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Articles from 2014 In May


International Self-Storage Builder Steel Storage Hires General Manager

Steel Storage Holdings Pty. Ltd., an international construction and development firm serving the self-storage industry, has appointed Adrian Starling as general manager for the company’s U.K. division, Steel Storage Europe, effective July 1. In his new role, Starling will assume responsibility for the group’s European operation and business. He joined Steel Storage in 2008 as the sales and marketing director.

“The board is delighted to offer Adrian this new challenge. He has been an integral part of the group’s success over the past six years. His attitude to fantastic customer service and drive to deliver epitomize the Steel Storage values and goals,” said CEO Colin Jeromson.

The growth of the self-storage industry in Europe is in an exciting phase, according to Starling. In addition, Steel Storage’s experience and knowledge combined with the company’s “high level of customer service and product quality,” make it an exciting time for Steel Storage Europe and for Starling personally. “I’m delighted to have been given the opportunity to continue to grow Steel Storage operations and the customer base within Europe,” he said.

Steel Storage provides a full range of construction and development services to self-storage operators in Asia, Australia and Europe. It has offices in Brisbane, Australia; London; Paris and Singapore.

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U-Haul Parent Company AMERCO Reports Self-Storage Revenue Increases for 4Q, Fiscal Year 2014

AMERCO, the parent company of U-Haul International Inc., reported financial results for the fourth quarter and its 2014 fiscal year, which ended March 31. Self-storage revenue increased $7.2 million (17.6 percent) year over year to $48 million during the quarter. Storage revenue increased $29.1 million (19.1 percent) to $181.8 million for the fiscal year compared to 2013.

Average monthly occupancy was 79.3 percent during the quarter, up from 77.8 percent for the same period last year. For the fiscal year, occupancy was 80.5 percent. U-Haul added approximately 2.1 million net rentable square feet to its self-storage portfolio during the last 12 months.

Companywide, AMERCO reported fiscal-year net earnings available to common shareholders of $342.4 million, $17.51 per share, compared to $264.7 million, $13.56 per share, last year. Net earnings for the quarter tallied $39.2 million, $2 per share, compared to $37.9 million, $1.93 per share, during the fourth quarter last year.

"Our employees, dealers and affiliates continue to find ways to improve the U-Haul rental experience," said Joe Shoen, chairman of AMERCO. "We operate in very competitive markets. We are surrounded by uncertainty. The better we serve the customer, the better our longer-term prospects."

Operating earnings at the company’s moving-and-storage segment increased $17.6 million in the quarter compared with the same period last year and $122.4 million for the full year.

AMERCO is the parent company of U-Haul International, Oxford Life Insurance Co., Repwest Insurance Co. and Amerco Real Estate Co. Established in 1945, U-Haul has more than 40 million square feet of storage space at more than 1,000 owned and managed facilities throughout North America.

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UK Self-Storage Operator Lock & Leave Opens Converted Facility in Canterbury, England

U.K. self-storage operator Lock & Leave Ltd. has opened a 40,000-square-foot facility in the Marshwood Business Park in Canterbury, England. The company purchased the property in March 2013. In addition to converting the site to traditional self-storage, Lock & Leave has included rentable offices and workspaces, industrial bulk units, and vehicle storage in its service mix.

The self-storage operator is marketing the office and workspace to startups and small businesses. Some pre-existing business-park tenants will continue to operate from the site near highway A28, according to the source.

“We’d been searching for a new expansion site in the Southeast for some time, and the Marshwood site presented itself as a real win-win opportunity,” said Andy Doulton, operations manager. “For Lock & Leave, there’s bags of potential both in terms of market prospect and physical expansion.”

The new facility also offers document-management services including archive storage, file retrieval and pickup, indexing, racking, and confidential shredding, according to the source.

The company also operates self-storage facilities in the English communities of Battersea, Twickenham and West Molesey.

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ISS Blog

Optimize the Customer Experience by Thinking Like a Self-Storage Retailer

Are You Thinking Like a Retailer?

When you think about your self-storage operation, do you think of it in terms of storing people’s belongings or providing a specialty retail service? The industry certainly grew from an industrial frame of mind (and building design), but moving forward, storage operators would be wise to increasingly ramp up the retail aspects of their business.

That doesn’t necessarily mean increasing the number and variety of your ancillary services (although I strongly encourage you to do so). What I mean is every self-storage operator, developer and investor should think of his business like a retailer. Specialty retailing (along with the best service businesses) is about providing an outlet for niche goods and services consumers want or need. The most successful specialty brands have staff who are experts in their niche, use consultative selling techniques to increase customer-purchase satisfaction, and display merchandise in a way that enhances the customer’s shopping experience.

Does that sound like something a warehouse does? Being a specialty retailer is much different than simply providing storage space. Providing rented space may be the core act of your operation, but it should not define the totality of your service value.

Admittedly, thinking more like a specialty retailer is a psychological play. Marketing is about appealing to someone’s senses or sensibilities. You’re trying to trigger a positive emotional response to make a sale and gain customer loyalty. How you design your facility and present your business internally and externally should do the same thing. It’s really about visual messaging, and there’s an increasing number of self-storage operators who are smartly applying this philosophy to their facilities.

In his education session on “Creative Design Techniques” during the Inside Self-Storage World Expo, architect Bruce Jordan talked about the change in facility design toward a more retail presentation. This is in part because it appeals more to women, who are the primary storage decision-makers, but also because storage still fights an uphill battle during the planning and zoning stages.

Let’s face it, municipalities aren’t fond of the industrial stereotype self-storage facilities can’t seem to shake. Neither are nearby residents (some of whom will be future tenants) who get up in arms about a storage location encroaching on their neighborhood. It’s up to operators and developers to change perception.

Look around your management office. What does it say about your facility and the services you offer? Is the color of the walls inviting and project warmth? Is it well-organized, with pack-and-ship merchandise, locks and boxes attractively displayed? Can customers easily grasp what unit size they need and visualize their three-bedroom house efficiently stored in your space?

I think the latter may be an underutilized opportunity to enhance a customer’s in-store (or online) shopping experience. Sample unit sizes can give customers an idea of space, but not everyone has a high enough spatial IQ to understand what will fit inside or how best to organize contents. To most people, an empty 10-by-10 unit looks pretty big. Making the effort to stage unit sizes with boxes, bins, furniture and other commonly stored items can go a long way toward helping customers visualize their personal belongings being safe and secure in one of your units. Display units can also be used to effectively showcase your retail merchandise, while demonstrating the size constraints of the space. This is something IKEA stores do very well.

Think about the services you offer. How does the design of your facility and its mix of merchandise reflect the full scope of your value proposition? If wine storage is a big part of your identity, do you offer wine accessories like openers, stoppers, pourers and foil cutters? These needn’t take up a lot of wall or floor space, and wine enthusiasts (particularly those who fancy themselves connoisseurs) will spend money on gadgets connected to their passion. Consider giving away store-branded promotional items that tie directly with your specialty services.

Think about your community. What tie-ins are there for you to promote on your property? Bridge Storage and ArtSpace in Richmond, Calif., has converted a sizable portion of its property into art and music studios housed in former storage units. The storage office doubles as a gallery space, displaying some of the artwork created by its tenants, and occasionally sells pieces on behalf of the artists. This is a great representation of the business and provides a community and customer service at the same time.

The key is to stand out for the right reasons and connect with tenants and prospective customers on their level. It doesn’t have to be fancy. Operators are increasingly getting creative with signage, even naming aisles and hallways with labels that resonate with locals and make it easy for customers to remember where their units are located. Ideas like this are simple to execute but can be memorable difference-makers.

Think about the retailers you enjoy shopping with the most and why, particularly if buying is not always your primary objective. What’s the hook? Finding inspiration from non-industry retail sources you respect is a great way to improve your business and can often provide a point of differentiation from competitors. What retail strategy do you or would you emulate or adapt in your self-storage business to create a competitive advantage? Please share your ideas in the comment section below.

The Benefits and Drawbacks of Cloud-Based Self-Storage Software

Cloud Computing

By Tim Schlee

As rapidly as technology progresses, it’s easy to get lost in a whirlwind of new advances and terminology when trying to stay up to date. But staying abreast of recent innovations can be vitally important to the success of your self-storage business. You don’t want to ignore any cool new gadgets that make your workflow more efficient or boost convenience for the customer, do you? Especially not when your competitors are taking advantage of those same features!

Cloud-based software is one of the recent tech innovations that’s changing the way people look at data storage and computer programs. Using the convenience of the Internet, cloud-based providers are able to streamline storage, installation, updates and virtually every other facet of the computer software they offer. It’s not without its critics, however.

If you’re not sure what cloud-based software is or whether it’s right for your storage operation, read on. I’ll address the major benefits and potential drawbacks you could encounter in switching to this new technology.

What ‘Cloud-Based’ Means

Let’s begin with a little background on cloud-based software. If you’ve ever heard mention of the “cloud,” it’s a term that refers to off-site data storage. In traditional software, your computer is the data-storage site. You input numbers, names, dates and any other information directly into a program that’s installed on your computer—and that’s where the info stays.

In cloud storage, however, your data is stored by a third-party vendor, not at your facility, and you access the info via the Internet. Cloud-storage vendors operate warehouses (sometimes quite large) that house servers, the databases in which your information is stored. A complex of servers offers far more computing power than the typical office setup and allows a specialized team of professionals to maintain the server farm’s safety and security.

Using Cloud-Based Software in Self-Storage

The popularity of cloud-based software is quickly growing. If you’ve ever used Google’s Gmail, Dropbox or Google Docs programs, you’ve taken advantage of the convenience of cloud storage. Its use in the self-storage industry is more recent and less widely accepted, though cloud-based software providers are growing in the industry.

Cloud-based software can be used in place of any site-based program. There’s a wide range of products that offer a variety of services including:

  • Payment processing
  • Management software
  • Call tracking
  • Security systems

Whatever computer programs you run at your facility now probably have cloud-based counterparts that offer innovative new features not available in conventional software. If not, then it’s likely you’ll be able find a cloud-based counterpart in the near future, as the use of cloud storage is growing.

The Advantages

By taking explicit control of the storage and maintenance of your data, cloud-based vendors relieve you of these duties and offer a number of advantages that other software providers don’t.

Convenience. The most significant advantage is the incredible convenience cloud-based software offers. Because you connect to the cloud via the Web, you can access your information anywhere you have Internet capability. This means you can access your software and data at home, on your laptop, from your smartphone, etc.

You can be stuck at home in a snowstorm, for example, and still have access to all your billing reports. You don’t have to go into the office to send invoices or apply late fees. You can check your security cameras late at night, or use your cloud-based call-tracking software to see which leads called back on the day you were out of the office.

The new software also offers a degree of control not previously possible. Even when on vacation, the facility owner or manager can still check in on a laptop or mobile device and make sure everything is running smoothly. This expedites your response to problems and allows you to take greater control faster to set things in order.

This feature is especially important in the self-storage industry, where some owners operate several facilities in separate towns or even across different states. With cloud-based software, they can now exercise as much or as little power as they like based on the needs of their facility managers. Other conveniences include:

  • Rapid implantation
  • Quicker updates and upgrades
  • Improved scalability
  • Improved system availability and disaster recovery

By exploiting the ease of access most people now have to the Internet, cloud-based software providers can offer a level of flexibility and personalization not found in most conventional software.

Security. This is one of the biggest concerns many people have with cloud-based software, but in actuality, it’s often much safer than keeping information on your computer in the office. This is true for two major reasons: encryption and redundancy.

Encryption is the process of encoding information to make it inaccessible to people who aren’t authorized to access it. The computing power required to crack the encryption keys of most cloud-based software providers is far too much for the average hacker. By comparison, what security measures do you take to protect the data sitting on your home or office computer?

Another common security mechanism is the use of redundancy, or storing the same information on multiple machines. This ensures a backup of all your information at any point in time, so even if one of the provider’s servers were to crash, your info would be safely stored on another.

Cost. While the cost of cloud-based and conventional software can vary widely, it’s often easy to find it for a cheaper rate than conventional software. The upfront costs are lower because the entire process is simpler. Cloud-based software doesn’t need to be mailed to your facility on a disk and then installed on your computer. Many programs can be operated right in your Web browser.

Operational costs are often lower as well. Because of the ease of access—both from the customer and provider—maintenance and support is significantly simplified, which often translates to lower prices for the end user.

Potential Disadvantages

Largely because of how new the technology and cloud-based providers are, there are some potential drawbacks to switching.

Internet dependency. There’s no getting around the fact that cloud-based software requires Internet access to be functional. In the event of an outage, your information will be perfectly safe at the provider’s server facility, but it will be temporarily inaccessible to you. This can be ameliorated by investing in a faster, more stable Internet connection, which may be an easy task if your new cloud-based software is saving you money each month.

Vendor lock-in of information. Third-party storage of your information can sometimes result in third-party ownership of that info. Read your contracts carefully. Some cloud-based software providers stipulate that, because they are storing your information, they legally own it. When you sign their contract, you give up ownership of your data.

This can cause problems down the road, especially if you ever want to move to a new provider. The company that owns your information can refuse to release it to you, meaning you won’t have it when you try to start over with a new company. Be wary of vendor lock-in to ensure you have complete control of your data. Ask each provider about this issue before making the switch to any new software, cloud-based or not.

Potential lack of support. Cloud-based software providers tend to be newer, smaller companies operating newer products. As such, some cloud-based programs don’t have the level of support that established, conventional programs do. It’s a good idea to inquire beforehand about a company’s support to ensure you don’t waste time and money training employees to use a software without any support.

Determining What Works for You

Cloud-based software offers a number of advantages, but ultimately, it’s up to the facility owner and manager to determine what’s appropriate for their business. Budget and need both play a role. If your current software provider is relatively inexpensive, there might be no motivation to switch, even with the added convenience. On the other hand, if you operate a company with facilities in various locations, the convenience of accessing your information from anywhere might outweigh any budgetary concerns.

Whether you choose to invest in a cloud-based software for your facility or not, it’s important to remain up-to-date about new technologies so you can operate your business and serve your customers in the best way possible. Take a look at some cloud-based options and see if they’re right for you.

Tim Schlee is a Kansas City native who studied English and linguistics at Truman State University. He is a content writer for StorageAhead, which offers Web-marketing technology for the self-storage industry, including lead-generating search engines and facility-management software. For more information, call 913.954.4110; visit www.storageahead.com.

Self-Storage REITs to Participate in REITWeek 2014 Investor Forum

Update 5/29/14 – When executives from self-storage real estate investment trusts (REITs) Extra Space Storage Inc., Public Storage Inc. and Sovran Self Storage Inc. give company presentations next week during REITWeek 2014, their sessions will be available online via live webcasts on REITStream.com.

David Rogers, CEO of Sovran, which operates under the Uncle Bob’s Self Storage brand, is scheduled to present on June 3 from 11 to 11:30 a.m. ET. A webcast of the presentation will be available by visiting the investor-relations section on the company’s website, where it will be archived for 90 days. The listen-only live broadcast will also be accessible on REITStream.com, which is handling the streaming of all scheduled webcasts.

Spencer Kirk, CEO of Extra Space Storage, will speak on June 3 from 2:15 to 2:45 p.m. ET., with the live broadcast available on REITStream.

Ronald L. Havner Jr., chairman and CEO of Public Storage, will present on June 5 from 9:30 to 10 a.m. ET. In addition to the live webcast on REITStream, the presentation will be available from the investor-relations section of the Public Storage website. An audio archive of the webcast will be available through June 19.

CubeSmart President and CEO Christopher Marr will also speak during REITWeek, the investor forum for the National Association of Real Estate Investment Trusts (NAREIT). Marr will be the first self-storage executive to present on June 3 from 8 to 8:30 a.m. ET. His presentation does not appear in the webcast schedule posted by REITStream.

REITWeek runs June 3-5 at the Waldorf Astoria Hotel in New York City.


5/13/14 – Executives from self-storage real estate investment trusts (REITs) CubeSmart, Extra Space Storage Inc., Public Storage Inc. and Sovran Self Storage Inc. will give company presentations during REITWeek 2014, the investor forum for the National Association of Real Estate Investment Trusts (NAREIT). REITWeek runs June 3-5 at the Waldorf Astoria Hotel in New York City.

Executives from the self-storage REITs will join management teams from more than 120 industry REITs as they outline their companies’ strategies in formal investor presentations. REITWeek is attended by pre-qualified investment managers, analysts, bankers and other industry professionals, according to NAREIT.

CubeSmart President and CEO Christopher Marr will be the first of three self-storage executives to present on June 3. Marr is scheduled to appear from 8 to 8:30 a.m. ET. David Rogers, CEO of Sovran, which operates under the Uncle Bob’s Self Storage brand, is scheduled to present from 11 to 11:30 a.m. Spencer Kirk, CEO of Extra Space Storage, will speak from 2:15 to 2:45 p.m. ET.

Ronald L. Havner Jr., chairman and CEO of Public Storage, will present on June 5 from 9:30 to 10 a.m. ET.

The conference will also feature keynote speakers during lunch general sessions on June 3 and 4. Tuesday’s opening lunch session will feature Jonathan Gray, head of global real estate for Blackstone Real Estate Advisors. Wednesday’s lunch session will feature a presentation by Fareed Zakaria, host of CNN’s “GPS” and editor-at-large for “Time” magazine and the “Washington Post.”

NAREIT describes itself, as “the worldwide representative voice for REITs and publicly traded real estate companies with an interest in U.S. real estate and capital markets.” REITWeek is designed to bring a large concentration of REIT management teams into one location, enabling them to share insights and their latest company developments. More information can be found at REIT.com.

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Canadian Self-Storage Operator StorageVault Buys Alberta Property for $1.5M

Canadian self-storage operator StorageVault Canada Inc. has completed its $1.5 million purchase of a property in Edmonton, Alberta. The company made two $50,000 deposits before a final $1.4 million payment at closing. It also waived due-diligence conditions as part of the purchase agreement. StorageVault announced it had agreed to purchase the asset on May 9.

The 3-acre property is in the Maple Ridge Industrial Park. About half of the land is developed as a compacted gravel compound, which includes an office and a 2,300-square-foot, steel-framed building on a concrete pad. StorageVault intends to use the site to operate a PUPS (Portable Units, Portable Storage) business, company officials said in a press release.

StorageVault owns several Canadian self-storage facilities, many in conjunction with a PUPS portable-storage franchise. The company operates a standalone Canadian PUPS facility in Saskatoon, Saskatchewan. It also manages five self-storage facilities in southern Ontario.

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W. P. Carey REIT Affiliate Leases Property to Self-Storage Door Manufacturer Janus

W. P. Carey Inc., a global net-lease real estate investment trust (REIT) specializing in corporate sale-leaseback financing, has acquired the Temple, Ga., property that houses the headquarters and two manufacturing facilities of Janus International Group LLC, a manufacturer of self-storage roll-up doors and building components. The $17 million transaction was made on behalf of CPA:18 – Global, one of W.P. Carey’s managed REITs.

The three facilities, which total 362,000 square feet, will be leased to Janus for a period of 20 years. The company also has manufacturing plants in Houston as well as Surprise, Ariz., and distribution centers in California, Florida, Mexico and South Africa.

"In the Janus transaction, we combined our real estate and industry experience with our financial-structuring expertise to address the specific needs of the company and its owners,” said W. P. Carey Executive Director Kathleen Barthmaier. "Given Janus’ leading position in the roll-up door market, the criticality of the assets themselves and the sponsorship support of an established private-equity firm, the investment had the characteristics we look for when sourcing investments for our portfolios."

CPA:18 – Global is a publicly held, non-traded REIT.

New York-based W. P. Carey is an investment-management company that oversees a global investment portfolio of approximately $15.4 billion. It provides companies worldwide with long-term sale leaseback and build-to-suit financing, and engages in other types of real estate-related investment.

Janus was acquired by Saw Mill Capital Partners LP, a private equity investment fund managed by Saw Mill Capital LLC, in late 2013. Established in 1997 and based in Briarcliff Manor, N.Y., Saw Mill Capital is an operations-oriented private equity firm focused on acquiring businesses with $40 million to $150 million in revenue that can be meaningfully grown organically and through acquisitions. The company partners with senior leadership teams to make control investments in businesses headquartered in North America, bringing capital and unique resources to help companies reach their full potential.

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Absolute Storage Management Releases First-Quarter 2014 Operating Results

Self-storage management company Absolute Storage Management (ASM) reported its financial results for the first quarter ended March 31.

To avoid inflating results, the company’s same-store property pool is comprised of 45 facilities, chosen from stabilized properties and based on historic data. At those facilities, total income increased 10.7 percent from the same period in 2013. The growth was largely due to increasing rental income, combined with decreasing discounts for new tenants, according to a press release. Retail and insurance income also contributed. The company’s square-foot occupancy rates rose by 3.3 percent, and street rates increased by 3 percent over same quarter in 2013.

“We continue to execute at a high level and compete effectively with the public companies,” said Michael Haugh, president. “Our team is expecting continued solid growth in revenue and [net operating income] for the remainder of 2014. Most of our trade areas are doing well enough to allow for improved street-rent growth.”

Haugh also said a large portion of the company’s growth is due to its website, which accounted for more than 4,500 leads during the first quarter.

Founded in 2002, ASM owns and manages self-storage facilities throughout the Southeast, operating more than 80 properties in 13 states. The company is actively seeking to add additional properties to its portfolio through traditional third-party management relationships and joint-venture/acquisition opportunities. Headquartered in Memphis, Tenn., it has regional offices in Atlanta; Charlotte, N.C.; and Jackson, Miss.

Self-Storage Software Provider SMD/SiteLink Awarded $1.7M in Lawsuit Against eMove

SMD Software Inc., provider of SiteLink property-management software for self-storage and portable-storage operations, was awarded a $1.7 million judgment against competitor eMove Inc. in U.S. District Court in North Carolina. The jury found that some marketing collateral distributed by eMove, a U-Haul Self-Storage Affiliate Network that offers the WebSelfStorage business platform, misled customers in a series of product comparisons with SiteLink.

In its lawsuit, SMD alleged that eMove published false advertising materials between 2004 and 2009 in violation of the federal Lanham Act and North Carolina’s Unfair and Deceptive Trade Practices Act. SMD claimed it lost customers as a result.

The jury found that eMove inflated the price of SiteLink in its materials. It also falsely claimed the software did not support real-time confirmed reservations, fully integrate online-payment processing, or include fully integrated call-center service, credit-card processing and tenant insurance.

“This is a huge win for us,” Ross Lampe, president and CEO of SMD, said in a released statement. “SiteLink software offers everything eMove claimed we don’t offer and more, and at prices far below those they misrepresented.”

In a pretrial order, eMove said an employee had obtained the product information it used through research and by mystery shopping on two occasions. The employee claimed he confirmed the information with Lampe during a tradeshow and with an SMD salesperson by phone, according to a report by “The SpareFoot Storage Beat,” a self-storage industry blog.

SMD’s lawsuit originated in 2008. eMove filed suit against SMD in 2010, alleging SMD had made false statements against eMove products, but a federal judge dismissed the case in 2012, according to the SpareFoot blog.

SMD also filed a motion to recover legal fees, which was appealed by eMove. On April 7, a federal appellate court upheld the motion for eMove to pay nearly $934,000 in legal fees to SMD, the blog reported.

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