SALT LAKE CITY — While the A&E network has made plenty of people care about what’s on the inside of old storage units — on the chance they may contain lost treasures — the truth may be that the real money is in owning a growing company that manages more than half a million storage units that never make it onto television.
With annual revenues that climb well into the tens of millions of dollars, a Utah-based company has quietly become one of the largest purveyors of storage space in the country.
Headquartered in Salt Lake City, Extra Space is the second largest owner-operator of self-storage properties in the United States and the largest self-storage management company in the nation. The company has 1,007 locations in more than 30 states, the District of Columbia and Puerto Rico, including 10 Utah locations. The company also operates regional offices in California, Connecticut, Florida, Maryland, Massachusetts, New Jersey, New York and Texas.
Publicly owned, Extra Space employs 2,500 people nationwide, including 300 in Utah, as well as operating and managing more than 59 million square feet of rentable space.
Founded in 1977, the company went public in April 2004 and today generates revenue of about $200 million with a nationwide average occupancy rate of about 89 percent for 667,505 available units. The company’s growth plans are to continue expansion in 2014 as it looks to increase its market share.
“We’re focused on growing our portfolio through wholly owned acquisition,” said Clint Halverson, vice president of corporate communication and investor relations for Extra Space. He said technology has helped improve the company’s reach through the Internet and social media rather than the phone book, which was the major marketing tool just a few years ago.
“We’re shifting how we find customers,” he said. “(Through our home page) we’re identifying the lifetime values of a customer the minute he hits our website.”
Learning how to target new customers is helping the company become more efficient and serve customers better, he added. The company has developed a mobile app to allow customers to access information on their account as well as pay bills, complete lease documents and monitor promotions, saving customers lots of time in their busy schedules, he said.
”By being able to shrink the time dramatically — on average about 25 percent, it’s really made them happier because they have enough stress going on in their lives,” Halverson said. “They don’t need the additional stress of having to waste time sitting in our offices (filling out paperwork).”
While most of the company’s customers are able to store their items in the units with few issues, a small percentage do fail to pay and as a result have their belongings sold at auction, hence the popularity of the “Storage Wars” television show.
The show features the auctioneering couple as well as buyers. When rent is not paid on a storage unit for two to three months — depending on the state — the contents can be sold by an auctioneer as a single lot of items. The show follows professional buyers who purchase the contents based only on a five-minute inspection of what they can see from the door when it is open. The goal for the buyers is to turn a profit on the abandoned merchandise.
Halverson said the show has been a blessing and a curse for his business. When items are sold at auction, the amount owed is reimbursed to the storage company, with the remaining amount paid to the owner, he explained. Extra Space has refused to participate in the show because of the potential negative impact, he said.
“It’s an unfortunate part of our business (and) one we don’t want to glamorize,” Halverson said. “It’s people’s personal belongings (that are being sold), and we want to respect the privacy of our customers.”
If customers are unable to pay their bills, the company would try to work with them to “make it a mutually beneficial situation” rather than going through the auction process, he said.3 comments on this story
“We have a good brand,” Halverson said. “We don’t know how that brand would be perceived on TV in those auctions.”
Ironically, even though Extra Space has not participated in the show’s auctions, there has been a significant gain to its bottom line in the local auctions that take place from time to time, he said.
“The show has definitely helped us,” Halverson said. “It’s increased the number of people who come to auction, and increased the amount being paid at auction. So it’s been beneficial from that standpoint.”
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