Has any industry truly been prepared to effectively operate their businesses during this unprecedented era of the COVID-19 Pandemic? Following the news and speaking to business owners in many different arenas, the answer to that question is a resounding “NO”, but there are a few that are uniquely positioned to thrive in a contact-free society. The self storage industry may be one of the few industries in the world that can successfully weather the storm.
The IRE Brokerage team speaks to self storage owners, management companies and REITs throughout the country every week, and it has become clear that there are many variations to the way in which operators are running their self storage businesses during the “Stay at Home” and “Shelter In Place” government mandates. The operating plans vary significantly based upon how resistant to technology advancements each operator has been over the past decade. The more resistant to change and technology improvements an operator has been, the more challenging these times will be for a self storage owner.
You may be asking yourself what can be done to reduce customer contact, how do we rent units, take payments, keep offices open or manage remotely, and how do we keep employees safe during this health crisis? Have you been curious about how to responsibly handle rent increase policies, auction timelines, late payment guidelines, truck rental programs, communication with tenants, website updates and does your lease cover the implementation of new technologies? These are important questions that need to have a solid answer.
First, how should we conduct business during this new age of “Contact-Free Operations”. What are the large operators in the industry doing?
Guy Middlebrooks, Vice President of Third-Party Management for Cubesmart said, “We’ve rolled out a program for contactless rentals, which has successfully allowed our facilities to continue to conduct business while reducing employee to customer contact. We’ve paused “Free” truck rental programs, paused rate increases, paused lien sales, our call center staff are up and running remotely, but rental offices are open to serve our customers. Our on-site management team has been trained to keep customer contact to a minimum for the safety of our team members and our customers.”
Alyssa Quill, CEO of third-party management company Storage Asset Management (SAM) said, “We implemented online rental programs almost 10 years ago, which has allowed the properties that we manage the ability to conduct new rental activity without too many issues. We require all of our properties to have only one employee on site at a time, and we’ve closed offices to any non-employees. Every property has a tablet and a cell phone, which allows them access to the management software, the ability to take customer calls, and to resolve renter issues remotely. Tenant rate increases have been put on hold for an August 1st reassessment, and auctions have been placed on hold temporarily. Our operations and marketing team has stayed on top of tenant correspondence to address any operations changes that may be experienced on a property by property basis as well.”
Jennifer Barnett, COO of Absolute Storage Management (ASM) said, “We’ve been able to maximize technology by offering no-contact rentals and payments. Our customers can rent and pay online, and we’ve been using a call center for some time that also can rent units and take payments. We’ve posted QR codes around the facilities that we manage for convenience to our tenants, and have sent emails and text messages to our tenants to keep them updated on any changes to office hours. In areas where we can, we have one person on site during normal office hours, but we are limiting tenant access to the office. They, of course, still have access to their units during normal gate hours. Our Regional Managers are conducting “virtual property visits” using Teams or Zoom. They are also holding weekly team virtual meetings with their property set. We are seeing many team members struggle with childcare options, since most schools have been closed. We are doing our best to make accommodations when necessary. Our VP of Human Resources, Amber Tyson, has done an incredible job of managing the individual situations of over 300 team members. We have created a “COVID-19 Task Force” that meets daily to talk through any team member and property updates, along with keeping our eye on the operational data that we are tracking. We also use this time to talk about one positive thing we have seen over the last 24 hours, as this time can become very daunting. I have been so incredibly impressed with our team and how we have come together to support each other during this time.”
You may be saying to yourself, “These are large operators and they have access to resources that we could never afford nor understand how to implement.” The reality is that many of the technologies that Cubesmart, SAM, and Absolute Storage Management have implemented to help reduce customer to employee contact, while maintaining a sense of operations normalcy, can very easily be implemented through a variety of great industry vendors. See our industry vendors page for additional information on vendors who can assist you with improved operating platforms.
Steve Lucas, CEO of website development and online rental program company, The Storage Group, says, “There’s never been a more imperative season than now to adopt the essentials for “no contact” operations, including ADA compliant websites that are search engine optimized, online rentals with e-lease, monthly pay bill options, and complete integrations with your management/gate software. The facilities that convert now, or have already converted, will be the ones to weather this storm and demonstrate fiscal superiority on the other side of this crisis.”
The reality is that every self storage operator across the country can reach out to many of the self storage industry vendors to implement management software, have intuitive websites designed, implement online rental programs, and add call center options. All of these operational improvements work seamlessly through the use of a tablet, which can be orchestrated by your management team to help reduce or eliminate employee to customer contact.
Secondly, what should operators consider doing to help alleviate or be sensitive to renters during this time of uncertainty due to lost wages and the fear of becoming ill with COVID-19?
Many of the operators we’ve spoken to are implementing the same operating procedures that Cubesmart, SAM, and Absolute Storage Management have recently adopted when it comes to handling auctions, rent increases, late fees and customer communication. Operators seem to be unanimously putting a hold on auction procedures until April 30th. Additionally, many self storage owners have a plan in place to reassess the appropriate timeline for resuming the lien process based on state guidelines for “Stay at Home” requirements. Most self storage operators are keeping their late fee structure in place, so as not to set a precedent that the timing of payments doesn’t matter. Becoming too lenient on the late fee structure and timing of late fees may cause renters to feel like the payment on their storage rent isn’t important. However, operators are pro-actively communicating with tenants who are having payment issues and helping find a win-win scenario to secure payment, or secure as much of the payment as possible, and allowing the tenant to move out. The manner in which operators are addressing rent increases has been a bit of a moving target. Many owners are putting a hold on tenant rent increases for the next 60 to 90 days, or longer, and a smaller percentage are continuing with normal rent increase policies. Being sensitive to where the country is with the current Pandemic, and financial challenges for families during this time, should be legitimate cause for owners to put rent increases on hold and avoid the opportunity for bad press.
Last, but not least, once you’ve implemented many of the technologies that have been discussed in this blog, you should have your lease reviewed. A lease that was drafted a decade ago may not be in compliance with revised state self storage laws over the past ten years. Adding new methodologies of communication, allowing for online payments, and renting units virtually requires language to help protect each owner. Many operators are moving to paperless leases, which is another effective way to help reduce employee to customer contact, while also capturing the rental when the customer is ready to do business.
Jeffrey Greenberger, Attorney at Law with Greenberger and Brewer, LLP said, “The country has been forced to slow down, and this is the perfect opportunity to retool your facility operations. One of the items that should be considered is having your lease reviewed to make sure it’s up to date with state laws, remove redundancies, and ensure that it covers advancements in operating technologies that have been added since the lease was last updated.”
Jeff has been a tremendous resource for the self storage industry; and working with a trusted attorney who’s up to date on self storage law is money well spent. Not only will revising your lease be money well spent and peace of mind for you, the operator, but it will also prepare your self storage facility for a higher volume of rentals that can be done without human contact.
Has the COVID-19 Pandemic changed the world and the way in which we need to learn to conduct business? Absolutely! Learning to work in this new environment is going to have some challenges, but it’s something that we can overcome by becoming better operators. As owners and operators of self storage properties, this is our opportunity as an industry to improve. We no longer need to rely on handwritten ledgers, card systems or some other archaic form of renting storage units. Take this time that we’ve been given as a country to slow down and “Stay at Home” to reach out to vendors who can help make your continued self storage operations a success. Reach out to other storage owners and find out what they’re doing to continue to conduct business.
Most importantly, keep your employees safe, keep social distancing in mind, and help renters have a safe and painless experience while doing business with your self storage facility.