After nearly 60 years of being “outlawed” locally, self-storage development will be allowed to commence under strict guidelines in West Caldwell, N.J. The town council passed a land-use ordinance during a public hearing this week that will allow at least one storage facility in its M-1 limited-manufacturing district. Though the ordinance was urged by Mayor Joseph Tempesta, any approved projects will need to be “compliant with certain conditions,” he said.

Stipulations include limiting operating hours between 8 a.m. and 9 p.m., access control, maintaining a log of people entering and leaving the property, and allowing police access to common areas, the source reported.

Some residents expressed concern about the types of items that could be stored, as well as the potential for excess lighting from the property. “We don’t know what’s in the warehouses now, but they have to follow certain guidelines and keep a record of what is being brought into the warehouses,” Tempesta said during the meeting. The mayor also indicated the town would try to control the brightness of the lighting.

Town attorney Paul Jemas described the ordinance as “very conditional.”

The move is similar to a city council decision in Santa Fe Springs, Calif., which will lift a 43-year restriction prohibiting self-storage from being developed along the city’s major thoroughfares. The council is expected to give final approval on Sept. 28.

Both moves come after several municipalities across the nation have recently instituted self-storage moratoriums limiting new construction or restricting development is specific areas.

Inside Self-Storage (ISS), which has provided education and resources to the self-storage industry for more than 26 years, has hired a new project coordinator to support the growing brand. Kortney Hannes will support the editorial and sales teams on projects related to ISS magazine, the annual ISS World Expo, the ISS Store and the Self-Storage Talk online community.

“I’m excited to be the newest member of the ISS team! I look forward to helping my colleagues and the brand continue to be top in education, and provide resources for those in the self-storage industry,” Hannes said. “Since I don’t have experience in self-storage, I also look forward to learning the ins and outs of the industry.”

Hannes earned bachelor’s degrees from the University of Wisconsin – Parkside and Kaplan University. Most recently, she was a healthcare concierge for Accolade, an on-demand service for healthcare employers, health plans and health systems. In this role, she helped clients understand their benefits and how they can best use their healthcare, and assisted them in resolving their claims issues.

Prior to her time with Accolade, Hannes was a marketing assistant for Uline, a distributor of shipping and industrial supplies. As part of the marketing team, she assisted with all levels of print and digital campaigns, projects, and reporting. She was promoted to that role from senior customer-service representative, in which she assisted customers with contracts, orders, and product-specific questions and certifications.

“Kortney is an excellent addition to the ISS team,” said ISS Vice President Teri Lanza. “She brings a great deal to this newly created role of project coordinator—intelligence, efficiency, customer-service savvy, marketing expertise and an optimistic attitude. I am confident that she will help the brand grow further and faster. Our well-oiled machine just got a performance boost, and we could not be more pleased.”

ISS announced changes to its executive leadership team in June when founder Troy Bix left the brand to join Janus International Group. Lanza now oversees day-to-day operation while Debbie Pirkey serves as business-development manager. The ISS team also includes marketing and education manager Melissa Black, editor Amy Campbell, and contributing editor/ISS Store manager Tony Jones.

For more than 26 years, ISS has provided informational resources for the self-storage industry. Its educational offerings include ISS magazine, the annual ISS World Expo, an extensive website, the ISS Store, and Self-Storage Talk, the industry’s largest online community. It is now owned by Informa Exhibitions LLC, which acquired Virgo Publishing in 2014.

 

 

Coro Realty Advisors LLC, a real estate and property-management company, may convert a shopping center it owns in Columbus, Ga., to self-storage. The facility would be managed by Artisan Properties Inc., a self-storage owner and management company that operates nine sites in Georgia under the brand Storage Xxtra.

The Cross Country Plaza at 2041 Auburn Ave., the oldest shopping center on the street, comprises three buildings. New Leaf Consignment and a UPS Store share one building, while retailer Tuesday Morning occupies another, according to the source. Tuesday Morning already has plans to relocate, and New Leaf is also seeking a larger space. The third building, adjacent to the automotive store Tire Engineers, has been vacant for three years. The three structures comprise 55,000 square feet.

The property’s current zoning includes self-storage, and the conversion plan is in the early stages. “The buildings would basically look exactly like they do. It would all be interior, climate-controlled storage units,” plaza manager Vickie Smith told the source. “It’s not going to be your standard metal, roll-up door, self-storage unit, if we go that route. It’s going to be a first-class operation. That’s what Coro does in every operation that they do.”

Coro purchased the property, which dates to 1956, from Glenwood Development in 2013 for $36.6 million. A blog by MidTown Inc., an advocacy organization for the area, included details about the project from Coro President John Lundeen. The facility will feature new landscaping and streetscape, along with “screening adjacent to nearby residential areas,” the blog stated.

The blog was written in response to inquiries from concerned residents about the storage project, according to Anne King, executive director of MidTown. “Understandably, the post has met with considerable disappointment and frustration. Know that we share that same disappointment. Our vision is probably like yours: a village center with restaurants and retail,” King said. “We also recognize the investment that Coro Realty has made in our community in the face of a dramatically changing retail environment. They have a responsibility to be financially profitable, and a commitment to being a good neighbor.”

It’ll be about 60 days before Coro makes a decision about the project, Smith said, adding the company has struggled to find tenants for the three buildings. “We’ve been marketing the 200 building [next to Tire Engineers] for the last three and a half years. It’s very hard to get the national tenants and restaurants to look at Auburn Avenue because they’re not here, and they don’t understand the amount of traffic that is there.”

The lack of interest led Coro to “think outside of the box” in filling the structures that were originally built for commercial companies. “We’ve had businesses in and out of there. A lot of the community doesn’t support those smaller businesses, so one by one they’ve either located to north Columbus or they’ve closed,” she said. “We certainly want to do what’s right for the neighborhood, for the shopping center, for this whole area. So, we’re trying to come up with some different things that would work in these areas.”

Based in Atlanta, Coro specializes in acquisitions, construction management, development and disposition, financing, leasing, and portfolio management. It oversees commercial and residential properties in Alabama, Florida, Georgia and Tennessee.

 

StorageMart, which operates more than 190 self-storage properties across Canada, the United Kingdom and the United States, has opened a new facility in Waukee, Iowa, just down the street from the Waukee Family YMCA. It’s the operator’s 18th location in the state.

The multi-story property at 225 N.E. Venture Drive comprises 57,810 square feet of rentable space in 439 climate-controlled and drive-up units. The facility offers packing and moving supplies, handcarts, 24/7 access by request, keypad entry and other amenities. Online billpay is available. Gate hours are 6 a.m. to 10 p.m.

"We're happy to bring another 'easy, clean, service' experience to the people of Waukee," said Cris Burnam, president. "We're looking forward to serving local business and residents with more of the level of professionalism and cleanliness StorageMart has come to represent.”

Founded in 1999 and based in Columbia, Mo., StorageMart is privately owned and operated by the Burnam family, which has been in the storage industry for three generations. Its portfolio consists of more than 12 million square feet of storage. It serves more than 75,000 self-storage customers, and operates in Chinese, English, Punjabi, Quebecois French and Spanish.

The Lock Up Self Storage, which operates 45 facilities in eight states, is converting a former Graymills Corp. manufacturing plant in Chicago to self-storage. The property at 3705 N. Lincoln Ave. in the North Center neighborhood is unusual in that it consists of two buildings separated by railroad tracks operated for the Chicago Transit Authority Brown Line. One of the buildings dates to 1870, according to the source.

Graymills, which manufactures industrial pumps and inking systems, vacated the building in 2016. It moved to Broadview, Ill., after more than 70 years in Chicago, the source reported.

The Lock Up operates six storage facilities within the Chicago city limits. It acquired the North Center property for $7.35 million.

The Lock Up is the operating brand of family-owned Lock Up Development Group, an affiliate of BRB Development LLC, which has offered self-storage services since 1976. The company owns 45 self-storage facilities in Connecticut, Florida, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey and New York. Its portfolio comprises more than 3 million square feet of storage space.

Self-storage developer M4 Management Inc. has completed construction on a 53,000-square-foot facility in Waipahu, Hawaii, on the island of Oahu, west of Honolulu. The property at 94-130 Leokane St. opened this month and is managed by Extra Space Storage Inc., a real estate investment trust and third-party management firm. It was converted from an office/warehouse building, according to the source.

The project was one of the first self-storage conversions on the island, according to Stephen Grossman, president of Self Storage Investment Services Inc. (SSIS), a brokerage that specializes in properties in California and Hawaii. “Most industrial properties on the island are small [for conversion], just 5,000 to 10,000 square feet,” Grossman told the source.

By comparison, the Waipahu structure had 75,000 square feet of gross area and featured high ceilings and a loading dock. It also had the appropriate zoning. It was previously occupied by Zippy’s, a local restaurant chain.

Based in Laguna Beach, Calif., SSIS specializes in the sale, acquisition and development of self-storage properties. It’s sold nearly 4 million square feet of existing self-storage and closed more than 1 million buildable square feet of entitled self-storage land.

M4 is a Beverly Hills, Calif.-based real estate development, investment and management firm, with emphasis on self storage facilities and shopping centers, primarily in Southern California.

Being a self-storage operator can seem overwhelming even on the best days. For many of us, the desire to improve leads us to seek education by attending industry conferences, reading articles and studying business rules. The problem is this quest for knowledge can create or grow frustrations and sometimes make us feel more incompetent than we really are. This journey is almost a rite of passage. It means we care and are trying!

Among the most confusing aspects of daily storage operation is the analytical data at our fingertips. It’s OK. You’re not alone.

Discussions about data use can be compared to a horde of teenage boys gossiping about the birds and the bees. Everyone is talking about it, but nobody really knows how to do it. Everyone thinks everyone else is doing it, so they claim they’re doing it. Well, guess what? You can be the one who’s actually doing it! Let’s review several reports on which I rely to improve my operation. Used effectively, they can benefit your business.

Setting Goals

Every self-storage facility needs goals to guide growth. These are a commitment to improve. If you fail to establish company objectives, you’re wasting valuable time and effort. You must know what you’re working toward with respect to retail sales, rentals and reviews. Employees must be given a path to walk, knowing their efforts assist in achieving the overall aims of the business.

That said, goals are meaningless without measurement and follow-through. This is why it’s essential to continually and consistently review your progress using operational performance reports from your facility’s management software.

Customer Market Report

What are the sources of your customers? Every experienced operator needs to know, with relative certainty, from where he gets his tenants. You can’t just take your best guess at this. Decisions related to marketing dollars, staffing, search engine optimization, unit pricing and even business expansion can all stem from understanding your customer pipeline.

To track this, use your management software to record every contact you have with potential customers, whether on the phone, in person or online. This takes time, but as you collect the data, it’ll help you make informed decisions that affect your store. Instead of guessing or being reactive, you’ll be proactive like many of your competitors.

How much better would you be as an operator if you could easily gather customer-acquisition information and examine it on a consistent basis? Take the time to make decisions based on the statistics.

Rate-Increase Report

I’ve attended many seminars in which speakers insist that raising rates doesn’t cause customers to move out. While I’ve always agreed, I needed to know for myself. I called technical support for my management software and learned there isn’t an easily accessible report to determine if this is true; however, because I believed understanding the effect of raising rental rates was important, I continued the pursuit. After an arduous process, I discovered a report I could export and modify to finally glean the information I desired.

Now I know how rate increases affect my customers, and I run this report once a month. Figuring out how to generate it, though, will depend on your software. (If we use the same system, I’d be happy to provide instructions.) Our data showed that customers from one store accepted a higher percentage increase than tenants from a different location, something I would never have known if I didn’t analyze the numbers.

Rate-Variance Report

Rate variances, such as customer credits and discounts, can be likened to an extended stay with your mother-in-law. Throughout your visit, it’s easy to make concessions here and there for the sake of getting along; but at the end of the month, when you get your credit card bill and see how all the charges add up, you’re the one stuck making the payment.

I’m not a fan of free months, dollar move-ins or mysterious customer-service credits. They rarely have a place; but if they’re going to be used, the practice should be pragmatic and deliberate. At the end of every month, you need to take responsibility for every credit and discount you issue. Run a report to examine these trends in your operation to fully understand what’s being given away. A few waived late fees here and there may seem harmless, but they start to add up, which amplifies their negative impact over time.

Leverage the Data

The key to leveraging all these reports is to consistently review and analyze them. It’s easy to get busy and drop the ball occasionally. It can also be easy to let things slide, miss goals or rely on discounts. However, by using the data, you’ll build a culture of responsibility that consistently propels your business forward.

My motivation comes from wanting advancement in my career and a desire to be a better owner-operator. I can’t accomplish either without knowing how my stores run and understanding how these data sets can assist my decision-making. I strongly encourage you to mine the data that can help your employees and facilities succeed.

Rick Beal is the district manager and part owner of Cubes Self Storage in Salt Lake City. His goal is to help a historically slow-changing industry embrace new, innovative ideas. His professional motto is “Storage is a business of inches not miles.” He can be reached at [email protected]. Connect with him on LinkedIn at www.linkedin.com/in/storagerick.

Before my partner and I created our self-storage company and sought to acquire our first facilities, we poured over industry data, attended tradeshows, examined local markets and analyzed potential competition. My simple theory was self-storage isn’t a real estate asset; it’s a business. That's what attracted us to it. We believed there was an opportunity based on that core principle.

We learned many people get into self-storage to create passive income from the real estate, not realizing they’re missing 50 percent of the opportunity. We believed we could purchase a decent piece of real estate, even if it was underperforming, and resuscitate the business aspects. This became our working strategy.

Of course, it was harder than it sounded; but I knew if the theory proved true, our efforts would be rewarded. Could the financial performance of a real estate asset be greatly improved through a change in operation, marketing and management? In this industry, yes! Self-storage performs similarly to retail. You have a store in which you sell products. Customers come in and out daily and have unique needs and circumstances. In the markets we studied, most of the product didn’t meet the needs of the client base. The customers had changed, but the businesses hadn’t.

As we looked more closely at the industry, our focus was on the customer, product and competition. We liked what we saw.

The Issue of Occupancy

In the beginning of our journey, my partner and I didn’t focus on things like occupancy or price per square foot. I know, I know … How can you get started in real estate without considering those things? Remember, we were building a business not investing in a real estate asset.

Too often, owners and managers look at square-footage (physical) occupancy as a gauge of facility success. The higher the occupancy, the better the facility is performing. But this can be very deceiving. After all, the goal shouldn’t be to have high occupancy but to achieve high revenue. It’s not that physical occupancy should be ignored. It can be a great benchmark across a market to indicate its overall health. If there’s widespread low occupancy, that’s a pretty clear indicator of oversupply. That said, we were focused on other factors.

Room to Improve

None of our potential acquisitions were similar in terms of traditional real estate metrics. Some were at 60 percent or lower occupancy, while others were at 100 percent. Some were selling for twice as much per square foot than others. Population and demographics where all unique. The facilities were even built differently. Not that those things weren’t important, but they weren’t the determining factors in our purchase decisions. So, what were we looking for?

We wanted to find storage properties that were underperforming in strategy, revenue, operation and customer experience. We looked for facilities that could be turned around, focusing on opportunities to increase revenue and force appreciation. Some of the sites we purchased had zero upside potential in occupancy because they were supposedly “maxed out”; but they had huge upsides in revenue through rate increases, collections, add-on products and services, and marketing.

Not all storage facilities are created equal, and neither are their customers. We didn’t want to convert every prospect who came through the door. We wanted tenants who were looking for quality, security and amazing service. By changing the customer experience, we looked to bring more value.

We also looked at profit per customer. The spread between cost of acquisition (how much you spend to get the customer in the door) and the lifetime value of the customer (the average monthly rent for the facility times the average length of stay), will tell you how much each customer is really worth. Then the questions to ask are: Can I lower the cost of acquisition? Can I increase the customer’s lifetime value? Can I lower our fixed and variable costs to increase profit per customer? These are the metrics on which we’re focused.

Finally, it’s important to note that each facility has varying demand for different unit sizes. We understood that these should be analyzed and priced separately. Rates should be looked at from size to size and customer to customer. This can be a great tool to maximize revenue and increase the lifetime value per customer. One unit size doesn’t fit all and neither does price.

Seek Potential

With the above strategy in mind, we could pinpoint acquisitions that met our criteria. We mined second-tier markets with lots of demand but subpar self-storage businesses where we could bring the most value to customers. We looked for poorly operated facilities that had lost control of their collections or expenses, were giving away unnecessary discounts, or were waiving fees. In all cases, these businesses were losing revenue, which can have a huge impact on the bottom line.

When evaluating self-storage properties in which to invest, occupancy shouldn't be overlooked, but it shouldn’t be your primary focus. Look at room to improve and revenue potential, and you’ll find a business that can be lead to great success.

AJ Osborne has more than 15 years of experience in the self-storage industry. In 2012, he co-founded Bitterroot Holdings, a privately held company that owns and operates Keylock Storage as well as fitness centers. Keylock has 10 locations across the Northwest, with plans to acquire or develop five more within the next five years. For more information, visit www.bitterrootholdings.com.

XPS Solutions, a provider of outsourced technology solutions for the self-storage industry, has partnered with StoreLocal, a cooperative created by independent self-storage operators to offer member benefits with economies of scale, to provide coop members with call-center services, according to a press release. The XPS call-center platform integrates with an operator’s self-storage management-software system.

“XPS sees this as a natural fit for our two organizations,” said Mike Roberts, executive vice president of business development and operations for XPS. “StoreLocal adds value for their members through technology and industry expertise to help independent operators compete with the [real estate investment trusts]. The XPS Solutions technology platform is a perfect fit to support these operators.”

“The [StoreLocal Partner Relations Committee] ultimately went with XPS because of their state-of-the-art call-center facility, as well as their reputation for exemplary customer service,” said Travis Morrow, committee chair and president of National Self Storage (NSS), a Tucson, Ariz.-based storage operator and developer. “We are pleased to be adding a call center to the list of StoreLocal partnerships.”

Morrow also serves on the StoreLocal board. NSS has developed, owned and operated self-storage facilities for more than 40 years. It currently operates 11 properties in Arizona, California, New Mexico, Texas and Utah.

StoreLocal leverages the combined strength of its membership for services such as customer acquisition, financing, marketing and technology. The coop also owns online self-storage directories StorageFront.com and SelfStorageHounds.com. Its total membership includes more than 700 self-storage facilities through 21 founding-member companies.

XPS provides digital call recording, lead tracking, Web-chat support, search engine optimization services, Web hosting and data analysis for the self-storage industry. It also offers an electronic gift-card program, an outbound follow-up tool and MyStorePal, a downloadable app designed for self-storage tenant use. The company’s headquarters in Richardson, Texas, serves as a sales and support center for thousands of independent sites.

Blue Mound 287 Self Storage will be co-sponsoring a graffiti/street-arts festival in Fort Worth, Texas, on March 17, to benefit the Texas chapter of SPCA (Society for the Prevention of Cruelty to Animals) International, an animal rescue and support shelter. The “Art-On-A-Can” event will take place at Box Office Warehouse Suites, 11 a.m. to 5 p.m., featuring a pet-adoption clinic, food, live music, a St. Patrick’s Day costume contest, arts-and-crafts vendors, and a gallery walk featuring work from local street artists.

Admission is $5 for adults and free for children under 12. All entrance fees will support the SPCA. Tickets can be purchased on site or in advance at graffitiartfestival.com.

In addition to serving as a sponsor, Blue Mound will offer a free three-month rental of a 10-by-10 storage unit as part of the event’s prize drawings.

"I've known the management team at Blue Mound now for over 10 years," said Ron Sturgeon, owner of RDS Real Estate, the event coordinator. "I've always found them to be community-minded, professional in every way, and more than willing to step up when the cause is a good one.”

The storage facility at 870 Blue Mound Road W. is locally owned and operated. In addition to traditional storage, the property offers vehicle storage.

Headquartered in New York, SPCA works to stop animal abuse and suffering through a number of programs.