The Republican and Democratic conventions have just wrapped up, and the basic message is that the nation is in trouble and needs a jump start. Trump wants to re-negotiate treaties, and Clinton wants to offer free college. But one way or the other, there will be change ahead if you live in the U.S. What will the impact be on the self-storage industry? Zero. Because self-storage is one of the few real estate niches that has strong demand regardless of whether the economy is going up or down. The macro trends of 10,000 Baby Boomers retiring and downsizing, as well as millions of Americans having to relocate in search of work and store their households, and the additional pressure of smaller homes with less storage space, all make a self-storage unit an American necessity rather than a luxury. So whether it’s Trump or Clinton as our next President, you don’t need to lose sleep regarding your self-storage investments. And that’s reassuring at a time when nothing else in the U.S. is.
Memo From Frank & Dave
The Beauty Of All-Metal Construction
This is a photo of the U.S.S. Constitution. It’s a constant maintenance disaster because it’s made of wood. One of the unique attributes of self-storage is the fact that it is normally of all-metal construction. No other real estate asset class shares that trait. There are some huge advantages from this, and it’s not a topic that most people talk about, but it’s definitely worthy of note, and discussion with lenders and others who are getting up to speed on the storage industry.
Strength and Durability
Steel framing will not rot, warp, split, crack, or creep, and is not vulnerable to termites. Steel framing does not expand or contract with moisture content. Steel is a noncombustible material and will not contribute to the spread of a fire. Because steel is noncombustible, it reduces the fire risk for occupants, firefighters, and neighboring property owners. Steel framing improves design efficiency, saves time, and reduces costs. Steel framing provides a significantly greater strength-to-weight ratio than wood. Steel framing allows for larger bays and wider frame spacing than wood construction. Steel structures perform well during earthquakes and other extreme events. Steel is a resilient material, with reserve strength and ductility that result in significant advantages in natural disasters such as hurricanes and earthquakes, and in other extreme events like fire and blast. Steel construction is engineered to provide a reliable, consistent load path. Steel is, essentially, a fantastic construction material.
And the benefits of steel don’t end with structural and safety issues. Steel also offers superior aesthetics. It remains a flat surface that is easy to paint. It does not sag or bow. Paint adheres better to it than any other surface. It is a timeless look as it is the farthest advancement in construction and will never become obsolete. Just the surface of metal gives it a unique look – you can find simple sculptures of steel in museums. A steel self-storage facility – properly maintained – can look great for decades.
It’s seldom discussed, but one of the best things about self-storage is the fact that it’s made of steel. That makes it free of expensive maintenance and always strong and solid. It’s the only sector of real estate that can boast this fact, and it’s a very significant one.
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Public Storage Is A Terrific Leader For The Industry
Every industry has a leader: the largest owner in that category. In the case of self-storage, that leader is Public Storage. Public Storage Inc. was founded in 1972 by B. Wayne Hughes and Kenneth Volk Jr. Public Storage is the largest self-storage brand in the US. As of 2014, there were 2,250 Public Storage locations in North America and 193 locations in Europe.
Spectacular Stock Performance
At the original IPO, the stock opened on November 21, 1980 at $14.63 per share. It closed on July 29, 2016 at $240.11 per share – which is more than 17 times more. Obviously, having this type of track record by the industry leader is a strong affirmation that the sector is profitable and worthy of investment. Particularly in a relatively new industry such as self-storage, a weak debut would have potential damage that might have hindered the asset class altogether.
Phenomenal Growth in Assets
Public Storage has grown at a tremendous rate of speed since inception. Today, it boasts around $2.4 billion in annual revenue and a net income of around $1.32 billion, and has assets of around $15 billion. It has around 5,300 employees. Pretty impressive for a company that began in 1972 with an initial investment of only $50,000 in a self-storage facility in El Cajon, California. Because of its rapid growth, Public Storage has created an image for self-storage as fast-growing. In addition, it was able to consolidate a huge number of early builders, giving them a profitable return on investment and further promoting the image of a real estate sector “on the go”.
Public Storage is well known for its superior operational systems and personnel. As it built its portfolio, it tested different methods, and perfected most of the management styles that are the mainstay of the industry today. Public Storage’s locations tend to be in dense clusters in major cities, especially near freeways and intersections. This allows for an extremely efficient management structure. Public Storage has very few employees for a company of its size. Customer access to each storage location is automated, while some locations have a husband-wife couple that live on-site and are paid close to minimum wage to monitor the facility.
Unique Debt Structure
The founders of Public Storage hated debt. So they used a method of raising capital from Real Estate Limited Partnerships (RELPs). This proved to be a very successful strategy, as it insulated Public Storage from market turmoil in banking and interest rates. During periods of economic recession when their competitors could not obtain loans to acquire properties, Public Storage was able to grow unhindered.
Public Storage is a tremendous leader for the self-storage industry. It is a company that has virtually created the identity for the industry on Wall Street and with the lending community, and has done a terrific job of it. Without Public Storage, the self-storage industry would probably still be just a loose congregation of mom and pop owners, instead of the behemoth it is today.
An Introduction To Building A Website For Your Self-Storage Facility
One of the most important forms of marketing for self-storage today is the internet. Most customers go on-line and Google “self-storage in ______” to find the potential facilities and then go to the winner’s website to learn more. If you do not have a great website for your business, then you are not going to have the sales you deserve. So how can you build a great website?
Get a domain name, preferably .com
The first step in building a successful internet presence is getting a good domain name. This is the official brand of your website. The best place to select this all-important moniker is at the website www.Namecheap.com . Try to select a domain that has some part of your location or sales pitch in it, as it reinforces with your customer why they would want to rent from you.
Reliable web host
You need a solid and reliable web host to make sure that your customers are not subjected to a slow site or no site at all. One of the best web hosts is www.Siteground.com . Their rates are reasonable and their service exceptional.
Make sure it has a big phone number and contact information
Don’t make your customer search for your contact information. The whole point of marketing is to sell, sell, sell. That means you need people to call you and get the process going. There is nothing more annoying than wanting to call and failing to find the number. That results in the potential customer simply going to the next website on their list.
Photos of the facility
Put your best foot forward and make sure to have great photos of your self-storage complex – not poor quality, grainy shots that are not even centered. If you need to, hire a professional photographer – or simply a friend who has a knack with photos. A photo tells a thousand words, and you don’t want those words to be “I’m sure not going to store my stuff there”.
Links into Google Places
Make sure that your website links into Google Places, so that your facility can be easily found on the map and will be found on a search for self-storage facilities in your market.
Professional logo and website design
There is no excuse not to have a professional website and logo in the modern world. There are so many different groups that can build you great designs at low prices. Two of our favorites are www.Fiverr.com and www.99designs.com . Both offer top designers at incredibly low prices. We’ve been using these for years and are endlessly amazed at what a great value they are – and how great their work is.
Complete description of facility
Make sure to put all the details in there on your site. Customers like to have all the information at their disposal. Put you location, size of units, pricing, contact information – everything that someone would need to make a decision. There’s little point in hiding from this data. 100% information leads to better quality contacts, and saves you time and effort from fielding potential prospects who actually have no interest.
Most all self-storage facilities these days have some type of special going on. Rather it’s a few free months or a reduced rent at the start, you need to prominently place these options on the website for everyone to see. Don’t know what to put on there? You need to be constantly calling your competition and tracking their specials so you know what the market dictates.
Monkey-proof with obvious buttons
Make sure that it’s obvious what buttons to push to get the customer what they desire. Don’t make your website too complicated. You need people to interact with it and navigate it, not stare at it and be completely lost at how to find the necessary data.
A top-quality website is a huge asset to any self-storage facility. Incorporate these concepts and you will be at the top of your game in regards to internet marketing – and you will be rewarded with higher occupancy and retention.