The most famous reasons why people use self-storage are probably the 4 D’s: downsizing, divorce, death and dislocation. The first of these is prominent during financial downturns and when housing cost rises exceed salary increases. The second reason shows no sign of going away and the third will always be with us. The last reason is a common one and applies when people move home and need to temporarily store their belongings.
A fifth D can usefully be mentioned: disappearance. For a self-storage manager, it is a very significant event when a renter is no longer contactable—quite probably they can no longer pay, and after a while their unit will have to be evacuated and their stuff either sold at auction or dumped.
We wanted to ask a professional some questions related to these matters to discover the day-to-day issues faced in the self-storage industry, and also to find out about the variety of items now stored. The answers are useful advice both for anybody wishing to set themselves up in the industry and for renters who might like to know how life events can affect their self-storage requirements.
STOR-N-LOCK Self Storage has been running storage facilities since 1979, with a base in Salt Lake City, Utah. Since then it has expanded into Idaho, California and Colorado, and currently has 22 storage centers providing a total of almost 1,500,000 square feet of space in nearly 12,000 units. The company prides itself on providing a friendly, helpful service, well-constructed buildings and advanced security features. Matt Casady is marketing manager at the company and he kindly answered our questions.
What are the most common types of business inventory that are stored in units?
Casady: Some of the most common types of business inventories stored are construction (like a subcontractor), pharmaceuticals, real estate, or businesses storing their seasonal inventory with us.
Have you ever experienced problems when two people who are divorcing both claim items in a unit?
Casady: When a tenant divorces and two people now have claim to the items we simply deal with whoever the primary account holder is. The person listed as the primary account holder has the right to revoke unit access to the other people listed on the account.
When people abandon a unit, how long do they usually rent it before that happens?
Casady: We haven’t necessarily noticed a correlation between length of stay and people abandoning units. Sometimes they stay with us for a few months and abandon the unit but sometimes they store with us for over a year before abandoning it.
How frequently do renters ‘disappear’ and cease to be contactable?
Casady: Tenants frequently cease to be contactable especially when their account becomes delinquent. We try lots of different ways of reaching them including through phone calls, text messages, emails, mailed letters, etc. but often the calls stop going through (either we’re blocked or their line is disconnected) and the letters are returned to sender. This could be because the tenants are, unfortunately, late on paying for other things in their life as well like their phone bill or rent.
Does the income from auctioning units generally compensate for the expense of disposing of junk?
Casady: Even with new modern online storage auctions we usually lose money on a unit that goes to auction because of the lost rent on that unit and the cost of disposing of the junk.
Can you name some of the interesting things found in storage units?
Casady: One time our tenant stored chocolate equipment in their unit which is a huge no no because it can attract pests. We called that unit the “Charlie and the Chocolate Factory” unit until they were politely asked to move out.
We notice with interest the geographical spread of your facilities. Can you tell us anything about the strength of the storage industry in those markets?
Casady: The storage industry is very strong in all the markets we operate in. Unfortunately, due to overbuilding in the Denver market rents and occupancies have dropped for most operators and the cost of acquiring tenants has gone up in the market.
The issues mentioned in Denver are reflected in Yardi Matrix’s self-storage report for November, which states that the city has about 7.7 square feet of self-storage space per person, representing slightly more than average market penetration, and that the amount of space storage facilities that is currently proposed or under constriction corresponds to about 8% of the total inventory. This has resulted in year-over-year street rate reductions of around 4-5% for 10×10 units in Denver, for example.
However, as Matt Casady says, many of the US’s western states are still rewarding territory for the self-storage industry—other places where STOR-N-LOCK operates, such as Boise, ID, Salt Lake City, UT, and the Los Angeles metro area, have not experienced such high average drops in their street rates. And, as the graph above shows, they are also performing well compared to all the nation’s major cities considered together.
STOR-N-LOCK Self Storage also demonstrate that the problems inherent to the industry can be handled with clarity and sensitivity. Renting self-storage for whatever reason, whether to store personal possessions or business inventory, has never been so easy.