Inside Self-Storage is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Cape Coral Self-Storage Facility Puts Lawsuit on Hold, Files Bankruptcy

Community Self Storage, which filed a lawsuit against the City of Cape Coral, Fla., in 2006, filed for bankruptcy on two weeks ago, putting its lawsuit on hold. After receiving a bill for $150,000 in sewer, water and irrigation assessment fees, the company’s owner filed the suit claiming the city’s utility-assessment methods were unfair. The judge could dismiss the case after a year if Community Self Storage doesn't move ahead with it. If the company cannot pay the utility bill in question, the fees will be tacked onto the property as a lien.
 
Source: The News-Press (Ft. Myers, Fla., Southwest Florida), Storage company suing Cape Coral files for bankruptcy

24hrStorage.net

Jiratech Inc. released 24hrStorage.net, a real-time marketing and rental solution for the self-storage industry. The new Web-based virtual kiosk aims to lower a self-storage facility’s advertising expenses and minimize its promotion effort.

24hrStorage.net plans to drive traffic to partner facilities through media outlets, cell-phone enhancements and Internet awareness. The monthly service charge for the service can be completely supplanted as long as the facility meets and maintains certain criteria, for example, moving approximately 10 existing customers to automatic bill pay each month.

Product attributes include: a personal website or integration with an existing website, targeted marketing to specific consumer groups, a real-time rental platform with point-of-sale features, rental fees sent instantly to the owner’s account, automatic bill pay, real-time pricing to honor discounts, rental agreement signed instantly at point of sale, and more.

24hrStorage.net is based in Massillon, Ohio. The company aims to create new ways for self-storage operations to promote themselves in a changing market. Info: [email protected], www.24hrstorage.net

126 Self Storage of Ashland Goes Green With Solar Panels

Michael Kane, owner of 126 Self Storage in Ashland, Mass., recently installed 99 solar panels on 2,000 square feet of his facility’s roof in an effort to be more green―environmentally and financially. He started using the panels two weeks ago.  According to Kane, the sun will provide approximately 60 percent of the power he needs to run the facility’s office and exterior lights. He’s hoping to reduce his business’ carbon footprint.
 
Installed by SolarFlair of Hopkinton, the panels could one day cover all 57,000 square feet of Kane’s facility, he said. While they cost him $149,817, he received a $67,568 rebate from the Massachusetts Technology Collaborative, a $44,945 federal tax credit, a $7,221 state tax credit and other incentives that brought the price down to $45,312. Kane said he’ll pay that off in six to seven years and then, theoretically, he should make money on the system, which is expected to generate about 18,900 kilowatt hours per year. In addition to saving about $3,800 on utility bills, he can possibly sell electricity back to his utility company.
 
Matt Arner, president of SolarFlair, is marketing the idea to other self-storage companies. His two-year-old firm works with clients to maximize return on investment.
 
Source: The MetroWest Daily News, Ashland businessman Michael Kane using solar panels

Manhattan Mini Storage Launches Humorous Ad Campaign

In keeping with the company’s tradition of tapping current events for campaigns, Manhattan Mini Storage’s latest advertising shines a laser on the city’s economic woes and finds something to make people smile. Based on the observation that Manhattanites are creatively multi-purposing their homes to economize on rent, the new campaign uses humor to highlight potential uses and benefits of self-storage while also coining industry-related terminology. Created in-house and rolled out last month, the campaign is appearing on billboards, phone kiosks and bus cards across the city. Ad examples are shown below.

Over the past 40 years, Manhattan Mini Storage has provided moving and storage services to more than 300,000 New Yorkers. With 17 facilities throughout the city, the company is the largest self-storage provider in New York. It is owned by Edison Properties LLC. For more information, visit www.manhattanministorage.com.  

 

 

Safestore Installs Payback Clause to Stop Bonuses Based on Failure

In an effort to end a corporate culture that “rewards failure,” self-storage group Safestore has initiated a “clawback clause” that will force its directors to pay back any bonuses awarded for profit that later proves to be false. Safestore is the first British company to include such a clause, though Prime Minister Gordon Brown has been calling on banks and other companies in a campaign to instate it.
 
The Safestore clause, included in its recent annual report, states the company's remunerations committee can require individuals to repay bonuses or Performance Share Plan awards at any time if the committee feels the payments were "manifestly inaccurate."
 
Safestore also froze the salaries of all executive directors at 2007 levels because of the current economic climate.
 
Source: telegraph.co.uk, Safestore introduces pay-back clause for directors' bonuses

Body Found at New Jersey Self-Storage Facility

Officers were called to investigate a body that was discovered inside a self-storage unit at West Deptford (N.J.) Storage Bin on Friday evening. Police reported that the body had sustained a gunshot wound, and that the man died as the result of an apparent suicide.
 
Source: Gloucester County Times / NJ.com, Body Found in W. Deptford Self-Storage

Related Articles:

Anyone have a suicide on property? [Self-Storage Talk Discussion Thread]

Strategic Storage Trust Partners With Penske Truck Rental

Strategic Storage Trust Inc. has entered an agreement to bring Penske truck-rental services to its self-storage locations. This new relationship will offer customers the opportunity to rent trucks on site. The company also plans to associate itself with the “Penske Promise,” a pledge to rent no trucks over three years old and to provide free, unlimited mileage with every rental.

Strategic Storage Trust is a publicly registered, non-traded real estate investment trust building a nationwide portfolio of self-storage facilities. Since September 2008, the company has acquired six facilities throughout Florida, Mississippi, Ohio and Virginia. For more information, visit www.strategicstoragetrust.com.

Headquartered in Reading, Pa, Penske Truck Leasing Co. LP operates more than 200,000 vehicles and serves customers from more than 1,000 locations in Asia, Europe and North and South America.

Public Storage Announces 1Q 2009 Financials

Last week, real estate investment trust Public Storage reported first-quarter 2009 financial results including net income, funds from operations, expenses and more.
 
Net income for the fourth quarter was reported at $151.7 million, down from $167.9 million for the same quarter one year earlier. The company attributed the decline to a $13.2 million foreign-exchange loss.
 
Net income allocable to common shareholders increased to $121.7 million or $0.72 per share from $102.2 million or $0.60 per share in the prior-year quarter, while funds from operations (FFO) grew to $250.72 million or $1.49 per share, from $237.28 million or $1.40 per share a year ago.
 
Total revenue for the quarter decreased to $421.82 million from $464.53 million in the same quarter last year. Self-storage rental income dropped to $381.81 million from $425.08 million. Revenue for ancillary operations totaled $29.19 million, down from $34.38 million. Interest and other income declined to $10.81 million from $5.08 million.
 
Total expenses for the quarter also dropped, from $310.77 million in the prior-year quarter to $246.95 million.
 
The company said it also received net proceeds of about $344.7 million in connection with the disposition of a 51 percent interest in Shurgard Europe in March 2008.
 
Public Storage of Glendale, Calif., is a fully integrated, self-administered and self-managed REIT whose principal business activities include the acquisition, development, ownership and operation of self-storage facilities.
 
Source: TradingMarkets.com, Public Storage Q4 Profit Declines On Foreign Exchange Losses - Update

Snow, Freezing Temps Hit Eastern U.S.

Freezing weather and heavy snowstorms are sweeping across many Eastern and Southern states, including New York and Massachusetts. A winter storm warning was in effect for Monday from the Carolinas to Maine.

Storms could dump up to 11 inches of snow in parts of the Carolinas, with New England and Boston facing up to 15 inches of snow as the day goes on, according to the National Weather Service. Northeastern states are expected to receive five to 15 inches of snow.

Many flights were canceled and highways were closed, wreaking havoc for travelers.

Source:  CNN.com,  Storm Targets Northeast After Dumping Snow on South  

Evaluating Your Self-Storage Rental Agreement

When the economy weakens it’s not uncommon to see a rise in lawsuits filed against self-storage owners and operators. This is not a coincidence. In tough times, people look for other ways to make money and are much less forgiving of the small losses they would have not previously fussed about. Additionally, with the increasing number of foreclosures and evictions, people are losing their homeowners or renters insurance, which would otherwise pay for some of these claims. Also, many self-storage owners and operators are cutting back on employees, deferring or making “temporary” repairs to facilities and equipment, such as alarms and gates, which normally provide some deterrent to theft.

Safeguard Your Business

While there is not much we can do to turn the economy around quickly, you can protect yourself. It may seem like bad timing, but this is the most important time to review and update your rental agreement to provide legal safeguards to fend off or minimize these types of claims. There are six areas you should review in your rental agreements to ensure these provisions are well-written, solid and apply to all your existing occupants.

1. Valuation limit. Have a valuation limit in your agreement and, if appropriate, a limitation of liability clause. A limitation on value requires that the occupant agrees there is a maximum value to the stored property in the storage unit. You are not, by this clause, necessarily agreeing to provide insurance or be responsible for that amount of value or even agreeing there is a value. Rather, if there is a claim later you will know the maximum dollar figure the occupant can claim against you.

This goes hand-in-hand, in some states where permissible, with a limitation on liability. The limitation of liability figure may even be lower than the value limit. While you may say the value limit is $2,500 or $5,000, in many states you can say you will only be liable in the event of a loss for up to $1,000, as an example.

In some states a liability limitation may not be an enforceable provision, but a value limit is always enforceable, if properly written. Remember, for a claim to be valid and result in a potential judgment against you several things must be present:

  • There has to be a loss.
  • You have to have done something negligent, willful or intentional to have caused the loss.
  • Damages must have occurred. Those damages must be demonstrated in a trial. If the value limit and the liability limit are set low enough it will often not be worth the occupant’s time, energy or money to bring a claim.

2. Military status. You are setting yourself up for a lawsuit if you do not ask in your rental agreement whether the occupant or any member of his/her family is in the military and, if so, to list additional contact information, including the commanding officer’s name and phone number. If you are not familiar with the terms of the Servicemembers Civil Relief Act (SCRA), and you are conducting lien sales, you are risking an unnecessary lawsuit. SCRA imposes upon you duties to act in a certain manner that may be different than with a normal occupant if you know your occupant or a family member is in the military and serving overseas.

The SCRA is a notice statute; you have to have notice of military service. If you have never asked this question, you have missed your opportunity to be on notice of military service. If you think it is better not to ask and keep your head in the sand, it will not be a good defense if an action is brought against you. The simple solution is to ask about military status and deal with it if need be.

3. Charges and fees. List your actual charges and fees.While the statute in your state may permit charges such as a late fee, non-sufficient fund fee, overlock fee, certified mail fee and so on, contractually you need to list actual charges, or notice of the charges the occupant could incur.

This is simple in New York where you must itemize all the mandatory and optional charges. In other states you should still list these charges. Do not give a judge the opportunity to say you are not entitled to a charge or, worse, that you sold but you should not have sold.

Also make sure you have a default clause. Obviously, a major default issue is non-payment of rent, but there are other grounds under which you would want to terminate the rental agreement.

As a matter of fact, your rental agreement probably lists, in various places, other prohibited activities, such as working on automobiles, manufacturing, living in the unit or housing animals. While these are defaults, you should have a clause that the judge can easily review to determine the operator had the right to terminate a rental agreement.

Further, the default clause should be followed by a remedies clause. While overlocking and eventually selling, if necessary, in the event of a non-payment default is allowed by statute, what other remedies do you have if a tenant is constantly leaving garbage around the facility? Can you overlock and sell for bad behavior?

4. Liability clause. Make sure your release of liability clause is strong and covers all events in which you want to be released. It should cover loss or damage to property from any source or cause. In some states you may not be able to disclaim liability for your negligence; this is a discussion to have with your attorney. Make sure you are also getting a release of liability for injury. Sometimes the claims brought are not so much about damage to the stored property, but a slip and fall, or a finger caught in the door spring. Most release of liability clauses do not cover personal injury.

5. Mediation clause. A mediation clause gives both parties the opportunity to meet and hear each person’s side of the story with a neutral third party before litigation starts. If you do not mediate and are sued, you will need an attorney, end up doing discovery, filing other pleadings and generally running up attorney fees.

After you have paid the attorney you will be letting a judge, who knows very little or nothing about the world of self-storage, or worse a jury, make a decision about whether you owe money to the occupant for something that was not your original responsibility.

6. Vehicle storage. Are you storing vehicles? Are you sure you're not? Many operators many not know there are motorcycles or ATVs stored in their units. In indoor/enclosed storage, if you are not asking up front if the occupant intends to store a vehicle in a unit, you are making a huge mistake. There is a lot of additional information you need to store vehicles, including title, registration, lien holder information and insurance. If there is a loss, you will be hard pressed to prove there was not a vehicle in the unit. Moreover, without the title, it’s a long cumbersome process to conduct a lien sale successfully.

While times are tight, one of the best investments you can make is to review your rental agreement with your attorney. It can substantially reduce your risk of frivolous litigation and, in the event of litigation, cap the amount of the claim. It will also help ready you to move to the next level of your operations when the economy improves.

This article is for the purpose of providing general legal insight into the self-storage field and should not be substituted for the advice of your own attorney.

Jeffrey J. Greenberger is a partner with the law firm of Katz Greenberger & Norton LLP in Cincinnati, and is licensed to practice in Kentucky and Ohio. Mr. Greenberger’s practice focuses primarily on representing the owners and operators of commercial real estate, including self-storage owners and operators. To reach him, call 513.721.5151; visit www.selfstoragelegal.com.