eKourier July 2012

Self Storage Industry in the US R ecently Jeff and I travelled to the US to attend a Self Storage Association Conference in Orlando, Florida and to spend time with large and medium sized Self Storage Operators. 2009 facilities. An amazing company, their systems and processes are designed to operate each facility efficiently and effectively to achieve the best results across the entire company.

There was a lot to take away from the experience with Public. We were particularly inspired by the average occupancy for all facilities of 91%. This is incredible considering the competition and the poor state of the US economy. Their primary focus is to maintain and grow occupancy to maximise their assets. We then spent a short period of time with Storage Quest, a smaller size operator with a similar number of sites to Kennards. Offering a plush office with computers available free for customers to access the internet, postal service, remote KIOSK for making payments and doing sign ups after hours, conference room, move in truck and stylish building facade. “Self Storage in the USA has been the fastest growing industry in the Real Estate sector for the last 35 years.” We then boarded a plane to Orlando to attend the Self Storage Association Conference. There we heard talks from industry leaders, with one of the better keynote talks delivered by Spencer Kirk the CEO from Extra Space Self Storage, another of the larger Self Storage companies with approximately 800 facilities. What was interesting and again inspiring, was how they approached their Revenue Management. When the GFC hit in 2008 the majority of Self Storage companies placed a hold on rent raising customers for two years. Extra Space went the other way and continued to increase rents throughout the GFC, adopting a seven to nine month rent cycle and surprisingly experienced no loss in occupancy. As a result they out performed all their competitors, an amazing result. The Trade Show floor at the conference was a great opportunity to

The trip provided an opportunity to discover and learn how the industry has developed, changed, improved and is currently performing in a competitive market and an economy that is struggling its way through a slow recovery. Self Storage is big in the USA. To create some perspective on how big it actually is, there are approximately 60,000+ Self Storage facilities Worldwide, 50,000 of which are located across the United States of America. These are round numbers from 2010 and have more than likely grown substantially in recent years. It was explained to us while in the States, that there is on average 7 square feet (2.15 square metres) of Self Storage Space for every man, woman and child in the USA. Total self storage rentable space in the USA in 2010 was 2.22 billion square feet (approximately 210 million square metres). To provide a comparison with Australia, we have 0 .4 square metres of Self Storage space for every Australian, a long way to go to catch up with the States. Self Storage in the US has been the fastest growing industry in the Real Estate sector for the last 35 years. The size and scope of the industry means competition is high. To be successful, Self Storage operators must deliver an exceptional product with exceptional service consistently; innovation and technology also play vital roles. The current state of the US economy has also made operating any business in the US a challenge. Our first visit was with Public Storage, the single largest Self Storage company in the US with

find new suppliers, new products, ideas and technologies. The second half of our trip was spent with Storage Mart who have around 120 facilities across the US and Canada. We visited sites in Miami, Fort Lauderdale, Pompano and Mirama. All well presented and well operated Self Storage properties. Storage Mart watch their rates closely and will change rates daily on any unit size according to supply and demand and the market. From here it was on to Atlanta to spend time at Universal Management who manage approximately 49 facilities on behalf of owners. Universal were focused on community involvement on site to drive traffic to their facilities. High end fit outs that included meeting rooms with projector and screen, free Wi-Fi, laptop stations and coffee bars were all part of their point of difference strategy. On our last day we did a surprise visit to an Extra Space Storage facility. The Managers were welcoming and very happy and proud to show us around. The theme of our visit was once again reinforced by the knowledge these two Managers had around dynamic pricing based on supply and demand. Overall there were many positive experiences. The standard of service in the States is amazing. It made me think that Australia has a long way to go to reach their service standards. If you have a competitor nearby, spare a thought for the US, where you could have nine competitors within a three kilometre radius. Consider it as opportunity for you to sharpen the saw and get better at what you do; it’s a good thing for consumers. It all comes down to doing the little things right and the big things will then look after themselves. It’s a win-win situation.

Darren Marshall General Manager

Kennards Kourier July 2012

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