When was the last time you took an in-depth look at your local market and your facility’s competitive position? Would you be prepared to compete against a new facility? In these uncertain economic times, a facility checkup is a crucial exercise to ensure a healthy future for your business.

Symptoms

Be on the lookout for certain symptoms indicating an ailing market. Begin by keeping detailed records of all phone and Internet inquiries from renters, and track how many of them turn into paying customers.

Over several months, you’ll be able to see if the pace is holding steady or if calls and conversions are declining. A downward trend in the percentage of inquiries turning into renters could indicate a serious condition in the market.

Also, review your rental-rate history and note trends following your last rate increase. If you lost customers as a result, determine how long it took to lease up again. Renters becoming more price-sensitive are another indication your market is tightening.

Finally, don’t forget to track your physical and economic occupancies. If you’ve increased rental concessions and incentives to maintain your occupancy then your market could be in for a decline.

Causes

Several underlying factors contribute to a declining market, the first of which is today’s unstable economy. The credit crunch and decline in the housing markets have left many families with less discretionary income. The result is fewer first-time renters and also a potential loss of current customers who can no longer afford to rent a storage space. Seasonal changes in occupancy can also be a factor, so be sure to keep good records over the years to note the normal flow of business or any anomalies that might reveal an unusual spike or drop in business.

Also, don’t overlook the possibility that an oversupply of self-storage is affecting your market. Overbuilding is a serious problem in many cities throughout the United States and often has damaging effects on the rest of businesses in the area. Consider how a new facility in an established market area can impact the overall occupancy of the market.

For example, let’s envision a market with 300,000 square feet of self-storage supply in a 3-mile radius. If the market has an overall occupancy of 85 percent, then the current demand for self-storage is 255,000 square feet. If a developer plans to enter this same 3-mile radius with a new facility, consisting of another 60,000 square feet, then the new total supply of storage in this market would be 360,000 square feet. At the current demand of only 255,000 square feet, this new market would now be facing occupancy of around 70 percent, down nearly 15 percent from its stabilized rate!

It would take a tremendous amount of population growth or additional demand coming from outside the 3-mile radius to return this market back to 85 percent occupancy. What should concern all current owners most is the older, lower-quality facilities will likely suffer the worst decline because the new site—with all its bells and whistles—can draw customers from the competition.

Prevention

Taking preventive action can make all the difference in how your facility weathers a changing market. We’ve developed an annual facility check-up list to accurately evaluate your operation against current and potential competitors. This evaluation, combined with your own valuable experience and knowledge, will give you tools to make informed decisions about how to remain competitive.

A word of caution: You must be completely objective when completing the evaluation and as thorough as possible in obtaining all details. Your results need to accurately reflect the market conditions to be useful to you.

A sample copy of the check-up form is included with this article to illustrate the analysis. If you would like a blank form, visit www.selfstorage.com/argus/toolbox/checkup.htm to download a copy. The form is merely a guide, so feel free to add other items to the list that affect your market.

To begin the checkup analysis, you need to define your market trade area, generally a 3- to 5-mile radius from your location. You may also want to include additional facilities just outside this area as they have the potential to impact your market.

Plotting all of the self-storage businesses in the area on a map will give you a good idea of market supply and what areas are likely to see future self-storage development. Visit your local planning and building department to inquire about projects on the drawing board; they could play a major role in the future success of your business. Add these locations to your list and then commence your evaluation by visiting all the facilities. Talk with the manager or owner at each location to learn as much as you can about their operations and how they market to potential renters.

Following your visit, use the checkup form to rank various criteria on the list such as location, visibility, access, signage, traffic counts and appearance. Be as objective as possible as you rate each item on a scale from 1 to 10. Obtaining each competitor’s rental rates will also help give you a better picture of the marketplace. If you can’t get these during your visit, try calling the facility to get an idea of their salesmanship and special offers. You must be careful how you obtain rental rates because discussing prices with competitors could be considered antitrust price fixing. It’s best to do this anonymously.

Last, but not least, perform the same evaluation on your own facility. Add the scores and look at the various rental rates, noting where you rank in relation to the competitors on your list. If your scores are lower than the average in any of the categories, consider those items to be a priority for your next maintenance project or capital improvement.

Perhaps you will also find that new or planned projects will significantly enlarge the market and that you must take some dramatic steps to remain competitive. Even if you have the best property in the best location in market, you will know better how to sell your facility against the competition and where you can benefit from the pricing structure.

Let’s review the sample checkup to see what the future looks like for this hypothetical market. The property at 8th & Main earns average scores among the group and also has competitive rates. Its greatest advantage is high traffic exposure, which is a factor an owner has little control over.

Ash & 4th is pricing units significantly higher than the group, which is likely hurting its occupancy. If the owners bring their rates down to a more competitive level, they could impact the market as they enjoy a high-visibility location with excellent access.

The facility on First Street is a strong competitor with good occupancy and high scores in all categories. The New Project entering the market has the potential to do some major damage. It has a high-traffic location and an appealing appearance, plus the facility will likely have all the bells and whistles to attract new customers.

Our Facility is in a relatively good position for now. Our occupancy is the highest among all the competitors and rates are average for the market. Once the new project opens, we will have to address the low scores in signage and visibility to avoid falling victim to the inevitable drop in occupancy that will occur.

An Apple a Day

We recommend completing the checkup process at least once per year to be sure you don’t miss any pricing changes or competitive threats on the horizon. A completed checkup provides you with some very powerful information to prepare for the future and, over time, you will possess a tremendous amount of information about the trends and intricacies in your market.

With a potential recession looming and problems in credit markets, these steps—taken now—will help you weather tough times. Being proactive, rather than reactive, is the best way to ensure your self-storage business will be strong and healthy for years to come.

Amy Hitchingham is vice president of the Argus Self Storage Sales Network. Created in 1994, Argus is one of the nation’s largest networks of independent real estate brokers specializing in buying and selling self-storage facilities. For more information, call 800.55.STORE; visit www.selfstorage.com.

Because a storage owner sees his property daily, he may miss signs of deterioration. “A large percentage of your storage renters decide whether they want to rent from you based on the curb appeal of your facility,” says Brian Byrd, vice president of sales and marketing for Landvest Corp. in Wichita, Kan. “To combat the unintentional blinders that you often wear, you need to have a weekly, monthly, quarterly and yearly checklist of items that need to be evaluated.”

Items on this checklist should include things such as exterior lighting, drive maintenance, signage, bollards, doors and more. This list will help an owner or manager focus on specific items to assess. “Keep in mind that the items you are reviewing need to be items that can be seen from the street and within the property. Curb appeal continues on the inside of the property as well,” Byrd adds.

Buildings, drives, fencing and landscaping are the visual priorities in exterior maintenance. The other priority must be roofs and the prevention of damage from water, says Donna May, president Cross Metal Buildings Inc., Bulverde, Texas. “Ratty-looking flowerbeds, trash against fence lines and clumsy or inoperable gates signify that the owners or managers don’t care, and potential tenants will go somewhere else for that reason alone,” May says.

Landscaping

The buzzword of the day is “green,” so know that your landscaping will be appreciated, says Dave Stefano, president of Norfolk, Va.-based D. Stefano, Building & Restoration Inc. “Keep it green and flowering, and everyone will be happier.”

Landscaping can break up long, plain views of your project as it becomes part of the architecture. Plants and bushes may also hide rodent traps and unattractive areas like dumpsters or parking areas. Remember to properly irrigate and fertilize everything you’ve planted.

“Landscaping is often a customer’s first impression of the facility and is the feature of the facility they like the best, or draws their eyes the most,” Byrd says. If neglected, it can also become the worst feature of a property. Keep bushes trimmed, eliminate weeds and replace plants immediately if they die.

Fencing

Fencing provides security and makes an attractive statement. Several kinds of fencing—chain link, brick wall, wood—can create solid and secure barriers. A steel ornamental fence with the proper base material and coating should require only moderate rinsing to remove dust and dirt buildup, says Mark Meek, president of sales and marketing at Ameristar Fence Products, Tulsa, Okla. Heavier dirt buildup, mineral deposits, bird droppings, etc., can be removed using a non-abrasive detergent cleaner.

Quality fence coatings will not mar or scratch easily, but if the surface is impacted forcefully by a sharp steel object that exposes the base material, a surface repair may be necessary, Meek says. In this case, the affected area should be smoothed with a fine-grit sandpaper, cleaned and dried. Coat the fence with a zinc-rich primer, then with UV-resistant touch-up paint of the same color and gloss as the factory coating.

Fencing needs to kept in good repair at all times, May says. “Damaged fencing automatically makes tenants think that the security of their units are compromised. So does a gate that does not work as it should.”

For gates, check tracks, wheels, chains, lift mechanisms, rust and paint, May advises. “Logic and manufacturers’ instructions are the best guidelines to follow in establishing inspection or service frequency. Vendors and service providers are generally very helpful in answering questions regarding maintenance.”

Paving and Parking

Asphalt paving is prone to weed and water damage. Materials growing up through asphalt must be “nipped at the bud” by using topical weed killers, May says. Cracks and holes from vegetation, water damage and stress should be sealed annually. “When asphalt loses its color and small surface crumbles appear, it needs to be seal-coated,” May says. “If it is damaged more extensively, it probably needs to be replaced.”

The weight of concrete drives as compared to the weight of slabs and buildings causes them to heave at different rates when affected by moisture, according to May. Prevent moisture from getting into the ground beneath buildings and drives as much as possible, particularly where there is expansive soil or freezing. Sealing all joints and abutments can prevent moisture-related unsightly buckling or uneven concrete drives. Keep parking stops in good repair. They are not expensive and make parking areas look shabby when broken.

Roadways should be clean. Also, repair low places where water collects, which will increase the asphalt’s lifespan significantly, Stefano says. Asphalt should be sealed within three months of completion, then every other year for lasting results. If you want to control traffic patterns, paint the roadways.

Posts and Bollards

Steel bollards can protect the storefront, storage units and landscaping from accidents. But steel bollards require considerable maintenance to keep them looking fresh. Over time, they will need scraping to remove rust, and a coat of fresh paint.

One solution is to cover posts with sleeves that are water- and chemical-resistant, can withstand extreme temperatures and are treated with UV and anti-static additives. “By covering bollards, the bumper-post sleeve improves a storage facility’s appearance,” says Chris Parenti, vice president of Ideal Shield in Detroit.

Since post sleeves never need to be painted, they can save man-hours and eliminate the cost associated with the continual need for painting. The sleeves are easily cleaned with industrial strength soap and water solutions.

Signage

The visual condition of signs is a very important part of a well-managed self-storage facility, says Jerry Kincade, Sign Systems Inc., Stanwood, Wash. Signs that are old, faded and in poor condition don’t send a positive message or convey an image of a clean and safe environment. Over time, certain factors—weather, rodent or bird pollution, age, wear and tear—may result in less efficient signage and reduced ability to find the way.

There are several categories of signs a facility uses: instructional, directional, advertising, promotional, safety and security. These signs help tenants use facilities safely, securely and within the rules, and also provide marketing opportunities. The best way to evaluate the condition and effectiveness of your signs is to take a tour of your property, Kincade says.

“We all know how quickly branding and parking lot appeal is lost when the lights go out,” says Julie Lapacka, director of business development for Houston-based US-1 Sign Maintenance Experts.

Signs that are old, faded and in poor condition do not send a positive message nor do they convey a clean and safe environment. Exterior signs are subjected to the elements of nature: extreme heat or cold, sun damage, wind, precipitation in all its forms, and even pollution. These elements cause faces to fade and crack, vinyl to peel, paint to chip, neon to break or dim, and lamps and ballasts to fail. In addition, simple dirt and grime can create problems. An annual sign inspection will catch problems before they escalate.

Sign cleaning creates a better appearance as it extends the life of the electrical components, Lapacka says. When your sign begins to flicker, it’s important to act quickly. Flickering is a sign of a faulty transformer or ballast, which, when not functioning properly, puts a lot of additional stress on other electrical components. Simply turning your sign off as soon as you notice the flickering and calling for service will save a lot in repair costs.

If you have individual channel letter signs, birds often nest in the letters, Lapacka says. Their droppings, in addition to being unsightly, also break down the finish on the sign. Bird spikes are an effective and humane deterrent that can be applied by your sign company.

Lighting

There are no typical lighting sources for exterior lighting applications, says Larry Leetzow, president for the World Institute of Lighting and Development Corp (Magnaray International) in Sarasota, Fla. If your facility is more than a few years old, chances are you are using high-pressure sodium (HPS) or metal halide (MH). Some facilities still use low-pressure sodium (LPS), which produces only a pure yellow light. Fluorescent (FL), which produces a white light, is preferred by most customers.

The choice of lighting determines how often bulbs must be replaced. HPS has a fairly good lamp life and lumen maintenance, but does distort colors of objects, takes a while to come on, and even longer to “cycle” in power interruptions, says Leetzow. In general, the lower the wattage of sources, the shorter the lamp’s life. Spot re-lamping (burnouts) is usually done, but can be costly. If the system is five years or less in age, only lamps normally need replacement. Older systems may need capacitors, ignitors, ballast and lamps replaced.

MH loses about 30 percent light output in the first 8,000 hours of use, while consuming the same amount of energy. LPS uses more energy as it ages, is hazardous to dispose, can cause third-degree burns if not handled properly, and requires protective clothing for installation, Leetzow says.

FL sources lend themselves to group-lamp replacement, which can save lots of maintenance dollars, Leetzow says. A scheduled re-lamp saves money on return trips, not to mention the safety consideration for parking lot and security lighting.

Replacing aging or broken neon with LEDs will virtually eliminate service calls as well as reduce energy consumption by an average of 80 percent, Leetzow says. Neon dims in cold temperatures and has significant lumen (light output) depreciation. Conversely, LEDs have almost no lumen depreciation and are unaffected by the cold, thereby providing a more consistent, brighter sign for a lower operating cost.

Regular group re-lamping of fluorescent signs and parking lot lights is more cost-effective than simply replacing what’s out. When lamps and ballasts start going out, others aren’t far behind.

Many sign companies offer scheduled maintenance plans with a fixed fee, or on-call maintenance services. Regardless of which scenario you choose, annual assessments will prolong the life of your signs, keeping them at their best and increasing your profitability, Leetzow says.

Dumpster

Dumpsters are a necessary evil on any storage site. They should be on concrete pads so that asphalt is not destroyed by heavy trucks maneuvering to pick up containers, May says. Never let trash accumulate outside the dumpster. It’s an eyesore that immediately draws attention and creates a negative impression.

“When possible, enclose a dumpster and rent a key to customers who actually need to use it,” says Stephano. The rental can be $2 per month; but the key holders will be registered and held accountable.

Doors

Doors are subject to constant wear and tear by customers and the elements including sun, snow, acid rain and salt air. Ultraviolet rays will eventually fade and chalk even the best paint. Salt air can oxidize and pit the metal, causing corrosion. Dirt and dust will settle on the chalky or oxidized doors making them appear dull and dingy.

Dirt or grit in the guides of the doors can gum up the mechanisms. Keeping doors free and clear of dirt and dust is difficult but minimizing this will add longevity to performance and the appearance of your doors, says Roc Hughes, director of business development and marketing (self-storage division) for DBCi, Douglasville, Ga.

Excess dirt and debris that collects in the guides and in the rain lip keep doors from sealing well at the bottom bar, Hughes says. Letting dust and dirt enter the guides causes wear and rough operation. The funnel effects between buildings caused by windy conditions, coupled with property cleanup by blowers, can force debris into, under and around the door openings. These conditions also leave scratches and pit marks, affecting the appearance of the doors, Hugh adds. The impact of winter salt can be minimized by regularly removing snow from the direct path of doors and guides.

Temperatures and moisture associated with direct sunlight, coupled with the dirt contaminants on the surface causes the paint on doors to chalk and fade. Wipe doors down with a wet cloth to remove dirt, then apply Armor All or any type of light-duty car wax twice a year.

Each time a unit is rented (or yearly, depending on which is first), managers should:

1. Inspect door curtain for any scratches, dents or debris, and clean, repair or replace as needed.
2. Sweep out unit, rain lip and guides.
3. Apply silicone-based grease on the springs (white lithium works best).
4. Spray inside of guides with a silicone spray.
5. Inspect all guides and fasteners for tightness.

“Since the appearance and smooth operations of your doors project your image to the public, maintenance does not cost you money, it makes you money,” says Teresa Sedmak, president and co-owner of Everbrite Inc., Reno, Nev. After every vacancy, owners should check doors are securely screwed into the wall. The screws may have backed out after excessive use. Sometimes none of the screws are in place.

Check the pull cords, especially if they are on the outside, as they wear very quickly. Make sure you melt or singe the cord ends so they won’t fray.

Oil or lubricate the springs with a very light coat of oil to reduce friction and prevent rust. Finally, check the tension and adjust according to the manufacturer’s directions. Maintaining the spring tension and making sure it is balanced is critical. People who hurt their backs trying to raise doors that stick or open unevenly can file lawsuits.

Roofs

When a roof is installed, it should be thoroughly cleaned by sweeping the entire surface with a broom or air blower, Stephano says. Metal particles on a metal roof can cause a chemical reaction.

A walking inspection of your roofs will reveal areas that need maintenance to prevent unnecessary aging and damage. When a roof has a nearly flat pitch, customers may toss debris up onto the roof where it won’t be seen or roll off.

Gutters and downspouts should be cleaned every fall, or more often in applicable geographical regions. Another inspection prior to the winter’s ice and snow is prudent. Care should be taken while using a garden hose to clean gutters and downspouts. Don’t let water pressure force water under the eaves, and look for roofing screws and other sharp objects that may wash into the roadways.  Installing downspouts into an underground water retention system reduces surface water, parking lot erosion, and ice in cold weather.

“Convenience, price and perception about the care your customers’ goods will receive are the three decision-making factors in choosing a facility,” May says. “Any one of the three can gain or lose a sale. That is why exterior maintenance is so important.”

Canadian Mini-Warehouse Properties Co., the general partner of Public Storage Canadian Properties, opened a newly constructed self-storage facility in Laval, a suburb of Montreal. The facility consists of a four-story, climate-controlled building with approximately 84,000 net-rentable square feet and 800 units. Total development cost including the land purchase price was approximately $9.5 million. This is the fourth facility acquired or developed by the partnership in the greater Montreal area in the last three years. For more information, visit www.publicstoragecanada.com.
 
 

There was a time when the word “eco-friendly” was synonymous with hippies and tree-huggers. Today, green is mainstream. People tote groceries home in canvas bags, hybrid cars cruise alongside gas-powered vehicles, and recycling is at an all-time high. Even the Oscars were earth-friendly this year.

Everyone wants to be green. More than just ethically the right thing to do, becoming eco-friendly can be good for your health and your business.

Light the Way

One of the easiest ways to be green is changing your light bulbs. The groovy-looking, spiral compact fluorescent light bulb, or CFL, is a type of fluorescent lamp that can replace an incandescent lamp and fit a multitude of light fixtures. The CFL gives off the same amount of light compared to regular light bulbs, but uses less power, has a longer life and saves greenhouse gases—an estimated 2,000 times its own weight. While CFLs cost more than your typical 100-watt bulb, the money you’ll save on your energy bill and in replacement costs more than makes up for it.

The Paper Trail

While you may not ever reach “paperless” status, there are a number of ways to cut back. First, make it a habit to print on both sides of the paper—that means double-sided contracts. There are also fax machines that do double-sided duty. Avoid color printing whenever possible, and purchase chlorine-free paper with a higher percentage of post-consumer recycled content. You may also consider switching to paper made from lighter stock such as bamboo, hemp, organic cotton or kenaf.

Also, take a look at where you can omit paper usage, such as posting employee info online or via e-mail. Collect e-mail addresses from your tenants so you can contact them via the computer rather than by mail. Review documents onscreen instead of printing them out.

Have a bin specially marked for recycled paper, even shredded sheets. This includes magazines, catalogs, newspaper and junk mail. Plus, recycling your toner and ink cartridges keeps metal, plastic and oil out of landfills.

Remodel, Rebuild

If you’re looking to remodel your facility or add on, consider using sustainable products. There are green products for nearly every inch of a building—low-VOC paint, low-flow toilets, CFL lighting, earth-friendly flooring and more. Reuse materials whenever possible; recycle what you can’t. If you need to replace furniture or computers, look for ones that use sustainable materials.

Landscaping Basics

Yes, plants are good for the environment. But if you’re constantly watering or using a lot of pesticides it defeats the purpose. Instead of row upon row of semi-annual blossoms, consider planting drought-tolerant native perennials. Not only will these plants require less maintenance, they can also be beauties, blooming at various times each year. To add a splash of color, plant annuals like petunias, daisies and snapdragons in decorative pots in the spring.

While grass is pretty, it needs major upkeep, so keep grass to a minimum. Instead, install rock landscapes, which can also be eye-catching when you use a variety of rock colors and styles. If a fountain feature is desired, explore self-contained systems that recycle the water.

Indoor Pollution

While outdoor pollution is often hyped, few consider indoor pollution—mold, dust, furniture, carpets, plant pollen and various chemicals. Proper ventilation is one way to quash these pollutants. Clean your filters and vents often, and keep air circulating in small, enclosed spaces, such as offices and hallways. If you have windows with screens, open them. Consider propping your door open during nice weather.

Cleaning is your other best defense against indoor pollution. Choose green products to cut back on these toxins because citrus and pine-based solvents can react with the ozone to create formaldehyde. Also, keep the use of pesticides to a minimum and away from any walking areas as they can attach to shoes and clothing.

The Hybrid Advantage

If records storage is part of your business, consider switching your pickup and delivery vehicle to a hybrid. There are a number of affordable hybrids on the market, from small compacts to SUVs. Hybrids combine a battery-powered electric motor, which takes some of the work off the combustion engine, with traditional gas power. Not only will you save big on today’s out-of-control gas prices, hybrids emit less greenhouse gases.

If you regularly use a golf cart, consider investing in a quality bicycle or even a bicycle cart—a bicycle that has built-in storage capacity—to carry general maintenance tools. Or switch to a golf cart that uses batteries instead of gas.

Seal the Deal

Heat and cooling often escape through cracks in the sealing around windows and doors. To repair cracked seals, use a high-quality sealant. There are also specialty sealants and coatings for rooftops. Check the Inside Self-Storage archives for more on this topic. In addition, include extra insulation whenever possible, and install energy-efficient windows. Also, look for tears in screens. Holes are easy access points for bugs.

Be a Computer Saver

Computers are a necessity in this industry, but they can also be energy-suckers. Make it a habit to keep them in tip-top shape with regular dusting and making any repairs in a timely manner. Another way to save is turning off computers and corresponding power strips when you’re done for the day. Give your computer a rest whenever possible by setting it to go to sleep automatically during short breaks. There are also a number of energy-saving computers, printers and monitors on the market today. When you do upgrade, be sure to recycle your old equipment. You may even get a tax deduction.