Austin, Texas-based self-storage aggregator SpareFoot has released its Tenant-Value Calculator, a free interactive tool that allows self-storage operators to quantify the lifetime value of a new tenant, giving an idea of how much each prospective customer is worth. Storage owners and managers can instantly compute this analytic using their real numbers around rental rates, length of tenancy, and acquisition cost.

Available at www.sparefoot.com/library/tenant_value_calculator, the tool was created as a solution to a common problem for storage businesses: determining how much they should spend on marketing to earn return on investment (ROI) from every new tenant.

Theyre exact calculations, down to the penny," said developer Evan Huston. "You can use it to calculate the ROI for one specific person, or your average.

The calculator adjusts in real time based on user-entered data to reveal the date on which a storage facility can expect to profit from a new tenant. Two graphs illustrate revenue from a tenant over time. The calculator can also be used to compare the value of different marketing platforms, such as fliers or online efforts.
 
Im excited anyone can use it, even without being a client, said account manager Sara Richardson. It gives facilities an idea of what our company is about.

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.

By Keith McConnell

When it comes to insuring your self-storage operation, the choice of coverages can be overwhelming. Plus, theres more to protecting your investment than the coverages themselves. Property valuation, endorsements, addressing unique exposures or perils, policy terms and conditions, and other specialty programs are important as well. This list outlines the top 10 insurance coverages and considerations that are critical for the protection of your self-storage business.

No. 1Special Coverages: Customers Goods Legal Liability and Sale and Disposal Liability

Specialty coverages are designed specifically to address challenging insurance exposures that are unique to the self-storage industry. Customers goods legal liability provides coverage against loss or damage to customers personal property for which the self-storage business may be legally liable. For example, this could include damage to a tenants belongings caused by rain that entered the unit via an unrepaired hole in the roof.

Sale and disposal liability coverage protects self-storage operations against liability claims by customers for loss to their stored property due to the sale, removal or disposal of the property as a result of a lien sale or other covered cause of loss.

No. 2Systems-Protection Coverage

One of the inevitable truths of running a business is equipment breaks. The good news is systems-protection coveragesometimes referred to as boiler and machinery coverage or equipment-breakdown coverageis widely available to address these types of losses. This coverage commonly includes items such as heating and cooling equipment, computer systems, surveillance equipment, electronic gates, phones, and other systems.

No. 3Valuation

The total insured value of your self-storage business is a critical component of your insurance package. Its not uncommon for a business owner to request a reduction in his property value to save premium dollars. But leaving your property underinsured is counterintuitive to protecting your valuable investment. The recommended course of action is to insure your facility for its replacement-cost value. Taking that step now can save you from a crippling financial exposure in the event of a catastrophic loss.

No. 4Umbrella Liability

Lets face the facts: In todays litigious environment, the odds of a business owner being sued are uncomfortably high. Just as an umbrella protects you from the weather, an umbrella insurance policy provides additional protection over and above the liability section of your commercial-insurance coverage. In the event of a disastrous claim against you, that extra layer of coverage would provide protection beyond the liability limits of your other insurance policies.

No. 5Building Ordinance (Building Law)

Building-ordinance coverage offers protection in the event the structures at your facility are damaged to the extent that local building codes or ordinances require the remaining structure be demolished and rebuilt to meet current building codes. Without this coverage as part of your policy at an adequate limit, you face a potentially catastrophic financial exposure in the event of a triggering incident.

No. 6Business Income (Business Interruption)

Business-income coverage protects your operations income in the event of a loss requiring reconstruction. A typical policy provides regular business income and extra expenses incurred for 12 to 15 months plus additional time following reconstruction while storage spaces are being re-rented. Some policies offer options to extend the coverage for 18 to 24 months. This coverage can be a significant factor in whether your business survives a catastrophic event.

No. 7Employee Dishonesty

Most employees are honest and work to help your business succeed. However, the ones who arent can cause business owners a lot of trouble. Employee-dishonesty coverage covers any loss of money or other business personal property belonging to the insured by dishonest or fraudulent acts of the operations employees. A common practice to mitigate this risk is to complete a criminal background check on new hires and an annual audit.

No. 8Cosmetic-Loss Limitation Endorsement

For self-storage business owners in hail-prone states, this endorsement may make the difference in whether a carrier is willing to offer a quote on a particular risk. A cosmetic-loss limitation endorsement offers business owners a premium credit for facilities in specific locations. The endorsement limits coverage for cosmetic hail damage to a metal roof. Hail damage to roll-up doors, siding, downspouts and gutters is not reduced on some policies. In addition, hail damage to the roof resulting in the failure of the metal roof covering to perform its intended function of keeping out the elements is not affected by this endorsement.

No. 9Cyber-Protection Coverages: Data Compromise and Identity Recovery

Businesses rely on computers for day-to-day operation, but that dependence can result in costly exposures in the event of cyber crime or data breaches. Data-compromise coverage helps self-storage businesses respond to data theft by providing services such as forensic IT reviews, legal assistance, credit monitoring, identity restoration services and notifications to affected individuals. The coverage responds to a wide range of data breaches including electronic theft (hacking), theft of computer systems, theft of data by employees, accidental publishing, procedural errors and fraud.

Identity-recovery coverage provides case-management service and expense reimbursement in the event of certain instances of identity theft. The key difference in these coverages is data-compromise coverage protects businesses and identity-recovery coverage protects individuals.

No. 10Tenant Insurance

It may seem unusual to cite tenant insurance in a list of commercial insurance considerations, but the truth is the importance of implementing a tenant-insurance program at self-storage facilities is difficult to overemphasize. This type of insurance has been proven to reduce the facility owners liability exposure in the event of tenant loss, which is a critical element of risk management.

Some tenant-insurance programs even include coverages that protect the facility in addition to those protecting tenants stored belongings. A tenant-insurance program may be strengthened even more by making insurance mandatory and requiring tenants to provide evidence of insurance.

Keep in mind these are just a few facets of your commercial-insurance coverage. Your insurance agent will be able to analyze your current coverage and make recommendations for changes to your policy that can protect your valuable investment from costly exposures.

Keith McConnell is vice president of business development for Phoenix-based MiniCo Insurance Agency  LLC, which provides specialty programs for self-storage businesses in the United States and Canada. For more information call 800.528.1056; visit www.minico.com.

Self-storage builder Mako Steel Inc. has hired Jerad Pearson of Sun Prairie, Wis., as a regional sales manager. Pearson has 12 years of experience in the self-storage industry working with developers, architects and contractors, assisting them in their goals to develop self-storage.

Most recently, Pearson worked for U-Haul International helping with the construction and start-up of a new facility in the Madison, Wis., area.

"Jerad's ability to connect with his customers, his depth of experience in the industry and his unique experience working on the 'other side of the counter' will be a great asset to our company," said Caesar Wright, Mako president.

Mako designs, supplies and installs steel buildings for the self-storage industry. The company specializes in boat/RV storage, multi-story and custom buildings.

The city of Boston's Zoning Board of Appeals approved a four-story, 700-unit self-storage facility with 16 parking spaces on Tuesday. Developer Lou Cabral expects to begin the $9 million, eight-month project in July. The Boston Redevelopment Authority also gave its approval.

The new facility will be located at 380 E. St. in South Boston. Cabral told the source he is developing the facility because his research shows there is an increasing demand for self-storage in the area. His attorney, representing Cabral before the board, said the traffic increase in the neighborhood will be minimal.

The project is supported by the mayors office and the offices of at-large City Councilors Stephen Murphy, John Connolly, Felix Arroyo and Ayanna Pressley. The office of City Councilor Bill Linehan, state Sen. Jack Hart, state Rep. Nick Collins, and state Rep. Marty Walsh also voiced their support.

Florida Gov. Rick Scott recently signed into law a revised self-storage lien statute, and the Florida Self Storage Association (FSSA) is hosting several regional seminars to educate facility operators about the new legislation. The three-hour seminar includes lunch and lien-law guidebook for $49.99. The scheduled locations are:

• May 29, Panama City
• May 31, Gainesville
• June 5, Ft. Lauderdale
• June 7, Melbourne
• June 12, Sarasota
• June 14, Orlando

Event details and an online registration form can be found at www.floridassa.org. Interested parties can also contact FSSA Executive Director Robert Bret at [email protected] or 877.222.9441.

Effective July 1, the lien law allows Florida self-storage operators to use cheaper and more effective delinquency-notification options, such as e-mail or First Class Mail with a Certificate of Mailing. The new statute also contains the following provisions:

• Tenants can provide a change of address to the facility using First Class Mail or e-mail.
• Self-storage rental contracts or applications ask whether a person is in the military.

More information about House Bill 715 and companion Senate Bill 646 can be found at FLSenate.gov.

The FSSA is a non-profit organization of businesspeople involved in the self-storage industry in Florida. Its members include facility owners, operators, vendors, developers, investors, property managers and suppliers.

Mobile-storage operator Smartbox recently opened a new facility in Melbourne, Australia. The 2,000-square-meter facility is in the Braeside area.

Smartbox expanded its services to Melbourne as a direct response to growing demand for the companys Smartbox mobile-storage units.

The company delivers a mobile unit directly to a home or business, the customer packs it, then Smartbox picks up the unit and transports it directly to its storage facility.

Delivery and pickup are available seven days a week and free of charge in many locations. As with traditional storage options, customers have access to their unit at the secure Smartbox warehouse seven days a week. Smartbox also serves customers in Auckland and Sydney.

Ironclad Self Storage in Chapel Hill, N.C., recently sold for just more than $3.1 million to Amerco Real Estate. The transaction for the 42,370-square-foot facility closed May 1. The buyers also purchased an adjacent five acres, which were not included in the sale, with the intent to use them for facility expansion. It is unclear if the facility will be rebranded.

The facility is at 102 Vickers Road, just off a U.S. Routes 15 and 501 in Chapel Hill, which is home to the University of North Carolina.

R.J. "Joey" Godbold of Percival McGuire Commercial Real Estate and the Argus Self Storage Sales Market brokered the sale on behalf of the original owners.

Based in Denver, Argus was formed in 1994 to assist self-storage owners and investors with their real estate needs. The company has broker affiliates covering nearly 40 U.S. markets.

Britannia Premier Self Storage, a facility in Burton-on-Trent, England, United Kingdom, is in the process of expanding its facility and adding 50-kilowatt solar panels, about a £1 million (about $1.6 million) total investment. The solar conversion and new storage building are supposed to be complete by mid-June.

Due to the credit crunch in the U.K., the facility owners were not able to secure bank financing, so they invested their own assets. They expect a £20,000 (about $32,300) payout in the first year from the electricity created from the panels that is re-circulated into the power grid. They also received a public subsidy but had to meet government-set cutoff date to begin the project.

Due to the continued success of the storage business, despite the current economic climate in general, it was an easy decision for the directors to make. Martyn Jones, managing director, told the source.

Britannia Premier offers item removal and shipping in addition to storage. The facility is currently a standalone operation.

Uncle Bobs Self Storage, which is owned and operated by self-storage real estate investment trust Sovran Self Storage Inc., is joining the National Association of Letter Carriers in its annual campaign, Stamp Out Hunger in America, on May 12. In addition to donating the use of its rental trucks, Uncle Bobs is supplying volunteers, collecting canned goods, and contributing boxes in which to store the collected items. 

Now in its 20th year, Stamp Out Hunger is the nations largest single-day food drive, collecting more than one billion pounds of food over the years. Postal customers are asked to leave a sturdy bag of non-perishable food items such as soup, canned vegetables, pasta or rice next to their mailbox prior to the regular delivery time. 

We encourage everyone to participate by leaving a package by their mailbox or dropping it at any Uncle Bobs self-storage facility, said Diane Piegza, vice president of corporate communications for Uncle Bobs.  Hunger remains a very real issue for millions of Americans including the young and elderly. Every donation counts. 

Sovran is a self-administered and self-managed equity real estate investment trust in the business of acquiring and managing self-storage facilities. The company operates 446 properties in 25 states under the name Uncle Bob's Self Storage.