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Articles from 1997 In December

Inside Self-Storage 1/98

The National Institute of Self Storage Education (NISSE)™ provides all levels of education and training to the self-storage industry. NISSE originated through the concepts and input of respected self-storage industry leaders across the country to ensure accurate and quality education and certification.

NISSE is the only educational source that provides professional designations and recognition for self-storage professionals. The professional designations offered by NISSE are the Certified Self Storage Manager (CSSM™) and Certified Self Storage Supervisor (CSSS™) Programs. The CSSM and CSSS programs are similar to accreditation programs offered to on-site managers and supervisory-level personnel in other property management fields (i.e., apartments and commercial real estate).

The primary goal of NISSE is to educate, accredit and recognize individuals who are committed to distinguishing themselves in meeting the needs of those they serve, the industry, the owners and, most importantly, the customers.

Seminar and workshop topics offered by NISSE include sales and marketing, telephone techniques, customer service, administration and operations, audits and inspections, employee hiring/supervision/retention and liability issues. NISSE also provides custom and individualized training, contract training, consulting, new facility startups, audits and inspections, employee handbooks and operations manuals.

To better understand what NISSE offers, let's take a look at some of the most frequently asked questions related to the institute:

How is NISSE structured?
NISSE is comprised of a certification and advisory committee that includes respected self-storage leaders who have been selected to assure industry-wide representation. The committee's primary responsibility is to review and approve course materials and class instructors. Cheryl Yeager is the founder and director of education.

Yeager has more than 17 years experience in real-estate management, with heavy emphasis on training. Using hands-on experience, she has developed and implemented numerous sales, management and marketing programs currently in use by companies throughout the country. Additionally, Yeager has instructed real-estate management certification programs for many years and is one of only six nationally accredited instructors with the National Apartment Association. Yeager is also a professional member of the National Speakers Association and has conducted many seminars and workshops at self-storage industry trade shows and conventions.

Why was NISSE formed?
The self-storage industry has become substantially more technical, competitive and legally complex and, as such, the needs of self-storage owners and operators have changed. More and more information is required to effectively operate and manage a highly profitable facility. Upon becoming actively involved in self-storage development, consulting with on-site managers, supervisors, owners, developers, vendors and other industry consultants, Yeager discovered that companies and individuals seeking to achieve higher and more competitive levels within the self-storage industry nationwide, not only wanted, but required more quality, affordable education and recognition to achieve their goals.

Why is NISSE providing the education and certification programs, rather than the industry associations?
The way in which business is conducted is rapidly changing in all facets of today's competitive business climate. The "outsourcing" concept is being recognized as a more efficient and affordable way for companies to obtain services than the usual standards of yesterday. It is proven fact that those who specialize in a particular aspect of a field are more qualified, dedicated and educated, which allows them to efficiently and effectively compete in their respective areas of expertise. Simply put, "we can no longer assume that the rules we played by in years past are still correct for the changes of today. We must continue to improve on what we are doing today." For whatever reasons, many owners and operators choose not to affiliate, join and pay membership dues to associations. NISSE is a non-political affiliated organization focusing on the best interests of all self-storage owners, operators and managers. Anyone desiring to contribute, attend or instruct seminars and workshops may do so without prejudice, regardless of membership in any association. Additionally, associations are encouraged to participate in the programs and to recognize their members involvement and achievements. Several associations have acknowledged the educational benefits of NISSE. These associations actively contribute to and utilize the resources of NISSE on behalf of its membership.

What are the benefits of my employees attending educational seminars and workshops?
With evolution of the self-storage industry from the mom-and-pop operations from past years into the highly competitive business mainstream, it is imperative that employees be equipped with the necessary information to be effective and confident in handling any given situation. Knowledgeable employees understand through education, experience and example how to operate a more efficient and profitable business. Additionally, they are more effective and credible with their customers. It is proven that it is a basic human need to continue to learn and become all one can be. Employees are more loyal when they are supported and given the tools they need to be confident in their jobs. Therefore, owners who provide education and ongoing training opportunities experience less employee turnover and expense.

What is the cost of the certification program?
For an individual to obtain the professional designation of CSSM, it may cost as little as $545. The candidacy administration fee is $50. Each class costs approximately $99 and includes all training materials, textbooks and exam fee. Elective credit costs vary, depending upon the individual and may be obtained in numerous ways. For example, industry trade show and convention attendance that include approved seminars and instructors, legal seminars, membership in industry associations and other real-estate associations, other approved workshops and seminars, etc.

How long does it take to complete the certification program?
The candidacy period is two years and may be extended for an additional year. The length of time will vary depending upon each individual's dedication, participation and attendance in the mandatory curriculum, as well as the elective credit time. The mandatory curriculum for the CSSM program includes five modules that consist of five one-day classes.

Where and when are classes conducted?
Classes are conducted throughout the country. The frequency in which they are held is determined by the participation, attendance and demand from the specific area. The following is a partial listing of cities scheduled for 1998:

  • Atlanta, Ga.
  • Baton Rouge, La.
  • Cincinnati, Ohio
  • Chicago, Ill.
  • Dallas, Texas
  • Denver, Colo.
  • Houston, Texas
  • Los Angeles, Calif.
  • Nashville, Tenn.
  • New York, N.Y.
  • Orlando, Fla.
  • Raleigh, N.C.
  • San Francisco, Calif.
  • Seattle, Wash.

Check future issues of Inside Self-Storage for dates and locations. For more information about NISSE, call (800) 464-6524.

Waterwood Self Storage

Waterwood Self Storage

Edmond, Okla.

By Jeff Sacks

Bill Howard is a modest man to say the least. After all, he runs several successful self-storage facilities in Edmond, Okla., and attributes his good fortunes to nothing more than the fact that Edmond has virtually doubled its population over the past 10 years.

"I have the right location and the right town, and the right location in that town. It's not any real tribute to my intelligence; it just happens to be in the right place at the right time. It's nothing I did particularly," says Howard.

Humble Beginnings

Howard first got into the self-storage industry after attending a mini-storage convention in San Francisco in 1983 with his friends Bob Williamson and Joe Looney. The friends owned a Budget Mini-Storage in Oklahoma City that they started around 1979, one of the first projects of its kind in the area.

"They were enamored with mini storages, and then I became enamored with them," Howard continues. "I owned a piece of land in this little town of Edmond, and I went ahead and built the first phase of a project there in the west part of town."

Howard was in commercial construction, erecting a line of metal buildings for other people and for himself. Then the idea of constructing self-storage facilities came to him and, as he says, "The mini-storage business seemed to be an easier, more profitable venture than a free-standing building. So I just naturally drifted into the mini-storage end of the business. I still contruct buildings, too, and operate other businesses, but mini-storage is one of the better things I do." And by better, you can bet he means more profitable.

Howard started in self-storage with a 20,000-square-foot project called Edmond Extra Storage, which he has since expanded to 54,000 square feet.

Of his first attempt in the self-storage industry, Howard says, "It was a nice mini, but I made the mistake of building it off the main road and sold the lot in front." This, of course, hid it from the view of passersby and hurt occupancy rates.

However, a few years ago he added an extra building that is tied to the main road, and this has brought up occupancy rates at the facility to the mid-90 percent range.

Then in April 1994, he built the project he is most proud of--Waterwood Self Storage, a 63,500-square-foot facility located one mile east of downtown Edmond.

Location, Location, Location

When you have a good location with a growing population, what better way to maximize your business than by building more self-storage facilities in the area?

Although he'd probably deny such economic strategizing, that must have been some of what was going through Howard's mind when he built Waterwood Self Storage.

"We're in a growing town, probably the most booming town in Oklahoma right now," he says. "There are a lot of new developments and a lot of new homes in this particular little town. When you have a lot of people coming and going, a lot of subcontractors, a lot of people building new homes, a lot of new businesses coming to town, you pick up a lot of tenants from that."

Waterwood is in the center of a partially developed office, hotel and restaurant area, across the street from the Ramada Hotel and next door to a Denny's restaurant. The University of Central Oklahoma, the state's second-largest college, is within view of the facility. Frontage is limited, but adequate.

According to Howard, Edmond is an upscale, bedroom community located 10 miles north of Oklahoma City. It is a college town, but only 30 to 40 college students are Waterwood tenants. "Customers seem to be divided, about 60 percent residential and 40 percent commercial. We have a lot of people moving into this area--probably over 50 subdivisions being constructed--so we rent units to people waiting for a house, subcontractors, retirees and so on."

Mission Possible

Waterwood was a challenge to develop for several reasons, says Howard. "Land is very expensive, three- to four-acre sites are scarce, and re-zoning is heavily contested on all commercial projects."

Howard had the good fortune to find an excellent location that was properly zoned and also included an offsite, master water-detention facility.

However, "Even with zoning and water detention pre-approved, it still required four Edmond planning board meetings and two Edmond city council meetings before a building permit was issued," says Howard.

City of Edmond requirements include extensive landscaping, brick and wrought iron fencing, precast walls, limited door exposure and a residential appearance for the office.

"In addition," Howard adds, "we were faced with a site that was about one-third solid rock and sloped 26 feet from north to south."

After extensive engineering, Howard's people came up with a plan to drop the buildings 2 feet for every 40, and erected a 12-foot step wall on the rear of the property.

"Most of the facility on three sides is totally enclosed with aggregate wall panels, including the retaining walls. All the wall panels were precast in Oklahoma City, then trucked to the site and erected," says Howard.

The overall building layout of Waterwood Self Storage is a pleasant-looking residence/office facility with 16 storage buildings. There are 500 units, ranging from 5-by-5s to 10-by-25s. The current occupancy rate is 92 percent, and usually runs around 95 percent during the spring and summer months.

Location aside, one of the other aspects of Howard's facilities that make them more successful than some of the others in town is that he tends to build nicer-looking projects.

"We've done a lot of brick, wrought iron and landscaping, and tried to make it look upscale. I think people tend to want to go to a nicer-looking project. There are some older, shabbier-looking units in town, and we seem to do better than they do. We seem to get better rates and better occupancy, and I think we have better location," he says.

However, he offers up this piece of advice: "I think it always pays to do things with a little bit better quality. You get better tenants and better managers."

Security Measures

Waterwood is operated with an "open gate" policy, with hours of 7 a.m. to 7 p.m. There is a 24-hour surveillance camera that uses VCR recording.

"Our most important security measure is to require all customers to use a round lock or a 2-inch (#5 Master) lock on all doors. These locks are almost impossible to cut and have eliminated most burglaries," says Howard.

"It's amazing that people will put $10,000 worth of goods in a unit and then use a $2 padlock to secure them."

The managers of the facility, Sammy and JoAnn LeGrande, live in a spacious 1,600-square-foot space, which includes a double-car garage and a 300-square-foot office. They started with the project when it originally opened in April 1994.

With the help of reasonable land costs, Howard, acting as the general contractor, was able to bring Waterwood Self Storage to fruition at a very reasonable cost and, he is proud to note, "The finished project blends well with the area. City officials and others who originally protested the project now agree that it is an asset to the community."

A Strict Liability Tort

By D. Carlos Kaslow

According to an article that appeared in the July/August 1997 issue of The Self Storage Legal Review, the tort of conversion is the most dangerous claim storage operators face. It can be likened to civil theft of property and is the one tort claim in which storage operators face a realistic likelihood of punitive damages. Understanding this tort and how it can be avoided is important for both the storage- facility owner and site personnel.

The legal definition of conversion is fairly straightforward. A conversion is "Any distinct unauthorized act of dominion or ownership exercised by one person over personal property belonging to another" (7A Am. Jur 2d. Pleading and Practice Forms 164).

Self-storage operators become vulnerable to allegations of conversion when they exercise their remedies against customers who fail to pay rent by the due date. Whenever a self-storage operator interferes with a customer's access to his property, the specter of conversion materializes.

When a space is overlocked or a customer is denied access to the premises, conversion becomes a possibility. A wrongful sale of tenant property is a classic example of the conversion of goods. A storage operator's primary defense to an allegation of conversion is compliance with rights granted by state law or contract. However, the law generally requires strict compliance with the law for these protections to apply.

A Strict Liability Tort

Conversion is a tort of strict liability. Unlike criminal theft, where intent is an element of the crime, intent is irrelevant in the tort of conversion. The fact that the storage operator had reason to believe he had a right to take control of the property does not matter. If the belief was wrong, a conversion has taken place.

This makes strict compliance with the law very important. Under the self-storage lien law enacted in most states, the storage operator is permitted to deny a delinquent customer access to his goods. However, the states vary as to when this right occurs. For instance, in Florida and New Mexico the lien law specifically authorizes denial of access when rent is six days past due. California and Nevada permit denial of access 14 days after sending a notice to the customer that such action will be taken. This translates into 30 or more days after the customer misses a rental payment. Jumping the gun can lead to a successful conversion claim.

Storage operators in states that do not permit denial of access for 30 or more days frequently ask, "Can we code them out of the gate just to get them in the office so we can discuss the rent situation with them?"

The answer depends on your risk tolerance. The lien laws in states like California and Nevada are quite specific as to when you are legally permitted to deny access. A court could conclude that any interference not authorized by the statute is a conversion. This suggests that if the storage operator permits access to the property after "getting the customer's attention" about the payment problem, a conversion has not occurred.

A policy of denying your customers access before it is permitted by statute, even if it is simply to get the customer's attention, can still be dangerous. It is unlikely that the self-storage operator will ever be sued for merely denying a customer access to the storage unit. Early overlocking becomes a problem when a suit for wrongful sale is brought. The plaintiff attorney will closely examine your delinquent tenant procedures. Early overlocking may seem rather trivial to you, but it will be used at trial to show your craven disregard for the rights of your customers.

What makes conversion claims especially difficult for storage operators are the damages that are typically available to successful claimants. Under most state laws, the customer can recover the full value of the property. Even with items that have little market value, courts are very liberal in valuing converted property, interest and in many states, punitive damages that can make conversion suits especially risky for storage operators.

Tenant Can Collect Punitive Damages

Punitive damages are available when the storage operator's conduct is "outrageous because of defendant's evil motives or his reckless indifference to the rights of others" (Restatement 2d. Of Torts ß 980(2) (1977)). While this may appear to be a very high standard that no responsible self-storage operator would ever breach, experience demonstrates otherwise. Juries have shown a willingness to find landlords' behavior outrageous when they have made technical errors in implementing their legal remedies for failure to pay rent. Appellate courts will give great deference to jury findings and frequently affirm such awards.

Nearly every self-storage operator will face claims of conversion at some point., so a working understanding of its consequences are vital to the development of operating procedures that will make missteps less likely. It usually becomes an issue when customers fail to pay rent and a storage operator begins to exercise his legal remedies. If you strictly comply with the law, a customer's conversion claims generally fail. A successful claim requires the storage operator to forget that the property in "his" storage unit belongs to someone else and cavalierly disregards the legal rights of his customer.

The following article was excerpted from The Self Storage Legal Review, a bimonthly newsletter on legal issues pertaining to the self-storage industry. For more information or to obtain a subscription, contact D. Carlos Kaslow at 2203 Los Angeles Ave., Berkeley, CA 94707; (510) 528-0630.

Opinions on legal matters are those of the editors and others; professional counsel should be sought before any action based on this material is taken.

State of the Industry

State of the Industry

Will the Boom Continue?

By Cecile Blaine

They say hindsight is 20/20. That's why we must look to the past in order to anticipate the future. It is especially true in gauging the health of the self-storage industry. Since self-storage is a real-estate function, it is subject to its business cycles, with few people actually agreeing on what part of the cycle we are in at any particular moment. However, we can look around us, to the past and to the present to analyze where the industry is heading.

Since industry experts began recording statistics in the early '80s, we have been able to look at the development of the self-storage industry and identify cycles, trends, growth spurts, stable periods and downturns with accuracy. What is confusing is that the various economic indicators of the industry aren't always in sync with each other; they may even contradict each other, with one area waiting to catch up to another. For example, new construction may be brisk, while rental rates and occupancy are leveling off or even dropping--as is the case with the current business cycle. That's why determining the health of the self-storage industry can really only be an exercise in educated guesswork--that is, until the year is behind us, and we have numbers, figures and hindsight on our side.

Self-storage was officially born in the mid-'70s in the southern states, areas of the country teaming with multifamily housing, roving populations and few basements to store belongings. Mainstream developers discovered self-storage as an investment in the mid-'80s. The word on the street was that self-storage was tantamount to easy money; cheap land, easy development, low overhead, few staff members and little management added up to excellent earnings in the eyes of developers. The result was a building boom that lasted several years with a number of newly converted self-storage gurus.

By the late '80s, however, a profitable, fledgling industry was turning into a bloated, overbuilt one with high vacancies and mortgage payments and sagging rents. It continued into the early '90s, with the market finally hitting its lowest point ever from 1990 to 1992, with many facilities across the country repossessed by lending institutions and the RTC.

Consumer demand eventually grows to meet supply in real-estate business cycles, as it did by the middle of this decade, and the market began to stabilize. The advent of REITs has led to increased sophistication, a wealth of financing from Wall Street investors, expansion of the typical facility and a hot market for existing facilities.

Let's look at where the industry is today.

Occupancy Rates

According to the 1997-98 Self-Storage Almanac, national rental rates for 1997 dipped about 3 percent from 88.3 percent in 1996 to 85.1 percent in 1997. Nevertheless, over a 10-year period, the Almanac's 1997 rates are still nearly 5 percentage points higher than 1988 figures of 80.4 percent.

When looking at that set of statistics only, it is easy to assume the industry is on the downside of the business cycle, but many would disagree. Dave Cook, president of Tech-Fast of Tacoma, Wash., is one of those people. "I think that's a reflection of the amount of inventory that's been brought into the market," Cook says. "You can look at isolated communities and areas of the country that...are overdeveloped, saturated. (However), development will shift to other regions until that inventory can be occupied."

Still others say that the industry has overemphasized the importance of occupancy. "That's the sacred cow of self-storage," says Mike Burnam of Storage Trust Realty, based in Columbia, Mo. "We've got to keep our facilities full. Why?"

Rental Rates

There are few national indicators of rental rates in this industry. According to the Self-Storage Almanac, rents on five out of eight unit sizes fell in 1997 compared to 1996. Presented with these statistics, the chief operating officer of one of the largest self-storage real estate investment trusts (REITs) is moved only by disbelief. "For a fact, I know they have not," argues Mike Burnam of Storage Trust Realty of Columbia, Mo. "Ours have gone up 8 percent," from $7.01 per square foot in the third quarter of 1996 to $7.69 in 1997.

Maurice Pogoda has a different perspective. As the president of The Pogoda Group in Farmington Hills, Mich., he says the many projects planned for his market this year are bound to push rental rates down. "I don't see us being able to get anything but measly rent increases this year--if at all," says Pogoda, who currently manages 19 facilities encompassing 1.2 million square feet. "We eked out what we could last year, and we still have projects in the mid '90s. But there's a palpable sense that it's not as strong as it was in 1997. It wasn't a dramatic difference, but as new projects come on line, it siphons off a little bit here and there."

Availability of Financing

One of the most prominent changes in self-storage in recent years is the development of REITs and the resulting insurgence of money available for financing.

Buster Owens of Rabco, the Ocoee, Fla.-based self-storage engineering and construction firm, says the amount of money available for construction is unprecedented. "The availability of money in the market to do construction is higher than it ever has been," he says. However, it isn't just REITs that are flush with cash. Management companies are finding other sources for financing, such as pension funds, Owens says.

Pogoda has also seen the financing landscape change significantly in the 10 years he's been in business. "Financing has changed so dramatically over the last two years," he says. "We've got financiers fighting over who can give the lowest rates and the best interest."

The question then arises "How much is enough?" Too much money in the economy can fuel inflation and too much in the industry can fuel a recession. Tech-Fast's Cook doesn't worry about the abundance of funds in the system. "I don't feel that it is out of control," he says. "I don't feel that financing is so available that (lending) is done without good judgment. The due diligence that (our customers) go through is certainly prudent and something I think is relatively sound. Financing is not free. It is available, but you still have to show where that's a reasonable risk. Having gone through the collapse of the savings-and-loan industry, that's not something that people have ignored and forgotten."

Not everyone is so optimistic. "Instead of 80 percent loan-to-values, I'd still prefer to see 70 percent loan-to-value, where people have to know their business and they have to be willing to put their money where their mouth is," Pogoda says. As he sees it, the current system "lets people open up facilities that haven't done their homework."

New Construction

Storage Trust's Burnam sees only one direction for the self-storage industry: up. As good values in the market are getting few and far between, the company is beefing up its plans for new construction in 1998. Burnam says $10 million is budgeted for in-house construction and $10 million to $20 million for joint ventures.

Cook says the amount of business his company is enjoying reflects a still-rising level of new construction. In fact, all of his barometers for business--inquiries, quotes, responses to advertising and existing business--indicate that good times are ahead. "The level of activity is still strong," he says.

Rabco's Owens, whose customers include some of the larger management companies and REITs, sees a similarly sunny outlook for the industry. The types of facilities he is building on the East Coast are generally larger than in the past. "A lot of that is attributed to all of the REIT money in the market," says Owens. "The availability of money in the market to do construction is higher than it ever has been."

Site Selection/Facility Design

The process of site selection has gone through its own cycle over the years, strongly influenced by REIT activity and the increased legitimacy of the industry. When the industry first started, developers often chose sites that were out of the way, irregularly shaped or in some way unattractive. They could be located in an industrial complex or have very limited street access with most of the facility out of view. By purchasing these relatively inexpensive, odd pieces of land, developers could enjoy profits sooner. According to Owens, the REITs have upped the ante over the years--building on land that is much more expensive, much more attractive to other developers. "What they are doing is paying premium prices for class-A sites," says Owens. "Therein lies the big difference.

"It's not uncommon for Shurgard to pay $795,000 or $800,000 for a four-acre piece," Owens continues. "It's not top dollar, but it's class-A exposure."

As a result, the definition of a "good site" has changed, says Cook. "The difficulty these days is to find that affordable site that can provide a return on their investment in a location where there is demand--at a reasonable price," he explains.

The type of site that larger developers are looking for hasn't changed, according to Burnam. "I still want my site to be in between Burger King and Taco Bell with McDonald's across the street, WalMart on the corner and a car dealership on the other corner," he says.

Facilities themselves have become larger, by most accounts. One of the most recent differences is that, as a rule, developers would build two-story facilities on expensive land in urban settings. Now, some say, REITs will put up a two-story facility almost anywhere.

Economies of scale and more attention to efficiency by the larger management companies may also explain the larger size, since those larger facilities offer the kinds of revenues that will pay for the property sooner than a small one. "You can spread your costs over more square feet," says Burnam. "Therefore, you can afford to pay for that location."

But what about individual developers? They don't have the bankrolls that the REITs do. Pogoda says he has seen site selection go full circle. "When I first got into the business, a lot of facilities were being built in what we most all agree are not great locations," says Pogoda, whose clients are mainly smaller independents. "Then for a while, the pros were stepping in and building in the A-1 locations. It's almost like the '80s all over again. We are seeing in our markets so many people who want to get in on this self-storage thing that they've heard so much about. So, they are building in locations that I personally would not build in. So, it's almost come full circle--but only in a negative way."

With the growing competition from REITs, which everyone admits has only made the industry stronger and more respectable, smaller independent management companies must pay more attention to operations. "If you are an individual developer, I still believe in the need for phasing," growing only when the immediate demand has been satisfied, says Owens. He also suggests more emphasis on curb appeal and meeting toe to toe with the big guys on amenities, such as climate control, security features and other extras.

"Bells and whistles are going to go a long way," he adds.

Facility Sales

One shortcut REITs can take in showing their investors an immediate profit--avoiding the construction phase altogether-- is by acquiring facilities. And they have been buying them up in droves. Storage Trust, for example, has more than $100 million budgeted for acquisitions in 1998.

"They have to show earnings immediately, especially with the Wall Street money," Owens says. "They can't just spend this money just to spend it. It's got to pan out, because if it starts hurting their earnings, they'll probably take a beating on the open market."

With the wealth of funds available for purchasing facilities, it has been a seller's market for the past several years. As an example, U-Haul has acquired approximately 150 facilities since 1992, according to Carlos Vizcarra, vice president of storage and corporate moves. The company has no specific budget for acquisitions for 1998, because as Vizcarra says, "We avoid restricting our budget so as not to limit growth opportunity. We will look at any size property or portfolio anywhere in the U.S. and Canada."

Where Do We Go From Here?

Is national saturation and recession just around the corner for the self-storage industry? There are a few who see the current financing situation as a sign of future overbuilding and a repeat of the late '80s and early '90s.

"Suddenly, what was learned from the S&L crisis and the real-estate depression of the early '90s has been forgotten in 1997-98," says Pogoda. "It is very disconcerting. We'll probably bottom out a couple of years from now, where average occupancy rates will be in the low- to mid-'80s."

Some recognize a downturn, but are not particularly alarmed by it. "I don't think that's a concern," says Cook. "I think that's a natural cycle."

But the view from the top is clearly grand, with larger management companies and REITs not aware of any end to the good times. U-Haul's Vizcarra says, "The health of the self-storage industry is contingent on continuing economic gains, and the future looks bright."

Valuing Your Facility

Valuing Your Facility

Part II

By R.K. Kliebenstein

There are three basic approaches to valuation that are commonly recognized in commercial real estate. The first is the income approach, which we discussed in detail in the September issue. The second method of evaluation is the "cost or replacement approach," and the third is the "sales-comparison approach." This discussion will help you understand these last two approaches. While they both play minor roles in the overall valuations of the facilities, they also can be benchmarks in determining value for insurance purposes as well as other non-traditional acquisitions or refinance disciplines.

Cost or Replacement Approach

Perhaps the easiest method of supporting valuation at cost or replacement is a per-square-foot calculation with a factor that represents the average cost to rebuild self-storage. This is perhaps the most simple method, although not the most accurate. It has the greatest utility when being applied to an existing facility, but becomes much more difficult and less objective as one considers this for a vacant land/development site.

If your goal is to obtain a rough idea, and extreme accuracy is not important, one could easily call any of the major self-storage building contractors and ask them what is the average cost per square foot for building self-storage facilities in a specific locale. Add the cost of land, and you have a value--albeit not a very accurate one. Nevertheless, if this is juxtaposed to your current site, you will get a rule-of-thumb valuation.

The cost approach can be very accurate when properly applied, for example, on a new or proposed facility. The challenge in using the cost approach on an existing, or particularly old building comes in trying to estimate total accrued depreciation.

Additionally, it can be said that the cost approach is a reflection of cost and not value in up markets. Most institutional investors and lenders today are starting to ask for the cost approach as they wish to know a couple of things only the cost approach can tell them.

First, they want to know they are not overpaying or over-lending, because no property is worth more than the cost of obtaining an equally desirable substitute property. Secondly, they want to test the question of highest and best use, which they can do only by knowing the land value. Thirdly, they need to know the insurable value, which is based upon costs.

Most investors want to know the ease of entry into a market. The availability and cost of competitive sites would be disclosed by a cost analysis, as would the cost of building a modern and highly competitive facility.

Contact with self-storage and/or building construction companies can often provide the greatest amount of useful information in determining a valuation through cost approach.

To become more precise or to measure this valuation in a development application, let's first start with land replacement. Land replacement has several factors that must be identified in the valuation process, including the following:

Traffic Count Demographics

  • Size of Parcel
  • Proximity to Development
  • Neighborhood Attributes
  • Topography
  • Availability of Utilities
  • Zoning
  • Environmental Issues
  • Wetlands
  • Deed Restrictions
  • Ease of Obtaining All Entitlements Necessary to Construct Self-Storage

One could spend a great deal of time analyzing each of these, but let's focus on the most important:

Traffic Count. The benchmark for traffic count in a 24-hour period is approximately 10,000 cars. Anything less than 10,000 devalues the property and traffic. Inversely, a traffic count of more than 10,000 enhances the value. It should be noted that the count itself is not the only factor. Other considerations include the speed of traffic, size of the window or opening through which the site is viewed, barriers to access, ease of ingress/egress and signage restrictions.

Demographics. While there are no absolutes in demography that point to a successful self-storage facility or the value thereof, one would only point out that population counts within a market area should be approximately 25,000. Equally important in the analysis of how many are in the population count are the number of self-storage facilities that serve that population count. Other key demographic indicators are persons per household, median income per household, median income per capita, median age of household, percent of renters vs. owners, and number of units in the structure.

Neighborhood Attributes. Perhaps the most important contribution the neighborhood makes to the valuation of the facility is the composition of its populace.

Sales Comparison Approach

While this may be the least significant of the three methods, the sales comparison approach, commonly referred to as the market approach, is also a good barometer, particularly from the perspective that no property has value unless--like any commodity--it can be sold in the open marketplace. The market approach simply indicates what comparable properties have sold for in "arm's length" transactions, which means the sale has occurred without the pressures of either buyer or seller having any previous responsibility or future responsibility to one another. That is to say they are not related parties or entities.

There are three overall market approach factors that can be analyzed in comparing the subject facility to those that have been sold. The first method is a comparison of price per square foot. It should be noted that facilities with less than 40,000 square feet are of an entirely different nature, and few comparisons can be drawn to facilities with greater than 40,000 square feet--a caveat to the latter rule-of-thumb to smaller facilities (less than 40,000 square feet) with very high rental rates.

The second methodology in the market approach would be an EGIM comparison or, more simply put, what facilities have sold for. The EGIM is simply a times-earnings ratio, for example, the sales price divided by the total collections from the previous 12 months. All discussions in the previous article about cap rates are applicable here. But, keep in mind: One should only analyze the cap-rate comparison if all of the facts of the income approach are known.

The third methodology is overall sales price. That would be to say that given cap rate, replacement costs, price per square foot, size and location, the price for one self-storage facility could be compared to another.

The most critical element in the market approach is verifiability of data. While listings and offerings may be good benchmarks in themselves, they are not significant enough to derive valuation. It is the sold transaction that governs all market approach discussions. That information should be verifiable through either the source (buyer or seller) or through a credible third party who has had access to documentation provided by buyer or seller to determine value.

A good relationship with an MAI appraiser who may be able to share this data would be significantly helpful in determining the market approach of valuation to a property.

One Final Word

A professional real-estate appraiser should play a significant role in determining a value for your property. Be very selective with whom you engage for the appraisal process. Check the certifications and designations, but also have the appraiser establish credibility through experience. Nothing like the tried-and-true experience in performing 40 or 50 self-storage appraisals can be substituted. It is not a belief among institutional buyers or financiers (generally) that a local MAI appraiser has any advantage over an appraiser who works on a global basis and has in-house databases and access to sale information. It should be noted that most local appraisers do not have the resources of a national appraiser, but that those appraisers who specialize in self-storage appraisals will often use the services of a local appraiser to get specific information from the venue of the subject property. Finally, it may be in your best interest to seek the services of an appraiser who has specialized in self-storage real estate.

The valuation process by an owner is often the most difficult because it lacks objectivity. The purpose of this reading is never intended to replace the professional appraisal, but simply to give storage owners a view of valuation from an institutional purchaser and former financiers' perspective.

R.K Kliebenstein is the director of acquisitions for The Amsdell Companies of Cleveland. Prior to his current assignment, he worked for Westar Management in Las Vegas, where he was responsible for new store marketing. His tenure in real estate dates back to 1979, with a focus on self-storage since 1990. Mr. Kliebenstein may be reached at (800) 234-4494, ext. 227.



DCAL Computer Systems has acquired all rights, assets and product offerings of Acorn Management Systems, including UNItroller management and UNIkey access control products, and has established the "Acorn Products Division" to market and support the Acorn Products.

DCAL has been serving customers in the dry cleaning and laundry business as well as other markets for more than 12 years. One of the primary commitments of DCAL is customer support. DCAL professionals stay in touch with customers and provide them an 800- number to use should they any information or support services.

In an offering to show goodwill, the company is also currently honoring all paid service-support agreements for Acorn Management Systems Inc. customers. Simply send a copy of your paid agreement to our office, and service will be honored at no additional charge to the customer for the remainder of the agreement period. The support agreements from Acorn Products Division begin when the previous agreements expire.

Acorn Products have been serving the computerized management and access-control needs of the self-storage industry for more than a decade. Acorn Products have contributed to the growth of the industry and have been enhanced to meet increasing demands for more secure facilities. Today, Acorn Products are poised to meet new challenges and to expand their influences in the self-storage industry as well as new markets.


Acorn's primary products for the self-storage industry include, but are not limited to the following:

UNItroller--Self-Storage Management Software

UNIkey--Access Control Software System

Unique Vertical Lift Gate--and other types of automated gates.


Acorn offers various levels of UNItroller software to accommodate individual needs. The most current version is UNItroller IV, which includes the Custom Reporting Module that allows the user unlimited reporting capabilities. In addition to Acorn's Daily Maintenance and Inspection (DMI) report, the UNItroller IV now offers the HOT DMI and Facility Maintenance report, providing the user with an even more efficient way to keep an eye on what is going on at the facility. The following are the current versions of Acorn's management software.

  • UNItroller 300 (Handles up to 320 units)
  • UNItroller 3000 (Accommodates unlimited number of units)
  • UNImax (Processes multiple data sets from various sites)
  • UNIcentral (Communications software that allows the central office to receive data from multiple sites by modem)

The management software generates a DMI report that furnishes the manager with the necessary information to track each unit. Any unit not meeting all of the standards defined by the software will automatically appear on the DMI report. These units are checked off during the physical inspections, so if something happens to one of the units there will be an evident time frame for the occurrence. Acorn suggests two daily physical checks of the facility using the DMI report. This action narrows the window for occurrences, so stay in control of your facility no matter the size.


  • Acorn's access-control system includes UNIkey access control IBM-compatible software and a 24-volt power supply, which receives a four-wire, 18-gauge shielded cable that is run to each keypad outside. A typical UNIkey package includes the software, power supply, two electronic talking keypads with enclosures, two gooseneck stands and a 250-foot spool of the shielded cable to hook the keypads back to the power supply. The software checks the keypads 24 hours a day to make sure they are functioning properly. The software has audit-trail capabilities to tell you who has entered your facility, how long they were there and when they left.


Acorn is enthused about the opportunities in the self-storage industry and beyond. The company is checking into ways to advance its software products in other markets such as apartment complexes, private parking for corporations, marinas, corporate storage areas, and almost any place where access control is needed.

Acorn Products Division of DCAL Computer Systems meets the need for self-storage security products through the sale of vertical lift gates and UNIkey access control systems. But it also responds to the need for management software that provides self-storage owners and managers with accounting data, ratios and percentages to help them evaluate their operations.

For more information on DCAL Computer Systems and Acorn Products Division, contact Darrell Potts or Gary Trook at 4100 Adams Road, P.O. Box 3936, Bartlesville, OK 74006; (800) 328-DCAL; fax (918) 335-0240; e-mail [email protected].

Relief Managers

Relief Managers

Baby-Sitters Or Part Of Your Management Team?

By Pamela Alton

A typical self-storage facility is open seven days a week and staffed with full-time on-site management that works five days a week, with a team or person to work on the other two days of the week. This team (or person) is generally titled "relief staff," and one of its primary duties is to relieve the full-time managers, so that they can have time off to relax, rejuvenate and attend to personal business.

There are usually three trains of thought when it comes to relief-staff employees:

  1. They are there to act as baby-- sitters--to keep the status quo while the full-time manager is away.
  2. They are hired as the full-time managers' personal "slaves" to do all the cleaning, filing, or work the managers don't want to do.
  3. They are thought of as a very integral part of your management "team."

From a professional standpoint, it is preferable to think of the relief staff as part of the management team. They are responsible for handling all operations for two out of seven days a week and, as such, should be given the same level of training, attention and motivation as the full-time staff.

Let's examine who relief-staff employees typically are, where you find them, the training they should receive and why, and steps to make them a part of your team.

Defining Relief Staff

Generally, relief staff don't reside on-site, but in the general location of your facility, owning a home or renting an apartment. At larger self-storage sites, members of the relief staff might be named "assistants," and may reside in an on-site apartment along with the senior management staff. Although they may work five days a week, three of those days might entail assisting the senior staff on the busiest days of the week. In addition, they may work alone for two days, allowing the senior staff time off.

The relief manager could be an older retired or semi-retired couple or person, a college student, or someone who is just looking for a part-time position to supplement his regular income. Retired couples often make for the best relief managers: They are generally more reliable, flexible as far as work schedules, and are often available to work a temporary full-time schedule in case of an emergency or during vacation time. Typically, too, they tend to stay longer with the company.

Hiring Relief Staff

When looking for relief people, begin searching in your own local community. In a large metropolitan area, don't waste your advertising dollars running an ad in a newspaper that goes to millions of people. It is too costly and covers too broad of an area. Instead, advertising space in a small, community newspaper that may only publish once or twice a week is much more cost-effective. It's less expensive and will likely create a greater return.

Contact the on-site managers at local retirement communities--the 55-plus apartment complexes and mobile-home parks--and ask if they know anyone looking for a part-time position. Ask if you can post an ad in the community hall, recreation area or laundry room.

Call your local churches or synagogues and see if they know of one of their congregation who is looking for part-time work. If you are in a college town, call the college; they usually have a job line, free of charge, where you can post the job opening. Post a "help wanted" sign on the inside of your entry gate, so current tenants exiting your facility can see it. Maybe even place a sign in your office window and ask your current tenants if they know of anyone looking for work.

Be prepared with job applications for the prospective employees to fill out, along with reference check sheets, I-9 and W-4 forms, and a relief-manager's job description of duties.

Your on-site manager should conduct the initial interviews with job applicants, as well as check references of the prospective candidates. Once the field has been narrowed down, then the owner and full-time management staff should discuss each candidate's application and come to an agreement as to which one best suits the management team.

When choosing the person or persons to hire as your relief staff, your full-time management staff should be consulted as to which candidate will best suit the team's needs. Relief managers should not be considered as the owner's "spies" at the facility, nor should the on-site manager feel threatened that the relief manager is out to take his job. They must work together as a team to obtain the results needed to make a facility successful and profitable.

Generally your relief staff will be paid an hourly wage vs. your full-time staff who could receive a base salary plus bonus, benefits and perhaps an on-site apartment. Relief staff may or may not earn a bonus or receive benefits such as medical insurance, retirement plans or so on. The hourly wage should be comparable to what your job market pays for similar types of part-time work, i.e., convenience store, retail shops, reception work, janitorial duties, etc.

Training of Relief Staff

As stated earlier in this article, the relief staff should be considered an integral part of the management team and, therefore, should be trained in a similar manner as the full-time staff. Training should always cover the basics: telephone techniques, facility tours, showing of units, marketing, collections, maintenance, lien sales, customer-service skills and daily, weekly and month-end closings.

Skeptics of such a rigorous training program are likely to wonder, "Why train the relief staff so extensively when they are only there two days a week?" Because, for instance, most tenants do not rent a unit on the same day that they shopped through the Yellow Pages and collected rental quotes. Instead, they come in a few days later and rent space. If the relief staff is not properly trained in telephone techniques, then they will not be able to lure the customers to the site over the next three or four days; hence, rentals will likely drop during the managers' regularly scheduled days. If you pay a per-lease rental bonus, then the full-time manager will not receive as many rentals, yet, the relief manager will get the benefit of renting space because the full-time manager used the telephone effectively. Try tracking your telephone calls, walk-ins and rentals over a month's period and see which days receive the most rentals; you could see a pattern that reflects this concept.

Collection calls and maintenance checks should be conducted on a daily basis, and the relief manager should be trained for both. In addition, should the month's end coincide with a relief manager's scheduled work day, he will need to know how to conduct the month-end reports. And, of course, the relief staff should be well trained in all areas of customer service.

One of the most compelling reasons to properly train your relief staff is that you will always be assured that you have a well-trained staff to take over a new facility should you build one, fill in if a manager quits without giving notice, or fill in during a manager's vacation or emergency leave of absence. You will always have staff available if you take the time to properly train your relief staff.

Making Them Part of Your Team

In order to make your management staff a successful part of your organization, you should take the time to select proper management, give them the tools and training to do their jobs effectively, set attainable goals, reward them for a job well done, give them support and make them part of your management team. By building a quality management team, you are giving individual members of your organization greater control over their lives; they will participate in solving problems and learn from each other as well as from you or your supervisors.

Being part of your team provides opportunities to satisfy many of their higher level needs for self-esteem and acceptance. Don't forget to ask for the relief manager's input. Just because he typically works at your site only two days a week doesn't mean he doesn't have ideas on how to run things more effectively, have new marketing ideas or other skills and talents that you can expand upon.

Making a solid team between your full-time staff and the relief staff will surely increase the facility's income, relieve you of staffing headaches and make a rewarding work environment for everyone.

Pamela Alton is the owner of Mini-Management, one of the industry's largest nationwide manager placement services. Mini-Management also offers policy and procedures manuals, sales and marketing training manuals, inspections and audits, consulting, telephone shopping and training seminars. For more information on the services offered by Mini-Management, call (800) 646-4648.

Customer Storage Insurance

Customer Storage Insurance

Protect Yourself Against Litigation

By David Wilhite

As you may know, every self-storage facility operator may be subject to litigation from tenants who have suffered damage to their goods. The good news for facility owners is that courts have generally held that facility operators cannot be held liable for damages as long as they have made customer storage insurance (CSI) available to their tenants. That's why most savvy self-storage operators offer a CSI insurance program, which can reduce or eliminate a major insurance exposure at zero cost to you while providing a valuable service to your tenants.

CSI can protect your tenants' stored goods while ensuring your peace of mind. By simply making CSI available, you can virtually eliminate the threat of litigation for damages to your tenants' stored goods. Remember, if your facility does not offer CSI, you could be held liable for negligence and/or damages to customers' goods.

It Pays to Know the Facts About CSI

Fact: Every self-storage facility operator is subject to litigation from tenants who have suffered damage to their goods.

Fact: The key element in any legal defense against claims of negligence or liability (on the part of the operator) is whether or not CSI was made available to the tenant while renting.

Fact: Tenants don't sue the facility operator for losses or damages when they can sue the operator's insurance company.

Fact: Today's judges are far more likely to uphold limits of liability contained in a self-storage rental agreement when CSI is offered to customers.

Fact: There are precedent-setting court cases in which the self-storage operator was found not liable for damage to a customer's goods, because CSI was made available.

Fact: CSI must be considered a necessity and must be made available at every self-storage facility.

Protect Yourself With Customer Storage Insurance

It is vitally important that customer storage insurance (CSI) be made available to your tenants in order to reduce your exposure to claims of negligence from those persons who have suffered damage to their stored goods. Universal Insurance Facilities Ltd. provides low-cost, A-rated CSI that will protect your tenants' stored goods as well as ensuring your peace of mind. Universal's program is professionally staffed and underwritten by one of the industry's top carriers, and there is no cost, no paperwork and no program maintenance for you.

For more information, contact William Mattern, Universal's Self-Storage program manager, at (800) 844-2101.

What Does Storage Insurance Cover?

The availability of a comprehensive CSI policy is the easy, low-cost way to protect your tenants' stored goods from loss or damage from a wide variety of perils. Tenants' valuables can be protected for amounts usually ranging from $2,500 to $20,000, and polices can typically be written or renewed in three-month, six-month or 12-month periods. Standard covered perils generally include fire, lightning, smoke, burglary, water leaks, hurricane, explosion, tornado, building collapse, wind, hail, earthquake and vandalism.

David Wilhite is the marketing manager of Universal Insurance Facilities Ltd. Universal offers a complete package of coverages specifically designed to meet the needs of the self-storage industry, including loss of income, employee dishonesty, comprehensive business liability, hazardous-contents removal and customer storage. For more information, contact Universal at Box 5400, Scottsdale AZ 85261-9957; phone (800) 844-2101; fax (602) 970-6240; Web site





By Cary McGovern

Records management in the second half of the '90s offers self-storage entrepreneurs new opportunities to expand their business and increase revenue. Whether you realize it or not, if you operate a self-storage facility, you may be in the records-storage business already. Think about it: Do you have customers stacking boxes of records in their units? Unfortunately, if you're not offering management services of these records, you're probably short-changing yourself extra income.


The "Big Boys" Are Active in the Commercial Records Center Business. Iron Mountain and Pierce-Lehey are the two largest commercial records centers in the United States. Each has centers in many U.S. cities and is acquiring businesses at an increasing rate. They are usually the biggest players in most large markets. There is more acquisition activity now than at any time in the past. But, while the "big boys" are acquiring additional locations, new start-up operations are growing as well--all of this at a time that technology is zipping at rates not thought of in the past.

What does this mean for self-storage entrepreneurs? It appears that although they typically corner the large corporate market, local or regional businesses prefer doing business with local folks. Of course, there are many medium and small businesses, and they far outnumber the corporate giants. Although no one knows what the future holds, it is likely that records-management and storage services will continue to be needed.

This new column will provide current information about records management in both its traditional form and in technology-related areas. Additionally, I will be available for questions and answers anytime. (See address information at the end of article.) As an extra service to readers, I will post a summary of the questions I receive, along with my comments, on my Web site at http://www.fileman.

The column will cover topics that are current concerns in the records-management business. Here are some of the topics that we will focus on this year:

  • A perspective for records management and storage in the second half of the '90s.
  • A look at what forces are driving records management and records storage, and how technology will affect traditional forms of records management.
  • A spotlight on the players in the marketplace--the experts, the suppliers and the market-share leaders in the storage business--with a focus on how you can beat the "big boys" on your own terms.
  • Developing a business plan for a commercial records center.
  • "Prospecting for gold!"

Coming Up

The business plan. Records management is a "horse of a different color." Nevertheless, to be successful in any business you must have a plan. The typical business concerns are a bit different in this business than in most other enterprises. It has been said that records-storage businesses are more like annuities because they grow annually from existing accounts at a rate of 15 percent to 20 percent or more. This requires a plan that looks at the need for capital and facilities on an on-going basis. We will look at service levels, costs and revenue streams and how to predict them.

What is records management anyway and why do we do it? Why do businesses and organizations keep records? We will discover the requirements from government, protection from litigation, fiduciary responsibilities and sound business practice. These are just a few reasons that records are not a choice but a requirement. In a sea of paper and computer data, which documents represent business records? All records are documents, but not all documents are records. If this is true, then how do you tell the difference and what does that mean to your business?

Records management expertise: What is it, who are the experts and where do I find the best sources for my needs?Who are the experts in records management and what makes them the experts? What are the organizations that the industry recognizes? Do I need an expert on my staff or do I outsource the expertise? These are a few of the questions that can help your business be successful. We will discuss the options.

The records management and storage market--vertical and horizontal. Positioning your business may depend on your specific community. You may provide services to a specific industry type, such as healthcare, environmental protection or energy. If so, what services will these industries need as far as records management? What expectations do vertical markets have of their records management and storage provider? We will discuss the value of your market-segmentation strategy.

Normal, everyday services in the records-management market. The basis of records management is the homogeneous grouping of like records. This in itself creates opportunity. Providing boxes, packaging, purging and indexing services is not only helpful to your customers but also profitable to your business. Once boxes are in your facility, you will provide storage and retrieval services. There are many ways to provide these; we will discuss the alternatives.

Indexing: What is it and how can I make money at it? Indexing creates metadata, or "data about data." One of the most important issues in records management is defining "what it is and where it is." The "it" I refer to is of course the record. The most expensive part of a records-management program is finding your files when you need them. Research by management consulting firms conclude that 50 percent or more of all administrative work is relative to finding information. Companies have discovered the need for indexing but do not typically have the inclination or resources to do it themselves. Productivity is essential; you can provide this service and earn as much as a 50 percent profit margin. We will discuss the alternatives and methods that you have in providing this much needed service.

The movement to digital and how it will affect paper records storage. Computers are everywhere, so why is there so much paper? And...the $64 question is, "Will this paper phenomenon continue and for how long?" No one really knows for sure, but we will discuss what the experts believe and how it creates opportunity.

The high end of the records management business. Records storage and retrieval services are the basis for records management. However, this is just the beginning. You can offer a wide array of services without a huge overhead. Records-management professionals and service organizations have found that partnering is a key to profitability. No one has the resources for all requirements. This column will address the alternatives and how to find the resources.

Regular columnist Cary F. McGovern is a certified records manager and owner of File Managers Inc., a records-management consulting firm that also provides outsourcing services, file-room management and litigation support services for the legal industry. For more information about records management, contact Mr. McGovern at File Managers Inc., P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; fax (504) 893-1751; e-mail [email protected] ; Web site

A New Supervisor? Don't PanicTurn change into a positive for your position

A New Supervisor? Don't Panic
Turn change into a positive for your position

By Kim Alton

In an increasingly competitive and overgrown market, many self-storage owners take a hard look, not only at their facilities, but also at the team of people who help operate them. A smart owner will want to utilize the most knowledgeable and experienced personnel to help maximize his investment.

As a facility manager, you may be faced with a new supervisor coming aboard. Even though your previous supervisor thought you were golden and creative, and thought you managed the facility to peak performance, now is no time to panic. Think about some of the following ideas to make the transition a win-win situation for everyone involved.

Be Open to Change

A new supervisor will bring new ideas, motivations and goals. Let the old supervisor go. They are physically gone, and dwelling on the previous situation is a waste of time. You may have feelings of your job being in jeopardy and losing the comfort zone of what is expected of you, but you must remember that people come and go for a reason, and change has a way of keeping us full of fresh ideas and from becoming complacent.

Show Your Stuff

You know your strengths; capitalize on them and let your talent shine through. Continue to offer marketing ideas, create fliers to hand out, offer brochures, sparkle on your phone sales and let your new supervisor know by your actions that you will remain an important part of the management team.

Attitude Is Everything

When you wake up in the morning, your first decision of the day should be that you are going to have a positive, productive day. You are in charge of your attitude and how you approach daily decisions while using your managerial skills. Have you ever tried smiling when you answer the phone? Do you raise your voice an octave to project the eagerness to assist a potential tenant on the phone? Keep your attitude in check. It reflects who you are.

A Fresh Look

Look at your site as if it is the first day you took over. Are the files organized and up to date? How about the bathroom--is it sparkling clean? Could your office use a fresh coat of paint? Is your handicap sign cracked and peeling, or could it use a touch up? What about the windows (especially the door windows)? Take a hard look at the first impression.

Get It Done Now

If faced with corrections on a file audit or your new supervisor has suggested new flowers, repainting doors or polishing roll-up doors, complete these job duties first in your list of priorities. Your new supervisor will really appreciate those who are cooperative from the very beginning. As jobs are completed, you may consider faxing or mailing the completion dates to your supervisor to let them know you are on top of it.


New supervisors have an overwhelming amount of projects to accomplish. They are usually bombarded with several fires to put out at once. If you are unclear about what is expected of you, or you feel uncomfortable about your situation, consider a phone meeting or a site meeting with your supervisor to discuss any fears or uncertainties you may be experiencing. Remember that perception is very important. Three people can read the same memo and interpret its meaning in three different ways. It is up to you to perceive change as a negative or positive and act upon it accordingly.

Working alongside and in the same direction as your supervisor will only produce great results for everyone concerned. You will realize that the fears and concerns you many have had in the beginning will prove to be unfounded. Take this golden opportunity to remain open-minded and improve your job.

Kim Alton is assistant operations manager and trainer for the C.N. Lyons Development Company based in Newport Beach, Calif. For more information, call (949) 752-5000.