A quick response from firefighters thwarted significant fire damage at a U.K. self-storage facility in Greater London Monday evening.

After an alarm sounded at 7:30 p.m. local time, black smoke began filling the hallways surrounding the offices at Big Yellow Self Storage, located about 9 miles southwest of central London in New Malden. Using a thermal image camera, the firefighters went to work quickly and were able to contain the fire so that only 10 percent of the office was damaged. The source does not specify whether or not individual units or tenants' contents were damaged.

The cause of the fire is still under investigation.

Source: KingstonGuardian.co.uk, Firefighters Prevent Serious Blaze at Storage Depot

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Five years ago, the city of New Orleans faced the devastation of Hurricane Katrina. Onlookers to the tragedy wondered if the town could survive the wreckage, let alone recover from such ruin. But today the Crescent City is thriving again. Despite ever new challenges tossed in its wake―now the oil spill in the Gulf of Mexico―New Orleans continues to flourish. The city is in constant renewal, restoring itself to former and greater heights.

Managers and owners of today’s self-storage businesses have been in their own survival mode in recent years, struggling against economic decline, the toll it has taken on consumers, and the tightening of real estate and finance markets. What has seen them through? A willingness to adapt, try new things, and invest in operational tools.

The Inside Self-Storage World Expo has been a steadfast provider of these tools, supplying operators with education, connections, products and services to weather and surpass the tough times. If you’re looking for new management techniques and marketing strategies that will see you through the fiscal storm, head to New Orleans, Sept. 29-Oct. 1. You’ll get what you need to move past the squall and, as they say in the Big Easy, “let the good times roll.”

Marketing and Management Tactics

Following is a taster of the marketing- and management-related resources you can access at the ISS Expo. To read more about the show’s seminars, workshops, networking opportunities and exhibits, visit www.insideselfstorageworldexpo.com, where you can even download a detailed pre-show planner.
 
Seminar: Champagne Marketing at Grape-Juice Expense: Low- to No-Cost Ideas You Can Implement Today
What You’ll Learn: Tips and tactics for promoting your facility online, via e-mail, inthe community and through traditional print methods. You’ll hear e-mail marketing do'sand don'ts, effective ways to use social media, low-cost marketing giveaways, and strategies for creating a big marketing splash in your neighborhood.
 
Seminar: How to Buy Advertising and Create Effective Promotional Materials
What You’ll Learn: Hands-on, practical steps for creating and implementing effective marketing pieces and campaigns, including how to budget for advertising, how to buy media, how to schedule your plan components, the best methods for distributing materials, and how to track the results of your efforts.
 
Seminar: Overcoming Competition in a Cutthroat Environment
What You’ll Learn: Four core strategies for outpacing competitors as well as effective skills for leading the marketplace.
 
Seminar: Marketing From the Right Side of the Brain: Developing Skills for Creativity and Innovation
What You’ll Learn: Tools you can use to expand your creative skills and connect with your customer base―even on a limited marketing budget.
 
Seminar: Marketing About Town: Building Rapport With Local Businesses and the Community
What You’ll Learn: Twentyinnovative and proven ideas for attracting, influencing and retaining local business renters and community organizations.
 
Seminar: Powerful Selling Techniques for Higher Self-Storage Profit
What You’ll Learn: How to create increased customer visits to your facility through a more powerful sales presentation, including practical steps to overcome objections, outdo your competition, and turn your unique advantages into profit.
 
Seminar: Internet Power Marketing: The How of Online Brand Expansion
What You’ll Learn: Strategies to help control your brand online,includingwhere to find back links to your website, the top 10 secrets of super online performers, key aspects of using social media, and five absolutes for becoming a social-media success story.
 
Seminar: Secrets of Search-Engine Optimization (SEO)
What You’ll Learn: The secrets to generating more business from Internet search engines, including how to make sure customers find you, techniques to optimize your site for search, and how to optimize your Google and Bing local business listings.
 
Seminar: Self-Storage and Internet Yellow Pages: Making the Most of Online Local Search
What You’ll Learn: How to get your business to appear in online directories, how to make changes to your online listings, and how to make the most of your IYP exposure.
 
Seminar: Effective Collection Techniques: Controlling Self-Storage Delinquencies
What You’ll Learn: Techniques for efficiently and successfully collecting rent from past-due tenants, in turn adding to facility revenue.
 
Seminar: The Top Legal Threats Your Self-Storage Business Will Face in 2011
What You’ll Learn: Some of the top legal risks facing facility operators, including tenant bankruptcy, wrongful-sale lawsuits, insurance claims, issues of authorized access, and more. You'll hear steps you can take to protect yourself from liability.
 
Seminar: Managing Self-Storage Managers: Creating Sales Effectiveness and Building Confidence
What You’ll Learn: Concrete, actionable ideas for creating a sales culture and bringing out the best in existing employees, including how to increase your staff's confidence, support them in converting more shoppers to renters, and create success that is not dependent on bonuses or incentives.
 
Seminar: Money Isn't Everything: Manager Compensation and Incentives
What You’ll Learn: How to attract, develop and retain great employees, develop bonus programs, create successful low- and no-cost incentives, empower staff, improve communication, and uncover new motivational resources.
 
Seminar: Rental-Rate Management: How Owners and Managers Can Create More Revenue From Existing Inventory
What You’ll Learn: Factors involved in setting prices, why regular increases are required, when you should implement increases and for how much, and how to properly and smoothly execute these changes.
 
Seminar: Self-Storage Facility Maintenance: Checklists for Saving Money and Preventing Problems
What You’ll Learn: Guidelines for creating a maintenance plan and tips for saving money on scheduled items. You’ll get daily, weekly, monthly and annual checklists to help facilitate this important aspect of site operation and keep your facility in tip-top condition.
 
Workshop: Excelling in Your Self-Storage Operation, Brad North
What You’ll Learn: How to build a dynamic team, create a powerful employee-training program, maximize profitability through operational effectiveness, and develop a work environment of higher productivity.
 
Workshop: Marketing and Sales Boot Camp, Tom Litton
What You’ll Learn: Fiftypowerful techniques that can be implemented at any facility quickly and inexpensively―in person, on the phone and online. This workshop will inspire you to think about sales and marketing in a whole new way.
 
Workshop: Management Workshop, Joe Niemczyk
What You’ll Learn: The ins and outs of daily facility operation and what you need to run a successful storage business. This seminar will cover operational essentials, the basics of facility marketing and advertising, customer-service issues, and legal challenges.

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A cooling fan for a security camera at a self-storage facility in Evansville, Ind., created temporary panic and a false alarm late Saturday night.

WTVW-TV in Evansville reported that firefighters were called to the scene at the Infinite Self Storage on Mesker Park Drive when witnesses reported screaming, pounding and moaning sounds coming from the units.

Out of fear that someone was trapped, the squad broke into at least six units, destroying the doors, as renters came to the property to unlock other units. Before long, it was discovered that the sounds were coming from the cooling fan.

Source: TristateHomePage.com, Cooling Fan Causes False Alarm at Evansville Storage Unit

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In the middle of his ongoing corruption trial, ousted Illinois Governor Rod Blagojevich is in trouble again, this time for several delinquent units at a suburban Chicago moving and storage facility.

The Chicago Tribune initially reported yesterday that Blagojevich owes thousands in unpaid rent for several units at Boyer-Rosene Moving & Storage in Arlington Heights, Ill., one of which contains a life-size Elvis Presley statue.

Blagojevich reportedly owes more than a year's worth of rent for seven different wooden units, which he began renting in 2002, and he's accruing penalties. The owner has notified Blagojevich via certified mail that the contents of the units will go to auction Aug. 14.

Proceeds from the auction will go to Children's Memorial Hospital in Chicago.

The laws governing moving and storage auctions and collections are different than those for self-storage. The facility owner is permitted to take inventory of the units in advance of the auction, which is how the Elvis statue was discovered. The units, all of which are five feet by seven feet, also contain boxes and records.

Blagojevich was unanimously removed from office in early 2009 after he allegedly made arrangements to sell his appointment to the U.S. senate seat vacated by President Obama in 2008. The ex-gov is currently facing federal corruption charges, and the proceedings are ongoing.

Source: Chicago Tribune, It's now or never for ex-gov's stuff

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The fire that broke out last Thursday at Security Self-Storage in Chico, Calif., was caused by a motorcycle, according to the most recent reports. The fire began at approximately 6:30 p.m. and heavily damaged at least four units.
 
Firefighting crews from Butte County, Chico and two volunteer companies battled the blaze until late evening, cutting holes in the doors of at least two units to get at the heart of the fire.
 
Cal Fire-Butte County investigators said a motorcycle that had been ridden earlier in the day and backed into a unit started the fire, though they could not say if the source was hot exhaust pipes or an electrical problem.
 
No damage estimate has yet been released.
 
Source: Enterprise-Record, Official: Motorcycle at fault for Chico storage business fire

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MiniCo Insurance Agency LLC is offering a deductible-waiver option designed to help relieve some of the financial burden on self-storage insureds in the event of a loss caused by hail or wind that causes cosmetic damage to roof coverings. Currently available in Arkansas, Colorado, Kansas, Oklahoma and Texas, the option permits the waiver of the applicable wind and hail property deductible when the named insured and the company mutually agree to choose elastomeric roof coating in place of roof replacement to repair cosmetic damage to roof coverings.
 
Elastomeric roof coating may be a more viable solution in situations where the damage caused by hail does not compromise the structural integrity or functionality of the roofing. Full-scale roof repair and replacement in most cases will require self-storage tenants to be relocated and prevent units from being rented for an extended period of time. MiniCo’s deductible waiver provides an option to avoid these types of disruption while reducing costs for both the insured and the insurance carrier.
 
The deductible-waiver option will be added to most renewal policies and new business policies with locations in eligible states.
 
Phoenix-based MiniCo has provided specialty self-storage insurance programs since 1974.

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StorageMart is donating the free use of a large self-storage unit at its downtown Kansas City location to Bridging The Gap (BTG), a local non-profit organization aimed at conserving the environment and promoting environmental awareness.
 
BTG uses the unit to store equipment such as wheelbarrows and spades for programs that involve planting and digging. Some of the programs include Kansas City WildLands, Five Green Things, EarthWalk, Clean Commute, Walking School Bus and others. The programs range in services from restoring natural habitat, reducing carbon emission and even walking children to school.
 
StorageMart owns and operates more 135 self-storage properties in the United States and Canada.
 
BTG opened in 1991 as Kansas City’s first volunteer-staffed community recycling center. Today, the organization works with approximately 2,600 volunteers annually who work to make their community healthy and sustainable.

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Financing for commercial real estate continues to be a challenge, especially for property types outside the four core asset categories. While not considered to be one of the central property types, self-storage has some advantages given that cash flow and occupancy declines have been less drastic than those of other assets during the recession. Given this performance, self-storage financing has been possible during the economic downturn, though at more modest terms than in the recent past.

If you thought financing or refinancing for a traditional storage property has been difficult since 2008, consider the special case of lending for boat/RV-storage businesses. While similar to traditional self-storage in some respects, boat and RV storage has distinct differences that can make financing even more challenging.
 
Demand Generators are Key

Traditional self-storage has proven it can weather economic fluctuations. Not only are customers willing to pay for storage to hold their possessions, the industry attracts business users, which broadens the customer base.

In contrast, boat/RV-storage properties store discretionary items, which customers may choose to sell in a down economy. In addition, business customers are less likely to use these specialized facilities, thus limiting the potential customer base. Given these fundamental limitations, prime property locations near “demand generators” are important from a financing point of view.

Location and demand are arguably the most important criteria lenders examine when evaluating a property. Traditional storage facilities often have a retail-type presence, with strong traffic counts and highly visible signage. This type of location can be enough to prove the property’s strength to a potential lender. In contrast, boat/RV-storage facilities need to show a proven demand generator with the ability to attract and retain customers.

So what exactly is a demand generator? In its simplest definition, it’s a market situation or geographic feature that spurs customer demand for the storage product. For example, a boat/RV-storage demand generator could be a single-family development with small lots and garages or prohibitive subdivision ordinances.

Another might be a senior-oriented gated community with strict covenants that restrict residents from storing boats and recreational vehicles. Other demand generators are recreational areas such as lakes, rivers and campgrounds that naturally attract recreational equipment that requires storage while not in use.

Lenders take these demand generators into consideration as they evaluate a property. A recent boat/RV-storage property that was successfully financed was located just over a mountain pass on the way to a popular lake. Customers didn’t want to tow their equipment over the narrow and daunting mountain. Instead, they found it attractive to rent storage, which allowed them to pick up their boats and campers on the other side of the pass and closer to the lake. This is a classic case of a demand generator.
 
Underwriting Standards

Similar to traditional storage underwriting, lenders will always analyze a property’s competitive attributes when considering any boat/RV-storage facility transaction. Their analysis will include the barriers to entry of new developments being built near the property. However, unlike traditional storage facilities, which are more improved and often require stricter municipal approvals, the possibility for new boat/RV-storage competition is often predicated upon the amount of available vacant land in the area.

Any municipal restrictions—zoning or otherwise—that limit competition are important to point out to prospective lenders and will support your financing request. An example of a restriction may be a requirement that any potential new storage property must come before the zoning board to prove sufficient demand for its services. At this hearing, competitors are also allowed to present a counterargument, which is a key advantage in a lender’s eyes.

The level of facility improvements will also be important in determining the lender’s willingness to finance a property. Given their general lack of large-scale improvements at boat/RV-storage facilities, lenders often look at the product as land, which, in today’s lending markets, is not widely financeable without a high percentage of equity. Improvements such as fencing, permanent rental offices, security systems and covered areas improve the property’s value and can increase the available leverage.

The level of improvement is a Catch-22, and you must guard against over improvement. Traditional storage facilities often have units and parking spots that compete with specialized boat/RV-storage properties. However, if you build units specifically for boat and RV storage without smaller, traditional self-storage units, the resulting unit mix will not fit the expected self-storage lending standard. Boat and RV units are larger, deeper and higher than traditional storage sizes; this can lead to obsolescence if there is insufficient perceived demand by intended users.

Lenders will not recognize this level of improvement as creating value, and instead will only make these properties less financeable. An example of a more financeable alternative to large individual units would be a warehouse building that provides multiple indoor storage spaces; this is less specialized from a lender’s point of view.
 
Tell and Sell Your Story

All things considered, if you’ve found lenders unfamiliar with traditional self-storage financing, the niche subset of boat and RV storage is likely to throw them for an even bigger loop. As a result, there are even fewer lenders willing to finance these properties. Those who are active will require a strong real estate story with an excellent location and strong demand generator.

The bottom line for today’s boat/RV-storage lending is not all that different from traditional self-storage: limited financing availability at higher levels of equity, higher interest rates and a shorter amortization term. While the current environment is difficult, it’s not all bad news, as new lending sources continue to re-enter the market almost daily. This doesn’t suggest lending terms from past years will return anytime soon; but what you could likely expect is the availability of financing for non-core property types including boat and RV storage should continue to improve during the coming months.
 
Noel Cain is a senior vice president at The BSC Group, where he provides mortgage-brokerage and financial-consulting solutions to commercial real estate owners nationwide. He can be reached at 847.778.4661; e-mail [email protected]; visit www.thebscgroup.com.

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