Across the country, there has been a dramatic increase in the theft of catalytic converters from all types of vehicles. As the price of recycled metals has spiked, a black market in catalytic converters is emerging, according to a spokesman for the Washington, D.C.-based Institute of Scrap Recycling.
The part, easily removed by a portable saw from under a vehicle, contains a variety of precious metals including platinum, palladium and rhodium. The amounts in each converter are tiny, but the current prices of $2,000 an ounce for platinum and $9,000 for rhodium are tempting thieves to take their chances. The converters can net anywhere from $70 to $200 per part. Although typically covered by insurance, a vehicle-repair cost can run from $500 to $2,500.
I issue this warning for several reasons. First, you need to ensure RV- and vehicle-storage customers are properly protected. Do you have adequate lighting and security cameras watching your parking areas?
Under the terms of a self-storage lease, managers do not have care, custody or control of tenants’ belongings, including vehicles. However, it behooves us to be aware of the growing problem and watchful of activity within outside parking areas. A loss of even a few catalytic converters from customer vehicles could produce negative reactions in the form of move-outs.
The second reason is to make sure the legal basis of the relationship with your customers, as it relates to insurance protection, is not skipped over or rushed during the rental agreement review. The Texas Self Storage Association felt that the issue of vehicle storage was so important that it commissioned attorney Jeffrey Greenberger (www.selfstoragelegal.com) to assist in the creation of a totally separate document to be used by member companies.
Finally, this is to make you aware of the problem because some thieves may be using units to keep their ill-gotten gains until they can be sold to a scrap-metal dealer. A catalytic converter is not easily dropped into a paper bag and secretly placed into a unit. They are large and dirty; any tenant loading a half-dozen of these parts into a unit from a pickup or van should be easily pegged.
Stay on guard. Your actions could help to keep your facility off the front page of tomorrow’s newspaper or local newscast. Spread the word in your self-storage community.
Still Some Tough Times Ahead
As the third-quarter of the year comes to a close, we are still seeing weakness in many areas of the economy and steep declines in some cities and communities. The staggering financial losses of GM, Ford and Chrysler have put them in jeopardy. The closing of entire restaurant chains like Bennigan’s makes us look closely at consumer patterns. The decline in home values and the numbers in foreclosure are also still alarming.
One area in particular is the overall drop in credit card usage. A recent report by Javelin Strategy & Research showed that 37 percent of Americans had reduced spending on their credit cards. Fifty-four percent of those surveyed said they plan to spend less on discretionary or luxury items in the year ahead, and only 5 percent anticipated spending more. Within the target market of 35 to 64 year olds, the percentage of those spending less was even higher.
However, a supplemental chart submitted by Public Storage from their second quarter shows minimal revenue impact from the housing slowdown. The chart specifies major metro markets, the time of peak housing values in each market, the number of homes in the foreclosure cycle and the company’s self-storage facility’s occupancies and net income within each selected market. It is a chart worth reviewing and using as a model for constructing our own target market areas.
Keeping a close eye on tenant payment trends and taking maximum advantage of every inbound telephone call from a prospective customer will be important for a long time to come—for obvious reasons. The days of the next replacement renter walking in the door are gone. We all need to be more aggressive in our closing techniques. The mantra: If they walk into the office, don’t let them leave without renting a unit!
I am still an optimist about the future of our industry, but we have to have patience and maybe work a bit harder to keep things positive.
Music to My Ears
The announcement that the Omni Hotel chain would be joining Hyatt Hotels, Westin and Sheraton hotel companies in a decision to eliminate Yellow Pages books from their hotels is music to my ears. Anyone who has heard me rant about Yellow Pages advertising knows why I am so excited by this news. I am firmly convinced that this could be the proverbial first hole in the Yellow Pages Dam.
The publishers of the phone books will probably try to put a PR patch on it quickly, if they can, but over the next several years their strangle hold on the self-storage industry’s perception that we “just can’t live without them” will burst. The growing list of hotels dropping the books should be the clarion call for all to reconsider the millions spent in countless Yellow Pages nationwide.
Ask one of your kids or grandkids and I bet you’ll find some have never opened a Yellow Pages directory. The impact of the Internet can’t be denied. As you start to consider next year’s budget, take a long hard look at your Yellow Pages expenditures compared to website costs. Are you really positioning yourself for the future reality that when someone is looking for a storage solution they will turn to keyboards rather than the Yellow Pages?
See you in Vegas, Baby!
The ISS World Expo in Las Vegas, Jan. 26 to 29, is shaping up to the biggest industry event of 2009. Vegas continues to be one of the best and easiest travel destinations from every part of the country and around the world. Returning to the Venetian Resort Hotel Casino for the conference means exceptional hotel rooms, outstanding meeting space and an exhibit hall capable of staging the largest tradeshow in the industry.
I am honored to have been asked to once again be among the industry experts selected to present a variety of industry topics at the 2009 Expo. I hope that you plan to attend.
Jim Chiswell is the owner of Chiswell & Associates LLC, which has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry since 1990. He is a member of the Inside Self-Storage Editorial Advisory Board, a moderator for the Self-Storage Talk online community, and a faculty member of the Self-Storage Training Institute. He can be reached at 434.589.4446; visit www.selfstorageconsulting.com.