Three Burnam Generations Build StorageMart Into Top 10 Operation
Sometime in the early 1970s, Gordon Burnam took his three children on a spring break trip to Brownsville, Texas. Constant rain nearly spoiled the trip, so Burnam, who has been described as a “serial entrepreneur” by his son, Mike, made the best of the situation by visiting a local business.
As fate would have it, they pulled into a self-storage facility.
“Mom and dad had been in many businesses,” recalls Mike Burnam, who was in high school at the time. “On this trip, they did what they did most of the time when they went on trips—they looked for new businesses. They happened to drive into a self-storage property in Brownsville.”
After his third visit to the facility, the owner finally let Gordon Burnam take the facility lease off his hands for a mere $10. Burnam returned to Missouri in 1972 and convinced a local savings and loan to lend him enough money to erect new buildings on the Brownsville property. “That was how he got into the self-storage business,” Mike Burnam says.
It was also how Mike, and eventually nine other members of his family, got into the business. The latest family member to join the company is Alex Burnam, the son of President Cris Burnam, who became a senior acquisitions analyst in May. Alex joins Mike’s son, Weyen, his daughter, Kerri Jones, and niece, Mercedes, as the family’s “3Gs,” or third generation to work at StorageMart.
Gordon’s late wife, Mickey, and their children, Kim and Tim, have worked at the company as well.
A Roller Coaster History
Mike says that between 1972 and 1976, his father tripled the size of the initial store. Then, in 1978, a local banker took an interest in Gordon’s success and offered to invest with him. Since the Burnams had recreational interests in South Carolina and Mississippi, that’s where they built their initial facilities. They continued to expand until 1986, when they sold their interests because of changing tax laws.
In 1987, the Burnams started over with two properties in Mobile, Ala., and Pensacola, Fla., and looked to expand. To do that, funds were needed, so the Burnams followed the money—straight into the offices of professionals in the community.
“We were talking to every doctor, dentist, and lawyer in our hometown, trying to raise limited partnership funds to build and buy additional properties,” says Mike.
Recalling the experience, Cris says, “Mike and I were raising money— $25,000 per unit—and we would literally sit in doctor’s examination rooms and doctors would come in between patients and we’d pitch them on self-storage deals.”
By 1994 the family controlled 58 stores that were eventually taken public into the Storage Trust Real Estate Investment Trust (REIT) in 1994. Storage Trust grew to 237 stores by 1999, when Public Storage bought out the REIT.
The Burnam family was left with 14 facilities that did not compete directly with Public Storage, along with six employees, most of whom were Burnams. They then launched StorageMart with an infusion of capital from private equity firm Warburg Pincus.
“Most of those were the ones we sold in 1986,” Mike, CEO, says about the 14 properties. “We bought and sold those properties three times by 1999.”
When Warburg Pincus cashed out in 2006, the family found a new partner in, of all places, their hometown of Columbia, Mo.
Today, StorageMart has grown into the largest privately-owned self-storage company in the world, with 196 facilities in the U.S., Canada, and the United Kingdom. StorageMart has risen to the seventh largest self-storage operation in the country, according to Mini-Storage Messenger’s “Top Operators” list.
In A Family Way
Self-storage was always in the blood and under the fingernails of the Burnam kids. Gordon made sure the teenage siblings knew the business inside and out by having them clean out units, pick up trash, fix roof leaks, and lease units.
As the children grew into adults, they took on more responsibilities. Along the way they developed individual capabilities and a trust in each other’s judgment.
“When you work with family, you have a bond and trust level,” says Cris Burnam. “We all have different talents, but, at another level, trust is there. That’s a lot of what has made our family dynamic work so well.”
The Burnams avoided the pitfall of the second-generation syndrome of family businesses where the children of the founder feel entitled or lack the same drive as the patriarch. “I have heard horror stories about other family businesses that have not been as fortunate as we have,” says Mike. “In most cases, going from first generation to second generation is where a lot of problems come up. We were fortunate enough to go public, which solved that situation.”
Burnam outlines where various family members fit in the business mix. “Each of us are very dissimilar,” he says. “Tim is the construction guy; he can fix anything. Tim was involved in all construction and development. Mom had 40 years of accounting experience. Sister Kim took over all accounting responsibilities; and then, as we grew, she morphed into human resources as we got more employees. Brother Cris was involved in operations. About 2005, he took over all operations and, without his expertise in that field, there’s no way we could have ever progressed.”
He credits the expertise and diligence of his two brothers and sister as being instrumental in the dramatic growth of the company since 1987, when they sold their portfolio for the first time. Since then, the Burnams have trusted key operations to family members.
“We recently completed a $1 billion debt refinance of the entire company, and we took over the largest publicly listed company in Canada—very complex financial deals,” Cris says. “My wingmen on those deals were always my brothers. When we work a deal, even without discussing how we’re going to do it, we fall into these roles that we are particularly good at.”
Arrival Of The 3Gs
During the past decade, a third generation of Burnams—the “3Gs”—have been integrated into the family business.
Mike’s son, Weyen, joined the company more than 10 years ago with a background in insurance and personnel recruitment. He started in operations and then moved into construction as StorageMart started to grow in development and expansions. He has taken over most of Tim Burnam’s responsibilities and now handles all U.K. acquisitions and all of the company’s Canadian and U.S. construction, according to his father.
Mike’s daughter, Kerri Jones, came to StorageMart a year ago with a background in mathematics. She became asset manager and “has been able to fill a niche nobody else in the family could do and was very difficult to hire from outside,” Mike says.
Tim’s daughter, Mercedes, came to the company three years ago after working in human resources with Hilton Hotels. Mercedes does all the hiring and recruitment in the U.S. and Canada.
The newest family member to work for StorageMart is Alex Burnam, who was deeply entrenched in the self-storage industry growing up. Over the years, he has taken summer and internship positions throughout the company. “I remember at a very young age going to the old headquarters to see my grandpa, so things have really come full circle,” Alex says.
The Tulane University graduate spent time after college working with Heitman, a Chicago investment management firm, helping transact several real estate closings in excess of $275 million.
“The G3ers that work in our company know they have an opportunity to take them as far as their ambition and talents will allow them to go,” says Cris. “Alex has a bright future because he has a great education and he has a talent of working with people.”
Alex also has a humble quality about him, which seems to be a common trait among the Burnams. “One of the things you learn quickly in this business is, if you’re someone who has an inflated or pretentious air about them, that doesn’t go over well with the mas and pas of this industry,” his father says. “We’re still a working man’s real estate class, so we think that’s a very important factor to have a sense of how the real world works.”
Nepotism is always a danger in a family business, but the Burnam executives try to avoid too many cozy relationships with a simple policy. “One of the family rules is your direct offspring are not going to work for you personally,” Cris relates. “Alex is my son, but he works for his Uncle Mike just as Mike’s son, Weyen, works for me. We want to make sure that we’re not too close to where you don’t have perspective about how an employee or family member is performing.”
Any family can have internal squabbles, which can escalate when financial issues hover over the family business. How do the Burnams handle these situations?
“We can be a family of yellers,” Cris admits. “We are all passionate people—passionate about our jobs, our company, and our family. We know sometimes tempers may flare, but that’s because you are so deeply committed. As a result, we’ve developed the ability to socialize and gain a consensus among our family ranks. Some people have a board of directors. Some people have a bank they have to consult with. We have a family council we need to consult with when we make major decisions. There is some yelling and table thumping involved.”
Hall Of Fame Family
Mike has developed, built, and sold over $3.5 billion in self-storage properties. He has been the president of the Self-Storage Association and has served three times on the national board of directors. He also sat on the Canadian Self Storage Association board of directors in 2007.
He was inducted into the Self Storage Hall of Fame in 2015, and became the second member of the Burnam family (following his father) to receive this recognition.
Ken Nitzberg, CEO of Devon Self Storage, who was inducted into the Hall of Fame at the same time, describes his friend Mike in these words: “He is generous to a fault. He’s willing to share his knowledge with anybody at the drop of a hat. If he can help you, he will go to the ends of the earth to do it with no remuneration in sight. Considering what he’s accomplished over the years, he’s humble about it. He’s a dear friend, and I trust him explicitly.”
Cris has been president of StorageMart since 1999 and has overseen several periods of unprecedented growth. Through three decades in the industry, Cris has completed over $4.5 billion in self-storage transactions. He was named EY Entrepreneur of the Year for 2014, the same year StorageMart earned the Torch Award from the Better Business Bureau for outstanding ethics.
As a corporate citizen in numerous communities, StorageMart supports many charitable causes, including foster care organizations, youth programs, shelters, and sports teams. The company’s stated goal is improving the lives of customers and members of the community in charitable partnerships.
StorageMart donated nearly $500,000 annually in cash and free storage throughout the U.S. and Canada in 2016.
“I think that’s an important part of being a good corporate citizen,” Cris says. “We are particularly interested in helping organizations that help themselves and, as a result, we donate product and time and self-storage units to hundreds of charities throughout the U.S., Canada, and the U.K., as well as donating many thousands of dollars to various charities. We appreciate the noble cause that so many organizations are involved in, but we want to make local contributions to organizations that are well run and impactful.”
In additional to its charitable giving, StorageMart has made a commitment to going green at many of its facilities. StorageMart is one of the largest providers of renewable energy within the storage industry, outfitting the roofs of many of its properties with solar panels.
We think being green helps you make green. It’s a good business philosophy,” Burnam says. “Wherever it makes good economic sense and environmental sense, it’s a good way to give back to our communities and the environment.”
Looking to the company’s future, Burnam is leaving all options open.
“We are very interested in expansion both through organic growth and from acquisitions,” Burnam says. “Does that mean we will buy 20 stores in 2018 or 200 stores? We feel we’re equipped operationally and financially to do either of those depending on the opportunities that are out there. We are going to continue to fill out our markets in the U.S. and Canada, and we are particularly interested in growing our new platform in the United Kingdom.”
He envisions StorageMart growing from its current 15 stores in the United Kingdom to potentially 30 to 40 stores over the next five years.
“In the U.S., we would like to see growth in the neighborhood of 100 stores,” Burnam says. “It’s very hard to acquire in Canada, but we’d welcome the opportunity to grow by 30 to 50 stores there.”
That may be considered conservative or ambitious depending on your perspective, however, it’s still remarkable considering how StorageMart started as a one-facility outpost in Columbia, Mo., and grew to the global entity it has become today—still run by the same family.
Mike is amazed at the growth not only of his family’s company but also the self-storage industry. However, he still laments this industry doesn’t always get the credit it deserves.
“When we went public in ‘94, we spent the first year explaining to Wall Street how a real estate business could possibly work with month-to-month leases,” Mike says. “We’re still fighting battles across the country when a new developer comes into a bank and wants to borrow money. It’s still shocking to me that some lenders don’t get self-storage even though we have one of the lowest default rates of any real estate type.”
Burnam acknowledges the industry is evolving from a mini-warehouse image into the retail spectrum. And that’s not all the changes under way.
“We see things changing from having mom-and-pop managers to professional managers to having phone centers take over sales responsibilities to even having no managers,” he says. “When you start looking back and seeing where we’ve come from and where we are today, I’m amazed every single day that I can make a living renting spaces for people.”
For the Burnams and StorageMart’s 500-plus employees, it all started during that fateful spring break in Texas all those years ago.
“Great things sometimes come from small beginnings, and we’re all thankful to my father, Gordon, who stumbled upon the idea of self-storage in 1970s and was entrepreneurial enough to put those ideas to work,” Cris says. “That was the seed that germinated everything that StorageMart is today.”
David Lucas is a freelance writer based in Phoenix, Arizona. He is a regular contributor to all of MiniCo’s Publications.