Self-storage building supplier Storage Structures Inc. has launched a new website and series of products to assist self-storage operators in complying with the new Americans with Disabilities Act (ADA) standards that went into effect in March. StorageDisabilityProducts.com provides ramps, door kits and more.

Under the ADA's new scoping requirements, 5 percent of a self-storage facility's first 200 units and 2 percent of all units beyond 200 must be ADA accessible. For example, a 350-unit facility must provide 13 accessible spaces.

The industry was being warned about these requirements for units for years," said Heath Mulkey, president of Storage Structures. "We knew the enforcement date of March 15, 2012, was coming. I wanted to have a product prepared that was economical. Operators can do the installation themselves. They just need to provide us the measurements to make the ramps.

Products in the line include ramps for exterior units, door handles and signage. Made of G90-galvanized, 16-gauge prime steel, the ramps fit the full width of the door opening and fill in the weather-ledge recession. They also meet the ADA requirements for slope. New handles raise and lower self-storage roll-up doors. Exterior rope handles are installed 15 inches above the floor, and interior handles hang 40 to 48 inches above the floor for ease of close.

Storage Structures understands the construction requirements to make self-storage facilities compliant with the ADA standards," said Scott Zucker, an attorney specializing in self-storage law. "The installation of these products can help to avoid costly lawsuits for many operators.

Based in Villa Rica, Ga., Storage Structures specializes in self-storage design, engineering and building erection in Canada, Latin America and the United States. The company's products include single- and multi-level buildings, mezzanines, and interior walls.

Austin, Texas-based self-storage aggregator SpareFoot is footing the bill for one college student this summer. The company is offering a $5,000 scholarship to cover school expenses. In addition, the company will pay for the winning applicants self-storage bill for the summer.

Applicants must be full-time undergraduate college students in good standing at the time of application and during the semester in which the prize is received. They must also complete the Spare Funds Scholarship application on the companys website by June 1.

SpareFoot will review the applications and choose a qualified winner based on past academic performance, extracurricular involvement, and the quality of answers to the prompts in the application.

The winning student will receive a check for $5,000 to be used for school-related expenses such as tuition, books, fees, etc., and reimbursement for rent paid on a self-storage unit if documentation is provided.

All applicants will be notified of their award status via e-mail by July 1, with the winner notified via e-mail and phone by June 25.

Founded in 2008, SpareFoot.com lists more than 5,000 self-storage facilities in its nationwide directory, which allows consumers to find, compare and reserve self-storage units online. Through multiple websites including SpareFoot.com, SelfStorage.com, Apartments.com and many others, SpareFoot helps self-storage operators find new tenants through a pay-for-performance model. The company is backed by Silverton Partners, FLOODGATE and Capital Factory.

A piece of legislation designed to revise the Connecticut self-storage lien statute failed last week as the bill did not pass the state's Senate before the end of the legislative session. Connecticut House Bill 5088 was backed by both the Connecticut Self Storage Association (CTSSA) and the national Self Storage Association (SSA).

The legislation passed the House in April and would have enabled self-storage operators to use e-mail instead of certified mail for delinquency notices. Similar measures have passed in several states throughout the country.

According to the SSA, there wasn't significant opposition to the measure, but a short legislative session and a high number of proposed new laws led to the bill dying on the calendar.

"We will start again in January," said Lorna Bolduc, CTSSA executive director. "With the longer session next year, we hope to get this bill through both chambers."

Bolduc thanked all CTSSA members for their support in calling and writing to legislators. She also thanked the association's lobbyist, attorney Andy Markowski; the CTSSA Board; and the SSA for its ongoing assistance in all government-relations efforts.

A full rundown of the history of the legislation, including the text of the bill, is available at www.cga.ct.gov. Enter "5088" in the "Number" field in the search bar at the top of the page.

Kelly's Self Storage in Guildford, England, United Kingdom, is hosting its first charity fun run on June 24. Proceeds from registration fees will be donated to ReachOut Plus, a charity that runs a variety of projects for low-income people or those living with disabilities in Guildford and nearby Dartford.

Registrants can sign up to run a 5K or 10K course at Munden House in nearby Bricket Wood. Runners can enter as individuals or as a team, and the first place prize is a canal trip for 12 people.

"As we have a thriving self-storage center located in St. Albans, we want to do something for the community we serve (in Guildford)," Moira Martin, director of Kelly's Self Storage, told the source. "We chose ReachOut Plus as they are a locally based charity working with disabled and disadvantaged people. This is the type of cause we are particularly passionate about supporting."

ReachOut has existed for more than 30 years, but CEO Ron Overton told the source the organization is still focused on increasing its visibility in the area, and partnering with Kelly's Self Storage should be helpful in doing that.

Kelly's Self Storage has seven locations in the United Kingdom. Guildford is located 31 miles southwest of London.

By Anita Huedepohl

Weve all heard the expression rob Peter to pay Paul, but what if Peters not home? That may be the way people feel in todays economic times. With an historic number of foreclosures, both commercial and residential, its sometimes hard to remember how things used to be and how we can plan to get back there.

All businesses operate based on profit and loss, commonly called P&L. Theres a natural ebb and flow to how funds arrive on your doorstep, are processed and ultimately end up in your pocket. Its much like a great recipe for your moms chocolate cakeit will not taste the same unless all the ingredients are added at just the right time and in just the right amounts. Although its much more complicated than that, the principle is the same.

Self-storage operators are often confused about the difference between gross and net revenue when it comes to annual profit. Theyll say, We made $875,000 last year! My response is usually, Great. Is that net or gross? Ninety-nine percent of the time, you can hear the crickets as the client tries to explain why he told me the gross rather than the net. Its always a case of We netted $250,000 on our $2.9 million proposed refinance. For some reason, people dont want to go with the bottom line, and yet thats what we need to see to get the funds they require. Lenders dont look at gross, they only look at net operating income (NOI). Thats not to say we cant work with those figures if we use the right amortization schedule and lock period.

That leads us to the right product for the right property. It may surprise you that sometimes the lowest interest rate is not in the facility owner's best interest. Those low, low rates are often for very short periods of time and can really tie up your cash flow if you dont read the fine print, which often states the rate is going up in 90 days to a range thats going to tie up all of your net.

When borrowers ask me, Whats your lowest interest rate?, I automatically know they may not be aware of all the factors that affect the product they think they want. Its my job to shed light on what may be best for their property, given the NOI, debt-service coverage ratio, property value and use of proceeds, if any.

For example, I recently worked with a storage owner who had a 6 percent interest rate. Sounds fair, doesnt it? He was looking for a rate in the 3 percent range, which is not attainable in commercial lending. I explained that residential and commercial lending are at completely opposite ends of the spectrum and priced very differently. He said he was having cash-flow issues because although the interest rate was 6 percent, it was based on a 10-year lock. A lock is the amount of time a lender will keep your rate at the terms it provided. Its often confused with amortization, which is the number of months a lender uses to calculate the monthly payments. Lets compare some loan scenarios for him.

Not only can we cut the payment nearly in half and free up his cash flow for improvements, building a new group of buildings or paying down the existing debts of the business, he no longer has to rob Peter to pay Paul every month. The best part is theres no prepayment penalty. This means the operator can pay down the loan each year or pay it off early if he desires.

Another Scenario

Sometimes whats best for one self-storage owner may not work for another. Lets say an owner has a 100 percent occupancy and a waiting list trigged by the new XYZ apartment building that leased up 60 days ago less than three blocks away. Rather than see those customers go to his closest competitor, he would like to add that third building he planned to build in 2008, right before the recession went full tilt. He has the cash flow already, not to mention the architects plans and city approvals in the back office, now covered in cobwebs thanks to the market crash. The same 30-year amortized product will allow him the $800,000 cash out necessary to complete his new building and yet provide a cushion of time with lowered payments to lease up.

Since hes not tied to a traditional 15-year bank amortization at 60 percent loan-to-value that was virtually the only product available in the last few years, he can not only hire the backhoe to break ground, he can afford the time necessary without the stress of the much higher payment. Additionally, his overall bottom line benefits because he now can have full occupancy on the new building with an increased cash flow that supersedes the need for the lowest rate.

It really is simpledont just look at loan interest rates. Sometimes rate is only the most modest piece of the puzzle, and the search for the lowest one can rob you of a better product, much like robbing Peter to pay Paul.

Anita Huedepohl brings more than 25 years entrepreneurial experience to her current position as owner of Liberty Funding. Shes worked in the financial sector for more than 10 years and is experienced in all types of mortgage financing. She launched Liberty with the goal of providing market expertise to underserved sectors, namely the self-storage industry. To reach her, call 615.417.4710; visit www.libertynationwide.com.

Commercial real estate lender Clopton Capital is expanding its loan options for self-storage facility owners nationwide who are looking to refinance, acquire properties or secure a construction loan. We are looking for any opportunity, whether it be a single-property business or a multi-property, middle-market operator, said company founder Jake Clopton.

Thanks to continually low interest rates, the cost of credit is also comparatively inexpensive compared to years past, according to a Clopton press release. Clopton provides a coupon for rates of less than 4 percent for strong operators in several locations.

Based in Chicago, Clopton Capital offers commercial mortgages, construction loans, bridge loans and commercial mortgage-backed securities loans to borrowers for a diverse range of property types and ownership structures.

Prior to founding his company, Clopton was a futures trader with a primary focus on interest-rate futures. Today his main focus is opening new lending relationships, consulting and finding competitive commercial products. The companys other officers are Matt Reed, vice president and senior financial consultant, and Eric Smith, a search-engine-optimization specialist.

Executives from self-storage real estate investment trusts (REITs) CubeSmart, Extra Space Storage Inc., Public Storage Inc. and Sovran Self Storage Inc., will be presenting at REITWeek 2012, the investor forum for the National Association of Real Estate Investment Trusts (NAREIT). REITWeek 2012 runs June 12-14 at the Hilton New York Hotel at 1335 6th Ave. in Manhattan, N.Y. All four REITs will speak on June 12.

CubeSmart will present from 10:15 a.m. to 10:45 a.m. ET. Company executives scheduled to participate include Dean Jernigan, CEO; Christopher P. Marr, president and chief investment officer; Timothy M. Martin, chief financial officer; and Daniel Ruble, vice president of finance.

Extra Space will present from 3:45 p.m. to 4:15 p.m. ET. Participating company executives include Spencer F. Kirk, CEO; Karl Haas, executive vice president and chief operations officer; and Scott Stubbs, executive vice president and chief financial officer.

Public Storage will present from 2:15 p.m. to 2:45 p.m. ET. Company representatives include Ronald L. Havner Jr., chairman of the board of directors, CEO and president; and John Reyes, senior vice president and chief financial officer.

Sovran, which operates under the brand Uncle Bob's Self Storage, will present from 8 a.m. to 8:30 a.m. ET. Company executives will include David L. Rogers, CEO; Andrew J. Gregoire, chief financial officer; Paul Powell, executive vice president of real estate investment; and Edward Killeen, executive vice president of real estate management.

NAREIT describes itself, as the worldwide representative voice for REITs and publicly traded real estate companies with an interest in U.S. real estate and capital markets. REITWeek is designed to bring a large concentration of REIT management teams into one location, enabling them to share insights and their latest company developments. More information can be found at REIT.com.

Given that so many state self-storage statutes have been modified over the last two years, many facility operators have questions about how they can effectively make changes to their rental agreement and make those modifications enforceable. Before revamping your self-storage agreement or adding an addendum, read through these guidelines to ensure you build a solid document and get tenants on board.

When it comes to changing your rental agreement, the first distinction you need to make is whether youre making large, substantial changes or small, administrative-type changes. Larger changes are those that would change the relationship between you and your tenants. These can include adding or changing value limitations, adding a negligence waiver, or changing your level of liability vis-à-vis your tenant.

Smaller changes, however, dont necessarily change the relationship between you and your tenants. Rather, they're make administrative or ministerial. The most common example is raising rent. Adding new ways to pay rent (kiosks or online, for example), altering a clause on the disposal of garbage or smoking, or changing a fee probably do not create substantial changes to the operator/tenant relationship. If made without larger changes, these would be handled differently.

Executing Large Changes

Once you've made changes to your rental agreement, how do you implement them with your existing tenant base? Unless theres something illegal about your existing agreement, something that requires you to update all tenants as quickly as possible, just use your new agreement with all new tenants for several months and allow attrition to do its work.

If you plan to make substantial changes to the nature of your relationship with existing tenants, however, its always best to get a new rental agreement signed in person. Sometimes you can just add an addendum to the rental agreement; but at the end of the day, a wet ink signature from your tenant, preferably done in your presence, is often necessary.

When its time to roll out the new agreement to existing tenants, asking them to sign in person helps to prove they knew about and acknowledged the changes. If you simply mail out the new agreement and ask tenants to sign and return, you take a risk. To encourage participation, consider holding a contest or drawing or offering some sort of incentive, such as a promise not to raise rates for a period of time or to waive one late fee.

For tenants who live far away, you may need to add a notary provision and obtain the tenants notarized signature. You may also be able to collect digital signatures online. If you do this, be careful to ensure you can prove it was your tenants digital signature. You can do this by requiring a password.

For the few tenants who will not communicate or cannot be found, remember that, for the most part, your rental agreement contains month-to-month terms. At some point, youll have to make the tough decision whether to allow these customers to stay on the old rental agreementwhich is probably untenable given that youve gone to the trouble and expense of creating a new oneor asking them to leave. Once you ask people to leave, their inertia generally subsides and they begrudgingly come in and sign.

A 'Hybrid' Agreement

Depending on the self-storage management software you use and the changes you hope to execute, you may face a "hybrid" issue. For example, I dont know of any software that can handle two sets of late fees and other charges simultaneously. So even though you may want to phase in your new agreement over a six-month period, all existing tenants will have to be brought up to speed on the new late fees, lien fees and other charges that go with the new agreement so your software can accommodate fee posting with only one set of variables.

In this case, before rolling out the new agreement to existing tenants, abide by the following procedures for making small rental-agreement changes. First, you'll advise existing tenants of any changes to dollar figures or date structures on the new rental agreement. Get their acknowledgement on these small items. Then roll out the full updated agreement later, getting live signatures whenever possible.

Executing Small Changes

Assuming all you need to do is make some minor changes to your rental agreement and youre not making substantial changes to the operator/tenant relationship, you can simply send a letter to the tenant outlining the changes and disclosing the actual language used in the new contract. You need to give him at least one periodic rental term to indicate if he will accept these changes.

For example, if rent is due on the first of the month, send a notice that says the proposed change will go into effect on the first of the next month. If your tenants pay on an anniversary date, you'll probably need to give them at least 60 days notice to ensure everyone has at least 30 days (one periodic rental term) to accept the changes or reject them and move out.

The notice might read something like, "Effective X date, provision Y of the rental agreement will be modified to provide that late fees will now be charged on the 5th at the rate of $10 per month. Remember to check your agreement for any language that may lengthen the amount of time youve got to give to make a change.

Most important, include verbiage that reads, Your payment of rent for the next month or term indicates your acceptance to this change(s) to the rental agreement. If you do not agree to these changes, please vacate the premises and consider the lease terminated by (the date stated in the notice).

Many of you dont want to chase away business by telling tenants their rental agreement is terminated if they dont agree to accept a change. However, if you feel the change is important enough to apply retroactively to existing tenants, everyone should be on board. If the change isn't that important, perhaps consider adding it to new agreements only and leave the old ones alone. Eventually, most of your agreements will be updated. Those that remain will be more manageable, and you can communicate with those tenants personally.

Dont let any of this scare you from modernizing your self-storage rental agreement. Like anything else, these agreements grow old and outdated. With statutory changes and new case law always being delivered, dont lose sight of important updates that will ultimately protect your business.

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 J. Greenberger is a partner in the law firm of Katz, Greenberger & Norton LLP in Cincinnati, where he concentrates his practice in the areas of commercial real estate with a particular concentration in self-storage industry. He consults with self-storage owners and operators to design and implement legal procedures, policies and other operational issues in most states with a focus on litigation and liability reduction and avoidance. To reach him, call 513.721.5151; visit www.selfstoragelegal.com.