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Self-Storage Collections: A Product of Company Culture and Strong Effort

While not every self-storage auction is avoidable, there are things you can do as a facility operator to keep delinquencies to a minimum. Pay close attention to collections and make sure your staff is adequately trained in this area. While a lot energy goes into getting customers to rent, once they do, you must take steps to ensure they pay on time. Successful rent collection is a result of company culture and strong effort.

Building a Culture

Your company culture is comprised of the underlying attitudes that influence the behaviors and functions of managers and customers. It will influence how hard managers work and how they interact with tenants. Think about your own corporate culture:

  • Does it promote customer service?
  • Do your managers feel accountable for their performance?
  • Do your managers and customers feel it’s important to make timely payments?
  • Are your policies and procedures enforced and followed ignored?
  • Do your managers enjoy their jobs and interacting with customers?

Company culture plays a major role in collections success. It determines how a manager treats the task and how the customer responds. A lackadaisical attitude will cause a manager to put in little effort and make the customer feel like he can pay whenever he gets around to it. A culture that’s too rigid may cause the manager to come across as coarse and angry when dealing with collections and have a negative impact on customer service.

What you need is a culture that promotes professionalism and respect. The manager will be courteous and consistent in his collections efforts. He’ll respect the customer. In turn, the customer will respect the manager and be more likely to make timely payments.

Your tenants have many financial obligations and sometimes have to prioritize them. Create a business environment in which they feel obligated to put you at the top of the list. Managers should be pleasant but firm when it comes to collections, viewing the task as a way to bring in revenue and help the customer avoid late fees and sales.

Make the Effort

Collections success is also a result of effort. Managers have to work hard to ensure customers pay on time. They should understand that collections is one of their primary job functions and feel accountable for following a consistent schedule of activities. This clearly defined list should address when to make phone calls and mail letters, adhering to the timetables outlined in your state’s lien law.

Letters should never be delayed or postponed but consistently mailed at the prescribed intervals. You may also want to e-mail copies of letters to customers.

Phone calls are perhaps the most important part of the collections process. They should be made consistently and according to plan. The best approach is to call the delinquent customer before the grace period expires to help him avoid a late fee. Once he is delinquent, make another call. In short, call the customer before and after each step in your delinquency schedule. Additional calls should be made whenever necessary to avoid a lien sale.

Make sure your managers are making their collections calls. They should keep a log of when each call is made so you can easily check their notes and see the account status. Accountability is essential to the program’s success, and follow-up will ensure the job gets done.
In the end, it’s always best to prevent customers from getting behind on rent in the first place. When possible, get them to enroll in an automatic payment program.

Now more than ever, storage operators and managers need to focus on collections. If you create the right culture of professionalism, respect and accountability, and put forth consistent effort, you will see results. You will sustain revenue and manage delinquencies, thereby making your investment as lucrative as possible. 

Rick Jordan Jr. is the president of RWJ Storage Management LLC, which provides third-party management, training and consulting for self-storage properties. To reach him, call 562.682.5003; visit www.rwjstorage.com.

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The Latest Add-On Profit Center: Soul Storage?

Think about it. What if you could store your soul away when it became too heavy to bear, what with all its entanglements and complications? What if you could suck your soul into a shiny air-tight jar and pack it away on ice until such time as you felt the need to experience its sorrows, joys, fears and epiphanies again?

Now imagine being the storage company running that racket. “Soul storage special! Just $9.95 a month! Let us lighten your load!”
 
Today I read a review in The Washington Post for a Sophie Barthes film titled “Cold Souls,” premiered earlier this year at the Sundance Film Festival. Starring Paul Giamatti, the movie is about a New York actor in the midst of an artistic and mid-life crisis who, believing his soul to be adversely affecting his work, decides to put it into storage. He stumbles across an article about a company that will extract and store human souls at a “reasonable fee,” and looks it up in the Yellow Pages, finding it under the “Self Storage” heading. Of course. Where else would you store yourself?
 
Giamatti (strangely, playing a character named ... Paul Giamatti) decides he can alleviate his suffering by disburdening himself of his pesky essence, and hops on down to the storage facility. There he is told he really only has two choices under the circumstances: “re-soul the body or disembody the soul.” He chooses the latter, ultimately stuffing his extracted spirit into a tiny refrigerated cubicle.
 
The film is set for official release in November. Give it a view and see for yourself whether soul storage might be a good fit for your facility. After all, souls don't take up much space, and think about the marketing possibilities. You can start your own, "Store a Soul, Save a Life" program, or "Store Two Souls as One" promotion. Mind-boggling.

Click HERE to view the trailer on YouTube.

Lion Self Storage Negotiates for Redevelopment Zone

Lion Self Storage LLC of Southampton, N.J., is negotiating with the town to build a 188-unit, 6,000-square-foot storage facility in a redevelopment zone. An ordinance that would have allowed the company to expand a vacant 8-acre site was tabled by the Township Committee until it can tighten stipulations relating to the project’s scope and deadlines. The issues are expected to be resolved by Sept. 1, and the ordinance should be adopted.
 
Township officials have been trying to find a tenant or developer for the site for several years. Lion Self Storage already operates a local facility on Eayrestown Road.

Source: Burlington County Times, Lumberton postpones vote

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Westy Self Storage Supports Create Footprints Walk

On Aug. 29, Westy Self Storage of Port Chester, N.Y., is hosting a sign-up event for the “Create Footprints Walk,” an event supporting the fight against Lyme disease. Visitors to the facility’s grand lobby from 11 a.m. to 2 p.m. will be able to pre-register for the event, enjoy light refreshments and win raffle prizes. The 3k walk/run will be held at Saxon Woods Park in White Plains, N.Y., Sept. 13.
 
Source: The Journal News, Westy to hold sign ups for fundraising walk

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New Portable-Storage Containers

Janus International has expanded its line of portable-storage containers. In addition to its MASS (Moveable Additional Storage Structures) units, the company has added four more container styles, each with its own unique features. Some models are foldable and can be erected in 15 minutes, while others are stackable, which offers valuable land conservation. Because the structures are classified as equipment, they may carry tax advantages to the owner as well as eliminate lengthy zoning procedures. A new product brochure can be found at Janusintl.com.

 

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Free Webinar to Address Mistakes Made in the Self-Storage Business

On Sept. 16, a free webinar for self-storage professionals titled, "The Mistakes People Make in the Business of Self-Storage," will be presented by Donna May, president of Cross Metal Buildings. May will provide self-storage developers, owners and managers with information they can use to make informed decisions about facility development, construction and management, including insight into mistakes to avoid. She will talk about: 

  • Issues some self-storage owners and developers fail to consider in advance
  • Items that are underestimated
  • The realities of time and money involved in self-storage development and operation
  • Exercising healthy skepticism in the self-storage industry

The webinar will take place at 2 p.m. ET. To register, visit MiniStorageMessenger.com.

Based in Bulverde, Texas, Cross Metal Buildings is a Parham Group company specializing in metal-building erection and consulting, design, engineering, turnkey systems and material packages for the self-storage industry.

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Reed Market Storage: Turning Profit, Starting a Trend With Business-Warehouse Units

To survive the worst recession in 70 years, small businesses must find ways to run more efficiently than ever. In self-storage, there’s an exciting development that has the potential to generate a tenfold cost savings in a business’ office and inventory overhead. My partners and I discovered it a bit by chance, while getting a push from tough economic times.
 
Just East of Highway 97 on Reed Market Road in Bend, Ore., is a new self-storage facility with oversized units for warehousing as well as the storage of boats, RVs and other vehicles. Dean Cameron, Gene Hoskin, Ravi Vedanayagam and I, all Oregon residents, developed Reed Market Storage during the aftermath of 9/11, when RV demand was strong and owners were looking for secure off-street storage.

Reed Market Storage is quite different from the traditional self-storage facility. The units vary in size from 15-by-30 to 15-by-60 feet, with a 14-foot ceiling height. They’re all situated along one wide, straight-access drive, so a vehicle as large as a semi-truck can comfortably pull up to the front of a unit for loading and unloading. Our customers appreciate the extra space, inside their individual units and throughout the facility.

Given their super size, all unit doors have automatic openers, allowing for easy entry and exit. State-of-the-art security features include digital video surveillance, giving customers peace of mind. Every unit is insulated, and there are options for heat and electricity throughout. 

Our facility was built with the intent of offering the RV owner convenience and security at an affordable price. Extra-large 15-by-50 units are available at less than $300 a month, based on the current move-in special.


 
Small-Business Warehouses

We love our RV and boat customers. What we didn’t expect was the wide variety of new customers our business now supports. In fact, many of our tenants are using their units as individual business warehouses. The size, accessibility and convenience of the facility have filled a need we even didn’t know the community desired.  

When we look at the harsh realities of small-business operation and inventory costs in the current economy, it makes a lot of sense. In the recent past, a small-business owner might have leased flex-space, which included a reception and office area, bathroom and adjoining storage area. This type of commercial property might lease for $1,500 to $2,500 a month, depending on location, size and other factors. The storage area was used for inventory and miscellaneous equipment.

Today, the new model for a small business is a home office and a storage unit for equipment and inventory, drastically lowering overhead. A business owner can scale back rental costs while maintaining a healthy inventory. Anyone who has worked out of a home office understands the convenience and efficiency. With an extra-large self-storage unit, inventory storage problems are solved with compelling savings.

Reed Market Storage’s occupancy has been close to full based on a wide variety of small-business applications. With our customers finding such a tremendous savings, we have to wonder: Will a product of today’s recession lead to even more home-office plus self-storage warehousing in the future? It certainly looks very attractive today.
 
Michael Gutmann is the managing director for VGX Capital LLC, a private investment company. A small-business owner and operator, he co-developed and operates Reed Market Storage in Bend, Ore. He was a software engineer and manager for Intel Corp. for 20 years. To reach him, e-mail [email protected].

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U-Store-It Trust Raises $161.2M Through Public Offering

Self-storage operator U-Store-It Trust today closed its public offering of 32.2 million common shares, making approximately $161.2 million. The company intends to use the proceeds to repay existing debt and for general corporate purposes.
 
BofA Merrill Lynch, Wells Fargo Securities and Morgan Keegan & Co. Inc. served as the joint book-running managers for the offering. SunTrust Robinson Humphrey, PNC Capital Markets LLC and ABN AMRO Inc. served as co-managers for the offering.
 
"We are very pleased with the closing of this successful common equity offering," said Christopher Marr, president and chief investment. "The strong investor interest in U-Store-It resulted in a significantly over-subscribed offering and the ability to attract and strengthen our base of investors."
 
U-Store-It, Wayne, Pa.-based real estate investment trust, owns 383 self-storage facilities nationwide and supports 306 third-party locations as part of its network.

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Building Tenant Relationships ... A Few Minutes at a Time

My 7-year-old daughter, Gracie, rides the bus to school. The stop is only two houses down, and usually arrives around the same time every day—sometimes a few minutes one way or the other. Usually, Gracie and I arrive at the bus stop five minutes early, just in case.

But one day, we were running a few minutes behind. As I opened the garage door, we could see the bus just hundred feet from its destination. Unfortunately, both Gracie and I had forgotten to grab her lunch box. As I ran back in to seize it, Gracie ran toward the bus stop. I was only a few yards behind her as she stopped in front of the open doors. The bus driver, Tom, waited patiently while we made the hand-off. As I was walking back to the house, I said aloud, “What a difference a few minutes makes.”

For the most part, a few minutes doesn’t make a whole lot of difference in life. Yes, there are those cosmic happenings—missing a car accident by seconds or moving just before something falls. And many TVs and movies wait until the last few minutes to unveil the big moment. But overall, a few minutes doesn’t really carry too much weight.

There is another place where a few minutes can mean a big difference. It’s not a life-and-death moment, yet those extra few minutes count. It’s the few minutes you give each customer.

There’s no doubt your job is demanding. You’re not just the person behind the counter selling units. You’re also the security guard, the maintenance crew, the marketing person, the tenant problem-solver, the software expert, and the list goes on.

But slowing down and giving each customer that extra few minutes builds a relationship with them. Perhaps it’s just a smile and a wave as they pass the office. Maybe you invite tenants in for bottled water or coffee. Believe me, those few minutes will count—especially in these economic times.

And once you have your customers' attention, make it count. Offer them a coupon with a discount on a retail item, ask them for referrals or just update their contact information for your files.

How do you build relationships with your tenants? Share your thoughts by posting a comment below or head over to Self-Storage Talk and join this thread.

McElroy Metal Buys Assets, Manufacturing Facility From Components Plus

McElroy Metal Inc., a nationwide provider of metal roofing and building components, has purchased select assets of Components Plus Inc., a designer, manufacturer and installer of metal-building products. In addition to a wide variety of roll formers, tooling, trim presses and other equipment, McElroy acquired CPI’s Sunnyvale, Texas, manufacturing location, which will now operate as McElroy’s 11th manufacturing facility. The acquisitions will bolster the company’s line of products, particularly for the self-storage industry, said Ian McElroy, president.
 
Started in 1963 and based in Bossier City, La., McElroy has 11 manufacturing facilities and 19 service centers nationwide.

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