Build This

September 1, 2004

2 Min Read
Build This

Build This

Under normal circumstances, there wouldntbe too much to say in a letter introducing our Annual Construction Issue besidesthe usual: Buildings are going up. People are renting spaces. Here isinformation on selecting a site, choosing a contractor, multistory construction,climate control, etc.

But these are hardly normal circumstances, are they?Self-storage among other industries has been tossed by the throes of what manyhave referred to as the crisis in steel. Over the past year, our industrypublications and conferences have been rife with editorials and meetings abouthow to weather this storm. And builders and owners alike keep looking for thateye in the storm.

In an update released by the United Steelworkers of America(USWA) in March, steel companies lost $11 billion between 2000 and 2003, andcontinue to report net and operating losses. Fourteen steel companies have filedbankruptcy since 200244 since the beginning of the crisis in 1997.Eighteen U.S. steel-making facilities, or nearly 15 million tons of steel-makingcapacity, have been shut down or idled in the past four years, causing 55,000steel workers to lose their jobs since January 2000.

In the self-storage industry, the concern has been over theincreasing cost of building materials. According to the USWA, the rise in steel prices has beendriven by increases in input costs (scrap metal, natural gas, coke and ironore), reduced steel inventories, decreased domestic steel capacity and theweakened U.S. dollar. The spot price for hot-rolled steel rose 38 percent from alow of $260 per ton in July 2003 to $360 per net ton in February 2004.

Regardless of the swell in materials cost, as long asinvestment opportunities are ripe, self-storage construction is not likely tocease. However, the professional environment must change. Communication, notcost, is the cornerstone of new business relationships. Owners must be flexibleand prepared for the punches that will come with new building: changes in costsand fluctuating budgets. On the other end, it becomes the responsibility ofsuppliers to keep customers apprised of any alterations to materials and bids,always providing options when possible, and being compassionate to ownersfrustration.

In short, focus on building relationships over structures, andtrust over profits. The rest will come in time. If you can maintain flexibilityand a positive attitude, you stand a greater chance of culminating your businesstransaction with a handshake rather than a more colorful gesture that says, Buildthis, buddy!

Best wishes for all your builds,

Teri L. Lanza
[email protected]

Subscribe to Our Weekly Newsletter
ISS is the most comprehensive source for self-storage news, feature stories, videos and more.

You May Also Like