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Winning With Technology In Self Storage
Technology may not be the driving force behind the phenomenal growth of the self storage industry, but it sure complements the activity, adding to the capacity for generating a return in the business and expanding the possibilities in customer service. Long a dream for many self storage operators, the technology to operate an unmanned facility, leads the list and stands as an example of technological innovations that offer solutions. These electronic systems provide efficient service assistance to customers, freeing time for management staff members, and allow owners to generate a healthier net operating income.
The impact of the gains in technological improvements to the practice of operating self storage may be hard to measure for each individual location, but a bird’s-eye view shows the contrast between the have’ and the have not’s. Go to the intersection of highways 24 and 28 in Anderson, South Carolina, a county seat just about halfway down Interstate 85 between Charlotte, NC and Atlanta, GA. From that intersection take each of the main roads–north, south, east, and west–and you’ll find no less than six storage facilities within two miles. That’s about average for most towns, it seems.
Expectedly, the oldest ramshackle building has an office in another business building on an adjacent piece of property, not even a hint of security, and little curb appeal. The newest, Westside Storage, right beside the area high school has great visibility for the store that has one first-phase building complete and two additional building pads ready to be poured. Great signage calls attention to the features of available storage with state of the art security features. In between, there are the fenced and unfenced stores that feature “Boat and RV Storage,” especially the ones on Highway 24, the most direct route from downtown to Lake Hartwell to the south and west.
The results of your short ride will readily reveal why one or two of the properties show up on brokers’ lists, ready to be sold. As in many lines of business, new competition and demographic shifts in the neighborhood dictate new approaches. In this neighborhood, the more industrial side of the town known as The Electric City, changes come as giant corporations decide whether or not their Anderson branch will stay or go. This southern city, within 20 miles of Clemson University and the research infrastructure it attracts, still holds onto names like Michelin and Honeywell, but has lost facilities and jobs for many of the old-line big names in textiles. The changes are apparent as witnessed by the contrast of new sub-division signs right alongside those that indicate “This Industrial Site is Now Available.”
For the owner or prospective investor, the answer to how to make a go of it rests on the ability to compete. Technological innovations and improvements in the way we do things open the door to generating profits more efficiently. The changes cover the scope of all we do, even from the initial evaluation. Market survey methods, architectural and engineering processes, building materials, construction procedures, security systems, accounting and management systems, and customer services all see innovation and change that make operating a business different. We save time and money. We make operations easier. We make our services more convenient and easy to use.
In a recent Self Storage Developer’s Seminar, one of the industry’s popular consultants showed maps of recent site surveys and commented, “We used to concentrate on the three-mile radius around each site under consideration. Now, with neighborhood transportation transitions, we look at a ten-minute drive. People are more mobile and the traffic management design for each area of the city has a significant impact on the proposed business and its ability to attract customers.”
Paul McElreath works with architects, engineers, and owners to depict all the features and support infrastructure of wiring and conduit for the sophisticated security systems furnished by Digitech International, specialists in security for the self-storage industry. “Each architect used to draft drawings by hand. We would get them and have to manually add our system information to the mechanical drawings, and then move them along to the general contractor. Counting the mailing time, that was a process that could easily take three weeks or more.” Pointing to his computer screen, he adds, “Now, it just takes a few seconds for an architect to e-mail a set of prints. We use a CAD (Computer Assisted Drawing) program to add a few lines, attach symbols, and drag’n’drop a few icons onto the drawing and we’re ready to send them out again within a few hours, depicting a complete system layout. It’s amazingly fast to use the tools that computers make available to us.”
What he says is true in moving information as well. Practical web-based management software solutions have appealed to early adopters who want to leverage the power of the Internet to make operating information available instantly and at virtually any computer terminal or laptop wherever they might be in the world. “The technology involved in parking vital information on a remote storage archive in somebody’s corporate server farm seems alien to some owners who think they still have to maintain local control of their operating data,” says Markus Hecker of SMD Software of Raleigh, NC. “Others, including some of the large real estate investment trusts that own multiple properties, and are gobbling up more through consolidation purchases, see the value of having all the data available instantly for evaluation back at the home office.” His counterpart at Centershift, one of the first software development companies to embrace the model, says that issues of security and redundancy were part of the original design, so that they would never need to be a worry for owners and operators, offering full time operational reliability. These firms, along with many of their competitors, now offer some form of remote information gathering, processing, and delivery.
Timely and convenient customer service and the age-old drive to conserve operating capital by reducing overhead influences the rapidly evolving business of ATM-like kiosks, self-service rental stations, appearing at storage centers in neighborhoods around the country. Notables like Shurgard and Public Storage join the few early adopters in adding the devices and processes in at least a few stores. Robert Chiti, President and CEO of Open Tech Alliance of Scottsdale, AZ, says, “The self-service rental station includes a method for each prospect to initiate a conversation with the home office call center, if they need to, but the tools are built in to allow each step of the process to be automated on the spot. With prompting and on-board video instructions, a customer can go through the steps to complete a lease and be accepted for an immediate move-in.” Positioned more as a manager’s assistant, rather than a management replacement, self-service kiosks offer hope to owners who want to cut away overhead.
Jefferson Shreve, the principal in Storage Express, owner operators of more than 65 storage locations dotting the Midwest, built an original business model around operating unmanned sites. “We started out in secondary markets, challenged to support the cost of operation for smaller facilities. Our average investment gave us about 22,000 rentable square feet, not enough to pay a lot of overhead. We had to find ways to compete effectively with the other properties.” Shreve says they are beyond the testing stage. They invest in the DSL or TV Cable connections that give them high-speed access to the Internet at each site. “We have about five sites now that have the kiosks in place, with orders for another five. That complements what we have been doing with access control and security for each location. Now we can lease properties and keep an eye on them with remote video across the Internet. The innovations have given us tools that allow us to do a better job and still keep the overhead under control.”
Shelly Gibson serves as Training Coordinator for Universal Management of Atlanta, GA, a firm fielding more than 100 employees to staff the more than 40 stores that make up its current roster of contracted clients. “When we’re recruiting, all the new technology at the store level puts more pressure on us to hire right to begin with. We have to be much more careful. Computer skills are an absolute, and we need people who can roll with what comes, because change is constant.” She details her experience, “I started out as a driver of the free move-in truck and part-time manager back in the days when our gate control system was operated with a little Tandy computer. The whole process is so much more in depth now. It takes a lot more training.”
One of her fellow workers, a trainee, and the manager of Quality Self Storage in Roswell, GA, Vanni Hardy, says she has seen many good changes in her twelve years in the business. “All of these things we used to have to do manually were time consuming for us and the customers. Just completing a lease took at least twenty, and usually thirty minutes. Now, the process is more complex and the lease includes a lot more, but we can get it done efficiently within about ten minutes.” Reflecting on what some of the innovations mean to customers, Vanni continues, “People come in to the office and see the monitors on display and it makes them feel secure, even though we don’t use that word “security” anywhere. We have the site graphics display as well. I show the prospects that we can easily keep track of who is on site and which units are being used. They understand it, and it’s impressive to them. It actually makes it easier to explain why we need all the background information as we put together their customer file.”
One of the demands placed on operators within our contemporary society, especially since the terrorist attacks we refer to as 9/11/01, is collecting accurate tenant information. With scrutiny in our industry what it is, or what it has become, the liability for not discriminating in the rental process has increased dramatically. “Our customers, political leaders, and the community-at-large demand a higher level of public and personal safety than previously expected,” says Michael T. Scanlon, Jr., Self Storage Association President and CEO. “Counter Measures is a program we introduced for our members last year that revolutionizes the process at the rental counter. It’s an instant verification of personal information including ID, credit scoring, bankruptcy record, criminal background check, and free monthly updates on customer addresses and information.” Available by subscription through the Self Storage Association in Springfield, VA, the program requires a computer connection by dial-up or high-speed modem. The program is designed to help owners with verification of information for both potential customers and employees.
Vanni Hardy, continuing to comment on the positive changes she has seen come through technological improvements says, “In our store, which is a multi-story climate controlled environment, we have intercoms throughout the building. That saves a lot of walking for our customers and the managers too.” James Doman, Manager for Secured Self Storage in Asheville, NC agrees. “The system we use has the intercom stations tied to the telephone system. When a tenant needs a question answered, they press the call button and it rings my cordless telephone. That way, with the long-range telephone I wear on my belt, I can be anywhere on the site, or even off the site. I can respond to them and get them the information they need.” Underscoring the importance of the convenience he says, “I’ve heard there are larger stores than mine that have as many as forty-eight stations interfaced to the telephone system, but mine isn’t that large. It sure makes it easier for customers though. Another thing that makes my life easier is that, if I need to, I can open the gate from any location on the facility by simply hitting the number 9 on my cordless phone.”
Mike Mead, an electrical engineer by training has been installing electronic security systems for owners of self-storage across the State of Texas for nearly two decades. Owner of Dallas Automatic Gates, Mike says, “Some of the biggest changes we’ve seen are making it easier to install the security systems quicker, and they’re more thorough too. The latch-type alarm contact for individual unit door alarms is a great improvement over the dual contact switches we used to attach to the door track. They’re all reliable when they’re installed correctly, but the QuickSwitch and LatchGuard can be installed a lot quicker, saving both time and money.” The activating device attaches to the door track. Rectangular in form, it creates a collar around the door latch. As the latch is moved to unlatch the door curtain, a magnetically sensitive switch embedded in the collar senses the movement. As with any of the door alarm systems, if a valid code is not entered in the access control system, and the unit door is opened, an alarm will sound.
“The biggest competitive advantage that’s new amongst the security tools now available for owners of self storage to use is the wireless door alarms.” Small, battery-powered transmitters installed at the exterior of the doorway to each unit serve a similar purpose. If the door is moved without a verification code being approved by the software system, an alarm sounds. “The fact that the system can be installed without having to enter each unit makes it an addition that even existing facilities can use,” Mead continues. “New technology may have hurt some of the little guys a bit, but not all. We’re helping several owners refurbish their older sites to keep up with the newer competition. With the wireless door alarms, new cameras, and some added curb appeal, they’re able to keep up with the Joneses, so to speak.”
As Jefferson Shreve and others have proved, the tools of technology make operating a smaller site more feasible. At the same time, Michael McGowan, active in acquisitions for Public Storage, Inc., the nation’s largest operator, says, “Maybe it’s coincidence, and it has to do with the markets where we look for properties, but we just don’t see properties that don’t have the bells and whistles for operations and security. We’re a big believer in the tools ourselves, and it looks like other owners are making them pay off as well.”
Technology and innovation will continue to impact the way we do business. We want to find faster and more efficient systems, less expensive materials, and better processes to achieve our profit goals. Like they say in business and design schools across the land–do it faster, cheaper, and better. You can win.
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