You may think I’m joking when I say there are things in the self-storage industry that keep me up at night, but I really do worry about how some of you are running your businesses. A storage operation is worth a lot of money, and failing to pay attention to certain details could put you at unnecessary risk of a lawsuit. Here are five things that keep me from sleeping comfortably when it comes to self-storage.

1. Failure to Understand Insurance Coverage

Do you really know what your business insurance covers? From whom did you buy it? If you didn’t get your policy from someone who makes it his business to represent the self-storage industry, you may have gaping holes in your coverage. Generally, you discover these holes only after you’ve been sued.

I’m asked at least three to five times per year to defend a lawsuit for loss or damage to a self-storage tenant’s personal property because the facility’s insurance covered only the buildings and included no wrongful-sale or disposal component. It’s irresponsible to operate your business without this coverage. You should consider additional coverages as well, including business interruption, employment dishonesty, cyber liability and hazardous-waste remediation. Consider an insurance review by any reputable company that specializes in the storage industry.

2. Unintentional Creation of a Bailment

The beauty of self-storage is you rent space to a tenant, who places his own lock on the unit and keeps the keys. If something were to go wrong inside the unit, you aren’t going to be held responsible because you’d have no way of knowing that.

Where facility operators can get into trouble is when they keep a key to the unit. There are a couple of ways problems can manifest in such a scenario. The first is when a tenant alleges the operator knew, or had the opportunity to know, that something was wrong in the unit—for example, a leak—and should have corrected it. The customer claims that by failing to do so, the business was negligent.

The second way you have a problem is when the tenant alleges something has been stolen from his unit, and only you and he have access to the space. When a customer claims you stole something and you hold possession of his key, there’s very little you can do to defend yourself. Given that some tenants may experience lapses in memory or sanity, creating an unnecessary bailment like this is foolish. This liability is simple to avoid in self-storage.

Incidentally, offering outdoor vehicle storage also creates the same type of bailment. For this reason, make sure you have a separate rental agreement for this service, and inform your insurance agent you offer it to ensure you have the appropriate coverage.

3. Failure to Understand the SCRA

The Servicemembers Civil Relief Act (SCRA) has been around since the 1940s (under different names). The act is designed to protect active-duty servicemembers (and several other categories of uniformed federal workers) from consequences that might occur while they’re serving the country.

The law was originally drafted during World War II to help servicemembers whose homes and cars were taken by repossession or foreclosure while they were off fighting. It exists for the same reason today. Among its protections is a provision that says an active-duty servicemember—and in some instances a spouse or dependent of that person—may not be foreclosed upon without permission from a court. Hint: A self-storage lien sale is a foreclosure.

At the time of rental, facility operators are required to ask within the agreement if the person renting the space is active-duty military, including the Reserves or National Guard. To avoid any controversy, also ask if he’s a spouse or dependent of an active-duty military member. The language used in some states may vary, for example, “uniformed services.” Regardless, if you don’t ask the question, you automatically violate the law.

Of the many rental agreements I review each year, less than a third even take a shot at asking about military service, let alone get the question right. This leads me to believe many of you aren’t looking at whether there’s a protected occupant/dependent prior to holding a lien sale. The consequences for violating the SCRA include civil and criminal penalties.

4. Failure to Comply With ADA

The Americans With Disabilities Act (ADA) has been around since the 1980s. While there may be some question about self-storage facilities built prior to the act, the ADA has become a real issue for the industry. Several national operators have even been sued recently because there was no way a blind person could use their websites, making them out of compliance.

You must take the ADA seriously. At a minimum, storage facilities must meet the scoping and dispersion requirements of the act. Scoping means a certain number of storage units must be disability accessible. Dispersion means ADA-compliant units must be distributed throughout the various types of units you offer.

In addition, think about other publicly accessible elements of your business, not just the doors to your units and buildings. According to recent class-action lawsuits, your website and marketing materials also need to be accessible to the disabled.

5. Failure to Update Your Rental Agreement

Self-storage facilities are often worth a million dollars or more. For many of you, the operation is your source of livelihood, or a generation-passing income or asset. For that reason, it’s worth having your rental agreement, as well as your policies and procedures, reviewed by an attorney at least once every three years. You may be pleased to learn that little or nothing needs to be updated. For peace of mind, it makes sense to spend a few thousand dollars to protect your million-dollar investment.

As case law develops and statutes are updated, attorneys learn more and more about what is necessary to protect self-storage operators and their businesses. You simply cannot ignore these changes and expect to stay clear of the vicious lawsuits plaintiffs file against the industry.

This column is for the purpose of providing general legal insight into the self-storage field and should not be substituted for the advice of your own attorney.

Jeffrey Greenberger is a partner in the Cincinnati law firm of Greenberger & Brewer LLP. Licensed to practice in Kentucky and Ohio, he focuses primarily on representing the owners and operators of commercial real estate, including self-storage. His website, selfstoragelegal.com, contains legal opinions and insights as well as an article archive. To reach him, call 513.698.9350; e-mail [email protected]. 

The factors that make self-storage a unique real estate asset also make conventional predictive tools less than ideal when determining if an existing facility will make a good investment. Cloud-based Storage World Analyzer Software is designed to provide industry buyers and investors with the following based on several assumption variables, including acquisition price and other investment costs, income, expenses, occupancy, capitalization rate, and debt service.

• Forecasting for internal rate of return
• Cash-on-cash estimates
• 10-year cash-flow projections
• Unit-mix and pricing-optimization tools
• Easy, step-by-step recording of data variables
• Detailed, printable reports
• Ability to customize reports with company logo
• Video tutorials
• Unlimited access with no time constraints

Version 2 of the software was issued in 2017 to streamline efficiency and ease of use. It includes new and refined modules that allow users to make long-term projections on all types of self-storage investments including:

• Existing facilities
• Raw land with new construction
• Conversion projects
• Site expansions

Visit the ISS Store for full product details and to view sample reports.

U.K. self-storage operator Big Yellow Group PLC may have a difficult time getting its revamped remuneration policy passed when shareholders meet this week. The company has proposed executive salary increases of as high as 40 percent to occur over a three-year period. Investment firm Royal London Asset Management (RLAM), one of the operator’s largest shareholders, has already indicated it will oppose the pay hike, according to the source.

“We have long-standing concerns about pay at Big Yellow Group, and we will be voting against the firm’s remuneration report and remuneration policy, as well as against the chairman of the remuneration committee,” said Ashley Hamilton Claxton, head of responsible investment at RLAM. “We are concerned by large salary increases of up to 40 percent for the executive directors over the next three years. This will have the effect of ratcheting up performance-based pay that’s set as a multiple of salary.”

Under the plan, chief executive James Gibson’s annual salary would jump from £302,000 to £440,000 by April 2020. Similarly, executive chairman Nicholas Vetch would bump from £275,000 to £375,000 during the same period, the source reported.

“While we welcome the introduction of a holding period for long-term awards under the firm’s new remuneration policy, we are concerned that variable pay will be more heavily geared toward short-term performance under the new plan,” Claxton said.

Big Yellow’s adjusted pre-tax profit growth during the last five years has been 110 percent, while revenue has increased 62 percent during the same period.

Competitor Safestore Holdings PLC has faced similar shareholder opposition to proposed changes to its remuneration policy.

Big Yellow Group operates 96 self-storage locations in the United Kingdom under the Big Yellow Self Storage and Armadillo Self Storage brand names, with most concentrated in Greater London. Its total portfolio comprises 5.6 million square feet.

Source:
Property Week, Big Yellow Faces Shareholder Revolt Over Proposed Salary Rises

Stock N Lock Self Storage of England has opened a second location. In addition to its facility in the Venture Business Park in Worcester, it now operates in Stonehouse, in the Stroud District of Gloucestershire.

The new property in the Stroudwater Business Park offers personal, commercial and vehicle storage. Customers can also purchase moving and packing supplies. “We’re really excited to be here in Stonehouse to serve Stroud and the local community,” said store manager Toni Hodges-Moore.

“Our ethos has always been to offer top-quality storage at affordable prices, and we feel our new Stonehouse facility is a great addition to the Stock N Lock family,” added Ryan Kemili, business manager.

Stock N Lock was named “Best UK Facility and Operator” by the Self Storage Association ofthe United Kingdom in 2015 and 2016. It was also a finalist in 2017.

Security measures at the properties include controlled access, individually alarmed units and video cameras. Additional offerings include electricity in some units, forklift services, records storage, package acceptance and delivery, and Wi-Fi.

Source:
Stroud News, Storage Company Opens New Stonehouse Store

Plans for a five-story CubeSmart self-storage facility in New Orleans were withdrawn last week following opposition from members of the Irish Channel neighborhood. The proposal included razing three warehouses in the 2600 block of Tchoupitoulas Street and building an 888-unit facility on the L-shaped lot. The storage facility would have frontage along Rousseau and Third Streets. The developer also requested a reduction in parking spaces from 36 to six, according to the source.

During a June 12 planning-commission meeting, the developers stated they had worked with city architecture experts for five months to create the facility design. They noted the property would have a low impact on the neighborhood and require minimal parking.

Neighbors who opposed the project said the area already has plenty of storage. They also had issues with the building’s height and aesthetic, with resident Al Bostick calling it an “insult to the neighborhood.” Bill Sawicki, who represented the Irish Channel Neighborhood Association, noted two self-storage facilities under development nearby will only contain three stories rather than five.

Planning commissioners were also split on the project. Commissioners Kelly Brown, Eugene Green and Robert Steeg were initially in favor of the project, while Jason Hughes, Jonathan Stewart and two other members were opposed. The commissioners ultimately voted 5-2 against recommending it to the council after Brown switched sides.

Two other self-storage developments along the uptown riverside corridor were recently approved, and neither faced community opposition. In January, the planning commission voted unanimously to approve a three-story Superior Storage proposal for 4866 Tchoupitoulas St. Last week, it favored a three-story expansion of Safeguard Storage at 919 Erato St.

CubeSmart is a self-storage real estate investment trust that owns or manages 987 self-storage facilities across the United States. Its operating portfolio comprises more than 60.5 million square feet.

Source:
Uptown Messenger, Controversial Storage Facility Proposed for Tchoupitoulas Withdrawn By Developer

Leon Capital Group, a Dallas-based real estate development and investment firm, intends to build three self-storage facilities in the Pacific Northwest. The projects are slated for Milwaukie and Portland, Ore., and Vancouver, Wash. Together, they’ll comprise about 320,000 net rentable square feet in 3,112 climate-controlled units, according to a press release from Talonvest Capital Inc., the boutique commercial real estate advisory firm that secured the construction financing.

The Portland project on Columbia Boulevard will comprise about 147,900 square feet. The site has approximately 160 feet of street frontage, with average daily traffic counts exceeding 30,000 vehicles. The Milwaukie facility, just south of Portland, will comprise 83,500 net rentable square feet on Oak Grove Boulevard, directly across the street from a Fred Meyer grocery store, the release stated.

In Vancouver, Leon Capital will develop at 83,500-square-foot facility on two parcels abutting N.E. 88th Street, across from a Costco.

Talonvest negotiated $28 million in financing. The LIBOR-based, floating-rate construction loan has a three-year term, with a 12-month extension option. It also includes a 12-month mini-perm option, the release stated.

Leon Capital has more than $3 billion in completed real estate transactions and assets worldwide. Its portfolio includes acquisitions, land development and existing building infrastructure in the multi-family, mixed-use, office, retail and self-storage categories.

To supplement shortfalls in sales-tax revenue, officials in Tuscaloosa, Ala., are considering a change to the city’s business-license fee structure in five categories including telecommunications, carnivals, check-cashing and title loans, self-storage, and waste collection. Members of the city council’s finance committee voted unanimously on the measure last week. If approved by the full council, the changes are expected to provide nearly $47,000 in additional annual revenue, according to the source.

The largest net gain for the city, estimated at $25,000 per year, would come from self-storage, in which collection rates would be increased. The second largest return would stem from a $500 fee added to licenses for check-cashing and title-loan businesses, providing an estimated $9,500 annually.

The proposal has received little resistance from the sectors it would affect. “We promoted this to our membership for several weeks,” said Jim Page, president and CEO of the Chamber of Commerce of West Alabama, which has consulted with Tuscaloosa officials on the move. “We had feedback from a national self-storage entity, and that’s the only feedback we got.”

The city is considering the changes as a way to offset some of the annual sales-tax revenue lost to Internet shopping. Sales tax accounts for about half of the city’s General Fund. Revenue from business licenses is second, but contributes just 15 percent of the fund’s total, the source reported. Business-license fees are based on an individual company’s gross receipts.

“The five proposals on the table wouldn’t affect the retail industry,” said Katy Beth Jackson, financial manager of Tuscaloosa’s urban-development department, whose group studied the returns on business fees and discovered the city was either deficient or not charging the full legal amount on license fees in several categories.

As of mid-May, Tuscaloosa had issued 11,219 business licenses to companies that generate an estimated $10 billion in sales. The collected license revenue amounts to about $23 million, the source reported.

It’s not clear when the full city council will vote on the proposal.

Source:
Tuscaloosa News, Tuscaloosa Eyes Business License Changes to Address Shortfall

The Butler, Pa., Township Planning Commission approved a land-development proposal from Fairfield Southpointe LP this week to convert a former medical center to self-storage. The Irene Stacy Community Health Center at 112 Hillvue Drive sits on 9.58 acres and comprises nearly 21,000 square feet of space in three buildings.

As part of the first phase, a 6,900-square-foot structure at the front of the property will be renovated into 28 interior storage units. The plans also include adding 13 smaller, drive-up storage units at the front as well as vehicle parking in a gated area at the rear of the site, according to the source.

The two remaining buildings will stay vacant. They include a two-story structure comprising 6,800 square feet and a single-story building containing 7,200 square feet. Much of the property’s infrastructure would also remain, according to the site plan submitted to the township.

The zoning board has granted conditional approval for the storage project even though the area is zoned agricultural. The township council will review the project at its Monday meeting. If approved, the storage facility could open in early September, the source reported.

Source:
Butler Radio, Butler Twp. Could Get New Self-Storage Facility

 

In my hometown in South Dakota, there’s a large group of retired farmers who are part of an informal Corvette club. All members have a Corvette, from 1960s classics to new models. They meet at the town diner on Saturday mornings to sip coffee and talk crops and cars before driving the open highways and winding lakeside roads in a caravan of shiny, colorful ‘Vettes.

Now that I find myself in the self-storage industry, I wonder where these clubbers are storing all those fancy cars. Has any savvy real estate investor had the idea to offer premium, climate-controlled storage for classic cars, motorcycles and watercrafts in the area?

Whether you’re a self-storage operator with hard-to-fill units or just looking to boost your revenue, now’s the perfect time to consider specialty storage options for your market. You can transform your property’s unique features—a newly built warehouse or unused basement—to create focused offerings designed to bring in new renters at a premium price. Whether your customers want a place to store Corvettes and have club meetings, a high-security unit to secure collectibles or merchandise, or customized space to store wine collections and host tastings, there are profitable options for nearly every market.

What’s Hot for 2018 and Beyond

Some storage owners are renovating their properties to add specialty storage, whether for wine, vehicles, business uses, documents, art studios or even band practices. These alternatives offer great opportunities for marketing and higher rates, and their popularity has surged in urban and rural markets.

As more companies go paperless, document storage and shredding might become a less popular niche. But with the ever-increasing cost of space and America’s rapidly growing cities, RV, boat and vehicle storage isn’t going anywhere. Visitors to recreation areas like national and state parks have more than doubled in the last five years as people look to “unplug” from their screen-filled, hectic lives.

Tomorrow’s generation of renters are mobile-first, and they’ll surely expect online conveniences such as high-tech security tools, instant access via apps and storage-to-home delivery services. When thinking about the long-term benefits of specialty storage, consider today’s shifting consumer focus toward online, mobile technology. With easy-to-use self-service tools, you’ll be able to easily cater to today’s renters.

Why Does It Work?

Let’s get macro-economic for a moment to understand why the specialty-storage business model works. Today’s consumers are used to the traditional self-storage model, especially Baby Boomers, who grew up with self-storage and are experienced renters. Boomers are 80-million strong and hold more than 70 percent of the nation’s disposable income in their pockets. This storage-savvy group is the ideal market for your specialty offerings. They’ve invested a lot of time and money in their stuff, and they’re willing to pay more for added security, convenience and amenities.

In fact, renters of all ages want the best security for their high-end stuff, and they want to access it 24/7, 365 days a year. Convenient features such as extended access hours and free Wi-Fi are huge selling points. Extended hours are especially important for tenants looking to store RVs or boats. They want to enter your facility early on a Friday morning, take out their vehicle for a long weekend of fishing or camping, and bring it back late Sunday night.

Renters love unexpected amenities that make your storage property a one-stop-shop for their needs. For example, if that same renter who stores his boat with you can also get it detailed at your facility and prepped for winter storage at the end of the season, that’s another level of convenience that makes his decision to store with you an easy one.

It’s clear why renters are choosing specialty storage, but what’s the benefit for facility operators? When you cater to these market niches, you’re able to charge a premium for the space and increase revenue in a big way. You can boost profit by meeting the needs of people who are actively looking for a certain type of solution. In addition, users of specialty storage typically rent longer.

There’s also the benefit of hyper-focused and hyper-local marketing. With specialty storage, brands are cutting through the noise of their competition online and standing out in search results. For many, it’s as simple as working with local wineries, or offering information on the nearest national parks, lakes and rivers on their facility website.

How to Get Started

If you’re ready to jump in, you’ll need to conduct thorough market research to find out what will sell in your area. When it comes to offering specialty storage, location is everything. For example, an underground wine-storage club might not be profitable in rural South Dakota, but it would surely be popular in Portand, Ore. If you’re near a large recreational area, you’re in prime real estate for RV and boat storage.

Once you’ve developed a business plan, it’s time to get busy with Web marketing. It’s easy to target customers for specialty storage using keywords such as “boat storage near Lake Madison” or “wine collector’s club in Seattle.” Work with a marketing team to fine-tune your target strategy, improve your search engine optimization and reach the renters who are looking for certain types of storage in your area.

With all the options renters have today, it takes a unique business model to stand out among competitors. Niche storage is a great way for facility operators to get noticed online and develop new relationships in their communities. If you’re looking to build a new facility or renovate an existing property, it’s the perfect time to research, analyze and explore the opportunities for specialty storage in your market. By adding premium storage space, you can boost revenue and bring in more rentals for years to come.

Jana Haecherl is a marketing-content writer for storEDGE, which offers a comprehensive suite of technology solutions designed specifically for the self-storage industry. As a graduate of South Dakota State University with a master’s degree in mass communication, she enjoys bringing technology, Web marketing, and industry news and tips to self-storage owners and managers. For more information, call 913.954.4110; visit www.storedge.com. 

In today’s digital-focused world, a good website is the foundation for any thriving self-storage business. It can help you with facility branding, marketing, advertising and sales. It’s the platform that lets the world know who your company is and what it has to offer. Today’s competitive environment makes it essential to have a website capable of guiding current and prospective customers toward your facilities.

For many consumers, your website will set their first impressions of your business. This can either entice them to visit you or drive them toward a competitor. People widely rely on the Internet to make their spending decisions, and there’s a direct correlation between your online presence and bottom line. You stand a far greater chance of having a business that flourishes if you have a well-designed website geared for success. Here are some tips for creating and maintaining one.

Professional vs. DIY

The only necessary steps to creating a website are choosing a template on a content-management system (CMS), filling in your information and publishing, right? If only it was that easy!

Web developers today are challenged to build for success while providing an exclusive design. Serious thought and creative work are required to develop a sleek, polished and prosperous website. This isn’t to say platforms such as WordPress aren’t useful. A CMS can be an excellent way to develop a framework, but Web design and maintenance require a massive time commitment. A high-performing site requires certain skills, so it’s often best to hire a digital marketing agency to do the work for you.

Try not to think of it as investing in a single product. Professional expertise will likely drive more revenue your way. The investment can also open your schedule, allowing you to focus on facility operation and expansion. You’ll find the cost is well worth the results.

Creation Checklist

There are certain website components that should be included on your “must-have” checklist. Security, user-friendliness, design and content are all elements that require consideration. The items below should be top-of-mind before constructing your website.

SSL certificate. A secure sockets layer (SSL) certificate is crucial for website security. It allows site visitors to surf, make reservations and share personal information with the guarantee that the platform is safe. An SSL site displays a lock symbol to the left of the URL on the user’s Web browser. In many cases, consumers will resist visiting websites that aren’t secure, potentially driving away revenue opportunities and hurting your place in search-engine rankings.

ADA compliance. In connection to the Americans with Disabilities Act (ADA), the Department of Justice (DOJ) determined guidelines for “public accommodation” that must be met to remain in compliance with the law. An ADA-compliant website allows users with disabilities to fully access the site’s components. Meeting these guidelines covers the DOJ’s requirements for businesses and will likely increase your audience.

Responsive design. Websites with responsive design are optimized to automatically adjust to the screen size of the device being used to view the site, including PC desktops, tablets and mobile phones. According to Statistica, 75.1 percent of U.S. Internet traffic is accessed via mobile phones. A website that works properly on mobile devices is a critical business tool that will allow you to effectively reach the majority of Internet users.

Sleek, clean design. A cluttered website can turn people away faster than you’d think. A clean, appealing look is essential to inviting and enticing users to stick around and explore. Stay consistent with color palette, font types and content organization to keep your audience engaged.

Appropriate content. An informative summary of your business mission and the services you provide are crucial content components. Your site should also include your mailing address and contact information, a Google map, high-quality facility photos, and descriptions of all the products and services you offer. Other pieces, such as a blog, can serve more than one purpose. They not only offer useful information, they increase the website’s visibility through industry-related keywords. Relevant, fresh content is a best practice for search engine optimization (SEO), encouraging Google’s algorithm to push your website’s ranking higher in search results.

Social media integration. You can increase your online presence by providing links on every page of your website to your business pages on LinkedIn, Twitter, Facebook, Instagram and other social media. Any business that plans to excel should be on a variety of platforms. Integrating them with your website provides an easy yet powerful way to help your organic search rankings and build brand awareness. It also allows you to connect with your local community, so it can be fantastic promotional tool.

Maintain Your Presence

Website creation is only half the work. A cutting-edge site is consistently maintained and improved. Strategies and tools such as SEO, social media, pay-per-click ads, customer reviews and blogs can carry your website to an advanced level. While design and content are the foundation, the quality and quantity of your traffic is what truly matters. The following will add to your website’s capabilities and assist in revenue generation.

SEO. The importance of SEO, which is about guiding the most relevant audience to your site and increasing volume, is commonly underestimated. According to digital-marketing company Bright Local, 76 percent of consumers perform local searches to find nearby businesses, and 26 percent of those result in purchases. A local search on Google is a common deciding factor for many consumers. The best SEO practices will work with Google’s algorithms and increase the chances that your website appears in organic and local searches.

Social media. Again, your business should make use of social media. Enhance your presence by posting regularly and including the URL to your website in each post. This will increase your follower base and build brand awareness. Linking to your website, engaging with community members and providing useful information on each post should result in increased website traffic. The importance of maintaining an active, engaging business presence on social becomes more critical each year. The benefits can be remarkable.

Pay-per-click (PPC) ads. A PPC ad is a highly effective promotional tool provided by Google. It allows you to target a specific population and fitting within a chosen budget. While organic and local search rankings can take time to increase, PPC ads can drive traffic to your page and start to generate sales immediately. There are many specialists in this field who can help increase the chances of ad success. The instant gratification PPC offers can make this investment highly beneficial.

Customer reviews. Embedding a customer-review system on your website deepens your business-consumer relationship while increasing your local and organic search rankings. Typically, such a system allows clients to automatically write a review and send it directly to one or more of the popular platforms such as Yelp, Facebook and Google. Allowing customers to leave reviews provides another opportunity for them to visit your website.

Blogs. Websites that excel typically have a blog with interesting, fresh content. Blogs enable alternative keywords to show up in related searches, improving your website rankings. This will boost your SEO and keep current and potential tenants engaged with your site. The self-storage industry is evolving rapidly, which means there’s a plethora of unique information you can share to keep your audience fully engaged. A blog allows you to get creative while providing virtual interaction with tenants and prospects.

Whether you’re designing a website or working to improve results, Web development can feel daunting. The above should provide a great place to begin your journey or keep you focused on what’s most important. By continually improving your website to perform well within an ever-evolving digital world, you’ll position your business to thrive. Take advantage of these digital-marketing techniques to drive your self-storage operation to its pinnacle.

Sarah Baker is marketing manager at The Storage Group, an interactive, digital-marketing agency offering services to meet the needs of self-storage operators. The company's offerings include local-listing management, mobile websites, online rentals, pay-per-click advertising, search engine optimization, social media marketing and website development. For more information, call 407.392.2328; visit www.storageinternetmarketing.com.