2020 Facility Of The Year International Winner: XYZ Storage – Eastern

XYZ Storage wants to make life for its customers “as easy as XYZ,” and it has embodied that philosophy with its newest storage facility, XYZ Storage – Eastern in Toronto, Ont.

The five-story building, just 29 blocks from the center of Toronto, boasts great panoramic views of the Toronto skyline, but for its customers, it is a state-of-the-art self-storage facility that has all of the bells and whistles of a Class-A storage property.

The $15.5 million facility is owned and operated by XYZ Storage, formerly known as All Canadian Self-Storage. One of the unique things about XYZ Storage – Eastern is that it is completely drive-thru and also offers plenty of parking spaces for customers, a premium advantage for any high rise.

“We are proud we won the award for International Facility of the Year,” says Hal Spradling, co-founder and partner of XYZ, which is based in Toronto.

However, getting the project from conception to completion was not as easy as XYZ.

A Parking Lot Presents Opportunity
John Donald and Hal Spradling founded XYZ Storage as All Canadian Self-Storage in 1997. The company maintained that identity for 20 years, rebranding itself as XYZ Storage in 2018.

“We wanted to transition our company to redefine self-storage in Canada,” says Donald. “Through rebranding, we feel we have been able to continue to innovate and improve the experience for our customers.”

The company owns eight properties in Toronto with a combined 1 million square feet of industrial and storage space.

They learned of the 1.5 acres that is now Eastern in 2015. The site was the parking lot for a former bakery located across the street, which is now being developed into condos. The parking lot parcel had previously been sold with conditional residential zoning, which was ultimately denied by the city. The land already had an industrial zoning, so Spradling and his partners decided to move on the property.

“There were two other storage facilities in the area, and they were fully leased and had the highest rates in the city at $45 to $46 per square foot,” recalls Spradling. “We negotiated directly with the owners and were able to close the deal in September 2015.”

After purchasing the property, land escalation in Canada jumped two to three times what they offered for the property. “We likely could have sold it for $2 million to $3 million more than we paid, but we felt this was a very unique location and it would be the first new facility in the core built in seven or eight years,” says Spradling. “The core of the city is limited for self-storage.”

XYZ hired consultants and industry professionals who would design and work on the project by October, and the team got to work and had a preliminary design by February 2016.

Spradling drew up his vision of the property and hired Rick Brown, president and a designer with Rick Brown and Associates in Toronto, to help with the design. Brown worked with J.H. Rust Architect in Toronto to bring Spradling’s vision to life.

Brown has worked for 18 years with XYZ on a number of projects. “They like drive-thru self-storage, and there were very few in Toronto until just recently,” he says. One of the challenges for the design was that the property was a long L-shape. “It was a challenge to get access to the main street,” says Brown. “The building we originally proposed was larger and met zoning without asking for variances.”

Working with the architects, engineers, and planners, XYZ decided to create a building slightly less than the “by rights zoning.” “It wasn’t practical, due to the land area, parking, and building placement, to create outside unit doors,” says Spradling. “This wasn’t a major loss to us as XYZ had previously designed two facilities with few or no exterior units.”

Spradling adds that these facilities are the only ones in the Greater Toronto Area that feature a drive-thru design with direct accessibility to units. “Cars and trucks are allowed to drive in and out of the building and park at or near their units,” he says.

The fact that the building has drive-thru presented its own challenges in design to meet fire codes. “Toronto is very strict with fire ratings,” says Brown. “In buildings with vehicles, we had to separate that from the storage area. It’s always a bit of negotiation to find a solution that keeps everyone happy.” The city also maintains strict ceiling height and sprinkler codes. “We were scrambling to find unique solutions to simple projects,” says Brown, “but in the end, everyone was happy.”

One of the unique features of the Eastern building is it has four elevators. “Most self-storage buildings would only have two elevators,” Brown says, “but having four allows the customers to get close to their units and they don’t have to congregate. They have their own space to load and offload.”

Adhering to codes was just the beginning of a very long and arduous approval process from the city and what ended up being a long construction process as well. “The project could be described as ‘everything that could happen did happen,’” says Spradling. “Despite the fact that the designed building was kept entirely within the specifications as outlined in the applicable zoning bylaw, including height limits, required parking, and gross floor area, another hurdle seemed to present itself at every turn.”

Zoning Vs. Approval
The first hurdle occurred at the political level when the council member who represents the area was opposed to the use for the site. She made her objections to storage known and ensured there were two community meetings to get approval for the use, even though none are required for that type of zoning.

The added level of scrutiny to the use of the site also drew a complaint from a neighboring music studio. The owner said they would be impacted by the noise. As a result of that issue, XYZ had to allocate $50,000 for any disruption of their business and had to schedule construction around the music studio’s recording. Additionally, XYZ had to replace the studio’s AC unit due to construction dust.

The conditional site plan approval finally came in February 2018. The final site design included 172,500 total square feet with 99,564 square feet of leasable space and 1,592 units.

Cooper Construction in Ontario was the contractor.

Issue Upon Issue
“Our first surprise was when we started clearing the site,” says Spradling. “The excavating machine uncovered an underground room.” The 20-by-30 room was the bad news, while the good news is that they were able to remove the brick from the underground walls, clean them, and recycle them. They were eventually used in the walls of the corporate office area on the fifth floor.

Other than what Spradling considers normal construction issues, such as soil containment and weather, the two remaining issues presented huge problems to the project.

It was discovered that Hydro electric’s overhead high voltage wires encroached on a portion of the property and were too close in proximity to the proposed building along one street frontage. “We were required to apply for a relocation of Hydro’s poles and wires to the other side of the street,” says Spradling. The additional cost amounted to over $100,000 and delayed the project for approximately eight months on the portion of the building subject to the minimum set back.

The second major problem also involved utilities. In late 2017, just after receiving the first conditional permit, the gas company raised a red flag during the standard utility location process. “At no time during any of the major application reviews and during a myriad of utility locates was the issue raised to any of our engineering consultants,” says Spradling.

There was also a problem installing the lateral connections from the building to the city services that included water, sanitary, and storm. This included each of the connections on both Eastern and Booth Avenue. The conflicts required disclosing the potential conflicts and revisions to drawing, construction analysis and costing, as well as resubmission for review to development.

This created exceptionally long delays in getting services to the building. In one case, the delays forced a cancellation of the initial constructor’s contract and a re-bidding due to the city policy for length to fulfill a contract.

The delays caused a domino effect to the building progress. “One wing of the building could not advance to the pouring of slab until sanitary and storm were connected,” says Spradling. “This led to major work-arounds such as mobility challenges and staging issues such as contractor scheduling changes.”

The utility issues also forced them to apply for a permit to meet the criteria for resisting floods. “The property is located in a flood plain,” says Spradling. “A cistern was designed to prevent rain runoff, which is located under the building.”

Finally, a soil landscape deposit for $86,000 was required and is still being held as the inspector says the landscape soil has too much compaction. “We are working on a solution,” says Spradling.

When XYZ decided to move their corporate offices to the top floor of the building, another application had to be submitted for re-zoning use. Part of the top floor will be used for the corporate offices and an additional 14,000 square feet will be built out as rental space. When the fifth-floor project is complete, there will be a total of 1,842 units.

Steel-Co Construction Inc. in Toronto built the storage spaces, roll-up doors, and interior locks for the doors. Atom Kubinec, owner and president of Steel-Co, says they have done many projects for XYS Storage, but this was the largest. “This was different in that it was completely new construction and was located downtown,” says Kubinec, adding that there weren’t many challenges for his company other than keeping the schedule with other contractors.

Bond Securcom Inc. in Toronto installed the PTI security system for XYZ Eastern. Eli Kanter, vice president of business development with Securcom, says his company has worked with XYZ on previous projects too. “We do a lot of high-rise buildings in the area,” says Kanter. “And we have done other storage facilities as well.”

There are 55 cameras throughout the building recording what Kanter describes as “clean” images and backup data. Another feature of the security system includes a double lock on the units that require a PIN to also be entered at the gate. “If the person doesn’t put in the right code, they can’t enter the unit,” says Kanter.

The challenge with any project is providing advanced security while meeting the budgetary needs of customers. “XYZ are always good people to work with,” says Kanter. “They are very straight forward and it’s a nice, secure facility.”

E-SoftSys LLC in Blue Bell, Pa., provided Self Storage Manager, a fully cloud-based software for the site. “They are early adopters of the technology and have implemented all of the modules we offer, including contactless rentals and online payments. If customers prefer, they call also call the call center,” says Kat Shenoy, president and CEO of E-SoftSys.

According to Shenoy, over 50 percent of rentals and more than 80 percent payments have been contactless this year. “The contactless transactions have helped XYZ Storage keep both their employees and customers safe during these challenging times,” he says.

Other features of the software XYZ uses included text messaging to send payment reminders and past-due alerts. Call Tracker is used to monitor call recordings and capture valuable statistics, including lead to rental conversion ratios and other important statistics.

After a total of six months of delays, XYZ Storage – Eastern opened in October of 2019.

Branding And Marketing
XYZ Storage was in the middle of its rebranding campaign when the Eastern facility was still in the permitting phase. “The whole rebranding was a two-year-long project that involved strategic planning,” says Glen Kerr, creative partner with Ampersand Studio, Inc., a branding and design firm in Toronto. “All of it with the focus of a heightened customer experience.”

The whole strategy included making sure the customer had a good experience and branding self-storage as a way to make their lives fuller. Per Kerr, the tag line, “Life is big. Make space,” and “Storage that fits your life” are very optimistic. “It says to the customer they can go out and enjoy their lives because we have the storage they need covered,” says Kerr.

Because a majority of customers looking for storage are dealing with a big change, they wanted to ensure a more seamless, stress-free experience. “We incorporated all of the branding and design from the website to the rental and applied that to the Eastern location,” says Kerr.

When customers enter the Eastern location, the first thing they see is cheery yellow and white colors and a “Hello” wall welcoming them into the building. Behind that is a demonstration area that allows them to see the unit size demos. “It’s very empowering for them to be able to make the decision of what size they need,” says Kerr.

The building also has a retail area where customers can buy packing and moving materials.

The heart of their marketing efforts is a strong Google presence. “All our locations rate No. 1 organically for many search terms,” says Spradling. “We learned early that Google reviews are very important in achieving and maintaining a high organic place for the first page.”

XYZ has a total of 3,648 Google reviews, and one location has 1,367 reviews. “Third-party research revealed no other self-storage facility in the world has as many Google reviews,” boasts Spradling.

In addition to the corporate marketing team managing the website and rankings, local managers work with local apartment managers, real estate companies, corporate offices, and others to entice rentals at XYZ – Eastern.

Property Performance
Despite it being a challenging year, XYZ – Eastern has managed to attain 61 percent occupancy and is expected to be at 85 percent lease-up by the end of 2022.

The company currently has three other properties under contract and is working on another in the core of the city.

“We are proceeding cautiously with the state of the economy and the ongoing pandemic,” says Spradling.