Whether you’re servicing your security system or resurfacing your parking lot, regular maintenance is part and parcel of a self-storage facility’s success. After all, delaying repair and maintenance can end up costing much more in the long run. Not only can expenses escalate when work is postponed, but customers who want to store their belongings in a clean, safe environment may choose to do business with another provider if they believe that site is better-run.

That said, keeping up with maintenance can be a challenge. While most self-storage operators recognize the importance of facility upkeep, they’re understandably looking for ways to reduce spending. The problem is managing work orders manually is a bit like piloting a plane without instrumentation or even a windshield—you’re flying blind.

The good news is modern facilities-management (FM) technologies and service automation are making it possible to manage repairs and maintenance in a way that provides unprecedented levels of visibility, data and control. These tools also make it possible to track all work orders centrally in real time, regardless of where in the field they were created. Let’s look at some of the innovations in FM technology and the benefits they can yield for self-storage operations.

Workflow Mobility

Mobile technology is one of the easiest ways to add efficiency to FM processes at self-storage facilities. Nearly everyone has a smartphone, so it makes sense to use that tool or an equally portable tablet. Here are three ways to leverage mobility:

Work-order management. This is normally a time-consuming and detail-oriented task, but mobile technology means you can manage work orders from anywhere. Facility managers can create new orders while walking the property, schedule or assign orders with detailed service requests, and easily identify duplicate orders. A bonus is the ability to add photos for vendors that illustrate and effectively communicate issues.

Asset management. Self-storage managers need to keep detailed equipment records including warranties, repair histories and maintenance costs. As they walk the property, they can scan tagged assets such as light fixtures, unit doors or HVAC systems, and upload their notes. The ability to record standardized facilities-condition data in real time on a smartphone increases accuracy and efficiency. Another benefit is corralling all this information about key assets in one place, ensuring accessibility and continuity.

Contractor management. Security is paramount for self-storage facilities. Managers need to know who’s on the property conducting repairs or maintenance at all times. From an accountability perspective, it’s important to know a contractor or technician spent the appropriate amount of time to address a work order. Mobile tools provide visibility into the comings and goings of service providers at your properties. In addition, Mobile-based identification requires them to prove their identity, purpose and qualifications before entering a worksite. Managers can view this information from anywhere, at any time.

Actionable Intelligence

Business profitability requires close attention to detail, reduced inefficiencies and informed spending decisions. Self-storage operators can gain insight to all these areas with FM technology, specifically business analytics. Adopting technology that captures data and generates insight is necessary to achieve better results. You can use FM software to support the following analytics-driven initiatives:

• Track spend data over time: FM software can aggregate repair and maintenance expenses across locations and develop spending insights based on trends and outliers. Managers can use this information to create preventive-maintenance calendars that assist with budgeting and planning.
• Identify areas for potential savings: By properly tracking expenditures—from replacement costs to regular service calls to repair jobs—managers can begin to identify areas to target for increased efficiency and cost savings. This is especially helpful across multiple locations where employees at the facility level may not have had visibility previously.
• Make data-backed spend decisions: With the right data on hand, managers can be empowered to make smarter spend decisions. FM technology can offer actionable recommendations based on a combination of data and machine learning. This can be applied to short- and long-term planning to optimize budget and resource allocation.

Streamline Workflow

Self-storage operations vary in size, number of locations and ownership types, but no matter the organizational structure, they can all benefit from efficient FM processes. Look for software that simplifies routine workflow for facility managers, such as scheduling preventive maintenance, tracking work-order status and invoicing, and managing property assets. Leveraging technology that streamlines and automates the following tasks can free up valuable time, ease frustration and drive efficiencies:

• Scheduling: Preventive maintenance is a critical piece to extending an asset’s useful life, but tracking and scheduling these tasks can be complicated. FM software is designed to simplify this challenge by allowing a company to manage scheduled maintenance at all locations through a single dashboard.
• Tracking asset management: Greater visibility into property assets, including their status, repair history and required maintenance, gives facility managers the ability to streamline FM processes and manage risk by staying ahead of necessary upkeep and repairs.
• Invoicing: Connecting invoicing and work-order management to FM software can streamline this duty. By managing workflow from proposal to invoice within a single system, managers can reduce invoice and processing costs and shorten approval time.

There are very few industries in which site maintenance and business success are so intertwined. Modern FM solutions can provide greater visibility into your self-storage systems, assets, vendors and historical data. Rather than viewing these tools as a financial burden, you should see them as a means to identify savings, drive efficiencies and improve the customer experience.

Tom Buiocchi is president and CEO of ServiceChannel, which provides facility managers with a single platform to source, procure and pay for repair and maintenance services from commercial contractors. He has more than 30 years of experience leading growth companies in technology and energy services. To reach him, call 800.508.6695; e-mail [email protected]; visit servicechannel.info. 

Update 8/20/18 – Absolute Storage Management (ASM), a self-storage owner and property-management firm, announced operating results for the second quarter of 2018. The company increased same-store revenue by 5.1 percent compared to the same period last year. Same-store occupancy increased by 1.5 percent as of June 30, according to a press release.

ASM gained eight management contracts during the quarter. The facilities include Arlington Climate Controlled Storage in Arlington, Tenn.; Eastside Self Storage in Snellville, Ga.; Melrose Storage in Nashville, Tenn.; New Shackle Self Storage in Hendersonville, Tenn.; and Starkville Storage in Starkville, Miss. The company also acquired five facilities at completion of construction.

“We are extremely proud of the efforts of our team members and their commitment to success,” said Jennifer Barnett, chief operations officer. “With occupancy levels at such high percentages, it is no easy task for our team to continue to generate such excellent year-over-year gains.”

Founded in 2002, ASM operates 107 properties in 13 states. Headquartered in Memphis, Tenn., it has regional offices in Atlanta; Charlotte, N.C.; Jackson, Miss.; and Nashville, Tenn.

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8/14/18 – Sentry Self Storage Management, an industry management and consulting firm, has released its second-quarter 2018 operating results showing year-over-year improvement in revenue, net operating income (NOI) and occupancy. The company reported revenue growth of 4.1 percent and a 2.7 percent increase in property expenses, which resulted in a 4.9 percent increase in NOI compared to the same period in 2017.

Occupancy at Sentry-operated self-storage properties was 90.7 percent as of June 30, a year-over-year increase of 10 basis points, according to a press release.

The company is expanding two properties in Lakeland and Tampa, Fla., which are expected to be complete during the second quarter of 2019. A new development in Hollywood, Fla., is also expected to open during the second quarter next year.

Based in Coral Springs, Fla., and founded in 1997, Sentry owns or manages 27 properties comprising more than 2.3 million net rentable square feet. The company’s services include consulting, development, feasibility studies, acquisitions, renovations and facility management.

Archetype Ltd., a product-development and manufacturing group, has introduced a new model in its Flood Buzz product line that can help self-storage operators identify potential leaks at their facilities. The small Flood Buzz Pro-01 can be placed inside each storage unit. When the two posts on the bottom of the device sense water, they trigger a 110-decibel alarm, according to a press release.

Flood Buzz includes a sealed battery and can be tested by dipping the prongs in water or placing them on a damp cloth. The product is reusable but should be replaced every three years. Available through authorized distributors, the product line includes four models designed for various applications.

Based in Short Hill, N.J., Archetype provides proprietary products to the commercial, industrial and homeowners’ markets. The company is managed by executives with decades of experience in senior distribution, manufacturing, product-development and marketing, according to its website.

Flood Buzz, Website

The discovery this week of several people living in units at a Boston CubeSmart self-storage facility has brought attention to the city’s housing crisis. Authorities conducting property inspections in the historic Dorchester neighborhood found storage spaces at 968 Massachusetts Ave. outfitted with curtains, ice chests and coolers, food, and electrical cords, according to a source. “That just indicates the desperate nature of housing here in Boston,” said Joseph Finn, executive director of the Massachusetts Housing & Shelter Alliance.

CubeSmart was ordered to vacate the units due to the severity of the violations, the Boston Inspectional Services Department said in a statement. A sign was posted on the facility’s front door stating that property access would be limited to office hours, effective immediately. The office is open 9:30 a.m. to 6 p.m., Monday through Friday, 8:30 a.m. to 5 p.m. on Saturday, and 11 a.m. to 3 p.m. on Sunday, a source reported.

A facility tenant told investigators she was renting a 20-by-20 unit for $230 a month. In comparison, a studio apartment measuring 26 by 20 feet is on the market just a few blocks away for $2,100 a month, a source reported. The median rent in Boston is $2,750, according to real estate company Zillow.

Although lotteries are held for rent-restricted apartments, scores of people vie for them, according to Robyn Frost, executive director of the Massachusetts Coalition for the Homeless. In addition to self-storage units, the homeless have set up tents in the woods.

“People do try to find whatever they can,” said Barbara Trevisan, a representative of the Pine Street Inn homeless shelter. “We have many folks who come through our shelter who are working, but they don’t earn enough of an income to have an apartment here.”

City officials are looking to build more than 200 units of permanent supportive housing for the area’s homeless. “What we have really determined is that we need additional housing resources,” said Sheila Dillon, chief of housing and director of neighborhood development. Two possible sites for the residences have been identified. The city hopes to raise $10 million through philanthropy for the project, a source reported.

About 50 percent of the city’s “chronically” homeless are from outside the area, according to city data. Boston draws these people because of its high concentration of services, medical care and transportation, according to a source.

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

Sources:
Boston Herald, Self-Storage Evictions Point to Larger Crisis
Boston Herald, Boston Proposes $10M Plan to Help House Homeless

After collecting résumés and conducting interviews and background checks, you’ve finally hired the perfect candidate to join your self-storage team. So, what’s the next step? You need a quality training program that ensures your hire receives the right guidance to succeed in his new role with your company.

Learning Styles

We often teach new managers in the way we learn best, not the way they learn best. Don’t expect to train all employees the same way, as it isn’t a one-size-fits-all process. Instead, it must be tailored to the skill set and learning style of the trainee. It’s smart to coach each new employee using his preferred method.

For example, he might prefer that you show him how to do the task, verbally explain how to do the task, or provide written materials that spell out a step-by-step process. He may wish to do the task himself after you’ve shown or explained it to him. In many cases, a new employee will learn through a combination these. Before you start training, ask which approach he prefers. You’ll find that framing the tutorial to the person’s learning style will benefit all involved.

Onsite Training

While many companies have training manuals or conduct training offsite, there’s no substitute for onsite learning. Seeing property issues, office challenges and the local market firsthand can enhance a new manager’s ability to learn the site and his role in its success.

The daily walk-through is a great example of a hands-on training moment. With a to-do list in hand, the trainer can show the steps to ensuring the property is up to standards.

It’s also important for the new manager to spend time training with other employees. This could include a co-worker, a regional or district manager, or the owner. Just be sure that any information he receives about operational procedures is consistent from everyone.

The training duration will depend on several factors including facility size, staff size, the new hire’s work experience and more. An experienced manager may only need a short time to get up to speed, while someone new to the industry might require more one-on-one training to fully grasp the job duties.

Don’t assume an employee is ready to be on his own after he completes the training period. Sometimes new items pop up, forgetfulness takes over or lack of repetition prevents retention. Ask the manager about his comfort level, and make sure someone is available if a problem arises.

Follow Up

In reality, job training never ends. Be open and available to questions for days, weeks, even months after the initial period. There are some tasks or issues that come up so infrequently it’s easy for an employee to forget. Don’t make it uncomfortable for him to seek input. Too often a new team member doesn’t reach out for help because he doesn’t want to appear unable to handle the job. Consider the following:

• Send e-mails to check in and see how he's doing. Ask if he has any questions.
• Pick up the phone and chat with him about issues at his facility, then offer suggestions or recommendations. Share stories of similar situations at other sites and how those managers solved the problem.
• Schedule face-to-face meetings. These can be short, informal get-togethers that allow him to ask questions.

Ongoing support and feedback will also improve the employee-owner partnership. Schedule periodic training sessions through Skype, GoToMeeting or other video-conference programs. A 15-minute meeting before the start of the day can be used to train, motivate and encourage all managers, new and experienced.

It’s also important to give your new manager guidance and room to make decisions. If he makes a choice that’s contrary to one you’d make, let him know but use it as a positive teaching moment. Unless it’s a gross violation of company policy, support his decision and give him “next time this occurs” feedback, explaining how he should handle a similar situation in the future. A manager who won’t make decisions is in fact deciding. Relying on superiors for every choice prevents him from taking ownership and accountability.

Lack of confidence will affect initiative, so create a support system that allows a manager to grow in his position. Consistent follow-up by the training manager or supervisor can help an inexperienced employee gain self-assurance in his role.

Retention

Retaining great employees can be nearly as difficult as hiring them. Not only does there need to be a strong trainer, a supervisor should continue to nurture their success within the company. Be a mentor for your managers. Too often they go through an initiation period and then are left to figure things out for themselves. This leads to frustration that can result in them leaving for a company that’s better about onboarding new talent.

As you continually improve your training program, ask yourself the following:

• Will the new employee work best on his own or in a group?
• What motivates this person?
• What reward or recognition would he appreciate for a job well done?
• When he needs to tackle a new task, does it motivate or scare him?
• Is he a self-starter or does he work better with consistent oversight?
• What type of feedback does he need from his supervisor?
• How does he handle negative feedback? Does he take constructive criticism well or does it make him resentful?

Find out what motivates your new hire. Is it recognition, praise, encouragement, challenges, goals or financial rewards? Some people need a cheerleader while others only require an occasional “good job on this task” so they know someone is paying attention. Each team member will have his own motivation level and desire for reward. By focusing on the achievements of each, your company will also excel.

The Unteachables

Work ethic is the driving force in employee success. Taking initiative and ownership, being accountable, seeking additional responsibilities, expecting excellence in themselves, setting a high standard and striving to exceed expectations … These are things that can’t be taught. It’s embodied in the person or it isn’t. An effective training period that teaches policies, procedures and expectations can reveal your new team member’s work ethic.

On the other hand, failure to train can have an adverse effect on work culture, employee retention and facility success. The economy is improving, more jobs are being created and competition for great staff is becoming fiercer. Having an environment that’s inviting for new hires and rewarding for existing members will reduce staffing issues. The challenge is to create a workplace that fosters the success of your property and people.

Donna Edwards is a manager at Plantation Self Storage in Bluffton, S.C., which is operated by Southeast Management Co. She joined the company in 2013 and has more than 10 years of experience in property management. Her marketing experience includes setting budgets, designing marketing plans, and creating all types of advertising. For more information, call 843.815.8000; e-mail [email protected]; visit www.southeastmanagementcompany.com. 

SmartStop Asset Management LLC, a Ladera Ranch, Calif.-based diversified real estate company that manages 118 self-storage facilities in Canada and the United States, has promoted James Barry to senior vice president of finance. He’ll also serve in the same capacity for Strategic Storage Trust II Inc. (SST II), a public, non-traded real estate investment trust (REIT) sponsored by SmartStop that focuses on income-producing self-storage facilities. Barry will be responsible for the management of budgets, forecasts and various financial analyses, according to a press release.

Barry formerly served in various financial capacities for SmartStop, including vice president of financial planning and analysis, director of finance, and financial analyst. Prior to joining the company, he served in analyst and accounting roles for Grubb & Ellis Co. and Thompson National Properties LLC. He earned a bachelor’s degree in finance from California State University at Fullerton, and an MBA with an emphasis in finance from Chapman University, where he graduated with honors.

“I am pleased to announce the promotion of James, who is a seasoned professional and a valuable member of our management team,” said H. Michael Schwartz, SmartStop’s founder, chairman and CEO. “We are excited to have him in this new role with SmartStop.”

In June, SmartStop promoted Gerald Valle to senior vice president of self-storage operations. Valle will oversee day-to-day governance of all the firm’s U.S. facilities branded as SmartStop Self Storage, including a team of 240 professionals.

SmartStop has approximately $1.5 billion of real estate under management, including five student-housing communities and three senior-housing communities. Its self-storage portfolio comprises about 8.5 million rentable square feet. It’s the sponsor of Strategic Storage Growth Trust Inc. and Strategic Storage Trust IV Inc., public non-traded REITs focused on self-storage assets. The SST II portfolio contains 83 storage facilities comprising 51,300 units and more than 6 million net rentable square feet.

Real estate firm Rosewood Property Co. (RPC) has begun construction on a self-storage facility in Tigard, Ore., a suburb of Portland. It’ll be the company’s first location in the area, according to a press release

The multi-story structure at the intersection of Oregon Route 99W and S.W. 68th Parkway will comprise 83,375 rentable square feet of storage in 850 units, 94 percent of which will be climate-controlled. Once complete, the facility will be managed by self-storage real estate investment trust Extra Space Storage Inc. and branded under its name.

“This new facility will add another important project to our expanding presence in the self-storage sector, and we are excited to expand to the Portland-area market,” said CEO Bill Flaherty. “It was carefully and thoughtfully designed in a strategic area to meet the needs of its targeted customers. We will continue our focus to selectively add self-storage projects in multiple markets that are a strategic fit within our portfolio.”

Earlier this month, RPC acquired a newly opened self-storage facility in San Antonio, its third in the city. The property comprises 88,875 rentable square feet of storage space in 784 climate-controlled units.

Based in Dallas, RPC owns 43 self-storage facilities in 11 states, totaling more than 3.25 million square feet and containing 26,500 storage units. The company is developing multi-story projects in select markets and remains focused on actively building its portfolio, mainly through acquisition, the release stated.

RPC is a wholly owned subsidiary of The Rosewood Corp., a private investment concern owned by the Caroline Hunt Trust Estate. Its investments include office, multi-family, industrial, self-storage and land assets as well as equity securities of public and private real estate investment companies.

Self-storage investors are enjoying the fluid nature of today’s transaction market, and it’s evident that property buyers and sellers need to focus on more than just price. We’re in an incredible period in which the unconventional and unexpected have become a part of everyday business. The influx and sheer number of buyers and equity to self-storage over the last few years has led to higher transaction velocity and facility values, and much to my surprise, has extended the investment cycle, with very little signs of slowing.

Industry brokers sometimes forget that day-to-day real estate transactions can be unfamiliar to clients. We deal with buyers and sellers every day, yet we sometimes forget to explain the nuances of this ever-changing market. With that in mind, I’d like to take you through a few of the less obvious aspects of today’s deals.

Structure

If you’re in the market to buy or sell a self-storage property, it’s important to understand that the structure of the deal can be as important as the price. With very sophisticated capital continuing to enter the market and values remaining high, alternative structures are becoming more common. I’ve advised clients on umbrella partnership real estate investment trusts (known as UPREITs), preferred equity structures and price allocations, just to name a few. These all allow the parties to achieve different goals and can be beneficial—if you understand them.

Too often the buyer and seller glaze over the structure without considering the financial implication of it. However, the devil is in the details. It’s important to remember that everyone’s situation is unique, so before you acquire or sell, seek tax and legal advice from an experienced deal lawyer and accountant.

Value

When brokers think about pricing, they’re focused on a number on which the buyer and seller can agree. Otherwise, there’s no transaction! However, today’s fluid market has made it difficult to pinpoint the exact value of a self-storage investment. Often, sellers are thinking about a price that would make them happy and not the one a buyer would actually pay.

In the real estate world, the market usually has a relatively narrow band of value. However, the range of self-storage facility values today is much wider. It’s not uncommon for offers to be 10 percent to 25 percent apart.

It’s important to remember that overpricing is not harmless! You must diligently and carefully analyze the value of a project today. Consider the traditional valuations techniques, such as market-sales comparisons, price per square foot, impact of new development, embedded value and the income approach.

In addition, you must also have a good feel for national investment sentiment and trends. We’re seeing more national and regional buyers expanding to secondary and tertiary markets, where there has been far less new development. This has driven up prices up in smaller markets while the valuations in major markets are flat or softening.

Bear in mind you shouldn’t be misled to believe your secondary market property is a 5 percent capitalization (cap) rate deal. We’re seeing secondary-market deals in the 6 percent to 8 percent range and major-market deals in the 5.5 percent to 7.5 percent range. These cap rates assume market-rate operating expenses for underwriting, such as payroll, offsite management, adverting, repairs and maintenance, etc. Secondary markets might not get the same respect as major ones, but it’s clear that in this cycle, this where the smart money is going.

Marketing

When taking a property to market, it’s vital to understand that the difference in quality and risk are often subjective. For example, a relatively low occupancy might indicate a poor performing property or, alternatively, a great opportunity to increase occupancy and revenue. For this reason, it’s extremely important to market properties expansively to find the buyer who has the most optimistic view of not only the asset but the investment market as a whole. Always beware the broker or colleague who says, “I have the right buyer for you. We don’t need to market the property.”

To maximize your value, you’re looking for the buyer who’s qualified and sees the opportunity to improve your facility. The more qualified prospects who are exposed to your offering, the better chance you have of maximizing your sales price.

When selling a self-storage property today, hire an investment broker who has experience and national reach to ensure you get the most from the transaction. When considering a sale, you would be well-served to focus on how your broker will structure the deal and market the property, and less on the price.

Ben Vestal is president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to self-storage buyers and sellers via an extensive marketing platform for self-storage properties. Property listings and informational resources can be found at www.argus-selfstorage.com. For more information, call 800.55.STORE; e-mail [email protected]. 

Pinnacle Storage Properties, a Houston-based firm that operates more than 10 Texas self-storage facilities under various names, has acquired AA Climate Controlled Storage in Montgomery, Texas, a suburb of Houston. Built in 2003, the facility at 5699, 18455 TX-105 comprises 58,685 net rentable square feet of storage in 483 climate-controlled units.

The buyer and the Houston-based seller were represented in the transaction by Bill Bellomy and Michael Johnson, brokers with Bellomy & Co.

Pinnacle also recently acquired Storage House of Texas in Garland. It was the first property to be rebranded under Pinnacle’s new Storage Plus brand.

Pinnacle is a privately held real estate owner and operator focused on the acquisition, development and management of self-storage assets. Its investment strategy is to purchase under-leveraged properties in suburban and secondary markets. The company also currently has a location under development in Round Rock, Texas.

With offices in Atlanta, Houston, and Austin, Texas, Bellomy & Co. focuses on the sale of self-storage, industrial, office and retail properties nationwide.