The Naperville, Ill., Planning and Zoning Commission voted unanimously this week to recommend that the city council rezone a 1.3-acre vacant parcel for the development of a three-story self-storage project. 5995 Naperville Self Storage LLC seeks to build an 84,477-square-foot facility at 2708 Forgue Drive, between Cantore and Leverenz Roads, according to the source.

The developer has also requested a reduction in the number of parking spaces mandated by the city. Parking would be available on the north side of the building, and include 10 exterior and four interior spaces. Loading and unloading would occur within the building. Trucks more than 26 feet long would be banned under the proposal, the source reported.

While most of the building would be three stories, the east portion closest to the adjacent duplex homes would be stepped down to two stories, according to a city memo. The facility would be built "primarily [of] brick and stone, with standing seam-metal roof accents."

5995 Naperville recently met with homeowners and agreed to eliminate a proposed tower from the plans. In addition, a fence and landscaping will create a buffer between the homes and the storage facility.

Eight of the 11 buildable lots in the area have been developed over the past 17 years. The community includes several office and retail buildings, a bank, a carwash, and a senior assisted-living facility.

The zoning request will next be reviewed by the Naperville City Council.

Update 9/15/17 – IRE has also hired Anna Hartman as property accountant. In this role, she’ll work with Braun and Scott, and be responsible for accounts payable and receivable, financial reporting, and general bookkeeping for the properties managed by IREM.

Hartman has more than eight years of experience in the financial industry. Most recently, she was the member-service representative at First Capital Federal Credit Union. In previous roles, she assisted with mortgage loans, completed financial reporting and research, managed legal-records filing, and provided credit solutions to customers. She earned a bachelor’s degree from York College of Pennsylvania, and is a member of the Pennsylvania Self Storage Association and the national Self Storage Association.

“I’m thrilled that Anna has chosen to join our team. Her experience in the finance trade, both in retail operations as well as lending, brings a fresh perspective to our portfolio accounting and operations,” Braun said. “We are always striving to become better, and I believe that Anna will be instrumental in helping us continue to do so. Anna has quickly demonstrated that she is a great fit with our team.”

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8/31/17 – Investment Real Estate LLC (IRE), a property-management and consulting firm serving the self-storage industry, has hired Elaine Scott as general accountant. In this role, she’ll work with IRE Chief Financial Officer Joe Braun to manage the daily accounting functions for the Investment Real Estate Group of Cos., which also includes Investment Real Estate Construction and Investment Real Estate Management (IREM), according to a press release.

Scott’s responsibilities will include providing support and administration in banking and treasury, accounts payable and receivable, payroll, financial reporting, and human resources. She’ll also work with the firm’s property accountants.

Scott has more than 20 years of accounting experience. In previous roles, she managed payroll, accounts payable and receivable, invoicing, reconciliations, customer service, tax and audit preparation, notary services, and financial reporting. She earned an associate’s degree from the Consolidated School of Business, and is a member of the Pennsylvania Self Storage Association and the national Self Storage Association.

“Elaine brings a wealth of experience and knowledge to our group. But more important, she’s an incredible fit in the culture at IRE, and I’m extremely excited that she’s joined our team,” said Braun. “Already, Elaine has established herself as a great team member within our group, and has shown that she’s willing to contribute and help wherever needed.”

Since its inception in 1998, IRE has provided brokerage, construction, development and management services to self-storage owners and investors.

Scenic City Self Storage opened on Sept. 1 in Chattanooga, Tenn. Developed and owned by Pratt Home Builders, the property at 1730 Dayton Blvd. comprises 34,270 square feet of storage space in 250 climate-controlled and drive-up units, according to a press release.

The facility is just south of Signal Mountain Road and near the residential communities of CityGreen at NorthShore, Hayden Place Apartments and Ridgemont Apartments. It’ll be managed by Absolute Storage Management (ASM), a self-storage owner and property-management firm. ASM operates four facilities in the city and 23 in the state, the release stated.

Pratt Home Builders is a family-owned business that builds houses in more than 45 Chattanooga communities.

Founded in 2002, ASM manages 88 self-storage facilities, 16 of which are owned and operated in joint ventures with the company. Headquartered in Memphis, Tenn., it has regional offices in Atlanta; Charlotte, N.C.; Jackson, Miss.; and Nashville, Tenn.

Inside Self-Storage (ISS) has released its 2017 Top-Operators Lists, ranking the industry’s top 100 facility owners and top 50 third-party management companies by net rentable square feet. The lists include facility and brand owners, independents and property-management firms. The data also features contact information, expansion plans, and each company’s number of locations and units. The lists are featured in the October issue of ISS magazine and available online.

The Top-Operators List has historically been issued as a single top-100 ranking by total square footage. ISS has broken the data into separate rankings for owned and managed square feet this year to reduce the potential for square-footage redundancy that can occur when using only total square-footage figures for all companies in a single list.

A more robust version of the list data is available at the Inside Self-Storage Store. The 2017 package includes the complete Top-Operators Lists in Excel format as well as a 26-page PDF companion comprising a five-page analytical report of the list results and a full representation of the rankings in easy-to-read format. For the third consecutive year, the lists feature data on owned vs. managed self-storage facilities for companies that do both, with breakouts for number of facilities, units and square footage for each.

The report portion of the PDF analyzes growth, decline and general movement among this year's final list participants. It also identifies companies in aggressive growth mode, others that are scaling back, and new up-and-comers in the business. Previous lists for 2012 through 2016 are also available for purchase.

The Top-Operators Lists are compiled annually by ISS. Participation is voluntary and open to all self-storage operators. To be considered for the 2018 list, self-storage operators can complete the online form.

For more than 26 years, ISS has provided informational resources for the self-storage industry. Its educational offerings include ISS magazine, the annual ISS World Expo, an extensive website, the ISS Store, and Self-Storage Talk, the industry’s largest online community.

By Hugh D. Odom

Adding a cell tower to your self-storage property can generate new revenue. However, many facility owners continue to make the same mistakes when it comes to negotiating and structuring the cell-tower lease—and it’s becoming costly. The average landlord throws away more than $852,400 during the life of a typical cell-tower lease, and this amount continues to grow.

To ensure you’re getting the most from this add-on profit center, here are five tips to maximize the cell-tower lease revenue at your self-storage property.

Tip 1: Level the Playing Field

Property owners sometimes treat a cell-tower lease like a do-it-yourself project, and the Internet like a home-improvement warehouse where they can get all the information they need. The problem is most of the information found online regarding cell-tower leases is incorrect and not necessarily applicable to your situation. It’s like buying a ruler that isn’t straight and trying to build a house with it.

The cell-tower companies not only anticipate this, they rely on it to increase the revenue margins they derive from your property. The numbers don’t lie. In 2016, the three largest cell-tower companies generated more than $12 billion in revenue, but only paid about 16 percent of it to property owners in the form of rent payments. Why? Because the property owners negotiated undervalued cell-tower leases.

Tip 2: Take Your Time

Whether you’ve been asked to enter a new cell-tower lease or extend the term of an existing one, one of the most common tactics these companies use is to set false deadlines. They’ll say an offer is only good for a limited time to apply pressure on you to make a quick decision. Why? Because quick decisions about matters with which you’re unfamiliar lead to big mistakes.

Cell-tower companies will also play the “rent card.” This happens two ways. In the case of a new lease, they’ll say you’ll lose potential rent if you don’t agree. Even more drastic, in the case of an existing lease, they might say that if you don’t sign the offer, they’ll relocate the tower and you’ll be in jeopardy of losing your revenue.

Remember, you’re in the driver’s seat. It’s your property, and they’re knocking on your door because they need you.

Tip 3: ‘Market Rents’ Don’t Exist

One phrase that should never be used when negotiating a lease for a new or existing cell tower is “market rent.” Because most property owners view this type of contract as a traditional real estate transaction when it isn’t (it’s a utility transaction), they turn to familiar pathways to structure the financial components of the lease. This is bad news for you and great news for the cell-tower companies. Why? Because they want you to perpetuate the bad deals that other cell-tower landlords have made over the last 20-plus years.

Every cell tower has its own individual value. There’s no one-size-fits-all answer when it comes to these leases.

Tip 4: 180-Degree Turn

When property owners get an offer for a new cell-tower lease or to extend an existing one, they almost always focus on what’s being presented to them. It’s not only human nature, it’s a tactic cell-tower companies promote and bank on.

While it’s important to understand what’s being offered to you, it’s more critical to comprehend what you’re offering to the cell-tower company. They’ll never disclose the true benefit they achieve from getting you to sign an agreement. More important, they’ll never tell you the detriment it might incur if you decline their offer.

Tip 5: Structure, Structure, Structure

How can you make an additional $1 million from your cell-tower lease? The answer is “structure.” It’s only common sense that a property owner will look to see how much rent is being offered with any lease. Again, this is what a cell-tower company counts on, as it wants you to micro-focus on this one component.

If you get a cell-tower lease that pays $1,000 per month with a 3 percent escalator every year, you’re effectively getting paid the same amount every year when you take inflation into account. No matter how much the cell-tower company makes from the use of your land, you won’t see another dime. Why? Because the company got you to focus on the rent, not the financial structure of the lease.

Again, a cell-tower lease is a utility agreement, not a real estate transaction. Your rent should be based not solely on how much space is being used, but how valuable that use is to the cell-tower company over time.

What could you do with an additional $852,400? That’s what you’re at risk of giving away by not having the information and representation you need to level the playing field with any cell-tower company or wireless carrier that approaches you about a lease. Remember, you don’t get the lease you deserve, you get the one you’re able to negotiate.

Hugh D. Odom is president of Vertical Consultants, a cell-tower consulting firm currently working with approximately 4,000 self-storage facilities across North America. He has more than 20 years of legal and telecom experience, including as an AT&T attorney for more than 10 years. For more information, call 877.456.7552; or visit www.celltowerleaseexperts.com.

Update 9/14/17 – The planning board officially denied SS Glen Rock’s variance request on Sept. 7. The rejection followed five hearings between April and June to discuss the facility that would have been 137,950 square feet and included more than 1,000 units, according to the source.

The nine-page resolution stated, “The size of the building proposed with a maximum building-coverage total floor area of 170 percent where 35 percent is permitted is out of proportion for the property and the surrounding area, and the grant of the variance will significantly and adversely substantially impair the intent and the purpose of the master plan and zoning ordinance.”

During a June 29 board meeting, Mayor Bruce Packer, chairman Robert VanLangen, and board members Ken Hrasdzira, Kristine Morieko and Greg Toro voted to deny the request. Harold Knapp cast the only dissenting ballot. “The [planning] board finds that adequate proofs to satisfy the criteria described for the grant of the variance do not exist,” the official resolution stated.

The board’s criteria for a variance include property shape, exceptional topographic conditions, and extraordinary situations affecting a specific property, the source reported. It also includes projects that will have no substantial detriment to the public and that won’t “substantially impair the intent and purpose of the master plan and zoning ordinance.”  

During one hearing, Mayor Packer suggested the facility’s proximity to New Jersey State Route 208 could draw those looking to store drugs. Those opposed to the storage development also stated it was “out of character” with the area, and that granting the variance would affect future planning.

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5/11/17 – Real estate developer SS Glen Rock LLC has proposed to build a five-story self-storage facility on the former site of Hudson City Savings Bank in Glen Rock, N.J., but neighboring business and property owners oppose the project. The 1.97-acre parcel at 161 Harristown Road is between a Bank of America and an office building, and across the street from Dobrow Sports Complex. Opponents voiced concerns about the facility’s size as well as potential safety issues during a May 4 planning-board hearing, according to the source.

The developer has requested a building-coverage variance of 170 percent. Though maximum allowable coverage is 35 percent, the variance request includes all five stories of square footage, the source reported. The footprint of the building would be 29,734 square feet, with the roof line at 53 feet and the tallest parapet reaching 61 feet. The application also requests permission for a 6-foot fence, two feet above the maximum-allowable height.

Tamer Ali, who owns the lot leased to Bank of America, told planners the size and appearance of the storage structure could potentially deter new business tenants from coming to the area and offering services better suited for the community. “We have to fill this town with more bodies—not possessions, not things," Ali said during the hearing. "Those don’t buy lunch; they don’t go to local areas; they don’t take the train.”

Peter Steck, a professional planner representing insurance agency MSO Inc., argued the self-storage facility wouldn’t fit aesthetically with the area. “That’s the danger here," Steck told planners. "By putting something so out of character with it, you’re going to injure the value of surrounding properties.”

Project manager Kevin Bulger indicated the developer was amenable to lowering the top parapet and bringing signage in line with the roof. He also suggested adding evergreen trees as a buffer along the southern property boundary, according to the source.

Opponents also said they feared the property’s proximity to Route 208 could entice someone to store drugs at the storage facility. Gregory Meese, an attorney representing SS Glen Rock, countered that those fears were overblown and the storage business would take measures to keep the site safe from criminal elements.

“There are specific prohibitions in the lease from storing weapons, dangerous materials and controlled substances like drugs,” Meese told planners. "There are provisions in the lease that allow the order to inspect different units as well as inspection by the police if necessary. There are security cameras in the hallways as well as around the property itself."

SS Glen Rock is expected to submit formal changes to the project during a scheduled hearing on May 30.

Update 9/14/17 – Margate officials have decided to make the city’s ban on self-storage indefinite. Though city staff suggested Margate could confine future storage development within its industrial zone, commission members instead decided to restrict the number of facilities to the city’s current supply. "We have nine in nine square miles," Schwartz said during the meeting. "I think we have enough."

Though the decision bans new development, it isn’t clear from the report if the move extends to any future expansion of existing facilities.

The city had also recently placed a moratorium on massage parlors, but the commission lifted the ban during the same meeting. The moratorium was initially imposed due to complaints of illegal activity. New development of such establishments will require a special-exception application, with the commission having final voting authority. The commission also recently asked staff to make it illegal for massage parlors to black out their windows, the source reported.

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6/12/17 – City officials in Margate, Fla., have extended an existing moratorium on self-storage development by six months. The temporary ban was introduced in November to give city staff time to write a permanent change to the zoning code, which is expected to limit where new facilities can be built, according to the source. Several officials last week expressed disdain for the number of storage facilities already in the market.

"In my mind, this nine-square-mile city has more storage facilities that we ever need to see for the rest of our lives," vice mayor Arlene Schwartz said during the meeting.

"I don't want people [to] move into Coral Springs and Parkland and dump their stuff in Margate," added commissioner Anthony Caggiano. "We should be a place where people and business move in, not a storage place for other cities. I don't ever want to see another of these things in our city; I want to end it. We have too many of them right now."

Officials also indicated they want the city commission to be the deciding authority on special-exception applications for self-storage.

Ben Ziskal, the city’s economic development director, told officials the city had received several self-storage applications. "We did have quite a number of special exceptions applications for storage facilities to the point of reaching saturation," Ziskal said. "We feel that revising our zoning codes to limit the locations where a new facility can locate will be in the best interests of the city."

The Lawrenceville, Ga., City Council recently approved a series of rezoning conditions and a special-use permit to allow local builder GS Construction Inc. to develop a self-storage facility at 530 Lyle Circle. The project was assigned several stipulations including restrictions on building height and hours of operation, according to the source.

The council limited the building to two stories and operation hours to between 7 a.m. and 9 p.m., Monday through Friday. It also specified the business can’t operate after 5 p.m. on Saturdays, and no “outside activity” will be allowed on Sundays, the source reported.

A 50-foot buffer with trees will be placed between the facility and neighboring residential areas. The council provided guidelines for the types of trees to be planted and ordered the buffer area remain free of underbrush, vines and weeds. It also won’t be allowed to return to its natural state, according to the source. The property must also include perimeter fencing.

The building site is adjacent to the GS Construction office. Founded in 1996, the company is primarily a utilities contractor specializing in capital-improvement projects related to roadwork, storm drains, sewer and water, according to its Facebook page.

Editorial credit for Amazon photo: Jonathan Weiss / Shutterstock.com

For food companies, if they haven’t created consumer “brand love" already, they might want to think about getting some. Why? Because loved brands will prosper in this new era, whatever it may become. For now, let’s call it the “click and wait" era.

First, the implications for food brands. Amazon doesn’t “do" small; its business model is predicated on moving critical masses of merchandise. Niche, specialty brands will feel two pressures. Foremost, their margins are going to be reduced significantly. Amazon leaders didn't even meet their new employees, and yet everyone was clear that on Day 1 prices were coming down. If the small specialty guys can’t react, they will be replaced by Big Brands A, B, C, etc.

During the food renaissance, many big brands have tuned in to consumers’ new expectations, and have cleaned up their product labels accordingly. In turn, they just may reconnect with some lost consumers and rekindle latent brand love. Big brands also have reinvented themselves via acquisitions and innovations. With Amazon (and all things online) critical mass matters. If you can’t supply the nation, you may not get the attention of retail partners trying to feed the online beast.

Specialty brands aren’t going to die, just like big brands were never going away. But it is time for them to grow up and make the investments to align with the right partner to feed an emerging and changing market. The challenge? Food remains a sensory sell, and an online post without sensory cues can only motivate purchase so much. Consumers still will want to shop for the items they hold nearest and dearest to their hearts. No one believes the bulk of groceries will be bought online, but even a conservative small share is big business. And again, Amazon does not do small.

Why does brand love matter? Because those with it will win, and those without it will be squeezed. Losing brands will be forced to focus on transactions and become low-cost producers. They will sell a lot of “pantry" items at low margins. Winning brands won’t completely defy oncoming margin pressures, but the benefits of being a click away from your target consumer will help outweigh any sacrificed margins.

Our research has shown that consumers will go out of their way, pay extra and even hoard their loved food brands. What happens when it’s easier for consumers to get those loved brands? Business will be good. Loved brands will become more accessible to targeted consumers and will have a greater opportunity to speak to those consumers. How can a marketer not love that?

Finally, food marketers should think about the notion of “click and wait." Although this may temper some of the hysteria surrounding the revolution in our midst, the established food acquisition model in our culture lives on: consumer sees food, consumer buys food, consumer eats food. This food journey can take seconds, minutes, maybe hours, but rarely days. Are consumers going to let the convenience of clicking (and waiting) for their food replace their expectations of instant gratification? The answer is yes and no. Some categories and brands will fit a click-and-wait model better than others. Obvious items such as pantry items, supplies, small wares and shelf stable foods will grow at a much faster rate than refrigerated or frozen foods. Figuring how stronger online players fit into an overall distribution mix will be the trickier task for marketers.

One thing is clear: as retailers and trading partners get stronger, brands that have not formed an unbreakable bond with their target will get weaker. Creating Brand Love is the best bet as the climate changes.

** Foodmix’s Ben Finch and Bill Sherman will be speaking about building Brand Love during the “Developing and Delivering Clean Label Messaging" workshop on Friday, Sept. 29 at SupplySide West in Las Vegas.