Canadian Operator Kalfa Makes His Own Rules

Kimberly Hundley Comments
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The young Turkish immigrant showed up alone in Quebec in 1984 with $150. Today, he owns 11 self-storage properties throughout the province with several more glinting in his crystal ball. Turan Kalfa says his destiny is being is the right place at the right time. Maybe that helps explain how a student with a van came to own a moving business and fleet of trucks in a scandalously short period. Deregulation shrank the license fee to $250 at just the opportune moment for Kalfa.

Fate may have stepped in to juxtapose his moving success with the debut of self-storage in Montreal. The industries were compatible, and Kalfa already stored property in warehouses for his moving customers. Self-storage caught his notice and in 1996, he seized an opportunity with partners to rent a 25,000 square-foot space in downtown Montreal.

Depotium, as the company was named, would compete against about a dozen established facilities, changing Quebec’s self-storage landscape in the process. The company has grown into a provincial mini-empire with annual revenues of $4.5 million. “Real estate was going down the tube in Montreal. I was there to buy the buildings at low prices,” Kalfa says, shrugging off that part of his fortune to chance.

The Luck Stops Here

Syncronicity did its bit, but Kalfa can’t discount the force of his own convictions. A true maverick, he’s resisted following the self-storage path blazed before him. He doesn’t even use accepted industry lingo. Units are “lockers.” Facilities are “warehouses.” To introduce the self-storage concept to French-speaking Quebecois, he borrowed the term “self-stockage” from operators in France. Lockers vary wildly in size, from 9 to 500 square feet. And his pricing philosophy makes competitors grind their teeth.

“Like the moving business, I set rules in whatever industry I go into,” Kalfa, 45, says. “I am good at building at lower cost—I know the market very well. Because of conversions, we have to actually use the area as best we can. Sometimes we have no choice but to put in smaller sizes because we don’t want to lose a lot of space to corridors.” Whatever the reason, customers adore the sizing options.

In construction, Kalfa again trots his own way, shunning most self-storage vendors. He says his buildings are “almost multipurpose,” designed to assume new identities for future buyers. He pays $800 apiece for custom-built wooden doors because snowstorms “were going right through the roll-up American doors when I tried them 10 years ago.” (A U.S. vendor Kalfa met at ISS Las Vegas Expo ‘06 is now talking to him about newer metal options).

As a former mover, he also designs his facilities to accommodate the reality of moving. Rather than outfit two-story Depotiums with elevators, he strives to provide a ramp so tenants can drive up their loads. Bigger lockers sit on lower levels, close to wide doors; smaller ones on higher ground.

His background contributes more than design savvy. In Quebec, about 60 percent of those needing storage still will call moving companies, not mini-storages, for guidance. His old compatriots promptly refer clients to Depotium, a fortunate circumstance that jump-started Kalfa’s client base.

Nice Price Vs. Vice

Depotium’s pricing plan can only be called Kalfaesque. He was the first to publish rates in his Yellow Pages ad, prompting pleas from others in the industry to stop because customers were calling to complain. “I said, ‘I’m sorry if you are uncomfortable. Maybe you should also bring it down to $110.’”

Kalfa proudly claims he’s single-handedly lowered rental rates in the province. “If you look at prices before and after Turan Kalfa, you will see prices have come down overall,” he says unabashedly. In the meantime, many would-be developers grumble Montreal’s high real estate values make it economically foolish to compete.

Turan well knows that industry consultants in the States advise lower occupancies and higher rents for maximum profit. “Maybe I am not as capitalist as America,” he says. “I believe in having full lockers at lower prices rather than empty ones at high prices.” Seventy percent of those relocating in Quebec move between April and June. Most facilities join truck renters and movers in kicking prices to the moon during moving season. Not Kalfa.

“My prices are the same 365 days a year. I don’t believe in getting the better of the client when they need you,” he says, and not without reason. “This is Depotium’s 11th year in the self-storage business, and the 11th year it’s been a Consumer’s Choice winner in Quebec. Our repeat customer-referral rates are very high compared to other companies.”

American Ingenuity?

A couple years ago, Kalfa reviewed stats at his flagship metro Montreal store. The facility was nearer downtown that any competitor and had been full since opening. “I thought I should learn something from America and decided to increase prices at that one location,” Kalfa recalls. “I went from 98 percent occupancy to 75 percent.” To his shock, prospects announced they’d rather drive 20 kilometers to save $20 a month than pay for a climate-controlled location down the street. “I changed managers and put my top people there, and couldn’t bring the occupancy back up, not even to this day,” Kalfa says. “I don’t care what people say. The reality in Montreal is price brings in clients.”

Stateside facility owners often dazzle prospects with state-of-the-art security features. But in Montreal, that selling-point is colder than sorbet in January, according to Kalfa. “In 10 years, I have not had a single break-in—I should knock wood. The No. 1 thing in Quebec, unfortunately for American competition, is price.”

Vendors also will have a hard time impressing Kalfa with the new advances in self-storage kiosks, a development the U.S. industry fast embraced. “I’m not interested,” he says. “Every client who is renting from us must come into the office to sign a register. We tried punching in codes at the gate and all that, but I realized how important it was for us to see clients and tell them good morning, and offer coffee and water. The relationship between manager and client generates a lot more friendship and trust.”

Many facility owners recognize the value of multilingual call centers, especially in Canada’s intensely diverse cities. In the classic model, would-be tenants phone to inquire about a unit and are directed to a trained operator who speaks their language. Kalfa’s created his own version of the service. Callers with special language needs are transferred within Depotium’s own string of facilities to talk to the right employee; onsite staff members speak Spanish, Turkish, Italian, German, Danish, Tagalog, Flemish, Russian, Romanian, English and French.

Local storage entrepreneurs have been slow to band together to form an association to further common goals and win government consideration. They are content with their investments, and most have no plans to expand. As time winds on, Kalfa figures Americans will probably take over the Quebec market, of which he estimates they already own 50 percent. Not that it makes him happy.

Kalfa admits he never wanted to be a businessman. He’s been swept along by his success, and destiny. “The small things in life—a hug from my kids, dinner with my beautiful wife, a glass of wine with a friend—all are much better than a major meeting with total strangers in a glass office tower.

“So what do you think?” he laughs. “Are those big American companies facing a major competition, or what?” For more information, visit www.depotium.com

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