Could More Tech And Fewer Employees Make Self-Storage Facilities Safer?

One in 10 U.S. households use self-storage units, and according to U.S. Self-Storage Industry statistics, over 50,000 are in operation.

With a rising number of investors looking for passive alternatives to office and multifamily investments, new property technology (PropTech) companies are launching to make those investments easier to maintain and remarkably hands-off.

From back office to security, companies like Denver-based Storage 360 are creating a technologically advanced tool for self-storage owners wanting a more passive relationship with their properties in 22 states. But will PropTech advances mean you’ll see fewer employees on the property? Not necessarily, Storage 360 Co-Founder and President Stephen Sandecki said.

“The bigger facilities generally require more people on-site. But if you own less than 250 units, you’re really not able to make money by having someone on the property all the time,” Sandecki told Benzinga. “There’s a misnomer out there that you can run these facilities without people. But with solutions like ours, you just don’t need them there as long.”

In addition to providing cameras and high-tech security options, Storage 360 invests in a kiosk setup where customers can check in, rent and pay for storage space without human contact. But Sandecki said that means on-site employees don’t need to be there all day. The technological advances in self-storage units have also led to a concern that a lack of on-site personnel will make the properties less safe. Sandecki said he’s heard that but says the technology he offers can make the units safer.

“I hear horror stories about kiosks and burglaries that aren’t even known until three months later. The issue is that criminals wait until the employees finish their eight hours on-site. But if you use an artificial intelligence (AI) camera system like we provide, which has facial recognition, facility managers are contacted immediately,” he said.

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Sandecki adds that as important as safety is its return on investment per unit that investors care about most. And to maintain that investment return, you must be mindful of the market and pricing of competitors in each town and be more engaged in the communities where they’re located. A not-in-my-backyard attitude has come to many cities across the U.S., with people viewing the self-storage properties as eyesores or violating local zoning laws with debates and controversies erupting in the past year in Springfield, Missouri; Baltimore, Maryland; Augusta, Maine; and Shawnee, Kansas among others.

Ryan Gibson, the chief investment officer and co-founder of self-storage-focused Spartan Investment Group, told Benzinga that his company found that building community relationships helps ease those debates and lessens detractors.

“We’re making partnerships with chambers of commerce, attending local events, sponsoring baseball teams and partnering with local schools,” he said.

But Sandecki said another issue many are afraid of is ill-maintained properties that are sometimes domiciles for squatters and people experiencing homelessness. He believes the security offered by PropTech companies like Storage 360 will alleviate much of that worry. He said that self-storage property owners and investors have to “provide value beyond property tax” and prove it’s not a location for potential crime.

“I’m aware that some cities are trying to get facilities shut down, but showing them you have the technology for safety at these properties makes them happier,” he said.

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