What reports does the owner receive and how often?
Halverson: There’s a regular reporting package that’s provided on a monthly basis detailing the financial metrics of the property.
Payne: The owner should expect all standard monthly financial reports including a balance sheet, a profit-and-loss statement (compared to budget and prior year) and a cash-flow statement. The owner should also insist on a Web-based application that allows access to relevant financial and operating information. Other reports necessary should also be available via communication with the management company such as damaged-unit reports, space-efficiency reports, etc.
Shipley: The frequency of reporting depends on the provider. The best third-party management providers not only offer periodic in-depth financial reports, but also real-time operational updates. These can include daily e-mail-based flash reports that summarize rental activity and other operational metrics, smartphone apps that provide intra-day rental and phone-call activity, a variety of customizable Internet-based reports with data-export capability, and even access to sales center call monitoring through an online portal. In addition, the third-party management provider should have someone available to answer questions and provide support to you whenever you need it.
How often does your company meet personally with the owner?
Halverson: If the owner desires, Extra Space will have either an asset manager or a district manager meet with them at least monthly.
Payne: Our goal is to meet annually with owners in addition to mutually agreed upon teleconferences. We also take advantage of our time at industry tradeshows, executive retreats and seminars to meet with owners and our clients.
Shipley: The reality is every relationship is unique. We understand this is a people business and always strive to offer an individually tailored, personalized approach to relationship management.
How often does a third-party management contract result in a change of staff at a self-storage facility?
Halverson: Employees are evaluated on a person-by-person basis. They are interviewed and evaluated on the same criteria as every Extra Space employee.
Payne: As with a normal acquisition, we like to keep the existing staff whenever possible. Of course, the decision works both ways. Each associate needs to decide if Uncle Bob’s is a good fit for his career goals as much as Uncle Bob’s needs to decide if the associate can meet our high level of performance expectations.
Shipley: When a third-party management provider takes over management of a facility, staffing is one of the first and most critical areas of evaluation. In a perfect world, the existing staff would meet the job description the REITS have deemed necessary for success and would be interested in joining the REIT. In CubeSmart’s case, we would interview the staff and give them every opportunity to demonstrate their ability to successfully run the facility. Oftentimes, the existing staff is hired by CubeSmart and, with the new tools and systems they’re provided, these managers are very successful and go on to be long-term, happy and instrumental assets to the company.