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Capturing Self-Storage Customers on the Web

With Internet usage reaching the billions, how you market your business, especially on the Web, is even more important than ever. We consistently hear Internet marketing is growing and how important it is to jump on the bandwagon. You must have a presence on the Web or you will miss out on a large portion of people making buying decisions daily.

Website design has become very competitive. Businesses are attempting to attract customers in as many creative ways as possible. Outshining your competition and showing you have a better, flashier website than your competitors seems to make people believe that this is what the consumers are attracted to and what will make the difference between a successful Web campaign or not.
 
Back to Basics
Contrary to popular belief, studies have shown that sometimes going “back to the basics” is actually more beneficial to your business and to the person visiting your website. Knowing what audience you will be targeting is extremely important when creating an effective site. While the younger generation may appreciate loud musical content and flashy graphics, other age groups may be turned away.

A simple-to-read layout that provides quick, informative data is always safe. We live in an impatient society where website visitors expect to obtain clear, concise information quickly. Visitors should experience simple, clean navigation through your website without complicated flash. They prefer quick downloads with little waiting time. Fancy illustrations and banners may make your website look attractive, but if users are waiting for an extended period of time, you could potentially lose their attention causing them to leave your site for another.

Make sure your logo, phone number and address are large, noticeable and present on every page of your website. If users experience a long wait time for the next page to load or a technical issue with their system, they can pick up the phone and call or visit your physical location without having to click around and waste more time. A visitor should not have to click onto a separate page or “contact info” bar in order to obtain important phone numbers or physical address. Why risk losing them?
 
Simple Is Best
Website content should be written in a format that grabs the viewer quickly. Text length should be concise, highlighting your business’ products and services. Share with the visitor what makes your facility the best choice for storage. Make it snappy; make it quick.

Text should be in an easy-to-read font and void of spelling and grammar mistakes, which can turn a viewer away and create a negative impression for your business. Harsh text colors are hard on the eye and may also turn them away. If you are using large text, use lighter colors, reserving darker colors for smaller text formats.

Your color scheme should blend nicely with your logo, creating a visually friendly balance between graphics and content. This can boost the viewer impression of your website if done correctly. Basic color is always best to use since computer browsers view color differently.
 
Welcome Change
Finally, it is suggested that you invest in a good content-management software. This will enable you to make ongoing changes to your website whenever you wish. Most programs enable you to update specials you are offering and alter them daily, weekly or monthly. These programs also give you the ability to change your content and add new features you offer or recent testimonials.

A good program will also allow you to update photos of your facility any time, placing you in control of updating the information you are relating to potential customers with no restrictions. Keeping your Web page fresh and updated shows you care about your business and sharing necessary information with others.
 
Let the Web Work in Your Favor
Being on the World Wide Web and having a website can work for or against you. If you have not taken a close look at what image you are projecting or whether your website if user-friendly, do so as soon as possible.

A good source of feedback comes from the customers contacting you. If they say they found you on the Web, ask them if they thought your site was user-friendly. Was it easy to navigate or did they have trouble finding where to go? Do they have any suggestions that might make it more appealing?

Ask if there was anything on the site in particular that caused them to contact you and, if so, consider making that item more predominate because it is probably something that would appeal to others. If you are going to spend the time and money to invest in the future of the Internet, make sure it pays off.
 
Michelle Millis is senior client service manager of Michaels Wilder Inc., an advertising agency specializing in Yellow Pages, Internet marketing and talent recruitment for the self-storage industry since 1989. For more information, visit www.michaelswilder.com.
 
 

Marcus & Millichap Brokers Sale of U·Store·It in Miami

The Mele Group and The LeClaire Team of Marcus & Millichap brokered the sale of two U·Store·It properties in Miami. The locations were sold separately, each to private real estate investment groups, and closed at $2,973,000 and $4,635,000 respectively. Michael A. Mele of Marcus & Millichap’s Tampa office and Chico LeClaire of Marcus & Millichap’s Denver office represented the seller in the transactions, while Greg Zeifman of Marcus & Millichap’s Miami office represented the buyers. For more information, visit www.melestoragegroup.com.

ISS Blog

The Hurt of the Free Month

Beware the self-storage freebie, my friends. Not only is it potentially risky to use the word "free" in relation to self-storage advertising and promotions, the execution of free offers can be a detriment to your own business, as well as to other storage businesses in your area. (Not that you care about them, but some of you are more focused on the bigger picture, i.e., the health of your industry market as a whole.)

On the coattails of last week's Legal Learning webinar, "No Such Thing as ‘Free’ in Self-Storage: The Potential Cost of Dicey Words," I've been seeing a lot of activity on the Self-Storage Talk forum, posts from operators wanting to know if others are using free-month offers to increase rentals, how those offers are working, how they're affecting the bottom line, and how competitors are responding. A recent thread titled, "Free Month" has been particularly hot.

The upshot of the conversation is operators all over the country are experimenting with various specials to see what will draw in customers. Some self-storage businesses are more fixated on income in the immediate moment rather than long-term effect: Get the money in the door today; don't worry what it does to year-end revenue. For some, I'm sure it's a necessity, but for others, it's a knee-jerk reaction to the facility up the street and may be needless.

Even the REITs are feeling a pinch. This week, Sovran Self Storage released its financial results for the fourth quarter of 2008. According to the company report, "Although average occupancy was only 50 basis points lower during the fourth quarter of this year compared to last year’s same-store fourth quarter, it was expensive to maintain that level as the Company continues to make extensive use of move-in incentives. During the quarter, almost $2 million in 'first month free' incentives were granted; more than double that of last fall." (For a summary of the report, read "Sovran Self Storage: 4Q 2008 Financial Results, Expectations for 2009.")

But even though Sovran acknowledges the fiscal challenges created by use of the move-in incentive, the company intends to stay the course in light of a down economy: "Sovran is anticipating reduced consumer demand in many of its markets and for conditions to become increasingly more competitive. It expects to use leasing incentives as well as increased advertising and aggressive marketing to improve occupancy and, accordingly, estimates a decline in same store revenue of 1 percent to 2 percent."

I'll repeat the invitation I served up in last week's entry: Tell me about the special and/or free offers you are using as part of your self-storage survival strategy. How are they working? Do you feel pressured to offer specials based on competitors' activity?

Sovran Self Storage: 4Q 2008 Financial Results, Expectations for 2009

On Tuesday, Sovran Self Storage Inc., a self-storage real estate investment trust (REIT), reported operating results for the quarter ended Dec. 31, 2008.
 
Net income available to common shareholders for the fourth quarter of 2008 was $8.4 million vs. $10.7 million for the same period in 2007. Funds from operations (FFO) for the quarter were $.78 per fully diluted common share. Management expects FFO for the first quarter of 2009 to be approximately $.72 to $.74 per share, and between $3.00 and $3.08 for the year 2009.
 
Costs associated with acquisitions the company no longer intends to pursue were written off during the quarter, and reserves were established against potential losses relating to customer accounts receivable and for settlement of a long-standing legal dispute. These write-downs and reserves had a negative impact of $.02 per share on the FFO for the quarter. Higher interest expense associated with the company’s recent long-term financing and increased customer move-in incentives were the other significant factors resulting in lower earnings for the quarter.
 
Net operating income for the fourth quarter declined 0.5% ($150,000) compared with the same quarter in 2007 to $32.3 million. Overall average occupancy for the quarter was 81.6 percent, and average rent per square foot for the portfolio was $10.54. Revenue at the 353 stores owned or managed increased 50 basis points over the fourth quarter of 2007, the result of a slight increase in effective rental rates.
 
Although average occupancy was only 50 basis points lower than the same quarter in 2007, it was expensive to maintain that level, as the company continues to make extensive use of move-in incentives. During the quarter, almost $2 million in “first month free” incentives were granted, more than double that of last fall. Further pressuring the top line was a charge of $170,000 against accounts receivable, which was taken as a result of longer than usual delinquencies at a number of our stores that have a significant military customer base.
 
Compared to last year’s fourth quarter, same-store operating expenses increased 4.7 percent; property taxes increased by 21.2 percent; and all other costs grew by 0.2 percent. During the quarter, strong revenue growth was shown at the company’s Louisiana, Missouri, New York, South Carolina and Texas stores. Stores in Florida, Georgia and Washington, D.C., markets experienced slower than expected growth.
 
Sovran is anticipating reduced consumer demand in many of its markets and for conditions to become increasingly more competitive. It expects to use leasing incentives as well as increased advertising and aggressive marketing to improve occupancy and, accordingly, estimates a decline in same store revenue of 1 percent to 2 percent.
 
The company has curtailed its expansion and enhancement program and, until market conditions significantly improve, will defer its planned 2009 expenditures of $50 million. It has an estimated total of $9.5 million of commitments outstanding on construction projects expected to be completed in 2009.
 
“Although adding significantly to our interest costs, the steps we took earlier this year to refinance our short-term debt have put us on sound financial footing,” said David Rogers, chief financial officer. “We’ve maintained a conservatively leveraged balance sheet, have no significant debt maturities until 2012, are obligated on less than $15 million of forward capital commitments, and have sufficient liquidity to enable us to navigate these difficult capital market and operating environments. We will continue to focus on improving operating results at our 385 stores and protecting shareholder value.”
 
Sovran, based in Williamsville, N.Y., is a self-administered and self-managed equity REIT that is in the business of acquiring and managing self-storage facilities. The company operates 385 facilities in 24 states under the name “Uncle Bob’s Self Storage.” For more information, visit www.unclebobs.com.

Related Articles:

Sovran Self Storage Forms Joint Venture for Property Acquisition

Locke Acquisition Represents Sovran in Purchase of Four Facilities

2Q 2009 Survey Launches for Self-Storage Confidence Index, Feb. 23

The Self-Storage Confidence Index survey for the second quarter of 2009 will launch on Feb. 23, continuing through March 10. An initiative of MiniCo Publishing, The Parham Group and Cushman & Wakefield Inc., the index is designed to anticipate the effects of economic conditions and trends on self-storage operations. The survey records next-quarter expectations in the critical areas of sales, profit, hiring, expenditures and industry economic outlook.
 
Storage professionals throughout the United States and Canada are encouraged to participate in the online survey, found at www.selfstorageconfidenceindex.com. Once compiled and published, the results will be available to participants and other interested parties. Participants can complete the first-quarter survey and view results from the previous year at the website.
 
MiniCo Publishing is a division of Phoenix-based MiniCo Inc., which provides specialty insurance programs, publications, and other products and services for the self-storage industry.

Self-Storage Expert Presents Free Webinar on Fee Management

On March 18, self-storage industry expert Anne Ballard, president of Universal Management Co., will present a free webinar titled, "Fee Management Specialists: Are We Right for Each Other?" The live, online event, hosted by MiniCo Publishing, will take place at 1 p.m. EDT. Participants will learn about Universal’s telephone, auction, customer-satisfaction and marketing programs. Other topics will include features that make the company unique, ways for a self-storage operation to save money, and how to maximize income while improving the asset.

A long-time top operator in the self-storage industry, Ballard founded Universal more than 15 years ago. In addition to acting as a global self-storage consultant, she has served for more than a decade on the boards of state and national self-storage associations. She has also written many articles for industry publications such as Inside Self-Storage, and is a regular speaker at industry tradeshows.

Universal provides fee-management services to self-storage business owners.

To register for the webinar, visit Ministoragemessenger.com.

Related Articles:

Customer-Service Savvy for Self-Storage (written by Anne Ballard)

Components of the Third-Party Management Package: Finding a Perfect Fit (written by Anne Ballard)

Emergency Preparedness and Self-Storage Insurance

A discussion on self-storage emergency preparedness for catastrophic loss would not be complete without focusing on insurance. One of the main reasons you purchase insurance is to reduce your losses when catastrophe strikes. Having adequate limits and proper coverage is part of the protection you will need. A good starting place is to understand what catastrophe exposures you face and what insurance is available to help you control losses from them. What protection you choose may be different than another facility owner. You can also choose to take actions that will reduce your exposures.

Up in Smoke

Nationwide droughts, lightning and other sources are generating large wild fires in areas not usually afflicted. Plus, areas often hit by wildfires are experiencing them in larger magnitude. Fires that consume brush and forest areas pose great catastrophic potential. They move through acres in a matter of hours, consuming everything in their path. The volatile nature of these fires creates an exposure that insurance carriers monitor carefully.

When evaluating clients’ properties, insurance companies inquire about the construction and age of structures and the fire-fighting capabilities near the location. While you can’t change the construction of your buildings or move the fire department closer, you can consider reducing the fire load of your buildings when maintaining and updating your buildings.

One of the easiest things you can do is clean any gutters and remove tree limbs and leaves from your premises. If you are situated in a densely covered brush or forested area, or even an area with dry grass, you’ll need to pay greater attention to removing the surrounding vegetation. Talk with your local fire department about how much vegetation to remove, particularly in the spring when growth begins.

Weather or Not

With much of the U.S. population living a short distance from a coast, exposure from wind and rain due to tropical storms and hurricanes are a major source of catastrophic loss. At this time, the insured losses from Hurricane Ike, a category II storm, are approaching $20 billion, making it the third costliest windstorm in U.S. history. Those who live and work in these areas are well aware of the risks and the requirements to protect their property when a storm approaches.

If your facility is located in an area prone to severe storm activity, your insurance company will limit its coverage and you must assume part or all of this exposure. Some policies exclude wind coverage, which means you may need to purchase a separate policy from another company to provide this protection. In areas where windstorm is a frequent cause of severe property loss, many insurance policies have a separate wind deductible that is higher than your property deductible for other causes of loss. This deductible can be written as a flat amount or a percentage of your property values.

From the insurer’s point of view, the higher deductible serves two purposes. First, it keeps the premiums somewhat lower. Second, it encourages you to take steps to lessen the amount of loss. Have your insurance agent explain how the deductible would apply when you are purchasing insurance.

The Flood Zone

A substantial number of buildings are constructed in flood areas and owners are not always aware of it. The fact that a flood hasn’t been recorded does not mean one hasn’t happened or won’t happen. Flood history is only one element used in determining flood risk. More critical determinations are made by evaluating your community’s rainfall and river flow data, topography, wind velocity, tidal surge, flood control measures and building development (existing and planned).

Floods can occur in any area, to varying degrees. If you live on a hill or in an area that has never been flooded, your risk may be significantly reduced, but it is not eliminated. Flooding can be caused by heavy rains, melting snow, inadequate drainage systems, failed protective devices such as levees and dams, as well as by tropical storms and hurricanes.

Most standard insurance policies exclude coverage for flood. If that is the case with your provider, you’ll need to purchase a separate policy for this protection. Most flood insurance is sold through the National Flood Insurance Program and will carry a high deductible. Make an informed decision about the flood risks you face before deciding whether to purchase coverage by talking it over thoroughly with your agent.

The Big One

If you live in earthquake country, then buying earthquake insurance may make financial and logical sense. You may need to purchase a separate policy for this coverage. Ask your agent and find out what options are available. And, as with other catastrophe insurance, you’ll probably have a higher deductible to meet. You can also reduce loss yourself by retrofitting your buildings with earthquake bracing.

Having adequate replacement cost coverage is always important but never more so than when a catastrophe occurs. If a disaster of great magnitude strikes, your ability to rebuild quickly can be impaired due to lack of materials and competent contractors available to perform the work. Both can create a larger loss of income than you may have expected.

Another important part of your loss of income coverage is the extended period of indemnity. This coverage allows additional time after the repairs are made to return to business as usual. In the case of self-storage, it allows the management time to recover, renting units to tenants and reaching typical occupancy levels. You don’t want to find out after you have a loss that you did not purchase limits high enough to replace your buildings and get your facility back into operation.

There are many tools available to help you determine the actual replacement cost of your facility. Start by talking to your insurance agent. Along with adequate property coverage, loss of income coverage is also vitally important. Review both the coverage amount and the time period for this coverage.

When thinking about catastrophe, remember to review your insurance coverage as well as take action to minimize your potential losses. No one wants to face disaster. Moreover, no self-storage facility wants to face catastrophe without ample insurance coverage.

Kay Schaefer, an underwriter for Deans & Homer, is a certified insurance counselor. Deans & Homer was established in 1856 and has specialized in the self-storage industry for more than 30 years, offering facility and tenant-insurance programs. For more information, call 866.753.2228; e-mail [email protected]; visit www.deansandhomer.com.

Guardian Access-Control System

QuikStor unveiled its new Guardian Series access-control system with product enhancements such as a standard display and intercom. Additional options include wireless communication, a proximity reader, a pinhole color camera and a card-reader with pay-at-the-gate functionality. The new keypad system was designed with lightning-prone areas in mind, with a housing that is 100 percent non-conductive and non-corrosive for high-salt areas. There is also a new component in each keypad used to dissipate surges caused by lightning or other power anomalies. The company is offering a seven-year warranty on the keypads. Info: www.quikstor.com

Simply Self Storage Names Senior VP of Operations

Simply Self Storage appointed Kerry G. Richard as senior vice president of operations. Richard has been with the company for four years, most recently serving as regional vice president of operations, and in the self-storage industry for more than 15 years. Simply Self Storage, based in Orlando, Fla., has more than16 million square feet of storage space and 200 operating self-storage facilities. For more information, visit www.simplyss.com.

Tax Tips for Businesses

As tax seasons begins, many business owners are on the hunt for new tax deductions.

The IRS recently released 11 important changes affecting business tax returns for 2008. In an effort to stimulate business growth, the Section 179 depreciation allowance for business equipment or property has been expanded for the 2008 tax year only. Business owners can write off up to $250,000 in qualified purchases, double the amount in 2007. In addition, purchases can total up to $800,000 in all (up from $500,000) without reducing first-year depreciation write-off.

Changes were also made to employer-owned life insurance contracts, S corporations and mileage rates.

Source:  Entrepreneur.com,  New Tax Tips for Businesses