Last month StorageMart announced it was getting into the third-party management business.
The new truSTORAGE platform will offer property management services to independent storage operators, allowing them to benefit from use of the StorageMart name, as well as the company’s proprietary revenue management system.
To find out more about what StorageMart is up to with truSTORAGE, we checked in with Adam Steckler, president of the new division. Steckler joined StorageMart following the company’s recent acquisition of Manhattan Mini Storage.
Below is an edited transcript of our conversation.
Why launch a third-party management platform now?
Adam Steckler: For a long time ownership has wanted to stay focused on day-to-day operations, and getting acquisitions through the existing relationships they have. I think they realize, looking at what other companies have done, that third-party management is an important way to get to know a property and get to know the owners’ of a property. It also benefits the self-storage owner by spreading out our overhead and marketing costs across multiple locations in a market.
How are you going about finding your first client?
We made a ton of contacts at the Las Vegas SSA show. We had a beautiful booth and were busy non-stop. We met with a lot of long-term self-storage owners and now we are developing relationships with them. Maybe it starts with doing a site assessment for them, or putting together a business plan. From there, if they are interested, we would discuss a term sheet and get into a contract.
Would clients operate under their own banner, or under the StorageMart name?
We strongly believe that the StorageMart brand should go on these facilities. We are also planning to expand the Manhattan Mini Storage Brand to the wider New York metro, and that could be advantageous to a lot of people.
Giving up their name can be hard for some people, and other third party management companies are willing to do that. We want to leverage the StorageMart name, and that’s where owners will get the most value.
StorageMart has a patented revenue management system, how does that work exactly?
It is a sophisticated system. It is not just categorizing units as good, better, or best. Once you sell the best units, there is nothing left to sell. In the StorageMart system every single unit is ranked. So if you have a 1000 units, they are ranked from 1 to 1000. That way, there is always a viable upgrade for each customer. As a result, 44% of customers pick an upgrade. Two years after taking over a facility, the average revenue increase is 21%. Our system has very measurable results that we are very proud of.
What do you foresee as the biggest operational challenges that self-storage owners will face in the coming months?
On the revenue side, the biggest concern is how long will demand continue to stay as strong as it has. Right now demand is very high. Vacates took a big pause in the pandemic, but now we are returning to more typical and seasonal levels. That may put more pressure on operators to do more rentals, and that often results in lower pricing. Most people in the industry are also pursuing high rent increases to existing customers. I don’t think you can do that forever, so we will see how that is impacted going forward.
On the expense side you have the issue of payroll costs and finding employees. People are paying $17 to $18 an hour—more than they ever have before. As the minimum wage comes up, storage is competing with other industries for workers. One solution is finding ways to operate more efficiently through remote operation and leveraging technology to automate the rental process. As people become more expensive to hire, operators will want to utilize employees in the most efficient way. Integrating technology into the operational process is the way to do that.
Are storage customers becoming more comfortable with the new technology from their end?
Absolutely. We have 30% of our customers doing rentals completely online. For us there is more room for improvement. That figure was about 5% to 10% pre-pandemic. The pandemic really pushed that for everybody, and it’s what consumers want. Most consumers are not looking for a high contact experience, and for those that do we can provide that.
How did you get into the self-storage industry?
I have an engineering degree and an MBA degree. I did engineering and found it very boring and gravitated towards the business world. I did some consulting at first and then found myself at Edison Properties. I spent 10 years running the parking business and spent the last seven years at Manhattan Mini Storage in a variety of roles, and president for the last three years. Then StorageMart found a few billion dollars and purchased us. That’s all led to the current opportunity for me to build and run truSTORAGE, StorageMart’s property management offering.
