Renovation is defined by Webster’s Dictionary as the act of restoration to life, vigor or activity. This definition is particularly relevant as it applies to the current state of the self-storage industry. Operators of older facilities must ask themselves: How can we compete with newer sites? The fact is an older facility can benefit greatly from a makeover of its appearance and operational procedures.
Unlike in the early days of self-storage, customers today have more choices. As first-generation facilities—those built in the ’70s and ’80s—begin to show wear and modern feature-laden facilities come online to compete, an increasingly large number of owners are considering renovation. While older facilities function well, they are not maximizing their potential to effectively compete for market share.
What factors should you consider when deciding on improvements for your site? Which renovations have the most potential to better your bottom line? To answer these questions, start with the customer in mind.
The Customer’s Choice
Customers need to know that you intend to give them quality service, and their decision to store with you will be the right one. Your goal should be to enhance the perceived value of your facility through changes your customer will clearly see and relate to positively.
The key to consumer choice and satisfaction is perception as to levels of security and convenience at a self-storage location. In addition, storage owners have long known about the importance of visibility and curb appeal as means to attract customers. Curb appeal is critical to creating a good first impression. Our mind associates businesses that appear well cared for with an expectation that we also will be well cared for. The opposite also stands true: a poorly maintained business sends a bad impression.
The self-storage customer is often in a state of transition or just downright tired from the strain of moving. A soothing, comfortable office environment will help him feel more at ease, enabling him to make the decision to store at your facility. The office should be inviting, clean and professional. Some of the most cost-effective means to create the right ambiance are as simple as a new coat of paint, improved lighting or a fresh welcome mat.
In this renovation, two single-story buildings were surrounded with new insulated walls and roof to create a climate-controlled building.
I once helped manage a facility that was built in 1977 and beginning to show its age. The office was originally a home that pre-dated self-storage development. The owner renovated with a modern office complete with storefront windows, visible security monitors, attractive retail displays and a customer counter. He also replaced the rusty chain-link gate with a secure gate and updated the parking lot.
Customers entering the new office likely perceived it to be part of a new facility rather than the older first-generation facility it was. Most important, they made their decision to rent without reflecting on the overall state of the facility’s appearance. The hotel industry has long understood this concept, which is why so much attention is paid to the hotel lobby. The adage says you can’t judge a book by its cover, but we often do.
Consider upgrading old black-and-white monitors to color, flat-screen monitors. The cost of these flat-panel screens has come down considerably. When installing monitors, make sure they're visible to customer as they enter the facility.
Adjust the counter orientation and height to enable your manager to see and be seen by customers, and to ensure a clear line of sight from the counter to the gate. Add lighting to eliminate “dark spots,” particularly around the gate and other areas visible from outside the secured perimeter. Rusted chain-link fencing conveys a poor image and should be replaced with a sturdy gate that gives customers a feeling of security.
A facility's visibility will increase the number of customers. While it’s not possible to change your site's physical location, there are a number of changes that can enhance its visual prominence. Is your landscaping attractive? Does it make the sight more visible, or does it obscure signage or buildings? Repainting buildings is another smart way to refresh your look.
Consider painting doors a different color if your facility is monotone or lacks shine. Artificial doors can also be added for visibility. One interesting approach is to create a false second floor with “dummy doors.” In such instances, the additional height can make a hidden building visible and identifiable to the public where it may have been previously unnoticed.
A monotone building was painted to enhance visibility: before (left) and after (right).
In studying various markets, it's not uncommon to find that low occupancy is not necessarily an issue of demand but an over or under supply of a particular unit size or type, for example, too few or too many climate-controlled units. Carefully study your unit mix and consider moving rental-space partitions, creating or removing interior corridors, or even adding more climate-controlled units.
Your Current Tenants
Once you’ve made substantial improvements to your facility, tell your tenants. Ask your manager to send letters to them promoting the upgrades and associated benefits. Increasing occupancy and profit comes not only from renting to new tenants, but by continuous rent increases to your existing tenant rent roll. Tenants will be far less resistant to future increases if they perceive they are getting more value in the form of improved conditions and services that are meaningful to them.
Jeffrey Supnick is the president of Supnick Real Estate Co. A 25-year veteran of the self-storage industry, he has served as a real estate officer for Public Storage Inc. and Storage USA. During his career, he has been responsible for the development of more than 30 self-storage sites. Supnick Real Estate is a full-service firm devoted exclusively to self-storage brokerage, consulting and property-management services. For more information, call 856.722.1414; e-mail [email protected]; visit www.supnick.com.