By David Wilhite

Sale-and-disposal legal-liability is an important coverage specific to the self-storage industry. It provides protection against conversion: the act of wrongfully taking, selling, using or destroying the goods of another party. Nearly every state has specific statutes governing the sale-and-disposal process, as provided for in the States Self Service Storage Facility Act. However, if the procedures are not followed to the letter, or if there is an error in any step of the sale-and-disposal process, self-storage operators are left vulnerable to lawsuits claiming loss or damage of stored goods. Due to the incredible diversity of goods commonly stored and the wide range of values of the property, the penalty for conversion can be extremely high.

Sooner or later, every self-storage owner will be faced with the unenviable task of evicting a tenant for failing to pay his rent, reclaiming the storage space and removing or disposing of the tenant's property. Fortunately, most states give self-storage operators extraordinary leverage against delinquent tenants. Nearly every state has specific statutes to govern this process. If the procedure is not followed correctly, an operator leaves himself vulnerable to lawsuits claiming loss or damage of stored goods. Even when the process is handled correctly, it is not uncommon for a disgruntled tenant to file a claim against the operator charging negligence in the removal or disposition of stored property.

For example, a self-storage operator was recently held liable for $250,000 in damages by a California court for the wrongful sale of a customer's property. The court judged that the storage owner's notice of intention of sale was defective, since the operator's newspaper ad did not include the delinquent tenant's name, which was required by state law. The court ruled that the operator was in violation of negligence and conversion as a result of this error.

It is important to remember that many sale-and-disposal lawsuits are the result of trivial errors, such as reversing the numbers on an address. The chance of an error occurring is compounded by the fact that most state statutes generally require that several letters of notification be mailed to tenants with delinquent accounts, and that the self-storage operator publish a legal notice in a general circulation newspaper in the judicial district where the sale will be held. There are, of course, many variations by state on these procedures, and each must be followed to the letter to minimize the likelihood of a lawsuit. It pays to be careful! Judging by several recent jury awards, a trend appears to be developing in which storage operators who make minor violations of state statutes can be held liable for large punitive and emotional damages far in excess of the actual value of a tenant's stored items.

The good news is that there are several effective steps you can take to minimize the risk of sale-and-disposal lawsuits. If you or your staff are involved in the sale-and-disposal process, you must be aware of lien law. Consult with an attorney about preparing a written procedure that outlines the exact steps for disposing of a delinquent tenant's property. Read and follow all state statutes. Always double-check names and addresses, and don't make any changes to information on the rental agreement, such as correcting an obvious misspelling, unless accompanied by a signed change-of-address card. Document, in photographs and writing, every step of the inventory and auction process. In a lawsuit, you will have to show proof that the disposal of the delinquent tenant's goods conformed to state statues. And if there is any reason to question the sale and disposal of a tenant's goods--don't. Many owners prefer to let tenants retrieve their property at no charge, rather than go through the potential liability of an auction (it is certainly preferable to defending yourself in a lawsuit). Last but not least, be absolutely certain you have adequate insurance coverage.

When shopping for sale-and-disposal legal-liability insurance, be aware that this industry-specific coverage is not normally available through regular business insurance carriers and generally cannot be added to a standard business owner's policy. However, the coverage can be secured through insurers specializing in the self-storage industry. No matter how large or small your self-storage facility may be, securing adequate coverage is essential for protecting your business and your peace of mind.

To better help you protect your business, Universal Insurance Facilities Ltd. offers sale-and-disposal legal-liability coverage as part of its extensive self-storage insurance program. Universal's coverage helps protect you against claims arising from the negligent sale, removal, disposal or disposition of customers' property when reclaiming space for which rental or other charges are delinquent or unpaid. The coverage further provides for defense and legal costs, even if a customer's suit is groundless or fraudulent. In addition to loss-of-income and extra-expense coverages,

Universal offers a comprehensive package of coverages specifically designed to meet the unique needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, write P.O. Box 40079, Phoenix, AZ 85067-0079; phone (800) 844-2101; fax (480) 970-6240; e-mail [email protected]; www.vpico.com/universal.

By Harley Rolfe

Me? Scared of the dark? At times. Most people's hearts race a bit when they go into unknown or strange territory. And "most people" includes those who are looking to rent a self-storage unit for the first time. Not many customers are repeats. Most are rookies, and they are wary of their own amateur status. That unease is an available hook for savvy marketers. A first step in breaking down a prospect's caution is to create familiarity. A known name--a brand name--helps disarm them.

First Thought?

When operators begin to feel the pinch of competition and thoughts of marketing begin to swirl, the first thing that many want to do is establish a brand name. That's not where I would start, but it can be done without much additional knowledge or change. One problem is that the name they want to establish is the one they now have, which may not be the best choice. Most existing names were conceived under commodity circumstances. But with more market stress, you may be dealing with a name that may not work as well in the new market conditions.

What's in a Name?

Perhaps a reference to the genesis of brands might help. You know of their use in Western films to identify cattle on the range. Back then, brands were used to identify which cows belonged to whom--quickly and from horseback. They needed to be indelible and impervious to modification. While things have calmed down since those Wild West days, many of the qualities of good brand design carry forward.

Can you think of a successful product that doesn't have a strong, well-known brand name? That's the primary way we identify a product. Sometimes the brand name is the most valuable part of a company's offering. Chevrolet the brand goes on and on, while individual models come and go under that Chevy banner. Think also to the hospitality industry where names like Holiday Inn, Hilton, etc., endure by offering franchisees instant recognition among prospective guests. So strong is that influence that finance sources often will not finance a new lodging facility without an affiliation. A good brand name may be so desired that it can be rented out and used to give instant recognition to other product lines. Often, heavy-duty lawsuits are filed to protect the owner's rights to a certain name. (Be sure to register yours in your state.)

Your name should be transferable. Some day you will sell your facility--the new owner doesn't want to inherit your surname, nor does he want to undergo the cost of establishing a new title. He will pay you for an established name that he can use. And well he should, because you have labored to have that name ingrained in everyone's mind and reinforced with a good reputation. It's part of the going business value and is one reason why an operating business is dearer than the sum of its physical parts.

Keep in mind that familiar things are more valuable than those that are not. A Sunkist orange is more valuable than a no-name orange. That increased value either takes the form of being preferred or commanding a price premium, sometimes both. Your brand name has a high-energy job. It will convey a core message succinctly. To do so, it must use all the tricks of the copywriter's trade--graphics and the selection of arresting words. The ingredients are pretty straightforward:

1. Graphics or logo: You've heard it before: One picture is worth a thousand words. It is the quickest route to something memorable. It illustrates the essence of your offering. It is also the least precise. While the logo is the centerpiece of the brand, it must be supplemented to convey a meaningful message. This is the "music" of our message.

2. Slogan: With a few choice words, we put "lyrics" to that music. It translates the graphic into a meaning that is specifically useful to you. A stand-alone graphic is usually not significant to a viewer until it's linked to your offering. The viewer must be led to the relevance of the graphic.

3. Name: You cannot communicate via the logo alone. The logo needs the name to convey the identity of the offering. When a prospect uses the name, he is really thinking about the logo, made appealing to him by the slogan.

You can just invent a name--like "Kodak," for example. Drug companies do it every time they come out with a new compound. The advantage is uniqueness and absolute proprietary rights. Also, it only means what the company wants it to--no baggage. The disadvantage is the necessity--through media--to give it meaning and to popularize it.

A clever name is good as long as it isn't maudlin or silly. It should entertain and make the name memorable. There is liberal use of double entendres, for example, "We bring good things to life," by General Electric, or "A cut above," the slogan of a beauty shop in my home area.

The brand name and its supporting cast (logo and slogan) should convey a theme benefit of the facility. Terms such as "mini-storage" and "self-storage" are descriptive but don't carry a benefit. The name "U-Save Storage" contains a benefit and uses a price appeal, while "Westside Storage" offers information. (With any luck, the operator is the only one on the "West side.")

As critical as a good brand name is, there are many who try to design one on their own. Don't. Find a good graphic artist who understands the subtle techniques needed to do it well. Case in point: A familiar word (those in your reading vocabulary) actually operates as a graphic. When it is misspelled, for example, you detect instantly there is something wrong with it. You aren't processing the individual letters, but have registered the whole word as one piece. That word has gained the status of a graphic in your mind. It is this characteristic that permits you to read fast. By stylizing the letters of the word, however, you can make it "yours." In so doing, you merge the graphic and name into one entity. This sort of thing is what graphic artists are able to do. You must be mindful of the message and the mood you are trying to convey. The artist cannot and should not invent your message, but he can usually execute it better than you can.

The creation of a brand name is not a casual enterprise. It uses a combination of art and science, and it must be featured in every venue possible. When done well, it is a symphony with several dynamic parts causing the viewer to regard your business as an old friend--despite the fact he may not actually know you from Adam. Brand names are powerful. We shouldn't--and don't usually--take them lightly.

Missed some previous issues? Check the web at www.hardnosed.com.

Harley Rolfe is a semi-retired marketing specialist whose career includes executive-level marketing positions with General Electric and AT&T. He also owned lodging and office facilities for more than 20 years. Mr. Rolfe holds a bachelor's degree in economics from Wabash College and a master's degree in business administration from the University of Indiana. He can be reached at his home in Nampa, Idaho, at (208) 463-9039. Further information can also be found in Mr. Harley's book, Hard-Nosed Marketing for Self-Storage.

Early in 1998, Eau Claire, Wis.-based Quayle Computer Concepts entered the national market of self-storage management software with a Windows-based program called the Storage/Warehouse Asset Management Program, or SWAMP. The path to success was neither short nor easy, with the program having undergone four major updates through 13 builds. But today, the company enjoys its place among the ranks of competitive software providers within the industry.

Getting Up and Running

In 1977, in a father-and-son partnership, Calvin and Gordon Quayle began the construction of CQrt Self-Storage, with Calvin managing the facility while Gordon finished school to become a computer programmer. Being naturally frugal, Calvin first used manual billing and record-keeping methods to run the business, then later graduated to the use of a Burroughs B-20 computer to automate his company functions.

He reviewed professional software and found it both expensive and incompatible with his operating system. However, using a word processor and spreadsheet, he was soon creating computerized invoices, late notices, letters and envelopes, as well as occupancy and income records. Over the years, Gordon would write macros on the spreadsheets to speed the process, making functions more accurate and easier to use. By this time, Calvin had graduated to a Compaq computer and a Windows operating system.

Gordon created Quayle Computer Concepts and developed a management program for a local insurance company. He realized many of the problems he had addressed with that project could also be applied to the record-keeping needs of self-storage, spurring the rise of the SWAMP program. During the next two years, Calvin utilized the program in his business and made suggestions for improvement while Gordon added features.

Eventually, the two felt the program was suitable for presentation to the industry, and it was offered to self-storage owners in the Eau Claire, Wis., area. Four managers purchased the program and added their own suggestions for further changes. Version 1.0 of the program underwent five updates before Gordon reached completion of version 2.0, which was offered to the public for the first time at the Inside Self-Storage Expo in Las Vegas, February 1998.

Industry Feedback

According to the Quayles, response to the program has been positive, with several managers inquiring as to why the program is so inexpensive, weighing in at hundreds of dollars less than some other popular management packages. But its inceptors insist no program should be too costly. They point out the SWAMP program does not feature some of the bells and whistles that add complexity and cost to some of the other available programs, though it is comprehensive.

Targeted especially for owner-operated facilities that do not want or need security-gate interface, elaborate password protection and audit trails, the SWAMP program efficiently handles all other management features, including templates for recording tenant information and payments, late fees, deposits and other miscellaneous information. It also generates invoices, envelopes or labels, as well as a wide range of reports, such as income, expense, occupancy, units available or locked out, and late and current tenants. Automatic rate increase and updating of tenant rates is also available, accommodating either anniversary or specified billing and automatic prorating of the first payment.

Since the unveiling of SWAMP version 2.0, more than 30 improvements have been made to the program to eliminate bugs and add features requested by users. Among these are greater control and flexibility in assessing late fees and the automation of rent increases. When Gordon presented the program at a meeting of the Texas Mini Storage Association in Dallas, May 1998, the question was asked, "Does it use the TMSA lease?" Though the response at the time was negative, that has since changed, demonstrating just one example of Quayle's responsiveness to customer requests. The company is now offering SWAMP version 2.3.

Keeping Good on a Promise

According to Gordon, computer software should fulfill its promise of making life easier and assist professionals in managing their office functions. "Our motto is 'Making Computers Work for You,'" he says. "One of us has managed storage units for more than 20 years, and the other has been programming computers for nearly that long. It was a natural merger to combine our experience and create a software product specifically designed for the smaller operation at a reasonable price."

Both father and son are committed to serving the self-storage industry as a whole, but particularly their loyal clientele. "We keep our overhead low, and we listen to our customers," says Gordon. "We will continue to add the features our customers want. We are committed to make a software product that truly makes good on its promises. What more could you ask?" For more information, visit www.quayles.com

Self-Storage has been one of the fastest growth industries to enter the American economy in the past 30 years. Its success can be attributed to a variety of factors, but one of the main reasons has been the industry's ability to evolve quickly as more of the public has been educated to the value of its use. As public awareness increased, storage demands increased, which in turn gave rise to the tremendous growth of both institutional and private self-storage development.

This nearly instantaneous growth in market competition sparked the need for specialty vendors and new technology to support the industry's continued expansion. The final evolutionary step is the search for the most cost-effective means to develop the most marketable facility while maintaining the highest return on investment. Since the self- storage product is storage space, the quest to develop the most economical, marketable facility centers on the design of its components. Nothing in the 30-year history of self-storage is more evident of this quest for success than the evolution of self-storage design.

The Evolution of Basic Design

The first- and second-generation self-storage facilities were those developed before 1970 and by the mid-1980s, respectively. The vast majority of these facilities had site plans that incorporated very poor land utilization, and unit mixes that were not based on local demand or placed for the best use by the customer. The storage buildings were a mixture of expensive commercial designs that incorporated components requiring extensive maintenance over time. In addition, the designs did not allow for the flexibility of changing the unit mix without very expensive building modifications.

In comparison, today's self-storage facilities have economic land coverage, maximizing land utilization and lowering the cost of the land vs. the facility's net rentable square footage. The vast majority have standardized their unit mixes based on the demands of the market, and have user-friendly positioning of unit sizes based on commercial and residential users. These same facilities have "master-planned" any remaining land to facilitate future phase expansion. Today's building designs are economically feasible, since they incorporate the most available local building products and the industry's most cost-effective building technologies. Current designs utilize "long-term, maintenance-free" design components, and have incorporated maximum flexibility for future unit-mix changes or other building modifications.

Driving Factors for Evolution

As you can see, there are major evolutionary design differences between those first- and second-generation facilities and today's self-storage properties. The main causes of this design evolution are centered around a constantly changing market, which has given evidence to three primary driving factors.

The first market-driven factor has been the ever-increasing cost of land. Caused by increased competition and the market's maturity of other real-estate development, the availability of economically feasible sites has greatly decreased. Thus, as the land increases in cost, the self-storage developer has been forced to maximize land coverage to decrease the cost of the land to his net-rentable square footage. As a result, cost-effective designs have become even more important--along with "maintenance-free" design-component considerations and building-design flexibility.

The second driving factor for evolution has been the increase in cost for building-design components. As many real-estate markets have "heated up," so has the demand for building materials and labor. Therefore, today's designs have been incorporating components that are both locally and nationally available to keep cost in line. For example, the cost of using concrete tilt panel walls may be prohibitive when prices for concrete are $90/cyd vs. other parts of the country where concrete is readily available at $52/cyd. In addition, building designs that allow for the use of specialty metal- building contractors vs. a commercial steel contractor could result in a savings of $3 to $4 per square foot.

The last driving factor has been the constantly changing jurisdictional requirements by local, state and federal government agencies. Zoning departments increasing setback distances, fire marshals increasing fire-lane widths, and new landscape ordinances increasing area percentages are just a few examples of jurisdictional changes that have greatly affected site coverage and increased land cost per net-rentable square foot in some markets. In addition to these factors are the building-code changes for fire separation, fire-code changes requiring fire sprinklers, and the zoning departments' requirement for buffering adjacent land.

Site Planning

In today's self-storage marketplace, the first key to having the most marketable and economically feasible facility is proper site planning. And the key to proper site planning is an understanding of the cost variables. Everyone in real estate has heard the old saying, "The three keys to success are location, location, location." For successful site planning, those three keys are the cost of the land, site coverage and the cost of site improvements. These three keys are the most important elements, not only to successful site planning, but also for the insurance of the facility's greatest economic potential.

As discussed, land prices will continue to increase and the availability of good sites will continue to decrease. As this market condition continues, most available sites cannot be used for any other purpose than that for which they were zoned--for one reason or another. Therefore, the good remaining retail sites may have an attractive price, but due to natural grades, existing easements, drainage, utility requirements and a host of other factors, the price for the land may be well beyond affordable for self-storage development. Understanding the normal cost of developing a self-storage property, along with the rents necessary to justify this expenditure of capital, is the key to determining what you can pay for the land along with any additional cost associated with its purchase.

With the impact of jurisdictional changes and normal zoning requirements, site planning to maximize site coverage will be the key to economic success. The more net-rentable square footage per land area (or increased site coverage), the less the cost of the land is to the development. The lower cost of the land over the facility's net-rentable square footage, the greater chance of site feasibility and the property's chances for the highest return on investment.

The last key to proper site planning is understanding the cost of site-work improvements. Site work normally includes grading, site concrete, paving, retaining walls, storm drainage, water and fire, sanitary sewer and landscaping. In regards to normal facility construction, site improvements have the greatest variable in cost, ranging from $4 to $10 per gross building square foot. Therefore, determining at least an estimate of what these costs are going to be is essential in determining, not only the site feasibility, but also the proper layout of the buildings.

Ensuring the Most Economical Site Designs

Knowing this, the question then becomes, "How does one ensure the most economical site plan?" If a new developer has limited experience in self-storage development, the best way is to hire an experienced design/builder, architect or civil engineer. However, it is advised that the new developer not leave everything to the professional. Do your own homework:

1. Review how other facilities in the market are site-planned.
2. Obtain all local zoning and landscaping ordinances.
3. Check with the local building inspections department and get approved building codes with any city amendments.
4. Visit with the fire marshal and obtain approved fire codes and any city amendments.
5. Check with local utility departments to determine the availability of utilities, and if there are any unique requirements or hidden costs.

Once fully studied by the developer, the gathered information should be reviewed with a hired professional to ensure site compliance. Once a preliminary site plan has been generated, it is recommended that it be walked through the jurisdiction's departments to determine if there are any further problems. It is also recommended that a follow-up letter be sent to each department outlining the things agreed upon during those meetings.

Site-Plan Considerations

There are a variety of site-plan considerations the developer and his design professional need to make. They should consider what will effect the final cost of the facility and how user-friendly it will be to the customer. These considerations set the stage for the facility's ultimate success. Those site-plan considerations, which have the greatest effect on the typical facility costs, are as follows:

1. Site Grading vs. Building Layouts: How the storage buildings are laid out on the site in regards to existing natural grades can greatly increase or decrease grading cost.

2. Site Grading vs. Building Types: When excessive natural grades exist, the choice of building types, such as "split-level" buildings, can greatly reduce grading cost while increasing net-rentable square footage on the site.

3. Site Grading vs. Retaining Walls: Always try to design site elevations that will eliminate or minimize the use of costly retaining walls. If there is no way to eliminate them, investigate the market's most economical types of retaining walls and utilize them.

4. Asphalt vs. Concrete Paving: Due to present demands, the cost of concrete has risen from 50 percent to 70 percent in most markets. Presently, the cost of concrete paving ranges from $2.25 to $3 per square foot vs. asphalt that has prices ranging from $1.40 to $1.65 per square foot. This variance between the two has given rise to the increased use of asphalt when concrete paving is clearly the best choice. Considerations should be made in using both--asphalt for the main drives and concrete paving for turning radiuses.

5. Storm Drainage: It is always more economical to design for surface drainage than underground drainage; however, sometimes underground drainage is the only option. When this occurs, ensure building and drive elevations are designed to eliminate as much underground storm-drainage piping as possible. Always investigate and discuss every cost-saving option with your design professional.

6. Detention/Retention Basins: If they are required in the storm-drainage plan, earthen basin with 3-to-1 slopes are by far the most economical; however, they require more land area. Analyze the increased cost of vertical concrete basins, which will also increase net-rentable square footage vs. the use of earthen basins, which will cause a net-rentable square footage loss but will have greatly reduced cost.

7. Fire Service: Once an investigation has been made by your design professional as to the location and number of fire hydrants required, determine if "looped "or "dead-end" fire-service lines are required. The looped system will double your cost. Also, check with the local fire marshal to determine if detector-check values with vaults are required. They will increase your cost by as much as $20,000 and will affect the building layout.

8. Sanitary Sewer and Domestic Water: The location of existing sewer and water improvements can greatly affect the cost of tapping into them as well as the layout of the storage buildings, especially if the local jurisdiction requires easements. This should be thoroughly investigated.

Site-plan considerations that ensure user-friendliness are just as--if not more--important than those pertaining to a facility's economic feasibility. These site-plan designs increase the facility's marketability and competitiveness. The most important of these to be considered are:

1. Wide Street Approaches: Always have at least a 25-foot or wider entry approach into the facility. Wide approaches assist large trucks, especially rental-truck entries by inexperienced drivers. They will also eliminate damage to improvements located around the entry approach.

2. Parking: Lay out parking spaces so they have minimal impact on ingress and egress traffic through the facility's security-gate system. Ensure they are as close to the office as possible and adjacent to sidewalks. Standard parking spaces are 9-by-18 feet. However, increasing the parking space width to 10 feet will be greatly appreciated by potential customers.

3. Entry-Control Systems: Always design the facility entry area around the entry-control gate system. Ensure that keypads are located to allow for the stacking of at least three cars where they will not interfere with traffic and parking back-outs.

4. "User-Friendly" Unit Placement: Locate larger units on fire lanes and/or the widest drives so they are more accessible to commercial customers. Try to segregate unit sizes, placing small and larger units in different areas. Don't place smaller units across from climate-control buildings since they will increase the amount of drive traffic for climate-control customers who have to use hallways and congregate around building entrances.

5. "User-Friendly" Hallways: Design hallway entrances with either 5-by-10-foot or 10-by-10-foot covered staging areas. Locate the larger units closest to the building entry while increasing the distance from the entry for units as they get smaller. Try never to have hallways more than 100 feet between building entries or elevators.

6. Increased Drive Widths: Be sure to use fire lanes, which are usually at least 30 feet in width, to maximize traffic flow through the facility. Drives with widths of at least 25 feet are preferable and will decrease building damage in the long run.

7. Turning Radiuses: Turning radiuses are most often determined by the fire department to have a 25-foot inside and a 50-foot outside radius. But in all cases, ensure that there is at least a 30-foot distance between the buildings and curb on all turning radiuses.

8. Site Amenities:  Locate trash dumpsters so they are convenient for customers while also providing straight-line access for service trucks in order to prevent damage. It is recommended that 6-inch, concrete-filled ballards be placed on all building corners to eliminate building repairs.

Summary

Over the next decade, the self-storage industry will evolve at a much greater pace than the preceding 30 years. As market competition continues to increase along with land and construction costs, there will never be a more important time for the successful quest of the most marketable and cost-effective facility design than in the near future. The key to success in this new decade will be the developer's understanding of the driving factors that have caused past evolution in self-storage design. This knowledge will set the stage for the developer and his design team to ensure their site planning incorporates the most economical improvements while maintaining the facility's maximum marketability and competitiveness.

Mike Parham is the owner and president of National Development Services Inc. (NDS) of Bulverde, Texas, which has designed and built more than 150 self-storage properties since 1980. The company's accomplishments include receipt of the "Facility of the Year" award in 1990, 1991, 1994 and 1996, and the "Design Excellence" award from Mini-Storage Institute in 1992. For more information, visit www.ndsinc.com.

By Jim Chiswell

This past summer provided me many unique opportunities. My consulting work, along with some personal travel, gave me the chance to criss-cross America's Heartland, mostly by car. The highways of Pennsylvania, Ohio, Indiana, Illinois and Missouri helped me to record more than 4,000 miles in my Bonneville.

My point in explaining this journey is not to give you a travel log or to rant about high gasoline prices, but to give you a framework for the following observation. In virtually every community I drove through, I saw established self-storage facilities as well as those under development. These facilities are not just in urban and suburban areas but, more importantly, across the rural landscape of America.

Signs for facilities names such as "The Cubby Hole," "A Little Extra Space," "Space R Us" and "Extra Shed" jumped out at me as I drove. Many facilities were just a single building perhaps 30 by 150 or 200 feet. Most had no office on site. Many were not fenced or paved. However, most appeared to be near full capacity. Following a trend that's being repeated hundreds of times in communities all over the United States, entrepreneurs are building facilities. Most of these micro-projects are not being counted in the mysterious number of "total facilities nationwide," which seems so difficult to establish. It was exciting to see all these facilities.

I mention this because I believe these owners may be more critical to our industry than ever before. The manner in which these new owners conduct their business is crucial in an era when the self-storage industry is seeing increased legislative initiatives and customer litigation.

It is important for all of us to embrace these new owners. We need to seek an affordable way to involve them in the activities of our state and national associations. As established owners, we need to reach out and share our expertise. Being a mentor could provide untold benefits for new owners as well as the industry as a whole.

If you are a new owner of one of these smaller facilities, do not hesitate to call on another owner near you. Make sure your occupancy agreement complies with your state's current standards for dealing with customers. Make sure your late-fee policy does not leave you open to possible future complications. Make sure your lien sales are conducted in compliance with your state's lien law so that "wrongful-sale" litigation can be avoided.

I'm excited to see how our industry is touching every community. The importance of self-storage to both our residential and commercial customers is undeniable. I am proud to be a part of this industry and trust that you are, too. Working together, we can continue to expand market opportunities while limiting our collective exposure to overzealous legislators and litigation.

Holiday Planning

It is not too early to begin planning your facility decorations for the year-end holiday season. Yes, that's right: holiday decorating! What a perfect opportunity to deck your buildings, fence line and trees with attention-grabbing lights. This is an opportunity, for just a few extra dollars on your electric bill and the one-time cost of decorations, to make the local community take notice of your facility.

Over the years I have seen very few projects dress up for the holidays. Sure, some creative managers have done a wonderful job of making their offices look festive, but the exterior generally continues in a "same-old, same-old" way. I just can't understand this, especially when we are constantly seeking new, creative methods to market our businesses year round. In addition to creating increased visibility for your rental prospects, holiday decorating will cause your existing customers to share in the holiday spirit you create. Your office should also tastefully reflect the joy of the season.

You don't have to be part of a specific religious persuasion to enjoy a holiday display of lights or a festive atmosphere at your facility, but don't force employees to execute your preconceived decorating strategy. Involve them from the beginning of the planning and implementation of your holiday decorating. Have fun and don't be afraid to go a little over the top in your display. Perhaps residents will actually slow down a little as they drive past to look at your handiwork. And don't forget to include that all-important sign: "Happy Holidays From Everyone at 'Your Name' Self Storage."

Electronic Signatures

At the end of June, President Clinton signed into law the "Electronic Signatures in Global and National Commerce Act." In short, this legislation gives formal legal status to an electronic signature on a contract or other legal document. This should clear the way for self-storage owners who are aggressively using the Internet to obtain a signed occupancy agreement from a customer. It may also provide an avenue for the sending of delinquent notices via the Internet, but that is a future opportunity that may present itself. If you are interested in complete details on the law, you can search http://thomas.loc.gov and under "Senate Bill 761 (S. 761)."

Grandpa Jim

On a personal note, I would like to close this column with a special thank you. On May 19th, at 7:28 a.m., Courtney Elizabeth Johnson joined the Chiswell family. Her parents--our oldest daughter, Christie, and her husband, John--have given my wife, Jackie, and I one of the greatest gifts in the world: a grandchild. Now I can point to Courtney as the reason why her grandpa acts so crazy at times! She has already brought joy to so many people. I just wanted to say "thank you" to Courtney, and her Mom and Dad, for helping me refocus on life's priorities.

Jim Chiswell is the president of Chiswell & Associates Ltd., which has provided a full range of consulting services to the self-storage industry since 1990. Mr. Chiswell can be reached at his office in Buffalo, N.Y., at (716) 634-2428; e-mail [email protected]; www.Jimdot.com.

Taking the self-storage concept one step further, the up-and-coming segment of the industry is mobile self-storage--storage that comes to the customer. Many users believe mobile storage offers the ultimate in convenience, an increasingly popular attribute in today's fast-paced world. But as those who have entered the mobile-storage business know, and those contemplating such a move will find out if they do their homework, breaking into the industry is not as simple as it might sound.

An Urban Enterprise

Because of the capital-intensive nature of mobile self-storage and the market size required to produce returns, the common mobile-storage model of today only works in large metropolitan areas, says Tim Riley, founder of Door To Door Storage Inc. Regions of fewer than 1.5 million population are probably not large enough markets, he says. Riley's company operates in four key West Coast regions: the greater Seattle area; the San Francisco Bay area including Marin County, the East Bay and the San Jose areas; Los Angeles and Orange counties; and greater San Diego.

Actually acquiring the money to get the ball rolling also presents challenges. "There's a difficulty to financing this business, whereas there's typically bank financing available for someone who wants to get into traditional self-storage," Riley says. "In our business, the capital costs typically require a sizable equity investment. Anybody looking at the business should plan on having a minimum of $2 million."

The shopping list for startups is extensive, Riley points out. First, there are the containers: A minimum of 2,000 is what you probably need to base your business model on. Warehouse space, trucks and forklifts also figure into the equation, not to mention a labor force qualified to operate the heavy machinery. Another major expense not encountered on the same scale by operators of traditional self- storage is that of implementing a computer system. "There are no off-the-shelf (software) systems," says Riley. "The three largest mobile-storage operators out there today have all developed proprietary software to run their own businesses."

And it doesn't appear likely that self-storage software producers will rush to accommodate the mobile-storage business, Riley adds. "If the market were bigger, someone might do it," he says. "But the complexity level of the systems we use is probably three to four times that of what a traditional mini-storage uses. It's everything a software developer hates: complex business processes and a small market. So there's not a lot of potential right now for a vendor to make money." What would likely happen first, says Riley, is one of the mobile-storage operators would license the use of its system. "One of us (operators) could market the software and the business processes that we've developed, if we were motivated to do so."

The Size of the Box

The size of container to use is a crucial consideration, with determining factors being the ceiling height of your warehouse space, how high you're looking to stack the containers (three or four high vs. two), and portability considerations. Many seem to think a box height of 7 feet is optimal, according to Rob Nist, marketing manager for Seattle-Tacoma Box Co., which designed and built the wooden vaults used by Door To Door.

"We've made all kinds of containers--probably 15 different models now," Nist says. "It's starting to settle into a 5-by-8-by-7-foot-tall model. With a door on the end, it's a pretty ideal container. It maximizes stability, gives people the ability to store their couches, and they can go four high in a warehouse if you have a 30-foot-clear building, which is really key to making a good profit. When we built the thing, we had it rated to stack four high."

An 8-foot-high container causes handling issues, however, such as difficulty securing and removing the covers, and residential-delivery problems caused by the box being too tall when on the back of a truck. And because the maximum allowable cargo weight (usually 2,000 pounds) nearly always fits within the smaller vaults, there's no competitive advantage to having an 8-foot container, Riley adds. "They're going to tip more when they're on the forklifts, and you can't get them under carports or into garages."

Another manufacturer, Kontane Inc. of Hickory, N.C., produces the HomePak mobile-storage container, which is also made of wood but features a metal roll-up door. Also in the works is a model with a swing-open metal door, which will enable the box height to be reduced while maintaining the same capacity.

Kontane not only produces the HomePak, but also helps potential entrepreneurs get started in the business. "What we see as the most critical factor for a startup is their marketing," says Dustin Deal, sales manager for Kontane. "We put together a marketing package with our HomePak brand name that would help them get started, so they don't have to start at square one and develop all their own advertising. We have a package that includes Yellow Pages ad layouts, newsprint ad layouts, full-color brochure clip logos and photos, things of that nature that will help them get started, along with our advice on what marketing has worked or has seemed to work. That's one step we take that we feel is beneficial."

Kontane also offers a computer-aided warehouse-design service. Though this feature is designed more for the company's customers in the moving and storage industry, it can also be of assistance to a new mobile-storage operator who is acquiring warehouse space. "We take the floor plan of their warehouse, along with where the columns are and what their ceiling height is, and we help them best lay out that warehouse so they can maximize their inside storage space," says Deal. "For a lot of the self-storage people who are acquiring a warehouse to do this, that is something they're very interested in because they've never really dealt with this type of storage before. You have to account for aisles for a forklift, where the dock doors are and all that, so it really helps them out a lot."

Long-Distance Market Covered

While customers needing mobile storage on a local scale turn to companies like Door To Door, there are also those in need of a similar service when executing a move between cities. Box Trotters, based in Conway, S.C., fills the mobile-storage niche for the long-distance market.

"For example, when a consumer is moving from Point A to Point B--let's say from Los Angeles to Atlanta--they often need storage at their destination for two or three months," says Henry Cox, president of Box Trotters. "For them, being able to place a container in storage at their destination without physically having to be there to coordinate all this activity in terms of unloading, reloading, etc., is important."

In the aforementioned example, if a customer needs a 20-foot container in Los Angeles, Box Trotters delivers it and gives them a specified length of time--usually a couple of days--to load it. The company then returns, picks up the container and ships it by intermodal stack train to Atlanta, where it is taken off the train and transported to a terminal for storage.

With gasoline prices reaching all-time highs in many regions over the past few months, another popular option for Box Trotters customers has been to ship their cars in the containers along with their household possessions. "We've had several customers call us after their move this year and tell us that they were able to get a plane ticket, and the cost savings balanced out to where, if they were moving 3,000 miles, it would cost them more in fuel to drive," Cox says. "Intermodal stack train per mile, compared to a truck, is much more economical from a fuel standpoint."

Box Trotters offers potential entrepreneurs an opportunity to get involved with the company as sales representatives, service agents and dealers. "For someone who is interested in providing this type of service, it could be as simple as setting up an affiliate website," says Cox. "In our business, the training and the knowledge goes much deeper than the typical drop-box storage model, because ours involves much more transportation. The easiest way is for them to get started is as a sales rep. We can set up a website, provide them with the Yellow Pages ads as well as a host of ways to market and sell their services. We start things off as a relationship with a sales rep, and this basically allows them to learn as they go."

After a sales rep has been on the job about a year, Box Trotters does a market study to analyze the transportation, as well as the demographics, of the local marketplace. At this point, a sales rep may have an interest in becoming a service agent, which requires an investment in assets beyond the sales promotion aspects of their business. This involves the would-be agent acquiring a truck and various types of trailers to deliver containers. Then the company arranges clearance for them to go into the rail terminals and receive , deliver and return the containers.

"There's not a lot of investment for the sales rep, but the service agent does have considerable investment," says Cox. "We want to make sure that our service agent is not just buying equipment. We want to make sure that they have a financial future there, and that we have continuity with their business model and with their business relationship. We basically encourage them to train for about a year, sell for about a year, and we'll just go from there with it."

Pricing Considerations

Operators who enter the mobile- storage business with the idea of pricing the service competitively with traditional self-storage are doomed to failure, says Riley. "You can't be a wimp on prices in this business," he says. "You've probably got to get a 30 percent to 40 percent price premium over traditional self- storage in your market to make money in this business because the costs are so much higher. You've got trucks, fuel, skilled labor such as truck and forklift drivers, and soft costs associated with things such as regulatory requirements and paperwork. It can come through rents, pickup and delivery fees--however you want to bake the cake. But it's got to net out to 30 percent to 40 percent."

Riley says when customers are educated about the advantages of mobile storage--including the fact that it eliminates the need for truck rental as well as for double loading and unloading--they willingly pay the higher rates. "Customers recognize the convenience," he says.

Premium prices are also justifiable, says Riley, because it's critical that new operators resist the temptation to skimp on equipment costs up front. "Some try to cut corners with trucks that carry less than five containers," he says. "They try to do it with little trailers, but the problem is you can't get the scale with the little trailers. You've got to get a truck that can carry five vaults.

"Also, get the piggyback forklifts. People sometimes don't like them because they cost $30,000 to 40,000 each, but without them you'll pay it in labor costs about three or four months into the business, so why not just get the right equipment up front and eliminate the extra costs? The payback period is so quick, why fight it?"

Taking the Plunge

Riley feels the mobile-storage business is still in what he calls its "research and development phase." "It's much like the mini-storage business was in the early- to mid-1970s where there was a lot of experimentation going on, with some hits and some real misses," he says.

Why has mobile storage taken longer to grow and mature than was expected when it first hit the scene in the mid-1990s? A major reason is awareness. There likely are many thousands of traditional self-storage customers who would opt for mobile storage, if only they knew about it. There are also millions of others who live in regions that are currently too small to be served by mobile-storage operators. However, progress on the first front has the potential to assist the second. As awareness of mobile-storage service grows in its current markets, economies of scale might allow it to become viable in smaller markets.

Nist, who deals with several mobile-storage companies, says there are two key things mobile-storage operators must have: "They have to have the right mentality. As odd as it sounds, this isn't the storage business. You have some of the same customers, but it is a very high level of service. If you can't commit to the service level, you're going to struggle."

The second attribute is a willingness to promote, Nist says. "Anyone who uses the service thinks it's the greatest thing ever. So companies that initially were quiet about what they were doing will probably talk more now because they realize that the more it's recognized in the marketplace, the greater the customer base will be."

Though he sees the mobile-storage business from a slightly different angle, Nist feels the industry is starting to build momentum. "We're seeing a lot of increased volume now," he says. "I think it's starting to really catch on." Illustrating his point through analogy, he adds, "Twenty years ago, everyone who wanted a pizza went to the pizza parlor. Today, you pick up the phone and they deliver to your door. People love service."

The need for capital still thrives, and the good news is that the capital itself still exists. There are specific kinds of debt and preferred places to access the debt markets. The search is a little more difficult than it was just a few short months ago. If you are seeking a refinance, two giants still have market presence: Heller Financial and General Electric Credit Corp.

The majority of capital sources for permanent financing, including the two just mentioned, look to mortgage brokers to procure a majority of their permanent loan business. There are two key characteristics of the self-storage industry that make it restrictive for capital sources to invest in direct-marketing campaigns: The average transaction is smaller than other property types, and the ownership concentration is very broad.

Construction and development loans are still best made by local banks, and are often referred to as "relationship" loans. These are transactions handled by your local banker, who is best equipped to administer and analyze local transactions. Expect to pay an interest rate 2 percent to 4 percent above the "prime rate" or 300 basis points over LIBOR (London InterBank Offered Rate). These loans, typically three years in term, are designed for getting the borrower through the construction and lease-up period.

Permanent Financing

When you know there is capital available but not always accessible, what should you consider? There is often a need to find a specialist who can communicate with the lenders and drive the best deal possible. These professionals are called loan brokers. There are mortgage banking and brokerage shops throughout the country that make it their job to understand which capital sources or lenders are in the market and the programs offered.

In many cases, the financing fees you pay will be the same regardless if you go direct to the lender or if you go through a broker. Many times, capital forces allow the broker to earn financing fees that would normally be charged by the lender. Loan brokers have various relationships with the capital sources. If the broker is an exclusive correspondent, he is the "middle man" between the lender and borrower. Borrowers may not have access to the lender except through the exclusive correspondent. You may still need to shop the deal, however, because a broker with exclusive correspondence is primarily representing one funding source.

There are brokers who have correspondent relationships with capital sources that are not exclusive. With correspondent relationships, the broker has incentives based on loan volume. There may be instances where there is both a lender's financing fee as well as a broker's fee, but the lender has the best overall deal.

Why a Broker?

Why would anyone choose to use a broker? As a borrower, you may not be familiar with loan underwriting (the process by which a lender determines the amount you can borrow) and perhaps more importantly, the interest rate. Proper packaging and underwriting can make a difference of as much as 2 percent in the annual rate, or five years amortization. On the typical $3 million self-storage loan, the difference in monthly payments of $2,920 (five years difference in amortization, and a conservative interest-rate savings of .5 percent) over the life of the loan, is a cash savings of a whopping $350,418.

There are a few things to consider. First, do you have the time to seek the lender best qualified to make the transaction? How much is your time worth to spend looking for financing? Sure, you check the obvious places, but what if your best deal is with a boutique lender? How do you find one?

Second, how do you know for certain who you're dealing with? I recall several transactions where the lender was a sham--they never had a real program and were just looking for processing and application fees. I also clearly remember a lender I thought could not possibly be for real and, sure enough, they funded two of my transactions.

Third, a good reason to use a broker is he is often the best-qualified source of "packaging" your loan for underwriting. A good broker will make sure you have a loan request that is tailored to the lender's needs, providing the information he needs to develop an interest in your deal. Keep in mind that overloading your loan officer is as bad as not providing him with enough information. Is your request clear? Are the expenses properly shown? What about capital improvements? What about the interest expense? What about vacancy and credit loss? How do you determine loan to value?

Lastly, there are the finer details of the transactions. Financiers today manage interest rates with hedges, caps, locks and a myriad of other terminology that to the borrower may be "junk jargon." Many a borrower has sold a cap and made money, or benefited from a hedge when rates rocketed upward. Do you know when to take a fixed-rate loan over a float? Do you know that some loan documentation for conduit loans may require you to pay for loan expenses like appraisals after the loan has closed? Did you know that some standard language allows the lender to change the terms of the loan at the time of securitization?

There are several reasons it is wise to retain professional help. Keep in mind that the best loan broker will know your property intimately, know the market and determine who the best-targeted lender will be. The broker is also able to work with and resolve issues introduced by third-party report providers such as appraisers, engineers and environmental specialists. Finally, the properly qualified loan broker will have placed many self-storage loans and will have been in the industry for a long period of time. The best brokers will even know how to operate self-storage facilities and be able to trade "war stories" with you.

R.K. Kliebenstein has worked in the self- storage industry since 1986. In that time, he has held positions in finance, acquisition and management. He is currently launching his own company, Coast-To-Coast Storage, offering his expertise to self-storage owners and operators in consulting, marketing plans, feasibility studies, loan brokering and acquisition/disposition. For more information, Mr. Kliebenstein may be reached at (561) 367-9241.

Neal Gussis is a senior vice president at Beacon Realty Capital Inc., a financial-services firm that arranges debt for self-storage and other commercial real-estate owners. Mr. Gussis has funded more than 250 self-storage transactions. He can be reached at (312) 207-8240.

Self-storage professionals are genuine and sincere. They are business facilitators who care enough to provide help where it's needed, especially when life takes its unexpected turns. Wayne and Jamie Jacobs of Novi, Mich., are self-storage managers who often step into their tenants' daily lives to make life's transitions easier, whether anticipated or not. Both were nominated by Tom Berlin, vice-president of American Self-Storage, for this year's Inside Self Storage Best Community Service award because of their dedication to helping people, love of community and personable marketing techniques.

A few needed basics--trucks, moving supplies and general assistance--sound simple to provide. But it's like the old saying goes, "A little goes a long way." Any one of us can help people, but "it's something that's got to come from within, and everybody's got it inside of themselves to help people," says Wayne.

Beginnings and Then Some

About five years ago, Wayne and Jamie answered an advertisement for a self-storage position in a local Indiana newspaper. "The self-storage business not only gave us both a job and a place to live, it allows us to expand our horizons," says Wayne. "If we didn't make the move into the self-storage business, we wouldn't be able to do all of the charity work we do."

Wayne's love for helping others was obvious even as a young boy living in a small northern Minnesota farming community. He signed up for Boy Scouts because he was dedicated and committed to improving others' lives and the community. Later, he got involved in the sales and service industry. His first job was with a cable company, which is how he met his wife, Jaime. But the job didn't allow the Jacobs to fully commit themselves to community efforts. "I'd make sure and do my job just right, but the previous companies I worked for didn't allow time to help people, so that negative worked, I think, for my persistence," says Wayne.

The Jacobs wanted to make arranging a move or finding a storage space convenient for people. "We offer one stop for everything, and since moving is so stressful anyway, we offer trucks, storage units and supplies to make things less so," says Jaime. The Jacobs' desire to help people has been fulfilling for them, but also for their beneficiaries. One of their most rewarding experiences has been helping a family of fire victims who didn't have a home because it was set ablaze after it was burglarized. The Jacobs gave the family a unit for a few months free of charge as their way of helping out.

Now That's Dedication

Both Wayne and Jaime are heavily involved in professional community organizations. Wayne is on the board of directors of the Novi Goodfellow, an organization making sure underprivileged children don't go without having a Christmas. The board also provides businesses with holiday poinsettias. At Christmas, Wayne dresses up as Santa. "I become Santa Claus. I let my beard grow long, and I go to a salon to have it dyed white, so it looks natural," says Wayne. Soon the Jacobs will create Santa Enterprises, which will do more to provide for needy children and underprivileged families.

Both are co-coordinators for a Toys-for-Tots campaign in which they identify donation locations, pick up donations from drop-off locations, and sort and distribute toys to children. Jamie serves on the board of the Novi Chamber of Commerce and likewise serves as Chair of the Ambassadors Committee and Silent Auction Committee. Both are members of the annual Charity Dinner Dance Auction Committee and serve on the annual Golf Outing Committee. In addition, the couple volunteered at the chamber's refreshment booth at the Novi Blue's Fest.

Outside of her professional commitments, Jamie is going to real-estate school. When the Jacobs are commitment-free, they enjoy spending time with their two children. Wayne likes to play video games and work around the house, and Jaime creates scrapbooks, collecting family and event memorabilia.

Inside Self-Storage would like to extend congratulations to Wayne and Jamie Jacobs for their outstanding job in promoting excellence in community service and the self-storage industry.

One of the summer's hottest entertainment phenomena, X-Men: The Movie, opened in theaters in July. The film is about a group of children born with an added "X-factor" attached to their genetic code, allowing them to perform extraordinary feats, such as telekinesis, the ability to fly or shoot laser beams out of their eyes, etc. Shunned by society as "mutants," the members of this unusual breed are taken in by an understanding doctor who trains them to use their powers for the forces of good. And, of course, there is a villain, Magneto, hell-bent on destruction, and a psuedo-hero, Wolverine, who becomes the center of the plot.

The point of all this? Aside from applauding the movie's showcase of some amazing special effects? This month's cover story, "Space-Age Designs," addresses the necessity of constructing self-storage buildings for a new era. The astounding growth that has been witnessed in the self-storage market over the past 30 years--particularly the most recent decade--has created both an environment of competition as well as a need for advanced building technology. According to Michael Parham, the next logical step in the evolution of the self-storage product comes in the area of design, with attempts to develop the most economical, marketable facility.

What will ultimately articulate the extraordinary from the mediocre in self-storage will be those all-important X-factors--or S(torage)-factors, if you will: Economic land coverage, maximized land utilization, flexible unit mix, maintenance-free building components, and user-friendly driveways, parking, hallways and unit placement are sure to become the deciding factors in determining facilities' success. As market competition intensifies and land costs rise, developers--the S-Men--will think toward these mitigating factors.

Also in this issue, Bret Ellis outlines the three key components to the construction of a successful self-storage project, highlighting some of the major steps in the process and offering some inside tips on proper documentation, working with architects and contractors, communication in the field and more. You'll find information on the potential and possible pitfalls of a recent industry trend: mobile storage. And R.K. Kliebenstein and Neal Gussis share their expertise, where they answer the question, "What to do when lenders disappear?," addressing an issue that effects development across the board.

Whether you're a developer investigating new self-storage projects or an established operator contemplating improvements to your facility, keep an eye out for those S-factors and their patrons of justice. It just may be you they save someday.

Best regards,

Teri L. Lanza
Editor
[email protected]

By Barry Morris

With today's "new economy" dominated by businesses rooted in technology and other 20th-century breakthroughs, firms with origins in the 19th century and earlier are becoming increasingly scarce. Those that have survived have done so through successful evolution, remarkable resilience and, in most cases, several generations of family involvement. This combination aptly describes the formula for the success of Seattle-Tacoma Box Co., a 111-year-old producer of, among other things, stackable wooden containers for the mobile-storage industry.

It was in the wake of the devastating Seattle fire of June 1889--in which all of downtown Seattle was destroyed after a glue pot ignited--that Jacob Nist established the Queen City Manufacturing Co., parent company for Seattle-Tacoma Box. With Nist's employer, Seattle Lumber and Commercial Co., falling victim to the blaze, he and his son, Michael, launched a new enterprise making wood products such as egg crates.

Not all ran smoothly from that point forward. Fire would once again do major damage to Jacob's livelihood; in fact, the company endured major fire damage four times in its first 31 years. Other obstacles on the horizon would include the Great Depression of 1929, labor unrest in the Pacific Northwest, skyrocketing lumber prices, and yet another fire in 1973. These and other challenges, not the least of which was stiff competition from much larger corporations, would jeopardize the company's very existence. Yet the company endured, and has evolved into the multifaceted organization that exists today as Seattle-Tacoma Box Co.

Operations are headquartered in Kent, Wash., situated midway between the two larger cities comprising the company's name. Several other manufacturing facilities and distribution centers are scattered in Washington, Oregon, California, Alaska and Hawaii, and the company even runs a furniture-grade cut-stock operation in Tauranga, on the north island of New Zealand. While agricultural packaging, corrugated boxes and the like have always been Seattle Box's mainstays, it is in a particularly uncharacteristic product--concave blocks and straps to contain expensive steel tubulars for petroleum exploration and production--that the company takes great pride.

The venture began when a major oil company asked if it could store some of its North Slope pipe on the company's property near Prudhoe Bay, Alaska. Seeing that much of the pipe material was being lost to damage in transport and on the site, Seattle-Tacoma Box designed a packaging and containment system that was reasonably flexible for placement on uneven terrain, separated pipe sections from each other, could be loaded by forklift in a matter of minutes, could be stacked indefinitely, and provided significantly greater safety in handling.

The product proved highly successful, and opened exciting new business for Seattle-Tacoma Box that quickly spread to Europe and the Pacific Rim, including deliveries to offshore oil platforms.

Six Generations Strong

Beginning with Jacob, six generations of Nist family members have made contributions to the success of Seattle-Tacoma Box Co. Following in Jacob's footsteps have been two sons, four grandsons, three great-grandsons, three great-great-grandsons, and the latest generation, represented by a great-great-great-grandson named after the founder himself.

Mobile-storage vaults are currently a sizable part of the company's business, with about 7,000 units produced annually, according to Rob Nist, marketing manager and fifth-generation descendant. It was a neighboring entrepreneur, Tim Riley (founder of Door To Door Storage), who was instrumental in launching Seattle-Tacoma Box's vault business. "Tim came to me and said, 'Here's the business I want to do. Design me a box,'" Rob says. "We spent quite an extensive period of time designing the box for him. Then we got it done and made a few hundred of them. We've continually changed it to where it's at today."

Two specific types of containers are produced: One is a bolt-together, collapsible model known as the EasyBox, appealing to those customers wanting to create extra space in their warehouses to sub-lease during slow times of the year. Other customers prefer boxes that are nailed and glued together, and this can be done at the site by the customer himself or a Seattle-Tacoma Box crew.

A generally favored, semi-standard vault measures 8-by-5-by-7 feet. This size seems to provide optimum storage space, stackability and portability without the handling difficulties and other problems posed by slightly larger sizes.

Rob is optimistic about the storage-vault business. The mobile-storage industry is just starting to take off, he says, with awareness continually growing thanks to the service aspect of the business. He describes the phenomenon with this analogy: "Twenty years ago, everyone who wanted a pizza went to the pizza parlor. Today, you pick up the phone and they deliver to your door."

For the Nist family, greater awareness of the mobile-storage business means more demand, more entrepreneurs entering the field and, consequently, greater demand for Seattle-Tacoma Box Co.'s wooden vaults. The family plan seems to be laid out well.