Do you want to hire employees for your self-storage business who can contribute to your success and profitability while adding value to your culture? Those of us who’ve been hiring—and firing—facility managers for a while can admit we’ve sometimes hired in a rush, hoping the candidate will be our “savior behind the counter.” But sometimes even a great employee can be wrong for this unique job.

Following are 10 secrets to successful hiring to help you choose the right person for your self-storage operation.

1. Write a Great Job Description

The best job descriptions don’t just outline duties, responsibilities and necessary skills. They also articulate how you want the work to be done, and the moral climate in which the company operates. If you’re a fiercely competitive company that likes to pit stores against each other, say so. If customer care is critical, ensure your candidate is empathetic.

Most self-storage businesses don’t have job descriptions in place for their various positions, but you need to set the expectations at the start. Recruitment planning identifies the specifications for the position so you know the skills and experience you’re seeking. It also addresses how you’ll publicize the position, who’ll review applications, and who’ll participate in first and second interviews.

You also must decide who’ll participate in the selection of the employee and who’ll provide input. This is a key step in a successful hiring process. You need to be clear about how interviewers’ input will be used by the hiring manager.

2. Know Your Talent

An important step in the posting process is to notify current employees when there’s a job opening. Are you sure there isn't internal talent who might seize the opportunity? Inside hires tend to do well, so if you promote from within, you’re likely to reduce your risk.

You want to encourage the employees who already work for you, so know what talent you have before you go looking for fresh faces. Whether you’re a small or large self-storage operator, offering career growth is key to showing employees you value them. Don’t overlook a golden candidate who’s already on your team because you want to avoid opening another position.

If you don’t believe you have any qualified candidates already on your payroll, you can post the position externally at the same time. However, your in-house applicants may surprise you with their talent and skills. If you do post the position outside, let your inside candidates know so you can avoid any misunderstandings.

3. Align Your Values

Make sure your hiring process is consistent with your company’s core culture and values. For example, there’s no point in saying teamwork is important and then letting one person make the hiring decision. If you say you value instinct, then doing a wide array of personal and professional assessments probably isn’t the way to go. If you value creativity and risk-taking, don’t ask ridiculously hard questions that humiliate those who can’t answer them.

What are the characteristics of a successful employee? Consider the following:

• Stable work record
• Well-groomed appearance
• Willingness to accept the conditions of work (hours, pay, duties, etc.)
• Ability to communicate (answer questions intelligently, converse easily)
• Pleasant personality (sincere, positive attitude)
• Intelligence
• Common sense
• Optimism
• Tact

The applicant’s tone of voice during the interview can be an indicator of his outlook on life. Be wary of whiners and complainers. Watch for confidence (not to be confused with arrogance) in their walk and talk. Also, consider that during the interview, the applicant is a guest. How did he handle this role?

4. Never Sell Your Organization

Interviewing should be about unfettered exploration, not persuasion. You shouldn’t sell your company, and the candidates shouldn’t sell themselves, either. What you’re after is an intelligent, adult discussion about what constitutes success within your organization and within the candidate's professional and personal life. The stories must be honest and appropriate.

5. Listen for Dissenting Voices

If everyone on your team loves your preferred candidate, something’s wrong. No hire is perfect, and there should be some dissenting voices around the table. What are the person’s weaknesses? These might not be critical, but they must exist. It’s better to identify them—and figure out how to accommodate them—early.

6. Perform Background Checks

Check references and backgrounds for your candidates during and following your second interviews. Confirm all claims by the candidate including education credentials, employment history and criminal background. Where possible, the best source of information is the applicant’s past supervisors.

7. Watch Salary Negotiations

How people manage money will tell you a great deal about how they’ll handle customers. If you don’t like what you see, pull the plug. If they state a dollar amount on the résumé and later change it during the interview, they may constantly be looking for a bump before it’s earned. Be careful of the 50-cent and hour “jumpers.” Check work history thoroughly.

8. Assign a Mentor

Most organizations are bad at explaining themselves. Each new hire should have someone he can turn to with questions—and this mentor shouldn’t be the boss. In fact, everyone in your company should be good at mentoring. After all, if you’re great with co-workers, you’re more likely to be great with customers. Mentoring new hires is also excellent leadership training for other staff.

9. Start With a Trial Period

You never know a person until you see him in action. This applies to the employee and the person hiring him. For both your sakes, agree to a joint review after one to three months. Provide honest feedback and ask for it in return. No new hire is ever as alert and insightful as he is at the beginning. Most companies lose all sense of how they come across to outsiders, so this feedback is precious.

10. Be Welcoming

How you welcome your new employee lays the groundwork for retention. Stay in touch with your new hire from the time he accepts the job offer until his start date, and then continue to build the relationship. Let co-workers know when the new employee will begin, issue a welcome letter, plan the onboarding process, and make sure the person feels warmly welcomed during the first days of work. If you do this effectively, you’ll have an excited employee who’s ready to set the world on fire.

Employee turnover costs time and money. Your goal should be to hire the right person the first time. Rather than rushing to fill a position, write a thorough job description and determine your staffing needs before the search begins. Make hiring your next self-storage team member a group effort and everyone will benefit.

Susan Haviland is the owner of Haviland Storage Services and a partner of industry consulting and training firm Self Storage 101. She has more than 27 years of industry experience, from serving as a site manager to acting as vice president of operations at Extra Space Storage Inc. and Price Self Storage. She's a frequent speaker at industry conferences and tradeshows. For more information, call 866.360.2621; visit www.selfstorage101.com.

There are many ways to measure the operational health of a self-storage facility. Following are some categories owners should regularly review. This list isn’t meant to be an all-inclusive evaluation, but a guide. Depending on what’s uncovered, there could be cause for additional assessment, which might include hiring an experienced self-storage consultant or accountant.

Staffing

The key to any successful storage operation is the proper hiring and training of managers. Ideally, your employees will have general public experience, from sales to property management. Each should be a customer-service extraordinaire with a positive aura and professional in appearance. After all, they’re the face of your multi-million-dollar asset!

Storage managers must be confident self-starters who can function with minimal supervision and work under pressure, with multiple tasks going at one time. If a manager is timid or comes with an unhappy or negative attitude, it’s time for a new one. The right employee will be excited for the opportunity to prove his worth and work toward monthly goals without complaint. He’s a part of the solution, not the problem.

Set the standard with seminar training at annual or state self-storage conferences. Make your managers buy in on bonuses based on revenue production, not longevity. This will get you more bang for the buck. It’s also a way to measure manager performance and your return. Non-productive managers should be terminated.

Delinquency

This is one of the most important categories, and yet it’s often overlooked. Yes, you might have high occupancy, but it may be due to high delinquency. Bad collections can sink your site quickly, especially when timid managers don’t make collection calls or enforce late or lien fees. They make excuses as to why the computer didn’t print the late notices or why they couldn’t keep track of the necessary days to enforce the statutes.

To remedy this and avoid excuses, set up your software to print automatic lien letters. Make a cheat sheet or checklist so you can check it against the managers’ work for compliance.

Employee training is the key to staying on track. Make staff accountable after watching you or another trained manager review the paperwork and conduct two or three auctions. Make sure they know to never, ever sell a unit that has violated any part of the lien law, or you and your insurance company will be sorry.

Ideally, total dollar delinquency beyond 30 days should be in the range of 2 percent to 3 percent. At 4 percent, you should be evaluating the collection efforts, if there isn’t a timing issue. Beyond 5 percent, there should be an auction in the works to reduce this bad debt. Stale delinquency over 7 percent without an auction is a red flag and a manager issue, unless there’s a severe city economic issue in the submarket. Guidance, additional training and a performance evaluation is needed if this is repeated.

Don’t hold delinquent units more than 30 to 45 days after your state’s minimal sales date, barring any unforeseen circumstances. Sell them in accordance with your state guidelines. This type of enforcement will signal to your tenants that you mean business when collecting rent.

Economic Occupancy

The most important item on your checklist is economic occupancy, which is the amount of the dollars measured by gross potential income divided by actual occupied income or effective income. It’s then compared to the square-footage occupancy of the site. This financial gauge is affected by high delinquencies, vacancies, specials or low rates.

Ideally, the spread between your square-footage and economic occupancy shouldn’t be more than 2 percent to 3 percent. You might see higher percentages if money isn’t collected, managers give away discounted rent, you fail to raise rents, you have high vacancy, or money collected doesn’t make it to the bank. I’ve come across owners who boast 90 percent occupancy but actually have an economic occupancy of 60 percent to various factors. When the spread gets as high as 30 percent, it’s definitely time to fix holes in the pipeline.

Lease and Insurance Audit

Review all your leases and insurance paperwork as well as any addendums for missing forms, signatures and addresses. These omissions are often unnoticed or ignored until it’s time for an auction.

The weekly walk-through to compare your actual unit inventory to the computer inventory should be done after a weekend or holiday. This exercise will give the manager an idea of unit movement and inventory, and the ability to catch errors and evaluate rents. Once a year, all required paperwork should be matched against rented units, as missing leases may indicate sloppiness.

Expenses

Expense control is just as important as revenue generation. Payroll and taxes are major categories for evaluation. Can the site operate with one full-time and one part-time manager vs. two full-time managers plus a relief manager? Are you in control of overtime, or is the manager allowed to work unchecked and submit payroll without prior approval?

Real estate taxes can also drastically affect operational performance. If your taxes have increased, have you given any thought to a real estate tax appeal? Is your city/county tax assessor evaluating taxes on sales or income of your site? If you don’t know, it’s time to find out, as the savings can be significant.

Rental Rates

Discounts and a failure to raise rental rates can and will drastically affect your economic occupancy. Market rates and specials should always be on the radar, and it’s your manager’s job to keep up with the local submarket pricing. If the market is charging higher rates, your site will be missing out if no one is paying attention.

Today’s software allows for pushing rates up or down with little effort from the manager. It can send automatic rent increases based on parameters set by the owner. There are still operators who like to handle increases the old way by evaluating each tenant, but this is a waste of time and effort when it can be done automatically. That said, there are times when you might need a special to fill slow-moving units or those with high vacancy. This is when discounts can be used to get tenants in the door, but make sure you program all specials with an auto-ending date.

Online Presence

If your store doesn’t have a professional website, you’re leaving money on the table. Hire a website developer immediately. Prospective tenants are trolling the Internet whether they live next door, across town or around the world. The younger generation doesn’t use Yellow Pages. They shop for their every need on the Internet, often from a smartphone.

Many operators use various social media apps and lead-generators to drive tenants to their website. Embrace change and build a website today or upgrade the current one to add all the bells and whistles. Your website is the first important impression a prospective tenant gets of your business, so invest the money to do it correctly.

The above categories are just a few gauges of facility functioning. They can be used to set owner and manager goals as well as for strategic planning. As always, the manager is the key ingredient here. A happy employee is a happy performer who strives to improve your business’ financial and operational performance.

Andrew Kelly is principal of Sierra Self Storage Consulting LLC, which was founded in 2004 to help new and existing facility operators enhance their return on investment. The company offers facility brokerage, consulting for new development and due diligence, facility audits, owner and staff training, and property management. For more information, call 520.323.6169; visit www.sierraselfstorageconsulting.com.

Recently, I’ve been focused on rebuilding my company’s website and digital presence. When I began this journey, the term “search engine optimization (SEO)” was just some abstract concept to me. I enrolled in college classes, read articles and engaged with vendors until I felt I had a good understanding of what it meant.

While I still think Google’s algorithms are part Magic 8 Ball, part black magic and some math, there are key points self-storage operators need to understand about SEO. I co-wrote this article with my associate, Julia Grignon, who’s an expert in the field of digital marketing, so we could combine my experience as a relative rookie with hers as an experienced account manager. We’ll try to give you a better picture of how to tackle SEO and attain the best results for your business.

SEO Tip 1: Practice Patience

Let’s say you recently opened an investment account. You completed your research, picked the right stocks and invested your money. Is it fair to say you’re not going to withdraw that money and retire off it the very next day? The same goes with SEO. There are mitigating and contributing factors, but overall, it can take months before you start to see significant changes in certain aspects of your program.

As with any financial investment, you need to actively monitor your efforts and make sure nothing changes for the negative. For it to truly grow over time, you also need to make regular contributions. The same concept applies to SEO. Regular website updates are required to meet the ever-changing algorithms of search engines and keep it running smoothly.

SEO Tip 2: Avoid Keyword Stuffing

Focusing primarily on keywords when it comes to website content is like Michael Bay directing another “Transformers” film. He concentrates on just one thing: the robots. He leaves out other important facets of a successful film such as plot, good acting and creativity.

Keyword volume will never be a substitute for good editorial content. You don’t want to pack your website with words that aren’t meaningful to the user. Keywords should be naturally peppered throughout your site, but they should also matter when Google starts to index your pages.

When writing website content, consider your audience. I wish Bay would understand this! Focus on the customer’s experience, both on Google and your website. Search engines will reward companies with increased brand visibility when they write for the user and focus on his experience. Senselessly loading your website with keywords won’t move the needle in your direction.

Keywords aren’t going away anytime soon. However, there may come a time when SEO as we know and understand it changes drastically. It’s entirely possible the power of the user experience will overshadow what most business owners currently understand as SEO.

SEO Tip 3: Use a Variety of Tools

A Swiss Army pocket knife is the ultimate survival tool because it contains a variety of blades, files, can openers and even a toothpick, all in a single self-contained unit. It’s been a favorite of mine for years. At first it was because of the TV character MacGyver (my adolescent hero), but later it was for its all-encompassing abilities.

Your SEO strategy should be multi-faceted like a Swiss Army knife. It’s essential to have a variety of tools at your disposal. Start with a good plan and extend it over a period of months, testing along the way. Focus on content and quality links to other websites. As you continue to build your arsenal, incorporate other aspects of SEO such as social media and paid search campaigns. You’ll soon discover, as I did, that this is just the beginning of what needs to be done.

SEO Tip 4: Jumpstart Your Strategy

Do you want to gain better visibility on Google Maps? Are you interested in buying the top spot on a search engine? There are simple things you can do to jumpstart your SEO.

Begin by claiming your Google My Business listing. Local search has become a pivotal factor to creating a successful online strategy, as most customers want to store within a few miles of their home or business.

Next, build trust with your audience. You can’t expect a prospect to believe your facility is the right choice without validation from current and past customers. This is where reputation management plays a role in connection with Google My Business. Positive reviews from tenants will add a competitive edge to your SEO strategy. Google factors your review rating into Maps placement. This is especially true if your goal is to appear in the premiums spots dubbed “three pack” or “snack pack” on the first page of search results.

SEO Tip 5: Think Like Your Customer

Shopping for storage has changed drastically in the age of mobile. Gone are the days of relying on Yellow Pages and drive-by traffic. Now the user is presented with a myriad of prices, specials and locations based on a single keyword search. As prospects sift through paid advertising, Google Maps listings and organic links, they’re thought process has a pathway. It’s your job to lead them to your facility.

Being that location, price and positive reviews play a key role in a user’s decision to store with you, what area do you need to work on the most? SEO is a delicate ecosystem. One decision could have a ripple effect that will ultimately affect your customer’s online experience. Ensuring that experience is positive is why it’s vital to measure and monitor your investment.

Rick Beal is the district manager and part owner of Cubes Self Storage in Salt Lake City. His goal is to help a historically slow-changing industry embrace new, innovative ideas. His professional motto is “Storage is a business of inches not miles.” He can be reached at rickb@cubesselfstorage.com. Connect with him on LinkedIn at www.linkedin.com/in/storagerick.

Julia Grignon is the marketing accounts manager at Automatit Inc., a provider of Web design and marketing services. With a background in creative writing and digital marketing, she works with customers to communicate online performance and educate on best practices. For more information, call 520.293.4608; visit www.automatit.net.

Editor’s note: This article was written in October. Due to the dynamic nature of the financial markets, the information presented could be subject to change.

Last year was strong for self-storage borrowers, and while it feels like we’re nearing the later innings of a predictable 10-year cycle, we’re heading into 2018 on solid footing. Decade-old loans are refinancing at historically low interest rates, and there are plenty of debt products to meet myriad rate, term and structural needs for acquisitions, refinancing and even new construction.

As always, it’s possible that unforeseen global events will fundamentally shift the economic landscape in unpredictable ways. Absent such factors—which go beyond the scope of this article—borrowers aiming to lock in longer-term debt and insulate themselves from potential rate increases should find many attractive options this year. Following is a summary of the common debt products available.

Small Business Administration (SBA) Loans

SBA loans have been available for self-storage since 2010, but have proven especially beneficial to owners in non-primary markets where traditional financing may be more difficult to find. They’re also useful for those looking to eclipse conventional leverage standards of 75 percent loan-to-value (LTV) or wanting to construct properties during this development cycle. There are two programs available for self-storage borrowers:

SBA 7(a). These loan proceeds can be used for acquisition, refinance and construction. Though loans through this program are typically variable-rate, commonly structured with a prime-based rate that resets quarterly, some lenders offer fixed-rate pricing. In either case, 7(a) loans are fully amortizing on a 25-year schedule, and they open to prepayment after the third year.

SBA 504. These loans are slightly more complicated in structure and are compartmentalized between a first lien, second lien and the owner’s equity. More specifically, a local bank provides the bottom 50 percent of the capital stack in the form of a first lien at conventional rates and terms. The second lien, up to 40 percent of additional project funding, comes from an SBA 504 loan, which is made available through a Certified Development Corporation (CDC). This component offers borrowers a low 20-year fixed rate (debenture rate) that carries a prepayment penalty for the first 10 years. When combined, the blended rate for borrowers is very attractive.

Historically, 504 loans were limited to acquisitions, but as of 2016, the SBA began offering a refinance option. These loans are available up to $13 million (potentially more) and can be structured with both a fixed- and variable-rate component. The 504 program also allows for construction, which makes larger class-A projects a reality through the SBA.

All-in rates for both 7(a) and 504 programs vary from lender to lender depending on a multitude of factors such as leverage, borrower profile and project strength. Borrowers should be aware that the processing, underwriting, approving and closing for an SBA loan can be time-consuming due to the document-heavy nature of any federal program. They should also expect to pay guarantee fees up to 3 percent of the loan amount, in addition to other closing costs customary with real estate transactions.

Overall, access to SBA financing has proven to be positive for the self-storage industry, injecting an additional source of capital and liquidity into the market.

Commercial Banks

Commercial banks are the largest originators of real estate loans, so it shouldn’t surprise us that they’ve been the primary source of capital for many self-storage owners. Banks are relationship-driven lenders that can meet a variety of borrower needs, ranging from shorter-term capital for construction, acquisitions or refinancing to longer-term, permanent debt.

The current regulatory climate means borrowers should expect an extensive credit review analyzing global cash flow (full financial picture), net worth and liquidity. A borrower’s ability to obtain a bank loan and the terms offered may be driven by the strength and tenure of his existing relationship with that bank. Regardless, he should be prepared to place operating accounts and other depository relationships with that bank.

Bank interest rates are attractive but vary greatly depending on factors such as loan term, borrower strength, leverage, etc. In October 2017, rates ranged from 3.5 percent to 5 percent on a fixed- or floating-rate basis on loans with terms from one to five years. To stay competitive and win deals, banks are increasingly offering seven- and 10-year fixed-rate term loans at competitive interest rates, often using a swap agreement. Bank amortization schedules are typically on the conservative side at 20 or 25 years, with leverage available today up to 75 percent LTV.

Banks typically require personal-recourse guarantees on almost all loans; however, the amount of recourse may be reduced or eliminated for lower-leverage loans under 65 percent LTV. Transaction costs for bank deals are generally very reasonable, and prepayments can be negotiated on a deal-by-deal basis.

Credit Unions

Credit unions have become an increasingly relevant financing source following the financial crisis. They’re like banks but with several notable differences.

First, whereas banks tend to be extremely relationship-driven, credit unions are more transactional in nature. Second, while most banks prefer to lend within a designated footprint that largely follows its presence or with existing clients, credit unions will lend nationally and often to a borrower with whom it has no pre-existing relationship. Credit unions are also cash-flow lenders and aren’t equipped to handle the complexities of construction or other transitional deals that may require draws, interest-carry, etc.

Commercial Mortgage-Backed Securities (CMBS)

CMBS loans are designed to be longer-term and offer a non-recourse debt option for five-, seven- or 10-year fixed rates. They typically feature amortization schedules up to 30 years, often with an interest-only period during the initial term. They also allow borrowers to leverage up to 75 percent LTV in a first-mortgage position.

CMBS lenders prefer larger deals in primary markets but are also competitive for smaller transactions in secondary or even tertiary markets. Rates on CMBS products today are between 4 percent and 5 percent.

CMBS lenders can creatively structure and price “around” risks other lenders will avoid. They size their loans using debt-yield targets (net cash flow divided by loan proceeds). Debt-yield minimums as low as 8 percent aren’t uncommon today, with lenders stretching lower for deals with positive cash-flow trends.

It’s noteworthy that CMBS loans are assumable. This is a nice feature that can be very valuable during a climate of rising interest rates. In terms of prepayment, they’re limited to yield maintenance or treasury defeasance. The implications of these rigorous options are less significant in a rising-rate environment, but borrowers should be aware nonetheless.

The closing costs on a typical CMBS deal average around $50,000, which includes all required third-party reports, lender and borrower legal documents, American Land Title Association survey, title, and other miscellaneous reports. There are several lenders in the market that offer streamlined yet competitive “fixed-cost” programs between $25,000 and $32,000 “all in” for loans up to $10 million. This has helped these loan products gain popularity with smaller-balance borrowers.

Life-Insurance Companies

Life-insurance companies are active real estate lenders that, like CMBS lenders, allow borrowers to lock in longer-term rates than those typically available from more conventional lenders. Unlike CMBS lenders, however, these companies tend to be extremely conservative, preferring to lend on high-quality, stabilized assets in primary markets, and at lower leverage points. Further, life-insurance companies tend to gravitate toward institutional and experienced sponsors or those with strong personal balance sheets.

Given their conservative stance, life-insurance companies are notorious for stressing cash-flow underwriting and capitalization rates that are applied to determine value, resulting in loan advances of typically not more than 65 percent of actual value. Historically, many of these lenders have preferred larger deals, but given the competitive landscape, some are stretching for smaller ones.

The cornerstone of life-insurance companies is their flexibility. For example, while five-to 10-year fixed-rate terms are most common, these lenders can offer fully amortizing loan structures between 10 and 25 years. They have the capability to lock the interest rate at application and can offer more flexible prepayment options. Overall transaction costs are similar to those of CMBS. As of the fourth-quarter 2017, interest rates for life-insurance company loans were extremely attractive, typically ranging from mid-3 percent to 5 percent, depending on the term and overall structure of the loan.

Construction and Land Loans

The self-storage industry is in the midst of a hearty development cycle, and the availability of financing for new projects has been robust over the last several years. While banks are the most likely lending partners for a developer with a feasible project, SBA lenders and debt funds are also viable sources of capital.

Full recourse coupled with a completion guarantee is the most typical structure for construction financing; however, recourse burndowns may be available as a project nears completion. Non-recourse financing may be available for very low-leverage projects with institutional sponsorship, but that’s not the norm. Conventional lenders will typically advance up to 75 percent loan-to-cost (LTC) at fixed or floating rates, with interest-carry and operational reserves often built in.

The demand for self-storage construction has encouraged some non-bank lending institutions to launch competitive construction-lending platforms. For example, Jernigan Capital Inc. recognized the need for new product in select markets, offering up to 90 percent LTC on a non-recourse basis, under a participating debt structure for qualified projects. The company is selective about the projects it funds. Alternatively, borrowers may secure higher leverage financing through the SBA, as well as private debt funds that aren’t bound by the same regulatory constraints as FDIC-insured banks.

The Road Ahead

After many years of historically low and stable interest rates, borrowers should realistically expect that rates will begin to tick up as the economy continues to improve. Nonetheless, self-storage borrowers have an abundance of options. Barring unforeseen events that would dramatically alter the financing landscape, the window of opportunity should remain open to lock in on low rates with aggressive lenders looking to put money to work.

Shawn R. Hill is a principal at Chicago-based The BSC Group, where he provides mortgage brokerage, financial consulting and loan-workout solutions to self-storage real estate owners nationwide. To reach him, call 312.207.8237; e-mail shill@thebscgroup.com; visit www.thebscgroup.com.

Devon Self Storage, a California-based operator that owns or manages 46 facilities nationwide, has acquired a 21-story U-Stor-It facility in downtown Chicago. The building on S. Wabash Avenue comprises 95,589 net rentable square feet, according to a press release from Marcus & Millichap, the commercial property-investment firm that brokered the deal.

Converted from a parking garage in 2016, the property features exterior brickwork, fire suppression and heating systems, and new flooring. Two high-speed elevators capable of climbing one floor per second also have a security feature that limits tenant access to floors on which they rent a unit, the release stated.

Amenities include a pull-through loading area and indoor, off-street parking for new customers. The structure also has a side loading area with 14-foot clearance for larger vehicles. The leasing office includes a retail component and security monitor displays.

“The buyer will benefit greatly from leasing up the remaining square footage, with nearly 8,000 apartment and condominium units under construction or permitted in the immediate area,” said Charles “Chico” LeClaire, executive managing director of investments in the Marcus & Millichap Denver office, who represented the seller in the transaction, along with Adam Schlosser, first vice president of investments. “This is truly a one-of-a-kind asset and at 21 stories, it is, to our knowledge, the tallest storage facility in the world.”

LeClaire and Schlosser also procured the buyer. Steven Weinstock, regional manager of the Marcus & Millichap office in Oak Brook, Ill., also assisted in the transaction.

Founded in 1971, Marcus & Millichap is a commercial property-investment firm with more than 1,700 investment professionals in offices throughout Canada and the United States. The firm closed nearly 9,000 transactions in 2016 with a value of approximately $42.3 billion.

Devon has maintained a dedicated self-storage operating platform since 1993. Since then, the company has been involved with the acquisition, development, disposition and management of approximately $1 billion in self-storage assets.

PTI Security Systems, a provider of access-control and security solutions for the self-storage industry, has partnered with Banyan Hills Technologies to bring an end-to-end Internet of Things (IoT) cloud platform to market. IoT is the interconnection of computing devices that enables them to send and receive data via the Internet. The PTI Core cloud platform will be released during the first half of 2018. It’s designed to enhance “customer experience and drive world-class operational excellence into all connected facilities,” according to a press release.

Currently in beta testing, the product includes centralized data, an enterprise-level view of operations, online access and real-time software updates, reports and device notifications, the release stated.

“Everything we’re developing at PTI—from AI (artificial intelligence) to facility automation to mobile solutions—began with our customer’s needs in mind,” said Franklin Young, CEO of PTI. “All innovations from PTI must accomplish two things: create a world-class experience for each facility’s customers and maximize the operational excellence at each site. It’s really that simple. PTI Core accomplishes those goals.”

Banyan specializes in IoT. Its Canopy platform helps companies monitor and manage networks of connected endpoints including self-serve kiosks, intelligent vending, digital signs and smart lockers. “We are thrilled to be partnering with PTI Security Systems,” said Steve Latham, founder and CEO of Banyan.

PTI manufactures technology-enabled access-control and security solutions. Its product line includes access-control hardware and software, wired and wireless door alarms and mobile-access solutions. The company has installed more than 35,000 systems in 30-plus countries. It operates through two U.S. locations as well as distributors in Asia, Australia and Europe.

Self-storage real estate investment trust and third-party management firm CubeSmart will soon operate several new facilities in the works in Louisiana, working with various owners and investors. The properties are largely in the Baton Rouge area, including the surrounding cities of Gonzalez and Prairieville.

Development has begun or land purchases made for four sites in Baton Rouge and one in Prairieville. Five additional land acquisitions are underway, according to the source.

Attorney Craig Smith is building a three-story facility in Baton Rouge. Additional development sites under contract in the city include the former Lone Star Steakhouse at 1920 O’Neal Lane and a property on Highland Road near Ruffino’s Restaurant.

A mixed-use project in Gonzales will include a RaceTrac Petroleum Inc. gas station in addition to self-storage. Locations in Denham Springs and Zachary are also being considered, according to Mark Hebert, an agent with Kurz & Hebert Commercial Real Estate Inc., which represented CubeSmart in some of the deals.

Each of the projects could include up to four stories and will cost $5 million to $6 million to build, said Hebert, who also represented the REIT during transactions in Lafayette and New Orleans.

Development in the state could be spurred by the flooding in 2016, which damaged many older self-storage facilities, the source reported. “Also, this type of commercial investment will likely be less of a risk factor for a commercial loan,” Hebert said.

StorageMax is also entering the Baton Rouge self-storage market with the development of a 600-unit facility on Burbank Drive. The company, which operates 21 facilities in the South, stated the industry’s growth on a national level could explain the new development in the area.

Malvern, Pa.-based CubeSmart owns or manages 868 self-storage facilities across the United States. Its operating portfolio comprises 58.7 million square feet.

David Ledoux and Rick Stockton were looking for passive income streams in 2015 when they decided to purchase a self-storage facility in Houston. After failing to agree on a price with the seller, they brainstormed alternative methods to break into the industry. Little did they know their disappointment would inspire them to build a new breed of eco-friendly facilities.

Their idea was to incorporate stacked shipping containers to create a multi-story structure. They stopped at their favorite watering hole and created a napkin sketch of what this type of facility might look like.

At the time, the pair worked at a Houston-based engineering, procurement and construction firm, which specialized in building and installing modular petroleum refineries worldwide. Over the next year, they spent their spare time working on their design. They also established relationships with contractors, engineers and, specifically, Stephen L. Levine, an intellectual-property attorney with the firm Carrington, Coleman, Sloman & Blumenthal LLP, to verify, expand and improve their initial concept.

“Steve has been instrumental in guiding us through the patent process, which was a real learning process for both Rick and me,” Ledoux says.

“It appears that self-storage intellectual property has been fairly static if not undeveloped, whereas the excitement and significant changes surrounding Rick and David’s innovations has translated into a long-term legal strategy that has them filing multiple patent applications, domestically and internationally,” Levine says. “This has allowed them to further secure and commercialize their rights in what could well constitute a pioneering transition and position in the self-storage industry.”

It wasn’t long before they left their day jobs and founded GreenSpace Holdings.

New Partners

Ledoux and Stockton soon met with Fairway America, an advisory, consulting and investment firm specializing in non-institutionalized real estate assets. After several months vetting the GreenSpace concept, the company decided to sponsor the first facility to be developed using the proprietary design, in Pearland, Texas.

It was at about this time the partners discovered finance firm Jernigan Capital. They not only liked its program, they visited its headquarters in Memphis, Tenn. “Jernigan Capital liked what we were doing and embraced our designs,” Stockton says. “It was clear to them that we had spent a lot of time developing numerous aspects and implementation innovations of the concepts. We visited Jernigan several times before committing to a project together, and they have been fantastic partners.”

Because the designs involved new construction techniques, finding a builder to sign their non-disclosure agreement (NDA) was difficult. However, they discovered a collaborator in design-build firm TMS Contractors LLC, which works right in their same office building. TMS Vice President David Cannaliato signed the agreement, and a new alliance was forged.

“Working with TMS President Stefan Knieling and David has been nothing short of a dream,” Stockton says. “They worked with us tirelessly for almost a year before we closed our first project finance. They are true partners.”

Once GreenSpace and TMS began collaborating on the first project, their creativity was turbo-charged. The companies spent hundreds of hours converting innovative ideas into engineered drawings that would be ready for permitting and further augment the growing intellectual-property portfolio.

Certain aspects of GreenSpace inventions have been vetted by industry moguls, the banking industry, civil and structural engineers, and investors. The benefits Ledoux and Stockton discovered from their patents-pending ideas convinced these groups to invest and finance their projects.

The Design

Self-storage projects incorporating GreenSpace innovations enjoy many benefits over traditionally built multi-story facilities. One core aspect of the design is it allows the structural integrity of lower containers to support upper floors, providing substantial cost savings. Other advantages include:

• A reduced need for new structural steel and concrete, which is better for the environment
• Lower electricity needs during the manufacturing and construction process, saving enough energy to power more than 500 homes for the full year and reducing carbon-dioxide emissions by about 600 tons
• A construction-cost reduction of $20 to $30 per gross square foot
• Leveraged break-even occupancy of about 45 percent
• A six-month construction timeline
• Lower interest-carry requirements and lower working-capital reserves due to quicker construction and lower break-even occupancy results
• Likely higher occupancy due to easily movable unit partitions, which quickly create different unit sizes
• Hallways that can be designed in any width
• Containers configurations that can fit any property shape
• Minimized engineering costs
• An exterior design that’s indistinguishable from any class-A facility
• Container walls that are three times thicker than traditional hallway walls, adding security

The Projects

The three-story facility under construction in Pearland will comprise 96,000 net rentable square feet of storage space in 1,017 units. Located off a main thoroughfare in one of Houston’s fastest-growing suburbs, the facility will be near a mix of retailers including Lowe’s Home Improvement and an H-E-B grocery store.

GreenSpace is also building a 133,000-net-rentable-square-foot facility in Houston’s energy corridor, just north of an affluent neighborhood, at Interstate 10 W. and the Sam Houston Tollway. Both projects are expected to be completed this year. They’ll be managed by self-storage real estate investment trust CubeSmart and branded under its name.

The Future

Since news about their designs and projects has been published, Ledoux and Stockton have been contacted by self-storage developers, public real estate investment trusts, real estate funds and high-net worth families looking to build single facilities or as many as 10. They’re also in discussion with a potential financial partner.

Their plan? To license their know-how and technology to other developers, build as many facilities as they can for themselves, and “have as much fun as possible,” Ledoux says. The company hopes to build 50 multi-story self-storage facilities nationwide in the next seven years. All in all, it’s not a bad beginning for a concept that started on a napkin.

Update 12/21/17 – AmeriStor Self Storage held its annual “Santa Paws Holiday Market” on Dec. 16 at 2010 E. Elms Road in Killeen, Texas. The dog- and kid-friendly event featured gifts and services for people and pets as well as information about local animal rescues. All proceeds benefited Emancipet Killeen, a nonprofit veterinary clinic that provides spay/neuter and other pet services.

The market is the brainchild of AmeriStor Owner Scott Sterling and Manager Cathy Sweem, who’s adopted dogs from local rescues in the past. “They’re the most loyal and even-tempered dogs out there,” Sweem said.

Self-storage developer Capco Steel Inc. is contributing for the first time to The Salvation Army’s “Angel Tree” program, which provides new clothing and toys to low-income families, foster-care children, group homes and nursing homes during the holidays. Capco employees, subcontractors and vendor partners will supply presents for 58 children and two seniors.

For more than 10 years, AmeriStor has provided climate-controlled and drive-up storage in Killeen.

San Antonio-based Capco Steel Inc. has provided steel buildings and construction services to the self-storage industry since 1985.

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11/30/17 – Self-storage operators around the world have launched drives to collect clothing, food, toys and more for various charitable organizations this holiday season. Here’s a summary of how they’re giving back to their communities so far in fall/winter 2017.

1-800-Self-Storage.com, which operates eight locations in Michigan, and mobile-storage provider Container on Wheels (COWs) of Pontiac, Mich., partnered with the Oakland County Sheriff’s Department in November for its annual “Coats for the Cold” drive. The self-storage operator donated boxes for the event’s 68 drop-off locations, while COWS provided mobile containers at three drop-off sites. The coats collected were delivered to several charitable organizations, who then distributed them to those in need at no cost.

Access Self Storage, which operates more than 50 locations in England, is supporting several causes throughs it annual Christmas Charity Appeal. Among this year’s beneficiaries is Family Action, which provides support to those experiencing poverty and social isolation. Access is also seeking donations for disadvantaged children who were victims of a June fire at the Grenfell Tower apartments in West London, which killed 71 people and injured more than 70. In addition, company facilities in Acton, Fulham and Isleworth, England, will serve as drop-off locations for donations of new toys until Dec. 15. The operator hopes to beat last year’s collection, in which 1,500 presents were given to more than 100 charities.

Several individual Access facilities are running their own charitable drives:

• The Access facility in Basingstoke is collecting toy and food donations through Dec. 15 that will be auctioned during a raffle to raise money for St. Michael’s Hospice, an independent charity that provides hospice care and education. “Our staff selected St Michael’s Hospice to receive this year’s donations because we really believe in the great work they do,” said Mike Blaszkowicz, property manager. “The acts of kindness that the collection inspires is a reminder to everyone that there are people out there who really care, and who are happy to put a smile on someone’s face they haven’t even met simply because it’s Christmas.”
• Access Self Storage of Mitchamis looking to fill a storage unit with new toys, games, books and clothing donations for the Salvation Army. It’s the third year the facility has collected donations for the organization. Last year’s collection netted 1,500 presents.
• Access in Romford, England, is accepting donations to benefit Hope4Havering, a collective of churches, businesses and individuals that help the local homeless population. Items being collected include clothing, personal-hygiene products and non-perishable food. “We’re starting early enough this year to, hopefully, make a real difference for Hope4Havering,” said Moiz Syed, property manager.

U.K. self-storage operator Big Yellow Group PLC, which operates 92 self-storage locations, has teamed with “The Chronicle” newspaper and other local businesses for its annual Big Yellow Chester Christmas Toy Appeal to benefit underprivileged children and family charities in the region. In addition to toys and gifts, the operator is accepting gift vouchers to purchase toys. This year, it hopes to set a new record for donations. “Last year really was amazing. We received well in excess of £10,000 worth of new toys and gifts to hand out to children and families, who really appreciated a present to open on Christmas Day, something they may not have had the chance to do had it not been for the toy appeal,” said Jeff Banks, business-development manager for the Chester store.

The Loves Park, Ill., location of Boxed Up Self-Storage, which operates three facilities in the state, hosted its first “Boxing Up Hunger” food drive, which ended Nov. 16. The operator collected nonperishable food items for families for the Thanksgiving holiday. Raffle tickets were given with every donation.

The Bismarck, N.D., location of Go Mini’s Moving & Portable Storage, which operates more than 160 locations throughout Mexico and North America, collected donations this month for Christmas Playpen, a program in which gently used toys and bikes are gathered, repaired and provided to area families. The items were repaired by inmates of Dakota Women's Correctional and Rehabilitation Center, the Missouri River Correctional Center and the North Dakota State Penitentiary. This year’s Joy Shop, where the toys are distributed, will take place Dec. 12-15. More than 500 children from 290 families benefited from the program last year.

The Poughkeepsie, N.Y., location of Guardian Self Storage, which operates 14 locations in New York’s Hudson Valley, partnered with Dutchess Outreach for its annual Susan DeKeukelaere Memorial Coat Drive during the month of October. Eight locations served as drop-offs for the donations. Last year, more than 5,500 coats were collected and distributed.

Westy Self Storage of Stamford, Conn., which operates 15 facilities across Connecticut, New Jersey and New York, is once again participating in “Operation Santa,” which collects and distributes winter coats and toys for underprivileged children. This year, the program will benefit Benjamin Franklin/P.S. 55 in Bronx, N.Y. It kicked off with a reception on Nov. 13 in which guests took “Dear Santa” letters written by children to fulfill the wish list as well as provide a warm coat, shoes, mittens and a hat. Donations can be made through Dec. 16 at the facility, where they’ll be stored and later delivered to the school via a Westy truck.

The Stamford Westy location as well as its sister store in Norwalk, Conn., are also supporting the U.S. Marine Corps Reserve Toys for Tots program. Donations will be accepted through Dec. 19. The sites will also store the donations and assist with final delivery.The operator has supported the cause for 19 years. “Westy continues to be a true partner of Toys for Tots. Their convenient locations throughout the tristate area make perfect drop off points for the toys,” said George Ducanic, campaign coordinator. “Thank you to all the generous contributors that help make Christmas special for the children in need.”

The Westy location in Wilton, Conn., hosted a personal-care donation drive for the Wilton Food Pantry in October. Donations included soap, body wash, shampoo and conditioner, toothpaste, paper towels, and more. “It is so important to remember those right in our backyards,” said Joe Schweyer, district director of for the Wilton location.

Sources:
Discover Killeen, 3rd Annual Santa Paws Holiday Market
Get West London, Grenfell Tower fire: Child Victims of Tower Blaze at Heart of Donation Campaign Ahead of Christmas
Mid-Hudson News, Dutchess Outreach Seeks to Provide Over 5,000 Coats in Annual Drive
Norwalk Daily Voice, Westy Self Storage In Norwalk, Stamford To Collect Toys For Tots Donations
Romford Recorder, The Recorder Urges Residents to Back This Year’s Access Romford Christmas Appeal for Hope4Havering
Romsey Advertiser, Access Self Storage Launches Festive Appeal for Hospice
Stamford Daily Voice, Westy Self Storage In Stamford Collects Toys, Coats For Operation Santa
The Bismarck Tribune, 'Christmas Playpen' Donations Being Accepted
The Chester Chronicle, BBC Apprentice Candidate Helps Launch Big Yellow Storage Toy Appeal
The Oakland County Times, Coats for the Cold Seeking Donations
Wilton Bulletin, Westy Hosts Wilton Food Pantry Drive
Wimbledon Guardian, Access Self Storage at Mitcham Is Campaigning for Salvation Army at Christmas