Building for Money or ‘How to Marry Rich Customers’
|Copyright 2014 by Virgo Publishing.|
|By: Dan Curtis|
|Posted on: 09/01/2007|
A friend of mind once founded a magazine for the women of Orange County, Calif., and enjoyed immediate attention and success by featuring a cover story titled, ”How to Marry a Rich Man.” Self-storage owners also like clientele who are well-to-do and have found new ways to attract them.
In the beginning, it was assumed the only way to draw storage customers was to keep costs low. Facilities were located in undesirable areas, used cheap construction, and very little attention was paid to how a site looked. Naturally, planning and zoning boards were less than enthusiastic when storage owners shopped for permission to build. That is no longer the case these days. Ugly is out and glamour is in.
But looking good isn’t the only thing that matters when attempting to attract the affluent—location also counts. Selfstorage must be built in the right neighborhoods. To get there, storage developers must gain approval from zoning boards, submitting plans that demonstrate their facilities will enhance and not detract from communities’ appeal. These designs must meet or exceed local architectural standards.
Finally, an attractive exterior must also be underpinned by unusually sturdy construction, top-notch security and environmental controls. This change in self-storage building philosophy has increased costs, but for the type of customer who can afford anything, nothing but the best will do.
Catering to the Well-Off
To attract the wealthy, first examine their habits. These folks are likely to travel frequently and often own homes in various locations. Because they are nomadic, they may prefer to live in upscale condominiums or elegant hotel residences rather than deal with the management of large estates. These domiciles have neither attics nor basements, so off-site storage is usually needed, particularly for their collections such as wine, fine art and firearms. Even when space is available, customers may choose to store their valuables away from home.
In addition to aesthetics, this means incorporating high security to protect customers’ possessions, many of which are kept as investments. Digital video recorders and motion detectors should be used to keep watch. In some facilities, biometrics may be used for unit access. Other options include private code names and numbers or multiple keys and entry points. Some tenants may be offered features such as private entrances and elevators.
Storage for valuables also requires precise physical conditions. Climate control is essential. Walls and ceilings must have superior insulation to keep units dust-free. Back-up generators and mechanical systems protect goods in the event of a power failure.
The added advantage to accommodating these special needs is customers will often choose to use the same site for their conventional storage.
To market to this special group of customers, you must go where they are, again considering their habits. The affluent tend to gather at events such as fundraisers, art exhibits, wine-tastings, auctions and other functions that appeal to connoisseurs and collectors.
Recently, a group of Atlanta art lovers, supporters and collectors was invited to tour a new art exhibit and enjoy a gourmet lunch at a local museum. The host was a luxury hotel in the construction phase that planned to offer elegant residences within the property. As the event benefited the museum, it was a tax write-off. But for the hotel, it also functioned as an advertisement to its target market. It could just as easily have been hosted by an upscale self-storage facility.
Acting as a sponsor for fundraisers and similar events within a target community is a great way to garner publicity and be appreciated for charitable works. Buying memberships in support of museums, symphony orchestras or organizations that appeal to wealthy tastes provides additional opportunities to draw attention to your facility. You can also approach local travel agencies, asking permission to offer facility brochures promoting the idea of storing valuables while their customers are abroad.
As our industry matures, owners attempt other ways to attract all kinds of tenants. Trends in self-storage construction are now full of innovations to improve the storage experience. Some services being built into modern facilities include:
Postal and retail services.Onsite post offices promote services such as FedEx and UPS. These are particularly attractive to small businesses that operate out of self-storage units. Along with postal services, many properties are expanding into other retail sales. Some are even placing fast-food establishments in front of the storage facility to generate more traffic in the immediate vicinity.
Kiosks.Many facilities have installed ATM-style kiosks to rent units, sell insurance, collect rents, etc. This assists the manager and allows the facility to do business 24/7. It also serves customers who are not able to come to the property during normal business hours.
Boat/RV storage.Boat and RV parking can be a valuable profit center. The high cost of land sometimes limits the amount of space that can be allocated for this use, but in phased properties, it can be a source of additional revenue until occupancy demands the next phase of building.
Escalating land costs have caused owners to build bigger and taller facilities. The market has accepted highrise buildings, many of them adding distinction to a neighborhood. The image created by an attractive façade has gained support for self-storage among planning and zoning officials.
After all, the buildings have low traffic flow of only eight people per day per 100 units. This is a passive use compared to that of an office building, and the tax rate is nearly the same. Multi-story buildings improve the industry image, and are being used by many of the larger companies to act as flagship properties. This trend will continue as land becomes more expensive and harder to locate.
Mezzanines are now being used for conversions of single-story buildings with ceilings of 18 feet or higher. They allow smaller buildings to be economically sound investments, and many tenants like the added security of being on the second floor. This application of metal construction also has the advantage of being portable, therefore qualifying it for seven-year depreciation as allowed for doors and non-structural partitions.
The second floor can be supplied with ¾-inch, fire-treated plywood with a vinyl coating. The tongue-and-groove design hides joints and creates a level, sturdy base. The floor loading for the second level must be greater than 125 pounds per square foot. Most mezzanines do require an elevator, which is added expense.
In many areas, local and state governments now require ADA-compliance for as many as 5 percent of a facility’s storage units. This means those roll-up doors must be installed with a low-cost electric operator and hand-held control that make them easier to operate. While costly, this innovation has solved all ADA concerns—a real plus considering this requirement will probably continue into the future.
Shelving and Carpeting
Many owners now customize their storage units by offering shelving and indoor-outdoor carpeting, which brings in additional revenue. Shelves are available in 5- and 10-foot lengths and depths of 12 or 16 inches. They come in Galvalume steel or are painted white. With the special brackets provided, they are easy to install, and all exposed edges are hemmed to prevent cuts or scrapes. Instead of shelves, racks are sometimes provided for larger, heavier items such as file boxes.
Carpeting is purchased in 8- or 12-foot widths and cut to fit. The edges may be glued down, and the carpet can always be removed at a later date.
In highly populated areas or those with large concentrations of students, many storage owners are installing lockers as a storage option. Lockers can be stacked three high, with the top one accessed by a rolling stairway. They are usually 5 feet wide and deep and 4 feet tall, and customer response has been good, as the top locker is considered to be a high-security area.
Innovations in self-storage construction have largely improved the quality of the product and the income produced. Being “good enough” just won’t satisfy the customers in today’s competitive self-storage market, especially those with deep pockets. Quality products will draw the big bucks and bring self-storage success.
Dan Curtis is president of Atlanta-based Storage Consulting & Marketing, which provides feasibility and marketing studies to potential self-storage owners. He is a frequent contributor to Inside Self-Storage as well as a speaker at numerous industry conferences. For more information, call 404.427.9559.