Industry news and the Self-Storage Talk forum this week are abuzz with a story about Waikiki Self Storage, the Hawaii facility that may be ousted from its leased space, causing a move-out panic among its 600 tenants. After five years of operation, the self-storage business has a year left on its lease; but the storage owner and building landlord can't come to terms on a recent rent increase.
Last weekend, facility staff were told to "clean house" and empty the office. On Monday, tenants were called and told to clear out their goods. Two days later, the mass move-out was put on pause when a second phone call indicated the facility may stay intact. Apparently the owner is considering a partnership with another self-storage company that would assist in making rent.
Now those tenants still occupying their units await a verdict: Do they stay or do they go? My question is, will they stay if the business does, or will their confidence be shattered?
An article in the Honolulu Star Bulletin explained that the 1,100-unit storage business shares its building with a billiards business and is run by California-based parent company Silver Oaks Management LLC. Some of its customers have been renting there since it opened five years ago. Some rent multiple units; one man had 14, until this week, when he moved to a competitor. That's a lot of stuff to manage on such short notice. Tenants will be refunded their unused storage rent, but the time and hassle are their own burden to bear.
The chaos is good news for Aloha Island Storage, a competing facility about half a mile away. Its parent company, StorQuest Self Storage, is offering Waikiki tenants three months of free rent, or one month free with the free use of a moving truck.
I don't know how common it is to lease land or buildings for a self-storage business. This is the first I've heard of a storage biz being uprooted in this way. I'd love to hear from some operators out there who are, in fact, leasing their land and/or buildings. What is your arrangement? And do you have concerns of being stuck in a similar situation?