According to Sovran CEO David Rogers, the Self Storage Is ‘Industry of Haves and Have Nots’ as reported by John Donegan, of the Storage Facilitator Blog.
Sovran is no small player in the Self Storage industry. Sovran Self Storage, Inc. is a fully integrated, self-administered and self-managed real estate investment trust (REIT) that acquires and manages self storage properties. Sovran operates its stores under the trade name Uncle Bob’s Self Storage®, and serves over 200,000 customers in 25 states.The Company owns and/or operates more than 400 self storage facilities encompassing over 30 million square feet, making it one of the largest self-storage companies in the United States.
Donegan states that at the recent REITWeek 2013 Investor Forum, David Rogers declared that technology, Internet advertising and revenue management tools have enabled the country’s four publicly traded Self Storage REITs, which make up 10 percent of the U.S. market, to “distance” themselves from mom-and-pop facilities, which constitute 90 percent of the U.S. market.
“It’s really become an industry of haves and have nots,” said Rogers, chairman and CEO of Sovran Self Storage Inc., one of the four publicly traded self-storage REITS.
If this information is true, it would seem that the facilities that are not part of the REIT Empire are in for big trouble!
Sovran currently spends $5 million to $5.4 million a year on Internet advertising. What’s more, it has 10 in-house employees and three outside consultants devoted solely to online ads. Rogers states that “we can say at least 65 percent of our customers get in touch with us through the Web,” Certainly, Sovran is clearly committed to internet marketing expenditure, but, does that really give them an advantage?
We at San Clemente Self Storage believe that independent, non- corporate owners can do “very well” against larger Corporate owned companies. The fact is that Good management will always prevail – whether it is in a “large corporate environment” or not. A well managed local company simply has an inherit advantages over larger Corporate ones that are burden with a bureaucracy that is necessary to keep them alive. The term mom-and-pop is an interesting term here, after all, most self storage facilities are worth millions of dollars!
David Rogers speaks of technology and marketing advantages that the larger companies have over smaller ones. Really – What advantage do they really have? Any local self storage owner can purchase operating software that includes state-of-the art reporting and security systems for very reasonable prices.
Regarding internet marketing, the self storage industry is a locally driven business, very specific in its nature. All one needs to do is hire a good “locally focused” Search Engine Optimization company to compete with the “big boys” in their local market. The fact is that Google does not give large corporate companies a break on advertising costs.
Perhaps David Rogers is simply trying to “scare” mom-and-pop” operators so that he can buy their businesses – “A trick as old as time itself”. Yes, it is true, if a mom-in-pop business is poorly managed they probably should look else where to make their money. But, a well run independently owned company can certainly do fine against the “big boys”.
Source of Sovran Information: http://blog.selfstorage.com/self-storage-reits/sovran-david-rogers-2712