Middlesex, N.J.-based Lackland Self Storage has been nominated for the New Jersey Family Business of the Year Award. The award is given in recognition of the significant role a family business plays in the states economy and its importance and vital contribution to state and local business communities.

Sponsors of the honor include New Jersey Monthly magazine, the Rothman Institute of Entrepreneurial Studies at Fairleigh Dickinson University and PNC Financial Services Group. Co-sponsors include Horizon Blue Cross Blue Shield, PSE&G (Public Service Enterprise Group), McCarter & English LLP and PricewaterhouseCoopers.

Every year, Lackland Self Storage has its management teams select a local charity or organization with which to participate, such as First Aid Squads, fire departments, Little League baseball, Pop Warner Little Scholars or various school programs. The goal of this 26-year-old, New Jersey-based family business is to provide the best customer service while giving back to the local communities in which its facilities are located.

Established in 1977, Lackland opened New Jerseys first self-storage facilty in the city of Piscataway. Industry pioneers and twin brothers David and Frederick Lackland had considerable experience in construction of residential and commercial buildings, which made the construction of self-storage a natural extension of their business. With 13 locations in 1994, Dave and Fred divided their portfolio of stores. Fred retained seven of the original 13 locations, and Storage Assets LLC was born. Since that time, Storage Assets, trading as Lackland Self Storage, has turned those original facilities into 17 locations ranging from as far north as Upper Saddle River to as far south as Atlantic City.

Lackland Self Storage has recognized changes in the marketplace and realizes customers continuously demand more from their storage service provider. The company uses state-of-the-art technology to enhance security and accessibility, while building eye-catching facilities (including several three-story locations) that are aesthetically appealing. Lackland has also modernized its storage offices to include packaging-supply stores for a one-stop shopping experience for customers on the move. Its storage consultants are trained to share the companys knowledge of self-storage while offering the best in customer service.

In addition to offering a convenient, high-tech website where customers can access everything from frequently asked questions about self-storage to a listing and map of locations, Lackland is the first self-storage provider in the state to offer a website in Spanish (www.lacklandesp.com) for New Jerseys large Hispanic community. Since the beginning, Lackland Self Storage has led the industry in quality, introducing enhanced security features and innovations to the industry over the last quarter-century of service.

For more information, call 732.627.0616 or visit www.lacklandselfstorage.com. 

I just completed a cross-country trip in my RV, from Nevada to New Jersey, along routes 70 and 78. Along the way, I dropped in on more than 20 storage facilities. The difference in the quality of facilities was amazing. There were some with terrific employees; though Im sad to report that was very infrequent. Most of the time, I found managers who were just getting by, serving as mere caretakers for facilities sorely in need of leadership.

Customer service really is a marketing toolone of many you have to increase occupancy rates and revenue. Here are some ideas to make the most of it.

Hire Right

Too often, in an attempt to save money, storage owners hire lessthan- quality managers to work their facilities. This is the wrong tactic. A good manager is worth his weight in gold. Not only will he generate more rentals, he will be more creative. Heres an example of how a poor manager can be a detriment to your business:

I went searching for a place to park my RV in the northern New Jersey area. I got on the phone with a number of places. One person I spoke to told me a space would be $140, but the price was negotiable. I said, OK, lets negotiate. He said he was not the person who could negotiate the price. I asked if he was the manager and he said he was, but pricing was handled by someone elsesome elusive figure I couldnt seem to get to on the phone.

The manager said he would call me back on my cell phone. He didnt. When I called him back, he said Mr. Big had determined the price should be $125. Its not how I usually negotiate, but I was getting desperate, as I was only an hour away. I then asked for directions to the facility, but the manager didnt have a cluehe didnt live in the area and couldnt direct me. Who could I ask? Mr. Big, but he wasnt aroundof course.

I hung up and found the city where the facility was located on a map. At about 10 miles out, I called again. I told the manager I was getting close and wanted to make sure he would be there when I arrived. He then informed me he wasnt sure if he had a space available. I asked how he could quote me a price on the phone, knowing Im on the road headed his direction, and then not have a space? I was told Mr. Big makes those decisions. Where was Mr. Big? No where to be found.

Imagine my frustration at having my time and energy wasted. Do you want your prospects to have similar disappointments? This is where an experienced manager is key. Will it cost you more to hire a good manager? Absolutely. But, whoever hired the person I dealt with was losing revenue at an alarming rate. Was it worth it for him? I think not.

Grant Authority

Whoever handles the phone at a facility needs to be able to make decisions. In my travels, I found at least 50 percent of the facilities I visited had employees with virtually no decision-making authority. This is poor business practice.

I suspect owners dont want their employees making mistakes. But if you hire correctly, youll have people capable of making sound decisions so you need to let them. Will they occasionally make poor choices? Yes. If they are competent, however, they will learn from these mistakes. Many owners want to micro-manage their facilities. All this does is frustrate a good manager and completely frustrate customers who have to wait for someone to be called or contacted before they can get an answer.

How much authority should you grant? I know numerous facility owners who can go on vacation for three weeks and not call once to check up on their baby. Isnt this the way you want to run a business? I would certainly hope so!

Hire good people and give them the authority to run the business like its their own. If you set up your compensation systems properly, youll attract employees who can make good decisions. As you get to know them, grant them more powerand spend more time on the golf course like you should.

Be Flexible

Wouldnt it be great if there was a rule book including every possible scenario one could encounter as a business operator, complete with proper responses? But this is impossible. In the storage business particularly, too many situations arise to which you have to respond with something outside the realm of plain vanilla. Sure, you can have guidelines to follow, but be willing to bend them to accommodate individual situations.

Heres an example from my recent RV trip. At one point, unable to find a location to park my vehicle, I pulled into one of a well-known chain of facilities. It did not have designated RV parking, but I asked to park the RV in the customer-parking area overnight. I explained my situation to the manager and he listened intently, understanding my dilemma.

He then said, OK, Ill let you park here. What do you think is a fair price? He did two things right at once. First, he was finding a way to generate revenue where there was none. Second, he asked me what the price should be. Naturally, I was indebted to him for his help and probably willing to pay more than he would ask. We agreed on $20 for the night. I ended up staying two nights, and the facility made $40 with no effort at all.

Not every situation falls neatly into categories you want or expect. Be ready to find a way to generate revenue in anyway possibleas long as its legal and ethical. For example, lets say someone wants a large unit and you dont have one available. Why not look for two smaller units next to each other and give him a package price? Its this kind of creative thinking that will allow you to squeeze every possible dollar out of your facility.

Go the Extra Mile

On my trip, I stopped at a facility in Missouri. My dogs needed some water, and I walked in and spoke to the manager. She was amazing. Not only did she have water, she even kept some dog treats around just for this kind of occasion. She didnt even own dogs herself.

If a situation arises, there is at least a possibility it could be repeated in the future, so learn from these occurences. Always have an answer for customers or prospects when a need arises. One manager I know keeps a set of jumper cables on hand because once, a few years ago, a customer needed them. He wants to be prepared for any eventuality.

Is it tough to get managers to do these kinds of things? Not if you hire right. Serving customers and prospects in this manner will generate a loyal following and longer lengths of stay.

Storage owners frequently view customer service as a necessary evil; but its much more than that. If used correctly, it can help you generate a lot more revenue. Youll get more customers, keep them longer, and generate a lot more referrals in the process.

Fred Gleeck is a self-storage profit-maximization consultant who helps owners/operators during all phases of the business, from feasibility studies to creating an ongoing marketing plan. Mr. Gleeck is the author of Secrets of Self Storage Marketing SuccessRevealed! as well as the producer of professional training videos on self-storage marketing. To receive a copy of his Seven-Day Self-Storage Marketing Course and storage marketing tips, send an e-mail to [email protected]. For more information, call 800.FGLEECK; e-mail [email protected].

Not Created Equal

Not all buildings are created equal andit comes as no surpriseneither are contractors, materials and service providers. We could discuss the issue of quality here, but I think it more important to address the matter of ethics.

In 1996, Barbara J. Jackson and Dr. John D. Murphy Jr. of Colorado State University conducted a study to assess the perceptions of construction students regarding the ethics of their own industry. They surveyed 285 senior construction students from six universities, including Purdue, Texas A&M and California Polytechnic. The study focused on their responses to a series of basic ethical situations. Students were first asked to answer as they believe the typical construction person would respond and, second, to select the most ethical response.

For the purposes of the study, the typical construction person was defined as an individual with at least five years of construction experience in either a management or field position. The term ethical response referred to behavior that is not only legal but honest, honorable, fair, responsible, socially acceptable, etc. The results of the survey illustrated students perceived a significant difference between what is ethical and typical in the construction industry. (Interestingly, four out of 10 students indicated they had an immediate family member involved in the construction business, and more than 65 percent had more than 1.5 years of construction experience themselves.) Why does construction have such a bad rep? Why do the industrys own underlings assume ethical insufficiency on behalf of its professionals? More important, why do they desire to join the ranks of an industry they perceive to be ethically unsound?

Some of you reading this are builders. Others of you are operators who have had the distinct pleasure or exasperation of working with contractors and their subs. Many of you are investigating your very first project, wondering what disasters of development lay in wait in your storage enterprise. While this issue attempts to address construction topics to tantalize all audiences, the one thing is does not tackle is this sticky issue of ethics.

If you are a construction authority working in the self-storage business, you have a responsibility to the community you serve to employ practices and philosophies consistent with ethical decision-makingnot just so you look good, and not to compete in the marketplace. Buy into ethics because it improves your reputation, your product or service, your overall business, and the industry as a whole.

Participants of the above study believed some construction professionals would engage in shady practices because the competition is doing so, overlook someone elses wrongdoing if in the best interest of the company, give profits priority over safety, and lie to customers/clients to protect the companyamong other unscrupulous acts.

Dont allow these to be true of construction in self-storage. Buildings and the space they provide are our product. Whether youre choosing a building team, designing a site or pitching a zoning committee, let ethics be your guide. Remember, not equal can mean better.

Best wishes,

Teri L. Lanza
Editorial Director
[email protected]

One of the biggest decisions an owner faces when building a new site is whether to include an on-site managers apartment. Most experienced managers in the industry are used to working and living at their storage facilities. This arrangement affords them the convenience of housing and utilities and is generally included as part of their compensation. An owner gets the benefit of having someone residing at the facility in case of an emergency or other situation that requires after-hours attention. The sites tenants get a feeling of security when they know someone is living on site.

In recent years, there have been some changes to this situation. Some owners are electing not to build on-site managers quarters for one reason or another. There are pros and cons when considering building an apartment for your site manager.

Zoning and Cost

Zoning is probably the No. 1 reason an owner cant build an on-site apartment. Many urban areas zoning and code restrictions will not allow such an apartment due to water restrictions, lack of residential zoning, lack of space, etc.

Obviously, there will be an increase in construction costs when adding an apartment. These could outweigh the value of having an apartment in your area. In some locations, it is more cost-effective to purchase an existing single-family home or condominium rather than building an apartment onto your facility.

Also remember, when adding an apartment, you are not just dealing with the steel manufacturer or crew that erects the buildings, you are dealing with other trades people: plumbers, electricians, carpenters, cabinet workers, carpet installers, etc. These people have different crews and completion times, so coordination in dealing with them is a must.

Apartment Size

If you can build an on-site apartment, size will play an important role. I always ask an owner a couple of questions. First, would he live in the apartment he is proposing? Second, would his family be happy to reside there? If the answer to these questions is no, he needs to re-think the project.

The apartment should contain at least two good-sized bedrooms, preferably two bathrooms, and a nice kitchen with plenty of counter and cabinet space. If you have a second-story apartment, consider adding a balcony where the manager can sit outside and barbecue or sip his morning coffee. In a lower-level apartment, add a patio area for the same reasons.

I have seen apartments with a center island, tile countertop and window garden in the kitchen; a fireplace in the living room; and a sunken Jacuzzi tub in the master bath. If you are considering a top-of-the-line facility, why scrimp on the managers apartment? After all, the managers will run your multimillion- dollar investment. Dont you want to attract the best quality people you can?

Management

When considering whether to build an apartment, think about who will manage your facility. Most experienced managers live on site and prefer it that way. If you do not have an apartment, you will likely have to hire people from outside the industry and train them in the management of self-storage. These people should be local, have their own housing, and have a strong background in sales, marketing and management. You will have to pay a higher wage and probably hire several individuals.

Turnover could also be higher with off-site employees. Management of your site is just a job to these people, and if they get a better offer somewhere else, they will probably leave. With an on-site apartment, there appears to be more of pride of ownership. Not only do the managers work in the neighborhood, they live there, too. If they have children, you will most likely have a five- to seven-year commitment from them while their kids are in school. As parents, they will be more likely to get involved in the local community. Their wages could also be lower because you are providing housing.

Keep in mind, if you provide an on-site apartment, you should have a written lease agreement with your managers stating housing is provided and outlining the terms and conditions. Who pays for utilities? What can the manager use the apartment for? Who can reside in the apartment? What pets can they have? What happens once employment ends? How long do they have to vacate?

Alternatives

If zoning restrictions or construction costs prohibit you from building an on-site apartment, what alternatives do you have? Some owners might elect to purchase a single family home or condo in the area. Others rent a corporate apartment in a local complex and sublet it to the managers. The managers live there rent-free as long as they are employed by the company; once employment ends, they can elect to stay in the apartment and pay the current rental rate. The owner usually has the tax advantage of writing off the cost of the apartment, and neither the owner nor manager have to pay higher taxes in wages.

An owner might elect not to provide managers quarters at all. That owner must consider the cost of a higher turnover rate, training new staff, higher compensation packages, and possible marketing shortcomings at his sites. As with anything in life, there are advantages and disadvantages to each situation. Only you can decide which best suits your needs.

Pamela Alton is the owner of Mini-Management^®, a nationwide manager-placement service. Mini-Management also offers full-service and "operations only" facility management, training manuals, inspections and audits, feasibility studies, consulting and training seminars. For more information, call 800.646.4648.

In 1985, Mid-City Storage was simply an abandoned shoe factory in Cincinnati. By the end of the following year, this complex of approximately 140,000 square feet had been converted into artists studios and workshops, bulk storage, records storage and, more important, self-storage units. Inside the buildings were sprinkler systems, elevators and boilers. There was also a substantial amount of existing plumbing, electrical and wall systems that needed renovation, removal or replacement to convert the vacant space into a multipurpose self-storage destination.

Self-storage developer and visionary R.A. Hermes and his team had to rely on their experience in design and construction to plan the conversion. At that time, selfstorage was only a concept to many, and resources were few and far between. There were no pre-engineered partition systems, only a handful of feasibility experts, and many financers had the opinion that self-storage was speculative real estate. It took a little imagination and a lot of perseverance to overcome the challenges of a conversion. This article outlines some of the most important considerations for a conversion project.

A Sure Foundation

When undertaking a conversion, the primary focus should be on the overall structure of the building. You must have a sure foundation, including floors. Ideally, floor-load capacity needs to be 125 pounds per cubic foot; however, in one instance, we were able to overcome the building departments objections to converting a second-floor space where the floor load was only 85 pounds.

After thorough research, we discovered the loading capacity of moving trucks and shipping containers designed to move household goods do not exceed 10 pounds per square foot. The storage units were limited to 8 feet in height, meaning a total of 80 pounds per cubic foot. In addition, 20 percent to 25 percent of the floor area was hallway space and common area that is normally unused. It made sense to us that if the prospective tenants couldnt get their belongings on the road in a moving truck, they wouldnt be able to bring their goods into the building.

The building department was likewise convinced. With the condition we hang signs that read 85 Pounds Per Square Foot, Household-Goods Storage Only, they granted our building permit.

A Sound Roof

The cost of roof repair or replacement can be the largest unexpected cost of a conversion project. Whether the roof is built-up or rubber, if its close to 20 years old, youll want to consider complete replacement. Roof leaks can be extremely detrimental to a self-storage operation. It usually isnt a matter of if your roof will leak, its a matter of when. In a conversion, the roof is usually higher than the tops of the storage units, so you know immediately when you have a leak. Your tenants know as well, and even if no damage is caused to goods, it causes tenants to re-evaluate their need to store at your facility when they see water in buckets or hallways.

The most common replacement options for a flat commercial/industrial roof are EPDM rubber or another type of single-ply system. Another option gaining popularity is to replace the current roof with a metal- Galvalume one. The Galvalume process is similar to galvanizing, which is a zinc coating; but Galvalume is 80 percent zinc and 20 percent aluminum, thus having a superior rust-protection coating. A Galvalume roof can last up to 50 years.

What option is best for you? Determine the cost over the life of the roof. Add the cost of the repair or replacement to the cost of financing the work. Divide that number by the life (in years) of the option. Also consider the following: If the roof can be seen, will it improve the look of the facility? How will the new roof affect the resale price? How much is peace of mind, tenant longevity and good will worth?

A Good Layout

Next, consider the overall layout of the building(s). What about customers? How will they access the building? When will they require access? Where will they load or unload their belongings? What sections of the building will be climate-controlled? How do you monitor access? Try to keep units no farther than 100 feet from the nearest point of entrance. Larger units should be kept closest to the entrance of the building.

When working with an older building, handicap access may have to be installed. If you have an existing dock area, consider installing a ramp next to the dock to provide the handicap access. Handicap ramps are not allowed to be more than a 1-in-10 slope. Most loading docks allow for a tractor-trailer length. By doubling-back the ramp, you can use one dock area as the handicap access ramp.

When creating the rental office and choosing your security systems, keep in mind more than 60 percent of self-storage shoppers are women. Even though you may have taken an old warehouse building and turned the space into self-storage units, it shouldnt feel like a maze of units in a big old warehouse. Use white or battleship gray and paint everything, including the ceilings of the existing building.

To hide an unsightly ceiling, paint it black. To make this more effective, extend the black paint down the walls 1 to 3 feet. A final touch is to paint a bright band around the bottom of the black paint. This creates an illusion that prevents a person from looking up past the wall to the area above the bright band. Thus, the average eye does not notice the ceiling. Another option is to highlight the exposed ductwork, sprinkler system, conduit, etc., by painting bright colors to create a designer look. Be aware this option is a little tricky and more difficult to pull off.

A third option is to install a suspended ceiling. Be sure the suspended- ceiling system does not interfere with the sprinkler system. In some cases, you can facilitate drop out panels in your suspended system. If building code allows it, these panels can be installed below the sprinkler heads. In the case of fire or sprinkler- head activation, the ceiling panels drop out of the ceiling grid. Egg-crate panels are another option below sprinkler heads. These consist of open squares, available in different colors. They create a nice effect for high-profile areas and rental offices.

Comfortable Environment

It can make sense to facilitate the existing heating, ventilation and air-conditioning (HVAC) system to provide climate-controlled storage. However, the existing system may not have the most desirable control system. Weve seen some heating systems that run continuously from the time the system is turned on in the fall to being shut off in the spring. It can be as easy as having a thermostat installed to turn the system on and off as necessary; however, more elaborate systems are available. Depending on the system, this can pay for itself in as little as one day of operation.

If your building only has a boiler system or space heaters and you want to add air-conditioning, a rack system is an effective option. A rack system consists of A/C units (and heaters if needed) and a high-powered blower unit mounted above the storage units. The air-conditioning units run as needed to maintain the desired temperature while the blowers run constantly, continuously circulating the air. This eliminates the need for ducts, maintains a consistent temperature throughout the space, and helps prevent mildewing of tenants goods. A rack system is effective for heating and cooling in a new climate-controlled facility as well.

If maintaining heat in the building is not cost-effective, consider converting wet sprinkler systems to dry ones. Dry systems need routine drainage of the low-point valves to alleviate any condensation that may build in the lines. Wet systems only require the building temperature does not fall below freezing.

Intercoms, sound systems, video surveillance and electronic access create a more inviting presence. Remember your clients will be unloading goods, moving through the building and into their unit. It should be easy for them to find their spaces. Try to make the hallways line up as in a grocery store. Use automatic sliding doors for convenience. Post directional signage. When numbering the units, use the first and last number of the hallway units as indicators.

Convenient Access

Weve noticed many buildings shut down when the rental office does. This means if your rental office is open Monday through Friday, 9 a.m. to 5 p.m., your customers have to access during those same hours. These times may not be convenient for tenants who work during the day. One option is to extend the rental-office hours. Access to the building must be secure and monitored, but convenient for tenants. Some doors may be set to open during office hours, but require a code or key faub.

Reasonable Expectations

Finally, another ingredient essential to your conversion success is to have reasonable expectations. Conversion facilities are not the same as conventional self-storage facilities. Because the units are not subject to the weather and rain doesnt wash the doors off, dust builds up. Allow enough time to keep the facility looking neat and clean. Also allow for maintenance contracts on the building systems, i.e., elevators, sprinklers and HVAC systems. Realize your costs will be higher than those at a conventional facility.

A Little Luck

Converting a vacant building that no longer fulfills its need to a useful self-storage operation is a noble concept. Self-storage is a need-driven product. Communities need self-storage for their residents. In the past, conversions have been successful in densely populated and major metropolitan areas where available land for a conventional facility is either cost-prohibitive or not available. However, many suburban communities are facing changes in zoning or retailers. Likewise, many department stores have consolidated stores or abandoned smaller stores for larger big-box operations.

In these markets, many opportunities exist for future self-storage development in an existing vacant building. With a little imagination, a sure foundation, a sound roof, a good layout, a comfortable environment, convenient access, reasonable expectations and a little luck, you may find your diamond in the rough.

Erik Hermes began developing self-storage facilities in 1980 with his father, R.A. Hermes, and is president of Hermes Construction Co., a design/build firm specializing in self-storage, conversions and multistory construction. For more information, call 859.781.7198; e-mail [email protected].

Melissa Hermes is co-founder and president of the Ohio Storage Owners Society and Kentucky Self Storage Organization. She is also president of Manager On-Call, a national call center devoted to providing professional answering services to the self-storage industry. For more information, call 866.271.0066; e-mail [email protected].

A museum was planning renovations as well as a large addition to its original building, which required moving more than 11,000 pieces of art to a temporary storage facility. There was no question as to whether the facility would be climate-controlledthe museums collections are so valuable, its directors even thought it feasible to spend $5 million on its own climate-controlled storage. Most self-storage tenants store items of far less value than a museum collection, but they believe their possessions to be worth as much. Not all stored goods require climate control, but others will always necessitate it. For this reason, all self-storage facilities should offer at least some climate control to attract the largest number of potential customers.

The 90s brought climate control to the front of the self-storage industry. Conventional sites were getting harder to find, and those available were expensive or on the wrong side of town. Prices of land had gone above $2 per square foot. If you happened to like big-city life, the price for raw land was often above $10 per square foot, if the land was available at all. Zoning boards were tired of giving conditional use permits to build self-storage, which was beginning to get a less-than-acceptable reputation.

Developers needed to use land more efficiently and increase income to offset the high price of land. At the same time, a higher-quality product became a constant request by renters. Security, mold and mildew, bugs and rodents, and roof leaks were becoming important issues with those storing items of any value.

At the same time, the big box storesWal-Mart, Kmart, Home Depot, Lowes and several grocery chainsbegan to leave behind vacant buildings. In the 80s, these retailers had decided to occupy 60,000- to 100,000-squarefoot stores. In the 90s, the trend was to relocate to buildings of 150,000 to 200,000 square feet to handle their ever-growing inventories. These converted buildings have caused developers from Public Storage, Shurgard and Storage USA down to the single-project developerto seriously consider using climate control.

Definition

Climate control typically means keeping the temperature below 90 degrees in the summer and above 40 degrees in the winter, with humidity below 65 percent to stop mold or mildew. Most operators use 50 degrees in winter as a low and 80 degrees to 82 degrees as a high in summer. The old myth of maintaining 72 degrees in the winter and summer is costly and not expected or necessary for the average tenant. In many parts of the country, climate control is achieved by heating in the winter and only dehumidifying in the summer, since summer temperatures rarely get above 90 degrees.

Building Codes and Design

Single-story or multistory buildings are equally suitable for climate control. As land costs go up, the need for multistory buildings increases. These are more efficient and cheaper to heat and cool, and tenants dont seem to mind loading their possessions on an elevator. Try to keep the distance from the entrance to any one unit to less than 120 feet; although many projects have been opened with distances up to 200 feet without problems.

One elevator is required for each 40,000 square feet of multistory use, with a maximum of three elevators. Out of every l00 units, only eight are visited each day. Therefore, out of 500 full units, only 40 will be visited. This represents very low or minimal use for an elevator when compared to any other building type. Access to all floors is usually not allowed by the security system, so tenants can only access the floor that houses their units.

As storage increases in height, fire and other safety codes become stricter. Fire codes are interpreted differently, depending on the jurisdiction. Work should be started early with the building officials. The cost of items such as sprinklers, fire alarms, smoke alarms, fire doors, firewalls and access windows or exits can be very high.

The average unit mix for conventional and climate-controlled storage is about the same. It varies from an average unit size of 90 square feet in inner-city locations to about 130 square feet in rural ones. Industry experts who claim tenants dont rent large units are simply wrong. Over and over, climate-control projects run out of bigger units and have an abundance of smaller ones available.

Demand

Demand is generated by several demographic and market factors. High disposable income generates the demand to store electronics, furniture, art and other valuable items. The comfort factor may be an important reason the experienced storage customer selects climate-controlled storage.

Facilities in business areas have strong storage demand for items such as records, furniture, fixtures and retail inventory. Accessible sites to highly traveled roads or freeways offer a justification to store sales samples, vending supplies and semi-perishables. Salespeople with retail items such as cosmetics, pharmaceuticals and drug-store items may require a controlled environment.

Other Benefits

Climate control spreads the market appeal to a wider range of tenants, probably reducing financial risk for the owner. It serves as a draw for new customers who have never used storage because it lends a sense of security. These new tenants tend to stay longer and to have very low rent delinquency. Climate-control storage also uses land more efficiently. Multistory buildings may use more than l00 percent of the land, a fact that keeps land cost per unit low.

Financial Considerations

To determine the cost of offering climate control at a facility, add about 15 percent to the basic building cost. The extra cost is in the HVAC mechanical system and additional insulation. Liner-wall or double-wall partitions are used to protect insulation along outside walls.

Proper construction planning must be used to prevent schedules from being extended. It does not have to take longer to complete a climate-control building. Additional utility costs must not be forgotten, but they may not be as high as anticipated. A cost study was done in the South that indicated a utility cost of 25 cents to 30 cents per square foot per year, using 8 cents per kilowatt hour as the energy cost.

With the temperature range mentioned earlier, design air-conditioning loads at 1,250 to l,500 square feet per ton. This figure is about one-third of the requirement for a house or apartment. By undersizing the HVAC units, you do a more effective job of humidity control. The operator who sets his thermostat at 70 degrees to 72 degrees gets very near the dew point in summer. This will result in the humidity being above 65 percent, and mildew will cause trouble.

Energy costs in multistory buildings can be lower, as only the top floor gets heat from the roof. Two story and over-and-under buildings built into a hillside are also very efficient for heating and cooling. Well-designed buildings will be 75 percent to 80 percent efficient. If the design of unit mix indicates anything below this, the floor should be redesigned. If there is a larger percentage of smaller units, it may be difficult to reach 75 percent efficiency. Small units require more hallways, which lowers efficiency.

Revenue

Revenues from climate control vary greatly in different parts of the country. If education of the benefits has not sparked public demand, rental rates may stay low. As soon as customers realize the benefit, rates can be raised. Eventually, rates will be 20 percent to 60 percent higher for climate-controlled units. Since large units rent well, it is suggested the rates for these units be raised more than those for smaller ones.

If resistance to price is encountered, value marketing is suggested. In value marketing, the operator discounts the units farther from the entrance. When the facility is full, rates can be raised uniformly. Dont be afraid to charge a premium for more conveniently located units.

Naturally, the goal of every owner is to fill his project. In this process, watch gross rental income as it nears maximum potential income. Not counting expenses, how can gross potential be reached or exceeded? An owner can increase rent, increase the amount of storage available, or add climate control.

These options allow rent to increase due to demand. It is not unusual for all three factors to double gross rental potential without raising expenses. That means these increases go to the bottom line. In turn, the value of the projectdefined by dividing net operating income by the cap rateis often 50 percent to 100 percent higher. The cap rate is net operating income divided by value of the property. Currently, cap rates are in the 8.5 percent to 11.5 percent range. Climate control adds significant value to the project.

More than any other, climate-controlled storage benefits from marketing. Professionals, business owners and sales representatives must be contacted. Apartment managers and condo agents must also be contacted regularly. Since l998, self-storage has been expanding rapidly due to the introduction of climate control. As land continues to become more expensive and difficult to find, there will continue to be an increasing market for this type of storage.

Dan Curtis is president of Atlanta-based Storage Consulting & Marketing, which provides market studies and feasibility reports, along with unit-mix and site-layout drawings. Mr. Curtis is a 30-year veteran of the selfstorage industry, a frequent contributor to

Inside Self-Storage and a well-regarded speaker as ISS expos. For more information, call 404.427.9559.

This article discusses the selection and use of facilities, units or alternative space for a records management operation within the walls of self-storage. There are common misconceptions and misunderstandings about the maximumization of space that prevents owners and operators from achieving the highest return on investment.

The most common question asked by self-storage operators seeking advice about a new records-storage operation is, How much space do I need? There is no single answer to this question. My usual response is quite simple: Start with what you already have. Now, that response requires a little further explanation.

Starting a records-storage and management facility with a self-storage operation can be done in several ways. Over the past few columns, I have discussed how nontraditional records management differs from traditional. I have explained how a self-storage facility can be profitable in 90 days or less. But that result requires one primary component: storage space. Lets look at the space issue from three perspectives: conversion of existing storage units, one at a time; conversion of a whole area or block of units; and conversion or construction of a separate building.

Conversion of Existing Units

It is always best to select the largest units possible for records storage. Never select units smaller than 10-by-10-by-8, and always choose those with the highest ceiling. Units smaller than this size do not effectively accommodate racking. A recent density study conducted by a provider of records-storage shelving showed the best standard unit sizes are:

Note: Yield per square foot is based on 35 cents per unit for storage and 65 cents per cubic foot of billable storage for service. In my recent column titled Price and Yield Differences (May 2003), I discussed the difference between price and yield per cubic foot of storage. It is common in nontraditional records management to yield one-and-a-half to two times the computed yields above. Now lets add a higher ceiling height of 12 feet to the mix and see what happens:

Do you see the difference here? The higher the ceiling, the more revenue you achieve per square foot.

Conversion of an Area

Choosing a contiguous area for records storage is always a good decision. I know one owner who chose 20 side-by-side 10-by- 10-by-8 units, took out the dividing walls, and achieved 10 percent more density. Aside from getting the additional 10 percent or so from maximizing storage space, your operation is simplified by grouping boxes in an area of your facility rather than scattering them around.

Conversion or Construction of a Separate Building

If you have a separate building with an area of 5,000 square feet or more, and if ceiling heights range above 16 feet, you may have a great starting scenario. Lets look at the make-up of such a structure and its attributes.

If we compute length times width times height of a 5,000- square-foot building with a 16-foot clear ceiling, we get a cubic area of 80,000 cubic feet. Using a density ratio of 50 percent, we find we have 40,000 billable cubic-foot units:

With 16 feet or higher ceilings, it is possible to introduce catwalks to your shelving system. This will allow you to have 30-inch aisles, which provide maximum density and reduce the need for access ladders. My experience indicates once you have achieved approximately 35,000 cubic feet of billable storage, you have the ability to use your cash flow to support the enlargement of your facility and move toward the more traditional model of records management.

Optimum Facility Size

Is there an optimum facility size? Throughout the world of traditional records-management facilities, there is a variety of sizes and shapes and ceiling heights, ranging from a 10-by-10-by-8 unit to a 20,000-square-foot area to a building more than 100 feet high (in cities such as Hong Kong and Singapore). The optimum building size I suggest is 10,000 square feet with a 30-foot ceiling height, or 300,000 cubic feet:

There are many in the industry who would argue this is not the optimum size with which to start. But lets see if I can make my case. First, using standard industry statistics, this size building grosses monthly revenue of $1.04 million over 12 months. But most commercial records centers are underachieving in revenue. It is my observation they typically leave more than half of every sale on the table. Based on potential revenue, records-storage operators could yield as much as twice this amount. Is it easy? No. But if it were, everyone would be doing it! It requires diligence, management and control, plus a formidable selling process.

The second reason this building size is optimal is its contribution to protecting your assets. Fire has caused problems in this industry in the past. But since you limit your contractual liability to only $2 per box and your facility is presumably insured, what, then, is really the problem? If there is a fire in a records center and it is not extinguished quickly, chances are the entire facility will burn to the ground. The problem is not the lost records or the lost buildingit is the lost revenue stream. Lost revenue on 125,000 boxes is a difficult pill to swallow, but by segmenting your records into several smaller buildings, you can limit your loss. I recommend putting 30 feet or more between buildings.

Finally, the industry has a common myth. I call it The Myth of the Six-Month Sales Cycle. My recommended selling method controls the sales cycle to 60 work days, or three calendar months on average. The process requires 25 predisposed prospects in the sales cycle at any one time and closes four to five accounts per month. The expectation for a single salesman is 100,000 cubic feet of records storage in the first 30 months. This size building would support the sales effort and provide a base for future expansion.

Perhaps I have convinced you about the optimum size, perhaps not. There is certainly room for argument. But dont believe the naysayersrecords management works in self-storage in many different ways!

Regular columnist Cary McGovern, CRM, is the principal of FileMan Records Management, which offers full-service records-management assistance for commercial records-storage startups, marketing assistance, and sales training in commercial records-management operations. For assistance in feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail [email protected]; www.fileman.com.

On July 24, 2002, a Public Storage complex in Florence, Ky., suffered a disaster when a fire burned a 200-foot concrete and metal building of 52 units, 39 of which were rented. Tenant Mike Hermes, 38, of Taylor Mill, Ky., lost a baseball autographed by the entire 1975 Cincinnati Reds World Series team and family photographs of his deceased father. It was a random accident for which the risk could have been mitigated, but not 100 percent prevented.

Peace of mind with regard to the security and protection of tenants goods is one of the main value propositions offered by the self-storage industry. Much of the marketing communications disseminated by facilities owners and managers is centered on access control, physical and electronic monitoring, and various forms of individual-unit locks and alarms.

As part of the overall risk-assessment and management process, facility operators spend considerable time and resources defining and mitigating specific risks, such as facility and equipment hazards that can result in flooding; storage practices that increase the risk of fire; and periodic storms or tornados.

This article focuses on the vital document-protection measures self-storage professionals can recommend to tenants. The question is, how can owners and managers better assure tenants they will not someday end up like the unfortunate Mr. Hermes?

Fireproof Storage

The most prevalent risk to vital records is fire, and most fire-protection measures (alarms, practice drills, sprinklers, etc.) are designed primarily for human-life safety. Vital-document and records protection is about mitigating loss and limiting property damage.

Overall responsibility for vital records and document protection within a storage unit lies with the tenant. However, by increasing awareness of fireproof- container products, facility owners and managers can help tenants justify the decision to use self-storage to store nonreplaceable items they may have previously stored elsewhere.

There is a growing trend toward do-it-yourself storage solutions, for many reasonsquicker retrieval, lower cost and increased control. While going with a specialized storage vendor is logical for business tenants who represent certain industriessuch as financial services or healthcareit is very costly; and at the end of the day, its not financially feasible for most small business owners and individuals.

There is one caveat to self-storing important documents. According to Mike Schofield, vice president of insurance at MiniCo Inc., which offers insurance programs to the self-storage industry, Self-storage operators that specialize or have identified significant storage of papers and records within their facilities should possibly consider seeking legal counsel on drafting a disclaimer pertaining to this particular risk.

Small business owners and individuals can easily emulate what a specialized records-storage company does, adds Rick Sorely, president of Safetyfile Inc. All they need to do is set up a system with their individual unit using Underwriters Laboratory (UL)-rated fireproof and fire-resistant file cabinets, containers, safes and filing systems. Many specialized records-storage facilities are billed as state-of-the-art; unfortunately, that usually means cardboard boxes in an open warehouse with a sprinkler system. The sprinkler system is the total protection of the records. Safetyfile is a distributor of fireproof files, safes and data safes.

Scott Lancaster of Deans & Homer, a provider of property-insurance products, agrees with this assessment. UL-rated fire resistant cabinets and safes may be considered cost-effective protection for both fire and water damage, he says.

When providing information to a tenant storing vital records and documents, the first thing you should ask him to consider is what, exactly, is being protected. Fire-resistant file cabinets for paper and microforms do not provide sufficient protection for magnetic tapes, disks and diskettes, since the ignition point of paper and microfilm is much higher than magnetic media. They need to be stored in vaults that hold the temperature extremely constant during a catastrophic fire. Paper is destroyed at 400 degrees, whereas computer media is rendered useless at 125 degrees and 80 percent relative humidity.

Basic lack of awareness leads to the destruction of many vital records, documents and media in catastrophic fires. Most individuals dont understand the difference between a fire rating and a classified fire rating. A nonclassified fire rating simply means a vault will protect the media stored inside it for at least two hours. A classified rating means the product has been tested and classified by UL or another independent testing lab. UL is the best, as no other testing and standards organization matches its reputation. Tenants should understand how imperative it is to seek products tested by a nationally recognized lab. They should steer clear of equipment with manufacturers or nonclassified ratings.

One trick to watch for is the product that claims to be built to a certain UL-class specification claim. This is marketing- driven wordplay, pure and simple, and it leads the customer to falsely believe he is getting a UL rating. In reality, its just the manufacturers dubious claim. UL has never tested it, and how it will stand up to a real fire is anyones guess.

The top vendors in the industry offer welldesigned, attractive media-rated safes, fireresistant file cabinets and safes for onsite records protection. You can readily find this equipment at your local office products dealer, in most office products catalogs or, increasingly, on the Internet.

Van Carlisle is president and CEO of FireKing International, part of FKI Security Group. FireKing provides a full line of fireproof file cabinets and safes to fit every filing requirement, space constraint and budget. For more than 50 years, the companys fireproof products have been protecting millions of dollars of vital information throughout the world. For more information, call 800.457.2424; e-mail [email protected]; visit www.fireking.com.

The competitiveness of todays self-storage industry has forced us into the same realm as retail businesswhich relies heavily on marketing and salesto fill our facilities. These days, self-storage companies spend tens of thousands of dollars per month, not only on Yellow Pages advertising, but on radio and television. All this is designed to do one thing: get the phone to ring. But after all of that money and effort, it is still up to somebody to handle the call in a professional manner and convince the caller this is the facility he should choose.

The primary role of a self-storage manager is that of a salesperson. Consider the top three reasons people choose a facility:

1. Convenience/Location

The majority of customers (90 percent) pick three to five ads out of the phonebook and call them based on where they are located.

2. Security

Not to be understated in this category is perceived trustworthiness. When it comes to security, most of the competition is pretty evenly matched as far as features are concerned. Most have computer-controlled gate access, fencing, lighting and video surveillance. Therefore, it is the person behind the counter who makes the prospect feel a particular facility can meet his needs better than others.

3. Price

This is actually third on the list, and if youve done your homework, you know what your competition is charging. Since the playing field is usually pretty level in this category, it can only be the person who does the better job selling who gets the customer.

Nobody is inherently born with all the skills, knowledge, professionalism and communication talent necessary to handle phone sales in an efficient, effective manner and produce desired results. It takes education and practice. To educate yourself in telephone-sales techniques, you need to understand the five basic steps of the phone sale.

Step 1The Greeting

A professional, rehearsed but sincere greeting will make a lasting first impression on anyone.

Step 2The Inquiry

You cannot properly advise someone as to how you can best fill their need for storage without determining when, why and even how long they need it. The inquiry is not only necessary for determining the customers needs, it allows you to control the flow of the conversation by asking questions and leading the discussion away from the subject of price. Often, Q&A will allow you to begin building a relationship. It will also alert you to the customers primary concerns. You can then address those areas first and put them to rest.

Step 3Value-Building

Once you know the customers needs and primary concerns, you can tell him about the features your facility offers and how they benefit the customer (meet his needs, address his concerns). If you have done this well, the price of the recommended unit will come across as a value, not an expense.

Step 4The Appointment

The object of the sales presentation is to get the prospect to visit your facility. Once there, the odds are in your favor (90 percent) that he will rent from you. The next logical step is for him to come in and determine for himself what size and style unit will best meet his needs. To get a firm appointment, it helps to create a sense of urgency. And it is OK to ask for the appointment. Our industry is need-driventhe prospect needs storage or he wouldnt have called you. One final note: Be sure to give him directions and landmarks to your store. This not only confirms he knows where you are located, but gives you the opportunity to steer him away from the competition.

Step 5The Close

End the call by asking if there are any further questions. This ensures you have addressed all the prospects concerns and dont leave anything for your competitor to answer. Offering to forward a brochure or some literature not only shows you are going the extra mile to help, but gives you a reason to get the persons information, which can then be used to follow up in a few days. Finally, giving him the name of your facility while thanking him for his call, is a proven method of solidifying your facility in his mind: Thank you, Mr. Jones, for calling ABC Self Storage.

Once you understand these steps, you can create a phone script, which will help you consistently achieve the maximum impact of your sales presentation. It will also help keep track of the important points you need to cover to be most effective in obtaining your goal: to realize the value of that call! You need to sell prospects on using your facility over others. You can do this by outselling your competitors on the phone.

The Mystery Shop

Mystery shopping is when you call a competing facility as a prospective renter to get an understanding of the managers phone skills, what specials the facility is offering, what features it has, and even its prices. Once you have an idea how good your competitors are, you can compare them to your operation by mystery shopping your own managers.

This should be done by an independent, third-party company for reasons of maintaining objectivity. These companies can supply you an audio tape of the conversation, as well as a previously agreed score sheet that details via a point-rating system the strengths and weaknesses of the call. They will even outline what the individual needs to do to strengthen the sales presentationall for between $25 to $50 per shop. If you think that is too much to spend on training for better sales presentations, consider what is at stake.

To figure out the cost of the average prospect call (which is very different from its value), divide your total advertising and marketing dollars for a given period of time by the total number of calls in the same period. For instance, if a facility spends $500 on a mailer one particular month and receives 50 calls, each call costs $10. This is money paid in advance. It is spent and gone whether the manager decides to answer the phone or not.

The value of the prospect call is what is at stake in your phone-sales presentation. It depends on whether you convince the customer to rent from you. It is determined by taking the average unit rental rate and multiplying it by the average length of stay. If the average rental rate is $75 and the average length of stay is 13 months, the value of the call is $975. This is what is at stake during every sales call.

It is expensive and difficult to get customers to call you. You must capitalize on the finite number of people who actually need storage at any given time. You cannot increase call volume at will by spending more money, regardless how well you do on the phone. It is easier and more cost-effective to increase the number of calls you convert to rentals by improving your sales skills and raising your closing ratio. In fact, the amount of call volume you do not convert to rentals becomes a tremendous missed opportunity.

For example, lets say you received 50 calls one month. Statistically speaking, only 88 percent represent valid businessthat is, only 44 of those callers will actually rent from someone. If you achieved an average closing ratio (35 percent is the national), you only closed 15 of them, leaving 29 potential rentals on the table. At $975 each, youve missed $28,275 for the month, or $339,300 per year. Thats a lot of missed opportunity. Perfect the phone-sales presentation, close more calls, and reap greater profits.

David Fleming is the director of operations for North State Storage LLC of North Carolina, which acquires and manages properties throughout the southeast region of the United States. Mr. Fleming provides operational consulting, training and auditing services to the self-storage industry as well as third-party management. He can be reached at 919.313.2764; e-mail [email protected].

Construction Corner is a Q&A column committed to answering reader-submitted questions regarding construction and development. Inquiries may be sent to [email protected].

Q: We are planning to install a music and paging system at two of our facilities. We are not familiar with the wiring or electrical requirements of these systems and thought you could offer some help.

Robert in Farmingdale , N.Y.

A: Music and paging systems come in many flavors. Electrical and wiring needs will depend on the type and size of the system. First, consult your supplier or installer to determine what will work best for you, keeping in mind each speaker or horn requires power, and the amplifier for the system must be able to handle the load. Most systems require the use of a 22- or 18-guage wire (depending on distance) that is shielded with two conductors.

Q: At my facility, I currently have a manual chainlink gate I push open in the morning and close at night. I would like to switch to an automated gate that will allowmy tenants access after I leave for the day. I would likely run the entire conduit myself, but do not know what size or type, or from which points I need to run it. Could you offer a guideline?

Dave in Reno, Nev.

A: Most access-control systems are controlled by outdoor keypads that use a common type and size of conduit. Your local codes and regulations will usually dictate exactly which type of conduit and how deep it must be buried. However, as a guideline, you will usually want to use PVC or Rigid conduit underground and have it buried at least 24 inches below grade.

You have two paths that are important for a standard gate system: from the office to the gate motor, and from the gate motor to the keypads. Following are examples of common installations: Run a 1- to 1.5-inch conduit between the office and gate motor. The larger of the two will allow for added features, such as a keypad camera or intercom. Run a .75- to 1-inch conduit between the gate motor and each keypad location. It is recommended to have the keypad-stand foundation be concrete and at least 18 inches deep.

Tony Gardner is a licensed contractor and installation manager for QuikStor, a provider of self-storage security and software since 1987. For more information, visit www.quikstor.com.