Every self-storage owner should be concerned about site security. After all, break-ins can be costly to the property and its tenants. However, being knowledgeable about options can be daunting, with options and costs varying considerably. To facilitate the process, let’s look at key considerations for your security investment, particularly in relation to your facility perimeter.

An Overview

Any time you leave your storage property unattended, everything inside is at risk from thieves including the storage units, vehicles, raw materials and equipment, and even your buildings. It’s wise to do everything you can to protect the considerable investment your facility represents. A security system can help in these key ways:

• Alarms and other components act as a deterrent to theft.
• Security serves as a marketing tool to attract customers.
• In the event of a burglary, it can scare away perpetrators and help law enforcement catch suspects and even recover stolen goods.
• It may help lower your insurance premium.

The main purpose of a security system is to detect, deter and delay. Modern perimeter systems include several components and provide multiple layers of protection, including an outer layer, such as a fence or other physical barrier, and detection capability, such as fence sensors.

A Word on Cameras

Too many self-storage owners rely on cameras to act as their security system, but these only offer only a partial solution, as they’re reactive, not proactive. Plus, they usually don’t cover the fence line. Even when they do, they often can’t see everything due to vegetation, moving vehicles or weather. Remember, in most cases, a camera works just like the human eye; if you can’t see through a blockage, a camera likely can’t either.

Instead, think of cameras as a forensic system. They’ll record video of someone who breaks into your facility, but they won’t prevent the crime or alert you in real time. Yes, there are systems with video analytics or motion detection, but they typically don’t perform well in outdoor conditions. They also tend to issue a lot of false alarms, unless they’re very sophisticated (read: expensive) or you’re paying a monthly fee to a monitoring company that watches for incidents in real time and alerts the authorities.

Establishing Your Perimeter

It’s important to mention the obvious: If you don’t have a physical barrier to stop people from entering your self-storage property, this should be your first move. A strong perimeter is your most basic measure to stop crime.

Use fencing designed for security. Some barriers are made to be visually appealing but lack in deterrence. The best way to transform a “stupid” fence into a “smart” one is to add a way to detect if someone is cutting, climbing or lifting it. This is usually accomplished with an alarm system, infrared sensors or electric fence.

Fence Alarms

A fence alarm is a sensor, usually a cable attached to the fence. Such a system used to be considered expensive, complicated, and only for government or military use, but there are now commercial-grade systems that are cost-effective and easy to install. Likely, a local installer can perform the work for you.

Fence sensors provide real-time monitoring capability to not only alert a self-storage operator of intrusion but prevent burglaries, since they can trigger sirens, strobe lights and other measures to scare away perpetrators. These intrusion-detection systems cost about $5 to $8 per foot for the equipment before installation.

Infrared Sensors

These are also called motion, line-of-sight or “laser” sensors. Though similar to the sensors you may use inside your home or office, they’re designed for outdoors. Usually, there are two sensors aligned with one another to form a “gate.” If someone breaks the beam, the sensors trigger an alarm. Available in wire or wireless versions, sensors are typically installed inside the perimeter and require 3 to 10 feet of clear path around the fence line to create a “no-go zone.”

Though this technology may sound like a great way to protect your facility, it has drawbacks. The main issue is false alarms, which can be triggered when something disrupts sensor alignment. This can be caused when a physical object (vegetation, vehicles, dirt, animals, etc.) blocks the view or direct sunlight blinds the sensors. Even extreme temperature can affect detection distance and capability, as these are based on an infrared heat signature. Sensors also tend to require frequent maintenance. They’re usually cheap, China-made equipment that can’t withstand harsh environments and fail after a few years at best.

Electric Fencing

This solution can be built from multiple parallel wires instead of standard fencing, or it can be mounted in front of an existing fence. It essentially creates two barriers whose collective purpose is to electrocute anyone who touches it. Most systems also offer detection capability, in which an alarm sounds when someone touches the fence. These are either purchased or leased, with the monthly cost ranging from $900 to $1,500, depending on the size of your property.

Though an electric fence may sound like a good way to exact revenge on criminal who intends harm, anyone wearing gloves or who throws a blanket over the wires can bypass the system. The nature of their construction also will not do much to slow trespassers.

When it comes to the security of your self-storage property, you owe it to yourself to investigate all available options. Few facilities need all the bells and whistles, and most security suppliers offer custom packages that allow you to hand-pick the options you value most. When making a buying decision, keep in mind the overall goal of the system and how its detection of and response to a criminal incident should prevent damage to your business.

Dori Ribak is vice president of RBtec Perimeter Security Systems, a manufacturer of fence protection, perimeter-security solutions and products. He’s been a physical-security professional for 11 years, selling fence-alarm systems to thousands of commercial sites in North America. For more information, e-mail [email protected]; visit www.rbtec.com.

The self-storage industry has been experiencing a construction boom over the past few years, with many new projects being built all over the county. The thing is, those who are new to the industry have a lot of misconceptions about the development process. Let’s talk about what they are and what you should really expect.

Misconception 1: I’ll Fill It in 12 to 18 Months

There are always factors to consider when calculating demand for a new storage facility, and it can be challenging to predict how many months it’ll take for the property to lease up. The 12- to 18-month timeline is almost unheard of with a facility of 50,000-plus square feet. In this case, I advise you to prepare financially for it to take three or four years to reach 85 percent occupancy.

Misconception 2: I’ll Build Small, So It’ll Cost Less

It’s just not as cost-effective to build a self-storage facility of less than 40,000 square feet. This is because of items such as storm-water management, property management and other fixed operating expenses. A small facility just can’t deliver acceptable returns.

One exception is if the site will be built in phases and the total buildout will eventually exceed 40,000 square feet. Another would be if it’s a conversion of an existing building that was purchased at a reasonable cost, or if the site is in a high-rental-rate market with a low cost of acquisition.

Misconception 3: I Can Build Anywhere, Because I Can Just Market It Online

It’s a nice thought, but you still can’t hide your property at the back of an industrial park, in a residential neighborhood or on a tertiary road. If you do, lease-up will be notably slower, regardless of marketing. Remember, there’s only so much you can spend on digital marketing before it becomes wasteful.

One of the most powerful tools you can use to promote the business is visibility. Build along a main road with storage doors visible to everyone, not on a weak, flag-shaped site or one that’s obscured from the street. Large signage, no matter how catchy or attractive, won’t compensate for not having those storage doors visible when a potential customer drives by at 45 miles per hour.

Misconception 4: I Already Own the Land, So It’ll Be Cheaper

Ask yourself, “Would I buy this parcel from somebody else to develop self-storage?” Just because you own a piece of land doesn’t mean it’ll work. If there’s no demand in the market and it takes you five years to lease up, you’re losing money and could potentially go bankrupt due to costs. That may be rare, but the more important thing to realize is you might be missing out on more lucrative opportunities to sell the land for another use and purchase a site to build your self-storage facility where demand warrants.

Misconception 5: Housing Units Were Built Nearby, So It Makes Sense

Just because a new housing development is being built doesn’t mean that a self-storage facility is going to work. There are several reasons it’s best to ignore that development in demand calculations. Subdivision development is historically risky, and it can take years to fill a neighborhood with homes or home buyers. Even if that development fills up quickly, for every 250 homes, there’s only 4,000 square feet of storage demand. Considering that most storage sites start at 50,000 square feet (to be economically sustainable), you should be cautious of including demand from housing units.

Misconception 6: I’ve Developed XYZ, So Storage Will Be Easy

Commercial real estate isn’t all the same, and that’s especially true for self-storage. It’s unique because it’s also an operating business. To simplify operation, you need to consider many things, such as site design. This might include gates at the end of driveways to push out snow from the drive aisles, or large windows that showcase interior units facing the main road. Even if you’ve built offices or high-density housing, you need to invest in general contractors, architects and suppliers who specialize in self-storage and have the portfolio to back it up.

Misconception 7: Self-Storage Doesn’t Work in Rural Areas

That isn’t necessarily true. You should cast a wider net when looking to develop outside of your area. Many storage properties are built by investors who live close by because they know the community and understand the opportunity of their personal networks. Rural areas can be successful if the site is on a heavily traveled road and has great visibility with the appropriate zoning. Many profitable facilities have been built in rural areas.

Misconception 7: The More Temperature-Controlled Space, the Better

Temperature-controlled is great, but though it’s been a dominant trend in new development over the last few years, it isn’t always better than standard drive-up units. It can make a lot of sense in urban areas, as it’s typically the best way to maximize square footage on a small piece of land. In suburban and rural areas, it’s added because operators can charge a 25 percent to 30 percent premium.

As enticing as that might sound, I recommend you stay around 35 percent of your total square footage for temperature-controlled units. Some customers want the simplicity of drive-up access and don’t want to pay that extra. Plus, if you can’t fill those units, you end up renting them at a lower rate and your HVAC expenses eat up your profit. Any feasibility study you’ve completed for your site should include a unit-mix suggestion that addresses the demand in the market (if any) for temperature-controlled storage.

Misconception 9: I Don’t Need a Feasibility Study

It can be tempting to bypass a feasibility study if you’re developing a self-storage facility in your hometown, because you feel you know it better than anyone else—the people who’ll become your tenants, their price sensitivity and the general zoning laws in the market. However, developing without a study is risky. There can be any number of pitfalls you may not see.

Calculating demand for a storage facility is difficult and best done by a consultant who has reviewed the lease-up results for many facilities and can evaluate your market dispassionately. Beyond the risk-mitigation element, a qualified consultant can recommend modifications to your site that may expedite lease-up, increase rates per square foot and lower costs. The small price you pay for a feasibility study will certainly outweigh the expense.

While building self-storage might seem simple, it’s actually complex. Before diving in, understand all facets of the development process so you’re not caught unaware and unprepared.

Kevin Bledsoe is vice president of brokerage for Investment Real Estate LLC (IRE), which brokers the sale of self-storage facilities in the Northeast and mid-Atlantic states. He’s responsible for listings, sales, buyer representation, due diligence, financial analysis and feasibility studies in Delaware, New Jersey and Pennsylvania. He holds a leadership position and plays a vital role in the firm’s strategic planning, accountability and goal-setting, while supervising and mentoring the team of brokerage advisors. To reach him, call 717.779.0804; e-mail [email protected].

Sabattus Street Self Storage of Lewiston, Maine, is hosting a bottle drive on July 13 to raise funds for Tommy’s Feral Feline Friends, a no-kill shelter for untamed cats. Donations of bottles and money can be made 8 a.m. to 5 p.m. at 1434 Sabattus St. They can also be mailed to Tommy’s at P.O. Box 274, Greene, ME, 04236.

Tommy’s typically holds a bottle drive each year in conjunction with its annual yard sale. However, lack of funding has forced the organization to host an emergency event, according to the source.

Founded in 1987 by Norm Blais and his partner, Rose Murphy, Tommy’s is named after a feral cat Murphy rescued. Upon discovering the feline sick and dying on the ground, she wrapped him in her jacket and took him to a vet, where he was given a 50/50 chance of survival. Under her care, he recovered and even lived with the pair for a time.

One winter night, Tommy went outside, where he played in the snow and disappeared into the dark. In their search to find him, Blais and Murphy began caring for other feral cats. The partners now build shelters, provide food and water, administer vaccinations and medical treatment, and oversee spaying and neutering. They also offer foster care with rehabilitation and attempt to place the cats with adoptive families after helping them learn socialization and trust.

Sabattus Street Self Storage is part of Midcoast Properties LLC, which operates five additional locations in Maine. The other sites are Boothbay Self Storage in Boothbay, Halls Self Storage in Gloucester and Gray, Livermore Self Storage in Livermore, and Wiscasset Self Storage in Wiscasset.

Sources:
Sun Journal, Bottle Drive to Be Held For Tommy’s Feral Felines
Tommy’s Feral Feline Friends, Website

 

Self Storage India has opened a second location as part of its countrywide expansion program. The new facility at New Pearl Academy, Sector 59, in Noida, Uttar Pradesh, has increased the company’s National Capital Region capacity by more than 300 percent, according to a press release.

The Noida facility is across from Pearl Academy, a fashion and design college, and near the Noida City Centre train station. It offers climate-controlled units in seven sizes, from 50 to 220 square feet.

Self Storage India plans to open new facilities in Bangalore, Chennai, Hyderabad, Kochi, Mumbai and Vadodara, the release stated.

Founded in 2013 by Dr. Manjali Khosla, Self Storage India is a subsidiary of Dynamic Group, which operates in several industries, including construction, human resources and software development. It’s original, flagship facility is in Gurugram, Haryana, India.

Source:
The Week, Self Storage India Continues Expansion With its New Noida Facility
 

Online self-storage auction platform SelfStorageAuction.com has partnered with The Storage Group (TSG), a digital-marketing and software provider serving the self-storage industry, to facilitate online auctions for TSG users. The SelfStorageAuction platform will be integrated with TSG’s standard, custom and “Pinnacle” Web-design offerings, according to a press release.

“Marketing needs in this industry have become a necessity,” said Jim Grant, CEO of SelfStorageAuction, which offers an eBay-style format that allows facility operators to post pictures and videos of for-sale units and their contents. Buyers can search and place bids via desktop or mobile devices.

“We’re excited to partner with SelfStorageAuction,” said Steve Lucas, CEO of TSG. “It’s clear that facility owners are always looking for simple and efficient ways to advertise their live-auction units. Providing them with SelfStorageAuction gives them the opportunity to do that. This partnership is a win-win.”

SelfStorageAuction.com provides information about online and live onsite auctions at participating self-storage facilities in Australia, Canada, New Zealand, the United Kingdom and the United States. It was launched in February 2017 by Grant.

Based in Altamonte Springs, Fla., TSG provides online tools and marketing solutions including local-listing management, mobile websites, online rentals, pay-per-click advertising, search engine optimization, social media marketing and website development.

Kure It Cancer Research, a nonprofit founded in 2007 by self-storage operator Barry Hoeven, has named two new board members, according to a press release. Christopher Doherty is a financial advisor for Merrill Lynch, while Marianne Nahin is a real estate sales producer in the Corona del Mar/Newport Beach, Calif., market.

Doherty grew up in Orange County, Calif., and earned a master’s degree from the University of Southern California. He and his family are active with several community charities, the release stated.

Nahin works alongside her husband, Jim Nahin, and son, Andrew Nahin, at their real estate firm, The Nahin Group. She’s active in several philanthropic organizations including the Hoag Family Cancer Institute and Hoag Hospital Foundation.

“We are very excited to have Christopher and Marianne join our board,” said Todd Perry, chairman of the board for Kure It. “We look forward to working with them in our pursuit of raising money for cancer research.”

Hoeven, founder of Westport Properties Inc./US Storage Centers, which owns or manages approximately 130 self-storage facilities nationwide, launched Kure It after being diagnosed with kidney cancer in 1998. In 2007, he partnered with cancer center City of Hope to create the Kure It! Kidney Cancer Research Fund, which raised more than $400,000. Kure It Inc., which still raises money for kidney cancer and other underfunded malignancies, was established as an independent 501(c)(3) nonprofit in 2010 to grant funds to cancer researchers investigating progressive treatments and cures. To date, the nonprofit has raised $8 million, according to its website. Hoeven passed away in 2016.

 

Cardiff Self Storage, a container-based self-storage facility in Cardiff, Wales, has changed its name to blue self storage with the intent to expand. The business is planning to open a second location in Llanishen, a district and community in North Cardiff, in September. It also plans to develop new sites outside of Wales in 2020, according to the source.

“Owing to the ever-increasing demand for affordable self-storage, especially from local businesses, we’re incredibly excited to be changing our name to blue self-storage to accommodate the demand and facilitate our upcoming national expansion,” said Chris Bryan, commercial manager.

The company opened its facility in the Wentloog Corporate Park in 1988. In addition container storage, it offers vehicle storage, unit racking and packing materials. It also leases yard space for heavy equipment. The site was the first in South Wales to be recognized by the Caravan Storage Site Owners’ Association for the highest recognized levels of storage for caravans, boats and motorhomes, according to the blue website.

Source:
Insider Media, Self-Storage Company Renamed Ahead of Expansion
blue self storage, Website
Caravan Storage Site Owners’ Association, Website

Life Storage Inc., a self-storage real estate investment trust and third-party management company, has sold 32 facilities to an affiliate of The Inland Real Estate Group of Cos. Inc., a commercial real estate and finance firm. The properties are in Louisiana, Mississippi, North Carolina, South Carolina and Texas. Life Storage expects to continue managing the properties, pending the finalization of a long-term agreement, according to a press release.

“We are pleased to complete the sale of these mature properties and look forward to growing our management relationship with Inland as they continue to expand their self-storage portfolio,” said Joe Saffire, CEO of Life Storage.

“We are thrilled to form this strategic alliance with one of the largest publicly traded REITs in the self-storage industry,” added Mark Cosenza, senior vice president of Inland Real Estate Acquisitions LLC, the group affiliate that handled the transaction. The company identifies potential acquisition opportunities, negotiates transactions and purchases real estate assets on behalf of larger Inland group.

Based in Buffalo, N.Y., Life Storage operates more than 775 self-storage facilities in 28 states and Ontario, Canada. Its portfolio of owned and managed facilities comprises more than 55 million square feet.

Source:
BusinessWire, Life Storage Inc. Announces Sale of 32 Self Storage Properties to an Inland Affiliate

Operators of independent self-storage facilities often cringe when they hear “rent increase.” Let’s face it: When you run a smaller business, you likely know many of your tenants personally and have built a relationship with them over the years. You know all about their families, struggles and successes because you talk to them when they visit. This can make it hard for you to even consider raising their rates.

Well, it shouldn’t. You need to get comfortable with the concept of rent increases, because you could otherwise be leaving a lot of money on the table and negatively impacting your facility value.

Remember, a self-storage property is an investment. Any savvy investor needs to maximize the return on that investment when it comes time to sell. If you purchased your site at an 8 percent capitalization (cap) rate, then every $1,000 in net operating income (NOI) is worth $12,500 in value. Just thinking in these terms should make it a little easier to start raising those rental rates now. Here are a few additional considerations and strategies to ponder.

Consider Your Costs

Think about your operating expenses, such as utilities. Have the prices stayed the same since you purchased or opened your facility? What about your property taxes? Have you made any sort of capital improvements such as new lights, unit doors or pavement?

All these goods and services have costs, and they inevitably go up every year. This is the reality of running a business. At the very least, you need to maintain your NOI year over year. The easiest way to do this is to share rising expenses with your tenants by implementing rent increases.

Create Churn

You also need to create churn in your tenant base. What does that mean and why do you need to do it? Churn is customer turnover. While we’re always looking to acquire new customers, it can be good for some to leave, too. It opens opportunities to re-rent units to new tenants at a higher price.

Some self-storage operators are 100 percent occupied and wear that as a badge of honor. However, this is one of the worst inhibitors of revenue in the self-storage industry, especially if you’re not using a rate-increase plan for existing tenants. If you’re fully occupied, your income remains flat. You instead need to follow occupancy-based pricing strategies, which will stop you from leaving a lot of money on the table with that stagnant tenant movement.

Catch Up to Street Rates

Finally, you need to aggressively manage your rates and raise them as demand increases. For example, let’s say a customer rented a 10-by-10 for $100 per month while that unit size and type was 85 percent occupied. A few months later, that unit type is at 95 percent. Demand is strong, so raise the street rate to $125. Of course, that means the tenant, who moved in at the $100 rate is paying $25 less than one who moves in today. Time to raise his rent at least part way.

As an independent self-storage operator, you need to set standards for rate increases. Many larger operators have a strategy to raise them at six months after move-in, and then every nine months after that. Sometimes they also raise them at the one-year mark. Take some time to figure out your strategy, then use your management software to automate the process and take the emotion out the equation. By implementing a rate-increase plan for your existing tenant base, you’ll be able to increase your property’s value.

As a brokerage advisor for Investment Real Estate LLC (IRE), Justin Quinto is responsible for listings, sales, buyer representation, due diligence, financial analysis and feasibility studies in Connecticut, Massachusetts and New York. IRE brokers the sale of self-storage facilities in the Northeast and mid-Atlantic. For more information, call 860.936.1117; e-mail [email protected]; visit www.irellc.com.