While at the Inside Self-Storage Miami Expo in November, I was reminded about the power of a single word and how we sometimes ignore that authority to our own detriment. During a seminar presentation, Jeffrey Greenberger, a prominent lawyer in the self-storage industry and a columnist of this publication, discussed the topic of the anniversary date—you know, the date many of us use in our rental agreements to indicate when a customer's rent is due. Some self-storage operators make rent due on the first of each month, others use a tenant's "anniversary." But do we ever stop to think about the implications of that word?
What Jeff pointed out is the word "anniversary" is being interpreted in some courts to mean a yearly event, not the monthly occurrence we imply in our agreements. According to the dictionary, an anniversary refers to an “an annual event occurring on the same day each year; the annual recurrence of a date of marking a notable event; a once-a-year remembrance such as a birthday or wedding date.” The unmistakable truth is self-storage operators have been misusing the word all of these years.
When pressed for an alternative wording, Jeff’s answer was direct: Use the term "renewal date.” In my opinion, rental agreements that use the old anniversary wording should be immediately updated to include this new phrase. There are countless operators out there who will think this suggestion is over the top. Why should you throw out hundreds of pre-printed agreements or change the language in your computer program because of a single word? The answer is as simple: protection.
The principle reason we have a rental agreement is to protect ourselves. OK, we also claim it protects our customers, but it's primarily about outlining our relationship with them. As an owner, you should want maximum safeguards in your rental agreement. If changing a couple of words will properly clarify and convey your intentions, do it. I urge all of you who use the term "anniversary" for your rental due dates to convert to using "renewal date" as soon as possible. Thanks to Jeff for pointing out "what's in a word."
I'm a great believer in keeping informed, and I read everything I can about self-storage. To read online news, I use several search engines that hourly generate links to media outlets that mention the industry. I encourage all owners to stay on top of things. You should especially follow the Security and Exchange Commission (SEC) reports of the major self-storage operators (the real estate investment trusts).
In addition to producing SEC reports, these companies conduct quarterly and annual conference calls that can be accessed directly from the Internet. You can log in and listen to their reports as well as the give and take with various stock analysts covering each specific company. Information on how to be a listening participant in these calls can be found on the respective companies' websites under “Investor Information” or a similar heading.
Following are the URLs that will take you to each company's SEC report. How have the “big boys” occupancies changed from last quarter and compared to last year for the same period? What has changed with their same-store results since last year? What is happening to their expenses? There is a great deal that can be learned by following these reports. The other reason to stay familiar with this information is, in many cases, your bankers are also monitoring the data. You want to be knowledgeable, especially if you are going in for a refinance or construction loan. You may even decide to become a stockholder.
- U-Haul— www.amerco.com/reports.html (Amerco is the holding company for Amerco Real Estate Co., U-Haul International Inc., Republic Western Insurance Co. and Oxford Life Insurance Co.)
- Public Storage— www.publicstorage.com/investor/financials.asp?mainnav=3&subnav=2
- Shurgard Storage Centers— http://investorrelations.shurgard.com/edgar.cfm
- Sovran Self Storage— www.sec.gov/cgi-bin/srch-edgar?sovran+AND+self+AND+storage
- U-Store-It— http://ir.u-store-it.com/edgar.cfm
- Extra Space Storage— http://ir.extraspace.com/phoenix.zhtml?c=180054&p=irol-sec
This column just celebrated its sixth anniversary. Launched in the February 1999 issue of Inside Self-Storage, it has been based on my observations as I travel to storage facilities throughout the country. In the past six years, I have probably logged 400,000 airline miles, attended countless meetings and consulting engagements, and spent hundreds of nights away from my home and family. It makes me respect and honor the sacrifices being made by our men and women in uniform and their families as they endure long separations.
I would like to share with you the closing comment I made in my very first column: "The better educated your manager is on using the phone, in his sales skills and in overall property management, the higher your rents will be. Make manager education a priority in 1999." This advice is just as appropriate in 2005, as we deal with increasing competition and a much more sophisticated customer.
Thank you for the opportunity to share my thoughts with you over the last six years. I will work hard to make year seven the best yet.
Jim Chiswell is the owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry. In addition to being a member of theInside Self-Storage Editorial Advisory Board, he contributes regularly to the magazine and is a frequent speaker at ISS Expos and various national and state association meetings. He introduced LockCheck, an inventory data-collection system, to the self-storage industry. He can be reached at 434.589.4446; visit www.selfstorageconsulting.com or www.lockcheck.com.