California self-storage operator A-1 Self Storage is donating money to San Diegos Thousand Smiles Foundation, a non-profit organization that provides free medical and dental treatments for children in Mexico who have maxillo-facial deformities such as cleft palate.

The Thousand Smiles Foundation was established in 1985 by members of a Rotary Club in the San Diego area. The organization also fosters international relationships between Rotarians from District 5340 and nearby districts within the communities they serve.

A-1 Self Storage has 16 locations in the San Diego County area and more than 40 locations statewide. It is the self-storage division of the Caster Cos., a third-generation, family-owned company headquartered in South California since 1959. Caster Cos. develops and manages A-1 Self Storage, A-1 Car Storage and other commercial properties in California. Its portfolio includes more than 4 million square feet of real estate.

 

Fort Knox Self Storage is offering two free months of self-storage to victims of Hurricane Irene. The self-storage business operates facilities in Matamoras, Pa., Montague, N.J., Monroe, N.Y., Port Jervis, N.Y., and Middletown, N.Y.

We are your neighbors, our homes were affected as well, but the stores are safe and dry, said Colleen Hodgins, operations manager. We are offering two months of free storage to anyone who needs to clean up, dry out and put their belongings in a safe place.

Fort Knox has been a neighboring business in the Tri-State area for more than a decade. Self-storage owner West Solloway has helped several flood and fire victims in the past. This storm has caused severe damage to so many homes, businesses and communities, that its overwhelming. We are here to help, she said.

By Mel Holsinger

A new trend is being discussed all over the self-storage industry: Mandating that customers have tenant insurance as a condition to storing. Following is a discussion of the pros and cons so you can make the right decision for your business.

For years, self-storage operators have been blessed with laws allowing them to require that customers self-insure through their homeowners or renters insurance policies. Facility operators are not required to insure tenants possessions, as they do not take care, custody or control of stored goods.

But over the past several years, there have been many lawsuits in which a facility operator was ordered to pay for damages to a customers unit contents. Other facility operators have offered compensation to avoid a legal battle or bad public relations. In most cases, however, the cost to replace or repair damaged belongings has been the burden of the customer.

A few decades ago, several insurance companies saw an opportunity and began offering customers goods insurance, more commonly called tenant insurance. For a small amount, usually $8 to $20 per month, a customer can purchase this coverage from the self-storage operator or directly from the policy provider. It varies, but most policies cover between $2,000 and $10,000 worth of property.

This facet of the industry has grown greatly in recent years as operators recognize the value of tenant insurance. Not only does it protect customers, it can potentially generate revenue for the storage business.

Make It Mandatory

When it comes to leasing a self-storage unit, theres a lot of information to cover with tenants, including facility rules, late fees and more. All too often, facility managers brush over the topic of insurance during the rental process, hoping tenants will read the pamphlet theyre given or ask questions about the program later.

A good self-storage manager will emphasize his facilitys tenant-insurance program with every new customer. Most tenants will assumeincorrectly, of coursethat the facility will compensate them if a loss occurs due to a fire, tornado or even a burglary. When they realize this is not the case, their emotions range from anger to disappointment, and the manager will be the target of their words and actions. For the tenants who are covered, either through their own policy or tenant insurance, the loss will be traumatic but not as severe.  

Self-storage operators can prepare for the worst and provide better customer service by requiring all tenants to purchase some form of insurance. At the outset, removing the option to self-insure may seem like youre forcing customers to do something they may not want to do. In reality, youre doing a better job of protecting yourself and your customers.

Many of the larger self-storage operators have already established this company policy. Tenants either provide them with proof of insurance on their unit contents or purchase a dedicated tenant-insurance policy. Though compliance hasnt happened over night, these operators have taken a stand; and now several smaller, independent operators are following suit. Put simply, if the tenant refuses to show proof of valid insurance or purchase a tenant-insurance policy, the operator will not rent him the unit.

A word of caution: Make sure you know and clearly understand your states laws concerning tenant insurance before signing on with an insurance provider. In many states, self-storage managers are allowed to sell tenant insurance without becoming licensed insurance agents. Many of the third-party tenant-insurance programs even offer a rebate on the premium to the facility owner or manager.

Learn More

With the economy declining in recent years, maximizing income has been a challenge for most self-storage operators. Many have had to offer discounts and rent incentives just to stay afloat. Asking your customers to pay yet another fee seems impossible.

Yet as more self-storage operators make insurance a mandatory component to renting a unit, this extra cost will become the norm for tenants. Operators can also roll the cost of the policy into the rental rate.

There are numerous companies you can work with to create a streamlined and profitable tenant-insurance program. Most will even train operators in selling the positive aspects of this coverage. Check out each provider and learn about its program.

Making insurance mandatory at your facility wont be easy at first. In the long run, however, youll be protecting your business and your customers, and will likely increase your facilitys overall revenue.

Mel Holsinger is president of Professional Self Storage Management LLC, which oversees the operation of more than 40 facilities in Arizona, Colorado and Texas. Holsinger has been in the self-storage industry for more than 25 years. He is a frequent speaker at Inside Self-Storage World Expos and other industry events, a contributing writer to Inside Self-Storage magazine, and a founding member of the Qualified Storage Manager training program. To reach him, call 520.319.2164; e-mail [email protected]; visit www.proselfstorage.com .

The Texas Self Storage Association (TSSA) recently elected new members to its board of directors. The new members to serve three-year terms are David Hunt of Access Self Storage in Lancaster and Jill Schwengler of Texan Self Storage in Wimberley. Mark Skeans of Mission Road Mini-Storage in San Antonio was re-elected to the board and currently serves as treasurer.

Charles Plunkett, president of Capco Steel Inc. was re-elected to serve another one-year term as the boards vendor-member representative.

The other board members are:

• President Robert Loeb (Castle Hills Self Storage, Victoria)
• Vice President Tom McCloskey (MC Self Storage, Lytle)
• Secretary Mike Gately (Daughtry Properties, San Antonio)
• Immediate Past President Dan Small (Diamond Self Storage, Pearland)
• Paul Glover (Storage Choice, Dallas)
• Kathy Hall (Burnet Road Self Storage, Austin)
• Ricky Jenkins (The Jenkins Organization, Houston)
• Jay Kanter (OConnor Self Storage, Dallas)
• Amy Nolan (The Storage Place, Corpus Christi)
• Currently serving as ex-officio members of the board are:
• Lolita Bader (A Better Place Self Storage, Boerne)
• Wayne Johnson (Strategic Storage Holdings, Dallas)
• Josh Parrott (AAA Storage Centers, Lubbock)
• Kathy Tautenhahn (Tautenhahn Holdings, The Woodlands)

New officers will be elected prior to Oct. 1 and introduced at the TSSA convention and tradeshow, Oct. 16-18, in Austin, where the association is celebrating its 25-year anniversary. Membership information and event details can be found on the TSSA website.

Established in 1986, the TSSA is a non-profit trade association dedicated to enhancing the quality of the self-storage industry in Texas. The organization provides opportunities for members to increase their knowledge through education, research and discussion.

Phoenix-based OpenTech Alliance Inc., developer of the INSOMNIAC line of self-storage kiosks, has added three new business development managers to its team, bringing its sales force to a total of six. The role of Brian Hauser (western region), Terry Matthews (mountain region) and Chris Orio (southeast region) is to help self-storage operators nationwide understand more about the companys kiosks and call-center services.

OpenTech products and services include seven models of INSOMNIAC self-storage kiosks ranging in price from $5,500 to $18,000, the INSOMNIAC Live!  call center, and the INSOMNIAC Self Storage Network for online storage reservations and rentals.

Storage Plus in Harrisonville, Mo., sold in August for $875,000 to ARH Investments. The purchase was financed with funding from the Missouri Linked Deposit Program with below-market loan terms. 

Storage Plus encompasses 29,040 rentable square feet of space. The facility is visible from U.S. Highway 71 in the regional commercial hub of Harrisonville, and about 20 miles south of the Kansas City Metro.

Larry Goldman of RE/MAX Best Associates represented the seller. Goldman is a broker with the Argus Self Storage Sales Network.

Based in Denver, the Argus Self Storage Sales Network was formed in 1994 to assist owners and investors of self-storage. Argus has 36 broker affiliates covering nearly 40 markets.

The BSC Group LLC, a commercial real estate financing advisor and provider of debt and equity capital solutions for self-storage owners, arranged $74.6 million in financing for a 19-property self-storage portfolio acquisition.

The BSC Group was exclusively engaged to arrange the financing for this acquisition of a 19-property self-storage portfolio, said Shawn Hill, a principal with the firm. Sovran Self Storage, Inc., a self-storage real estate investment trust (REIT), worked in joint venture with a major equity sponsor to purchase the portfolio of performing stores for its newly formed venture, Sovran HHF Storage Holdings II LLC.

The BSC Group worked closely with Locke Acquisition Group, which is engaged primarily in identifying self-storage properties for Sovran and negotiating with sellers for the acquisition of properties. In the 10 years since its inception, Locke has represented buyers and sellers in nearly $1 billion of acquisition and disposition transactions.

The BSC Group is in the capital markets on a daily basis, measuring volatility and identifying loan program options, said Angelo Tomasello, president and CEO for Locke Acquisition Group. They provide a realistic and viable array of property funding options from which to choose.

In addition, The BSC Group, in conjunction with its exclusive alliance partner, 1st Service Solutions, assisted in defeasing three loans using Commercial Defeasance LLC.

The storage facilities encompass a total of 1.4 million square feet of net rentable storage space. Seventeen of the stores are in New Jersey, and two others are in Pennsylvania. The BSC Group arranged the mortgage financing package with PNC Bank N.A.

"We are excited to launch this venture with such an attractive group of properties, and the team at The BSC Group was able to provide us with a very compelling financing package for this acquisition of class-A stores, said David Rogers, Sovran's chief financial officer.

Formed in 2009, The BSC Group LLC offers financial and loan advisory, mortgage brokerage and loan-workout solutions to commercial real estate property owners and investors, with a special emphasis on the self-storage market. Through its capital source network, The BSC Group provides clients with access to debt and equity financing for commercial real estate investments nationwide. 

Behringer Harvard Opportunity REIT II Inc. acquired a 537-unit self-storage facility at 6366 Babcock Road in San Antonio. The 3.2-acre site is north of Loop 410 and approximately five miles south of the University of Texas at San Antonio.

The company acquired an 85 percent ownership interest in the property through a joint venture with Watson & Taylor Management Inc., an operator of more than 34 self-storage facilities in Texas, Massachusetts and Tennessee, and with an investment group represented by Kennedy Wilson Austin Inc.

Now operating as Noah's Ark Self Storage, the Babcock Road facility comprises 10 one-story storage buildings, constructed in 2000, providing a total of 56,275 rentable square feet. As a result of the joint venture's acquisition, the property will be rebranded as a Watson & Taylor facility. Kennedy Wilson Austin will provide the venture with partnership asset management and back-office support services. The acquisition is the first in a self-storage acquisition program planned by the joint venture partners.

"We're pleased to pursue this venture with Watson & Taylor Management, a respected industry leader in the self-storage property sector," said Samuel A. Gillespie, chief operating officer of Behringer Harvard. "The Babcock Road facility represents the type of self-storage acquisition opportunities we plan to target as we build a portfolio through future joint ventures with Watson & Taylor and Kennedy Wilson Austin."

Behringer Harvard creates and manages global institutional-quality investment programs for individual and institutional investors through its real estate investment trusts, joint ventures and proprietary program structures. The company also offers strategic advisory, asset management and capital market solutions. Programs sponsored and managed by the Behringer Harvard group of companies have attracted equity of more than $5 billion and investments into more than $11 billion in assets. 

This week Red Nova Labs will release WebReady, a service that provides small self-storage operators (those with 10 or fewer facilities) with a website, content-management tools, ongoing search-engine optimization (SEO) and business optimization for local search. The package also includes ongoing Web-marketing consulting. It costs $499 annually, including Web hosting.

WebReady is a templated website with hundreds of different design combinations from which to choose. Once an operator chooses a design package, his website is built with a company landing page and additional landing pages for each facility. Each website also includes Red Nova Labs patented self-storage calculator and storage tips for users.

WebReady provides clients with an option for ongoing SEO service, but it is not mandatory, explained CEO Dan Miller. While he suggests it for self-storage operators in a non-competitive market, he recognizes that those with fewer than 10 facilities may not need that level of SEO.

For self-storage, the story is still proximity, especially on the Web, said Marc Smith, director of business development. For facility owners with a smaller portfolio, including those with only one site, a website that is well-designed for conversion and SEO is critical, he said, so that as Google continues to reward local content, you're in the right position and ready to convert interest into rentals.

Red Nova Labs entered the self-storage market in 2009 with the launch of StorageFront.com, an online directory of self-storage facilities. The company launched WebWorks earlier this year, a Web-design and marketing service for larger self-storage operators.