Closetbox, a startup business specializing in valet self-storage services, recently launched in Denver. The company uses an online platform that allows customers to schedule free item pickup, print barcodes to affix to boxes and oversized belongings, and keep track of items using a private dashboard.

Founded by Marcus and Katy Mollmann, the company began serving the Denver metro area in May and has doubled revenue each month since its debut, according to the source. Customers can pay to store items by the box or reserve a set amount of storage space. Rent starts at $12 per month and $2 per box for bin storage, and ranges from $73 per month for 25 square feet of space to $228 per month for 200 square feet, according to the company website. The equivalent of a 10-by-10-foot space is $142 per month.

Closetbox uses two moving trucks and will pick up items for free as long as the customer rents for a minimum of two months. Belongings are stored in a climate-controlled warehouse. The company will deliver requested items within 24 hours for a fee, or customers may pick up items at the warehouse themselves, provided they schedule an appointment with 24-hour notice. The cost to return an item is equal to “the per-month amount of rent attributed to that single item,” according to the Closetbox website.

In addition to labeling boxes and larger items with unique codes, customers can include photos of belongings. Items can be tracked and viewed from a private, online dashboard.

Closetbox has been an attractive option to business customers downsizing to virtual offices as well as residential customers who don’t have enough room for furniture and other belongings, Marcus Mollmann told the source. “We've come down to certain apartment buildings that may be a little bit smaller than renters expected,” he said. “We've been able to store as little as a couch, where their couch wouldn't fit into their apartment.”

Smaller apartment size is a development trend in Denver. According to commercial real estate services firm HFF (Holliday Fenoglio Fowler LP), the average apartment unit built since 2013 within two miles of Denver Union Station has shrunk more than 4 percent, from 807 to 773 square feet, the source reported.

Closetbox plans to expand its services this fall to Dallas, New Orleans and Santa Fe, N.M., according to the source. The company is similar to other recent startups across the nation, including Boxbee Simple Urban Storage in San Francisco, Cubiq in Boston, MakeSpace Labs Inc. in New York City, Remote Garage in San Antonio, and Storrage Inc. in Seattle.

TaxiBox, a mobile self-storage operator based in Melbourne, Australia, has expanded its services into the Brisbane market. The move is part of the company’s ongoing national-expansion plan.

"We are very excited to be coming to Brisbane,” co-founder Jeremy Rosen said in a company press release. “We think our colorful TaxiBox [storage containers] are just the right color for the ‘Sunshine State’ [Queensland], but more than that, we know based on our experience in Melbourne and Sydney that customers will love this revolutionary product offering in the self-storage space."

The company launched in Melbourne in August 2010 and expanded service to Sydney in December 2012. In April 2013, it added interstate moves and transportation service, with a fixed price for interstate moves across all Australian cities.

"Another fantastic opportunity for us in Queensland will be the expansion of our interstate-service offering, where someone in Melbourne or Sydney can now have their TaxiBox stored and then moved to Brisbane or vice versa,” added co-founder Ben Cohn. “It's a very unique offering in the market."

TaxiBox is noted for the taxi motif the company uses on its trucks and storage pods. Units are wrapped in bright-yellow covers that feature black-and-white checkered striping synonymous with yellow taxi cabs. The covers also feature the company’s marketing slogan in a graphical display: “We Deliver, You Pack, We Store.”

Butler Manufacturing, a manufacturer and builder of metal buildings for self-storage and other industries, has introduced RetroLite, a daylighting system that can be used in existing buildings to minimize lighting-related electricity costs, according to a company press release. A building equipped with a RetroLite system and lighting controls can reduce lighting-related electricity expenses by up to 70 percent, the release stated.

“Ninety percent of the total cost of a building occurs during occupancy. The RetroLite daylighting system opens the door for owners of existing buildings to take better control of their operating budgets,” said Justin Willett, energy consultant. “As utility costs continue to rise and energy codes become more stringent, the RetroLite daylighting system provides opportunities to enhance energy efficiency and achieve code compliance.”

RetroLite, designed to replace the company’s Lite*Panl panel system, is available for retrofit applications on the company’s MR-24 or CMR-24 roof systems. According to the company, product benefits include the ability to:

• Add weather-tight protection. The company’s testing shows the product is effective at preventing water penetration.
• Harness the power of prismatics. RetroLite provides 100 percent diffused light without glares or hot spots, even in overcast conditions. Its acrylic-dome design pulls in more light earlier and later in the day, with a visible light transmittance value of 0.68.
• Simplify installation. The diverter of the system can be tied into the splice of a Lite*Panl panel system. In addition, the design reduces the number of fasteners required, which decreases the field labor needed for installation.

Headquartered in Kansas City, Mo., Butler Manufacturing is a division of BlueScope Buildings North America. The company designs, manufactures and markets metal-building systems for commercial construction, including self-storage. Its systems are marketed through a network of more than 1,400 full-service contractors with local trade areas.

MiniCo Insurance Agency LLC, a provider of insurance products for the self-storage industry, is celebrating its 40th anniversary. Founded in September 1974, the company pioneered offerings designed specifically for the storage business, including specialty coverages to address unique exposures, according to a company press release.

Industry veteran Hardy Good launched Mini Storage Insurance Corp. in 1974 and a publishing division five years after. The company later became MiniCo Inc. Good sold the insurance and publishing divisions in 2010 to Aran Insurance Services Group, a full-service general agency and underwriter. Aran has since expanded the company’s product line to include specialty property and casualty insurance. Current non-storage programs include those for fine art and collectibles, agribusiness, sports and activity, contractors liability, and fantasy sports gaming.

“Forty years is an important milestone for any company,” said Mike Schofield, CEO and president. “MiniCo’s sustainability is largely attributable to our core value of customer-focused service. Our company culture places a significant value on serving our customers to include policyholders, insurance agents, subscribers and advertisers.”

To celebrate, MiniCo will host a cocktail party at the Self Storage Association Fall Conference and Tradeshow, Sept. 11, at Caesars Palace in Las Vegas. All conference attendees are invited.

Phoenix-based MiniCo offers two tenant-insurance programs and specialty property and casualty commercial insurance for self-storage operators in the United States and Canada. The company carries an A.M. Best rating of “A,” and also operates MiniCo Insurance Agency of Canada Inc.

“If it looks like a duck and quacks like a duck, then it’s gotta be a duck.” This is not the case when it comes to self-storage tenant insurance and protection plans. There’s definitely a difference. The goal of this article is to clear up some confusing information floating around the industry with facts about these two distinct offerings.

 

The Programs and Differences

Self-storage tenant insurance is the transfer of risk from one entity (your tenant) to another (your provider’s insurance carrier) in exchange for payment. Those payments are pooled by the insurance carrier to pay claims within that pool. The carrier is required to provide the tenant with a contract (policy) that outlines the terms of coverage and his rights under that contract.

Tenant-protection plans are a contractual relationship between the tenant and the storage operator. Under a protection plan, the operators agrees to retain limited responsibility for the tenant’s property under very specific terms and conditions. Facility owners can assume this risk on their own or insure all or part of the risk through associations or contract liability-insurance policies currently offered by some companies.

The biggest difference between tenant-insurance programs and tenant-protection plans is licensing. Fact: All 50 states have insurance rules and regulations to which self-storage operators must adhere. Of those, only 16 allow storage owner/operators to legally sell tenant insurance under a limited license. In the other states, your insurance provider may be operating under an “assumption.” However, anyone at a storage facility who offers tenant insurance to a customer would be required to be a licensed insurance agent. That would include the storage owner, should he ever need to fill in for the manager. On the other hand, a protection plan is not insurance, therefore, no licensing is required.

The second biggest difference is the ability to offer remuneration for each policy sold. All states have laws when it comes to paying insurance commissions. Since property-protection plans are not an insurance product, they don’t fall under these regulations.

Along with the licensing issue, the tenant-insurance product’s carrier must follow each state’s insurance guidelines when changing rates or commissions. Under such regulations, rates and commissions can’t be arbitrarily adjusted by the facility owner/operator. The tenant-insurance provider’s carrier must submit any changes to the state’s insurance department for review and approval.

Protection plans don’t have these requirements, so carriers have the flexibility to adjust rates and commissions as long as it doesn’t go against public policy. Also, because protection plans don’t fall under insurance regulations, such programs have either had opinions issued by state insurance departments or been upheld by the courts.

It’s important to note that just because a state has adopted a limited license, it doesn’t mean protection plans can’t be offered. Some state self-storage associations have been lobbying for limited-insurance licenses that allow operators to sell tenant insurance. However, you’d probably agree with the statement, “There’s a lawyer around every corner.”

Both tenant insurance and protection plans have been subjects of litigation. The juiciest cases are class-action lawsuits brought by ambulance-chasing attorneys bent on scoring a big settlement from the giants in the self-storage industry. Be aware, most of the complaints filed involve allegations that a company forced its tenants to buy its program without any type of opt-out. Make no mistake: Not having tenant insurance or a protection plan is not a defense against a lawsuit, whether individual or class action. Here are some recent examples:

• SpareFoot Storage Beat, Public Storage Faces Class-Action Suit Over Tenant Insurance
• Alabama’s 13 WVTM Birmingham, 13 Investigates: Storage Unit Insurance Follow Up
• Kentucky Self Storage Association Newsletter, Second Quarter 2014, Kentucky Court: Protection Plan Is Not Insurance
• State of Oregon Department of Consumer and Business Services Insurance Division

 

The Customer-Service Aspect

You may be asking, “Do I need to offer tenant insurance or a protection plan to my tenants?” Savvy self-storage operators know one of the simplest revenue sources in the market are fees garnered from the sale of insurance or protection plans. The more you sell, the more you make.

Plus, let’s not forget, the more tenants are protected, the fewer headaches for you and your staff. It’s just good customer service to offer a plan. You can be sure that stuff can and will happen to tenant goods—whether it’s Mother Nature or a human doing something foolish! No matter how secure and well-constructed your facility is, as an owner, operator or manager, you’ll be the one your tenant goes to when something bad occurs.

How will you respond to these issues? If you have no plan to offer, what are the financial, emotional and opportunity costs? Will you have to pay out of pocket to avoid bad publicity? How will you respond to the ravenous media when a disaster occurs affecting multiple units and tenants? Do you think tenants who’ve lost everything really want to hear, “Our lease says it was your responsibility”? And to whom will they cry first, the media or a lawyer?

In a nutshell, having a plan is place for your tenants is good customer service, an additional source of revenue, a risk-management tool and a public-relations backup in the event of a catastrophe.

 

Finding a Provider

Paramount in your search for a provider should be whether the company is customer-oriented and will be responsive to your tenant. Never forget, it’s your facility’s reputation on the line. No one will know or care about your “provider” or its “insurance carrier.”

So how do you evaluate providers to ensure you find the right one? Here are some things to keep in mind:

• Research the financial strength of the insurance carrier standing behind the provider’s obligation.
• Ask if your state is one of the 34 that requires an insurance application and license for the facility owner and his employees to sell the provider’s insurance product.
• Find out if the prospective provider is also a storage operator. Could it compete against you and have access to some of your financial information?
• Research the provider’s claims-paying record. You can easily do a Google search or check with trusted fellow owner/operators.
• Ask if the protection plan is self-insured or a contractual liability-insurance policy available to the operator.
• Always get a copy of the provider’s insurance-carrier’s policy terms and conditions so you’ll thoroughly understand how it affects your tenants. In the case of protection plans, get a copy of the lease addendum-indemnity agreement from the plan provider. In both cases, read the fine print!

There are options, and you do have control over these situations by establishing a tenant-insurance program or a property-protection plan, training your employees in how to sell it, and then making sure each and every tenant has signed an understanding of his obligation and yours. Having a signature on file makes for a much easier conversation with an irate tenant if something does go wrong. It would certainly look better in court that you not only offered an insurance program but the tenant was made aware of his options, which can be attested by his signature.

Hopefully, you now have a better understanding of what these two products are and why it’s important to offer one of them.

Matt Schaller is executive vice president of Arizona-based Tenant Property Protection. Licensed in 50 states, the company partners with self-storage operators nationwide to provide tenants with protection of goods while maximizing a facility’s revenue potential. Mr. Schaller has more than 27 years of experience in the self-storage and insurance industries, and has worked with companies that provide tenant insurance and property-protection plans. He’s licensed as a Certified Insurance Counselor and a Certified Risk Manager. For more information, call 317.440.9182; visit www.tenantpropertyprotection.com.

Update 9/3/2014 – A new self-storage facility proposed for Bluffton, S.C., has drawn criticism from some local storage operators who say the market is already saturated. The 4-acre project would be constructed on Lot 4 off of Oliver Court in the Bluffton Park commercial subdivision, according to the source.

“It’s definitely going to cut into the piece of the pie,” Terrina Frank of Village Self Storage told the “Savannah Morning News.” “I think it’s going to affect our business.”

Employees at Plantation Storage and Universal Storage Solutions in Bluffton also expressed concerns, the newspaper reported. “I think they’re doing an overkill. I really do,” said Brenda, manager at Universal, who would only provide her first name. “If somebody wanted to do parking that would be different. Nobody has enough space.”

Bob Stewart, manager at Palmetto Self Storage in Bluffton, said growth in the area will likely accommodate another competitor in the market. “The Bluffton area is growing, and I would suggest there’s likely room for a [new] storage facility,” he told the source. “A lot of people come and rent with the intention of moving here, or they’ve moved from up North and have more furniture than they have room in their new house. We’re seeing so much growth.”

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8/25/2014 – A development company hopes to build a self-storage facility on a 4-acre commercial plot in Bluffton, S.C. Evans and Bradshaw LP and Jeff Ackerman of Carolina Engineering Consultants Inc. are seeking Coastal Zone Consistency (CZC) certification from Ocean and Coastal Resource Management (OCRM), a division of the South Carolina Department of Health and Environmental Control, according to the source. CZC certification is required for any activities that could disturb the land within any of the state’s eight coastal counties.

Construction on the self-storage facility would begin on Nov. 1 and be completed in March 2015, according to state records. The project is 3,700 feet from an unnamed tributary to Sawmill Creek and 10,200 feet from Sawmill Creek itself. Colleton River is 14,500 feet from the development site.

OCRM is South Carolina’s coastal-management agency, responsible for implementation of the state’s Coastal Management Program, which was enacted in 1972.

Based in Beaufort, S.C., Carolina Engineering Consultants specializes in water, wastewater, storm drainage, paving and grading designs for commercial, industrial, residential and municipal projects. Evans and Bradshaw is based in Hilton Head Island, S.C.

 

 

Update 9/3/14 – Speakers and education details have been announced for the Latin America Self Storage Trade Show and Education event in São Paulo. The show will include:  

• A keynote speech by Rick Hielscher, a principal with The Lock Up Self Storage, which operates facilities throughout the United States. Involved with the expansion of Brazil-based operator GuardeAqui Self Storage, Hielscher will compare his U.S. facilities to self-storage operations in Brazil.
• A presentation by Alessandro Leal, business director for Google Brazil, who has 20 years of executive experience in sales, marketing, strategy and finance.
• A presentation by the Association of Brazilian Self-Storage Operators Board of Directors.
• Information about self-storage development in Latin America.
• An “Operators Forum,” in which local managers and owners can meet, ask questions and exchange solutions to common issues.
• Interactive one-on-one sessions with the show’s sponsoring vendors, available to existing facility operators.  

Attendees will receive an early-bird discount if they register by Sept. 30.

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July 25, 2014 - The second annual Latin America Self Storage Trade Show and Education event will be held Nov. 12-13 at the São Paulo State Housing Syndicate’s (Secovi-SP) convention center in São Paulo. Designed for self-storage investors, developers and operators, the event will feature seminars and an operational forum where attendees can “meet and exchange questions and solutions to common local issues,” show organizers said in a press release.

Presentations will focus on areas of special interest to Latin American operators and investors, and exhibiting vendors will represent all aspects of the business, including building materials, insurance, marketing and security, officials said.

“With the overwhelming turnout at last year’s show, we all knew that this would become an annual event,” said David Blum, president of Better Management Systems LLC, a U.S.-based consultant who has assisted self-storage developers in several countries and one of the event’s producers. “The structure and content of this year’s show has been designed to address Latin market issues specifically. We all look forward to a marked increase in participation.”

The Association of Brazilian Self-Storage Operators and Secovi-SP are also event producers. Established in 1946, Secovi-SP is considered the center of the Brazilian real estate industry and houses several key operating sectors of its production and service chain, according to the release.

Sponsors of the event include Janus International, JR & Marto Consulting and Insurance, PTI Security Systems, SMD Software Inc. (SiteLink) and Universal Storage Containers.

Show details can be found at www.ssabrazil.com.br.

ABC Self Storage in Pittsburgh has become the go-to spot for local bands seeking rehearsal space. The facility at 1109 Arlington Ave. in Allentown is in a converted electric-supply warehouse. Thirty bands currently rent custom-sized rooms on the first and second floors, which offer 24-hour access to the musicians, according to the source.

Rehearsal-space rentals range from $130 per month for three-piece bands to $300 per month for larger groups. The concept has proved so popular, the facility often has a waiting list of bands waiting to get in, the source reported.

“Being it’s an old warehouse, it’s got very thick walls. You can crank up your amps at four in the morning if you want,” facility manager Dan Split told the source. “Basically, it’s freedom to come and go as you please. There’s a lot of other rehearsal rooms [elsewhere] that have time limits, and you have to share.”

Split came up with the idea when he was in a band and working for facility owner Mike Barry’s moving company. “He was a teenager working for my moving company, and he kept getting thrown out of garages and other places,” Barry said. “When I bought this building [in 1996], he kind of begged me to put something together for him.”

Barry also houses about 30 bands at his ABC-EZ commercial-dumpster rental business in McKees Rocks, Pa., according to the source.

The idea has been embraced by local bands as well as established groups, including Anti-Flag and members of Rusted Root. Musicians like the ability to practice at any time of day, as well as the social aspect of the facility and its central location.

“The advantages are that it’s pretty centrally located to any part of the city, about 10 minutes away from everywhere,” musician Russ Tompkins told the source. “The prices are fair, the rooms are sizable for the money, and my big thing was repair. Anytime we needed anything, Dan or Mike would be there. We have 24/7 access to the building, too. It doesn’t matter what time you get home from work; you can find time to practice.”

Several of the bands that use ABC Self Storage for rehearsal space have wound up sharing gigs after connecting at the facility, Tompkins said.