The Arizona Self-Storage Association (AZSA) held its 22nd annual conference and 25th anniversary celebration Feb. 17 and Feb. 18, 2022, at the WeKoPa Casino Resort and Conference Center in Ft. McDowell, Ariz.
The event drew about 200 attendees and about 140 vendors, AZSA Executive Director Amy Amideo says. The conference and its related golf tournament raised $30,000 for the charity StorageGives.
Several AZSA board members shared their thoughts with Mini-Storage Messenger about their experiences at the conference, the current state of the industry, and where it’s likely headed through the end of 2022.
Networking And More
Networking—normal human interaction in a professional context—was easy to take for granted. The pandemic changed that.
“COVID had alienated everybody in every industry,” Amideo says. “The self-storage industry in Arizona is hot, hot, hot. The conference gave opportunities to look at investing and meet and talk with experts.”
AZSA is founded on three pillars, she says: providing industry-specific legal and legislative information; education, made more important by the advent of COVID; and networking.
Amideo is relatively new to the self-storage industry. This year’s AZSA conference was her first. She came from the “cutthroat” financial world. Self-storage, by contrast, is “extremely welcoming.” People try to help one another learn the ropes and read the signs.
‘It’s that idea of collaboration,” she says.
When asked whether that collaboration comes from self-storage industry professionals thinking there’s enough to go around for everybody, Amideo agreed, but added that “the deeper reason is they want to keep the values the industry has had all along. If you’re a smaller investor, they want to make sure newcomers understand the culture and abide by it.”
James Appleton, director of sales for special risk for Phoenix-based MiniCo Insurance Agency, says AZSA’s main goal is to engage self-storage industry members in Arizona and “make sure we’re leading the industry in education, making sure people are understanding and following lien laws and doing business properly. It seems like a lot of other parts of the country aren’t quite there yet.”
Alonna Ross, Scottsdale, Ariz.-based business development manager for StorageAuctions.com, based in Baton Rouge, La., has attended the conference for 10 of the past 12 years. Ross says the conference enables the company to boost its brand awareness, communicate with its current locations, talk with prospects, and counter misconceptions about the lien process.
The pandemic’s disruption of normal business operations and networking opportunities made the conference’s return especially welcome, says Ross, and it brought in a lot of vendors who hadn’t participated in years.
Carol Mixon-Krendl, owner of SkilCheck Services, based in Lodi, Calif., has attended 10 AZSA conferences. As a vendor member with a booth at the smaller state conference, the company had “more quality time with more potential and current customers than we normally do at the national shows.”
“The exposure was well worth the time spent at the show and on the booth,” says Mixon-Krendl. “Every booth and the tradeshow floor were set up so nicely. The flow of foot traffic was awesome, and it was easy to speak with who you wanted. No one got lost! It was nice to even take some of our visitors to fellow vendors personally and make introductions.”
Lee Starrett also emphasizes that, as with any conference, networking is a big benefit of the AZSA event, and especially this year because of the pandemic-caused two-year hiatus. Starrett is the Peoria, Ariz.-based sales manager for Kiwi Construction, which is based in Murrieta, Calif. He has attended AZSA’s conference most years since 2008.
Whitney Jurjevich agrees that self-storage especially shows the benefits of networking because “the industry as a whole is very open and collaborative.”
Jurjevich, who is a retired police officer, owns Ameripark Covered Storage and Ameripark RV & Boat Storage, which has Arizona facilities in Tempe, Queen Creek, and Tucson; four more under construction in Casa Grande, Mesa, and Waddell, all in the Phoenix area; and one in development in Marana, northwest of Tucson.
He has attended the conference for nearly 10 years and says AZSA has done “a phenomenal job” bringing timely and thorough economic and industry data, not only for self-storage.
This year’s conference returned to the format of separating vendor booths from the conference room for programming while keeping both close to each other for easy interaction between vendors and attendees.
“You could walk out one door and 30 feet away down the hallway and into the other door,” Jurjevich says, and vendors could come into the hallway and encounter attendees, and vice versa.
COVID has cast doubt on whether people would be comfortable returning to in-person events, but Jurjevich expected a return to normal with at this year’s AZSA show. “People were sick of it,” he says. “They were tired of being locked down. They were tired of being nannied. And they wanted to go out into the world and be social and do trade shows and travel and do golf … and they did, big time.”
Belinda Rosthenhausler is the Phoenix-based vice president and commercial loan officer for San Diego-based CDC Small Business Finance. She works with SBA 504 small business loans, for which many self-storage owner-operators qualify, and has never seen the loans’ interest rates so low—four percent for a 25-year loan.
AZSA’s conference provides a venue for Rosthenhausler to educate owner-operators about how these loans can help them. It also gives out-of-state attendees a chance to explore the Arizona market, which she says is “still a good deal,” and learn more about what’s happening nationally.
State Of The Industry In 2022
The AZSA board members who spoke with Mini-Storage Messenger were generally upbeat about the state of the industry and the outlook for the rest of 2022.
According to Ross, the self-storage industry “looks very good” and appears to be shifting to traditional self-storage. Many locations are considering options for spoke-and-hub model types. Sales are picking up along with consolidation, “so it looks like it’s going to be a fantastic year as far as self-storage goes.”
Mixon-Krendl has worked in the industry for nearly 40 years, and the past two years “have been the best two years I’ve ever seen based on occupancy levels and income at the properties.”
Kiwi Construction is seeing improvement in materials shortages caused by the pandemic and in “very volatile” steel prices, Starrett says. Prices are stabilizing, more steel is coming to market, and “it’s becoming a little bit more opportunistic for developers to open the gates a little bit.”
“It’s hard to tell what’s going to be coming at us,” says Starrett. “Hopefully that is an even balance of work as 2022 unfolds and isn’t bottlenecked to one portion or the other.”
Jurjevich’s “an RV and boat storage guy,” and these “toys generally” have seen increased production and sales, which is good for self-storage. And permits pulled in Arizona are good.
Self-storage inventory is good as well, with new facilities coming on line, occupancies rising, and delinquencies falling lower than expected, says Chris Rudel, founder, owner, and president of The Rudel Co., a Phoenix-based real estate developer. He has attended the conference for about 20 years and served as AZSA’s president when the organization started the conference.
As Rudel notes, the pandemic is significantly driving the strong market.
“In this time of COVID, with people working from home, storage demand is acute, and the industry is very solid,” Rudel says. “Two years ago, we would’ve said the industry would be way overbuilt and we’ll drive prices down and vacancies will rise.”
Rudel’s company told tenants at the pandemic’s start that it would impose no late fees and have no lien sales. The company asked tenants to tell them if they were having problems because of job loss or for any other reason and the company would work with them. The company expected occupancies to fall because people wouldn’t be able to afford storage, but the opposite occurred.
“It turned out to be one of the best public relations things we’ve ever done, because a lot of tenants expressed gratitude to us for standing beside them during tough times,” says Rudel. “A low percentage of our tenants needed any kind of assistance.”
Rudel goes on to say that the self-storage industry is strong and AZSA’s health is “excellent.” “We try very much to stay tuned in to needs of our members.”
Per Appleton, the industry is seeing expansion and rate increases. While he thinks the industry “looks really good now,” he anticipates a slowdown in the next year or two.
“The fear is big companies building big facilities are taking out the smaller owner-operators, but I’m seeing new construction,” Rosthenhausler says. “There aren’t too many facilities trading hands. Construction requests are up, and users aren’t selling. If they do sell, what are they going to do with all that money? Pay the capital gain?”
Ray McRae,vice president and designated broker for Storage Solutions, based in Chandler, Ariz., says self-storage “is the darling of the real estate industry.” He referenced a recent Marcus & Millichap report that said self-storage, apartments, and industrial are currently the hottest real estate segments.
“We’re on fire in Arizona and the rest of the country,” says McRae.
Arizona’s single-family housing rents rose 18 percent, compared to 12.6 percent nationally, McRae points out. And migration has increased during COVID to Arizona, Texas, Florida, and Idaho from states with stricter lockdowns. Self-storage’s year-over-year rental rates have shown roughly the same spike. Gas prices are going up, causing prices of “everything else you touch to go up.”
Of course, self-storage has always had a recession-resistant reputation. But with the world’s heightened uncertainties, McRae hopes the industry will withstand “any recessionary resistance well, but nobody has a crystal ball, so you always have to be wary of that.”
“Storage is one of those things that you need a little bit of disposable income when it comes to choosing which bills you’re going to pay,” says McRae. “I think an individual’s usually going to pay the one that covers the roof over their head. We’re the one that puts the roof over their items that they don’t have room for. … Sometimes self-storage may be a bill that can go away. We’re hoping that it’s a necessary essential, [so] if there is any recessionary pressure, stagnation, or even worse, a depression, that we can at least hold our ground as we have in the past.”
The special guest speaker at this year’s conference was Brendan McDonough, the sole survivor of the Yarnell Hill wildfire in 2013 that killed 19 of his fellow firefighters. In this gripping and heartbreaking presentation, he discussed the events of the lightning-caused blaze near Prescott, Ariz., which is one of the deadliest fires in U.S. history, what it was like to be the only survivor, and how he overcame the tragedy to change his life. In addition, McDonough autographed copies of his book, My Lost Brothers: The Untold Story by the Yarnell Hill Fire’s Lone Survivor, which was published in 2016 and inspired the movie “Only The Brave” in 2017. Autographed books are available from AZSA.
Jerry LaMartina is a freelance reporter and editor based in Shawnee, Kansas. He is a regular contributor to all of MiniCo’s publications.