The Impact of Automation and Remote Management on Self-Storage Facility Value

The self-storage industry is one that continues to evolve and embrace more technology. In recent years, we’ve seen a huge shift from sites that were previously run by property managers to those operating on a fully automated model.

One reason for this is it’s a cost-effective option for owners and investors. Plus, the way everyone conducts business has changed since the pandemic when industries of all sorts accelerated their use of self-service technology. In self-storage, we responded to customer needs by offering remote facility and unit access and a variety of contactless options. Now, consumers can do just about anything through their mobile devices.

With a new era upon us, many self-storage owners are debating whether it makes sense to switch to a remote-management approach that allows them to operate their facility with minimal or no onsite staff. If you’re one of them, you may be wondering: What effect, if any, will this have on my asset value? It’s a good question. The answer is yes, there will be an impact; however, whether it’s positive or negative is entirely up to you. To land on the right side of the equation, efficiency and optimization are key.

What Is It?

First, let’s talk about what an unattended self-storage facility is. This type of property largely operates without onsite personnel, leaning on technology to accomplish routine tasks such as renting units, taking payments, selling supplies and updating customer accounts. Between access-control systems, kiosks, surveillance cameras, two-way video, remote security monitoring, smart locks, chatbots and other automation tools, these “unmanned” sites are able to fulfill nearly all customer needs.

That said, even an unattended facility needs some form of management, particularly for things like cleaning vacant units and other essential site maintenance. In some cases, owners will assign one or two employees to oversee several properties within a region, or they might contract with a third-party company that specializes in remote management.

The Risks

If done correctly, switching to an unmanned operational model can positively impact the value of a self-storage facility. However, there are some risks of which you should be aware.

Before initiating a change, research your market. For example, what are the local crime rates? Is security a greater concern? While electronic access and surveillance cameras certainly mitigate this risk, they might not provide the same level of response as an onsite manager.

Also, in some regions and for some populations, there’s a stigma attached to contactless operation. For example, many senior citizens prefer in-person contact, so building trust and credibility with this group of tenants could be more challenging without the reassurance of onsite staff.

Finally, there’s a higher risk of deferred maintenance with an unattended facility. You’ll need to pay careful attention to site condition and keep on top of curb appeal and repairs. If you’re hiring a third-party management company, conduct a thorough evaluation to ensure they’re up to the task of overseeing an automated site. Read online reviews and check references. They might contribute to lower asset value if they fail to operate the property successfully.

The Benefits

Once you’ve navigated these risks, you can focus on the positive benefits a transition to unattended operation can bring to your self-storage asset. Here are the most notable:

The Right Circumstances

Only you can determine if a fully automated model is right for your self-storage operation. If you conduct your due diligence and plan strategically to make the switch, it can certainly raise the value of your asset. Of course, each scenario varies, and the right circumstances are key. There are a variety of qualified vendors in the industry who can help steer you in the right direction. All you need to do is ask!

Jared Houck is an investment associate with The Bledsoe Self Storage Group of Marcus & Millichap, a commercial real estate investment services firm with offices throughout Canada and the United States. The team specializes in self-storage brokerage throughout the mid-Atlantic and Northeast. For more information, call 717.808.1192; email [email protected].