As the self storage market becomes more competitive and consumers become more educated, professional management is becoming a defining feature for a successful self storage operation. Gone are the days of the ‘build it and fill it’ attitude. Facilities that are not well-managed with professionally trained staff proficient in a range of skills to compete in today’s competition may be left behind.
With self storage maturing as an industry, many owners and investors are investigating the advantages of management companies to lift the facilities professional image and provide a service that allows the owner to step back or move on to other interests or investments, whilst letting the management company maximise the return on their investment.
Many management companies have a proven track record in performance and years of experience in the industry. They know what works and what is required in order to make a self storage facility flourish in the present climate. This experience and organisation is advantageous to those owners and investors who may want to retire, improve their lifestyle, have health issues or simply think that the property can be better managed by someone else.
The day-to-day management of self storage is more intensive than when the industry began. A lot of new entrants to the industry can underestimate the effort and time required to run a self storage facility to the level that consumers demand these days. As competition grows, the customer has choices and they start to look for high levels of customer care, value-added products and services, convenience and reputation of the facility as well as the marketing that surrounds them.
From accounting to payroll, staffing, HR, IT, training, systems and procedures right through to expansion and design, unit mix and even construction management, self storage management services offer property owners the opportunity to become completely passive and pursue other interests. Management companies basically shift the responsibility of performance to the sub-contractor. Those looking to management service companies include both older operators and new entrants to the industry. With the changing needs of customers, self storage has edged towards a more retail focus. With state of the art security, meeting rooms, cafe amenities and business centres, facilities are finding they have to differentiate themselves from other operators in the customer’s mind. Operators are finding that they now have to have an effective sales presentation to turn more prospects into tenants. It is not just property management any more, older operators who don’t have up to date sales and marketing skills, are close to retirement or want to move on to other interests but still realise the potential in their investment are turning to management companies to take the reins and deliver results.
Many of those who turn to management companies may have more than one facility. Very often they are involved in other types of real estate or located interstate and are looking for an expert in self storage who has the tools and experience to help increase occupancy, decrease operating expenses or oversee capital improvements and repairs. This gives them the peace of mind that their property is being professionally managed. Monthly, quarterly and yearly reports are compiled by management service companies detailing occupancy rates, income, discounts, delinquents, KPI’s and operations analysis for the owner to reference. Essentially, these reports allow the owner to assess the performance of their investment. (Management companies base their fees on a percentage of income and/or share of profits).
Good management companies will standardise an operation based on a case by case basis so the facility runs at peak performance based on its amenities and surroundings. This leads to a ‘high level of service for a high level of performance’.
More skilled employees are being attracted to career advancement that professionally managed facilities can offer. There is a career path that could see staff moving between facilities, becoming a regional manager or moving to ‘head office’. This helps to ensure high levels of customer service are maintained. Intense training and feedback opportunities through such avenues as mystery shopping in addition help to provide staff with targets and provides them with a sense of responsibility that some owner/operator employers don’t have the time or resources to provide.
While management companies can’t be expected to compensate for a poorly equipped, constructed or located facility, they will however, review a facility to see if they can improve the business’ profitability before promising the world.
They also admit there are many owner operators out there with the time, skill and drive to have made their self storage facility a thriving success. Reviewing those facilities on a case by case basis ensures not only that the investor receives the rates of return expected, but also the management company maintains the high standard, benchmarking and quality control that they have established over many years.
Using a storage management company can provide new entrants and existing operators a chance to keep their investment within the industry whilst being able to step back, reassured in the knowledge that they have an expert to run the property to its best potential. Whilst this is a choice for owners within the industry some would still quote the old adage of those that own the store know how to run the store best. Professional management gives owners the option of exiting the duties of the operation, rather than exiting the industry.