Specialty Storage Winner: Highlands Self Storage, Hardyston, New Jersey

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2018 Facility Of The Year

It’s long been a dream for Jonathan and Allison Brett to add wine storage to their facility, Highlands Self Storage. They just had to wait for the right time.

The facility is located in the middle of wine country in Hardyston, N.J., not far from a famed resort known for its extensive wine cellar.

The first phase of the facility was completed in 2008. Later, the Brett’s added solar power. Finally, the Brett’s were able to add wine storage, which was completed with the second phase in 2015. It is now the only known zero net solar energy wine storage facility in the country.

Highlands Self Storage added 160 storage units in the second phase, bringing the total to 462 units.

The pride of Highlands Self Storage, however, is the 31-unit high-tech wine storage.

A Complicated History

The Brett’s were beginning to plan for their retirement in the early 2000s, when they decided to start looking into business opportunities that they could do while they traveled. “We wanted to retire early and travel the country in a motor home,” says Jonathan, “but we also wanted to own our own business.”

They wanted a business that could be operated remotely and one that didn’t require many employees.

The couple began investigating the self-storage industry, which, at the time, was in a period of huge growth. “We basically just began driving around looking for property,” recalls Jonathan. “We knew a guy who worked in building codes and he told us to look into Hardyston.”

Once they found the property in 2004, located at 178 Church Road, the permitting process was pretty easy. “We hired a person as a consultant in the self-storage industry in New Jersey,” says Johnathan. “And we then took it to the engineer, who penciled it out and went from there.”

Their real problems began when they hired the general contractor. “We went through a nightmare,” says Allison. “It was at the end of 2007, and the contractor started having financial problems and stopped paying the subs.”

As a result, those sub-contractors began putting liens on the Bretts and their property. After some legal issues arose and the Bretts had to hire an attorney, the project stopped for six months. “The construction loan ran out and we weren’t ready to open,” says Jonathan.

The Bretts saw their dreams vanishing. For a while, it appeared as if the first two buildings in Phase I wouldn’t open, much less the third building with wine storage. Thankfully, they were finally able to refinance the loan.

The city also had a surprise increase in one of the fees. Jonathan remembers the fee jumped from a quarter of a percent to 2.5 percent of the value of the building. “It went from $10,000 to $74,000; we were lucky they worked with us and did whatever they could to help,” Jonathan says.

Although the facility opened in 2008, just as the economy crashed, the couple was able to pull the business through. “At one point, we were advised to file for bankruptcy,” says Jonathan. “But we struggled through, got the facility opened, and worked weekends for three years getting everything on track and cash flowing.”

Jonathan and Allison say the biggest lesson they learned from their experience is that new developers in the industry should work with experienced consultants and contractors who know the self-storage business. “Do a background check on the contractors and builders,” says Jonathan. “We weren’t contractors or builders, so we didn’t know a lot about it.”

Adding Solar

By 2012, the Bretts had recovered from the Great Recession and decided to install solar to the first phase of the facility, taking advantage of the extensive energy savings and tax credits given to businesses in New Jersey that produce renewable energy.

Of course, they wanted to hire a reputable company that wouldn’t put them through the nightmare of their first construction at Highlands. They found KC Green Energy in Lancaster, Pa.

“Everything came from the U.S.—nothing came from China; they were neat, clean, and polite,” says Jonathan.

“Some of the other contractors moved around a lot and this was a family-owned business,” says Allison. “We knew we definitely wanted to go with them.”

As a bonus, they didn’t have to hire another contractor to make sure the roof was capable of handling the load. That was handled by Kautz Construction, which is connected to KC Green Energy.

The New Wine Country

Meanwhile, the Bretts were busy researching Phase II for Highlands and learning all they could about wine storage in their region.

Upstate and western New York have long been recognized for producing fine wines. The Finger Lakes Region in New York is recognized as one of the country’s leading producers of wine. However, New Jersey is coming into its own as well.

Until 1981, before passing the New Jersey Farm Winery Act in 1981, New Jersey was only allowed to have one winery license for every million residents. At that time, the state only had seven wineries. In the decade between 2007 and 2017, the state grew to the seventh largest wine producing state in the country. While still far behind California, the largest wine producing state, it makes a very wine-interested East Coast with thousands of collectors and brokers in the region who may need wine storage.

The Bretts are wine drinkers, not collectors, but they recognized the need for a state-of-the-art wine storage facility in the region. The couple visited The Grand Cascades/Crystal Springs Resort, located not far from Highlands, which Jonathan believes has the third largest wine cellar in the country. The Wine Cellar at Crystal Springs Resort holds more than 6,000 labels in a multi-catacomb cellar. It claims labels from the top wineries in Bordeaux, Burgundy, Rhone, Italy, and California.

In other words, the luxury resort and condominium complex cater to wealthy wine lovers. “We heard that many of the people who live in the townhouses and condos near there are wine collectors,” says Jonathan. “If you live in a house, you might have your own wine cellar in your home, but when you live in a townhouse or condo, you don’t have anywhere to store your wine.”

In addition to the state growing wine at a great rate and the proximity of Crystal Springs, the couple also learned there are many wine clubs in the area catering to the market’s growing interest in the drink.

“We also learned of one other wine storage facility even remotely close and it’s bigger but isn’t near the quality of the one we wanted to build,” says Jonathan. “We also thought we could draw tenants from New York City and surrounding states.” 

The Bretts were so impressed with the wine cellar at the resort that they took photos of it and decided to model the wine storage at Highlands after the resort.

Ready For Phase II And Wine Storage

The Bretts wanted to repeat the construction experience success they had installing their solar system and avoid the near-disaster on the initial build, so they hired Kautz Construction, the affiliate company of KC Green Energy, as the general contractor. “When we did the solar project on the first phase, we just really hit it off,” says Gordon “Gordy” Kautz, general manager.

The two-story building was designed for 160 additional climate-controlled storage units, bringing the total to 462. There is an elevator giving easy access to the second floor.

Kautz’ company has worked on solar for self-storage, but this was their first ground-up build.

Nevertheless, the construction on the building went according to schedule, even though they had to re-do part of the foundation, which was laid during initial construction in 2008. “It was a typical build; we had some issues in the winter with snow and ice, but nothing major,” says Kautz.

The building was also well insulated, not only to make efficient use of the net zero all solar facility but to have extra insulation in the wine storage area, which must maintain a steady temperature year-round.

Additionally, the wine storage area is on a completely different heating and cooling system than the rest of the building. Kautz also supervised the installation of the 5K natural gas generator that kicks on to maintain the wine storage cooling and humidity systems in the event of a power outage.

State-of-the-art modern humidity control was installed to ensure the facility maintains a steady 50 to 60 percent humidity atmosphere inside the wine storage area. If anything changes inside the storage area, alarms alerts managers.

Miller Buildings, Inc., in Flourtown, Pa., built the wine storage lockers, which are metal with a faux wood finish. Miller Buildings is a well-known company in the self-storage industry.

Louis Gilmore, president, says they have only built wine storage lockers for two facilities. “There is only one real challenge with the smaller lockers in that you have to have installers who are more craftsmen with attention to more detail than larger buildings,” says Gilmore. “We sent two of our guys who typically do our exterior trim for this job.”

Jonathan designed the size of the lockers based on research. Highlands offers 28 4-by-5-by4 lockers and three 4-by-8-by-8 lockers. They can hold from 48 to 300 cases of wine. “I looked into installing racks, but our research showed if people were going to store wine, it is typically by the case,” says Jonathan. “If they have wine in racks, it’s at home to be consumed.”

The wine storage was placed down a corridor with its own security system and has a unique European wine cellar feel. Old-style stone walls and granite floors set an upscale ambiance. “When you enter the third building, you go down a long hallway and the wine storage is 650 square feet,” says Jonathan.

Once inside the wine storage area, granite tile floors continue, dark wood finishes adorn the walls, and a copper-colored tin roof features small chandeliers. The chandeliers are equipped with LED lighting, as not to damage the wine is throughout the room.

The Bretts also went with a contractor known to them when putting the finishing touches on the wine storage. Kimberly Hamilton, principle at Kimberly Hamilton Interior Design in Summit, N.J., previously designed a remodel in the Bretts’ home.

“I had never worked on wine storage, and I thought it was a really exciting project,” says Hamilton. “I had just returned from Portugal, where I toured some wine cellars and picked up on the set ups and finishes when I was there.”

She adds that it was challenging getting the configuration perfect at Highlands so that it would be both aesthetically pleasing and functional. “We worked a lot on the access to the higher-level lockers and lighting; we needed to make sure no one was banging lights when opening their locker doors,” says Hamilton. “We collaborated with the construction team; open communication with them was the key to the project.”

Gilmore believes the attention to detail in the looks of the facility makes it such a unique facility. “Jonathan’s experience comes from working in high-end car dealerships,” says Gilmore. “Bringing that high-end level of retail to a self-storage application is very unique; it’s just really top notch, clean, and slick.”   

High-tech temperature and humidity control and a high-end feel were just part of the equation. Wine storage must also have state-of-the-art security. In addition to the access gate to get onto the property and camera monitoring throughout, wine storage tenants are the only ones with access to the wine storage corridor. They must unlock an old-English style arched door with high-tech facial recognition. “No one can get in unless they store their wine there,” says Jonathan.

The inside of Highlands Wine Cellar, as it’s named, is monitored by four of its own state-of-the-art closed-circuit cameras, which transmit to the managers. Each locker is individually locked, alarmed, and records each time someone enters. PTI Security provides the security for Highlands.

SiteLink provided the management software for the entire facility. “Wine storage sometimes requires unique configurations, and SiteLink was able to accommodate this without any special changes,” says David McCormack, director of sales, who mentions that the facility is equipped with SiteLink Web Edition. “For example, adding the smaller wine units to the facility map was no problem. It was up and running right away.”

Phase III

The self-storage portion of Highlands is currently at 98.2 percent occupancy, thus paving the way for a planned Phase III in 2019, which will have an additional 130 self-storage units. The Bretts made use of extra land and the additional fourth foundation, which has been poured since 2008, by offering RV and boat storage.

Most of those tenants will be displaced with the additional building, but self-storage is much more profitable. “We’ve tried acquiring the lot next door for RV and boat storage, but so far the owner won’t sell,” says Jonathan.

Marketing

Self-storage owners typically don’t market via radio, television, or cable ads, but wine storage at Highlands makes it an atypical facility. A marketing firm assisted in mailers and social media, but most of efforts were on those unconventional channels. Separate marketing ads were created for self-storage and wine storage. As a result, Highlands has picked up individual collectors, as well as commercial tenants and brokers from across the region. “We have some locals, but most of our tenants come from all over,” says Jonathan.

The facility offers 24-hour access and accepts deliveries for wine storage tenants who sign a release to allow facility staff into their lockers. One important benefit the Bretts offer their wine storage customers is a monitoring report, which shows the wine in their storage has been maintained at the proper temperature and humidity. This is especially important to brokers and commercial tenants as it helps them prove the value of their wines.

Wine storage is at 50 percent occupancy. “We would like to be at 100 percent,” says Jonathan. “I think as time goes on, and word continues to spread, we’ll get there.”

DEVELOPMENT TEAM

Facility Owners: Jonathan and Allison Brett
Architect: Charles Schaffer
Construction Company: Katz Construction and KC Green Energy
Security System: PTI
Management Software: SiteLink

Kerri Fivecoat-Campbell is a freelance journalist based in the Ozark Mountains. She is a regular contributor to MiniCo’s publications. Her business articles have also appeared in Entrepreneur, Aol.com, MSN.com, and The Kansas City Star.

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