Section 6 • Management Most managers (91 percent) perform a simple visual check of the


lock status daily, however, only 53 percent perform a daily physical lock inspection and 21 percent perform a daily space audit of every door. Weekly space audits are performed at 46 percent of facilities, according to survey respondents.


Operational Styles, Requirements And Benefits We can see that managers’ duties are many and varied—and critical to the success of a facility. Choosing the right management style is essen- tial, especially given that in many ways it will determine the profitability and smooth operation of the self-storage asset. Owners use a number of ways to staff and manage their facilities;


some operators manage directly, some hire onsite or offsite manag- ers, some have assistants run the store, and many use a combination of these options. True entrepreneurs, the owners who self-manage want to be very involved in the day to day decisions. The REITs not only manage their own holdings but also offer fee management to smaller operators. In the current market, the REITs— Public Storage, Extra Space, CubeSmart, and Sovran (Uncle Bob’s)—are the largest operators in the industry and comprise about 11.9 percent of the total market. The remainder is then segmented by other large third- party management companies (both re- gional and local), and the total make up the 24 percent of facili- ties that utilize third- party management. Locally owned


Table 6.5 – Average Number of Lien Sales


Time Period Last 12 Months Average Per Month


Table 6.6 – Delinquency Prevention Methods


Preventative Percentage Measures of Facilities


Regular Billing


Auto Debit Credit Card Processing Auto Dialer Via Software Late Fees


Lien Sale Warnings Posted Notices


Notice of Legal Action


59% 73% 5%


73% 71% 49% 64%


Source: © 2014 Mini-Storage Messenger Management Survey


Av. Number 15.15


1.26 Source: © 2014 Mini-Storage Messenger Management Survey


and operated self- storage


facilities


across the nation are still the largest segment of the mar- ket by far. However, only 7 percent of all facilities are owner- managed, “mom- and-pop” stores. In- stead, 54 percent of owners hire full-time, non-resident manag- ers and 20 percent utilize management


Table 6.7 – Space Audits by Type and Frequency Space Audits Quick Physical Lock


Frequency Every Door Visual Daily 21%


Weekly 46% Monthly 15% Quarterly 11% Annually 4%


91% 5% 3% 0% 0%


Source: © 2014 Mini-Storage Messenger Management Survey 76 Self-Storage Almanac 2015


36% 5% 1% 1%


30% 47% 9% 1% 9%


couples. Although the trend is waning, the resident man- ager with an onsite apartment is still somewhat prevalent in the industry, usually in stores developed pre-2000. As previ- ously noted, 54 percent of operators reported offering an apartment as a manager benefit. Owner managed properties show significantly different


operating numbers and margins than those of the larger operators, REITs, or management companies. For example, owner managed properties tend to have higher delinquen- cies than do third-party managed stores. Giveaways, waiv- ing fees, and lack of consistent auction processing can be common within this category and some don’t operate from a budget. Owner/managers tend to keep things close to the vest


and make decisions differently than do larger operators. There are some very savvy owner/operators with one or more sites.


We can see that managers’ duties are many and varied—and critical to the success of a facility.


Third-Party Management During the recent recession, two interesting occurrences took place. First, many were drawn to fee management in an effort to bolster income and occupancy as their own knowledge of the latest marketing and revenue manage- ment systems was lacking and their stores’ incomes had dropped considerably. Some mortgage lenders were ada- mant when doing loan workouts that their “son, Jack” was no longer allowed to manage the facility and that profes- sional management was a requirement of the loan workout. The second group took management back in house to cut operating costs; however, many of


in an effort


these have since returned to professional management as they found themselves outmaneuvered by more savvy competitors. In recent years, the REITs have begun handling third-


party fee management clients, partly in an effort to fuel their pipelines for acquisitions. The REITs’ current focus is ac- quiring stores or management contracts within the top 50 major U.S. markets or in markets with an existing presence. REITs and other large operators have lower operating


Cut Lock


Inspection Touch All Locks 53%


costs as a percentage of income than do small or indepen- dent operators. This can be attributed to their scales for advertising and online marketing costs and their ability to aggressively reduce property taxes and other expenses that offer scale unavailable to the smaller operators. These lower operating costs are a primary reason they are able to make third-party management affordable for an indepen- dent operator. When you hire a third-party management company, you are placing your trust in the organization’s ability to gen- erate revenues, maintain targeted occupancy levels, and run the business efficiently. Generally speaking, the more


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132