The Amsdell family of companies has acquired Moore Self Storage in Neptune, N.J., near the Jersey shore. The facility has 50,000 net rentable square feet and will operate under the name Compass Self Storage LLC. Financial terms were not disclosed.

The purchase signals the introduction of the Compass brand into the New Jersey market. Amsdell has been very active in recent weeks, purchasing five facilities last month in the area around Memphis, Tenn., and entering the Cincinnati market in June with the purchase of a five-property portfolio.

"We are excited to expand and grow into the New Jersey market," said Todd Amsdell, president. "We look forward to providing quality self storage solutions and services to our new customers."

Converted from a clothing manufacturing building into a self-storage facility in 1997, the New Jersey property offers 499 climate-controlled units, 105 traditional storage units, outdoor vehicle storage, and a full line of boxes and packing supplies. At the time of sale, the facility was 85 percent occupied, according to Marcus & Millichap Real Estate Investment Services which represented the seller..

Moore Self Storage has four remaining facilities, with three in North Carolina and one in Pennsylvania.

Headquartered in Cleveland, the Amsdell Cos. draw its roots from the family-owned construction company founded in 1928. The company, which owns and operates self-storage properties in Florida, Kentucky, Michigan, Mississippi, New Jersey, Ohio, Pennsylvania and Tennessee, has since been active in several billions of dollars worth of real estate ventures with a primary focus in self-storage.

Marcus & Millichap is a commercial property investment services firm prominent in the self-storage industry. The company has more than 1,000 investment professionals in offices nationwide and closed more than 5,000 transactions last year.

Statewide Storage of Victorville, Calif., was recently sold from STW Ministorage to WCAL LLC for $3.3 million. Located at 11622 Amargosa Road, the property consists of 102,860 rentable square feet of storage space in 623 units.

Built in 1985, the facility sits on 6.7 acres. Facility features include high street visibility on Interstate 15, concrete construction, steel doors, an onsite residence, personalized gated entry and video surveillance. The buyer, an out-of-state self-storage owner, plans to update the property.

The seller was represented in the transaction by Stephen Grossman, a senior vice president of national self-storage investments for commercial real estate firm NAI Capital. This deal is clear evidence that demand for well-priced storage properties in smaller markets is back," Grossman said. "Investors are beginning to return to the value-add markets with a longer-term investment strategy in mind."

Based in Encino, Calif., NAI Capital has 14 offices throughout Los Angeles, Orange, Riverside, San Bernardino and Ventura Counties. The company is the Southern California affiliate of NAI Global, a real estate service network with 350 offices worldwide.

Bar 4 Mini Storage, a self-storage facility in Gilbert, Ariz., sold recently for $4 million. The sale price reflected a capitalization rate of 7.81 percent and $68 per square foot.

The facility consists of 11 buildings totaling 58,340 square feet on 5 acres. There are 500 storage units, 159 open parking spaces and three cell towers on the property.

The seller was a single-person entity based in San Diego. The buyer was a business entity created by Business Property Trust, a Portland, Ore.--based investment company specializing in small-business industrial properties and self-storage facilities.

The deal was negotiated by Bill Alter and Denise Nunez of Rein & Grossoehme Commercial Real Estate, a Scottsdale, Ariz.-based firm specializing in the sale of investment properties and commercial leasing.

Sentry Self Storage LLC, which provides self-storage management and consulting services, has made two staff promotions. Lainie Miller was promoted to vice president of operations. Christopher Ward was promoted to district manager of Georgia, Indiana and North Florida.

In her new role, Miller will oversee the company's day-to-day operations. She joined the company in 2007 with 13 years of operational and human-resources experience from Extra Space Storage and Storage USA. For the past year, she served as Sentry's regional manager of Georgia, North Florida and Texas.

Lainie has been instrumental in both our growth and strategic direction over her five years with Sentry," said Richard Yonis, president.

Ward most recently served as Sentry's area manager for Georgia and North Florida. He joined the company in 2006 with seven years of operational experience from Extra Space Storage and Public Storage.

Based in Coral Spring, Fla., Sentry Self Storage manages more than 40 properties in several states, working with 18 ownership entities.

Big Box Storage Inc. in San Diego, Calif., is partnering with Charity Storage, a nonprofit organization, to raise funds on an ongoing basis for three charities through self-storage auctions.

Under the terms of the partnership, Big Box Storage has devoted a storage unit to be used exclusively as a collection point for donated goods. Existing storage renters, visitors to the storage facility, residents and businesses can donate items to the charity storage unit by dropping them off at the facility, 7077 Consolidated Way.  

Donated goods are then sold via auction at the companys next quarterly auction sale, with 100 percent of the funds generated distributed across three nonprofit organizations:

• RePets Animal Rescue is devoted to reducing the over population of homeless animals through spaying, neutering and adoption. Sixty-percent of all auction proceeds will be donated to RePets.
• Kure It Cancer Research, a charitable organization committed to finding a cure for kidney and other underfunded cancers, will receive 30 percent of auction proceeds. Since its inception in 2007, Kure It has raised more than $1 million for research.
• The National Self Storage Scholarship Foundation grants need-based scholarships of up to $5,000 per college student. The scholarship fund will receive 10 percent of auction proceeds.

Founded by veteran self-storage professionals, Charity Storage is a 501(c)(3) nonprofit recognized as tax-exempt by the IRS.

Big Box Storage Inc. has facilities in California, Nevada, Oregon and Washington. The company also offers mobile-storage services. 

New Mexico Self Storage, which operates under the brand A-1 Self Storage in New Mexico, recently acquired another facility in Santa Fe.

The 80,000-square-foot facility on Rodeo Road will be the companys fifth self-storage property in the Santa Fe market. New Mexico Self Storage also has facilities in Albuquerque, Rio Rancho and Tijeras.

The company funded the $2 million needed for the acquisition through St. Paul, Minn.-based Advantus Capital Management. Mike Kelly, president of Q10 Capital LLC, represented the self-storage operator and the finance company.

New Mexico Self Storage is currently converting its self-storage facilities to solar-generated electricity. The company is also expanding and updating its facilities.

By Angie Guerin

We are like eggs at present and you cannot go on being an ordinary, decent egg. We must be hatched or go bad.
~ From Mere Christianity by C.S. Lewis

Im quite sure C.S. Lewis didnt have the boat- and RV-storage business in mind when he made this analogy, but I like the way it applies to the dynamics of change within our industry. Twenty-five years ago, while in its infancy, self-storage was like a prequel to the ugly duckling. It was an egg. It was the era of unimaginative industrial metal structures on equally unattractive industrial sites. Then it hatched, grew up and evolved. Self-storage became a swan.

Boat and RV storage, like its older sister, is also evolving. Its getting bigger, fancier and more profitable. New developments are building in amenities that differentiate them from the facilities constructed a decade ago, and existing operators are adding features that are helping them compete with the new grown-up version of the business.

One of the ways these developers are finding success is by tapping into the mindset of a typical boat and RV renter and providing amenities to add value to potential customers. Having a fully lighted wash bay and dump station for my tenants has been a great draw to my facility, and a key selling point for our management team, says Jeff Jenson of North Plains Boat and RV Storage just outside of Portland, Ore. People like the idea that they can access the site in the early morning or late at night and not have to worry about adequate lighting while they are vacuuming, dumping or washing down their boat or RV. This, along with our secure site and friendly office, has helped draw tenants away from our competition.

Considering Amenities

Understanding the competition has been a key factor for many developers when determining what types of amenities to add to a new boat- and RV-storage development. Its a delicate balance between having enough to establish interest from your tenant base and adding more than a specific market can bear.

Higher construction costs can lead to a lower rate of return. One piece of advice I heard years ago from one of my earliest mentors was Find out what your competition is doing successfully, and do the same thing ... just a little bit better.

Be aware, though, the tricky part may be determining who the competition really is. Unlike its self-storage predecessor, boat and RV storage has the ability to draw from a wider geographic area. Some owners offer such a wide range of amenities and perks that they draw tenants from across state lines.

Consider Garage Plus, in Spanaway, Wash. Heavily marketed via billboards, commercials and radio ads, its a facility that offers unlimited potential extras. These include the ability to add a mezzanine structure or loft space, electricity in every unit, Wi-Fi access and cable hook-ups throughout the site, customizable flooring, and a club house with meeting space thats unmatched, featuring big screen TVs, an indoor fire ring, a wet bar and a pool table.

Garage Plus offers every conceivable perk to draw interested parties to the site, including a number of events and gatherings it hosts throughout the year to target the market its trying to reach. Another major difference between Garage Plus and a more typical boat/RV-storage facility is the condo concept.

Designed as for sale units, many of the additions or luxuries offered to tenants help increase the value of the unit and have a quantifiable return to the original owner.

Offering Convenience

Whether its a wash bay or dump station, mezzanine or outlet in every unit, Wi-Fi or a luxurious clubhouse, amenities are essentially convenienceswhich is always a selling point to tenants. The need for convenience has been a catalyst in hatching the egg of this industry. Tenants wanted convenient access, and we provided it by raising the bar on security. They wanted heated or cooled space, and the industry delivered standardized climate-control systems. Tenants wanted meeting spaces, conference rooms, wine storage and better lighting. The self-storage industry responded.

Boat and RV storage is changing, too, and the market demand for amenities or conveniences are the driving force. What was once merely an afterthought in the form of a fenced and graveled yard is morphing into an industry thats becoming architecturally more interesting, can stand on its own merit, and is giving its swan of a sister a run for her money.

Angie Guerin is the national sales manager at Mako Steel Inc., a Carlsbad, Calif., company that designs, supplies and installs steel buildings for the self-storage industry. She has worked in the self-storage industry for 12 years, assisting developers and contractors with their steel-building needs. When shes not peddling metal at Mako or writing blogs for the companys website, she works for a 3-year-old dictator named Isabella. She enjoys both jobs immensely. For more information, call 800.383.4932; visit www.makosteel.com.

Schools back in session, summers over, Halloweens around the corner Its time to start thinking about your self-storage facility's operational budget for 2013! Already!?!? you ask. To budget well, we need to prepare, research and take our time. Budgets are usually completed for the following year by Dec. 1. The process can take about a month, so you should begin by mid-October.

Why is budgeting important? For starters, many investors and bankers require it. Even if its not required, a budget helps predict cash flow, sets goals for revenue growth, and creates a framework from which operators can manage their expenses. Without a budget, it can be easy to spend more money than youre bringing in. Here are seven critical steps to creating a realistic 2013 budget for your self-storage operation.

 

Step 1: Gather Tools and Data

Before you begin assembling your budget, spend some time gathering important data. If you have a bookkeeper or property accountant, ask him for copies of the propertys profit-and-loss statements for the last two years, and year to date for the current year. Also, find out when paychecks will be cut next year. If payday is every two weeks for your manager, which two months will have three payroll periods instead of two during 2013? Review any existing contracts that will continue into 2013. This may include Yellow Pages ad commitments, preventive maintenance or Internet-marketing contracts.

You should also generate a couple of critical reports from your self-storage management software, including the most recent monthly summary report. It will give you starting points for gross potential, occupancy and total actual rent. It would also be really helpful to have a historical report that shows move-ins, move-outs, occupied units, total rent collected and discounts given for the last 36 months.

 

Step 2: Review the Competition

Budgeting season is also a great time to visit your local competitors. How does your facility compare in terms of quality, service and value? Are there any changes you could make in 2013 that would significantly improve your occupancy or revenue? This might include adding climate-controlled units, sealcoating your parking lot, purchasing new banners to improve signage, instituting a new move-in special, or hiring a more sales-oriented staff.

 

Step 3: Audit for Maintenance and Capital Project Needs

After youve visited your competitors, do a thorough walk-through of your property, trying to see it from a customers perspective. Make sure all the lights are working, and review the condition of the signage, gutters and roof. Are all keypads, gates and cameras working? Are there any signs of asphalt damage or wear and tear? Are there any doors that need spring adjustments or replacement? Create a list of capital improvements and maintenance projects youd like to complete next year, and then gather estimates.

 

Step 4: Ask Experts for Help

Who knows your property better than you? Your property manager! Include your manager in the budgeting process. Ask what he would do differently if he owned the property. Managers often have great ideas for improving the property and bottom line but are hesitant to say something to owners because theyre afraid of insulting them. Your manager should also be able to provide you with his expectations for growth in occupancy and rental rates for next year.

If you know other self-storage owners in your area, give them a call. In this industry, people are generally friendly and eager to help one another. Share your thoughts on the market and expectations, and then ask for their opinions. Maybe theyve heard rumors of a potential new competitor you didnt know about. Other storage investors can be a great source for information on the industry and your market.

 

Step 5: Analyze Trends

Analyzing trends in key areas at your property over the last couple of years can help you make a more accurate prediction for the next 15 months. If you have some experience with Microsoft Excel, Word or PowerPoint, creating quick line charts is a piece of cake. If you havent done it before, you can use the help tool within the program itself or search online for tutorials.

I recommend plotting these six line items on individual charts by month for the last two to three years:

• Total revenue
• Total discounts given
• Total expense
• Move-ins
• Move-outs
• Square-foot occupancy

Look for seasonal and long- and short-term trends. Does occupancy usually peak in August? Do move-ins spike in May due to local college students leaving for summer break? Do you have to give more discounts in the summer months or in the winter? Knowing this information can help you plan accordingly.

 

Step 6: Make Projections

Now the fun really starts! To predict rental income, start with last months rent, add in the expected rent from move-ins next month at your average street rate per unit, and subtract the expected move-outs at your average rate-per-occupied unit. If youre increasing existing tenant rates on a regular schedule, add an appropriate amount on a monthly basis for those increases. Lastly, subtract the amount expected for discounts and bad-debt write-offs.

Remember to add other revenue line items to your budget. For example, it's easy to predict items such as administration fees and merchandise sales by using an average cost per move-in. Looking at the last six months, on average, what were your merchandise sales divided by the number of move-ins? Use that number to predict next years merchandise income. Insurance premiums, truck-rental income and rent from any other sources (cell towers, office space, etc.) should be factored into your budget as well.

For expenses, review the amount youve spent for each line item over the last couple of years. For many categories, you can just assume an annual growth rate, such as 3 percent. For marketing, decide if you want to spend more or less next year. How did the investments you made for advertising work last year?
For items like credit card processing and management fees, calculate the percentage of revenue you paid last year, and then apply that percentage to your 2013 revenue projection to calculate your budget for next year. Use the contracts you gathered and maintenance list you created earlier to predict your repairs and maintenance budget.

 

Step 7: Make the Final Review

A good sanity check for your budget is to layer on a line for your 2013 projections onto each of the six charts you created earlier. The charts should look similar to the ones below.

Do the lines indicate the same general trends as the 2010, 2011 and 2012 year-to-date data? If they vary dramatically, you may not be predicting realistic numbers. After working on the budget for next year, the numbers can start to blend together. This is a good time have someone else to take a look. Accountants have a keen sense of expectations, especially for expenses. Ask one to review your proposed budget and provide feedback.

Hopefully, this article will help you organize your thoughts, streamline the 2013 budget process, and create an accurate prediction of net operating income and cash flow for next year.

Alyssa Quill is an owner of Storage Asset Management Inc. (SAM), a third-party management and consulting company that currently manages 27 self-storage facilities across the mid-Atlantic and Northeast regions. For more information, call 717.779.0044; visit www.storageassetmanagement.com.

The cast of Self-Storage, a horror movie from Woodhaven Production Co. and Verdi Productions, continues to grow with intriguing additions. Producers recently added professional wrestlers Tommy Dreamer and Thea Trinidad to a roster that already includes actors Eric Roberts, Jonathan Silverman, Michael Berryman and Eliza Roberts.

Dreamer is best known for his time spent with World Wrestling Entertainment (WWE). Known as the Innovator of Violence, he is a 14-time WWE Hardcore Champion. Trinidad is known as Rosita and currently competes for Total Nonstop Action Wrestling. She is a former Tag Team Champion.

"We are very pleased to have signed both Dreamer and Trinidad. They bring a very special look and feel to the film," said Chad A. Verdi, one of the films producers.

Self-Storage was written by lead actor Tom DeNucci who plays Jake, a night watchman at a highly secured self-storage facility. Under the films premise, Jakes friends are home from college and looking to party, so he invites them to his work to indulge in a night of sex, drugs, and rock and roll. However, the characters find themselves trapped in an evening of pure terror.

Filming began last month at a self-storage facility in East Greenwich, R.I. and is expected to wrap soon. "This film is going to be something very special. It started with a great script and now with this cast, the sky is the limit," Verdi said.

Self-Storage is the third film developed by Woodhaven Production Co. and Verdi Productions. In addition to his starring role, DeNucci is directing the movie and has a producer credit alongside Verdi and several others. The film has a targeted release date of March 2013.

The California Self Storage Association (CSSA) and Talonvest Capital Inc., a provider of self-storage finance services, co-hosted the eighth annual Self Storage Owners Summit last month, providing attendees with business and market insight from industry professionals. Among the important topics discussed during the sold-out event were self-storage marketing, development, and an emphasis on loan and financing trends. This week the organizations released 10 key takeaway points from the event:

1. Self-storage today is as much about marketing as it is real estate development and ownership. Operators who fail to evolve and adapt to changing market trends risk losing their value proposition and their business.
2. Self-storage owners who maintain an understanding of current loan options will have more opportunities and be able to make better decisions. Owners and investors have more financing options than ever before.
3. Operators should increase revenue from existing clients. Aggressive rate increases, as much as 8 to 10 percent, can be passed along to existing tenants.
4. Life-insurance companies are lending in secondary markets, offering early rate locks and providing self-storage owners with opportunities for a second funding/mortgage at a later date.
5. The elasticity of new tenants changes dramatically after move-in. In fact, there is no meaningful statistical impact on a tenants choice to move out until his rent is about 20 percent above the street rate.
6. Commercial mortgage-backed securities (CMBS) loans for self-storage are back, with leverage up to 75 percent and sometimes 80 percent for taking on a higher rate.
7. The gap between bidding price and asking price is widening. Anonymous audience-polling responses taken during the Owners Summit revealed 68 percent of willing sellers require a capitalization rate of below 7 percent. Only 22 percent of audience members said they would buy at those cap rates.
8. Self-storage owners who have not ramped up their online presence and begun to cater to an increasing number of consumers relying on mobile technology are likely losing out to competitors who are more aggressively targeting mobile users. For example, approximately 60 percent of rentals garnered by CubeSmart, a self-storage real estate investment trust, come from its website. More than one-third of the companys Web traffic comes through mobile devices. Yet, more than half of summit attendees said they do not have a dedicated mobile website.
9. Self-storage owners willing to sign recourse to a credit union can get a fixed-rate loan without a prepayment penalty.
10. The art of converting prospective self-storage customers, who are increasingly using nontraditional methods to shop and make purchases, into paying tenants is vital to success.

CSSA is a non-profit trade association dedicated to supporting the self-storage industry in California. The group offers educational events, networking opportunities, legislative advocacy and more.

Talonvest Capital structures debt and equity for self-storage owners nationwide. The firm has provided more than $3 billion in capital for self-storage owners through Talonvest, Buchanan Storage Capital and Belgravia Capital.