work phone numbers where the tenant can be reached, as well as emergency-contact information. A photo ID will not only help verify the street address, but also the tenants physical description. A copy of the ID will provide a record to keep on file. By being diligent with information gathering during the initial application process, operators will be more equipped to track down errant tenants.

ID Technology

There are several valuable technologies that allow storage operators to collect and file photo IDs and the information they contain, as well as verify their validity. Leading the market are drivers-license scanners that scan cards in a matter of seconds and provide saved files of the persons photo and signature.

Some high-end scanners have OCR (optical character recognition) functionality that reads a cards face. OCR is the only card-reading technology that can read ID cards from all 50 states. When a card is scanned, the textual information on its surface, such as name, address, birthdate, etc., are automatically placed in appropriate text fields in a database, eliminating the tedious need to manually type all information from the card. These scanners are great solutions for information-gathering because they provide a better-quality captured image than a photocopy. They also collect information in far less time than it would take a facility manager to collect it manually; and they can put the information into databases that facilitate other tasks, such as billing or customer tracking.

On the Lookout

Though photo ID is an extremely valuable tool, storage operators must be vigilant to ensure an ID presented by a tenant is not doctored or fake. Obviously, if the photo or description on the card does not match the physical appearance of the customer (i.e., the card shows a birthdate in the 1950s, but the applicant is a young man in his twenties), something suspicious is afoot, and more investigation is necessary. Doctored cards, on the other hand, can be trickier to recognize.

There are reference books on the market that describe and include pictures of each states drivers license as well as various forms of international identification. These books are fairly inexpensive and can be great resources for verifying ID cards. The only problem is they are limited in their coverage of international IDs, as well as the newer, updated formats of drivers licenses constantly being issued.

More accurate ways of verifying photo ID involve using technologies built into the cards themselves. As many as 25 states include a loaded magnetic strip on the back of their drivers licensesmuch like those on credit cardsthat contain the cardholders information. Magnetic strips can be read very quickly. The downside is they tend to demagnetize easily, so it becomes difficult to read drivers licenses that are not in good condition. Furthermore, not all of the information on the card front is stored in its magnetic strip.

Similarly, there are 20 to 25 states that issue cards with information loaded into a barcode. Barcode reading is extremely accurate; but, like magnetic strips, barcodes can be made less translatable due to wear and tear. Several state ID cards include magnetic strips and barcodes.

A card scanner capable of reading all card technologiesOCR, magnetic strip and barcodewill be able to compare the information stored on a card and cross-check it for matches. While an expert forger may be able to doctor the face of the card, it is highly unlikely he would be able to tamper with either the barcode or magnetic strip.

Advantages to Storage

Card scanners using OCR technology or all three reading abilities allow operators to quickly scan a drivers license while a customer waits and tailor the information or collective database toward his specific business needs. These scanners can very well increase a facilitys profitability by making operations more efficient and increasing closing ratios through a more complete database for tenant follow-up.

In a business where every visitor is a potential sale, drivers-license card scanners could be the newest product to provide an edge over competitors. Through the simple task of reading and copying a customers photo ID, a storage owner can cover his bases in terms of knowing who his tenants are and verifying their identities. He can also save money down the line by making it easier to collect delinquent payments.

Julia P. Shih is marketing manager for Card- Scanning Solutions, a developer of card-reading systems. Its systems, based on OCR (optical character recognition) technology, are designed to quickly and accurately read the information from drivers licenses, passports and other ID cards. The companys software provides extensive database capabilities for automatically processing, storing and manipulating acquired data. For more information, call 310.691.8920; e-mail [email protected]; visit www.card-scan.com.