Savvy self-storage operators always are on the lookout for ways to ramp up revenue, boost foot traffic and gain a competitive edge in a growing industry.
Over the years, properties have dabbled in a variety of business endeavors, ranging from selling packing and shipping supplies to hosting cell towers. Those added business lines not only are on the rise, but are expanding to include complementary business operations such as on-site truck rental, business centers and pack-and-ship franchises.
“Because there are more self-storage facilities now than ever, property owners are having to find ways to differentiate themselves and to drive traffic to their sites,” said Kevin Bledsoe, director of operations at Storage Asset Management Inc. in York, PA.
Bledsoe’s company manages a portfolio of about 30 self-storage facilities, primarily in the Mid-Atlantic region. Storage Asset Management manages self-storage properties but often is charged with managing other on-site businesses that have included concepts such as Budget and Penske truck rental, as well as franchises for The UPS Store.
Most self-storage operators like the idea of having a billboard or a cell tower on site that can generate additional income without a lot of extra work. Now, offering more products and services, such as rental trucks and moving supplies, is standard for many self-storage facilities, said Todd Amsdell, president and CEO of the Amsdell Cos. in Cleveland, which operates 35 properties under the Compass Self Storage brand.
Compass Self Storage has operated a variety of business lines within its self-storage facilities over the years, ranging from filling propane tanks to hosting an on-site post office. Those sidelines work on a case-by-case basis, depending on the property, the location and the surrounding customer base, Amsdell said.
Business Services Are in Vogue
Business centers and pack-and-ship operations in particular can be a boon to revenue and foot traffic at self-storage facilities, Bledsoe said. As of mid-June, Storage Asset Management managed three locations that include UPS Store franchises. On average, the UPS stores draw 500 to 800 customers each month. “It’s a great way to drive traffic to your property,” Bledsoe said.
Especially for self-storage properties that are in the lease-up stage, UPS franchises are a great way to get in front of new customers. The small business customers that frequent those stores also are an attractive target market. “We are focused on getting more small business clientele within our self-storage facilities, because we know that they are long-term renters,” Bledsoe said.
As of mid-June, UPS had 11 locations within self-storage facilities. Typically, the self-storage locations are smaller than traditional stores. The typical location is about 1,200 square feet, compared with 500 to 700 square feet for a self-storage office. However, the self-storage locations offer the same services as bigger stores, such as mailboxes, packing-and-shipping supplies and services, printing services and computer services.
“The interest level from the self-storage industry has definitely grown, and it is a niche market that we would like to continue to grow,” said Steve Chambers, director of non-traditional development at The UPS Store Inc. “We see a lot of synergies between The UPS Store and a self-storage location.”
Consumers storing items need boxes, packing supplies and moving assistance. Meanwhile, small business customers who use self-storage might use UPS for mail delivery, printing and shipping.
Finding a Good Fit
Certainly, adding an on-site business to a self-storage facility comes with challenges or potential pitfalls. Like any business, it’s important to have good staffing and good managers to operate these side businesses. “If you don’t, it can go south very quickly,” Bledsoe said.
In some cases, a side business might not be a perfect match with a self-storage facility, and that can cause a bigger management headache. For example, properties that also run truck-rental operations must consider that people will be calling every day to reserve trucks, and to pick up and return those vehicles. So, it’s important to have staffers in place who understand domestic and international shipping laws, know how to run digital printers and can notarize documents.
Running a side business also can be an unwanted distraction. Having managers filling propane tanks or tackling other tasks that aren’t relevant to the self-storage customer can take attention away from the primary self-storage business, Amsdell said.
“You never say never to anything, but there has not been a situation where we have been able to find that many other businesses that work well within our self-storage properties,” he said.
In fact, Compass Self Storage has downsized or eliminated other business ventures at its properties, Amsdell said. “We want our team focused on helping our self-storage customers,” he said.