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Wendelken Named Director of Marcus & Millichap Self-Storage Group

Marcus & Millichap Real Estate Investment Services has named Gregory Wendelken national director of the firm’s National Self-Storage Group (NSSG), according to Harvey E. Green, president and chief executive officer. Wendelken is also vice president and regional manager of the firm’s Seattle office.

Wendelken joined Marcus & Millichap in 1984. He was a senior associate in the Newport Beach office from 1984 to 1988. In March 1998, he became the sales manager in the Ontario office. After four months, he was appointed regional manager for the Seattle office. Prior to joining the firm, he served as vice president for a prominent Southern California developer for two years.

Wendelken graduated from University of Southern California with a bachelor’s degree in business administration with an emphasis in real estate and finance.

With more than 1,300 investment professionals in offices nationwide, Marcus & Millichap Real Estate Investment Services is a brokerage focusing exclusively on real estate investments. In 2007, the firm closed $20.7 billion in transactions. For more information, visit www.marcusmillichap.com.

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GM's Two-Mode Hybrid Named Best New Green Technology

The hybrid auto received another stamp of approval when the Automobile Journalists Association of Canada (AJAC) recognized GM's Two-Mode Hybrid technology as the 2009 Best New Green Technology.

The inaugural award results from AJAC's desire to recognize innovative new green technology developments in the auto industry that will be of benefit to the Canadian consumer.

Unlike conventional hybrid systems, GM's Two-Mode Hybrid is designed to optimize fuel efficiency in both city and highway driving while still enabling the hauling and towing capability that customers expect, making it unlike any previous hybrid system on the road.

Source:  MSNBC.com,  General Motor's Two-Mode Hybrid Voted 2009 Best New Green Technology

The Legal Implications of 'FREE' in Self-Storage

If you’ve been reading my column over the years, you probably know I’m creating a list of words that should be abolished from your self-storage vocabulary. This time, I’m adding the word “free.”

I see the word “free” often in relation to self-storage marketing. I’ve even written a critique about the self-storage offer of “free truck with move-in.” I’ve warned that, in the past, operators have had to buy toy trucks to hand out with move-ins to fulfill the obligation of literally giving away a “free truck with move-in.”

Further, I have cautioned you about making sure that the truck is really free, with no terms and conditions that cost money or change the deal. Some of you have told me that you do not take me as seriously as you should on this issue and maybe suffered consequences. Some realized the wording needed to be different, calling it a free use of truck.

Cell Phone Lawsuits and Lessons

Recently, multiple state attorneys general have joined together to file class-action lawsuits against all the major cell phone providers over the use of the word “free.” All cell phone providers have some variation on the following concept: “If you sign a two-year service agreement, you get the cell phone for free.”

That seems innocent enough; however, if you terminate your cell phone contract early, you have to pay an early termination fee. The explanation that the cell phone providers have given for years about the early termination fee is that it’s used to recoup the cost of the “free” phone. When you do not fulfill the entire service agreement, the cell companies have to recover that cost of the “free” phone. Guess what? It’s not free if the phone cost is built into the price of a contracted calling plan.

Turning again to the dictionary, as I am prone to do, there are multiple definitions of “free.” Here are two:

  • Provided without, or not subject to, a charge or payment (example: free parking or a free sample).
  • Given without consideration of a return or reward: a free offer of legal advice (perish the thought).

I have spared you the other 46 definitions, but I think you get the idea. When the cell phone companies say a phone is “free” but then say the cost is built into your monthly service charge, that phone is not, by definition, free.

Now let’s apply this lesson to self-storage. I have many operators who tell me that they work out a deal that if you will sign a 12-month lease, the “Xth” month is free. What happens if a tenant breaks the lease? Is the last month free, even if it’s not the 12th? If not, I could contend that the month is not free because it requires 11 months of paid rent.

Free or Not

The problem may be more apparent in other “free” items. Free shelving with the signature on an agreement or an extended term is not really free; it is actually built into the price you charge someone who rents a unit with shelving. Better yet, what about a free lock? Do you give locks away to anyone who walks into your office, or only those who sign a rental agreement? If you only give to new tenants, then is the lock really free?

The same is true with free truck-use at move-in. Is it really free? It may not be if a person has to sign a lease to use the truck.

Further, many self-storage operators charge insurance premiums and/or other usage charges. Also, many impose hour limitations, usage or mileage limitations on the truck. If that is the case, I do not believe that the truck is always provided “without, or not subject to, a charge or payment,” i.e., free. If I keep the truck for three hours and I was only supposed to keep it for two, I owe a fee, which means it’s no longer “free.” If I have to pay for insurance then I am not getting a truck without a charge or payment either.

You get the drift. If you are not really giving it away, if something is tied into or requires consideration of something else in order to obtain the “free” item, then that item is not free. I caution you about this because self-storage could be a target after the attorneys general finish up with cell phones.

Knowing competition in the industry is stiffening and some facilities may be suffering because of a downward economy, there is a lot more “creative” marketing and concessions being considered. I strongly caution self-storage operators to ponder concessions carefully and avoid the word “free” at all costs.

In fact, it may be better to offer the second month for $1, rather than free. While the dollar is not going to make that much difference to your bottom line, you are avoiding the idea that you are “giving away” the second month for no consideration. To the contrary, the occupant has to pay rent for the first month.

The same goes for truck use: How about $1 for use of truck for two hours if you sign a minimum one-month rental agreement? I know it does not flow off the tongue quite like “free truck with move-in” but it may save your hide from litigation.

As always, I am just warning you to be careful. It may only be a matter of time for private attorneys, who see the cell phone case, to start thinking about using the same strategy with self-storage facilities. Please consider banning “free” from your self-storage vocabulary to steer clear of costly legal battles ahead.

Jeffrey Greenberger practices with the law firm of Katz, Greenberger & Norton LLP in Cincinnati. He primarily represents owners and operators of commercial real estate, including self-storage. He is the legal counsel for the Ohio Self Storage Owners Society and the Kentucky Self Storage Association. His website, www.selfstoragelegal.com, contains his legal opinions and insights into the self-storage industry, as well as an article archive. For more information, call 513.721.5151; e-mail [email protected].

Coast-To-Coast Manages New Automated Self-Storage

Coast-To-Coast Realty Advisors LLC was appointed the third-party asset manager for Safe & Secure Self-Storage, an automated self-storage facility in Coconut Creek, Fla. The 145,654-square-foot project includes 106,600 square feet of self-storage, 3,567 square feet of retail and 20 RV slips. 

Coast-To-Coast will be responsible for the operations of the store beginning with the grand opening March 15. The Pugliese Co. is developing and building the project, which is currently available for sale for $25 million.  For more information, visit www.automatedselfstorage.comwww.askrk.com.

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Safestore FY Earnings Up

British self-storage retailer Safestore revealed it was coping with the housing slowdown and growing annual earnings. The company also maintains it is well positioned to withstand the economic downturn.

The company's earnings before exceptional items for the year ended October 2008 increased 10.9 percent to 45.1 million pounds ($65.36 million) on sales that were up 11.5 percent at 82.9 million pounds.

The average rate the company charges per square foot rose by 11.6 percent to 24.06 pounds during the year, the group said. The company said it would increase  the total dividend to 4.65 pence from 4.5 pence.

"While Safestore is not immune to the broader economic downturn, the resilience of the company's performance demonstrates its wide cross section of both domestic and business customers and that Safestore is not wholly reliant on the housing market," Chief Executive Steve Williams said in a statement.

The consensus forecast from Reuters Estimates was that, on average, analysts expected the company to post earnings of 34 million pounds for the year.

Safestore, which generates much of its revenue from house movers, said it was getting less business from people moving but said those doing so were storing goods for longer periods of time.

However, closing occupancy was 2.72 million square feet, a fall of 6.7 percent from October 2007, the company said. 

Safestore opened nine new self-storage facilities during the period and plans to open five more in 2009.

Shares in Safestore, which have underperformed the FTSE All Share index by over 50 percent in the last three months, closed at 60 pence on Monday, valuing the company at 113 million pounds.

Source: Reuters, Safestore FY Earnings Up

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President Barack Obama Addresses the Nation

The nation's 44th president delivered a somber assessment of America's plight during his inauguration in Washington, D.C.

President Barack Obama touched on a number of topics including America's troubled economy, security, health care and education. "Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time," Obama told hundreds of thousands of people gathered on the National Mall in front of the Capitol. "But know this, America—they will be met," he said.

Wearing a navy suit and red tie, Obama was sworn in using the same Bible that was used in President Abraham Lincoln's inauguration.

As many as 2 million people were expected to crowd into the area between the Capitol, the White House and the Lincoln Memorial to hear Obama take the oath of office.

Source:  CNN.com,Obama: Challenges Real, But They 'Will Be Met'

 

Perfect Self Storage Opens in West Chester, Pa.

Perfect Self Storage opened a four-building facility along the well-traveled Paoli Pike in West Chester, Pa. Using a geo-thermal system for temperature regulation, the facility offers 312 climate-controlled and non-climate-controlled units in more than 33,000 net rentable square feet.   
 
This facility is managed by the management division of Investment Real Estate LLC of York, Pa.  The owners of the facility also employed the construction division of Investment Real Estate to build the facility. For more information, visit www.irellc.com.

Enhanced Specialty Insurance Program

MiniCo Insurance’s self-storage specialty insurance program now offers three new options to enhance coverage for self-storage property owners. The specialty businessowner policy may be augmented by adding any of three new enhancements:
· Blanket Property Coverage–to extend blanket coverage to all locations.
· Extended Business Income Coverage–to extend coverage for actual loss incurred from 15 to 24 months.
· Data Compromise Coverage–to help businesses respond to data theft including forensic IT review, legal assistance support, notifications to affected individuals, credit monitoring, identity restoration assistance, case management services, and a help line open seven days a week.

These enhancements to the MiniPak Gold policy are currently available in most states. Additional filings are in progress for many other states with approvals expected in coming weeks. Info: www.minico.com

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Coke's Vitamin Water Sparks Lawsuit

The Center for Science in the Public Interest (CSPI), a public interest group, is suing Coca Cola for false health claims in regards to its VitaminWater beverage. The lawsuit was filed on Wednesday in U.S. District Court in the Northern District of California.

The CSPI stated Coke made false claims when marketing the VitaminWater, going far beyond the FDA's approvals, making it deceptive.

The group states the high levels of sugar in the drink promote obesity, diabetes and ot her health problems, offsetting the benefits from the vitamins in the drinks.

Source:  dbtechno.com,Coca Cola Hit With Lawsuit Over Healthy VitaminWater

ISS Blog

A Season of Change

It’s seems fitting somehow that today celebrates the life of Martin Luther King Jr. and tomorrow the country will inaugurate a new president, Barack Obama. There are many similarities between the men. But the biggest is both men believed in change—and believed the American people could unite to channel change.

Next week, the Inside Self-Storage World Expo hopes to channel some change, too. Our theme this year, Survive and Thrive in 2009, is aimed to give you the knowledge and tools you need to make changes in your business.

The seminars are taught by the experts in the field. Like you, these are people whose lives and businesses have been changed by today’s down economy, so these seminars will be nothing like anything you’ve heard before. Learn new marketing strategies, smart ways to protect your company from lawsuits, how to find financing in today’s restrictive lending environment, and get a snapshot of the existing self-storage real estate market.

You can review the complete agenda online, plus all the extras you’ve come to expect from an Inside Self-Storage World Expo, including the developer’s seminar, legal learning and roundtable discussions.

We hope to see you there.