2020 Facility Of The Year Conversion Winner: StorCo Self Storage

James Reid has an ambitious goal for StorCo Self Storage, a company he founded in 2015. He envisions expanding StorCo into a nationwide company through owning high-tech self-storage facilities and providing third-party management services to other facility operators. The company is based in O’Fallon, Mo., and currently owns one facility there and another in Wood River, Ill.

“The goal of owning and managing 1,000 stores in 25 years is not unrealistic,” Reid says. “Our goal is to provide day-to-day management services to our partners and treat each store as our own StorCo Self Storage. We want our partner stores to know that we plan to build a long-term relationship for many years to come. By helping partner stores become the leader in their demographic area with employee management, day-to-day management, and making them financially profitable, it is a win-win relationship for our partners and StorCo Self Storage.”

O’Fallon is about 30 miles northwest of St. Louis. It is ranked among the top 100 best places to live in the United States and has a vibrant entrepreneurial community, both of which helped persuade Reid to locate his second facility there. It officially opened on June 1 of this year.

The $7.5 million conversion project in O’Fallon transformed the existing building, which contained more than 53,700 square feet, into a two-story, high-tech, climate-controlled self-storage facility with 713 units and 70,000 square feet of rentable space. The building at 24 O’Fallon Square formerly housed an Altitude Trampoline Park franchise as part of the O’Fallon Square Shopping Center, which StorCo purchased in December 2019. The building had housed a Kroger Supercenter in 1979 and a Shop-N-Save starting several years later.

The shopping center has another building, which continues to be occupied by seven tenants, including Vantage Credit Union and Fantastic Sam’s. That building contains 13,000 square feet and has 3,000 square feet of retail space available for lease.

The two buildings combined proved irresistible for Reid. “O’Fallon Square is a strong retail destination located in an area with a high demand for self­storage,” he says. “We saw an opportunity to fill both needs and to make O’Fallon Square part of this great community. We will offer storage for a wide range of personal and business items, including freezer space. Free use of our moving truck within a 15-mile radius is also provided with each rental.”

That opportunity O’Fallon Square presented and Reid’s decision to put his second facility there has paid a benefit of recognition: The facility won Mini-Storage Messenger’s 2020 Facility of the Year Award in the conversion category.

A High-Tech Site
The facility uses the Nokē Smart Entry System and Storelocal Storage Co-op’s operational software, Hummingbird. Together, these systems give clients the ability to rent with ease.

“When you’re renting a facility, you’re typically going through something stressful in life,” Reid says. “We want to make it easy, bring some light to the darkness they’re going through. Everything can be done online. We try to keep it easy as possible and convenient.”

Self-storage facility operators increasingly realize that technology provides benefits both to them and to their tenants. The COVID-19 pandemic is underscoring technology’s benefits to the industry and to many others. But Reid still values the personal touch in serving his customers, so management is on site daily at the facility.

“We’re not trying to get people out of the picture but to make it easier through technology,” says Reid. “The pandemic is forcing the new norm.”

The Nokē Smart Entry System uses Bluetooth and enables tenants to enter the facility and their units using a smartphone app, says Christine DeBord, vice president of the smart entry and facility automation division and director of marketing for Janus International Group. The system improves the facility’s security and provides operational benefits including ease of rental application and automated overlock. Many self-storage operators charge a 10 percent to 30 percent premium for such features.

This smart entry technology, touchless capability, and automated rental process, especially in light of the pandemic, make the facility stand out among its competitors.

“No operator within a three-mile radius of (Reid’s) facility offers this level of integrated technology,” DeBord says.

The facility uses Storelocal’s Hummingbird operating software, developed by its sister company, Tenant Inc. The system combines Hummingbird with the Nokē Smart Entry System and the Mariposa storage website. StorCo’s O’Fallon facility is the first conversion project to use all three in one package, Storelocal Chief Operating Officer Anne Mari DeCoster says.

Reid benefited from Storelocal’s services because they enable independent owner-operators to compete with REITs. This counteracts the trend of vendors monopolizing through mergers and acquisitions, which yields fewer choices and higher prices for independent owner-operators.

DeCoster credits Reid’s “insight to know that he needed to compete with the best of the best” by using integrated technology as an important reason his O’Fallon facility stands out among its competition.
“Consumers can rent online from their phone, from their car, or from home,” she says. “It’s touchless, on-demand. They can pick their unit, pay for it, sign their lease, and get their gate code.”

After customers rent online with Mariposa, they receive a text or email to download the Nokē app, use their phone to open the facility’s door, and then open their unit.

Because StorCo’s O’Fallon facility is a conversion project, it fits into “our reduce, reuse, recycle mindset we have to reuse a building,” DeCoster says. “The benefits of his property are that it’s in a central location in a retail area, it has building recognition, and people are happy it’s being used again. It’s a vibrant business in a vibrant retail center. He’s almost like an icon of the entrepreneur entering self-storage today. The industry is traditionally slow to adopt technology. James had the foresight to know he had to compete with the Public Storages and Extra Spaces of the world with cutting-edge technology.”

Update And Renovate
Renovation of the structure housing all that technology was led by BBi Constructors, based in St. Peters, Mo., which also worked on StorCo’s Wood River facility. It is a 500-unit, indoor, climate-controlled facility that formerly housed a car dealership.

BBi has been in business since 2005. It works on office buildings, restaurants, and other commercial buildings, but it has increased its focus on the self-storage industry the past eight to 10 years, says Dennis Buehrle, project manager for the O’Fallon facility.

Using the Nokē system posed some challenges for BBi on the O’Fallon project, but “it ended up being a great system for construction and for the owner,” Buehrle says. “It’s very notable to talk about the Nokē system. It’s a very big feather in Janus’ hat that they’ve got that technology. It’s on the cutting edge of having remote access. There are a lot of advantages that come with it. It curbs a lot of the overhead you may have with keys and operations.”

The City of O’Fallon’s zoning regulations presented a more formidable challenge. Reid, Buehrle, and their team “worked on a bunch of documents and went to a lot of meetings to make it happen,” Buehrle says. The facility sits on O’Fallon’s main thoroughfare.

“All municipalities look at tax revenue, and self-storage is minimal compared to grocery stores or any others that sell a product,” Buehrle says. “We try to push that it’s an amenity to the community. It’s like saying a church shouldn’t be built because the county or city doesn’t make money on it.”

Buehrle points to the team Reid assembled as the most important factor in the project’s success –“an unbelievable team to pull off what we did in the time frame we did, especially with the pandemic. James is an unbelievable leader.”

Having to accommodate an elevator in an existing building without exceeding the roof is one of challenges that conversion projects usually pose. BBi was able to achieve it on this project while meeting all required building codes.

“It’s all these little things that you start uncovering as you go,” Buehrle says. “There was an existing mezzanine, which posed a bit of a challenge. The building was originally built for the grocery store. We redid the ramps and sprinkler system to keep the existing mezzanine to save construction costs. From the new mezzanine’s height to the existing mezzanine’s height we put ramps so it’s usable storage space.”

BBi has “come down a long road” to be able to reduce costs in making a facility work while keeping track of all the details. Reducing ductwork is one example. Sometimes a project has little or no ductwork.
“The first floor has to have ductwork,” says Buehrle. “You need to make sure the airflow coming out of the units can span to the next units. So, you have to engineer it so that air is moving, and we can recycle it to reduce humidity. If you really look at a second floor on a conversion unit, that’s all open air. So, we’re not trying to heat and cool every unit directly. It’s ambient. In residential or office construction, because it’s not all open, you have a lot of cubes that are sealed by doors, so you have to put a supply and return in each room.”

At the O’Fallon facility, BBi opened up a lot of first-floor space to allow for adequate air movement. It also installed motion sensors to the LED lighting system to light up individual fixtures at a time to help reduce day-to-day operational costs. Conversion projects oftentimes involve poor ventilation. This can cause problems when workers are finishing concrete because most of the machines used to do the job properly run on diesel fuel. BBi was able to vent the exhaust out of the building and pull in fresh air to make the environment safe.

Some other notable aspects of the facility include:
• The facility meets current Americans with Disabilities Act of 1990 regulations.
• The layout was designed to accommodate the existing building’s structure to maximize rentable square footage, including integrating unit partitions to increase the second floor’s rentable space.
• A second mezzanine was built while accommodating the existing mezzanine to create more rentable space.
• The existing plumbing systems were surveyed to streamline them and save costs on required bathrooms and amenities.
• A photometric lighting design for the facility’s private rooms, corridors, commons areas, and units was used to achieve safe and effective lighting levels.
• Energy-efficient exterior LED lighting controlled by photocells and time clocks improve exterior safety.
• The HVAC system was designed to create optimal distribution of conditioned air while balancing efficiency.
• StorCo worked with the local Ameren UE to maximize energy-efficiency credits and worked alongside the PACE Program, which gives facilities access to equipment financing to increase the project’s efficiency.

Exceeding Expectations
Architect Jack D. Whaley, based in Saint Charles, Mo., designed StorCo’s conversion facility. Whaley has been an architect for 50 years and has designed a wide range of buildings, including retail centers, churches, office buildings, and residential dwellings. The O’Fallon project was “pretty straightforward, overall, from my standpoint, but maybe not from the subcontractors’ standpoint,” says Whaley. “Anytime you do an existing building, you work with what’s there. The people we worked with—the contractors and owner—we all knew what to expect from each other, so everything went well.”

Working with O’Fallon’s city council required “dealing with 10 different personalities and trying to share your vision with what you want to do with a building,” Reid says. “Most people don’t get excited about storage. I do. To share my vision for the store and get the council on board at times were challenging.”

The pandemic caused “not a major setback, but challenges” in abiding by all the state’s guidelines, coordinating the scheduling of workers in different trades at different times of each workday, and adjusting to delayed deliveries. Despite these hurdles, the team finished the project two months early.

Most of the O’Fallon Square Shopping Center’s tenants were shut down because of a state mandate. StorCo gave them a grace period to pay their rent and provided them with grant information to help them stay afloat financially.

This action fits with StorCo’s philosophy of helping the communities they operate in a variety of ways. The facility’s design puts utilities in the front of the building so the company could have room to host events. Reid bought a commercial-grade drive-in movie theater, set it up in the facility’s parking lot, and showed movies on Friday nights. Because the pandemic resulted in numerous event cancellations, about half the showings doubled as fundraisers for various causes, including the O’Fallon Chamber of Commerce & Industries, stray animals, and first responders. The company also hosted drive-in Easter services at the facility.

The O’Fallon facility’s grand opening was held July 3. Most public fireworks displays had been cancelled because of the pandemic, so the company hosted one as part of a festival on the facility’s grounds with a live concert and food trucks, all of which was coordinated with the city.

Reid sees these kinds of efforts as an important part of making the facility stand out. “It’s the way we treat our clients and how we physically, mentally, and investment-wise invest back in our community,” he says. “I love people, and our goal with our clients is to love people, in a way. Shed good light in our community. I call our clients ‘guests.’ And the way we get involved in our community, doing things for the community, is part of that.”

Reid describes a conversation he had recently with a customer at the O’Fallon facility after he had thanked her for her business. “She smiled and said, ‘This is my happy place; I can’t believe I’m saying that, but it is.’ I took that to heart. People remember when you touch their lives.”