Making the Case for Automated Self Storage
About Copper Storage Management
Copper Storage Solutions was formed to acquire, develop, and manage self storage facilities across the US. The company’s principal focus is on acquiring mature facilities with a minimum of 20K net rentable square feet (or the capacity to expand to that size) with some identifiable upside potential. Our secondary focus is to develop storage facilities in markets where the rates are high relative to the cost of development, and stabilization can be projected within 30 months of operations. In addition to our own facilities, we currently manage 35 properties for a number of other owners using our model for unattended, automated self storage facilities, and have 7 additional properties coming online in the next 30 days.
The CSM model incorporates best practices for customer service, marketing, rate management, cost control, and streamlined operations utilizing low and high-tech automation processes. First, whether a facility is fully staffed with personnel or altogether unmanned, our customers deserve and expect a high level of customer service. For CSM owned and managed facilities, this begins with a facility that is clean, well maintained, secure, and simple to use. We start with security that includes a fence and gate system with access control that allows our tenants easy access to their storage units while keeping out those who don’t belong. Our access control system connects to our software via cellular or internet service, eliminating the need for onsite computer equipment while maintaining real-time status updates for rentals and tenant payments which influence the access provided. In addition, our facilities are equipped with security cameras which record upon motion detection and maintain those recordings for 2-4 weeks.
Great customer service also includes a well-maintained facility. For all of our sites we employ/contract with a local maintenance/operations coordinator who visits each property a minimum of once per week. During these weekly visits, the onsite staff checks every unit for compliance with the property reports, cleans up the facility, and makes any needed minor repairs. Information gathered at these weekly visits are reported to our management team who update the software system and escalate any maintenance or operational issues.
Possibly the most important component in the area of great customer service is our in-house Operations Center which we developed to handle all phone/email/internet traffic to all of our sites. Our system ingrates with several major self storage software companies providing a seamless experience for customers from any of our owned or managed facilities. Our onboarding team gathers specific information about each site which allows our agents to be quite familiar with each property in order to give excellent customer service to those who contact us.
Our management team works to coordinate all of these customer service components to ensure that all properties under our management follow our fairly simple formula for efficiently and profitably operating an unattended/automated self storage facility.
Secondly, CSM-managed facilities benefit from the close eye we keep on marketing and rate management. We work closely with our website developers and self storage marketing aggregators to put our managed sites on the front page of any internet search for self storage in our markets. Our Operations Center team works aggressively to convert those leads into rented units. Through selective discounting and incentives, we work to keep units rented at all of our owned and managed facilities. In addition, we utilize Rate Management components of all the major self storage software solutions to optimize rates on an ongoing basis. Our Rate Management staff monitor inventory capacity and occupancy to keep upward pressure on street rates, while simultaneously managing rate increases for existing tenants to maximize the revenue at each property.
Perhaps the most important advantage of an unmanned/automated self storage facility is cost control. In addition to the obvious decrease in personnel costs by eliminating a manager at each facility, we also reduce the overhead and office administration costs for a facility, and often are able to rent the office out to another tenant for additional revenue. The difference between paying a manager $40K per year (and higher for larger properties) and $7K per month (up to $18K for larger facilities) is enough to add $500K to the value of your property. Add to that the difference in the cost of management fees for most 3 rd party management companies versus those charged by CSS for our unmanned/unattended facilities, and our model is a real financial game-changer. While it’s easy to see the immediate financial impact of replacing managers and management companies with this system, the greater financial impact is in the improvement in operations from the Operations Center agents to the onsite personnel to the streamlined operations process. Our agents are far better trained and more experienced than any single manager at a self storage facility. They have more sales opportunities with a variety of customers and objections to be able to handle any situation and close more sales. Our onsite personnel are focused on the facility itself and not distracted by often time-consuming requests made by tenants. Our system creates a streamlined and efficient self storage facility, adding to the bottom line for the owner.
Examples of self storage management cost reduction through automation
Copper Storage Management’s first acquisition was in Griffin, GA. Because of the history of the facility, the large U-Haul business, and the demographics of the neighborhood, we thought it might be helpful to maintain the status quo and keep the manager from the previous owner. While she was a good person and did as well a job as could be expected, we ultimately decided to transition to our unattended/automated model and the results were tremendous.
In addition to reducing costs by $45K per year, we also eliminated the frequent discounting and fee waiving that was occurring. We rented more units, collections/delinquency improved, and the facility is in much better physical condition. (See attached P&L Comparison). Shortly after removing the manager and converting to our unattended/automated system, we reached 95% occupancy and installed an additional 124 units to the property. Those units were installed in January of 2020 and total occupancy sits at 88%, with a monthly Gross Potential more than $14K higher, increasing the value of the property by $2.4 million – all of that without a Manager on site. That’s a huge increase in the value of that property and all of it with no manager onsite.
At the other end of the spectrum, CSM just opened a brand new ground-up development in Panama City, FL. We built this property with no manager’s office, intending it to be unattended/automated from the start. The facility has a 547 units and 62,512 net rentable square feet, including a large climate-controlled building with multiple hallways. We built a “rental center” on the exterior of the CC building which houses our security monitor and informational signage instructing the tenants in how to do business with us. Using QR codes, and high-quality signage to direct the tenant to our website and call center, we intend for that facility to operate forever without an onsite manager.
We rented our first unit on April 9, 2021 and as of today (May 21, 2021) have rented 51 units, with 7 more currently reserved for move-in this weekend. No manager. No onsite staff. All rented using our system. The facility looks immaculate, and we expect to be above 50% occupancy by the end of this year. (less than nine months operations).
Needless to say, we believe in the Copper Storage Solutions system for managing unattended/ automated self storage facilities and expect our portfolio of managed properties to exceed 100 properties by year-end.
For more information about our management services for unattended/automated self storage facilities, please contact: