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Support Fairness First: When Reviewing Self-Storage Employees, Impartiality Avoids Liability

Article-Support Fairness First: When Reviewing Self-Storage Employees, Impartiality Avoids Liability

By Amy Campbell  

Last week, Mini Price Storage in Virginia took a serious financial hit after a judge ordered the company to pay a former employee $150,730 for “improper firing.” The storage operator also has to cover attorneys’ fees and court costs. The judge ruled Mini Price’s former manager, Sean Mohammed, a Seventh-Day Adventist, was fired in retaliation for his refusal to work during Sabbath hours, from sunset Friday to sunset Saturday.

In short, when Mohammed was hired by Mini Price in 2007, he informed the company he was able to work every day except Saturday. All was well until his schedule was changed in 2010 by a new area manager. Although Mohammed declined to work on Saturdays and his “no Saturdays” schedule was reinstated, it set off a chain of events that, ultimately, led to him being fired for “lack of performance and lack of work” just six months later. You can read more about it here. Members of Self-Storage Talk (SST), the industry’s biggest online community, are also discussing the lawsuit.

A number of legal and staffing issues came to mind after I read about this case. However, one thing that stuck with me the most was this information: the review form the area manager used to document Mohammed’s work performance following his refusal to work on Saturdays wasn’t the same one used for other company employees. What? The supervisor had a “special” form just for this one employee? That doesn’t make sense. Worse, it’s unethical and, in this case, aided Mohammed in his quest to prove he was fired without cause.

Even more disturbing, the judge noted several mystery-shop evaluations between 2008 and 2010 deemed Mohammed an “excellent” employee. One evaluation even described him as “providing the best experience across all of Mini Price.” Hardly seems like a manager who’s suffering from “lack of performance.”

As this case shows, when and how you evaluate your employees is critical. Not only can reviews help storage owners and supervisors track poor work performance, they also aid in highlighting employees who are doing excellent, which can boost work performance and even help retain great managers.  

Unfortunately, many owners shy from carrying out staff evaluations for a variety of reasons. If you have employees and haven’t conducted a review in the last 12 months, it’s time to schedule some. If you’re not sure where to start, the article “Taking the Suspense and Drama Out of Evaluating Your Self-Storage Employees” offers guidance on why it’s critical to your facility’s success and how to do it.

While most companies depend on annual reviews to evaluate staff performance, more frequent, “mini” reviews—if you will—can be beneficial as well. They can serve as ongoing dialogues between supervisors and employees. Not all conversations have to be a formal review, but a paper trail is a must, even if it’s just a check-in to evaluate an employee’s progress. Consider creating a longer review form for annual evaluations, but toss in a few shorter ones that can be used in between. One note of caution: the same review process should be used for all employees. If there does come a time when you need to terminate an employee, here’s some advice on doing it the right—and fair—way.

Managers, if you haven’t had a review since the last presidential election, it’s way past due. While many employees fear reviews—myself included—you need to see them from a different angle. Rather than view it as a “look what you’re doing wrong” assessment, think of it as a way to improve. Let’s be honest, we all have room for improvement. And if you’re confident that you’re amazing and doing a great job, wouldn’t it be nice to be told so?

How does your self-storage business handle staff evaluations? Add a comment below or on Self-Storage Talk in the “Staffing” forum.

Global Self Storage in Sadsburyville, PA, Expands With 2-Story Building

Article-Global Self Storage in Sadsburyville, PA, Expands With 2-Story Building

Update 6/18/15 - IREC has completed construction on the Global Self Storage expansion project, adding 23,650 square feet of storage space with the two-story building. The project included an elevator and two stair towers. A combination of brick and stucco comprise the decorative façade, according to a press release.

The project began last summer and experienced challenges on the exterior work due to harsh winter weather that included extreme temperature swings and significant snowfall, IREC officials said.


6/25/14 - Construction of the final phase of Global Self Storage in Sadsburyville, Pa., is underway and will add 23,000 square feet to the property. Slated to be completed in November, the new two-story building will provide a mix of climate-controlled drive-up and interior units. Global Self Storage currently consists of 60,450 square feet of building space.

Sadsburyville is in western Chester County, Pa. The town is bisected by U.S. Route 30, which is part of the historic Lincoln Highway. Global Self Storage is just off Route 30 and visible from the historic highway.

The expansion will be completed by Investment Real Estate Construction LLC (IREC), a branch of York, Pa.-based Investment Real Estate LLC (IRE). The company has a long history with Global Self Storage, previously providing its feasibility study, construction management, property management and brokerage services.

IREC is also in the process of adding two climate-controlled buildings at CaGe Self Storage in Dillsburg, Pa., and constructing a 12,600-square-foot storage expansion of a Moove In Self Storage facility in Lancaster, Pa.

Since its inception in 1998, IRE has provided brokerage, construction, management and development services to self-storage owners and investors.

Global-Self-Storage-Sadsburyville-Pennsylvania-Investment-Real-Estate***

 

Bentonville, AR, Commission Approves Plans for Mixed-Use Self-Storage Complex

Article-Bentonville, AR, Commission Approves Plans for Mixed-Use Self-Storage Complex

Plans for a mixed-use self-storage complex were approved this week by the Bentonville, Ark., Planning Commission. BOS Park will be developed in two phases on 12.26 acres at Greenhouse Road and Southwest Airport Regional Boulevard. Phase one will be built on 8 acres and comprise 87,982 square feet of office, retail and storage space, according to the source.

The bulk of phase one will be dedicated to climate-controlled units, encompassing 51,352 square feet. The project will also include 11,620 square feet of traditional self-storage space, 14,850 square feet for vehicle storage and a 10,160-square-foot retail and office space.

The street-facing portions of the development will have decorative features including board and batten cement siding, brick veneer, and pattern and textured stucco, according to Jorge DuQuesne, engineering manager for Blew & Associates P.A. The second phase of the project will include similar features and connect the development to Morning Star Road, DuQuesne said.

The project was supported by city officials as part of the municipality’s ongoing effort to bring retail and service businesses to the southwest portion of town. "It helps the municipality from a traffic standpoint because it allows shorter trips in much closer proximity to where people live and gain access to services," Troy Galloway, the city’s economic and community development director, told the source.

Sources:

Self-Storage Development Request Denied in Belle Plaine, MN

Article-Self-Storage Development Request Denied in Belle Plaine, MN

A request by real estate developer Scott Schmidt to construct two self-storage buildings on vacant parcels he owns in Belle Plaine, Minn., was rejected this week by the city council. In a 4-0 vote, the council agreed with the planning commission’s recommendation to decline a self-storage project proposed for the southeast corner of Court Street and North Meridian Street.

Schmidt told the council a storage facility would be a “good fit” and could act as a buffer between the downtown area and nearby residences, which includes apartment complexes, the source reported. Two others also spoke in favor of the development.

Mayor Mike Pingalore read a letter from the city’s planning commissioner, Anthony Hetzel, outlining the commission’s reasons for denying the request. Their primary concern centered on the area’s zoning, the source reported. The city staff also recommended vetoing the development.

Council Member Scott Schneider, who’s also the council’s liaison to the planning commission, previously voted in favor of an ordinance amendment that would permit self-storage in the area. Although Schneider said he could go either way on the vote, ultimately, the request was denied.

Sources:

Metro Storage Conversion of Former Car Dealership to Self-Storage Opens in Blaine, MN

Article-Metro Storage Conversion of Former Car Dealership to Self-Storage Opens in Blaine, MN

Update: 6/18/15 – Metro Storage opened its conversion project this week, according to a press release. The multi-story facility encompasses 75,000 rentable square feet of storage space in 627 units, most of which offer climate control.

Metro recently opened another conversion project in Brown Deer, Wis., and has another self-storage conversion project underway in Northbrook, Ill.. The company also recently purchased several properties in other markets, including Pond Road Self Storage in Oakdale, N.Y., on Long Island and Willow Grove Self Storage in the Philadelphia suburb of Willow Grove, Pa.


6/20/14 – Metro Storage LLC has acquired a former Dodge auto dealership in the Minneapolis suburb of Blaine, Minn., which it plans to convert to a Metro Self Storage facility. The 627-unit property will feature multiple stories and is slated to open in the first quarter of 2015.

The current design includes 75,000 square feet of storage space, with a drive-through that will connect the renovated existing building to a new building. It will also feature a covered loading and unloading area, controlled access, 24-hour video surveillance, motion-sensor lighting, and storage-to-office communication points.

“This is a great acquisition for us,” said CEO Blair Nagel. “It’s in an outstanding location with tremendous visibility, and it will enable us to begin to leverage the Metro brand across the Minneapolis market.”

Metro Self Storage also operates a facility in nearby Maple Grove.

“We've had great success in the Minneapolis market and are looking forward to launching our expansion with the repurposing of this auto dealership into a state-of-the-art, consumer friendly, self-storage facility,” said Matthew Nagel, company chairman.

Headquartered in Lake Forest, Ill., Metro Storage is a privately owned, fully integrated real estate operating company specializing in the development, acquisition and management of self-storage facilities nationwide. The company operates 90 stores in 11 states.

Metro-Self-Storage-Conversion***
A rendering of the new facility in Blaine, Minn.

 

Self-Storage Overbuilding: Could It Happen in Your Market?

Article-Self-Storage Overbuilding: Could It Happen in Your Market?

You may have heard that now is a good time to buy, develop, refinance or sell self-storage properties. Sounds good all the way around, right? The strong market fundamentals and liquid lending market have made good deals even better, and the cash-on-cash returns are simply staggering for buyers, owners and sellers alike. We’ve all seen the comparison of self-storage to other real estate sectors over the last few years; in short, the returns are higher and the various risks more moderate in our industry—with the one exception: overbuilding.

The general market fundamentals are compelling for new self-storage development around the county. However, as you dig into each potential site, make sure there aren’t several other projects coming online in your market, as new storage projects appear to be clustered in areas with similar demographics.

Overbuilding is a critical issue facing our industry, as developers are loading the pipeline with product that will hit the market over the next 12 to 36 months. This article will help you recognize the potential consequences of overbuilding in your market and provide steps you can take to protect your business.

What Is Overbuilding?

Let’s begin by defining what I mean by “overbuilding.” This is a market condition in which self-storage supply exceeds demand (renters) at any given time. I suggest that almost all markets are overbuilt to some degree if there’s more than a nominal vacancy there.

For example, a stabilized market that averages 88 percent occupancy might really be overbuilt by 12 percent. While 88 percent isn’t economically life-threating, it indicates excess demand simply isn’t there; otherwise operators would be renting more units.

Self-Storage Demand

What do we know about self-storage demand? The quick answer is “not much.” The overall issue is complex, and results are inconclusive at best; but several bright industry groups have moved the information in the right direction.

During the first 30 years of the industry (1970 to 2000), no one worried about demand because there was so much pent-up need for our product. However, over the last 15 years, we’ve learned that demand is elastic and mainly driven by population growth and income levels. Thus, we can be reasonably certain that if demand is to increase, there has to be more people and, hopefully, those with higher income levels.

Self-Storage Supply

What do we know about supply? The first thing we know about a lot of new projects is they’re driven by the high returns the industry has produced over the last several years and the availability of cheap money more so than the careful analysis of demand. There’s plenty of money available for a credit-worthy builder if someone will give him a positive feasibility study. We’re estimating 250 to 350 new projects will open in 2015, and that number will nearly double in 2016. It could be very scary in 2017 if the majority of the projects on the drawing board get built.

By our best estimation, the U.S. storage industry can typically absorb 400 to 500 new projects each year if they’re appropriately spread throughout the county. The problem is they all seem to be built in the areas with the highest rents, and most builders who can get financing are all focusing on the same core markets. The new projects aren’t being appropriately dispersed.

The Impact of Overbuilding

The table below shows the impact of one new facility in a hypothetical market with an 88 percent occupancy level. Study it closely because, over time, the existing occupancy will roll over and level out among all competitors, depending on their competitive merits. If the new facility has “a better mouse trap,” more marketing, lower rents, etc., it might actually get a larger (perhaps much larger) share of the market. Remember, the new facility doesn’t create demand; it can only steal it from someone else!

 Self-Storage Occupancy Table***

Assuming the pent-up demand from the last five years is nearly exhausted, how long would it take for this market to grow out of its problem? Assuming there are unlimited opportunities for growth and no more new competitors, the demand has to grow by 25 percent to get back to the average 88 percent occupancy.

The United States experienced a population growth rate of 0.8 percent last year, and the fastest growing city expanded 6.5 percent. Dividing the occupancy deficit by the annual growth rates shows that it takes 21 years for the market to return to 88 percent occupancy, and the absolute best-case scenario is 2.7 years. The economic effect can also be troublesome, as self-storage owners typically find themselves in a rental-rate war when competing for occupancy with a new project.

Each market is different and requires unique projections, so my rough calculations should only be used to get a perspective on the potential magnitude of the consequences of overbuilding. Even with major adjustments, the problem can be very serious and affect storage owners significantly.

Overbuilding doesn’t have to be a citywide or nationwide phenomenon; it can affect just one small market. A careful analysis of your market is in order to see where your facility stands. It’s always good to stay in touch with your local planning department to know what may be built around the corner.

Ben Vestal is president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to self-storage buyers and sellers and operates SelfStorage.com, a marketing medium and information resource for facility owners. For more information, call 800.55.STORE; e-mail [email protected]; visit www.argus-selfstorage.com.

Metro Storage to Convert Former Liquor-Distribution Center to Self-Storage in Brown Deer, WI

Article-Metro Storage to Convert Former Liquor-Distribution Center to Self-Storage in Brown Deer, WI

Update: 6/17/15 – Metro Storage opened its conversion project this week, according to a press release. The new building consists of 58,000 rentable square feet of storage space and three newly constructed buildings that add another 21,000 rentable square feet. The facility has 647 storage units and includes gated entry and video cameras.

“In addition to the acquisition of established storage stores and ground-up development of new facilities, the conversion of buildings into self-storage facilities is a key part of Metro’s growth strategy,” said Matthew Nagel, chairman.

The company also has a self-storage conversion project underway in Northbrook, Ill., and recently purchased several properties in other markets. Earlier this month, it acquired Pond Road Self Storage in Oakdale, N.Y., on Long Island. Metro now operates three storage properties in New York and is developing a fourth in Brooklyn, N.Y.


7/1/15 – Metro Storage LLC, which operates more than 90 self-storage facilities in 11 states, has acquired a former liquor-distribution center in the Milwaukee suburb of Brown Deer, Wis., which it plans to convert to a Metro Self Storage facility. The new site will be the company’s first in the Milwaukee market.

“This is a great opportunity for us,” said Matthew Nagel, chairman. “We’re looking forward to entering the Milwaukee market with this outstanding store.”

Slated to open in the fourth quarter of this year, the property at 4059 W. Bradley Road will include 638 storage units. In addition to the existing building, three new structures will be built for a total of 107,458 gross square feet of storage. The existing building will consist of climate-controlled space, a drive-through for vehicles, and interior loading and unloading areas. The three new buildings will feature traditional drive-up, non-climate-controlled storage.

The Wisconsin property is the third development site acquisition for Metro Storage in three months. In June, the company acquired a former Dodge auto dealership in the Minneapolis suburb of Blaine, Minn. The 627-unit property will feature multiple stories and is slated to open in the first quarter of 2015. The company is also converting the former Sears Parts and Repair Center building in Bannockburn, Ill. The facility is expected to open later this year.

Green Bay, Wis.-based Associated Bank is providing a $5 million commercial loan for the project. The bank's commercial real estate division is based in Chicago.

Headquartered in Lake Forest, Ill., Metro Storage is a privately owned, fully integrated real estate operating company specializing in the development, acquisition and management of self-storage facilities nationwide.

 

Westport Properties Buys Vista Self Storage in Orlando, FL, for $11.8M

Article-Westport Properties Buys Vista Self Storage in Orlando, FL, for $11.8M

Westport Properties Inc., which operates 85 self-storage facilities under the US Storage Centers brand, recently purchased Vista Self Storage in Orlando, Fla., for $11.8 million, or about $121 per square foot. The price was a substantial premium over the $100-a-square-foot average sales price commanded by storage properties in the Orlando market, according to an article in “The Wall Street Journal.” The property at 6707 Narcoossee Road received bids from 18 potential purchasers, including several real estate investment trusts, the source reported.

“This is a perfect example of how hot the self-storage market is,” said Michael Mele, senior director of the National Self-Storage Group at Marcus & Millichap Real Estate Investment Services, which brokered the transaction. Mele represented Westport and the seller, Florida-based Vista Self Storage Co.

Built in 2003, the facility was expanded in 2005 and renovated last year. It sits on nearly 7 acres and is comprised of 97,300 square feet of storage space in 696 units.

“With an exceptional location on Narcoossee Road in Orlando, this facility has all of the amenities today’s self-storage investors are seeking—a high-density location on a main thoroughfare with excellent accessibility, surrounded by a growing population base, which should fuel demand and steady rent increases over the long term,” Mele said.

“We continue to see overall population growth in Orlando, which has correlated with an increase in demand for self-storage. This is an exciting market and we expect to see an increase in revenue and growth with the implementation of our advanced marketing and operations platforms,” said Jason Lopez, marketing vice president.  

Based in Irvine, Calif., Westport Properties is a real estate investment company that acquires, develops and operates self-storage facilities as well as provides third-party management services. It’s affiliated with Westport Memphis Self Storage LLC.

Marcus & Millichap is a commercial-property investment firm with more than 1,500 investment professionals in offices throughout the United States and Canada. The company closed more than 7,600 transactions in 2014 with a value of approximately $33.1 billion.

 

Sources:

UK Moving Company Burke Bros. Adds Self-Storage Units in Wolverhampton, England

Article-UK Moving Company Burke Bros. Adds Self-Storage Units in Wolverhampton, England

Update 6/17/15 – Burke Bros. Moving Group has completed the addition of self-storage units to its headquarters. The new wing officially opened during a recent ribbon-cutting ceremony that included participation from Wolverhampton Mayor Ian Brookfield. The project added 94 traditional storage units to the company’s mix of storage services.

“Initial interest has been very positive,” Gary Burke told the source. “Since word got out, we’ve already received inquiries from local businesses, public-sector organizations, private individuals and students, all looking to store a whole range of items from archive files, office equipment, products, studio flat contents, to household effects.”

The project included new roofing and signage, and natural light has been incorporated into the warehouse. Bottom-floor offices were remodeled, and a corridor was added from the main reception area to the storage units. Self-storage is available on two floors, according to the source.

“I’m always greatly encouraged to see noteworthy local investment and new city facilities that will serve many of our citizens and business owners, especially when it’s being made by a flourishing and expanding family-run firm who are right here in the city,” Brookfield told the source.


4/20/15 – Burke Bros. Moving Group is adding traditional self-storage units to a portion of its headquarters on Fox’s Lane in Wolverhampton, England. The £166,000 project includes a two-story self-storage building on a portion of the property previously dedicated to container storage. The project was awarded £50,000 from the Green Shoots Fund, a government-supported initiative administered by the University of Wolverhampton in conjunction with business leaders who play a role in rewarding business expansions that provide new jobs, among other criteria, according to the source.

“This is a very exciting time in the expansion of our business because for many years, we have provided the only containerized storage in Wolverhampton, plus free-standing storage and archive storage,” said Gary Burke, managing director. “But now we are bolting on self-access storage to meet all individual and business needs.”

The storage building is expected to open in June and will offer spaces from 10 square feet up to 120 square feet. Customers will have access to large loading bays, dollies, fork lifts and pallet trucks, Chris Burke, director, told the source. “The customers will be given the keys to their own dedicated rooms, and they’ll have easy access,” he said.

A large portion of the moving company’s investment will be spent on security including access gates, closed-circuit television and perimeter fencing, the source reported.

Burke Bros. is a family-owned business that specializes in moving services in the United Kingdom and abroad. It has offered storage services for more than 30 years.

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Yardi Releases Yardi Genesis2 for Self Storage Software Package

Article-Yardi Releases Yardi Genesis2 for Self Storage Software Package

Real estate software firm Yardi Systems Inc. has released its first mobile, Web-based, cloud-hosted product designed for self-storage operators. Yardi Genesis2 for Self Storage is built on a software-as-a-service platform and designed to streamline property-management and accounting functions for businesses with small to mid-sized portfolios. It features automated, day-to-day operational workflows and a full accounting system. Data is centralized and accessible from any Internet connection, according to a press release.

The product is built on the Yardi Genesis2 Suite, a fully integrated platform that enables optional add-ons related to insurance, leasing, marketing, payment processing and tenant services. For example, RENT Café is a marketing and leasing module that allows storage customers to “apply” for available units as well as manage their accounts and make payments online, company officials said.

“We are thrilled to welcome self-storage clients to Yardi and are so pleased to offer them additional end-to-end management solutions that will help them optimize operations and achieve their business goals,” said Terri Dowen, senior vice president of sales.

Yardi will continue to support Store Advantage and Store Enterprise, self-storage applications designed for integration with call centers, centralized mail services, corporate offices, mobile devices, Web aggregators, websites and other business systems, company officials said. Yardi took control of those products when it acquired management-software firm Centershift Inc. in March 2014.

Yardi is a designer, developer and supporter of software for the management of property and other real estate investments. Its suite of programs includes accounting, ancillary processes, operations and services with portfolio-wide business intelligence and platform-wide mobility. Based in Santa Barbara, Calif., and founded 40 years ago, Yardi serves clients worldwide from offices in Asia, Australia, Europe, the Middle East and North America.

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