Pogoda Companies is looking to break out of its Michigan and Ohio base – and it’s hired Beau Agnello to help, operationally and strategically, achieve its expansion goals.

The Farmington Hills, MI-based Pogoda recently announced that Agnello will serve as its new senior vice president of operations, overseeing its 58 owned and managed facilities in Michigan and Ohio. Agnello previously was a division vice president responsible for Extra Space’s Texas and Oklahoma region.

Agnello will also be “instrumental in formulating strategic plans for the company’s continued expansion, maximizing the investment value of all managed/owned facilities,” the 100-employee company has announced.

Agnello, who has also worked in the self-storage space in his native San Francisco and in Salt Lake City, recently talked with Storage Beat about Pogoda’s expansion plans, operational issues and other topics concerning the company and industry.

Storage Beat: Is there a particular geographic region of the country that Pogoda Companies is eyeing for expansion? You’ve mentioned there are expansion plans in the Midwest.

Beau Agnello: Michigan is our home base but there’s nothing that’s off the table. If there’s a direct flight from our home office in Michigan, we’re interested. As we expand, I can see us setting up regional operation offices as we get further into the Midwest and where there’s enough density. We’re actively looking for properties across the Midwest where we can leverage or expertise. There’s very little in the Central Time Zone that we wouldn’t be [interested in].

The company has said it expects to buy seven to nine more properties in the coming year. Can you give us any general details about those acquisitions – where they are, how big, when will the deals be announced?

I can’t provide specifics yet, but I will say that there’s enough density that we can go in and operate a property at a high level with a local management team.

How many facilities does Pogoda hope to own within, say, three years?

It’s tricky to chase a number because we don’t want to grow just for the sake of growth. But if there’s a market or portfolio that presents a good opportunity, we’ll take a look. One hundred stores is a nice round number – and that sure sounds great. I will tell you that in three years doubling in size is a great stretch goal. But if we don’t hit that target and the properties that we add are in our sweet spot where we can deliver a great return, then I’ll be happy.

Operationally, how far along is Pogoda in terms of having partially or fully automated self-storage facilities?

A trap that operators can fall into is considering automation as a binary: Are we automated—yes/no? If it is only considered as an expense saver, the standalone value of the suite of technologies that enabled automation is ignored. We have a robust website where customers can manage their account, an online rental platform, a call center, and staffing efficiencies based on customer behavior to provide the best service. In that respect, we fall into the “partially automated” camp for most of our stores, because our technology allows customers to transact business better with us in the way that they choose. The ATM didn’t replace bank tellers, they became coworkers.

What’s the greatest operational challenge now facing self-storage facilities in general?

I’ll tag on to the question around automation – we often talk about the 4 Ds of self-storage that drive demand: divorce, death, downsizing, and displacement. In our industry we hire amazing, empathetic managers to help our customers through these difficult times. Bluetooth hasps are a great technology, but what our customer is ultimately paying for is service that starts and ends with a well-trained manager behind the desk. As we continue to innovate and deploy new products, let’s not forget the human element of our business.

What’s the biggest challenge facing Pogoda as it seeks to acquire more facilities? Increased competition from other investors?

It’s such a hyper local business, but we’re certainly watching over-supply and overbuilding. Those are a concern in some markets. But we have a sound approach to selectively buy properties where we can grow smart and not just fast.

Do you see the current frenzy, if you can call it that, to buy self-storage facilities easing at some point soon?

That’s a tough one to answer. We’re lucky to be in a very resilient industry. But it isn’t as well kept a secret as it used to be. I think we’re all lucky that self-storage was not disrupted (during the pandemic) the way retail, hospitality and food services were. As a result, there are more eyes on the self-storage space. But I don’t see big changes in customer behavior and in demand for storage. It’s still an industry with a lot of opportunity for consolidation and I don’t see that changing anytime soon.

Does it help you with so many investors in the market to be a company that kind of focuses on secondary and tertiary markets? It seems the big REITs aren’t as interested in those markets.

Sure. If we find a property in that sweet spot where we can add more value and get a little more creative than some of the REITs might, it’s certainly something that helps us.

What individual strengths do you hope to bring to Pogoda? What field of expertise do you think you’re strongest in?

Thanks for asking that. I’m less focused on what I contribute as an individual and more focused on how we can leverage the strengths and knowledge of our team. Can I give you a quote from Phil Jackson, the former NBA coach and player. He said: “The strength of the team is each individual member and the strength of each member is the team.”

The approach that I’m coming in with is hopefully trying to empower a dynamic organizational culture.

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Jay Fitzgerald