A lot of self-storage operators out there believe they provide site security simply because they have keypads, cameras and other similar equipment. What they don't realize is the technology doesn't run itself. It’s the person behind the counter who is managing the business! It's the manager who does regular lock checks, reviews the surveillance tapes and keeps the software up-to-date. Everything else is just a tool.
I'll admit the tools have become more valuable, providing more information and enhancing our ability to protect customers' belongings. But if you eliminate the human element, the tools themselves will not properly “run” the store.
Once you acknowledge it's the management team that truly operates the facility, your focus changes. You have to ask yourself, “Am I giving my people all the tools and training they need?” The answer, unfortunately, is usually “no.” The budget often lacks the funds to adequately maintain systems, upgrade to new versions of the operating software, even to establish a complete policy and procedures manual.
I've lost count of the number of storage facilities I’ve visited over the years that had fire extinguishers hanging in interior hallways or the office that had not been serviced in years. I've looked at keypads on which most of the numbers were rubbed off from frequent use. I've discovered storm-water retention ponds—originally installed on a property to prevent flooding—that were overgrown and malfunctioning.
So, as you step back to give yourself a wide-angle perspective of the security at your facility, don’t ignore the people who really make it work. Ensure your team has the proper systems and everything is in good working order. Remember, without people to operate, watch and maintain them, security tools have no value to a customer.
Is the Economy Impacting Your Store?
If you've been in the self-storage industry for any length of time, you've probably heard someone say, “Don’t worry, our industry is recession-proof!” I've always believed we might be a bit more recession-resistant than many other real estate asset types, but we're certainly not bullet-proof. Evidence of an economic downturn, especially in the housing market, is beginning to rear its ugly head. I'm hearing from self-storage owners who, for years, have operated in the 90 percent-plus occupancy range, but are now in the mid to upper 70 percent range.
Just as important is the dramatic drop off in inbound telephone inquiries from potential new customers. More than 60 percent of the people who have participated in the online poll at Self-Storage Talk (www.selfstoragetalk.com) indicated their phone volumes are lower than last year. Our business is a numbers business, after all. If call volume declines and you don’t improve your historic closing ratios, the net result will undoubtedly be fewer rentals.
Not everyone lives in communities where frantic residential growth and wild property values shot up. The sub-prime mortgage crisis is having an impact in every area, even if it's not on the front page of your local newspaper. Escalating default rates in home-equity and auto loans are yet another bad sign. All these indicators should be getting our attention, prompting us to evaluate the trends and how they will affect daily operation.