New Self-Storage Developments are Coming! Are You Prepared to Fight?
|Copyright 2014 by Virgo Publishing.|
|Posted on: 01/23/2014|
A Guest Installment by Jim Chiswell, Owner, Chiswell & Associates LLC
“The new facilities are coming! The new facilities are coming!”
Just like Paul Revere and William Dawes (who is often ignored because his name did not appear in Henry Wadsworth Longfellow’s historic poem) alerted the Colonial militia to the approach of the British military before the battles of Lexington and Concord, let this serve as a warning to all self-storage owners and managers. New storage development is booming across the United States, and you could be facing a new competitor in your market before the year is over.
The performance success our industry has enjoyed over the past decade (especially during the recession) combined with the allure of cheap money and acquisition capitalization rates at record-low levels has spurred a building explosion. For many storage owners, having a new project develop in their target market area will be an eye-opening experience. And, if you own or manage an existing facility that has not been maintained well and simply coasted along enjoying occupancy levels of 85 percent to 95 percent, you may be in for a fight.
Many of the new self-storage facilities being built across the nation are including state-of-the-state security features as well as very female-friendly offices with a distinct retail environment. How does your facility measure up?
Expansion projects are another source of new competition. In most cases, all an owner of an existing facility with surplus property has to do is walk into his city’s building department with a requisite set of plans and simply apply for a building permit. There would be no public hearings or warnings of any type, unless you track the building permits in your community. A couple of months from now, you could discover your competition marketing new climate-controlled units, while you don’t have any at your facility.
I don’t think it’s too late to get yourself ready, but you should apply a critical eye to your business. When was the last time you took an objective look at your office? It may be time to repaint. Adding some artwork or maybe a few plants can transform the office for very little money.
Next, when was the last time you drove by your facility at night? Are all the bulbs working? Does it look inviting to people driving by? Remember that during the winter months, more than half of the folks going by your business are doing so in the dark. What kind of message does the image of your facility present? A couple of new flood lights could change everything.
Also, if you have blacktop paving, sealing the entrance and the first 50 to 100 feet of the entrance way can change the curb appeal of your business for new customers. In addition, make sure you are still actively pushing your referral bonus program to all your current customers. They are your best salespeople.
Finally, when was the last time you updated your website? Are you taking advantage of all the totally free possibilities on Google, Bing and other search engines? Google, for example, lets you post multiple photos and two videos. While we’re on the topic, when was the last time you checked Google Places, Bing Maps and MapQuest to make sure those sites are showing your facility at its the proper location? Remember, it’s not up to them to get it right; it’s up to you to make sure it is correct.
The other option you have is to ignore this warning and hope that nothing new happens in your target market to rock the boat. I, for one, am glad that folks heeded Revere and Dawes.
Jim Chiswell is an industry veteran and owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence, coaching and customized manager training for the self-storage industry. He has served for a number of years on the Inside Self-Storage Editorial Advisory Board, is a moderator on the SelfStorageTalk.com online community and is a faculty member of the Self-Storage Training Institute. He will be a featured speaker at this year’s Inside Self-Storage World Expo in Las Vegas. Jim can be reached at firstname.lastname@example.org or www.selfstorageconsulting.com .