Police Seek Arsonist in ABC Self Storage Fire

Police detectives are seeking the arsonist(s) responsible for setting fire to ABC Self Storage in Shelbyville, Ind. At approximately 10 p.m. on Jan. 21, the facility was intentionally set ablaze. Twenty-eight units were burned, causing approximately $300,000 in damage. The same evening, other local storage facilities—Vassars Self Storage, K&D Self Storage and Beverly Street Self Storage—were burglarized but not arsonized. Detectives believe the crimes are related.

Source: Fox 59 Indianapolis, Person or persons wanted for arson in Shelbyville 

The Impact of Facility Image: Self-Storage Curb Appeal and Refurbishing

When it comes to the overall appearance of your self-storage facility, image truly has an impact on your success. In today’s business environment, perception is reality to most people. Your tenants and prospects look at your facility with a critical eye, and if they don’t like what they see, it will surely affect your bottom line.
One of the most important facets of your facility’s appearance is the condition of your buildings. Even if your landscaping is relatively attractive, curb appeal is the key. 

The Customer’s Viewpoint

Picture this: A tenant comes by to drop off or retrieve stuff from his unit and has difficulty opening or closing the roll-up door. Or maybe the door’s paint is faded. What kind of impression does this leave?

Perhaps a prospect is thinking about storage and happens to drive by your facility, but it appears unkempt and shabby compared to a newer, more appealing site he saw the day before. Which facility will he choose?

Customers scrutinize the appearance of your facility because they want to ensure their valuables are in an environment that is safe, clean and dry. Did you know that 60 percent to 70 percent of self-storage decision-makers are women? They tend to be more discriminating about appearance. The better they feel about the look of your facility, the more likely they are to rent from you. 

Why the Obsession With Image?

This preoccupation with facility appearance on the part of customers is relatively new. It hasn’t always been this way. To get a proper perspective, a little industry history is in order.

Anyone who has been in the self-storage industry for a while will tell you that, in its early years, it didn’t have the best reputation as far as businesses go. In fact, it didn’t have much of a reputation at all. But in the 1960s, as construction migrated eastward from the West Coast, people saw more and more rows of cinderblock or tin buildings pop up. Sure, they were on the wrong side of the tracks, because no self-respecting neighborhood wanted these unattractive buildings polluting the landscape.

As a result, storage facilities were relegated to the industrial and commercial sections of town. But in spite of its modest, somewhat questionable and unheralded beginnings, self-storage began to draw operators and customers from all walks of life who recognized its value. Whether folks were moving, divorcing, downsizing or simply needed extra space for their valuables, finding a suitable storage facility at a reasonable price became important.

Faded self-storage doors are unattractive to renters (left). Replacing them gives your facility a fresh look (right).

Predictably, demand led to growth, and when industries grow, people pay attention. That includes potential investors as well as consumers. Wall Street also began to take notice because entrepreneurs soon discovered self-storage was a much better investment than most real estate. The more self-storage entered the limelight, the more it was expected to meet to the expectations of consumers and communities.

Over time, self-storage evolved from being a marginal investment to where it is today—a business with a good return on investment, but stiff with competition in some areas. It now operates from well-designed, state-of-the-art complexes, often in upscale neighborhoods and retail environments, offering the latest technological features. These are the reasons facility image has become so important.

A New Day in Self-Storage

To fully understand the impact of your building’s appearance on the mindset of self-storage customers, you must realize that they have more choices than ever before. If they don’t like the way your facility looks, they can go elsewhere—without ever leaving the neighborhood. Here’s a good rule of thumb when it comes to your facility’s curb appeal: If your competitor’s buildings look better than yours, it’s time to refurbish.

Another reason to consider refurbishing now is the state of the economy. If you were forced to put expansion plans or new construction on hold, a viable alternative is to refurbish existing buildings to make them look like new. It will cost less than new construction and has other advantages. For example, refurbishing may increase rental rates and occupancies, reduce maintenance, and eliminate roof leaks. Plus, the cost may even be a tax write-off.

Look closely at your buildings for signs of deterioration. From a practical point of view, look at your competitor’s buildings too. If they appear pristine and new, it’s all the more reason to level the playing field and refurbish your buildings to equal or exceed their appearance. If your facility has a few years on it, now might be the right time to consider a facelift. 

Matt Doyle is the national sales manager in charge of repair and refurbishing for BETCO Inc., a single-source manufacturer in the self-storage industry. For more information, call 800.654.7813; visit www.betcoinc.com.

President's $825 Billion Stimulus Plan 'On Target'

Efforts to pass a billion-dollar economic stimulus plan by mid-February are "on target," President Barack Obama said in a White House meeting.

This is despite Republican lawmakers' objections to some elements of the plan. Speaking before a meeting at the White House with a bipartisan group of nine congressional leaders, Obama said he recognizes that "there are still some differences around the table and between the administration and the members of Congress about particular details" of the plan.

The proposed $825 billion package is designed to create 3 million to 4 million new jobs, he said. The stimulus package could make it through Congress by the Presidents' Day weekend.

Source:  WashingtonPost.com,  Obama Says New $825 Billion Stimulus Plan Is 'On Target'

ISS Blog

An Adventure for the Self-Storage World

My suitcase lies open on the floor of the room, half filled with the bits and pieces that will see me through next week's expedition. Packing for Las Vegas is an intricate art requiring balance, diversity and vision. We're approaching the apex of an exciting journey, and I need to be prepared for anything.

Every winter, thousands of self-storage professionals make this pilgrimage to one of the free world's most notorious business and entertainment Meccas. They gather for education, insight, interaction, exhibits and, of course, diversion. In the current economy, they come also for reassurance as well as strategies that will help them survive and thrive in the year ahead. Their destination? The Inside Self-Storage World Expo.

Starting Monday, self-storage owners, managers, investors, developers, suppliers ... prospects ... gurus ... guests and others will come together at the Venetian Hotel and Sands Exposition Center for the industry's largest conference and tradeshow. And they're coming from all over the globe—literally. This year's attendance includes participants from Australia, Canada, Chile, Colombia, France, Iceland, Ireland, New Zealand, Nigeria, Poland, Singapore and Slovenia. They're making the voyage that could ensure the success of their business ventures in 2009.

Self-storage is among the asset classes that is still performing well in the real estate world, and as such, it's getting attention in these tight times. Just this week, REJournals.com, Commercial Real Estate News, published a story stating that while investment sales plunged in the second half of 2008, some specialty classes are still performing well, self-storage among them. Financing to initiate deals and build new construction is scarce but still available.

I think we'll see proof positive of this at next week's show, during seminars and as we talk in the aisles. The outlook for our industry is expectant in 2009, with an emphasis on keeping existing facilities healthy and strong. The development side of the business will rally as costs for construction materials and labor decrease. It's not all doom-and-gloom for self-storage, as our attendees will soon discover.

I hope to see you at the expo. It's not too late to register, if you haven't already. It's an excursion worth undertaking, and one your business deserves.

Got special plans for your Vegas adventure or a story to tell once it's said and done? Share it with our blog readers. I love a good quest tale!

$635M Donated to Eradicate Polio Worldwide

Around the world, polio is still a growing conern. Now, a vaccine campaign funded by millions of dollars is aimed at ending the debilitating disease in the next five years.

The global effort to eradicate polio, which began more than two decades ago and has suffered repeated setbacks, will receive an additional $635 million in an effort to finish the job.

The money will be used to intensify vaccination campaigns in northern India and northern Nigeria, the two regions that account for more than 80 percent of the remaining cases of the paralyzing infection. In addition to those two countries, Pakistan and Afghanistan are the only others where "wild" polio virus still circulates.

The funding comes from several sources, including Rotary International, the service organization that first proposed the eradication of polio and has raised $825 million toward the goal; the Bill and Melinda Gates Foundation; and the governments of Germany and Britain.

Source:  WashingtonPost.com,  $635 Million Is Donated to Fight Polio

Clayton Road Mini Storage Sells Land, Facility for $6.38M

Clayton Road Mini Storage sold land and a 488-unit self-storage facility in Concord, Calif., to New TKG Storagemart Partners for nearly $6.38 million. Constructed in 1985, the property consists of 58,501 square feet of storage in three two-story buildings. The sale also included vacant retail land fronting. The total property size is 2.29 acres on three parcels. Dave Schnayer and Matt Hastings of CM Realty in Walnut Creek represented the seller, recorded as Aspara Inc. Peter Ingersoll of Sperry Van Ness in Benicia represented the buyer. For more information, visit www.cmrealty.com.  

First Mortgage, Mezzanine Financing and Equity Investment Programs

MJ Partners offers First Mortage, mezzanine financing and equity investment programs from major institutional and other type investors for commercial real estate projects.

Included in the offerings is a the Small Balance Program for self-storage loans ranging from $1 million to $5 million. The loans are non-recourse with a 25-year amortization, 70 to 75 percent loan-to-value.

Chicago-based MJ Partners has placed in excess of $250 million worth of loans and equity investments over the last 48 months. Info: www.mjpartners.com

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Finance Workbook

Finance & Tax Issues

Self-Storage Feasibility Boils Down to Site Quality, Market Dynamics and Financial Performance

Guerin Assumes Role of National Sales Manager at Mako

Mako Steel, based in Carlsbad, Calif., with additional locations in Jacksonville, Florida, Vancouver, Washington and Washington, D.C., is pleased to announce the addition of Angie Guerin as national sales manager. She will work in the company's Carlsbad office.

Guerin brings an extensive background in self-storage construction to her new role, having worked closely with developers, general contractors and architects in the industry over the last eight years.  

Mako Steel, founded in 1993, designs, supplies and installs self-storage buildings nationwide, including boat/RV storage, multi-story and custom buildings. Mako is a certified dealer for Nucor Building Systems. As an employee-owned company, each employee has a vested interest in their customers’ success and that of the industry as a whole. For more information, visit www.makosteel.com.

Related Stories:

One-on-One With Caesar Wright, President of Mako Steel

Mako Steel Opens Washington, D.C., Office

Self-Storage Talk: Steel vs. Wood Construction

Goals for 2009: Competitive Sales, Facility Remodeling and More

There’s no escaping the growing recession across the United States. Many self-storage markets are experiencing a drop in occupancy and an inability to raise rental rates. These forces are creating a market environment in which we all need to capitalize on any competitive advantage available.

Many are turning increasingly to various discounting ideas. Ray Wilson, president of Self Storage Data Services (SSDS), indicated during his keynote presentation at the Inside Self-Storage Expo in Nashville, Tenn., Oct. 7-10, that SSDS is tracking more than 40 different discounting programs. He also maintained that discounting doesn’t necessarily negatively impact overall operational income, so take heart.

Thinking about discounts made me wonder if we are maximizing competitive advantages that cost us nothing by simply discussing them in positive terms to prospective customers. Two of these advantages are not charging security deposits and offering rent guarantees.

I know security deposits are a thing of the past, but simply saying, “We will not be charging you a security deposit today,” to a prospect can become a positive advantage. Remember that the 2007 national Self Storage Association’s Self Storage Demand research indicates 51 percent of Americans have never used storage. Instead of just ignoring the fact that you don’t collect a security deposit, use it as a positive statement in your rental dialogue.

What is your company’s policy on increasing rents on new customers? Most owners will not raise rents on new tenants for six months or a year. However, if you don’t explain this to potential customers as a part of your sales closing process, you are missing out on a significant competitive advantage.

Some companies, as you know, will attempt to attract new customers with “low-ball” pricing only to turn around and increase rental rates within a month or two. At a time of such financial uncertainty, assuring your new renters the facility’s rates will not increase for a significant number of months encourages them to sign your rental agreement. This can also be a great statement to make on the phone as you are trying to get the caller to come into the facility.

Owners and managers should adopt an aggressive closing mindset wrapped around the following: “No one leaves without renting a unit.” Managers should have the authority to make whatever deal necessary to finalize the sale with potential renters in the office.

The same is true about every incoming phone call. Every inquiry must be converted to an appointment and every appointment turned into a rental if we are to maintain current occupancy levels throughout 2009.

The job is not to sell units; it’s to sell storage solutions. Salesmanship and taking advantage of all of our competitive advantages must be priorities for 2009.

Remodeling Your Future

As I travel across the country and visit hundreds of self-storage facilities, I see some brand-new beauties with positive drive-by images and large retail-oriented offices. The vast majority of facilities, though, are 10 or 20 years old and haven’t been well maintained. I see faded doors, damaged buildings, broken pavement and storm water detention areas that are all sending negative messages to future and existing customers.

My intuition tells me the greatest opportunities in our industry over the next decade will not be in the development of new stores, but rather in the rehabilitation and re-branding of our existing facilities. Every owner needs to take an objective view, during the day and at night, of their facilities.

Are you proud of what you see? Would you rent at your facility? Is your office space adequate in today’s competitive environment? If your answer is “no” to any of the above, you probably need to turn it around to stay competitive.

Building upgrades often result in dramatic improvements in net operating income and increased facility values. Maybe you are not in a position to replace the 75 old doors at your complex but can afford to clean or paint them and alter the image of your business. Repainting your office can have a positive and immediate impact. Replacing a solid entrance door with an all-glass version not only improves the natural lighting in the office, but presents a more positive image, especially to female customers.

Broken pavement especially deserves attention. Postponing minor repairs always produces a bigger repair bill later on. Concrete and blacktop just don’t heal themselves, but they will worsen. Think about the message you are sending to tenants if you can’t even maintain parking lots and drive aisles.

Take a close look at your own facility and see if your capital improvement projects for 2009 are really sufficient to keep new customers coming in every day.

Have You Written Your Goals for 2009?

As one year ends and another starts, I ask owners and managers how they did on their written goals for the year. All too often this question is answered with a blank stare. For all too many the budget turns out to be their only success measurement. Having specific goals can pay huge benefits in keeping everyone focused on the objectives for the year.

For example, if you challenge yourself to sell a minimum of $10 in supplies per newly written lease, it’s very easy to measure your achievement. If you write 10 leases, the goal is to sell $100 in supplies. Did you achieve that goal?

If you have only 10 percent of your current customers paying by credit card or ACH deposits, you might set a goal of 15 or 20 percent in the year ahead. Knowing that people who pay by credit card stay longer should be sufficient motivation to get managers to ask customers to pay by credit card and to get them to sign an auto-pay form.

A great goal is to set a number for total leases to write in the year ahead. Few managers can get current customers to keep their unit when their storage need is over, so there will always be a given level of move-outs.

Let’s say you have a 500-unit project operating at 80 percent occupancy (400 units). If your traditional pattern is approximately 100 people move out annually, and you want to get your facility to 85 percent occupancy by December, your written goal should be to rent a minimum of 125 total units.

If move-outs increase, the goal will need to be revised upward during the year. Putting these goals in writing and getting the agreement of everyone on the management team gives everyone direction for the year ahead.

If you haven’t already done so, get your team together. Talk about the things you want to achieve for the year financially and even personally, and put it in writing. Remember, without having a measurable goal, you don’t know if you have achieved it.

See You in Vegas?

The Inside Self-Storage World Expo in Las Vegas is always the biggest storage event of the year. The ISS team has put together an outstanding educational program, as well as the largest vendor and supplier tradeshow. Returning to the Venetian Resort Hotel Casino for the meeting gives us outstanding meeting space. Las Vegas also has a variety of hotel selections with room deals and vacation packages, so everyone can take advantage of coming even on a strict budget.

You can get complete details on the agenda and exhibitors at www.insideselfstorageworldexpo.com. I hope to see you there.

Jim Chiswell is the owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry. Jim has served for a number of years on the Inside Self-Storage Editorial Advisory Board, is a moderator of the Self-Storage Talk online community and an instructor of the Self-Storage Training Institute. Mr. Chiswell can be reached at 434.589.4446 or chiswell@earthlink.net; visit www.selfstorageconsulting.com.

Harvard Study Shows Air Pollution Cuts Life Expectancy

Cleaner air can lead to longer lives, a new study from Harvard University shows.

People living in cities where air pollution decreased in recent decades saw their life expectancy increase an average of five months as a result of cleaner air, a new study from the Harvard School of Public Health and Brigham Young University strongly suggests.

The researchers looked at the amount of small particle pollutants in 51 US cities, including Boston, Worcester, and Providence, R.I., during the '80s and '90s and found that the predicted lifespan increased most significantly in cities where air quality also increased most dramatically.

The study, which will appear in the New England Journal of Medicine, signals that efforts to curtail the small, toxic particles spewed by power plants, factories, cars and trucks and inhaled by city-dwellers had significant health benefits over those two decades. Several clean air advocates and public health specialists say the results also show that stronger standards for air pollutants are necessary.

Source:  Boston.com,  Harvard Study: Air Pollutants Cut Increased Life Expectancy