By Chris Koenig
Yes, automation is the future of RV and boat storage. Are we there yet? No. Will all things RV and boat storage be fully automated? Probably not anytime soon.
Last Friday, Toy Storage Nation hosted its Reno RV and Boat Storage Workshop for current and prospective RV and boat storage developers looking to get into the Class A RV and boat storage space. Many own operating RV and boat storage, traditional self-storage or are new to storage all together.
Presentations by industry experts helped to introduce newcomers to the market, along with informing them of what technology is available across various fronts (security, Internet/websites, gate access, etc.). John Bilton with Janus International led a presentation about security and technology, and it got me thinking more about this topic. If you have never been to a TSN workshop, and you’re looking to develop or own Class A RV and boat Storage, then you should definitely attend a show or four; they are worth it (unbiased opinion).
The one component of advanced technology that I cannot wrap my head around, yet, is a fully autonomous RV and boat storage site; and I say this for three reasons.
Reason 1: Lease-Up
During the lease-up phase, your site will get the most traffic from drive-up customers. Your site is new, and they will want to see the office, amenities and spaces. Some might even want to “try it out” to make sure they can park their rig in a spot.
I had one customer bring his 40-foot RV to the site, and he tried to park in his assigned space, but he didn’t like how the canopy post was to his right, and preferred it to be on the left, for easier maneuvering. So my manager, who was onsite, promptly changed his unit on the fly to suit this tenant’s needs, and then he was on his merry way.
This is not impossible in an automated/kiosk scenario, so I won’t argue that point, but it certainly can cause frustration for customers, which may even lead them to going elsewhere for storage. This particular customer was quite flustered as it was, and I highly doubt he’d have wanted to go back to a kiosk to “figure it out.” I say this based on experience with said customer to get the required online documents (insurance, registration), which needed in-person hand-holding.
This one example doesn’t represent 100% or probably 50% of the customers we have at one property, but I know, based on our internal tracking metrics, that 75% of the customers walked in because “we were finally open.” We ask if they saw our ads on Facebook, Google, Nextdoor, the local paper, etc. Some say “yes,” some “no,” but they all say, “We drive by daily and we’ve been waiting to see a car in the front and a person in the office.” Capturing these leads with a live body during lease-up is crucial!
A sign on the door and a QR code and a link to sign up can be quite problematic for this, not all, demographic, which is generally retirees with paper copies of documents and an inability or reluctance to take a photo and upload documents to a portal from a kiosk that they may or may not even want to use, let alone touch.
From experience on this particular site, I know several customers who either have no cellphone or they still have flip-phones. I ask them for feedback: “What would you think if we didn’t have a manager onsite to help you out today, and instead, we had a kiosk or a tablet?” Two-thirds of customers say they’d probably just go somewhere else.
I find this odd, but the people spoke. During lease-up, I can’t be losing these prospective customers, because we all know once they are in, it’s highly unlikely they will leave. We’re spending big marketing dollars to get these prospective customers to show up to the property, and we want them to sign-up; it’s highly unlikely to get them to come back after they go to a competitor unless we drop prices!
Depending on your particular situation (i.e., you live nearby so you can put out small fires as they arise, or you have little/no competition), I could see the need for an onsite manager going to 0% to 50% once you reach stabilization. I wouldn’t advocate this, but I understand the argument for this … once you reach stabilization!
Reason 2: People Like To Talk
Our customers like to talk to our manager in the office. They like to tell stories about their recent trips and show pictures of their adventures. This is actually what makes this RV and boat storage community so great and ownership of these facilities so exciting and unique. Absent a mental-illness, it would be odd for our customers to talk to a kiosk in this same manner. I guess people are getting more comfortable “talking” to Siri, but there’s something about sharing experiences with a live human, in my opinion, at least for the foreseeable future.
I do believe most customers would be fine talking to a kiosk or calling an 800 number to resolve issues (billing, changing units, etc.), but these in-person interactions are conveniences people want, no demand for a premium Class A facility.
COVID-19 forced wild advancements in how we dine-out with scanning QR codes and ordering from the table. I think at most bars and restaurants this was OK to the customer, but when people go to bars or eat out there is an inherent desire to interact with the bartender and server and strike up a conversation. “What do you recommend?” is a classic example of what customers ask, and servers will often ask,“What are you celebrating?”
People like to talk and share their experiences in these settings. I can’t imagine a fully QR code dining experience at a high-end steak house, but we are all fine with it when we order from the McDonald’s kiosk. McDonald’s is a fairly seamless kiosk ordering system, but if we have issues or prefer speaking to a human, there’s usually several staff members there, and at least one is manning the cash register.
I believe the Class A RV and boat storage facility requires, at a minimum, a part-time manager for these personal touches. They are paying a premium rent, and this level of service and convenience is a premium–which should not be overlooked. Will this change as younger generations enter the RV and boat ownership world? Probably, but only time will tell; you can adjust at that time, but that time is not now.
Reason 3: Investment Protection
Call me “old school,” maybe, but as an owner, I think there’s something to be said for having someone onsite overlooking your investment property. I started my real estate career working for a small, local retail developer and property management company–think neighborhood shopping centers with a nail salon, hair salon, title company, real estate offices, Chinese restaurant, pediatrician’s office and the like. Our office was smack dab in the middle of three shopping centers. Tenants had issues daily, the site had issues weekly (things broke or needed maintenance), various vendors were on site fixing things, contractors were doing tenant improvements in units. We were onsite to make sure the center was in pristine shape and these onsite vendors and tenants had a good experience. There was never trash or debris left onsite when we left for the day.
Our competition was a larger grocery-anchored center across the street, managed by a larger REIT with no onsite presence. The site looked like crap, daily. There were constantly vagrants loitering outside and around their property; there was always trash all over the parking lot and planter areas. You get the picture.
Does this matter to the value of the property? Probably not unless we are going to sell it, right? Aside from a deferred maintenance deduct, is there a cap rate deduct for this? I don’t think so. Do the tenants in the poorly maintained facility keep paying rent? Yes; however, there is a pride of ownership factor as well as an overall customer satisfaction that goes along with having this onsite representation and personal touch to make sure my $10-million to $20-million investment is being taken care of daily/weekly versus a regional manager driving by once a month and then hiring vendors to come clean up X, Y, Z. The latter is a perpetual game of whack-a-mole. I know one time there was graffiti along the whole side of their building for two months! If this was my site, this would be awful for my investment and my customers.
I am not convinced that autonomous systems can replace this personal touch and care for your investment property. I want my manager to have a desire to keep the facility maintained and have a pride and sense of ownership. From an ownership side, I want it constantly maintained so I don’t have big hits for deferred maintenance or customers leaving because it’s getting run-down and the nicer, newer facility across town is offering my customers half off the first month’s rent to move.
Yes you can schedule weekly landscaping and parking lot blowing services, and all the things to keep it looking clean and safe, but the onsite manager has to be there to make sure it’s getting done properly and hold service providers accountable to make sure your multimillion-dollar investment stays at the highest value possible for you and your partners.
My only suggestion on any and all automation is to talk with owners that are using it; talk to those that are selling it; and talk to those that decided not to use certain automation. Get the information, do the research and make a well-educated decision. Do it for your investment, your pride of ownership and for your customers, because, you know, people do like to talk!
Chris Koenig has been developing real estate for Pacific Union Property Advisors in Napa Valley, Calif., for more than 15 years, including retail/warehouse properties and self-storage, as well as solar-canopy RV and boat storage.
Chris can be reached at email@example.com.