Inside Self-Storage talks with self-storage expert and veteran Bob Schoff about the general state of the industry, where the business is headed over the next five years, the legislative endeavors of the national Self Storage Association, and plans for his company, National Self Storage.
Robert “Bob” Schoff knows more than a thing or two about the self-storage industry, having entered the business in 1974. Thirty-five years later, he’s not only the president and chairman of the board for National Self Storage (NSS), he serves as chairman on the Self Storage Association Board of Directors and is the immediate-past president of the Arizona Self Storage Association.
Bob began his self-storage career as the city manager for Tucson Self Storage, an investment partnership sponsored by his brother, Michael, and partner, David Mackstaller, as part of real estate development company The Schomac Group. By 1976, he was managing seven facilities comprising 360,000 rentable square feet. From 1978 to 1980, he worked for Phoenix-based Mini-Storage Insurance Corp. (now MiniCo Inc.), where he coordinated sales, advertising and accounting, and held an insurance-sales license.
In October 1980, Bob was recruited by NSS to become its vice president in charge of operations, responsible for facilities in Denver, El Paso, Texas, Sacramento, Calif., Salt Lake City, and Tucson, Ariz. He was promoted to president in 1986, overseeing the acquisition and development of more than 30 facilities during that period of strong growth. He left the company in 1989 to work as an independent self-storage consultant, but rejoined the company in 1991 to coordinate its consulting and contract-management divisions. He was re-elected as president in 1994.
Bob has been actively involved in the national Self Storage Association (SSA) since its predecessor, the American Mini Warehouse Association, was founded in 1974. He was one of the original 52 members of an association that now represents more than 6,000 facilities worldwide. He began his second three-year term on the SSA Board in January 2006 and is board chairman for 2009.
Bob has been published in numerous industry publications including Inside Self-Storage and is a regular presenter at self-storage conferences and tradeshows. He has also served as a self-storage expert in legal proceedings.
ISS is pleased to present the following interview with such an esteemed industry representative. Thanks to Mr. Bob Schoff for his time and industry insight.
1. Let’s start with an industry “snapshot.” What do you feel is the general health and status of the self-storage industry in today’s struggling economy?
“Better than most!” would be my short answer. No doubt the economy has slowed things for the self-storage industry. Move-ins are down 5 percent to 10 percent from a year or so ago. Unfortunately, move-outs continue at 10 percent to 15 percent of occupied space, so it’s a struggle to increase occupancy.
Most operators report flat or slowly declining occupancies. However, a 5 percent or 10 percent decline is not so bad compared to other real estate sectors and associated industries. Shrewd operators have still been able to show net operating income (NOI) growth through rate adjustments and expense control.
It will be interesting to see how the self-storage industry fares this summer. If occupancies decline, it will be the first time the decline was due to the economy rather than an increase in new competition. Fortunately, our customers want to hang on to their personal belongings, so self-storage demand has remained fairly constant.
New development has all but disappeared, so conventional wisdom says occupancies should rise as population grows within a given market due to the lack of new supply. Today’s development process and financing difficulties will keep the new product “pipeline” short for many years, which bodes well for those currently in the business. That’s not such good news for those in the self-storage development and construction fields; it may be a while before they recover.