Thatcher Milholland, Vice President of Business Development Ten-X
Since its inception, the self-storage industry has changed in numerous ways. In regards to construction, there has been a shift from simple, single-story metal “sheds” to elaborate, multi-story facilities with countless amenities and security features. At the same time, the way storage business is conducted has progressed. From paper ledgers to sophisticated management software to high-tech Internet-based programs, it’s clear that technology has made a lasting impact on the storage sector—and there’s no turning back.
Imagine attempting to go back to paper ledgers after using a robust management software. Human error with rent calculations and the inability to make credit card payments would cause quite a stir. It’d be like American Express trying to revert to the cardboard credit cards of the early 1950s after customers have come to rely on the advanced features of the chip cards. It just wouldn’t work.
Indeed, technology should move in only one direction: forward. And as technology improves, self-storage owners and operators should continue to incorporate the advancements into their businesses to meet customers’ expectations and streamline operations.
Upgrade And Integrate
According to Thatcher Milholland, vice president of business development for Ten-X, formerly known as Auction.com, “Technology is on the forefront.” And he sees it as an opportunity for small self-storage operators to better compete with the REITs and larger operators. “It has made great leaps and bounds in the industry. Access to technology has never been better. It’s dramatically closing the competition gap.”
What’s more, Milholland doesn’t foresee the technology surge losing momentum any time soon. In fact, he firmly believes it will strengthen over the next several years, especially when it comes to integration. “There will be more connected operating systems,” he says. “As platforms advance and integrate, operators can operate more efficiently. All aspects will be better connected as time goes on.”
For example, the integration of software from multiple platforms such as gate and access systems, payment systems, kiosks, call centers, etc., enables operators to provide customers with better service and managers with a more dynamic operating system where all of the site’s components communicate with each other for maximum efficiency.
One of the newer technologies that Milholland predicts will become more prevalent is the electronic signature. Accepting electronic signatures enables a self-storage facility to increase its lead-to-lease ratio by allowing tenants to sign leases and other documents from anywhere, which means they can complete the entire move-in process online without having to visit the office.
“Operators should work to streamline the lease process,” Milholland says. “It can be cut down dramatically. e-Lease can offer a 20- to 30-minute lease time.”
Crystal Clear
In addition to creating efficiencies, technology also makes self-storage businesses more transparent for owners and operators. “In the beginning, there was limited real-time info on the business,” says Milholland. “Now there is true visibility into operations.”
This transparency enables self-storage operators to conduct business from any location at any time, even if they operate multiple facilities in various states. Connected and cloud-based systems give them the ability to make adjustments, run reports, check rates, view security footage, etc., from any device with Internet access.
While management software and other self-storage innovations have generated transparency for individual businesses, Milholland attributes the industry’s overall transparency to the property and rental aggregator websites. “It’s helpful to have transparent resources,” he says. “Those websites provide competitors’ rents, which allows owners and operators to see what their competitors are doing. And sites like StoreTrack offer historical rental rate information. Data is more available than ever before.”
Virtual Auctions
The transparency with the industry and the increased awareness of self-storage, due in part to television shows such as “Storage Wars”, have generated an interest in online sales of delinquent units and entire self-storage facilities. “Views and bids on single-unit lien sale auctions have skyrocketed over the past several years,” says Milholland. “It’s the beauty of technology: Buyers’ reach has never been greater, and it’s affecting the way we do business.”
Similar to eBay auctions, online auctions of delinquent storage units allow buyers to view photos of a unit’s contents and place a bid in real time. The biggest perk: Bidders only have to travel to the physical site if they win the auction, saving them both time and money. Online unit auctions are more convenient for facility managers as well since the auctions are not held at the facilities, thus reducing the hassles of hiring an auctioneer and hosting a potentially crowded auction that can deter regular business.
The success of online unit auctions led to the creation of Ten-X, an online transaction platform that conducts purchases and sales of real estate via the Internet. “This is an asset class that truly can be shown well on a computer screen, tablet, or even a smart phone,” Milholland says, adding that the company has sold more than $250 million in self-storage real estate online.
Not unlike online unit auctions, Ten-X enables bidders to view properties without having to travel. This is a definite boon, considering the fact that the majority of its buyers are not local. “In 2015, 60 percent of the listings were sold to out-of-state buyers,” says Milholland. “And 40 percent are international buyers. There is a strong demand for U.S. commercial real estate.”
Ten-X also provides buyers with access to due diligence materials up front, producing transparency and simplifying the entire process. Moreover, buyers have already been pre-qualified by Ten-X and there are no seller fees. Overall, it’s a fast and efficient process from start to finish that allows brokers to quickly sell real estate.
“On average, more than 90 percent of commercial real estate sales conducted on the Ten-X platform close escrow within 30 days of the auction end date,” Milholland says. “The entire cradle-to-grave process generally takes less than 90 days, on average, from the very beginning to the close of escrow.”
Final Considerations
As technology continues to advance on a seemingly daily basis, it has become increasingly important for self-storage owners and operators to stay on top of trends and their customers’ desires. Keep in mind that what works at one facility may not work for another. For example: A kiosk may be essential for an urban facility but experience minimal usage in a rural setting where customers prefer to make payments over the phone. In this particular instance, employing a call center may be a better route.
Nowadays there are countless options to consider—all of which can help facility managers provide better customer service experiences when used in the right setting. Therefore, before implementing any new technology, do some research and find options that fit both your budget and needs. And be sure to seek the input from your most valuable asset: your customers.
Erica Shatzer is the editor of Mini-Storage Messenger, Self-Storage Now!, and Self-Storage Canada.