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Salvation Army Opens Drop-Off Center at Hawaii Self Storage

The Salvation Army has opened a donation drop-off center at Hawaii Self Storage in Pearl City, Hawaii. Another drop-off center is planned to open at the Hawaii Self Storage facility in Kapolei.
 
Source: The Honolulu Advertiser, Salvation Army sets up new donation center

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Marcus & Millichap Report: The Impact of the Stimulus Package on Investment Real Estate

To help real estate investors better understand the national economic stimulus package and its effects on their investments, Marcus & Millichap Real Estate Investment Services is offering clients a special research report titled, “Government Intervention, Bank Stress Tests Aim to Restore Confidence―Will Measures Be Enough?” The report addresses key financial sector developments, a commercial real estate outlook, an economic overview, conditions for commercial real estate investment and more.

This report and others can be viewed through the "Research Services" page at www.marcusmillichap.com. For more information, interested parties can contact a local company office e-mail John Chang, national research manager, at [email protected].

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Forecasting the Self-Storage Investment in Canada

If you’ve been reading or listening to the news, you cannot help but feel that eerie pit in your stomach as you absorb the cloud of economic gloom. But is this doom really true for every industry? Forecasting the economic future for Canada is a challenge and may take some time to clearly define just how dismal it will be.

However, investment and developing in the self-storage industry may be another consideration entirely. While the country’s economy as a whole may thrive on the consumer’s ability and desire to buy, the storage industry is an all-weather profit center that has proven to do fairly well during difficult times.

This business is somewhat insulated from financial woes as an integral service to companies or people who are downsizing or experiencing some type of transition. Therefore, the demand for storage is likely to increase through a tough economic period. This could subsequently increase new self-storage construction and momentum for facilities across the country. 
 
A Good Time for Investment

There are numerous reasons why this economy can be favorable for self-storage development in Canada. Just look at the way developers are pulling back from retail, home and industrial developments that require the consumer engine to be running at full strength. These developers are not going dormant; they’re seeking to refocus on other avenues to generate income. Self-storage provides new opportunities for investment.

In addition, there is an increase in availability of skilled tradesmen from other slowing industries, so the cost of labor is lower. Self-storage construction methods have also become more cost-effective. Although the popularity of multi-story structures has ebbed due to the challenge of finding suitable land, we are now seeing conversions of existing industrial or warehouse buildings in prime municipal locations.

Conversion developments change existing single-story industrial buildings into two-level storage facilities that maximize profit by doubling the rentable space. Falling real estate values of existing buildings also makes them an attractive option for Canadian developers, owners and investors. Just look at the declining purchase price of a 50,000-square-foot industrial building―an acceptable candidate for self-storage conversion in most cities. The cost savings of 10 percent to 20 percent from just a year ago would make any investor or developer’s heart skip a beat with excitement.
 
Lending Options

On top of this massive boost to your bottom line, institutions that lend to developers in all industries have reviewed their levels of exposure and risk. We’re seeing major reductions in lending ratios for industries that have cooled; but as recent as mid-March, we saw one developer receive financial approval from a major institution for a new self-storage facility with a favorable 70/30 investment ratio.

With its solid track record―not just enduring but growing despite numerous shifts in the economy over more than three decades―the self-storage industry is seen by many as a stable and worthy investment. Even private funding is gaining ground in the amount of investment exposure.

There are plenty of reasons to get into the self-storage business at any time. However, now is the time to take advantage of lower construction and labor costs along with rising profitability to maximize your harvest of success and abundance. The return on investment will be more than satisfying to any investor looking for a sturdy ship to weather through our current economic condition.
 
Richard Leach of Richard Leach and Associates Inc., in Brampton, Ontario, is also a marketing consultant for the Ontario-based Canadian Metal Manufacturing Inc., which develops turnkey self-storage systems. Established in 1999 as a metal fabricator, the company has been in the self-storage industry since 2003. For more information, call 905.951.1762; visit www.canadianmetal.ca.
 
 
 

Forecasting the Self-Storage Investment in Canada

If you’ve been reading or listening to the news, you cannot help but feel that eerie pit in your stomach as you absorb the cloud of economic gloom. But is this doom really true for every industry? Forecasting the economic future for Canada is a challenge and may take some time to clearly define just how dismal it will be.

However, investment and developing in the self-storage industry may be another consideration entirely. While the country’s economy as a whole may thrive on the consumer’s ability and desire to buy, the storage industry is an all-weather profit center that has proven to do fairly well during difficult times.

This business is somewhat insulated from financial woes as an integral service to companies or people who are downsizing or experiencing some type of transition. Therefore, the demand for storage is likely to increase through a tough economic period. This could subsequently increase new self-storage construction and momentum for facilities across the country. 
 
A Good Time for Investment

There are numerous reasons why this economy can be favorable for self-storage development in Canada. Just look at the way developers are pulling back from retail, home and industrial developments that require the consumer engine to be running at full strength. These developers are not going dormant; they’re seeking to refocus on other avenues to generate income. Self-storage provides new opportunities for investment.

In addition, there is an increase in availability of skilled tradesmen from other slowing industries, so the cost of labor is lower. Self-storage construction methods have also become more cost-effective. Although the popularity of multi-story structures has ebbed due to the challenge of finding suitable land, we are now seeing conversions of existing industrial or warehouse buildings in prime municipal locations.

Conversion developments change existing single-story industrial buildings into two-level storage facilities that maximize profit by doubling the rentable space. Falling real estate values of existing buildings also makes them an attractive option for Canadian developers, owners and investors. Just look at the declining purchase price of a 50,000-square-foot industrial building―an acceptable candidate for self-storage conversion in most cities. The cost savings of 10 percent to 20 percent from just a year ago would make any investor or developer’s heart skip a beat with excitement.
 
Lending Options

On top of this massive boost to your bottom line, institutions that lend to developers in all industries have reviewed their levels of exposure and risk. We’re seeing major reductions in lending ratios for industries that have cooled; but as recent as mid-March, we saw one developer receive financial approval from a major institution for a new self-storage facility with a favorable 70/30 investment ratio.

With its solid track record―not just enduring but growing despite numerous shifts in the economy over more than three decades―the self-storage industry is seen by many as a stable and worthy investment. Even private funding is gaining ground in the amount of investment exposure.

There are plenty of reasons to get into the self-storage business at any time. However, now is the time to take advantage of lower construction and labor costs along with rising profitability to maximize your harvest of success and abundance. The return on investment will be more than satisfying to any investor looking for a sturdy ship to weather through our current economic condition.
 
Richard Leach of Richard Leach and Associates Inc., in Brampton, Ontario, is also a marketing consultant for the Ontario-based Canadian Metal Manufacturing Inc., which develops turnkey self-storage systems. Established in 1999 as a metal fabricator, the company has been in the self-storage industry since 2003. For more information, call 905.951.1762; visit www.canadianmetal.ca.
 
 
 

ONeil Software Adds Costa Rica to Customer Territories

O’Neil Software, a provider of records-management software and hardware, has increased its international network of markets served to 70 with the addition of Costa Rica. The company was recently selected by Grupo Mudanzas Mundiales/Guardadocumentos, one of the largest records-storage companies in Costa Rica, to provide its in-house software system.
 
Grupo Mudanzas Mundiales is a large moving and storage company with several warehouses in San Jose. It will use O’Neils RS-SQL software, which allows for Spanish translations. The company will also install wireless access points in three of its warehouses for barcode communication and to enhance the efficiency of its operations department, said company president Carlos Jose Zuñiga. In addition, it will roll out O’Neil’s RSweb.NET to provide its customers with fast, real-time access to their business information.
 
O’Neil serves more than 850 records centers worldwide, ranging from startups to multi-nationals. Its software manages and tracks multiple types of data, including storage boxes, file folders, documents and tapes.

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Self-Storage Books Available via Amazon Kindle

Two self-storage books are now available for purchase and download to the Amazon Kindle electronic reading device: Auditing Self-Storage: Preventing Employee Theft & Embezzlement, by Tom Litton, and How to Invest in Self-Storage," by Scott Duffy and RK Kliebenstein.
 
Litton’s book provides practical information to guide self-storage owners through the auditing process. Topics include embezzlement techniques, warning signs and reasons employees steal. Duffy and Kliebenstein’s publication is a practical guide for anyone interested in entering the self-storage industry. It addresses reasons to start a storage business, common myths, and a step-by-step process for developing or acquiring a facility. Both books are published by MiniCo Publishing.

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Big Yellow Announces Big Loss, Puts New Shares on Market

U.K. self-storage company Big Yellow today announced a pre-tax loss of £71.5 million for the year ended March 31, 2009, down from a profit of £102.6 million in the prior year. The loss was mainly due to the reversal of revaluation gains booked in the previous year, it said.
 
The company will also sell up to 11.6 million new shares at 10 pence each to allow it to take advantage of property market conditions and fund the development and acquisition of sites.
 
David Ross, who holds a 9.92 percent stake in Big Yellow, today put £250,000 into the self-storage company, where he quit as a director last year. He and current members of the board will buy £680,000 worth of shares. Ross was forced to resign from the boards of Big Yellow, Carphone Warehouse and National Express last year after pledging some of his company shares as collateral against loans.
 
Big Yellow operates 54 self-storage facilities throughout the United Kingdom.
 
Source: Daily Mail, Big Yellow swings to loss and places 11.6m shares for sale

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Simply Self Storage Chooses Penske Truck Rental

Simply Self Storage, an Orlando, Fla.-based operator of more than 200 self-storage facilities, has chosen Penske Truck Rental as its exclusive provider of consumer rental trucks. Customers can now rent Penske trucks at approximately 70 of Simply’s U.S. locations. The two companies are cross-promoting their relationship on their websites.
 
Simply Self Storage is the largest privately owned self-storage company in the United States and Puerto Rico.
 
Penske Truck Rental is a service of Penske Truck Leasing. With one of the newest fleets in the industry, it provides do-it-yourself movers with trucks, moving equipment, packing supplies and accessories.

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Sovran Self Storage Revises Outlook Due to Fitch Rating Downgrade

Sovran Self Storage Inc. today reported that the recent action taken by Fitch Ratings to adjust the credit rating of its unsecured term notes and revolving line of credit to BB+ from BBB- will result in higher interest costs and have an impact on its second quarter and full year 2009 net income and funds from operations.
 
As of March 31, the company had $500 million of unsecured term notes outstanding. The blended interest rate on these notes will increase from 6.14 percent to 6.93 percent as a result of the ratings adjustment. The interest rate on Sovran’s $125 million revolving line of credit will increase from LIBOR plus 1.375 percent to LIBOR plus 1.75 percent.
 
As a result of these rate increases, Sovran expects to incur additional interest costs of approximately $2.6 million for the balance of 2009, and further expects to report a second-quarter charge of up to $1 million in waiver, amendment and legal fees associated with its various unsecured notes. Accordingly, FFO guidance for the second quarter has been reduced by $0.08 per share to a projected range of $0.65 to $0.67, and by $0.17 per share for the year to between $2.83 and $2.91.
 
“We are obviously disappointed in this unexpected action taken by Fitch. We believe this abrupt change is unwarranted based on our long corporate history of conservatively managing our balance sheet and operations,” said David Rogers chief financial officer. “We employ modest leverage, have no significant debt maturing for at least three years, and maintain a strong debt-coverage ratio. We will be working in the coming weeks to re-achieve the favorable interest rates we feel our capital structure warrants.”
 
Sovran is a self-storage real estate investment trust that operates 385 facilities in 24 states under the name Uncle Bob's Self Storage.

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ISS Blog

Hats Off to Tom Litton, Self-Storage Marketer Extraordinaire

The ultimate success of a seminar depends as much on the energy exchange between speaker and audience as on the quality of its content. If you have a knowledgeable, charismatic speaker, you’re bound to have an engaged, satisfied audience. If your presenter is flat, even the most powerful material will fall flat with him.

I know this not only from having attended hundreds of seminars during our ISS Expos, but from reading attendee feedback after each event. We have sometimes made the mistake of bringing in a speaker based on his talent and expertise in the field, without having seen him present. We'll later get comments like, "Really smart guy, but BORING," or "That was so dry!" Or worse—the attendee can't comment because he wasn't paying attention or didn't stay until the end of the session.

This week, I enjoyed a delightful seminar experience. Hats off to Tom Litton, who presented several sessions as part of the Arizona Self-Storage Association annual conference and tradeshow. The one I saw was "Sales & Marketing Boot Camp," in which he covered 50 great tips for self-storage operations. Tom was energetic and funny, very personable with his audience, and had fantastic ideas to share. I was extremely impressed.

Which is why I'm thrilled to announce that Tom will be presenting a similar program as part of upcoming Inside Self-Storage World Expo in Washington, D.C. On Oct. 5, attendees can take advantage of an intensive five-hour workshop on self-storage marketing and sales. Based on what I've seen, I highly recommend it. Here's just a very small sample of the ideas I learned during this class:

  • Collect coupons from surrounding businesses and send them to tenants with their bill each month. You have to buy the stamp anyway, and tenants appreciate you helping them save money. Not only that, but it's a great opportunity to build relationships with your neighbors and cultivate those oh-so-valuable referrals.
  • Keep a toy box of goodies for children to play with when they come to the facility with their parents. It keeps the kids happy, which keeps the parents happy. And if you get some toys printed with your store name and logo, you can distribute them to customers as well as schools and other local childrens' groups.
  • Advertise your facility on craigslist. Don't forget to post a new ad every day. It's free!

This is just a very small taste of the seminar content. Tom is a fount of self-storage marketing ideas after his decades of facility management experience. Don't miss your chance to see him in action.

If you've got a clever marketing idea to share, feel free to post it to the blog or add it to one of the many marketing discussions happening at Self-Storage Talk: