Hopefully, by now you’ve heard of Storage Asset Management (SAM), which is one of the major property management and consulting companies in the self-storage industry headquartered in York, PA. SAM has had rapid growth and success over the years and has a combined 70 years of executive industry experience. We are excited to be joined by their Chief Executive Officer Alyssa Quill for our most recent episode of Engaging with the Experts, as part of our Self-Storage Unlocked series. In this interview, Alyssa dives into SAM’s growth across the country, how they have built a great culture among their employees, and some great tips on how a smaller self-storage owner/operator can outperform the national REITs.
How did you get started in the self-storage industry?
I didn’t grow up thinking I wanted to be in self-storage. But like most other people, once I found it, I fell in love with it, and I’ll never leave storage. I was working in Connecticut as an actuary, and my husband got transferred to Memphis, Tennessee. So, I just started looking for jobs in Memphis, and I didn’t move with him until I found a job and I went out to interview for a job. Through a recruiter, and while I was interviewing for that job, she said, yeah, you’re qualified for that, but I have this other company I’m working with and this other job that you might like better than that. She said it was with a self-storage company. I ended up interviewing with them the next day, and that company was Storage USA, and they were big and publicly traded. I got that job with them and moved out to Memphis to be with my husband and work for my first storage company. That was 20 years ago.
Fast forward to where you are now. You’re currently the owner and CEO of Storage Asset Management. Tell us about that.
We manage about 300 – 400 storage facilities. We started Storage Asset Management (SAM) about 11 years ago. After working for the publicly traded company for about eight years, and for personal reasons, I moved over to working for a local owner/operator who was trying to start a management company. He ran it for one year, then decided he didn’t want to run a management company and wanted to sell the 20 management contracts that he had. He called the person I had replaced at that company and asked him if he was interested in buying those contracts. Then that person called me and said, I’m interested, but I don’t want to do it by myself, so would you partner with me? I had never considered it before, so I was in the right place at the right time.
Early on in your career in self-storage, what were some of the least anticipated things that you didn’t see coming?
First, I thought self-storage seemed kind of sleepy, boring, and easy. But once you get into it, you realize there’s a lot more to it than you think if you want to succeed. Another surprising thing was the willingness to share information. Coming from the insurance industry, you didn’t really talk to other companies very much. So, it was really fascinating to get into self-storage and realize that people are willing to share ideas and information across the country. You really only care about your competitors within a couple of miles of your facility. The other thing is coming from a big publicly-traded company and moving to a smaller company I learned how much cash it takes to buy or develop a property. If you’re developing it, get to cash flow positive. When working for such a large company, it seemed like there were endless amounts of cash there. But when you start working for an individual, and it may be the first storage property they ever built, when the property’s not leasing up fast, they’re taking money out of their back pocket, borrowing it on their house, or doing something else to pay those bills every month. Self-storage can be very profitable, but you must do it right and really have to know what you’re getting into before you start. That was eye-opening for me.
With lots of new people coming into the industry, what are your top three tips for getting started in self-storage?
If you’re thinking about developing a property, I would say my number one tip is you absolutely need a feasibility study by somebody who knows storage, who can look and ask is there enough demand? And is this market not already oversaturated with supply because some are and some are not. Before you spend too much time getting into engineering and planning, let’s make sure it’s going to make sense. Then, as part of your feasibility study, have a really good cash flow forecast. If you’re acquiring a property, I think it’d still be a good idea, despite technically having a feasibility study, maybe hire a consultant. There are some really good consultants in our industry that could at least help you analyze and do your due diligence.
Once you’ve built or bought your facility, I’d say the most important thing to do is invest in a really good manager. That person is going to make or break your property. I’d also say, don’t overreact to a slow week, a slow day, or a slow month. I see some people who thought they’d have five move-ins this week and they only had three, so they decide to drop their rates by 20%. Well, that probably wasn’t a rates issue. So, don’t overreact.
SAM has been around for 11 years, and you have roughly 400 properties, which is pretty rapid growth in a condensed time. Walk us through how you’ve mapped that out through the years and what does the future look like for SAM’s growth and expansion.
Honestly, we did not map it out – we thought maybe we’d get to 100 properties. But what happened is, we were always more worried about doing a good job, getting good results, and having a good reputation in the industry, while still having a team that overall is happy and engaged. Because of that, we really don’t have booths at trade shows or things like that. Since we’re just doing a good job, we’ve been able to grow just through word of mouth. Our clients are happy with the way we’re managing their stores, so they keep buying more properties. And honestly, as we’re talking to people about potential third-party management, we just want people that we’re going to work well with. We’re not the best solution for everybody. So, we look at it more like a partnership – we’re going to work together to try to increase the value of your stores. And if we don’t think we’re going to work together great, let’s not waste our time. Then, as our clients are buying and building, and doing that fast, sometimes we’ve actually had to temper our growth and say we can’t take on any new clients for the next six months because we have a pipeline just within our existing clients. We don’t want to burn out our team and we don’t want to not pay enough attention to our existing stores because we’re taking on too many new stores. We’ve been very fortunate to have the growth we’ve had, but we actually err on the other side that we’d actually rather not grow quite as fast, if possible.
We’ve been able to talk to some of your team and they speak very highly of you. They say there’s a great culture at SAM. Is culture among your employees something that you’re passionate about?
It’s funny because for years people would talk about our culture, and I don’t even know what our culture is – this is just what we do. But, as we’ve grown bigger, it’s gotten more important to me because it’s easier to lose. We have a lot more people now, and if we bring someone on who doesn’t mesh well with the existing culture that’s here, it stands out. So, when we’re adding people to our team, we really explain to them, even though I don’t really know how to put it into words, what the atmosphere is like, what the team is like, and how we work together, to make sure that’s what they’re looking for.
We were talking before about the importance of getting a great manager, and I would say our culture here is really built around our managers. Our job is to make sure they can do their job. Everything else goes from there. It’s an open door, and any of us can help anybody, at any time.
SAM recently received a local award for one of the best places to work. Talk to us about that.
The award is Best Places to Work in Pennsylvania. All employers in Pennsylvania are eligible and a bunch apply, and then they survey all the employees you have in that state. You have to get something like 80% of your employees to fill out the survey and then you will end up seeing where you rank. Last year was the first year that we were in the top. It’s something I’m really proud of.
If I’m a newer owner/operator and I trying to mark my footprint in the industry, what can I do to help differentiate myself, so people pay attention to who I am?
It’s the same thing I tell my kids, be generous and kind. How do you get people to notice you? Just be nice to people. In your community, maybe you’ll contribute to charities or have some event at your property that you invite some local charities to come to and you help raise money and awareness for them. The tendency that you’re doing these nice things to help the community might be talked about or shared on social media. I think caring about the place where you are can go a long way. It’s caring about your property and how you look having the best curb appeal. It’s only space that we’re selling, so it should be clean and secure. Certainly, there are products that you can offer that others might not and those might be differentiators that help improve your close rates, but first, you need to show up and feel good there.
I think for the large national REITs, it’s harder for them to build awareness and trust their local managers to go out into their markets and build those relationships. I think that is one place where a smaller self-storage operator who has one to three facilities can outperform the national companies.
For a newer owner/operator looking to get into a market, what are some of the key attributes that you look at when you’re looking at the market analysis to make sure that you’re making a smart decision and smart move entering that market?
I’d want to make sure that the properties in the area haven’t already provided enough supply for the potential demand. And there are resources and tools you can use. You can hire somebody to do a market study or a feasibility study. I’d want to understand what’s in the pipeline, so I’d be calling the local municipalities/townships to find out if people are already planning on building there. Then I’d want to understand if it’s easy for me to get permits and approvals to build a self-storage facility because then it’s probably easy for others to do too. I want to understand the barriers to entry other people have. If you’re tenacious, persistent, patient, and can build in a market that has a lot of barriers to entry, then you’re probably safer because other people might not be willing to put all of that effort in.
This asset class is having huge performance right now. Do you think this is here to stay for a while? If so, how much longer?
Occupancy is higher than I’ve ever seen it. But it’ll eventually come down. We’re not going to be at an average of 94-95% occupancy every summer, but we’re not so far from normal for self-storage. If it comes down, it might come down to 91-92%. It’s still going to be a good industry. I think one of the good indicators is that millennials per capita are using self-storage more than any other generation. As younger generations come up, they’re more aware that self-storage is an option. More people have used it in the past year and a half than ever before. And once you use it, you’ll probably use it again. I think self-storage awareness is better than it’s ever been. I don’t have any long-term fears. Now, are there going to be some small pockets that are oversaturated and too many people develop in? Yes. But eventually, all those properties will fill in – it just might take a long time.
What are your thoughts on self-management for an owner/operator versus moving to third-party management?
I think there are times and places for both. In my life, I think about it. If I wanted to retire, but then I got bored or something, I think it’d be really fun to have one or two properties and just run them myself and wear all the hats again. But there are things I’m bad at, and that piece scares me. Personally, I am not great at internet marketing. I don’t know when Google changes its algorithm and things like that. I’m not great at construction either. So, there are things I’m good at and things I’m not. I think if I was running it myself, I would just really need to make sure that the things I’m not good at I still outsourced.
As a smaller self-storage operator that has a few properties, joining a group like the SBOA is brilliant because now I have economies of scale that I wouldn’t get myself because I’m now partnering with all these other owners/operators. Sometimes I wouldn’t even know where to look for the best company for internet marketing, but if I can be part of the SBOA, I can find those easier.
But, for someone who has another career, wants to spend time with family, or likes to travel a lot and doesn’t want to deal with the headache of a manager calling in sick or quitting, a customer upset about a rate increase, or doesn’t even have a lot of people, having a third-party manager can be a way to avoid that. The third-party management companies have the data, are able to test out things, and understand the industry and people better.
When you first entered the self-storage industry, there were not as many women as there are now. Tell me what you’ve seen historically. And going off that, tell us about the SSA Women’s Council and how that idea was created.
When I started in the industry 20 years ago, there were definitely women I worked with, but there weren’t as many women in high-level roles in self-storage companies. But I was very lucky. When I was at Storage USA, there was a male CEO and then GE Capital bought us and owned it for a couple of years, and the CEO they brought in was a woman. Honestly, I never felt like I stood out like a sore thumb because I was a woman. I always felt respected. And the men I worked with were great. I’ve been very fortunate in the self-storage industry; I haven’t had many tough people to work with. But I would love to see, and we’re starting to see it more, women figure out how to handle a work-life balance, so they can continue to grow in their career and continue to lead. I think all leaders offer something different. They all have different expertise, different things they’re good at, and different personalities. And the more diversity in leadership we get, in any industry across the country. The better off we are. So, the Women’s Council started naturally. It didn’t start formally, but some women started coming together and going for a happy hour. It was other women who started doing it. I was on the board of the Self Storage Association (SSA) a few years ago, and they wanted to make this a bit more formal and get some support from the SSA. They asked if I wanted to be part of this and I was thrilled that they asked. It’s been fun to be part of and it’s awesome to see more women getting involved in the mentorship program.
How much emphasis does SAM put on ancillary income?
We definitely put a lot of emphasis on tenant insurance because it’s a good revenue source and drives a lot of value to the property and if something goes wrong, it is much easier to deal with the situation to have them file a claim with a tenant insurance company. Quite honestly, if we didn’t provide that, hardly any of our tenants would have some form of coverage. There are a lot of other things you can do – selling locks and boxes. It’s extra revenue and it’s a one-stop-shop for tenants. It makes their lives easier. Truck rentals are another one popular in our industry if it’s the right time and place. We’ve tried lots of things. We’ve had UPS stores in our properties, FedEx shipping locations, we sell propane at some, have RV parking available. It’s really about what works at each individual property. Is it going to add to it or be more of a headache? For new people getting into the self-storage industry, I wouldn’t jump into a million ancillary things immediately. I would first pick the biggest lever, which is protection for tenants, and then add others one at a time and see where it goes from there.
How much focus does SAM put on revenue management?
We put quite a bit of emphasis on revenue management. It’s critical – we need to make sure we’re priced right. We have an obligation to the owners of the self-storage properties we have to maximize the net operating income and to do that we have to maximize the revenue. But it’s a balance. You’re maximizing revenue but want really good online reviews, so you don’t want to go too far to drop a five-star rating to a four-star rating on Google because that’s a long-term impact. What I would say is we’re very focused on revenue management, but we are in this for the long term. You can use revenue management to make a very short impact. I can drop rates dramatically and fill my property fast. But that might hurt the market I’m in for many years to come. Or I might lease up a little slower but at a higher rate, so I’m at a higher rate for many years to come. We really try to make sure that our revenue management strategies are beneficial for the property long-term. We spend much more of our time talking about customer service than sales. It’s important to focus on what we can do to sell at the property.
Click on the video below to watch the full interview with Alyssa Quill talking about her experience in third-party management and the self-storage industry. Stay tuned to the SBOA Facebook, LinkedIn, and website for more Engaging with the Experts interviews as part of the Self-Storage Unlocked series.