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Fort Wayne Storage Proposes New Facility

On Monday, the Fort Wayne (Ind.) Plan Commission approved plans for a new 101,400-square-foot self-storage facility. The City Council will make a final ruling on whether a community shopping center can be rezoned for commercial use, allowing for the development of Fort Wayne Storage. The Board of Zoning Appeals has schedule a hearing for the project on Thursday. One plan-commission member and some neighboring office owners oppose the project, claiming it will lower property values.
Fort Wayne Storage has three other Allen County locations. The company plans to invest more than $5 million to build the proposed complex. If approved, development will begin in late spring.
Source: Fort Wayne Journal Gazette, North-end self-storage site wins initial nod

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Manager Training Is a Key to Self-Storage Success

In these economic times, everyone is looking for a way to save money. Unfortunately, some wrong decisions could be made, cutting corners to save money. 

A  recent article on says on-the-job training is being reduced in big and small companies. About 35 percent of companies have reduced or limited training for employees, according to Watson Wyatt. Another 15 percent are planning to.

Employee training in the self-storage industry is a critical component of success. Let’s face it: Managers are the cornerstone of your operation. They greet customers, make the sales and are the last person customers see on move-out day. Skimping on training in this area could be seriously detrimental to your facility’s success. And it doesn’t have to be costly, either. There’s a wealth of information on the Web, in books and even from your vendors.

If you’re serious about employee training, check out the Self-Storage Training Institute’s  Qualified Storage Manager program. The online program has classes on marketing, sales, collections, maintenance, phone skills, legal issues and more. Class cost varies, with some under $30. Plus, discounts are available for companies that purchase training for more than one employee. Because the program is online, managers can take courses at their own pace. Check it out today.


Obama Plan Offers Incentives for Loans to Small Businesses

Getting a loan for a small business may become a little easier.

The Obama Administration is unveiling plans Monday to make lending to small businesses more attractive through two programs handled by the Small Business Administration (SBA). 

One allows small businesses to get loans of up to $2 million backed by the federal government through the SBA. The second program guarantees up to $4 million worth of economic development projects for small businesses.

Source:,  Obama Plan Would Boost Small Businesses Via Lender Incentives

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Study: Significant Residential Growth in Urban Areas

New residential construction is popping up in more urban areas, according to a new government study.

In more than half of the 50 most populous metropolitan areas in the United States, communities at the urban core have captured a significantly larger share of their region’s new residential building permits since 2002 than in the first half of the 1990s, according to an analysis by the Environmental Protection Agency.

There was a consistent increase in housing in urban centers from 2002 to 2007, and the trend could transform growth patterns in some places for decades to come.

Source:  Nation's Building News,  Urban Areas See Revival in Housing Construction


Five Essential Tools of Self-Storage Risk Management

Risk management can help you make money or protect you from losing money. In a November 2008 Inside Self-Storage webinar, Paul Cardamon and I talked about risk management in the self-storage business. This article begins to explore what risk management is and looks at some of its standard tools.

The recent ISS webinar addressed two types of risk: speculative and pure. Pure risk deals only with the opportunity for you to lose, or at best, maintain your financial position before a loss. This is the type of risk dealt with by the insurance industry.

Speculative risk, on the other hand, is what most of us think about when we think of risk. It’s the ability to make or lose money, based on a number of factors including chance and our personal risk tolerance. Examples include investing in the stock market, betting on a horse race or starting a business.

Why is speculative risk important and what does it have to do with running a self-storage company? Its relevance has to do with the distinction between a “known” risk and an “unknown” or “unintended” risk. Examples of known risk include: Is my property up to code? Is it well maintained? Do I have adequate security? Unknown or unintended risks include: Am I over-leveraged? Do I have the right kind of insurance? Who do I have working for me?

Speculative risk may involve some of the same analysis, but the chance element is more like gaming than the insurance business. When we deal with “pure risk” in the insurance business, it is based on a large body of experience and we can assign probabilities of loss that translate into premiums.

While we can’t predict the exact time, place or financial impact of any one loss, the insurance industry can set a price to accept the risk based on the law of large numbers (i.e., the number of building fires for a specific area over a given time period for a specific type of construction, and their resultant financial losses). The insurance industry measures probability, frequency and severity of a loss to determine how best to fund that loss (using premium), to bring you back to where you were financially before the loss.

The Five Tools

Risk management is the practice of applying tools developed to reduce the chance of loss. Properly applying these tools helps reduce the disruption a loss causes your business while helping keep the costs of insurance reasonable.

In self-storage, risk-management concepts apply not only to your buildings, roofs and driveways, but also to your maintenance practices, property security, operational procedures, records management, hiring practices, safety procedures, financial controls, disaster-recovery plans and lease language.

Over the years, the insurance industry has developed five tools for managing pure risk:

1. Avoidance. This is the simplest of the tools. If you see an opportunity that’s too risky, that you don’t believe is worth pursuing, run—or at least walk quickly—away from it.

2. Control. This tool recognizes that you have some level of risk and applies logical, prudent business practices to control the risk. For example, if you have a site manager who rents units, sells ancillary products, and collects rent and late fees, you should have written procedures in place explaining what the manager is supposed to do and what he’s accountable for; and an audit process that verifies and balances receipts, bank deposits and inventory.

Your lease is another control element, protecting you against your customers by identifying your responsibilities as well as theirs. It should state tenants can’t store flammable liquids or contraband, can’t live in their units, etc., and that they have to pay rent on a certain date every month. You get the idea.

3. Non-insurance transfer. This is a simple concept with a basis in contract law. It says that two parties can decide who is responsible for certain actions. It also is a concept found in your lease—your insurance requirement. Most self-storage leases have language naming tenants as responsible for insuring their property, and you (the landlord) are not responsible for loss or damage to their property. It also adds that should you be responsible (if you’re negligent), your liability is limited to the amount specified in the lease, usually $2,000, $2,500 or $5,000.

The insurance requirement is a critical piece in your defense that you are a landlord, not a warehouseman. It supports the “exculpatory” language in your lease (the words that say you are not responsible for loss or damage to the tenant’s property) especially in the large number of states where courts do not recognize exculpatory language. Assuming liability for tenant’s property may sound like a great marketing tool but may well expose you to one or more unintended risks.

4. Insurance. This is a transfer of potential financial loss to a regulated third party—someone who has the financial resources to do so. Making sure that you have the right kind of insurance is important. The insurance industry has developed specific policies to protect you with coverages including:

  • Tenant insurance
  • Customer goods legal liability insurance pays for your defense in negligence suits as well as judgments
  • Pollution clean-up coverage pays for remediation when a tenant leaves a unit full of toxic waste
  • Sale and disposal legal liability insurance for when you’ve sold the contents of the wrong unit in a lien sale
  • Business-interruption insurance with an extended period of indemnity replaces your lost income while re-leasing after a disaster.

In addition, you may need industry standards like boiler and machinery coverage if you offer climate control or have elevators in a multi-story building.

5. Retention. This represents the amount of financial loss you are willing to absorb. Your deductible is the simplest example. In the process of trading a higher deductible for a lower premium, you’re also recognizing that insurance is only one of the tools you use to run your business. It’s your hedge against financial loss—laying off a small amount of money that can help you recover when a disaster strikes.

Risk management is not a difficult concept. On the operations side of your business it most often involves keeping your eyes open, looking for things that can hurt people or cost you money and applying common sense. On the insurance side it means working with a professional who knows and understands your business and can provide the right kinds of policies needed to protect your investment.

Bob Bader is the founder and CEO of Bader Co., as well as the director of the National Multi-Housing Council. He has more than 35 years of experience in the insurance industry. Bader Co. offers commercial and tenant insurance programs that best fit the objectives of self-storage owners and their management companies. For more information, call 888.223.3726; visit

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Stock Market Starts Strong But Falters

After a four-day streak, stocks started off strong on Monday only to falter as the day progressed. 

The Dow Jones industrial average lost 7 points, or 0.1 percent. The S&P 500 index slipped 2 points, or 0.4 percent. The Nasdaq composite tumbled 27 points, or 1.9 percent.

Stocks had gained through the early afternoon on a rally in bank shares and some upbeat comments from Federal Reserve Chairman Ben Bernanke. But the advance lost steam late in the afternoon.
Investors were pulled between wanting to extend the advance and wanting to take profits.

Source:,  Stocks Can't Sustain Rally

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Fire Hits Stuff-It Storage in Hadley, Mass.

Investigators in Hadley, Mass., are seeking the cause of a fire that damaged numerous units at Stuff-It Storage on Route 9 last night. The Hadley Fire Department received aid from the surrounding cities of Amherst, Northampton and Sunderland in battling the blaze that was reported around 7:30 p.m. Firefighters returned to the scene this morning to extinguish a small fire that rekindled in a pile of debris. The value of damage from fire and smoke has not yet been determined.
Source:, Fire Damages Hadley Self Storage Business

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Partnering With a Self-Storage Consultant or Management Company

Not too long ago, self-storage was considered a recession-proof industry. When things were good, business was good; when things were bad, business was still good. At the top of the real estate bubble, new investors were pouring money into self-storage based on historic numbers and the expectation of similar results moving forward. It seemed self-storage was the investment of which everyone wanted a piece. 

Then came 2008. The downtown in the economy has had such a pervasive effect on the American population that self-storage is seriously feeling the pinch. This, coupled with increased competition and rising expenses, has become the perfect storm keeping many storage owners from getting a good night’s sleep. Businesses that once were considered or expected to be cash cows are now finding the grazing pasture sparse. 
A Second Opinion

In this economy, facility owners have to ask hard questions and make even harder decisions. It’s more critical than ever that these questions are answered with diligence and scrutiny, and decisions are followed by action and evaluation―not an easy task even in the best of times.

Now could be the time to consider partnering with a self-storage consultant or management company to guide you. Whatever your priorities are for your business operations, an outside assessment can provide objectivity and perspective. Here is a short yes/no assessment to help you identify potential problems:
Yes   No    My competitors are getting more business than I am.
Yes   No    I don’t audit. I trust my manager completely.
Yes   No    We have not increased rental rates in more than a year.
Yes   No    I think our delinquencies are higher than they should be.
Yes   No    We pay way too much for Yellow Pages advertising.
Yes   No    I'm not sure we are following the right auction    procedures.
Yes   No    My rates are significantly lower than my competitors’ rates.
Yes   No    We generally let the manager decide what special to give.
Yes   No    We are not getting the results we need from our marketing or advertising. 
Yes   No   We have not had our lease and letters reviewed in a long time. 

If you’ve answered yes to one or more of these questions, it might be time to talk to an industry consultant who can provide you with some solid solutions. When the car is not running correctly, we take it to a mechanic. If we have a legal question, we call our attorney; a tax issue, our accountant. It only makes sense that when our self-storage business needs a boost, we consult an industry professional. 

When doing what you have always done is just not enough anymore, a fresh initiative may be just what you need. Sometimes a conversation, site assessment, audit or market review from an unbiased party can jumpstart your business with realistic expectations and a plan of action. 
Finding Success

Perhaps you enjoy the self-storage business but no longer want to oversee your store’s day-to-day operation. If self-storage is just one of your business ventures, you may find the demands on your time and attention have shifted. Or maybe you want to spend more time on other activities and pastimes.

Employing a management company whose sole focus is self-storage will enable you to spend your time and attention where you want or need it without your business suffering. The cost can also be minimal, if you consider the value of your own time and effort. Management companies generally charge between 5 percent and 10 percent of a facility’s gross revenue. However, the increase in results—higher occupancy, employee training, advertising programs—usually recovers this additional cost many times over.

Having your operations assessed or run by a professional can offer a broader range of new ideas, and steer you away from mistakes toward solutions that are right for your business. Sometimes, a few minor tweaks are all you need for increased success. 

With a fresh perspective, a workable plan in place and a professional partner on your team, you can leap ahead of the competition with more money in your pocket and more time on your hands without losing anything in the process. Isn’t that what attracted you to the self-storage industry in the first place? 
Linnea Appleby is president of Sarasota, Fla.-based PDQ Management Solutions Inc., which provides full-service facility management, consulting, startup, auditing, management and training services. For more information, call 941.377.3151; visit

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Inside Self-Storage World Expo Secures Better Dates for Fall Show

The Inside Self-Storage World Expo scheduled to take place this fall in Washington, D.C., has changed its dates to Oct. 5-8, 2009. Originally set for Nov. 3-6, the event will still be hosted at the Gaylord National Resort & Convention Center.
According to show planners, the decision to change the dates of the self-storage conference and tradeshow was threefold. “First, we wanted to help attendees and exhibitors avoid conflicts with other industry events taking place during that time of year,” said Tradeshow Director Dana Hicks. “We also wanted to move the show further away from the Thanksgiving holiday, and we thought participants would appreciate being in D.C. earlier in the year when it isn’t quite so cold.”
The ISS Expo is designed to meet the educational needs of self-storage owners, managers, investors, developers and suppliers. It will comprise four days of seminars, add-on intensive workshops, networking events, and product and service exhibits. Topics to be addressed include facility marketing and promotion, legal issues, insurance, finance and lending requirements, green building, rental-rate management, development guidelines and more. For information, visit

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Minimizing Risk in Self-Storage: Employment Practice Liability Insurance

What the risk-management process lacks in excitement it more than makes up for in importance. Since the absence of an effective risk-management plan can undermine even the most successful business, minimizing or eliminating risk is the cornerstone of any profitable commercial venture.

When developing a risk-management strategy, business owners typically focus on protecting against the most obvious source of potential liability to the exclusion of others. For self-storage facilities, this often means risk-management focus is almost entirely on the physical site as well as the property stored on the premises for others, and any liabilities that may result if such property is lost or damaged. But there is another considerable exposure.

Consider this: An employee in your organization files a discrimination lawsuit alleging she was not promoted because of her gender. You’re confident the promotion went to the better-qualified candidate and have sufficient documentation to support this decision. Still, having to defend your company against her claim in court could be costly; legal fees might seriously deplete your business’s cash reserves, perhaps even lead to bankruptcy.

But you were smart. Two years ago, you purchased an employment practice liability insurance (EPLI) policy, which covers precisely this sort of situation, ensuring your business is protected from a possible financially devastating loss.

Such a scenario is quite possible in today’s increasingly litigious business climate, in which even the most proactive employers can find themselves in violation of one of the many employment laws governing the workplace. In fact, according to the Equal Employment Opportunity Commission (EEOC), the likelihood of experiencing such a scenario is greater now than it has been in the last decade.

In 2007, employees filed almost 83,000 charges with the EEOC, including charges of discrimination on the basis of race, sex, national origin, religion, age, disability and retaliation. This figure represents the first increase in the number of annual charges filed since 2002. Although a precise explanation for the recent surge in employment-related charges may not be available for quite some time, it is possible that the struggling economy may play a significant role.

In any event, the result for business owners is the same: a significantly increased risk of exposure to employment-related liabilities that can push already struggling businesses over the edge. That’s why EPLI has become an almost necessary part of a business’s insurance umbrella.

The Right Protection

EPLI protects employers against workplace claims such as discrimination, wrongful termination and sexual harassment, whether perpetrated by employees or other individuals. These policies can also be extended to provide coverage for acts discriminating against customers or prospective customers (client discrimination).

Generally, a policy covers eligible losses stemming from such causes of action and attorneys’ fees. And the insurer will provide the services of attorneys who specialize in defending against such claims, significantly increasing the likelihood that employers will prevail in the event litigation does occur.

Maybe you think your facility’s commercial general liability (CGL) policy protects you in such situations. Not so. In most cases, CGL policies specifically exclude employment practice claims. CGL policies protect your business against losses resulting in bodily injury or property damage. Employment practice claims generally involve injuries that are mental, emotional and economic in nature and are, therefore, outside the range of protection offered by CGL insurance.

What does an EPLI policy typically cover? The most common situations include:

  • Discrimination and retaliation
  • Sexual and general workplace harassment
  • Negligent hiring
  • Breach of employment contract
  • Wrongful termination, dismissal or discharge
  • Violations of the Family and Medical Leave Act
  • Situations involving defamation, libel and slander
  • Denial of training or deprivation of seniority

Most commonly purchased as a stand-alone policy or an endorsement to a directors and officers policy, an EPLI policy is generally available in claims-made format, meaning the policy will cover only those claims that occur and are reported made during its term.

An EPLI policy also requires the insured give prompt notice to the carrier as soon as the insured becomes aware of facts or circumstances that might give rise to a claim. Most EPLI policies are subject to a single-policy aggregate limit of liability covering both defense and indemnity, meaning the costs of defending against a claim will diminish the amount paid to cover settlements or judgments.

Some carriers will allow an insured to purchase defense as well as policy limits, thereby placing the litigation defense costs outside the amount available for indemnity. Ultimately, the best course of action is to consult your insurance agent to assist you in choosing the policy that suits your business’s needs and provides you with the appropriate level of protection.

As with any liability policy, EPLI may not cover certain risks including:

  • Risks covered by other policies, such as a CGL
  • Intentional, criminal, fraudulent or malicious acts
  • Contractual liability
  • Strikes and lockouts
  • Violations of the Occupational Safety and Health Act

Keep Up Training

Of course, EPLI insurance should be considered only the last line of defense in a healthy business’s battle against workplace liability. Regularly providing your employees with comprehensive training can substantially reduce the risk that they will engage in the sort of illegal or unethical behavior that may lead to litigation.

Unfortunately, during difficult financial times, training is often the first casualty of cost-cutting measures because it is considered a nonessential expense rather than a revenue-generating function. However, since any savings generated by eliminating training may be dwarfed by a single employment-related claim, such a perspective can be costly.

Businesses committed to protecting their profits can provide management and workforce training with minimal expense by providing online training. E-learning offers the information necessary to develop competencies in employment practices that ultimately serve to reduce liabilities. The costs of e-learning are significantly lower than those associated with live training, even though online training is infinitely more effective than standard textbooks.

Moreover, today’s technology allows business owners to easily track their workforce’s training to ensure no employee falls through a training crack. With the option of convenient, affordable online training of employees, the benefits of risk reduction are achieved at a marginal cost.

Also, well-written and properly enforced human resources policies and procedures are essential for keeping your business in compliance with the many and varied regulations covering the workplace, even if it is not in the form of a formal division or department within a self-storage organization. It can be invaluable in reducing the risk of suffering employment-related losses, which often result from a lack of knowledge, attention or both. Ensuring neither circumstance exists within your organization can significantly reduce the likelihood of an employment-related claim.

The good news is that EPLI policies are practical and usually quite affordable. Carefully examine your business’s training programs, employment practices and compliance history to determine its degree of exposure to litigation and weigh these factors against the costs of EPLI. Such a risk inventory may make clear that the cost of an EPLI policy may be a relatively small price to pay when measured against the ruinous financial penalties that can result from employment-practice litigation. Your insurance specialist should be able to assist you in selecting the right coverage for your organization.

Tiffany Luongo is an attorney and director of risk management for Setnor Byer Insurance & Risk, an independent insurance agency dedicated to developing comprehensive insurance and risk-management solutions for clients throughout the United States. For more information, visit

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