The top executive at one of the nation’s largest self-storage companies still sees plenty of opportunities for further expansion – locally as well as nationally – even after five years of rapid growth that has sharply increased the size of the Amherst-based company.
Citing record high occupancy levels throughout its nationwide network, Sovran Self Storage CEO David Rogers told shareholders Wednesday that consumer demand for locker space is strong, and his company is well-positioned to meet it because of its scale, technology and strong financial position.
“We’re a very big fish in a very small pond,” said Rogers, whose company owns Uncle Bob’s Self Storage, the fourth-largest company in the industry. “We like where we are. We think we have lots of opportunities to continue to grow.”
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The publicly traded real estate investment trust already has been on a growth tear for the past five years, adding more than 200 locations through a series of acquisitions to give it a total of 569 stores in 26 states, with 400,000 individual units. It added 27 properties last year, paying about $287 million, and announced in January that it would buy another 30 for $398 million, bulking up in some markets while marking its first entry into the Los Angeles area with nine facilities. And the stores are being actively used, with occupancy peaking at a record high of 93 percent last July.
“In the last few years, we’ve really stepped it up,” he said at the company’s annual meeting.
In its home market of Western New York, Sovran said in early April that it is adding two more locations as part of a larger purchase of nine stores for $88 million. That will give it a total of 14 in the Buffalo market, with about 9,000 storage lockers in all. It has more facilities locally than any other competitor, yet they’re more than 90 percent full. “It’s very good here,” he said. “It’s not a tremendously growing market, but it’s probably under-supplied compared to many markets.”
But the look of the operations has changed to meet demand for climate-controlled storage, and to shepherd construction through local permitting. Unlike the bare-bones, drive-up outside operations with wide aisles that dominated the industry in the past, the newer facilities are often brightly lit multi-story buildings, containing smaller individual air-conditioned storage units. The units still have the trademark yellow doors, but the buildings have polished floors, better security and large windows. “This is the new face of self-storage. This is not your grandfather’s self-storage,” Rogers said.
The company has invested heavily in technology, including a sophisticated internet marketing program that spends $7 million a year to advertise Uncle Bob’s online and elevate its presence in search results. The company also maintains a 45-person customer-service center, operating 24 hours a day for all but five days of the year to handle calls for all 569 stores. And it has developed a high-end proprietary revenue-management system that oversees all of its storage units, setting rates and discounts months in advance, while predicting when customers will come and go.
“This is something we can do that 85 percent of the competition cannot do,” he said. “We have the scale to do it. If you have one to three stores, you don’t do that.”