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Articles from 2014 In November


Converting Walk-Ins to Rentals: Sales Tactics to Close More Self-Storage Foot Traffic

Handshake Deal

By Erich Noack

You may be great at closing self-storage prospects on the phone, but what about those walk-ins? Experts say these customers should be easier to sell to because they’re a “captive” audience, but is that true?

Depending on your area, walk-ins can produce significant leads for your facility, so you need a strategy for closing as many of these potential customers as possible. Taking steps toward refining your company’s physical and online appearance and adjusting your sales approach can drastically increase the number of walk-ins you convert to renters.

Improve Public Perception at the Door

Your customers are forming an opinion of you and your facility well before you even get the chance to talk to them and explain all the great benefits of renting with you. Seems unfair, right? Consider how you feel when you visit a place of business. The appearance of the building, including the interior and exterior space, affects your view of the owners and the products they sell. The same applies to your customers. Consider these points:

  • The value of curb appeal is immeasurable. As one of the first points of contact between you and your customer, your facility exterior needs to present a positive overall representation of your company.
  • Make your interior inviting. As the second point of contact with your customer, the office is just as influential in developing public perception, so make it pleasing. Your goal is to provide an environment in which customers will want to spend time. After all, the longer they stay in your office, the more likely they are to rent from you.

Improve Public Perception Online

Technology is king when it comes to public perception. The advent of smartphones and the ability to access information from just about anywhere has made consumers more discerning about the businesses they patronize. Your website is perhaps the most important factor in developing a positive public image, so keep these things in mind:

  • Your website must be easy to find. This sounds straightforward, but work with someone who has the search engine optimization (SEO) know-how to get your site ranked well in search-engine results.
  • Unique, informative content is important. Keywords are essential, but having helpful, easy-to-follow content goes a long way in site ranking and user-friendliness.
  • Functionality and attractiveness are equals. Your website has to provide necessary information in an accessible way while also being attractive. Having a website that’s aesthetically pleasing and functionally sound makes potential customers feel good about renting with you.
  • A good website is never static. Periodic updates after launch will help you remain at the top of search rankings. Consider employing a firm whose SEO practices reflect a vigilant need to keep your website current and relevant.

Close More Sales

Your facility sells a service, and that service helps customers solve problems. A walk-in wouldn’t be in your office if he didn’t have a need for storage. Your sales tactics should reflect this understanding. Solving a customer’s problem is your mission. Here’s how to do it:

  • Listen more than tell. Your amenities are great—the best in town, perhaps. But you must first listen to what your prospect needs and establish trust between company and customer.
  • Empathize with your customer. Create an emotional connection with your customer by asking questions and hearing his story. You’ll be surprised how far this goes.
  • Enhance your record-keeping practices. Around 80 percent of your sales will happen in the follow-up, so record specific details about each customer to help you reconnect. Note strategies for selling that are successful—and those that aren’t. Also simplify and modernize your record-keeping through the use of a well-designed management software. The right technology assists your company in crossing that line between great and excellent customer service.

Never stop improving your facility and sales methods. Keep up with recent activity in the storage industry by reading blogs and getting subscriptions to industry publications. Speak with others in the business. Attend conventions. Continue learning how to provide for your customers and sell with more confidence. Above all else, listen to your customers and solve their problems from there. This will be the key to closing those walk-in prospects.

Erich Noack is a content writer at StorageAhead, which offers Web-marketing technology for the self-storage industry, including lead-generating search engines and facility-management software. For more information, call 913.954.4110; visit www.storageahead.com.

Redtop Storage in Chico, CA, Sells for $3.2M

California-based BVI Redtop LLC recently sold Redtop Storage in Chico, Calif., to an unidentified Southern California investor for $3.15 million. The facility is comprised of 77,040 square feet in 589 storage units and sits on 3.74 acres. It features all-metal construction and concrete drive aisles, according to a press release.

The facility at 1322 Nord Ave. opened in 2005. It was listed at $3.48 million with a capitalization rate of 5.62 percent, according to the property’s listing LoopNet, a real estate website. The facility is on a major thoroughfare near California State University, Chico. It’s across the street from University Village, an apartment complex that houses several hundred students, according to the listing.

“The property has a history of strong performance during the summer months when students are out of school, and an opportunity exists to increase occupancy during the school year by offering concessions and parking to students,” the listing stated.

Bobby Loeffler and Tyler Skelly, self-storage specialists with The Loeffler Self-Storage Group (LSSG), represented BVI Redtop in the transaction. LSSG is a commercial real estate brokerage firm specializing in self-storage properties throughout the West. The group has closed more than 65 storage transaction in California and Nevada, company officials said.

Redtop Storage in Chico, Calif.***

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UK Self-Storage Company LoknStore Sells Facility to Fund New Stores

U.K. self-storage company Lok'nStore Group PLC recently sold its property in Reading, England, to a housing developer for £2.9 million. Additional payments will depend on the value of house sales achieved, according to the source.

The company is also in negotiations to sell an undeveloped site in the community of North Harbour in Portsmouth, England, for £3 million. The transaction is dependent on the buyer’s ability to secure planning permission from city officials, which could take up to 18 months, the source reported. The funds from the sale would be used to finance the development of Lok’nStore’s new facilities in Bristol and Southampton, England, CEO Andrew Jacobs told the source.

Lok'nStore purchased a 0.9-acre lot in Longwell Green, Bristol, earlier this year to develop a new facility. The city’s planning commission approved development of a 50,000-square-foot self-storage project, which The development is expected to cost about £4 million and open next year.

Lok’nStore builds, buys or leases large warehouses or industrial buildings and rents storage units to customers on a weekly basis. Around 60 percent of the company's 7,000 customers are residential and 40 percent are commercial. Lok’nStore has more than 920,000 square feet of net rentable space, which is evenly split between freehold and leasehold.

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Self-Storage Profit-Makers: Ancillary Products and Services With Staying Power

Unit rentals are the bread and butter of your self-storage business, but that doesn’t mean you can’t add a little jam on top. Since self-storage came on the scene many decades ago, operators have experimented with ways to expand their product and service offering. While some add-ons haven’t panned out, others have proven to be ideal companions to the base business. Here are some profit centers that have proven their staying power for bringing in new customers, satisfying existing tenants and generating additional revenue.

The Retail Store

Locks, boxes, tape and other packing and moving items are considered the golden standard when it comes to self-storage ancillaries. People need these items when moving or storing, so why shouldn’t they purchase them from you? Operators are fulfilling much-needed supply for a huge demand.

But just putting products on display won’t make them sell. It takes packaging and salesmanship. Consider creating moving kits that bundle boxes in several sizes, packing material, tape and a permanent marker. If you sell dish-packing kits, put one on display so customers can see how it works. You’ll also want to practice suggestive selling techniques.

“To have successful retail sales, the biggest thing that helps me is to convince the people they need these retail items,” says Penny Casassa, manager at Bordentown Self Storage in Bordentown, N.J. “As storage operators, we are the professionals. We need to explain to them that they may have paid a lot of money for their mattress, and wouldn't they want to protect the investment with a quality mattress bag?”

Offering retail products makes your facility a “one-stop shop” for customers. To entice them, keep your walls and displays full of product so you always have fresh stock, advises Nancy Martin-Wagner, marketing vice president of Chateau Products Inc., which supplies retail inventory for self-storage operators. “Also, ask your customers what they’re moving to allow you to suggest items they’ll need.”

If you’re not sure where products should go, try building a plan-o-gram for your retail area. This diagram, or image map, provides details on how to artfully place your items in your store. “This gives every product a consistent place that suggests other products the customer may need in conjunction, and also makes sure every empty space is filled back up with products after each sale,” Martin says.

The cost to stock your store will vary depending on the products and your vendor. A general rule of thumb is about $20 of product cost per square foot of retail space, Martin says. “So if you have a 72-square-foot wall of display, you’ll need approximately $1,440 in product at your cost on the wall.”

Some must-haves include locks, boxes in several sizes, packing material—such as clean newsprint, peanuts or bubble wrap—tape and tape guns, marking pens, and utility knives. Other items to consider include label kits, gloves, furniture and mattress covers, glass and dish cell kits, stretch-wrap rolls, and tie-down rope or bungee cords.

Most important, let people know you carry these items. “Make sure the items you offer are clearly posted on your website, and always mention it to your customers on the phone, in e-mail, on social media and in your printed materials—from the busy street and when customers are in your office,” Martin says.

Although a large space is ideal for a well-stocked retail store, even small areas can be successful. “A small space could work by hanging a display of one of each item and then having the stock in a storage unit,” Martin says. “You could ring up the customer’s purchase, and then have the customer pull his vehicle up to the unit to load the items.”

Truck Rental

The truck-rental offering comes in many flavors. First, there’s a full-scale operation in which you contract with a national chain such as U-Haul or Penske to provide truck rental for one-way and local moves. In this scenario, you receive a commission for every rental. Another program that’s becoming increasingly popular in the storage industry is one in which you buy or lease a truck for local customers to use. This arrangement allows you to generate revenue, market your facility and provide great customer service.

It’s this type of program that has given Platinum Storage Group a competitive edge in its busy markets. The company, which operates 30 facilities in seven states, offers new customers free use of a moving truck at 18 of its properties. It also lends the trucks to local schools, charities and other organizations.

“Everyone loves a bargain, and that includes self-storage customers,” says Roger Burgin, Platinum’s vice president of field operations. “Rather than reducing rates, the ‘free’ moving-truck program allows us to offer a competitive concession without impacting our site’s potential revenue by over discounting,”

Platinum has created a few systems to generate additional revenue from its trucks. For example, each tenant is allowed 25 free miles of use, then charged 99 cents for each additional mile. The company also charges $19.99 per hour beyond the allotted time. A refueling charge of $5.99 per gallon is applied when tenants fail to gas up the vehicle, and a $100 cleaning fee is charged if the truck is returned dirty or full of trash.

Operators should also consider renting out hand trucks and furniture blankets, says CJ Steen, marketing director for On The Move Inc., which provides a turnkey rental-truck program for the self-storage industry. Another option is to offer a moving service. “Many people don’t have the means to move themselves and have a difficult time finding movers they trust. Hiring a few college students or part-time movers to help your customers move can add value to your service offerings, Steen says.

Burgin highly recommends that any operator offering truck rental invest in a creative and well-designed vehicle wrap. “Vehicle wraps directly influence customer’s perception of you and your business as a whole,” he says. “A well-designed vehicle wrap puts your services and contact info front and center, effectively making your truck a rolling billboard for your property.”

According to Steen, trucks get up to 600 visual impressions per mile driven. You can also work with local businesses to park your truck in their parking lots, which will garner even more exposure.

Records Storage

Much like truck rental, records storage can be simple or complex, depending on facility location and the services you choose to offer. In addition to storage, a full-scale records-management operation includes box retrieval and re-filing, pickup and delivery services, document-destruction services, indexing, and re-boxing.

If this seems like too much, you can opt for a “slimmed down” version wherein you outsource all services with a residual profit, says Cary McGovern, owner of Fileman, which provides records-storage feasibility, implementation, sales guidance and training. “It offers a great ancillary service using the existing space, systems and personnel while increasing the per-square-foot yield,” he says.

Self-storage operators can even retrofit their existing contiguous units by removing internal walls and adding shelves, McGovern says. However, he cautions to not make huge unit-mix alterations until you’ve a signed contract with a records-storage customer.

Cell Towers

Although a cell tower on your property doesn’t offer much for your storage customers, when executed correctly, it can bring in some great revenue. “A self-storage operator should look at a cell-tower lease as a potential no-cost vehicle of procuring additional ancillary revenue from the use of land that otherwise would not be utilized,” explains Hugh Odom, president of Vertical Consultants, a telecommunications-consulting firm. “If structured correctly, a cell-tower lease can be a steady, long-term stream of revenue and an appreciable asset that grows in value based on the revenue being generated by the cell-tower company.”

A1 Mini U-Store-It in Ottawa, Ontario, Canada, benefited from cell-tower revenue until earlier this year when the 10-year contract expired and the telecommunications company found better infrastructure elsewhere. “We received approximately $10,000 per year for the base unit, $155 per month for hydro usage, and rent on a storage unit for their equipment,” says Mat Seguin, A 1’s director of operations. Overall, he says it was a positive experience. “It’s an excellent way to increase revenue that requires no upfront costs and little to no maintenance.”

Operators courting cell-tower companies should do their homework first, Odom advises. “The biggest mistake most self-storage operators continue to make when it comes to a cell-tower lease is they rely on so-called ‘market rents’ to determine how much they should receive for the use of their property.” However, market rents don’t exist when it comes to a cell-tower lease because each site has its own unique value, Odom says. This is information few telecommunications companies will impart.

Instead of just focusing on the revenue a cell-tower will generate in the short term, operators should focus on getting a fair value for the use of their land over the entire lease. “A cell tower lease isn’t a real estate transaction, it’s a telecom transaction, and understanding that important difference and how to use it your advantage could mean significantly more rent for you. Also, make sure you don’t enter into an agreement that could negatively impact the value of your overall property,” Odom advises.

Tenant Insurance

When properly put into play, a tenant-insurance program generates more revenue than truck rentals, boxes, locks and packing supplies, says Stephanie Tharpe, vice president of operations and marketing specialist for A+ Management Group, which operates seven self-storage facilities in Tennessee. “The revenue that can be generated from tenant insurance is all found money,” she says.

Though it’s in their best interest to have it, few renters will ask about tenant insurance, which means staff has to be proactive about getting tenants on board. Usually, all that’s needed is training, Tharpe says. "Our managers have been properly trained and track their success. They average enrolling eight out of 10 new tenants into the insurance by assuming the insurance sale properly.”

There are three ways operators can present tenant-insurance programs to their customers, says Matt Schaller, executive vice president of Tenant Property Protection, which offers a tenant property-protection program:

  • You can offer optional coverage the customer is free to accept or decline at the point of lease.
  • You can use a lease-compliant or mandatory plan, which stipulates that every customer must provide proof of insurance on their stored goods to fulfill the requirements of the lease.
  • You can offer a bundled program in which you build protection into the lease on every unit as part of your service offering. With this method, the protection is often listed as a tenant amenity, Schaller says.

The addition of a tenant-insurance program to your business doesn’t have to be costly or time-consuming. According to Schaller, the cost to institute a plan is minimal. On the issue of time, Tharpe says: “When you have these results across the board, the time you take to enroll the tenant becomes irrelevant. It takes us under one minute to enroll our tenants into the insurance.”

Wine Storage

As a special niche service, wine storage is being incorporated into more ground-up developments and being added to established self-storage facilities. Not only is there increasing demand for this service, it elevates a facility’s character and can be a great source of revenue.

“We knew we didn’t want to build just any self-storage facility,” says Al Gardes, director of operations for Elmwood Self Storage & Wine Cellar in Harahan, La. “Our cellar is the only public wine-storage facility in the city servicing commercial and residential clients. It was created because New Orleans is such a famous city for food, wine and good times that having a wine cellar made sense.”

The Elmwood cellar, which was expanded three years ago, offers 70 custom-built mahogany cabinets in three sizes. The walls display a hand-painted mural of Italy. The wine-storage area has a redundant mechanical system with a back-up generator for continuous control of proper humidity and temperature. Additional amenities include a conference room, delivery acceptance and 24-hour access via a biometric system and code.

“A lot of customers who come in, even if it’s to buy a box or rent a truck, want to see the cellar,” Gardes says. “The customers who don't know we have a cellar will see the mural through the glass doors and ask about it.”

Even facilities with limited space can add this profit center, which generates a higher rental rate per square foot than traditional self-storage. Wine storage was added to an A1 Mini U-Store-It facility two years after it was built. “We used a 500-square-foot area in the basement of a 100-year-old bakery. The tenants really love the retro-industrial look of the place,” Seguin says. The area has 51 units that can accommodate a few dozen bottles or up to several cases.

Wine storage requires strict temperature and humidity controls, which is one reason many private collectors seek a self-storage facility that offers these provisions. In addition, a the area should have a properly insulated and designed perimeter that will prevent air movement and condensation, a temperature- and moisture-level logging system, and a multi-tiered, high-level security system to protect tenants’ collections.

But before you add wine storage, understand your market. “Our customers include affluent private collectors, charities, embassies, restaurants and civil servants. We’re in the city’s core in one of Canada’s wealthiest cities—the nation’s capital. The leaseup is also extremely slow; it took the better part of three years to fill,” Seguin says.

Marketing the service also takes more effort, as few people are actively looking for it. You’ll want to promote the service to current tenants and actively pursue new ones. Consider inviting a local wine club for a tasting, advertising in a community wine newsletter, or visiting nearby restaurants to see if they need storage space to house their collections.

“Aside from HVAC costs, our yield per square foot is impressive,” Seguin says. “It’s also an interesting attraction for self-storage prospects on facility tours, even if they don’t collect wine.”

While not every profit center will be right for your facility, there are many options. To determine which service or product will be successful for your business, consider your customer demographics, upfront costs, possible revenue, available space and how it will affect your staff. After all, operating a successful profit center will take time, marketing, dedication and superb customer service.

ISS Blog

Using Self-Reflection to Improve Self-Storage Customer Service

Using Self-Reflection to Improve Self-Storage Customer Service

Customers are funny aren’t they? Businesses certainly can’t survive without them, and yet those who deal directly with clients are sometimes left to wonder how they can function efficiently with them. The most difficult customers can make work extremely challenging, creating unexpected or unreasonable hoops to jump through and testing one’s patience and boundaries of decorum. This holds true, whether you’re a self-storage manager, auto mechanic, bank teller or any other type of service provider or manufacturer. Business creates customers as well as the occasional, customer-induced headache.

Some industries, like self-storage, have built-in customer pain points simply in the way they function. About a year ago, ISS highlighted the “The 10 Worst Types of Self-Storage Customers” in a memorable slideshow, compiled from contributions by members of Self-Storage Talk (SST). The forum thread that spawned the slideshow has continued to grow, gathering more true tales from the trenches. It’s worth a read, not only because many of the entries are hilarious, but to see the commonalities of problem customers self-storage managers deal with on a regular basis.

A more recent SST thread has managers sharing some of the unspoken thoughts they have rattling through their minds when confronted with difficult customers. Clearly, managers experience their fair share of bite-your-tongue moments, and it’s interesting to examine some of the actual retorts they use to diffuse certain situations. The camaraderie of pain points is readily apparent.

We’ve experienced our own share of challenging customers since launching the ISS Store. Most users are wonderful, of course, and genuinely appreciate the efforts we take when they occasionally experience difficulties with the website or a product they’ve purchased. Like any business conscious of good customer service, we strive very hard to resolve any issues that arise with promptness and courtesy, even if we know the problem they are reporting is on their end.

Sometimes, though, there is little that can be done for customers who convince themselves a business is in the wrong, no matter how much evidence is presented to the contrary. Self-storage managers deal with this frequently when it comes to late payments, overlocks, lien notices and other items that may be explained in a rental agreement but have gone unread or misunderstood by the tenant.

We have a unique position through the ISS Store to engage with customers who come from all points around the industry, from tire-kickers examining the prospects of building or investing in a self-storage facility to analysts studying market trends to storage owners and facility managers looking for ways to improve their business acumen. Because we are a business-to-business entity, the one thing almost all of our customers have in common—outside of their connection to ISS and self-storage—is they each have their own client base.

So when customer-service issues arise, it’s interesting to experience the dynamic of a business person being a customer. In those rare cases when a customer has been unruly or unreasonable while trying to resolve an issue, it’s natural to wonder about the professionalism that person displays when dealing with challenging issues brought forth by his own customers.

I’ve used the few negative instances we’ve experienced to reflect on my own behavior as a customer. When an issue arises and I’m gearing up to lodge a complaint, I’ve found myself taking a step back to more carefully examine the problem to see if there is something I’ve missed or misunderstood that will help me rectify the situation on my own or clarify the issue I need resolved.

This is what we wish our most difficult customers would do isn’t it—take stalk and re-examine their complaint from all angles before jumping to conclusions and laying blame? Not only has this made me a nicer customer to deal with, I believe assuming preferred customer behavior has helped improve my own customer-service skills in terms of assisting clients through a problem or explaining our position on an issue. If nothing else, it’s a useful exercise in slowing potential volatility and building empathy when trying to view a problem from the customers’ perspective.

By no means is this meant to condone or excuse unreasonable client behavior, but by holding your own customer-service issues against a mirror, you’re likely to uncover insight that will help you improve customer relations and sharpen your problem-solving skills.

I’d be curious to know if others have taken a similar approach to examining their customer service. What are you like to deal with as a customer? Please share some examples of how self-reflection has helped you improve customer service in the comments section below.

StorageMart Acquires 17-Property Self-Storage Portfolio in KS, MO

StorageMart, an owner and operator of self-storage facilities in the United States and Canada, has acquired the 17-facility Safety Mini Storage portfolio in Kansas and Missouri. The company is now the largest privately owned provider of self-storage in the Kansas City areas of both states, according to a press release. The acquisition adds 1.5 million net rentable square feet of storage space and more than 1,000 units to the StorageMart portfolio. The facilities are:  

  • 1044 E. Santa Fe St., Gardner, Kan.
  • 850 E. Warren St., Gardner, Kan.
  • 7401 State Ave., Kansas City, Kan.
  • 1285 W. Dennis Ave., Olathe, Kan.
  • 24200 W. 43rd St., Shawnee, Kan.
  • 2300 N.W. Outer Road, Blue Springs, Mo.
  • 2300 S.W. U.S. Highway 40, Blue Springs, Mo.
  • 620 N.W. Jefferson St., Grain Valley, Mo.
  • 2500 S. Hub Drive, Independence, Mo.
  • 6855 E. U.S. Highway 40, Independence, Mo.
  • 13750 Holmes Road, Kansas City, Mo.
  • 9200 N. Oak Trafficway, Kansas City, Mo.
  • 465 S.E. Oldham Parkway, Lee’s Summit, Mo.
  • 3920 S. State Route 291, Lee’s Summit, Mo.
  • 24610 E. U.S. Highway 50, Lee’s Summit, Mo.
  • 280 N. Church Road, Liberty, Mo.
  • 7101 Stewart Road, Pleasant Valley, Mo.

“Safety was a pioneer in the storage industry in West Missouri. We’ve been working on this acquisition for a number of years, and we’re really excited to finally be adding the Safety portfolio to our stores in the Kansas City metro area,” said StorageMart CEO Mike Burnam.

Property features include indoor and outdoor vehicle parking, climate-controlled and drive-up units, dock-high access for large moving trucks and semi-trucks, retail stores with moving and packing supplies, perimeter fencing, gated access, and video cameras. StorageMart plans to upgrade the lighting at all of the properties.

Headquartered in Columbia, Mo., and founded in 1999, StorageMart owns and operates 163 storage facilities in the United States and Canada.

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California Self Storage Association Board Member Seriously Injured in Head-On Car Crash

Karen Jones, a board member for the California Self Storage Association (CSSA), and her husband, Scott, were seriously injured Nov. 22 in a head-on vehicle collision in Southern California. Both are in intensive care in a San Diego-area hospital. Karen is in a medically induced coma with extensive injuries, including internal bleeding and broken bones, according to Emily O’Leary, who has organized a campaign to raise money for the Jones’ medical expenses.

“While Scott is showing signs of improvement, Karen's injuries are much more extensive,” O’Leary said. Both were scheduled to undergo surgery on Tuesday, according to “The Storage Facilitator,” an industry blog.

A drunk driver is suspected of causing the accident, according to the information O’Leary posted on YouCaring.com, a Web-based fundraising platform. As of Nov. 26, the donation campaign has raised more than $15,000 toward a goal of $50,000. Donations will be accepted through March 31, 2015.

“While Scott and Karen recover, they will both be out of work for an undetermined amount of time. Not only will they need to cover their regular monthly bills, they now also need to pay for their medical bills and any other associated costs,” O’Leary wrote. “Karen has spent her life caring for others; it's time we all help her and Scott!”

Karen Jones joined the self-storage industry in 2011 when she became director of Kure It Cancer Research, a nonprofit dedicated to funding kidney and other cancer research. The group was founded by industry veteran Barry Hoeven and has been supported by numerous self-storage operators and vendors. Jones currently serves as a consultant with StoreLocal Corp., a co-op of private self-storage operators in Canada and the United States. The group leverages the combined strength of its membership for services such as financing, marketing and technology.

“We were devastated to learn of this tragic news,” CSSA Executive Director Erin King told the Facilitator blog. “Our thoughts and prayers go out to Karen, her husband, Scott, and her children during this difficult time.” The CSSA is a nonprofit trade association dedicated to supporting the self-storage industry in California. The group offers educational events, networking opportunities, legislative advocacy and more.

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Metro Storage Opens Converted Sears Building as Self-Storage in Bannockburn, IL

Update 11/26/14 – Metro Storage has opened its newly converted self-storage facility in Bannockburn, Ill. The new facility includes 383 interior, climate-controlled units. Two additional buildings are under construction and scheduled to be complete in February. The new structures will add 314 units. Once finished, the facility will add 75,175 rentable square feet of storage space to Metro’s portfolio.

“There is strong demand for self-storage in the Chicago area and elsewhere,” Nagel said. “This is an exceptional facility in a great location to meet the storage needs of the surrounding community.”


4/7/2014 – Metro Storage LLC, which operates more than 75 self-storage facilities in 11 states, plans to convert the former Sears Parts and Repair Center building in Bannockburn, Ill., to a Metro Self Storage facility. The company will use the property’s existing 54,000-square-foot building and add two single-story buildings for a total of 97,500 gross square feet and 700 units. The demolition and conversion begin this month.

Slated to open in the fourth quarter of this year, the new store at 1951 Waukegan Road will include climate-controlled drive-up units and interior loading docks.

The project will be Metro’s 17th store in the Chicago area. It will serve the towns of Bannockburn, Deerfield, Highland Park, Lake Forest, Lincolnshire, Riverwoods and other surrounding communities.

“We’re excited to expand our presence in Chicago’s North Shore suburbs,” said Matthew Nagel, chairman. “This is an outstanding location in an exceptional community. The property has great visibility from a major thoroughfare and the building is well-suited for conversion to self-storage.”

Headquartered in Lake Forest, Ill., Metro Storage is a privately owned, fully integrated real estate operating company specializing in the development, acquisition and management of self-storage facilities nationwide.

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Smart Strategies for Managing Your Self-Storage Rental Rates in 2015

Percentage Dice Rates

Part of creating an annual operating budget for your self-storage facility involves determining where the rental rates currently are and where you want them to be in the year ahead. If you’re a site manager, you can help your owner plan by doing a comprehensive review of your customer base. Is the time right to eliminate some or all of your discounts? Are your “board” rates in line with those of your competition? Finally, can you effectively increase facility income without sacrificing occupancy?

Many managers are reluctant to raise rates for existing customers because they fear a mass move-out event. Generally speaking, this rarely happens. The fact is, if you have high occupancy within a certain unit size, you can slightly raise rates for these renters, and a majority of them will stay.

For example, let’s say you have 100 units of a specific size. You charge $100 per month, and the units are 95 percent occupied. Assuming everyone is paying on time, you’re generating $9,500 per month on these units. If you increase the rate a mere 5 percent, or $5 per month, you’ll raise your monthly income by $475 if all the tenants all stay.

Now let’s say five customers move out because of the increase. This drops your profit margin by $500 per month, but you can now rent the newly empty spaces at the new rate. If you fill all five of them, you make up that $500, plus you’re another $25 ahead. On top of that, you’ll make $105 instead of $100 per unit per month on the remaining five vacant units. This may seem insignificant, but the extra income can offset some of the probable increases in utility costs, insurance and other facility expenses during the year.

Stop Discounting

Another way to increase your income is by eliminating discounts. Let’s revisit our example from above, but this time we’ll assume you have 50 customers paying $100 per month and 45 customers paying $90 per month due to a discount. You’re generating $9,050 per month in income.

By increasing the rental rate for those 45 discount customers by just $5 per month, you increase your income by $225 per month, and they’re still paying less than your board rate. However, you’ve now gotten them closer to where you want them. Assuming the occupancy trend continues, you should be able to raise their rate again in about nine to 12 months and show continual increases in revenue.

One of the ways to justify a rate increase (if you feel like you need to) may be to simply see what your competitors charge for a similar unit. If you’re charging $100 for a certain size and your closest competitors are charging $110, you can increase your rate by 5 percent and still be lower. You can certainly use this as a marketing tool.

However, even if you move your rates closer to the top of the market, you should be able to emphasize the positive features of your facility that will entice customers to spend their money with you vs. “the other guys.” You should feel confident enough about your operation to be able to do this.

The Question of When

When it comes to raising rates or eliminating discounts, the question is often when to do so. There are many different strategies you can use. You can change rates based on a customer’s anniversary date, or the season, or the customer’s length of stay, etc. The most effective time to raise rates is when occupancy in a particular unit size is high. You want to be relatively sure that the next customer through the door will be willing to pay a little bit more because the demand is there.

Any time you see the traffic to your facility increase, you should be thinking about raising rates:

  • First, increase your board rates.
  • Second, increase the rates of existing customers who have discounts.
  • Lastly, increase the rates of customers who were (until step one above) paying board rates.

Have a plan that will take advantage of increased demand before it actually happens. It’s easier to raise rates on future customers than existing ones.

Consumers will often continue to buy goods and services even though the cost goes up. For example, fast-food restaurants are slowly increasing their prices by 5 percent to 10 percent, but people are still buying their food in record numbers. Why? Because the demand is there.

The self-storage business is no different, yet we are often reluctant to raise our rates for fear of overpricing and losing occupancy. By employing a strategy as outlined above, you take a small risk to increase your income, but you have a lot to gain when the rate increases take effect.

Our costs are increasing every year. To maintain a profitable operation, you must have a tactic to raise rates and your overall profitability. After all, we’re in the business to make money, and we should regularly embrace the challenge.

Analyze your rates compared to your competition, review your customer data files, and raise rents on discounted units first. If your occupancy is high in a certain unit size, raise it now before the next customer comes in. You’ll start seeing improvements in your income stream immediately.

Mel Holsinger is president of Professional Self Storage Management LLC, which oversees the operation of more than 40 facilities in Arizona, Colorado and Texas. Mr. Holsinger has been in the self-storage industry for more than 25 years. To reach him, call 520.319.2164; e-mail [email protected]; visit www.proselfstorage.com.

Stor-Age Self Storage of South Africa Recaps 2014 Growth, Performance

This video from Stor-Age Self Storage in South Africa highlights the operator’s growing portfolio and 2014 performance. It stylishly takes viewers on a fly-by of facilities—including Africa’s tallest and largest properties—teases five current development projects and recounts a busy year that included 7,000 move-ins at its 28 operating locations.