Andover Properties LLC, which operates under the facility name Storage King USA, purchased $21 million worth of loans for four self-storage properties in Florida and Missouri. The properties comprise more than 420,000 square feet and 2,880 units.

Steve Bruce and Clifford Crowe of Lee & Associates National Self Storage Group brokered the off-market transaction, representing both the seller and the buyer. Ed Indvik, a principal in the Los Angeles Lee & Associates office referred the seller.

Andover President Brian Cohen completed the purchase of the loans in an all-cash transaction. The deal adds to Andovers two previous loan-pool purchases made over the past year. Andover, a developer and owner/operator of self-storage facilities on the East Coast, continues to partner with Angelo, Gordon & Co., a privately held alternative-investment advisor with approximately $23 billion under management across various disciplines. 

Lee & Associates Self Storage Group provides commercial real estate brokerage and advisory services to public and private investors/owners, investment trusts, banks, receivers, and other lending institutions throughout California and the U.S. for self storage facilities.

 

 

By Markus Hecker

In the face of a new economy and changing demographics, self-storage operators continue to modernize their systems to improve profit. New technologies have made Web-based management software mainstream.

But facility owners dont just replace standalone Windows programs with Web-based ones for the sake of technology. Well-designed Web software costs less to own and will grow revenue. Web systems exchange critical information such as pricing, unit availability and payments with other platforms including self-storage directory websites, kiosks and call centers in real time. Newer, more powerful databases collect and analyze additional marketing data that can result in better advertising. Enhanced reporting also shows when to offer discountsand when to skip themto greatly impact revenue.  

Web-based software systems can also offer a two-way flow of information to a facilitys website, listing services and call center to capture every lead and calculate closing ratios. Payments, reservations and even move-ins on a facilitys website are all the rage, and not just with younger clients. Shifting demographics show consumers often bypass phone directories to research and buy products online.  

Self-storage owners who seek to replace their Windows-based software program should realize not all Web-based management systems work the same way; they differ in design and capabilities. While Web systems allow access any time and anywhere, smart design can lower the cost of ownership significantly because owners spend less on hardware and maintenance.

For example, a program hosted in a data center eliminates the owners cost on servers, networking, backups and program updates. The programs architecture will determine speed, reliability and up-time. It pays to shop and compare because Web systems vary in look, feel and function.

If user-friendly design and rock-solid architecture are the foundation of a Web-based program, integration with other services may be its greatest possibility. To connect and exchange data with other vendors such as insurance companies and call centers, programs often use APIs, or application programming interfaces. APIs allow other platforms to share the data entered into the management program.

Lets look at the most important features of Web-based software that helps self-storage operators come out ahead.

Tenant-Account Management

Newer, more powerful programming tools and databases of Web-based management systems can be connected to a facility website, allowing tenants to create accounts, and view their balances and payment history. Customers can pay rent online or opt for recurring billing by credit card or ACH/bank draft. Online management allows a facility to accept payments around the clock, and eliminates tenant trips to the office just to pay. Today, most customers expect to manage their account and even reserve units online.

Reservations and rentals also increase when tenants see pricing, availability and specials on a facilitys website. Web-based systems share data in real time, reflecting every change at the facility and eliminating the need for manually posting or uploading of pricing and availability. Many operators have found rentals increase as tenants see the value of online account management and renting. Owners should expect a free e-commerce module with their Web-based management software.

Lowering Credit Card Fees

Automatic credit card billing at the facility level and on the facilitys website has long been a staple to collecting self-storage rent. To lower credit card fees, more owners offer their tenants ACH or bank draft as an alternative to automatically processing credit cards. Monthly savings in credit card fees add up quickly.

The newer technology underlying Web-based management programs lets software vendors offer, not just ACH and credit card billing on websites and at physical sites, but direct integration with processors, which can lower processing fees. Most important, the reliable integration to a growing number of processors gives owners more choice. When consumers have choices, they can shop and pick the vendor offering the best rate and service.

Call Centers

Web-based systems share tenant data as well as facility pricing, specials, availability and other information with any number of users at any time. When a facility registers with a call center, Web systems share up-to-date information with phone operators who accept payments, reserve units and move in tenants. Managers see reservations from the call center and follow up to convert prospective customers to paying renters.

Kiosks

Like call centers and facility websites, kiosks offer convenience, cut operating expenses and bring in rentals. A kiosk can accept payments, reservations and move-ins, and even sell locks. Most important, it solves the dilemma of renting to a person online without proof of proper credentials.

For example, a customer can reserve a unit on a facilitys website, entering all necessary contact and unit details. The Web-based software can then exchange that data between the website and kiosk in real time. When the customer visits his unit for the first time, he first stops at the kiosk, where he views his reservation, scans his fingerprint or drivers license, and gets his lock. 

The integration between the kiosk and management software has reached a much-awaited milestone, says Robert Chiti, CEO of Opentech Alliance Inc., developer of the INSOMNIAC line of self-storage kiosks. Now, tenants can reserve units online and complete move-ins at the kiosk with the same security measures as in-store rentals.

Open Architecture

The robust, modern databases underlying Web-based management software allow owners to maximize services from partner vendors such as kiosks, call centers and listing services. Web systems powerful APIs enable payments, reservations and even exit surveys. Facilities can automatically send electronic reports to insurance companies.

Most Web systems do not charge for integrating with these and other vendors. More important, companies may launch new services that help owners to rent and save.

In the years to come, Web-based management software systems will offer more value to owners. Integration with other platforms will lead to increased rentals and lower operating costs, improving profit for self-storage operators. Now thats reason to be excited about the future and technology.

Markus Hecker is the chief operating officer for SMD Software, which offers SiteLink and SiteLink Web Edition for managing self-storage and mobile-storage facilities. For more information, call 919.865.0789; e-mail info@smdsoftware.com; visit www.smdsoftware.com.

The town board in Windsor, Colo., granted an extension to Windsor Guardian Self Storage's conditional use grant, which will allow the facility to continue to rent space for RVs. The four-year grant was set to expire May 2012, but it's been extended to May 2015. The facility has 96 RV spots and a waiting list for new tenants.

The associate planner for Windsor said the fenced-in RV lot is barely visible from the public sidewalk, keeping the area from becoming an eyesore. During the meeting, the town mayor admitted he wasnt aware the RVs were parked there because they were so well-hidden.

Windsor Guardian Self Storage advertises itself as "northern Colorados largest self-storage facility." It also features boat and RV storage on its website. Windsor has approximately 19,000 residents and is 60 miles northwest of Denver.

San Diego Self Storage and its affiliate, Smart Self Storage of Solana Beach, was a major sponsor of the 15th annual Del Mar Solana Beach Sunrise Rotary Turf Bocce Ball Family Day and Tournament on March 6. Held at the Del Mar Horse Park, the event raised $50,000 to be shared by The Community Resource Center, San Diego Advocates for Youth and Voices for Children.

The event included a silent auction, face painting, a luncheon and a bocce ball competition. Ten SDSS teams competed for the winning title, which was ultimately captured by The Columbians.

Founded in 1972, SDSS is one of the largest locally owned and operated self-storage providers in San Diego County, with a network of 17 neighborhood facilities and additional sites in Los Angeles and Orange Counties. The company offer discounts for active military personnel and supports a variety of non-profit organizations in the communities it serves.

The Del Mar Solana Beach Sunrise Rotary is a local chapter of Rotary International, the world's first service club organization, with more than 1.2 million members in 33,000 clubs worldwide. The local club was established in 1992. It has an active service orientation, providing physical as well as financial assistance to those in need.

Alcatraz Storage recently sold a self-storage facility in Muncie, Ind., for an undisclosed amount to Community Storage.

We are in the process of raising capital for expansion in certain markets by selling off select facilities within our portfolio, said Scott Meyers, president of Alcatraz Storage, which owns and operates several facilities throughout Indiana. Meyers added the continued positive trending in the industry along with growth of his company's self-storage training business, Self Storage Profits Inc., has Alcatraz ready to acquire facilities along with its joint-venture partners.

Alcatraz has an office in Noblesville, an Indianapolis suburb, but the business website shows one operational facility in Crawfordsville. Community Storage has eight locations throughout Indiana.

Mini Storage on the Green in Hampstead, N.C., is hosting a yard sale to help a local animal non-profit organization raise funds.

Operation Topcat is looking for new and gently used appliances, glasses, silverware, furniture and tools for an April 9 yard sale. Volunteers will also be needed for the event, which begins at 9 a.m. Mini Storage on the Green is located at 17062 U.S. 17 South.

Operation Topcat is a non-profit that helps residents whove rescued cats with neutering, vaccinations and home referral.

A man in Bandon, Ore., was arrested March 9 when police were called to conduct a welfare check at a local self-storage facility.

Chris P. Gray, 33, was arrested at Seabird Mini Storage off Highway 101 just before 11 p.m. Police officers were told Gray was possibly suicidal. Although it was determined he wasnt, Gray was arrested on an outstanding warrant from Malheur County. The warrant stemmed from a failure to appear in court on a theft charge.

Highway 98 East Mini Storage in McComb, Miss., was sold in early March to an undisclosed investor for $240,000. The facility has 18,000 rentable square feet and 144 units. It sits on 2 acres with room for expansion. Built in 2000, the property has good visibility along Highway 98.

Bill Barnhill and Stuart LaGroue of Omega Properties Inc. represented the sellers. Both brokers specialize in the Alabama, Florida Panhandle and Mississippi markets and are affiliates of the Argus Self Storage Sales Network.

Based in Denver, Argus was formed in 1994 to assist self-storage owners and investors. The company has 36 broker affiliates covering approximately 40 markets.

Within self-storage, a new venue for scams is the auction, which has gained much more attention in recent months thanks to the TV shows "Storage Wars" (10:30/9:30 p.m. CT, Wednesdays, A&E) and "Auction Hunters" (7/6 p.m. CT, Tuesdays, SPIKE). A discussion is brewing on Self-Storage Talk, the largest online community in the industry, called "New Auction Scam," in which a member outlines how auction buyers and are scamming each other. Dozens of members, many of whom are managers, are posting responses.

Member hurlco describes the scam, which happened at a facility in his area, like this: "A well-respected auction buyer bought a unit at an auction that looked really, really good. He paid $2,600 for it. When he started going through the unit, he discovered that the boxes were taped up but empty. He also found boxes filled with trash. He was (angry) and told the facility and auctioneer that something was wrong with this space. He later found out that two other auction regular buyers who partnered on spaces rented a unit, filled it with their junk and trash, dressed the unit up to look good, stopped paying their rent and allowed the facility to sell their space. These two guys owed only $900 in back rent and fees and received a check from the facility for $1,700 since it sold for more than what was owed on it."

Member SMSSId bemoans, "Wow! What a can of worms. Im not sure how I would handle the situation." Member shaekirk can relate: "It happened to us in November. I don't know if the 'occupant' was an auction buyer, but he definitely knew the ropes. He dressed up the unit with a lot of empty boxes marked 'antique,' 'comics,' 'baseball cards,' etc. All the boxes were empty. He actually showed up to the auction to see how much his unit sold for. In good faith to the buyer, we refunded the money and considered it fraudulent by the occupant."

The original poster, hurlco, suggested facilities could thwart these scams by taking a more detailed inventory of what's available in each delinquent unit. Of course, detailed inventories can create increased liability and tampering allegations from the delinquent tenant. Many members seem to be on each side of this issue. That said, some states require facilities to inventory units and provide a general description of the goods to buyers.

What can facilities do to prevent these scams and protect their loyal, honest auction buyers? Those who would like to share their ideas can do so by visiting SelfStorageTalk.com, logging in or registering a free account at http://www.selfstoragetalk.com/register.php, and posting in the thread: http://www.selfstoragetalk.com/legal-insurance-issues/4771-new-auction-scam.html.

Live and growing since January 2008, Self-Storage Talk is the official forum of Inside Self-Storage, a dynamic services company that provides publications, events and educational resources for the self-storage industry. In addition to more than 4,100 registered members, SST has approximately 4,270 discussion threads and 37,700 posts in 23 different topical sub-forums.