Self-Storage Golden Age: Knuppe Family's 50th Industry Anniversary

It’s said that necessity is the mother of invention, and in 1969, housing developer H. James “Jim” Knuppe was in search of an idea that would keep his homebuilding workers gainfully employed. Interest rates had spiked, and the housing market cratered as prospective buyers awaited better times.

As a man of faith, Knuppe prayed for inspiration. It eventually came when he attended a builder’s conference in San Diego. A vendor was hawking portable wall partitions, and the homebuilder was struck with the idea of using these panels to separate storage rooms. “The mini-storage concept was born,” Knuppe says.

Following the inspiration, he sent his “land man” out to look for a light industrial parcel that turned out to be a three-acre site in Alameda, Calif.

“The result was that we built the first standalone mini warehouse—as it was known in the beginning—in California, opening for business in June 1971,” Knuppe says.

As with many other mini-storage developers in the industry’s early years, the initial concept was designed as a land hold, using the property for storage until a higher and better use came along. “That never happened,” he says, “and the Alameda location still leases storage space on that same location today, 50 years later.”

The facility was the first 5A Rent-A-Space location for Knuppe. Before the internet, businesses tried to secure the top listings in the Yellow Pages with names like AAA Plumbing or AAAA Electrical. Why not AAAAA Rent-A-Space then to trump all the other competitors?

The strategy was emblematic of Knuppe’s business practices, which have included innovative thinking yielding worthwhile ideas lasting to this day.

After opening the first 5A location in Alameda, the Knuppe family continued expanding the business and operating self-storage facilities for more than three decades. At the peak of 5A’s success, the company had 14 locations encompassing some 18,000 storage spaces, in nearly 1 million square feet of rental space, along with a staff of 145 members.

In 2007, the business merged 11 locations with Extra Space Self Storage. 5A Rent-A-Space still has three facilities: one in Foster City; one in Moraga, Calif.; and one in Lahaina, Hawaii.

That first facility was located in an industrial area across from a community of single-family houses. Knuppe later set the standard for facility location by choosing high visibility, well-traveled, and easily accessible parcels.

“Often, we had to fight tooth-and-nail to get planning boards and city councils to acquiesce, allowing us to build on those primo locations that we selected,” recalls Michael Knuppe, Jim’s son and company president. “Sometimes we had to add a retail element, but it was well worth spending the extra money to get first-class locations.”

When the first facility opened in 1971, four sizes were available at that time: a 5-by-5 rented for $5 a month; the 5-by-10 went for $10; the 10-by-10 was $20; and 10-by-20s were $25 a month.

As home and condo builders, the family wasn’t sure what they were getting into with this venture, but some numbers stood out. “I always put pencil to something,” says Knuppe, now 91 years old. When I can buy land for $1 a square foot at that time and I could build for $3 a foot and I could get $10 a square foot, that was no loser.”

Industry Innovations

The Knuppe family is credited with numerous innovations in the self-storage industry. These innovations are among their achievements:

• Added merchandise sales to leasing offices. It was natural that customers would need packing supplies and locks.
• Early adapters of the use of video surveillance back in the VCR days.
• Developed the concept for the first self-storage kiosk with Diebold, eventually investing with Phoenix-based OpenTech Alliance. Kiosks are now used throughout the industry.
• Created late charges for non-payment of rent.
  
  

The Knuppes believe they had the first managers living on site in apartments. They thought retired fire, military, and police officers looking for supplemental income would be ideal candidates for managers. By providing an apartment on site, they assumed prospective customers would feel secure knowing their stuff would be watched 24 hours a day.

5A also started a “come to your door” self-storage concept called Space Shuttle Storage. The company would take the “capsules” to the customer’s door and, after the customer filled the storage box, 5A would pick up the capsule and store it in a warehouse. However, the service proved to be labor intensive as it became extremely difficult to accommodate customers who wanted to retrieve individual items from capsules from time to time.

The Knuppe family was ahead of their time with Space Shuttle Storage, which sounds a lot like today’s portable storage concept dominated by PODS.

The Knuppes also developed what they called “Strongbox,” which offered safe deposit type storage for fine wine, guns, and other valuables. The requirement of an armed guard along with staffing needed to be available on a moment’s notice became expensive and burdensome.

“On paper it looked great,” Knuppe says. “It just didn’t pencil.”

Strongbox is a precursor of today’s profitable specialty storage offering upscale services for wine connoisseurs and collectors.

Knuppe also maintains 5A developed the first self-storage facility on the Hawaiian Island of Maui, which it’s still operating profitably today.

A True Family Business

5A is a true family business, with Michael Knuppe and his three sons involved in the business. In fact, Michael is the longest serving team member at 48 years; he has been in the building business since he was six years old.

“From the beginning, I was a builder’s kid,” Michael says. “I went to every job site picking up nails and sweeping houses. I was born into the family business.”

Michael’s sons, all college graduates, have been involved with 5A along the way. One son is 5A’s marketing director. The oldest son is a computer guru and, along with the middle son, does the company’s networking and installation of software and computer systems.

Jim and Michael had to negotiate some divots and sand traps on the long course to business building as their personalities could clash at times and the younger Knuppe freely admits he thought he knew it all at times.

“Frankly, I thought my Dad was crazy when he told me he was going to build our first mini-warehouse,” Michael says. “After all, I was an 18-year-old who knew everything. I argued with Dad, stating that nobody was going to pay us to store his or her junk. Boy was I wrong.”

As a teenager, the son would occasionally leave the family business, trying his hand at a dozen other jobs, including sheet metal apprentice, newspaper carrier, fruit stand stocker, gas station attendant, shoe salesman, architect’s apprentice, and concrete former and finisher. But the lure of self-storage seemed too compelling, so he eventually returned to the fold.

“Dealing with the public in a retail and commercial environment better prepared me when I permanently entered my father’s business,” Michael says. “I demanded that 5A be a customer-oriented business. It still is to this day.”

SSA Founded

One of Jim’s greatest accomplishments was his work in establishing the Self Service Storage Association, which was later renamed the Self Storage Association (SSA). He worked with Arthur “Buzz” Victor, Hardy Good, and some three dozen other real estate professionals to bring the association to fruition. Good, MiniCo, Inc. founder, and Victor, United Stor-All founder, were among the first individuals to be inducted into the Self Storage Hall of Fame in 2005.

Jim was instrumental in crafting the self-storage act for the State of California, an important piece of legislation for the fledgling industry. He has been generous with his time and knowledge, as he imparted much of his know-how to those new to the homebuilding and self-storage industries as well as those who needed fresh ideas for their businesses.

Every Super Bowl Sunday for over 35 years was dedicated to conducting how-to seminars at the Home Builders Conferences in Las Vegas and Dallas, where he shared his insider knowledge with thousands of builders who filled the halls to hear his seminars.

“I’m proud to say that I have helped over 1,000 builders become multi-millionaires, showing them how to do it,” Jim says.

Honored In Two Industries

Jim is considered a pioneer in both the homebuilding and self-storage industries. His business built over 3,000 houses and condominiums in the San Francisco Bay Area. His numerous building innovations and decades of service to homebuilders led to his induction into the National Association of Home Builders Housing Hall of Fame in 1994.

As a pioneer in self-storage, he received recognition for construction expertise at the Foster City facility. 5A’s early facilities figured to require remodeling from time to time to keep up with competitors. Normally that would entail a fresh coat of paint and some spring flowers, along with a religious maintenance schedule.

The Foster City store, built in 1976, had a few remodels over the years, but its 40-year-old buildings needed a 21^st century makeover. The owners were offered a lucrative deal to sell the property, but they decided instead to invest $200,000 into a complete renovation.

The challenge became turning the existing non-descript long buildings of yesteryear into welcoming modern structures. Instead of stucco buildings, the metal ribbing on part of the buildings now portray a 21^st century high-tech feel.

The building is dressed up in powder blue with silver aluminum motifs. A seamless 24-gauge rib roof was installed along with new roll-up doors and motion detector lighting activation.

The eye-catching project resulted in 5A Rent-A-Space winning Mini-Storage Messenger’s 2016 Facility of the Year for Renovation.

“That was our most ambitious renovation,” Michael says. “We’ve been made multiple offers for the land to be used for a multi-family high rise. By not having a mortgage, and continuing to keep many team members employed, is more than pleasing to us at this point in our careers.”

Green Approach

The company was an early adopter of solar energy for both its environmental and economic benefits.

“Our green approach started from the beginning of our company,” Michael says. “In the storage business, we were among the first to solarize all of our properties, including our headquarters in the mid-1990s. Green is always first and foremost on our minds.”

Solar panels were added to the exterior of the Foster City renovation, which now generate 90 percent of the facility’s energy usage. The company had already converted its Hawaiian location to solar, which is generating all its own energy and selling the extra electricity to the local utility company.

“We liked it so much we invested over $1 million in our Hawaii property in solar panels,” Michael says. “It’s more than paid for itself.”

5A has also donated time, money, and energy at the West Maui location to the monthly recycling program “Go Green Keep Our Island Clean,” which allows residents free disposal of bulky items such as air conditioners, batteries, appliances, and electronics.

Team 5A Lifers

A key ingredient in the company’s longtime success is treating both customers and employees like family. This policy has resulted in long-term customers and employees. In fact, one customer at the Foster City facility has rented space for more than 25 years.

The “Team 5A” members, as employees are called, are managed by these principles: “Treat our team members like we like to be treated. Be fair and honest. Make the self-storage business rewarding. Make them feel and believe like they are operating their own business with a vested interest in seeing not only their location do well but the entire company as a whole.”

The 5A staff averages 18 years’ longevity, with some serving as many as 30-plus years. As a family business, it’s been all hands on deck for 50 years. “I give credit to my wife, Bobbie, who has been a wonderful supporter and my partner all these years,” says Jim.

She was instrumental in business operations and conducting the how-to seminars for homebuilders and storage professionals with her husband for over three decades.

Jim credits much of his success to his religious beliefs. “My pastor made a change in my life and I started praying about everything—every decision and every direction to take,” he says.

Hardy Good has seen these beliefs in Jim’s business practices over the decades. “He is honest and true,” Good says. “His Christian testimony is woven all through his success in the self-storage industry.”

If cleanliness is next to godliness, it’s a lesson close to the business owner’s heart. “Cleanliness is the essence of business,” Jim says. “I learned that working in a service station in Oakland when I was a teenager. I’ve always used it and it works well.”

Jim and his son still pick up wrappers when they walk the property. Regular maintenance goes hand-in-hand with a clean property. They paint walls when it’s needed and replace roll-up doors, roofs, and siding. “Spend the money when you have to, and even before you have to. You have to be dedicated to this business,” Michael says.

Fifty years and 14 locations later, all of the properties developed by the Knuppes are still high volume, high production self-storage facilities. The key has always been “location, location, location.” They never wanted to be located in an industrial park or beside railroad tracks.

“We currently have 3,500 tenants paying rent every single month on our three remaining sites,” Michael says. “That supports 40 team members, including my three sons who are carrying the torch onward for the next generation.”

Future success undoubtedly will be based on a combination of faith, family, and learning valuable lessons of superior customer and employee service from 50 years of a remarkable history that continues to inspire the industry.

Top Testimonials

“He’s one of most unforgettable characters I ever met—his style, his determination, his commanding authority, and his success. Jim is a stalwart. Jim imparted a lot of secrets to his success as a featured speaker at Self Storage Association meetings. He was always helpful and open and sharing ideas and information.”

– Hardy Good, MiniCo, Inc. Founder

“Meeting Mr. Knuppe at one of my first SSA conferences changed my life. I had a dream of starting a company that would bring innovative ideas, superior service, and a long-term commitment to the self-storage industry, but things were moving pretty slowly. When the Knuppe family decided to buy 15 kiosks and become an angel investor, I felt like I had been given my chance. Throughout Mr. Knuppe’s career, he has helped many people realize their dreams.”

– Robert Chiti, OpenTech Chairman and CEO

(From a statement released June 2020 with a donation $50,000 to the Self Storage Association Foundation in Honor of the Knuppe Family)