Rochester Self Storage LLC recently purchased Deep Discount Mini Storage in Rochester, N.Y., from Flower City Storage Operations LLC, a New York-based limited-liability company. The property at 265-271 Hayward Ave. has been rebranded as Rochester Self Storage. It will be managed by Storage Asset Management Inc., a York, Pa., company that oversees more than 35 self-storage properties and three UPS Stores along the East Coast.

The facility includes 70,000 square feet of storage space on 1.43 acres of land. The four-story building features two elevators, a rooftop sign and energy-efficient lighting, according to a listing on LoopNet.com. Site amenities include truck rental, packing and moving supplies, and online reservations and account-management capabilities. Located at the front entrance to the Rochester Public Market District, the storage property also has a large open yard facing Main Street.

Renovations are underway, and the new owner is also looking to expand its portfolio to other markets in nationwide, according to the source.

The seller was represented by Nicholas Malagisi, national director of self-storage for Sperry Van Ness, a Buffalo, N.Y.-base firm that specializes in the marketing, sale, disposition and acquisition of self-storage properties throughout the United States. The buyer was represented by Patrick Quigley, Esq., a partner at the law firm Harter Secrest & Emery LLP.

By Emmet Pierce

Reprinted with permission from "The Storage Facilitator" blog.

Because the Internet now provides consumers with many sources of information about businesses, some self-storage professionals question the need for membership in the long-established Better Business Bureau (BBB). Founded in 1912, the nonprofit BBB is designed to boost public trust in businesses. More than 100 independent offices in the United States and Canada are overseen by the Council of Better Business Bureaus in Arlington, Va. The affiliates take consumer complaints and monitor the performance of local businesses.

“There are lots of places to get opinions about a business," says Robert Chiti, president and CEO of OpenTech Alliance Inc., a call-center provider and manufacturer of automated kiosks. “The BBB would be last on my list of places to check.” Chiti maintains that self-storage consumers are much more likely to look at business-review websites, such as Angie’s List, to learn about self-storage businesses than to turn to the BBB for guidance.

Natolie Ochi, a partner at SKS Management LLC, which manages and markets self-storage facilities, says having BBB accreditation isn’t a significant marketing tool. She notes that consumers have a variety of ways to learn about the facilities she represents. “We now have Yelp and Google and social media,” she says. “To me, those have replaced chambers of commerce and the Better Business Bureau.”

Choosing BBB Accreditation

Not all self-storage operators dismiss the importance of BBB accreditation, however. Don Schreiber, owner of Boston Self Storage and Eden Self Storage in New York, says he displays the BBB emblem to increase his facilities’ appeal to consumers.

Being part of the BBB bolsters consumer trust, since the public knows the organization tracks and reports consumer complaints, says Schreiber, who pays about $300 a year for his BBB memberships. “We have always been with the BBB. It is a part of our advertising.”

Becoming accredited with the BBB gives facilities a chance to show their commitment to being a business customers can trust, says Katherine Hutt, a national spokeswoman for the BBB’s governing council. Each BBB office provides members with the BBB seal, which can be displayed in offices, on vehicles and websites, and in advertising and marketing.

Local BBB organizations are active in their communities, working with chambers of commerce, law-enforcement agencies and others to promote ethical treatment of consumers, Hutt says, adding that one of the strengths of the BBB is that it’s governed at the local level. Each office is a nonprofit corporation with an independent board of directors consisting of local business leaders.

The cost of accreditation varies, depending on the size of the business and the number of employees. For small businesses, it typically ranges from $400 to $1,000 per year.

Winning BBB Accreditation

To win accreditation, a business must receive a “B” rating or higher from the BBB. The group assigns grades ranging from “A+” for the best performers to “F” for the worst. The organization examines many factors when considering applications, including how long the company has been in operation, whether it’s had any complaints filed against it, how it responded to complaints and the owner’s reputation, Hunt says.

The BBB also reviews an applicant’s website, advertising and marketing materials to ensure the business is ethical in its dealings with the public. If the business is part of an industry that requires a license, the BBB requires proof.

Although consumers have more choices today for obtaining self-storage business reviews, some operators still find value in the BBB designation as the organization continues to enjoy a high level of recognition among consumers.

Emmet Pierce is a San Diego-based freelance writer whose work appears on SelfStorage.com and SpareFoot.com.

Self-storage operator KMG Conversion LLC has purchased Spur 122 Storage in San Antonio. The six-building property comprises 38,870 square feet and will be rebranded as 37/410 Self Storage due to its proximity to the intersection of Interstate 37 and Loop 410 in the southeast part of the city, according to the source.

The property is just north of U.S. Highway 181 on a segment of South Presa Street also known by its state-designated highway name Spur 122, the source reported. The facility has onsite management, gated access and video cameras. It will be managed by RPM Storage Management LLC of New Braunfels, Texas.

Paul Krause, managing partner of KMG Conversion, said he and business partner Mark Skeans were drawn to the property because it is in a growing area of the city. “We’re very excited about this opportunity in the rapidly growing southeast quadrant of San Antonio and look forward to serving the area’s residents and businesses,” Krause said in a company press release.

KMG Conversion also owns Mission Road Mini Storage and Potranco Self Storage in San Antonio.

The Brooksville, Fla., Planning and Zoning Board will address a rezoning request this week submitted by StoreSmart Self-Storage. The company wants to add a two-story, 10,200-square-foot building to an existing facility at 4867 Commercial Way in Spring Hill, Fla. The project would require a zoning change and a county revision to the master plan for the site, according to the source.

StoreSmart recently purchased the property from U-Stor Self Storage, the source reported. East StoreSmart Spring Hill Two LLC, an affiliated company of StoreSmart Holdings LLC, is listed as the property owner.

Planning staffers have recommended the board approve the zoning request.

StoreSmart operates more than 20 facilities in Arkansas, Florida, Georgia, Illinois, North Carolina and South Carolina. Its locations are managed by its affiliated property-management company, Reliant Real Estate Management LLC.

Although the economic recovery is not yet complete, many key indicators suggest it’s well on the way. Interest rates remain near historic lows, yet the unemployment rate is improving 18 months ahead of schedule. The begging question becomes: How long can these historically low rates last?

Although it remains uncertain how soon and at what pace rates will rise, if you listen closely, you can clearly hear the Federal Reserve’s chatter indicating rates could start creeping higher in the next nine to 12 months. While the timing will depend largely on the speed of the recovery, it appears to be a question of when, not if.

Even if you’re a gambler, now’s the time to act. The window of opportunity is still wide open, so take the sure bet! Seize this opportunity to evaluate your options and develop a sound strategy that will maximize your self-storage investment and insulate you from the looming increase in interest rates.

The Markers

Two of the primary markers at which the Federal Reserve looks closely when considering monetary policy are unemployment and inflation, both of which seem to be improving. The previously stated goal of the Federal Open Market Committee (FOMC) is to keep interest rates low until unemployment falls below 6 percent or inflation eclipses 2 percent, at which time it would begin to consider raising rates.

With respect to unemployment, the economy is getting very close to the 6 percent threshold. Consider that in the month of July, employers added 288,000 jobs, which was a healthy increase over the consensus prediction of 215,000. The second-quarter average was 272,000, outdoing the previous 12-month average of 201,000. In July alone, the unemployment rate dropped nationally to 6.1 percent compared to 6.3 percent in June. This is the lowest it’s been since September 2008.

On the inflationary front, the Federal Reserve maintains that inflation remains below the range where it would consider raising interest rates. Despite that, the personal consumption expenditure index, which is the central bank's favored inflation gauge, is up 1.6 percent on an annualized basis, according to the latest reading.

In addition, during the recent earnings season, companies across various industries—from food to technology to healthcare—are raising costs for consumers. Included among these are companies such as The Hershey Co., Mars Inc., Kraft Foods, Starbucks Coffee Co. and Chipotle Mexican Grill, all of which announced they’re raising prices. When prices rise for the consumer, it’s a clear sign that inflationary pressures are mounting.

Interpreting the Signs

Although we may still be nine to 12 months away from a formal rate increase, if you read carefully between the lines, it would appear one is definitely on the horizon. At recent meetings, one FOMC voting member indicated a preference to raise rates earlier than expected, but at a gradual pace. Another reiterated his view that the Federal Reserve will begin hiking interest rates in mid-2015. A third suggested an increase in the first quarter of 2015 would be dependent on improvement in economic and labor market conditions, a trend that appears to be playing out.

Based on these comments, it would certainly appear there’s an awful lot of Fed chatter around a 2015 rate hike. The bottom line is if the labor markets continue to improve or inflation accelerates, you can safely bet an increase will come sooner than later.

Place Your Bet

The strengthening economy is increasing the demand for commercial real estate assets, self-storage included. During inflationary periods, property owners have a leg up because they can push rent, which, theoretically, results in an increase in property value.

The offset, however, is interest rates and capitalization (cap) rates are highly correlated. When interest rates increase, cap rates should also rise, thus constraining the increased valuation. In addition, if your interest rate isn’t fixed for an extended period, at some point your interest rate on debt will adjust, thereby increasing debt service and marginalizing the cash-flow delta. For investors who aren’t careful, increasing cap rates and the rising cost of debt will offset many of the benefits of inflationary rental-rate increases.

Regardless of your strategy, if you’re a real estate investor, the next six months present an excellent opportunity to evaluate your options and act. Given the current cost of debt and plentiful equity looking to invest, cap rates are extremely aggressive.

If you’re looking to sell in the near term, it’s a great time to talk to an investment-sales broker and obtain an opinion of value. Alternatively, if you’re an investor with a long-term hold strategy, now’s the ideal time to consider your refinance options. Interest rates on long-term debt products are extremely low, and lenders are aggressively seeking deals. Commercial mortgage-backed security lenders, for instance, are offering 10-year, fixed rate, non-recourse money around 4.5 percent. Insurance companies and banks are also offering very competitive long-term rates.

Going forward, expect volatility and a rise in interest rates. Given that rates remain historically low, the potential to lock in a great deal over the next six months presents an excellent opportunity for investors. Don’t be passive. Make the safe bet to benefit from historically low rates and corresponding aggressive cap rates to enjoy your winning hand for years to come.

Based in Chicago, Shawn Hill is a principal at The BSC Group, where he advises clients on debt and equity financing and loan-workout services for all commercial property types nationwide, with an emphasis on the self-storage asset class. He can be reached at 312.207.8237 or [email protected]. For more information, visit www.thebscgroup.com.

By Nick Bilava

Having a strong social media presence is important to any business, including self-storage companies. Even if your budget is small, paying to advertise on social media could be worth the cost. Here are three features of the equation you should understand to maximize paid advertising for your self-storage operation.

Geotags

It’s easy to assume the best way to conduct the social side of your business is to keep things general, operating on a national scale and generalizing why people might seek storage. But the quickest way to gain social support is to reach out on a local level—an effort made much easier and more efficient by the option to geotag on Facebook and Twitter.

People want storage units that are convenient to them. They generally won’t consider a facility that’s more than 10 miles from their home or office. By targeting your facility’s tweets to the ZIP code of your nearest college campus or boating destination, you can show students or boat owners that you have what they need just down the street.

The same is true of Facebook, where geotagged posts and company pages will show up in the appropriate consumer’s graph search. Offering boat storage to someone in Kansas with a non-tagged ad won’t get you much traffic, but that same ad targeted to the right ZIP code in Florida sure will.

Demographics

Platforms like Twitter and Facebook allow you to target your paid posts to the demographics that will find them most useful. If you know the majority of your units are rented by women, you can promote advertisements based on gender. If your numbers show a spike in inquiries from students ages 18 to 24, you can choose to market ads just for them, and so on.

The opportunity to earmark ads for certain groups of people can give your social posts a real boost as well. In getting the right eyes on your posts, you increase the likelihood of shares and clicks.

Reports

A big benefit to social media advertising is the opportunity to see how your posts are being received. The ability to know which ads are and aren’t performing well is incredibly valuable, allowing you to maximize your return on investment—in other words, to make sure you’re getting the right bang for your advertising buck.

Social media reports will show how many interactions an ad garners—from retweets to favorites to likes and shares—so you can improve upon successful posts and rework those that didn’t fare as well. This information can help you understand how to best use demographic and geotargeting for your ads, too, as it becomes clear which groups and locations are responding positively to your campaigns. These tools will help you save money by not paying to run an ad somewhere where it’s irrelevant, and make money by targeting ads to the users and locations that generate sales and leads at the same time.

Since self-storage is so rooted in geography, paying for advertisements that engage current and potential consumers in the right way is definitely worthwhile. Social media services are popular, and it seems like they’re here to stay. Taking advantage of the growth opportunities they present for your storage facility is just a matter of getting online and getting to work.

Nick Bilava is the director of sales and marketing for Storage.com. He’s been an active member of the storage community for more than seven years and can be found at various industry events. His goal at Storage.com is to help operators market their business more efficiently and effectively. For more information, visit www.storage.com.

Metro Self Storage received approval this week from the Lower Providence Township, Pa., Board of Supervisors on a zoning change that will reduce the number of required parking spaces at the company’s facility in Eagleville, Pa., from 320 to 12. The move will allow the self-storage facility to add two outdoor areas for boat/RV storage at the Eagleville Plaza location, according to the source.

One of the additions will be a 12,300-square-foot fenced area behind the storage facility. The second will be a 20,250-square-foot fenced area behind several retail shops in the shopping center, where some of the facility’s current parking spaces are located, the source reported.

Rob Lewis, an attorney representing Kimco Realty Corp., a real estate investment trust headquartered in New Hyde Park, N.Y., said the zoning change would allow Kimco to market the shopping center more effectively. The board voted 4-1 in favor of the change.

Metro Self Storage is the operating brand of Metro Storage LLC, a privately owned, fully integrated real estate operating company specializing in the development, acquisition and management of self-storage facilities nationwide. Headquartered in Lake Forest, Ill., the company operates more than 80 self-storage facilities in 11 states.

Explosive devices, including two pipe bombs, were discovered recently inside a self-storage unit in Valle, Ariz., near Flagstaff. Investigators uncovered the pipe bombs, along with improvised explosive devices (IEDs), shotgun shells with a fuse attached to the primer, and other items, after a man cleaning out the unit reported finding a number of IEDs, according to the source.

One of the pipe bombs detonated while technicians from the Flagstaff Police Department’s Explosive Device Response Team were examining the devices, but no one was injured, the source reported.

It’s unclear why the man who discovered the explosives was asked to clean out the unit. Investigators believe the man responsible for the devices is currently serving a 10-year prison sentence in New York. Police withheld the suspect’s name pending further investigation but indicated he is incarcerated for charges stemming from unlawful possession of explosive devices and firearms in an unrelated incident.

No charges have been filed in the case.

The Storage Group (TSG), an Internet-marketing company serving the self-storage industry, has introduced StorageForce, a website platform that allows self-storage operators to update their facility websites themselves. Users will be able to add Web pages or change photos on their own, or they can continue to have TSG manage their updates. The new platform will also allow TSG to make global changes to customers’ websites as search engine algorithms evolve.

TSG clients can choose from a custom or preset website design. StorageForce is a responsive platform that will adjust to fit any mobile device, according to a company press release. Additional features include a multi-device, online-rental integration via the company’s ClickandStor software, a lead follow-up and management system, and a content-management system. No annual contract is required to use the new platform.  

TSG will offer demonstrations of the new Web platform at its booth, No. 707, at the Self Storage Association (SSA) Fall Conference and Tradeshow in Las Vegas, Sept. 9-12.

“The StorageForce website platform allows for developing customer loyalty through performance and results rather than a long-term contract,” says Steve Lucas, director of sales. “We look forward to sharing this wonderful new product at the SSA’s fall conference and tradeshow and feel sure that attendees visiting our booth will be impressed. This is the perfect time and venue to be rolling out such a great product.”

Based in Maitland, Fla., TSG provides online tools and marketing solutions to the self-storage industry. The company's customized services include mobile websites, website development, content management, search engine optimization, online rentals, pay-per-click marketing and transparent reporting/analysis.