Update 9/14/21 – The Texas Department of Motor Vehicles (DMV) has published detailed guidelines for transferring self-storage tenant property to a licensed vehicle-storage facility (VSF) under SB 1181. Once the towing conditions outlined in the measure are met, vehicles can be transferred to a VSF 15 days after the notice of claim is sent to the delinquent tenant by verified mail.

Prior to releasing possession of a vehicle, the self-storage operator must also supply the VSF with supporting documentation, according to a Sept. 13 newsletter emailed to SSA members. This includes:

• A copy of the tenant’s signed rental agreement, which should include authorization for VSF to take possession of the vehicle
• Proof the notice of claim was sent to the tenant
• A completed and signed “Self-Service Storage Facility Lien Foreclosure” form

Once the VSF takes possession of a vehicle, it must follow the statutory lien-foreclosure requirements outlined in the state’s Occupations Code, according to the DMV.

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6/15/21 – Texas Gov. Greg Abbott signed Senate Bill 1181 last month, giving self-storage operators another option to reclaim their space if a tenant fails to pay their rent. Now, rather than sell a customer’s stored goods via lien sale, facility managers can arrange to tow certain items from the property. The law goes into effect Sept. 1, according to a June 14 newsletter emailed to Self Storage Association (SSA) members this week.

If a self-storage tenant is in default and the property subject to lien is a motorboat, motor vehicle, outboard motor, semitrailer, trailer or vessel, the facility operator may have the item towed if three conditions are met. First, towing must be expressly authorized in the written rental agreement; second, the tenant must fail pay within an allotted time after the operator provides the lien notice; and third, the towing company must agree in writing to accept possession of the property. Storage operators who don’t already have “expressly authorize towing” in their rental agreements are encouraged to add it.

The annotated Texas Lien Law, which explains the amendments in depth, will soon be available on the SSA website at selfstorage.org. The bill was supported by the SSA and the Texas Self Storge Association (TSSA).

The SSA represents about 22,000 U.S. and international member-affiliated self-storage facilities, according to its website. It’s allied with several state and international self-storage associations and has about 6,000

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

Sources:
SSA Magazine Weekly 9/13/21, Texas DMV Provides Guidance on New Towing and Transfer Law
Texas DMV, Registration and Title Bulletin #002-21 Policy and Procedure
SSA Magazine Weekly 6/14/21, Texas Governor Greg Abbott Signs Optional Towing Bill Into Law

Update 9/14/21 – Stora has received additional investment from self-storage entrepreneur David Milton. The undisclosed amount will triple his stake in the company, according to a press release.

“Closing another round of funding from such a well-respected industry leader as David not only helps to propel Stora into the right markets for growth, it’s also exciting industry validation that what we are doing is making an impact,” Shields said.

“Since investing earlier in the year, Stora has rapidly grown its customer base both inside and outside the U.K.,” said Milton, who also sits on the Stora board of directors. “The shift to online bookings, payments and automation is an exciting development in self-storage that simply can’t be ignored.”

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5/4/21 – Stora, a U.K.-based startup that offers an all-in-one management and sales software for self-storage operations, has raised £500,000 to expand within the U.K. and enter the U.S. market. The infusion came from a funding round led by venture-capital fund manager Techstart Ventures LLP, plus an investment from self-storage entrepreneur David Milton, according to a press release.

Stora launched three months ago, offering a web-based suite that gives facility operators a business website with integrated management software. The platform was built by StoreStuff Self Storage, which operates a facility in Portadown, Northern Ireland. The company developed its own product because it couldn’t find a single solution that provided everything it wanted, said Gavin Shields, CEO of Stora and founder of StoreStuff. “Stora is the secret sauce behind the rapid growth of our own facility business, and we’re excited to make it available to the wider industry,” Shields said.

The Stora website solution facilitates online unit reservations and payments as well as automated processes such as recurring billing and customer check-in. The facility-management system allows operators to customize the website, allocate units, set unit rates and review business metrics, the release stated.

“The coronavirus pandemic has accelerated the self-storage industry’s adoption of online technologies such as contract signature and ID checks,” Shields said. “We fundamentally believe that the self-storage industry is moving online in the same way the airline, hotel and countless other industries did years ago. Not having online bookings and payments on your website will become a major competitive disadvantage as customers increasingly seek convenience and speed during the booking and move-in process. Our goal at Stora is to facilitate the shift to online for all operators.”

“I believe in the [Stora] team’s vision of an industry that is shifting increasingly online,” said Milton, who sold London-based ABC Selfstore to Shurgard Self Storage Europe SARL in 2018 for £50 million. “I have seen the technology up-close at their own facilities and believe Stora is well-positioned to not just benefit from, but drive, this shift. To have already brought on customers across the U.K. at this early stage shows the demand for a modern, web-based solution in this industry.”

Milton and his brother, John, founded ABC in 1993. At the time of sale, the company’s portfolio comprised three freehold properties in Greater London. David served on the board of the Self Storage Association of the United Kingdom from 2004 to 2009, including three years as chair.

Techstart operates in Northern Ireland and Scotland. It invests in early-stage technology businesses and startups launched through university programs. It has £50 million of equity funds and manages a £4.5 million proof-of-concept grant fund, the release stated.

StoreStuff opened in September 2019. In addition to Portadown, the self-storage facility serves the communities of Armagh, Belfast, Craigavon, Dungannon and Lurgan.

Sources:
Stora, Self Storage Veteran Triples Stake in Stora as Industry Moves Online
News Anyway, Self Storage Software Provider, Stora, Raises £0.5M

You know your self-storage facility needs regular maintenance, right? Sure, you do. It probably brings to mind things like litter, faded paint, cracked pavement and dented doors. Perhaps in this time of COVID you’re fixated on surface cleaning, air ventilation and traffic flow. But these relate to the physical property. What about your operation’s digital landscape?

You may not think about it, but every day your company’s digital footprint is growing by Sasquatch-size proportions. At a time when your every online action is tracked by cookies and every email is a potential security hazard, now is the perfect opportunity to start cleaning up your virtual assets and online presence. I’m talking about your computer files, software and mobile apps, Internet safety, online business listings, social media profiles, and more.

It’s easy to think your information is safe in a digital environment, but there’s always a security risk. Trouble can come from clicking the wrong link, losing a device or falling victim to a third-party data breach. The goal is to keep your assets organized and accessible to those who need them while minimizing exposure to cyber threats. Consider the following.

Update Your Passwords

Change your digital passwords at least every 60 to 90 days and delete or deactivate any accounts you no longer use. Unless you’re using strong codes, you might be exposing your company information. By the way, “Password” is not a password! Harvard University’s Information Security suggests creating a unique code by converting a phrase into an acronym, or choosing four to five random letters and coming up with a phrase to help you remember them. For example:

• A:IGI,TH! = Acronyms: I Get It, Thanks Harvard!
• JS!!EPP = JustStop!!EnoughPasswordsPlease

Essentially, you want your passwords to be a strong combination of numbers and letters, using capitalization and punctuation. If trying to keep track of them all seems like too much of a hassle, use a password manager to stay organized and secure. This application generates unique codes for each of your accounts and stores them securely behind strong encryption. That way, instead of retaining each password individually, you just need to know the one for your manager.

Back Up Your Data

Cloud-based software has been the de facto platform for the self-storage industry for quite some time, but in a climate of increasing security risks and distributed workforce, you should back up anything you can. This includes information from your mobile devices and laptops, and definitely any business-related information on your desktop computers.

Many backup strategies have emerged over the years, but none as prevalent as the 3-2-1 rule, which advises that you keep three copies of your data (your original and two backups), on two different media, with one copy kept offsite for disaster recovery. Though the term was coined in the 1990s, long before cloud storage, it’s still useful as a guideline. I recommend it with a modern twist: Create three copies of your data (your original and two backups), on two different media, one of which is the cloud and the other an external drive—local, cloud, external.

Reputable management-software providers take this a step further on your behalf and provide redundant backups on the cloud, too, so come hell or high water, your information is always secure. Just remember that any information that isn’t stored within in your management software doesn’t enjoy this benefit.

Update Your Online Listings

If you aren’t using online business listings such as Bing Places for Business, Google My Business, Yahoo and Yelp to promote your self-storage operation, you should be. They’re a great tool for drawing in customers. The catch, however, is you must carefully maintain them, ensuring all information is accurate and up-to-date. This ensures a better experience for the end user and better online results for you. When reviewing your listings:

• Check for accuracy in business name, phone number, email, hours of operation, address and logo.
• Check for reviews and respond to all of them, positive and negative.
• Check for new or previously unused fields.

Creating and maintaining these profiles is important for your operation’s online health and requires little to no technical experience. You can even use a free tool such as Yext or Moz Local to quickly scan your local listings and see if there are any inaccuracies or missed opportunities. Both generally take less than a minute to run and will give you a quick view of more than two dozen sites.

Check Your Social Platforms

Chances are you’re using at least one social media channel for your self-storage business. While it’s important to regularly post content for a continued viewership, it’s also critical to keep your information relevant and secure.

Most platforms will allow you to pin a post to the top of your business page. Take advantage of this by adding eye-catching content, but be sure to change it at least every six to 12 months. Any longer than this and your account will appear inactive.

Properly configure your privacy settings to avoid cyber attacks based on social engineering, which is the practice of manipulating people into performing actions or divulging information based on false pretenses. If your social accounts are unprotected, criminals can access things like employee names, company events and announcements, which can be used to compromise your business. On Facebook, Twitter and LinkedIn, the public-privacy setting is turned on by default, but you can easily change them. Still, avoid posting tidbits such as company job roles, work email addresses and other internal information.

Finally, take a look at any images you’ve posted and remove any that may be old or off-brand. To make a good impression on readers, it’s important to reflect upon the public impression you’re making with photos.

There’s Always More to Do

All these steps provide a great foundation for a clean digital landscape, but ultimately, there’s always more to do. Not a single thing listed above can be done once and never touched again. Setting company-wide policies and staying vigilant are the best ways to ensure your self-storage business stays organized and efficient, in the physical and virtual realms.

Kevin Kerr is the marketing manager for Storage Commander Software, a Temecula, Calif.-based supplier of cloud-based management software and pay merchant services for self-storage operations. To reach him, email [email protected].

The Ocoee City, FL, Commission this week discussed whether to impose a temporary moratorium on self-storage development. The ordinance would affect projects in the general-commercial, restricted-manufacturing and warehousing zones, according to the meeting agenda.

There are currently 11 self-storage facilities within the city limits that are either open and operating, under development, or recently approved. Staff said a six-month moratorium would allow them to assess how self-storage fits with the municipality’s long-term vision, particularly in relation to other commercial developments such as strip malls or restaurants.

The commission will hold a second reading of the ordinance and a public hearing on Sept. 21. Interested parties can attend in person or watch the meeting on the city’s YouTube channel the next day.         

Sources:
Orange Observer, Ocoee City Commission to Discuss Passing a Temporary Moratorium on Self-Storage Facilities at Sept. 7 Meeting
Ocoee City Commission, Agenda

Shurgard Self Storage Europe SARL, the European affiliate of U.S.-based real estate investment trust Public Storage Inc., this week unveiled its corporate growth initiatives during a virtual Investor Day. The plan includes an aggressive acquisition and development strategy designed to grow the company’s portfolio over the next several years as well as furthering its sustainability and social initiatives, according to a press release.

Shurgard’s development strategy includes the expansion of existing sites, plus the exploration of new-construction and conversion opportunities. The company will also pursue acquisitions of smaller operators. It expects to infuse €170 million per year toward expansion, with the goal of adding 90,000 square meters or 16 locations to its portfolio by 2024, the release stated.

“We have the ambition to accelerate the expansion of our market-leading portfolio,” said Marc Oursin, CEO. “To do so, we will double our investment each year and rely on three levers: redevelopments, new developments and market consolidation.”

As part of its revenue-growth plans, Shurgard is also optimizing its digital platform to improve the customer experience and better utilize staff. The company is now equipped to automate the entire move-in process at facilities it operates, projecting that more than 50% of its move-ins will come via the web by next year. Online improvements include data-driven pricing tools.

Shurgard also will continue to move toward carbon neutrality as part of its sustainability initiative. As of January, all of the company’s locations were supplied with 100% green electricity contracts and 60% natural gas. The operator has cut is CO2 emissions by almost 40% in the last seven years, officials said. Its goal is to reach carbon neutrality in its operations by 2030 and be at net zero with materials by 2040.

Shurgard operates 245 self-storage facilities comprising 1.2 million net rentable square meters in Belgium, Denmark, France, Germany, The Netherlands, Sweden and the United Kingdom.

Headquartered in Glendale, California, Public Storage has interests in 2,649 self-storage facilities in 39 states, with approximately 184 million net rentable square feet. It holds a 35% interest in Shurgard.

Source:
Shurgard, Shurgard Unveils Its Strategy to Accelerate Mid-Term Growth

New Mexico isn’t the most robust of the Sun Belt states when it comes to self-storage, but the outlook is bright enough that owners and investors still consider their future prospects in Albuquerque and other parts of the state. This is particularly notable considering population growth has been stagnant compared to that of other states in the region.

For example, the Texas population grew 8.9% from 2010 to 2020, while Arizona increased 11.9% and Colorado jumped 14.8% during the same period. In contrast, New Mexico’s population increased just 2.8%, while its largest city, Albuquerque (915,000 people), grew by only 1.67%, according to U.S. Census figures. Many believe the slow growth is attributable to economic issues that have kept the state’s unemployment rate high in recent years. The jobless rate was 8.3% in April, which was above the national average of 6.1%.

In many ways, New Mexico—specifically Albuquerque and its immediate surrounding area—defies self-storage logic. Despite the low population growth, many in the industry are encouraged because the area is considered relatively stable, with steady markets whose long-term attractiveness should remain strong as long as Americans continue to flock to Sun Belt states in general.

“We’re not a high-growth market like other nearby states; but we’re still growing, and there are great opportunities here,” says Brian Patterson, vice president of development for Titan Development, an Albuquerque-based commercial real estate developer that’s built four self-storage facilities in New Mexico in recent years. “You can find micromarkets here that are underserved. New Mexico has been good to us.”

Market Dynamics

Overall, there are 187 self-storage facilities in Greater Albuquerque comprising about 9.4 million square feet. In terms of new construction, the metropolitan area has seen solid, though not hyperactive, with total supply increasing 9% since 2017, according to Radius+, a company that specializes in self-storage data, analytics and location intelligence. Meanwhile, the self-storage penetration rate (the amount of square feet per capita) remains high at 8.1, well above the national rate of about 6.

And yet, Albuquerque’s rental rates have remained relatively strong over the years. In May, prices were hovering around $175 per month for a 10-by-10, climate-controlled unit, according to Radius+, while occupancy levels remained above 90%. Santa Fe, the state’s scenic capital, is seeing even stronger rental rates in the $225 range, despite experiencing fairly active new construction in recent years. Occupancy levels are also strong there.

“It just goes to show how self-storage is really a market-by-market phenomenon when it comes to performance,” says Cory Sylvester, a principal at Radius+. “Overall, Albuquerque is not a dynamic market, but it’s stable. It hasn’t seen insane amounts of new supply. Generally speaking, it’s a pretty good market.”

In that regard, the dynamics driving Albuquerque and the state of New Mexico in general are similar to those of other self-storage markets across the country that are being buoyed by the pandemic and more people working from home. If you perform thorough and careful research, there are pockets of opportunity, so look carefully to identify underserved areas.

Economic Inhibitors

Though Albuquerque is considered a secondary market, large industry players have moved in, including real estate investment trusts. According to industry observers, what’s likely preventing it from becoming a “hotter” region in terms of population and self-storage growth is the lack of dynamic employers who offer jobs attractive to younger workers. Most agree the state needs more major employers and jobs to grow at a faster clip.

Dean Alexis, a member of the New Mexico Self-Storage Association and owner of two self-storage facilities in Santa Fe, says the state has been “mired in semi-economic malaise” for a while. “We’re certainly better than California, but not as good as Texas,” he says.

Still, the state has the respected University of New Mexico as well as the federal government’s Sandia National Laboratories, the Los Alamos National Laboratory and the Air Force Research Laboratory, all headquartered in Albuquerque. In addition, Netflix recently announced plans to boost its presence by expanding its ABQ Studios in Albuquerque’s Mesa Del Sol area, which includes a commitment for an additional $1 billion in production spending.

Despite the economic challenges, Ryan Goodman, a partner at Around the Corner Self Storage, which operates eight locations across the state, is among those who remain upbeat about New Mexico’s self-storage future. “It’s a good market that I think will grow,” he says. “I’m optimistic.”

Dylan Stallings is an advisor for The Storage Acquisition Group, which specializes in acquiring off-market self-storage facilities and portfolios nationwide. He uses his background in finance and economics to research markets and provide industry reports for potential acquisitions nationwide. The company also offers market-analysis reports, underwriting and closing support. For more information, call 757.867.8777.

When ranking the most enjoyable activities you engage in as a self-storage operator, collections probably isn’t even on the list. After all, if you’ve ever been on the receiving end of a collection call or letter, you know how “fun” they can be. Still, staying on top of past-due payments is a necessity in this business. Let’s examine some legal considerations to help you be more effective in this endeavor while avoiding related risk.

Communicate, But Use Caution

Your customers should know non-payment won’t be tolerated. In nearly all things, communication is the key to success, while its lack can only breed failure. It’s especially true when it comes to self-storage delinquency. To collect rent, you must communicate with your tenants; but do it in a smart, lawful way!

First, you’ll likely make a bunch of phone calls. Keep a record of all attempts. If you wind up in court, being able to show how hard you tried to collect before you went to auction will impress the judge. Calling a person’s home or office isn’t generally considered harassment, but check your state laws for guidance. Just make sure you only share account information with the tenant who signed the rental agreement. It is not OK to call someone’s office and tell a supervisor their employee owes you money.

If you use a third-party collection agency, it’s fine to inform tenants that their account may be turned over to it. If you have an attorney, it’s acceptable to inform customers that their account may be given to counsel to file a lawsuit. What isn’t OK is to threaten those activities if you have no intention of following through. When you raise the possibility of turning matters to an agency or attorney, say the account may be handed over, not will be.

Letters are another effective communication method. When you send one for collection purposes, provide the tenant with the amount due and how you arrived at that number. Tell them where and how they can pay. Keep a copy in the tenant file for your records.

Whatever communication methods you use, keep a cool head and be nice. Tenants may react harshly, which can be difficult, but kindness is the best way to get someone to do something they don’t want to do. To avoid uncomfortable situations, begin the collections process early. Don’t wait until the debt is unmanageable and fees have piled up.

Know the Law

Collection methods that resemble actions from a “Godfather” movie are certainly a no-no. Organizing a protest in front of a tenant’s home is not OK. Posting nasty comments on social media is also a bad idea.

Of course, you knew this already! But there are less obvious activities that can get you in legal trouble, particularly with the Fair Debt Collection Practices Act. There is a federal version but also state versions. Under federal, an owner or employee collecting a debt isn’t subject to the restrictions of the act, but this can vary by state. In Texas, for example, anyone collecting money on their own behalf is automatically considered a “debt collector,” which makes them subject to certain restrictions. Generally speaking, most states prohibit practices that involve:

• Using obscene language or name-calling
• Threatening criminal prosecution
• Placing anonymous phone calls
• Making repeated calls for the purpose of harassment
• Threatening bodily injury or harm

Common sense is a great guide here. If you believe an activity would be harassment if directed at you, it’s likely something you shouldn’t turn on your tenant. A good rule of thumb is to treat the customer as you’d want to be treated. If being nice doesn’t work and the tenant is obstinate, you can move forward with turning them over to a collection agency or attorney.

Focus on Prevention

If you just don’t want to deal with your self-storage collections or you’re concerned about the legal risks involved, you can simply do your best to prevent them! Thankfully, there are ways to minimize the need to perform these activities in the first place.

First, make sure your lease agreement is well-written, comprehensive and has appropriate language to compel people to pay on time. Also make sure that if they don’t pay, your remedies are quick and decisive in accordance with your state law. Not sure if your agreement is up to snuff? Send it to a knowledgeable self-storage attorney to have it updated. A strong, accurate and legal contract is the first step to preventing collections.

If you haven’t already, consider having your tenants sign an autopay agreement that’ll allow you to automatically charge their credit or debit card each month. And keep a backup payment method on file in case the tenant’s card expires or is cancelled. The backup might be a PayPal account or direct bank draft.

Have a collection system in place. For example, your plan might state that on day X, the first call is made; on day Y, the second call is made; on day Z, the first letter is mailed, etc. Make sure the plan identifies a particular day on which to start the lien process or send the case to a collection agency or attorney. Once you have a written strategy, stay vigilant and follow it dutifully.

Finally, remember that you’re under no obligation to rent a unit to anyone. You have the right to refuse a rental as long as that decision isn’t discriminatory. So, if you get a bad feeling about a customer, don’t proceed. For example, if a prospect doesn’t have a credit card and their check is numbered “0001,” you may not want to lease that space. If a customer comes in smelling like they just finished swimming in a liquor barrel, think twice. While the drive to rent units is strong, it does you no good if the tenant won’t ultimately pay their rent!

Following the above strategies should help you minimize collections and keep you organized for when the need arises. If you’re unsure how to proceed or have a unique situation that requires expert advice, contact an attorney who specializes in self-storage.

Murphy Klasing is a partner with Weycer, Kaplan, Pulaski & Zuber P.C. He has a wide range of appellate, arbitration and trial experience, successfully handling numerous litigation matters. With more than a decade of experience in the self-storage industry, he serves as counsel for Public Storage Inc. in Oklahoma and Texas, and has defended matters involving allegations of breach of contract, code violations, employment issues, fraud, negligence, personal injury, premises liability and theft. To reach him, call 713.961.9045; email [email protected].