When you blend comedy with nostalgia, you get marketing gold. It’s a winning mix New Zealand self-storage operator National Mini Storage has mastered. In another yet another of his humorous commercials, funny man Leigh Hart recalls the stories behind items being moved from his office to a storage unit, and how the facility will protect those cherished memories. Enjoy the laugh and get inspired for your next marketing campaign.
Self-storage properties are constantly changing hands, and Inside Self-Storage is regularly notified of these market transactions. Many are covered in detail on the ISS website and available for viewing on the “Acquisitions and Buying” topics page. Following are additional acquisitions and sales that weren’t covered.
AA Storage in Little Rock, Ark., was sold for $9.6 million to First Neck LR 10th St. LLC, a Philadelphia limited liability company (LLC). The 4-acre property at 5700 W. 10th St. contains 517 units as well as a two-story, 4,200-square-foot office. The seller was AA Storage @ Fair Park Limited Partnership.
AAA Spring Storage in Spring, Texas, was sold. The facility at 25528 Aldine Westfield Road comprises 79,778 square feet of storage space in 673 units, 77 outdoor parking spots, 14 lockers and one retail space. The seller was represented in the transaction by Dave Knobler, first vice president of investments, and Charles “Chico” LeClaire, executive managing director of investments, for Marcus & Millichap (M&M).
Choice Storage in Key West, Fla., was sold for $23.8 million to a national ownership/management company. The 6-acre property at 2600 N. Roosevelt Blvd. comprises 55,000 rentable square feet of space and has room for expansion. The real estate transaction was brokered by Atlanta-based Southeastern Business Intermediaries LLC (SBI) and Jeremiah Baron & Co. Commercial Real Estate LLC.
Clover Hill Self Storage in Richmond, Va., was sold. The facility at 16830 Hull St. Road comprises 89,250 square feet of storage space in 514 units. The seller was The Jenkins Organization Inc., which had operated the facility since 2015.
Diamond T Storage in College Station, Texas, was sold to an LLC. The facility at 3262 Rock Prairie Road comprises 17,820 square feet of storage space. The buyer and the seller, also an LLC, were represented in the transaction by Knobler.
Eagle’s Nest Storage in Humble, Texas, was sold to a national LLC. The facility at 11950 Will Clayton Parkway comprises 119,470 square feet of storage space in 426 units. The seller was represented in the transaction by Knobler and LeClaire.
Four Seasons Boat & RV Storage in Tullahoma, Tenn., was sold. The facility at 4396 Awalt Road comprises 52,128 rentable square feet of storage space in 141 units. The seller was represented in the transaction by Ashley Compton, national director with Collier’s International.
Freedom Self Storage in Shelton, Wash., was sold for $3.6 million to an out-of-state LLC. The 5.33-acre property at 2992 E. Johns Prairie Road contains nine single-story buildings comprising 36,900 square feet of storage space in 253 units. It also includes two offices and a small studio. The buyer and the seller, a local LLC, were represented in the transaction by Christopher R. Secreto, an investment specialist with M&M.
Guymon Econo-Storage in Guymon, Okla., was sold to a private investor. The property at 605 S.E. 5th St. comprises 43,700 rentable square feet of storage space. The buyer and the seller, also a private investor, were represented in the transaction by Jared Jones, owner of Jones Investment Properties and a broker affiliate for the Argus Self Storage Sales Network.
Hubbard Storage in Park Rapids, Minn., was sold for $360,000 to a local operator. The 1.99-acre property at 16890 Brandon Drive comprises 19,008 rentable square feet. The seller was represented in the transaction by Tom Flannigan and Corly Wilkerson of KW Commercial Minneapolis. Both are Argus broker affiliates.
Lone Star Mini Storage in Ingram, Texas, was sold to an LLC. The facility at 2824 Junction Hwy. comprises 45,680 square feet of storage space. The buyer and the seller, also an LLC, were represented in the transaction by Jon Danklefs, an investment specialist with M&M.
Merrillville Storage in Merrillville, Ind., was sold to an out-of-state operator. The property at 3950 W. 73rd Ave. comprises 32,000 rentable square feet in 183 units. It also contains vehicle-parking spaces and four rental houses. The buyer was represented in the transaction by EquiCap Commercial.
Pine Belt Mini Storage in Laurel, Miss., was sold for $515,000 to an out-of-state buyer. The 2-acre property at 4876 MS-15 comprises 20,100 rentable square feet of storage space in 138 units. The buyer and the seller were represented in the transaction by Bill Barnhill and Shannon Barnhill, both Argus broker affiliates.
Rochester Mini Storage in Rochester Hills, Mich., was sold to an out-of-state buyer. The facility at 1790 S. Livernois comprises 94,115 square feet of storage space. The buyer and the seller, a local owner, were represented in the transaction by Gabriel Coe, Brett R. Hatcher and Brian Kelly, investment specialists with M&M. Fellow M&M broker Steven R. Chaben assisted.
The Space Place in Lancaster, Calif., was sold. The facility at 825 W. Ave. L12 comprises 46,917 square feet of storage space in 547 units. The seller, an LLC, was represented in the transaction by LeClaire and Adam Schlosser, first vice president of investments for M&M.
Storage Nation of Smyrna in Nashville, Tenn., was sold to a Florida-based operator. The facility at 300 Wolverine Trail comprises 84,060 rentable square feet in 572 units and 17 vehicle-parking spaces. The buyer and the seller, a private LLC, were represented in the transaction by LeClaire and Schlosser.
Argus is a Denver-based network of real estate brokers who specialize in storage properties. Formed in 1994, the company has 36 broker affiliates covering nearly 40 markets.
Colliers is a global commercial real estate services firm employing more than 16,000 professionals who operate from 554 offices in 66 countries. The company offers a variety of services for investors, business owners and developers.
Headquartered in Saint Charles, Ill., EquiCap is a boutique brokerage firm specializing in the self-storage industry. Its primary focus is in the Midwest and mid-South markets.
Formed in 1989, Jenkins Organization has an ownership and management portfolio comprising more than 3.5 million square feet of storage space in Louisiana, Minnesota, Missouri, Oklahoma and Texas.
Jeremiah Baron & Co. is a commercial brokerage firm with offices in Palm Beach Gardens and Stuart, Fla. The company specializes in the sale, leasing and management of retail shopping centers, office buildings, industrial warehouses, and multi-family properties throughout Florida.
Founded in 1971, M&M is a commercial-property investment firm with more than 1,500 investment professionals in offices throughout Canada and the United States.
SBI is a commercial real estate that specializes in off-market brokering of commercial properties. It also arranges permanent, bridge and equity financing for real estate investors, corporations and developers.
Source:
Northwest Arkansas Democrat Gazette, Company Pays $9.6M For Mini-Storage Warehouse in Little Rock; Apartments Sell for $7.1M
As someone who’s been placing self-storage managers in facilities for nearly 30 years, I see more than 100 resumes each month and am privy to many of the wage and incentive programs being offered by owners today. The reality is there’s no set standard for what a manager should be earning. Salaries are all over the board and often dependent on location, facility and staff size, whether the property offers a residence, employee experience, and other factors. Bonuses and benefits vary from site to site, person to person.
That said, I’m going to try to provide some industry averages. While some owners may be tempted to think they’re paying too much, and some managers may try to leverage for higher pay, keep in mind this is for informational purposes only. After all, other than paying less than the legal minimum wage in your state, there’s no wrong compensation package. Also remember that if you have resident managers, you can’t use the cost of housing to offset any minimum-wage deficiency. We’ll talk more about that later, but first, let’s examine the concept of a living wage.
On July 24, 2009, the U.S. federal minimum wage jumped to $7.25 per hour. It hasn’t increased in nine years. Since then, has the price of food, gas, housing, cars, clothing or anything else we buy on a regular basis stayed the same? Of course not! At $7.25 per hour, someone who works 40 hours per week, 52 weeks per year would earn $15,080 annually. That’s $7,270 less than the federal poverty line of $22,350.
Minimum wage and a living wage are two different things. I don't know anyone who can live on $7.25 per hour, do you? The Massachusetts Institute of Technology has created an online “Living Wage Calculator” that allows you to gauge how your pay structure fares in your city and state. The site lists the typical wages earned in your area for various job titles. As you peruse the numbers, ask yourself: Do the typical job duties of a self-storage manager—including rental agent, collection agent, salesperson, social media guru, maintenance person and office manager—warrant a higher wage than unskilled labor?
If you decide to pay an annual salary, make sure it’s at least the same as $7.25 per hour or your state minimum so you don’t end up in front of the labor board forced to pay back wages. Again, you can’t use the housing expense for a resident manager to offset any minimum-wage deficiency. For example, you can't pay a husband-and-wife team $3,400 per month but charge them $1,200 monthly to live onsite. In this case, your actual wage would be $2,200 per month. Assuming a 40-hour work week, that works out to only $6.35 per hour per person, which is well below minimum wage.
While you can pay whatever you like if someone agrees to work for lower wages, be aware that you’ll be in violation of labor laws and will most likely end up paying a lawful amount in the end anyway. This will occur either by notice of your state’s employment-development department (EDD) or your manager helping himself to cash from the register!
Pay scales have changed dramatically since the first generation of self-storage. In the early days, almost all facilities had resident managers who were typically retired or older. Most received some small stipend to supplement their Social Security. After all, if they were being provided with housing, why pay them a lot, right?
Over time, compensation has increased along with the professional quality and skills of management staff. That isn’t to say resident managers are a thing of the past. Believe it or not, some newly developed properties are still including apartments. Therefore, compensation packages—hourly or salaried—typically look different depending on whether the property manager lives onsite or off. Let’s take a closer look at both scenarios.
Resident managers may be paid an annual salary or an hourly wage. Most also receive some sort of bonus program and/or other benefits such as medical coverage.
Hourly wages for resident managers can run $10 to $15 per hour. Compensation for a salaried, single resident manager is typically $2,200 to $3,000 per month, while a resident couple or team earns $3,900 to $4,800 per month. Some managers make upward of $6,000 per month.
Even if your manager earns a salary, he should complete a time card for all hours worked. If a situation arises in which a salaried employee needs to work an extraordinary amount of overtime, you should pay him extra for those hours so you don’t eventually get in trouble with your EDD for undercompensating the number of hours worked.
Upon hiring, a resident manager should receive a formal Letter of Employment that details his job duties, expectations from the owner, facility goals, wages and benefits. Incorporate a separate apartment lease in his employee package.
In the last decade or so, non-resident managers have become the norm in self-storage, which makes them just like employees at other retail businesses. They come to work and go home at the end of their shift. The majority are paid an hourly wage, not a salary. Incidentally, for properties that have resident managers, the relief managers will also fall into this category since they reside offsite and typically work one or two days per week.
A full-time, non-resident manager gets paid an average of $14 to $20 per hour, while relief managers typically make $11 to $14 per hour. Maintenance staff generally earns $12 to $16 per hour. In some states like Washington, which has a minimum wage of $15 per hour, relief staff can earn as much as $24 per hour.
Non-resident managers may or may not receive a bonus plan in addition to their hourly wage. There’s no need for a formal Letter of Employment for managers who aren’t living onsite because, frankly, their position is just like any other job. They can leave at any time (hopefully with a proper notice) and find another position without the complication of a residential move.
There’s some perception that self-storage manager compensation increases with facility size. While this may be true in some cases, it isn’t always a factor. The manager of a 350-unit property is often paid just as much as one who manages an 800-unit property. That said, the owner of a 1,700-unit facility will probably pay more than he would at an average-sized property because the manager will likely supervise other office and maintenance staff.
Other factors may also come into play. An older, smaller property may not have a mortgage and operating expenses may be low. If a facility is in a densely populated area, rental rates may be high, making it possible to pay the manager as much as his counterpart at a larger facility in a more rural setting. This is why there’s no set standard and compensation can vary widely.
One thing’s for sure: Employee wages are likely an owner’s next highest expense behind his mortgage. Keep that in mind when designing your annual budget, but don’t underpay. If you have a good manager, pay him well in wages and benefits! Train him and give him the tools to do his job well. Install a motivating, achievable bonus program. Conduct regular financial audits and property inspections to hold him accountable. Review job performance at least annually, and provide raises or additional bonuses when warranted.
A good manager is worth his weight in gold. The person behind the management desk can make the difference between a clean, high-occupancy and financially successful facility and one that underperforms. Respect the person you’ve hired and empowered, and remember to say thank-you for a job well done. If you follow that basic credo, you’ll create a win-win-win situation for you, your manager and your investment.
Pamela Alton is the owner of Mini-Management Services, a company that has been placing self-storage managers in positions all over the United States since 1991. She also offers staff training, operational consulting, and facility audits and inspections. For more information, call 321.890.2245; e-mail [email protected]; visit www.mini-management.com.
Real estate developer 1784 Capital Holdings LLC has proposed a new self-storage project for Kensington, Md., at the site of a farmers market. Plans for the 1-acre property at 10619 Connecticut Ave. include a five-story building, with one level underground. It’ll comprise 140,648 square feet of space, including 5,000 square feet on the first floor for offices, retail or artist studios. If approved, the project is expected to be complete in late 2020.
1784 recently submitted concept plans to the county’s planning department, which suggested the project should include “satellite” office space to give it more of a mixed-use feel, said county planner Patrick Butler. An official application has yet to be filed, he added.
Hawkins’ Produce, which has operated in the area for nearly 40 years, relocated to the property last year after its previous location was sold for redevelopment. The market was founded in 1979 by Ann Hawkins. It’s currently operated by her son, Joe Hawkins.
1784 also has a facility under development on River Road in Bethesda, Md. Expected to be complete in a year, the eight-story building will include three stories below ground. It’ll comprise 143,529 square feet of rentable space in 1,254 units.
Founded in 2013, 1784 Capital acquires, develops, constructs and owns self-storage facilities. Its subsidiary, 1784 Solar LLC, provides short-term construction financing for solar projects in Canada and the United States.
Sources:
1784 Capital Holdings LLC, Website
Bethesda Magazine, Hawkins’ Produce New Kensington Location Is Temporary, Owner Says
Technology and modern conveniences have significantly heightened consumer demands and expectations. The abundance of choice puts more power in the customer’s hands. To entice these increasingly discerning shoppers, self-storage operators must evolve.
In this video filmed at the 2018 Inside Self-Storage (ISS) World Expo, Phil Murphy of Next Door Self Storage addresses “The Age of the ‘Unreasonable Consumer’: Tech Essentials for Self-Storage, Today and Tomorrow.” He discusses the customer-communication strategies and tech tools facility operators need to automate processes and increase tenant convenience, sharing insight to artificial intelligence, chatbots and social-media-based service that may change the industry moving forward.
This highly informative video is available at the ISS Store in DVD and on-demand formats.
Affiliates of New York City-based Joy Construction Corp. and investment-development firm Maddd Equities LLC have acquired the five-story American Self Storage facility in Brooklyn, N.Y., for $60 million from Warren Diamond. The companies intend to temporarily operate the building as self-storage before converting it into a 235,000 square-foot residential building, according to a source.
The property is in the Ft. Greene neighborhood at 202-208 Tillary Street. It was recently rezoned from R-6 to C6-4, allowing the developers to nearly double the size from its current 120,000 square feet. The project will operate under the city’s mandatory, inclusionary policy to provide 25 percent of its residential units as permanently affordable housing, a source reported.
The property is just east of Flatbush Avenue in downtown Brooklyn, which has had several former industrial buildings redeveloped into multi-family use, a source reported. The site is within a half-mile of several subway options.
The companies will use a $30 million loan to help fund the acquisition. They’re also using $21 million in financing to acquire a 27,675-square-foot parking lot in the Bronx, N.Y., for $35 million. They plan to build two affordable-housing towers at 1150-1159 River Ave., according to a source.
Sources:
GlobeSt.com, Maddd Equities to Convert Parking Lot and Self-Storage to Housing
ABL Advisor, Natixis Provides $30MM Acquisition Financing for Brooklyn Self-Storage Facility
Update 8/28/18 – On the heels of its announcement regarding Amazon Alexa, OpenTech has also integrated its IoE platform with its existing call-center service. The addition allows call-center agents to remotely assist tenants and control self-storage facility access using INSOMNIAC CIA, according to a press release.
“We handle thousands of tenant calls a day in our call center, and we are always looking for new ways to improve a tenant’s experience,” said Robert A. Chiti, president and CEO, noting there are times when customers tailgate into the property and get stuck behind the gate after hours. In those cases, they often contact the call center, which must then initiate emergency protocols. The exchange could be problematic, Chiti said.
“We have heard of customers calling 911 or actually driving into the gate, so you can see how that process was not working,” Chiti said. “By empowering the call-center staff with tenant data and the ability to remotely control access to the facility through our cloud-based, access-control solution, we are creating happier tenants, eliminating negative social media reviews, and making self-storage simpler to use.”
OpenTech’s IoE integrations with Alexa, the call center and HVAC systems are available to customers at no charge. Several third-party devices and related systems are supported by the platform, the release stated. The call-center integration module is also available to third-party and internal call centers.
8/21/18 – OpenTech Alliance Inc., a Phoenix-based provider of self-storage kiosks, call-center services and other technology, has integrated its Internet of Everything (IoE) platform with Amazon Alexa virtual-assistant devices, which will enable self-storage operators to use voice commands to perform facility functions or retrieve information. Customers can use Alexa to open the access gate, find out how many tenants are onsite, see the name of the last renter on the property and complete other tasks, according to a press release.
“The way we interact with computers changes every 10 years. Voice-enabled commands are the next user-interface model,” said Jon Loftin, vice president and IoE product owner. “Alexa is utilized at many self-storage facilities to assist with translation services, and integrating hand-free commands allows managers to work more efficiently.”
Earlier this month, OpenTech announced the integration of its IoE platform with self-storage HVAC systems, the release stated. The company launched its IoE initiative last year to facilitate its next generation of products.
OpenTech provides several models of INSOMNIAC self-serve kiosks as well as a range of self-storage rental solutions including the INSOMNIAC Live! Call Center, INSOMNIAC Online Web and mobile applications, LiveAgent! software products, and the INSOMNIAC ILock Security System, all available through the company's self-storage cloud.
Stow-It Self Storage, which operates two facilities in Ontario, Canada, was a silver-level sponsor for the Aug. 19 Lake Huron Gran Fondo bike ride in Southampton, Ontario. Facility owner Steve Levack and his wife, Tracy, donated $2,500 and participated in the cycling.
Organized by the Saugeen Memorial Hospital Foundation (SMHF), the inaugural event raised $125,000. The money will be used to purchase a new MRI machine for Owen Sound Hospital and fund upgrades for its patient information-services system.
The Gran Fondo, which means “big bike” in Italian, attracted 700 riders from all over North America, according to Sally Kidson, executive director for SMHF. “We see it as a major event for the foundation, and I think in future years it’s going continue to grow,” she said, adding that it has the potential to attract 1,500 cyclists and raise even more money next year.
The ride also drew several sponsors, who covered the event costs. “After that, virtually every registration dollar and donation dollar was able to come directly to the hospital,” Kidson said.
Participants had a choice of four routes. The 70-kilometer route drew 200 participants, and 200 more participated in the 30-kilometer ride. About 140 took part in the 110-kilometer route, while 85 joined the 160-kilometer ride.
The Levacks took part in the 70-kilometer route, from Southampton to Paisley and back. They completed the journey in two hours and 50 minutes. “It was a fantastic ride—beautiful country to go through, friendly people. Just a great day all around,” Steve Levack said.
The ride also included four rest stops, one of which was at the James Mason Memorial Culture & Recreation Centre at the Saugeen First Nation, an Ojibway First Nation band along the Saugeen River and Bruce Peninsula in Ontario. “We always have to remember that everything we do is on [traditional] lands of the Indigenous people, the people who first walked this land,” Kidson said. The Saugeen First Nation stretches from the tip of the Bruce Peninsula to Goderich.
Robert Price, an elder from the Ojibway tribe, performed a traditional sunrise ceremony at Pioneer Park. “Our entire ride was on territory of the Saugeen First Nation, and it was really important to connect with them; and having our event start with a sunrise ceremony was unbelievable,” Kidson says. “It’s a ceremony where they welcome in the day with a small ceremonial fire that they start with a flint. It was really a wonderful moment and a great way to start the day.”
Stow-It operates facilities in Owen Sound and Port Elgin. In addition to self-storage, the business offers moving and packing supplies, U-Haul truck rentals, outdoor vehicles storage, and shredding services.
Source:
Shoreline Beacon, Gran Fondo Raised $125,000 for Saugeen Memorial Hospital Foundation
Nuvo Development Partners LLC will soon begin construction on a three-story, climate-controlled self-storage facility in Palm Beach Gardens, Fla. The $15 million project is near Burns Road, Interstate 95 and Florida State Road A1A. Expected to be complete in November 2019, the project will comprise 100,000 square feet of storage space. It’ll be managed by self-storage real estate investment trust Extra Space Storage and branded under its name, according to a press release.
It took the Nuvo Development team nearly three years to gain approvals for the project. “The city of Palm Beach Gardens is very particular about zoning and land use, so we are confident that there will not be another competitor entering this market any time soon,” said Jason Canin, partner and vice president of real estate.
The company seeks to build in markets with high barriers to entry and unmet self-storage demand, said Gary Cardamone, CEO and managing partner. “Quite frankly, our Palm Beach Gardens site is the best location I’ve seen in 20 years.”
Founded in 2014, Nuvo Development is an affiliate of Winter Park, Fla.-based Nuvo Co. It offers architecture, development and engineering services to the self-storage industry. The company is led by Gary Cardamone, who founded the Stor-A-Way brand in 1999 with his brother, Rich Cardamone. The brothers sold the properties in 2007.
Steel trade tariffs imposed by President Donald J. Trump are driving up the cost of self-storage developments already underway or in the pipeline across the nation, causing owners and investors to rework their financing to cover construction. The uncertainty of how inflated steel prices may affect future building also has some developers worried the industry could be headed for a construction slowdown, according to “SpareFoot Storage Beat,” an industry blog.
In some cases, the tariffs have prompted developers to add up to 10 percent to final project-cost estimates, the source reported. “We’re seeing a lot of people coming back to us to re-work [the numbers],” said Terry Campbell, general manager of Live Oak Bank, a lender that focuses on specialty industries including self-storage. “We always have contingency costs built into [financing plans], but we’ve basically had to double our contingencies. The tariffs are definitely having an impact.”
Though most projects in the pipeline are still being pursued, steel prices have increased about 30 percent in the last year, causing some builders to wonder if developers will choose to forego new projects or expansion plans. “I’m worried about a slowdown,” John Bull, owner of Oregon-based John Bull Builders LLC, told the blog. “We still have projects. There’s still a lot of work in the pipeline. But I’m worried about what comes after that. It’s not a good thing. People are getting nervous. The prices are getting higher, and people are having to jump through a lot of hoops to get things done.”
Trump announced a 25 percent tariff on foreign steel in March, which was largely targeted at China imports. In June, the president extended the tariff to include steel from Canada, the European Union and Mexico. Though the implementation of the tariffs was recent, the threat of imposing them for more than a year prompted steel prices to inch upward, according to Caesar Wright, president of California-based Mako Steel Inc., which designs, supplies and installs steel buildings for the self-storage industry.
With the tariffs now underway, U.S. suppliers can leverage the market to command higher prices. “It’s a form of domestic greed,” Wright told the source. “But what can you do? The demand for steel is high, the supply is low. It’s been a challenge.”
In addition to higher prices, the market has been affected by a lack of available production to meet current demand. Campbell estimates it will take domestic and foreign suppliers not affected by the tariffs into next year before the supply chain stabilizes. In the meantime, he warns steel buyers to be wary of inferior product. “There may be better prices out there, but you have to be on guard,” he told the blog.
Source:
SpareFoot Storage Beat, Tariffs Take Bite Out of Self-Storage Construction Industry
