Missing-Person Case Files Saved From Self-Storage Auction

The National Center for Missing Adults (NCMA) reached an agreement with Allstate Self Storage of Phoenix to avoid having 30,000 missing-person case files sold at auction.
 
Due to significant financial hardship, NCMA had failed to make the monthly payments on its two large storage units, owing Allstate $3,800. An auction was scheduled to sell the units’ contents today. In addition to office furniture and equipment, the units contain client records including personal information and Social Security numbers.
 
Representatives from Allstate contacted NCMA to say it is not company policy to sell personal information or confidential files, and they would comply with all state and federal privacy laws. They authorized NCMA to remove all of its property from the units by Nov. 27. In return, Let’s Bring Them Home, an Arkansas nonprofit organization and surviving corporation of a merger with NCMA, agreed to resolve the outstanding balance owed to Allstate. 
 
“We have faced significant hardships these last several years due to over extending our financial resources during Hurricane Katrina and our country’s economic struggle. Losing the storage units would have compromised the security of our case files,” said NCMA Director Kym Pasqualini. “Our appreciation goes out to everyone at Allstate Self Storage for taking our extenuating circumstances into consideration.”
 
Over the past 16 years, NCMA has handled thousands of missing-person cases including more than 13,502 resolved cases from Hurricane Katrina.

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ISS Blog

Auctioning Personal Records in Self-Storage: Getting Your Due vs. Bad Policy and PR

This year, the issue of abandoned records in self-storage has really come to the fore, as more and more businesses go bankrupt or lose solvency and fail to pay their rent. What do you do when you have a delinquent unit belonging to a company that stores records—records that often contain peoples' personal information such as name, address, phone number, date of birth, Social Security number? Think, for example, about a mortgage or finance company.

If you think back to March, you may remember a story that was in the news about a self-storage operator in Maine who attempted to auction off 60 boxes of financial records from a mortgage company. The Maine Bureau of Consumer Credit Protection got involved, and the issue became a legislative one. (You can read a past blog about the details of the case here: Self-Storage Legislation: Could Be Heartache on the Horizon.)

Since then, we've had a number of inquiries about the issue from self-storage operators nationwide, and other legislation has emerged. For example, a law was introduced in California in April to outline a course of action for the disposal of information. Read "New CA Bill Addresses Disposal of Abandoned Records" for details.

This week, the issue rears its ugly head yet again. Allstate Self Storage in North Phoenix announced it would auction off boxes containing 30,000 case files to recoup unpaid rent from the National Center for Missing Adults. Fellow storage operators were horrified that the facility would move forward. See what people are saying about it on Self-Storage Talk: "Missing-Persons Case Files to Be Auctioned Off."

Jump in and share your thoughts on this critical issue. Have you experienced a situation where you were stuck with personal records in a unit? How did you handle it? How do you think an operator in this situation should proceed? Sometimes a facility is owed thousands of dollars by the company that left the records. Does that excuse the exposure of innocent peoples' information, especially when that info could lead to identity theft?

If you want some more information about how to deal with abandoned records in self-storage, read these two informative articles written by industry legal expert Jeffrey Greenberger:

You can also purchase an audiovisual recording of our most recent Legal Learning Webinar, which focused on the issue: "Addressing Abandoned Records in Self-Storage: What We Can Learn From Maine."

Florida Self Storage Association Hosts Executive Retreat

On Oct. 23, a group of 75 self-storage owners and developers met at Disney’s Yacht Club Resort in Orlando, Fla., for the Florida Self Storage Association’s first annual Executive Retreat. The event was intended to serve as a “think tank” for self-storage executives to share ideas and discuss industry strategy for the upcoming year. Guest speakers included: 

  • Dean Jernigan, Chief Executive Officer, U-Store-It Trust
  • Jim Stevens, Senior Vice President of Strategic Partnerships, Extra Space Storage Inc.
  • Christian Sonne, Managing Director, Self Storage Industry Group, Cushman & Wakefield
  • Seena Sharp, Sharp Market Intelligence
  • Daniel Pearlman, Medelia Inc.

The FSSA is a non-profit organization comprised of individuals who have an interest in the self-storage industry in Florida. Members include facility owners, operators, developers, investors, managers and suppliers.

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Bonita Springs Self-Storage Project Drives Woman to Tears

This week, Great Space Storage of Bonita Beach, Fla., won approval to add 50,000 square feet of space to its existing 93,000, driving a local homeowner to tears. Tabitha Cunningham told the city council the expansion will decrease property value and diminish the tranquility of the neighborhood.
 
The zoning changes that allowed for the expansion were passed with a 4-3 vote. One of the council members said the change was unfair to residents.
 
Four property owners will be affected by the project, including Cunningham. Great Space is being required to plant landscaping to buffer the property lines, and all onsite lighting will be aimed away from the homes. Company principal Charles Sample told Cunningham they will work with her on any concerns.
 
Source: Naples Daily News, Driven to tears: Bonita OKs storage business expansion, which makes one resident cry

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Eight Storage Units Robbed in Baton Rouge, Tenants Suspect Inside Job

Eight units were robbed at Tom Drive Self-Storage in Baton Rouge, La., last weekend, and some of the victims believe the culprit may be someone familiar with the property. One tenant said she believed the theft to be “an inside job.” The tenant found her lock broken and several items missing from her unit.
 
The self-storage facility has video surveillance and code gate access. None of the surveillance cameras were facing the row of violated units.
 
Local police are uncertain if the robbery was an inside job.
 
Source: WAFB 9, Police investigate burglaries at storage site

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Allstate Self Storage to Auction Missing-Persons Case Files

Allstate Self Storage in North Phoenix plans to auction off more than 30,000 files filled with clients’ personal information from the National Center for Missing Adults, a delinquent tenant of the storage facility. The center’s CEO, Kym Pasqualini, owes the facility $3,800, and the facility managers refuse to turn over the files stored in the unit.
 
On Tuesday at 8 a.m., the unit’s contents will go up for bid. Pasqualini says the files contain personal information from thousands of missing-persons cases, including Social Security numbers.
 
Pasqualini ran the center for 16 years. Due to a lack of donations, she had to shut down and move everything into storage a few years ago. After selling her house and depleting her savings, she is unable to pay her storage bill. She hopes the auction winner will give her the files.
 
Source: KPHO, Storage Facility To Auction Off Case Files

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Abandoned Records in Self-Storage: Whose Responsibility Are They?

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Aurora Self-Storage Facility Sells for $2.3M

Russ McGrane of Winner Storage LLC purchased a self-storage facility at 1800 S. Chambers Road in Aurora, Colo., from U-Store-It Trust of Wayne, Pa., for $2.32 million. The 49,900-square-foot facility was constructed in 1998 and renovated in 1999. No brokers were involved.
 
Source: CoStar Group, UPDATED: Aurora Self-Storage Property Changes Hands

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Five Challenges Faced by Todays Self-Storage Owners and How to Maximize Your Asset

The famed artist, sculptor and engineer Michelangelo is credited with this quote: “The greater the danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low and achieving our mark.”

If your self-storage business is experiencing a crunch from the economy, if new competitors have moved in on top of you, or if your site is the oldest in your marketplace, you have a problem. But you also have a big opportunity to revitalize your business, grow your personal wealth and sharpen your competitive edge. It may require a repositioning of your business. It will require you to cut out the cancer of complacency among your staff and advisors.

In many markets, a strange phenomenon is apparent. The stores with the lowest rates often have the lowest occupancy, which ultimately translates into the weakest asset. Here are some ideas on how to make your operation better—no matter where you are in the business life cycle.

Two Case Studies

First, here is a tale of two self-storage businesses that are just minutes apart in the same market. Operator No. 1 is a true visionary. He built his stores 30 years ago when self-storage was a new concept. The business is operated as a family venture. Resident managers occupy four stores on major thoroughfares in an urban market. Worth noting is their prices are 20 percent to 30 percent lower than their competitors’. The stores offer limited security features, and the gate is always up during business hours.

The owners and managing staff believe the market is overbuilt, because occupancy is showing a steady trend of decline over the past several years. This company has frozen all spending on capital improvements and facility promotion. At one location, the resident-manager team, a senior couple, is unaware of the rates at competitors’ stores and truly believes the market is terrible for everyone. They plainly read from a price and availability script when answering the phone, and sometimes greet customers in their bathrobes or pajamas. The office carries the odor of the managers’ apartment and last night’s dinner.

Operator No. 2, with two stores within 2 miles of Operator No. 1, is a fully modern operation. The management team wears uniforms and greets customers as soon as they walk through the door. They are quick to offer tours of the facility, which they are upgrading. Security features are evident in the office and around the site. The managers take turns operating the front desk one day and, on alternate days, contact customers, prospects and referral sources, either by phone and e-mail or in person.

The store’s well-designed website generates many leads, and one of the stores has rented 160 units in the past two months. Unit rates lead the market for standard and climate control. One of the managers, well-trained in sales and customer service, has partnered with other local businesses—a car wash, nail salon and moving companies—to create synergy. Occupancy hovers around 90 percent year-round, even in this tough economy.

These stores compete every day for the same customer. Which store are you?

Complacency Is the Great Evil

It’s the “Ah” moment. When you finally move your business from the lease-up phase into the realm of profitability, it feels like it’s the top of the mountain. No more red ink. No more deficiencies.

Don’t rest long, though! Otherwise, you begin the ride back down into the red zone. If you’ve been successful, be assured that other entrepreneurs have taken note. A new competitor is eyeing your market. Existing competitors may be sharpening their approach and upgrading their services. In business, you cannot afford to fold your hands and enjoy success for too long; you must continually look for ways to improve. If you relish the “Ah” moment for long, your business will suffer.

You must measure and monitor everything you present to your market. As you analyze your business, ask yourself these questions:

  • Where do you rank among competitors in rates, service, management and site quality?
  • Are your short- and long-term goals clearly defined at the ownership and management levels?
  • How effective is your manager? How do you measure this effectiveness?
  • How are you monitoring success and failure rates of existing operational, marketing and sales strategies?
  • Are you considering additional investments and their expected returns in your business and manager?
  • What internal threats are you facing? Employee theft? Declining revenue? Outdated features and benefits?
  • Are you prepared for the external threats your business may face in the next 12 months, including an economic downturn, overbuilding, price wars, debt markets, unemployment, change in management and delinquency?
  • How effective is your overall presence in your marketplace?
  • What are the best ways to incrementally increase revenue and the value of your business?
  • Are you willing to learn and implement better methods if it means more profit?

Asking the tough questions, and designing a program to capitalize on opportunities and manage risks, will enable you to create more profit, wealth and opportunities for yourself and, more important, your family.

Common Challenges for the Self-Storage Owner

When you ask these questions, you’ll be able to identify some key challenges about yourself, your business, and the vitality of your self-storage property or portfolio. There are common challenges you’ll face as you consider re-positioning your business, increasing your income, and enhancing the value of your assets.

As you read through some of these challenges, keep in mind that eliminating all complacency will enhance your profit now, and a future buyer will only pay premium prices for premium businesses. 

Challenge No. 1: Your store manager has been with you for a long time. You like him and don’t want to let him go.

Train your existing manager, add an experienced salesperson, or sell now at a reduced price and let someone else do the work. This is a competitive business. You must either accept that or suffer the consequences of lost revenue, reduced profit and declining value of your assets.

This industry offers many training opportunities, often at the state and local level. Your managers should read industry trade magazines every month, and attend tradeshows and seminars. Your management team should be focused on getting new tenants in the door, maximizing revenue and beating the competition. As an owner, you must focus their activities to enhance your bottom line. 

Challenge No. 2: Your manager is not great, but he is cheap.

That manager is the lifeblood of your operation. If he’s not strong, neither is your business. A cheap manager could care less how much money you make or lose. Invest in your managers! Audit their records. Give them goals. They are the one link between your customers and your bank account.

Challenge No. 3: I’m very profitable and don’t have the debt load those new guys have. So I can keep my rates low and occupancy high.

You’re losing value if you don’t keep your rates up. A good operator should always be looking for ways to give better service and enhance profitability. Being 100 percent occupied—in any unit size—is the tell-tale sign that your rates are too low. If you have no units to rent, someone else will build some and charge the next guy looking for that unit size to use it.

There’s only one good reason for competing stores to be 30 percent or 40 percent different on rates: one operator is that much better. If you don’t manage your rates regularly, you’re probably not making what you could. Manage for profit, not occupancy.

Moving the income bubble just a little bit can make a big difference in the value of your property or portfolio. If you improve the net operating income of your store by $10,000 annually, it will increase the value of your property, using an 8.5 percent cap rate, by around $100,000. For a store with 400 tenants, that is $2 per tenant, per month. Pay attention and build value into your business.

I am not encouraging greed. I am encouraging focused stewardship of the assets with which you create wealth for your family—a noble cause. Will you sell your property? Will it pass to your children? You owe it to yourself and your family to get as much out of your assets as possible. If you’ve worked hard to build your assets and streams of income, make sure you are fine-tuning your business for today and the future.

Challenge No. 4: Everyone else is losing occupancy. We’re already competitive. It’s just that the market is so tight.

Be sure your “sense” of the market is accurate. If you don’t regularly track your competitors, you should. Your manager should, too. It’s imperative that you know when the store across town raises prices or offers concessions. Know if it is offering a move-in special on certain sizes.

You cannot compete if you don’t keep track of the market. A trend in your bank statements—up or down—doesn’t necessarily represent a market trend. Be sure you know the difference between internal and external influences on your income. Would you be surprised if you saw a detailed competitive market study in your area? 

Challenge No. 5: My site is older, and the investment in remodeling is too high. I’d just rather keep my rates low and keep going like I am.

The asset you’ve built, the business for which you sacrificed and the time you spent away from your family will lose value if you are complacent. The value of your self-storage asset is not in past performance but reliable future income. If your site is dated, the capital improvements you need are probably not that expensive when you measure expected return. And when you provide better service to your customers, you’ll be able to charge stronger rents and generate more income in the long run. If you simply let your business die, be assured, it will.

Invest Today

We’re all in business for pretty much the same reason: We want to provide for our families. We want our kids to have more than we have. We want our grandchildren to be secure. We want to retire and have an income we can depend on. We want to travel, make other investments, build new things, live a certain lifestyle. As self-storage owners, we owe it to ourselves, our families, and our legacies to do business the right way—not waste our opportunities.

Someday, your facility will be sold, either by you or by your heirs. Now is the time to invest in your managers and facility and improve the value of your business. If the benefit is not fully realized by you, it will certainly become part of your legacy to the next generation.
Whether yours is a young business or an established one, set your standards of management and competitiveness high to perpetuate the value you have created for your family. 

Ben Burkhart is owner of BKB Properties and StorageStudy.com. Located in central Virginia, he assists self-storage owners, developers and managers in analyzing site and market feasibility, measuring and improving sales and enhancing profitability.  To reach him, call 804.598.8742; e-mail ben@storagestudy.com.

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Blogger Writes About Fake Self-Storage Pharmacies and Medicare Fraud

American Thinker writer David Hass published a blog this week about a 60 Minutes report on fraudulent medical-equipment suppliers and fake self-storage garage pharmacies. According to 60 Minutes correspondent Steve Kroft, who did his investigation in South Florida, these sham operations collect millions of dollars monthly from Medicare.
 
Hass pointed out that Medicare has three investigators for the state of Florida, and yet there may be more than 2,000 criminals in the Miami area alone who participate in Medicare fraud. The person in charge of enforcement at Medicare says the enforcement budget is too small, Hass wrote.
 
According to Hass, the fraud casts doubt on the government's ability to run a program that gives out lots of cash.
 
American Thinker is a daily Internet publication devoted to “the thoughtful exploration of issues of importance to Americans.”
 
Source: American Thinker, Medicare Fraud - $60 Billion and Growing

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Indiana Couple Arrested for Stealing Items Out of Self-Storage

A husband and wife in Terre Haute, Ind., face several counts of burglary as well as drug charges after police found items in their home that had been stolen from self-storage facilities. Police presented a warrant to search the home of Ebb and Heather Howard, 29, on Thursday, finding jewelry, collectibles, power tools, hunting and fishing equipment, and other items.
 
Police said there was enough stolen property to fill several trucks, according to an article in the Terre Haute Tribune Star. Most was found in the home, while some was stored in a self-storage facility on Wabash Ave.
 
The Howards appeared in court on Friday for initial hearings on three charges of burglary. In addition to the theft charges, the judge found probably cause for the couple’s arrest on a charge of manufacturing methamphetamine. A non-working meth lab was allegedly found in the couple’s garage, and Ebb Howard was allegedly found in possession of the drug.
 
Bond for the Howards was set at $75,000. A hearing for the formalization of charges will take place on Wednesday.
 
Source: Terre Haute Tribune Star, Husband, wife face multiple burglary counts, police say

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