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G-8 Leaders Agree to Reduce Carbon Dioxide Emissions 80 percent by 2050

Global leaders meeting this week for the G-8 summit have agreed to make global warming a top priority, and target reducion of carbon dioxide emissions.

President Barack Obama and other world leaders this week convened at a G-8 summit to discuss common problems and propose solutions.

The G-8 countries include the United States, Britain, Canada, France, Germany, Italy, Japan and Russia. All agreed to aim reduction of carbon dioxide emissions by 80 percent by 2050.

The goal is to prevent the Earth's atmosphere from warming by more than 2 degrees Celsius (3.6 degrees Fahrenheit). Scientists have warned a climate change above the 2 degree Celsius threshold would have a catastrophic impact on the planet.

The U.S. Congress is currently debating on a new energy policy that could codify the G-8 target for emissions reductions in law. 

Source:  CNN.com,  Obama: Leaders Will Work Together on Climate 

ISS Blog

Today's Self-Storage Outlook: Are Things Getting Better?

A few days ago, we posted a news item about the owners of Granite City Self Storage in Quincy, Mass., who say the economic downturn has actually been good for their business and even led to a facility expansion.

A similar news piece came across my desk today. Greeneville Self Storage in Greeneville, Tenn., celebrated a 47-unit addition this week with a ribbon-cutting ceremony.

The last few months of roller-coaster news have left many of us scratching our heads and wondering, “Are things getting better?”

While I do not have a definitive answer to that question, I can tell you self-storage is holding its own in most markets. Physical occupancy did drop 5 percent nationally in the second quarter compared to the second quarter of 2008—when, let’s face it, the economy was doing much better—and currently stands at about 84 percent, according to information from Self Storage Data Services Inc. (SSDA), which measures rental demand by tracking and analyzing monthly trends in move-ins and move-outs.

“A lot of people are looking for, no wishing for good news about self-storage, but unfortunately, self-storage is feeling the pain all real estate sectors are feeling,” Ray Wilson told me via e-mail Thursday. Ray is the president of SSDS and a renowned self-storage expert valuation expert. However, he also said the “only difference is self-storage’s performance is not being impacted as severe as all other sectors.”

In May, SSDS reported the demand for self-storage did gain strength in the consumer market during the first quarter. In March, total rental activity increased nearly 10 percent over February 2009 and was only down 3.5 percent compared to March of 2008, according to SSDS data.

Some Self-Storage Talk forum members have experienced increased move-ins this summer, while others are eagerly awaiting their next customer. Gatorgal in Gainesville, Fla., says all of the facilities in her area are struggling. In contrast, Always Open Storage in Danville, Ill., reported 30 move-ins and only 10 move-outs in May.

What’s happening in your market? Are you fielding more calls or greeting more walk-ins. Post a comment below or join the discussion at Self-Storage Talk.

Self-Storage: Still the Best Investment

Everyone’s feeling the pinch of the economic downturn. How is it affecting self-storage? In talking with many facility owners and feasibility consultants, I’ve come to some conclusions.  

First, I still haven’t found a business investment better than self-storage. At least 60 percent of the owners with whom I’ve spoken have experienced steady or moderate increases in rental activity. They also say the clientele has changed. The tenant who rents a unit while moving into a larger home has been replaced with the unemployed tenant who rents because he’s going to live with his parents or friends. Most owners have had to use some discounting to lure tenants; many have seen a rise in delinquent accounts.

The remaining 40 percent of owners are watching occupancies slip. The largest amount of change is happening in areas that are losing population, or those that have a large glut of home foreclosures. Even the self-storage REITS have experienced a decline in occupancy of 3 percent to 6 percent, but that is minimal, again showing the strength of the self-storage investment.

New Opportunities

There are fewer new or expanding self-storage sites developing this year. Many projects are on hold due to financing issues. While money is still available, a larger amount of equity is now required to seal the deal. In some cases, this could mean building a smaller phase or taking on a business partner. The flip side is, for the developer who does have financing, there is less competition for resources and building sites, not to mention less competition for new customers during rent-up.

One big advantage is a more favorable attitude from city and county zoning boards. In the past, some potential self-storage developments couldn’t get approval in a specific area because municipalities were picky about projects. Now, officials fear their cities will not grow, which means no new taxes will be added into the community or they may be forced to lay off staff. Consequently, they are much more receptive to self-storage development.

This may give you the advantage to get through the approval phase what was once considered an “impossible” project. Take advantage of this situation as best as you can, and build that facility you’ve always wanted.
 
The Cost of Construction

The other reason now is a great time to build is the costs related to development or construction have declined. We’ve seen a substantial decrease in the cost of materials including steel, concrete, paving and other building components. Land costs have come down in many areas due to the sluggish real estate market.

The decrease on construction volume makes resources more available and affordable, which can mean higher-skilled labor at better prices and shorter lead times. When you take into account the changes in development costs, a project that last year was marginal may now be feasible. In addition, hiring a general contractor is easier, and fees have also been trimmed.

Taking all this into consideration now is a great time to find that good location, build your facility, and be in position for the economic rebound you know is going to come.

Jamie Lindau is the national sales manager for Trachte Building Systems in Sun Prairie, Wis. Lindau has crisscrossed the United States and Canada for 23 years helping people plan, develop, build and profit from self-storage. Drawing from his own experiences as a former self-storage owner, he has also led more than 200 Trachte seminars since 1988. For more information, call 800.356.5824; visit www.trachte.com.

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Seven Myths of Self-Storage Development and Operation

Now Is a Good Time to Build Self-Storage

Got Dirt? Adding Space to an Existing Self-Storage Facility

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ISS Blog

Curb Appeal: The Key to Luring in the Customer

Facility grades are based upon many factors, one of which is location, but even with a less than desirable location you can draw people into your store. A fresh coat of paint, a flat of flowers and a clean property speaks volumes in a customer’s eyes.
 
As the person in charge, I’m constantly reminding staff members to walk outside and look around. I like for each staff member to start at the street, approaching our place and taking a good look around. Is there trash in the street gutter? If so, we pick it up. We’re located in a business park so what's usually blowing around is someone’s packing material from our place. Picking up the litter makes the approach to our place pleasant, and simultaneously makes us good neighbors.

Next in line is our street sign, the first flowerbed and our massive flag. Have the birds been resting atop the sign after a lunch of bugs and berries? Well, then it needs to be cleaned as no one wants to see tons of bird droppings as a first impression. Is there a 2-foot tall dandelion that doesn’t match with your flower-planting color scheme? Then it needs to be yanked out.

Next I have the staff look up and determine if our flag is in good condition. Are there any signs of peeling paint on the gates, or other maintenance issues to address? If we find something it's noted and addressed.
 
The parking lot and the stepping stones through the main flowerbed are next on the list. We pick up any litter, and sweep up leaves and such that have blown into the corners of the three-stall parking lot. As we approach the office, we take a look at the windows to determine if they are spotless, including the windowsills where the dust loves to collect. If they’re dirty, it takes literally five minutes or less to grab a wet cloth and wipe down nine windowsills. When they're clean, the whole place feels nicer.
 
Opening the office door brings forth the other items on our daily to-do list. Is the office neat and tidy? Is the coffee, water and snack area clean and well stocked? Is the office in need of a wipe down or a quick pass with the vacuum? Are all the items stocked and ready for the customer’s purchase? If all is well, it’s out to the customer restroom for a quick peek and restocking of any necessary items.

All in all, if we needed to do every one of the things above, the entire process takes easily less than an hour for one person. Some may argue this point, but if you do this type of inspection continually, the jobs are easier as there is less to do each time. For example, if a toilet stays dirty for days, it's harder to clean and, therefore, takes longer than if you had cleaned it earlier. The same holds true for a dusty office or carpet that never gets vacuumed.

Maintaining a clean place is a lot easier than cleaning it once every month or so. Walk outside and be your customer, look at your place through their eyes and ask yourself? Would I rent here? Do I like what I see?
 
When a potential renter sees that nothing is out of place, your facility could be 25 years old but will show like a new one simply because you are showing that you care. Most people checking out a storage facility are looking for a place to keep items they care about. A properly maintained property shows you share their desire for caring for items. Curb appeal for your facility is truly that simple.  

For more on curb appeal, check out these articles from the ISS archives:

A Self-Storage Cinderella Story

Capture Self-Storage Tenants With Low-Cost Curb Appeal

Self-Storage Maintenance Retains Customers and Property Value

Big Yellow Self Storage Revenue Falls in Second Quarter

U.K. self-storage operator Big Yellow Group Plc recently reported that its second-quarter 2009 revenue fell 6 percent. According to a statement issued to the Regulatory News Service, the company’s sales dropped to £13.5 million in the three months ended June 30, from £14.3 million in the same period of 2008. Same-store occupancy suffered an 8 percent decline during the quarter when compared with the same quarter a year earlier, though it rose 1 percent when compared with the quarter ending March 31, 2009.
 
Trading conditions have recently shown improvement, with positive occupancy performance in June, Big Yellow CEO James Gibson said in the statement. The company anticipates the usual slowdown in the fall, he said.
 
Big Yellow raised approximately £32.9 million in a share sale in May. The sale gave the company “very strong” finances, according to real estate analyst John Cahill, who has put a “buy” recommendation on Big Yellow stock.
 
Source: Bloomberg.com, Big Yellow Group First-Quarter Revenue Declines 6%

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Big Yellow Self Storage Launches ‘Rent a Room’ Initiative

Big Yellow Self Storage Reports a Drop in Profit

Big Yellow Sells Four Self-Storage Properties to Partnership

Down Economy Has Positive Benefits for Quincy Self-Storage Owners

The owners of Granite City Self Storage in Quincy, Mass., say the economic downturn has helped their business improve, even prompting them to expand one of their facilities. Don McNally and his wife, Paula, who own three local self-storage sites, said a downturn like this creates the need for more storage space.
 
The McNallys, who founded their company in 1983, survived the recession of the 1980s. They said now is a good time to expand because other businesses are struggling. They’ve added a 30,000-square-foot building to the facility at 95 Old Colony Ave., where there was already a 35,000-square-foot building. The two are connected by a glass walkway.
 
Granite City Self Storage has three full-time and five part-time workers. The operation averages 80 percent occupancy, the McNallys said.
 
Source: The Patriot Ledger, Quincy storage company booms with recession

Related Articles:

Got Dirt? Adding Space to an Existing Self-Storage Facility

Self-Storage Phasing: Save Time and Money

Phasing for Greater Profits

SafeStor Financial Results Show Company Growth

U.K. self-storage company Safestore has released its financial results for the six months ended April 30, 2009, showing growth even in a down economy. The company has increased revenue 3.3 percent, from £40 million to £41.3 million, and expanded its property portfolio.
 
“It is encouraging that the business has performed well at a time of such economic uncertainty,” said Chief Executive Steve Williams. “The first half has seen an increase in revenue and underlying EBITDA over the same period last year, which has been mainly driven by a solid rental rate and improved occupancy movement performance.”
 
The second half of the year has gotten off to a good start, with progress being made on rental rate per square foot and occupancy. According to Williams, the company will continue to selectively acquire new sites.
 
Related Articles: 

Safestore Installs Payback Clause to Stop Bonuses Based on Failure

SafeStor Self-Storage Receives 'Business of the Year' Award

Self-Storage Veterans Launch Davies Ingersoll Capital Partners

Self-storage finance expert Jim Davies and self-storage investment broker Peter Ingersoll have joined forces to launch Davies Ingersoll Capital Partners, a national firm providing debt and equity solutions to operators of self-storage facilities and other commercial real estate. The Newport Beach, Calif.-based company will also offer investment opportunities to investors.
 
Davies Ingersoll offers debt, equity and note purchase financing nationwide. The company arranges equity, including joint-venture and preferred-equity investments, and structured financing. It also represents an aggregation of self-storage and commercial real estate owners and investors. 
 
With 28 years of commercial real estate experience, Davies previously served as senior vice president and shareholder of Buchanan Street Partners, and was a co-founder and principal of Buchanan Storage Capital. He has closed more than $3.5 billion in self-storage financing and disposition transactions during the past 15 years.
 
Ingersoll has more than 22 years of commercial real estate experience, specializing in the acquisition and sale of self-storage properties. He serves as the new company’s CEO and is a managing director of Sperry Van Ness/Davies Ingersoll.
 
Davies and Ingersoll serve on the board of directors of the California Self Storage Association.
 
Details can be found at DaviesIngersoll.com.

Related Articles:

Financial-Crisis Survival Guide for Self-Storage Owners

Exit Strategies: Best Practices for Selling a Self-Storage Facility

Got Financing? What You Need to Get $$ in Self-Storage

The State of Self-Storage: Industry Report 2009

Litton Presents Webinar on Self-Storage Management and Staffing

On July 22, self-storage management expert Tom Litton will present a free webinar titled “Managing Self-Storage: Motivating Facility Managers for Success.” The free online seminar will identify effective management styles and teach facility owners how to set achievable work standards and evaluate job performance. Attendees will learn about motivational techniques, compensation strategies, bonus programs, training systems, how to hire the right managers, and how to fire poor performers. They’ll also get strategies for conducting a financial analysis of a property and making an effective property visit.

The live event will take place at 2 p.m. ET. Interested parties must register at MiniStorageMessenger.com.

Litton heads the self-storage management division of Litton Management & Consulting Inc. He began his career in the self-storage industry during its infancy and has managed more than 150 self-storage facilities in 11 states. He currently fee manages and consults throughout Australia, Canada, England, France and the United States.

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Litton Presents Sales and Marketing Boot Camp at ISS Expo

Litton Sales and Marketing Boot Camp [Self-Storage Talk]

Set Your Own Standard : Commit to an upkeep program[By Tom Litton]

DryCool Standard

The new DryCool Standard unit by Munters provides self-storage operators with the ability to control a building’s temperature and humidity independently. The system is designed to treat 100 percent makeup air and can work in conjunction with an existing A/C system or energy recovery ventilator. It controls humidity on an as-needed basis, when humidity levels exceed setpoint. Because all of the energy required to operate the DryCool Standard’s desiccant dehumidifier is recycled from cooling components, the unit is cost efficient. It can process between 1,000 and 16,000 CFM (cubic feet per minute) of makeup air.

With offices in Argentina, Australia, Austria and Spain, Munters provides energy-efficient air-treatment solutions and restoration services.

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Climate-Control Tenants [Self-Storage Talk]