An East Coast company has put its own twist on fully automated self-storage, and customers have responded with resounding approval.
10 Federal Storage LLC opened its first built-from-the-ground-up automated and unmanned 155-unit self-storage facility in Graham, NC, in mid-2016 and it took just six months to lease it up — a rate twice as fast as what the company expected.
“We are the third iteration of what is automated or unmanned,” said Brad Minsley, co-founder of 10 Federal. “The first generation was people throwing up a number on a fence … the second generation has been kiosk-driven … the third iteration involves more hardware.”
10 Federal, a diversified real estate company based in Raleigh, NC, also recently automated a formerly manned facility in Durham, NC, with similar success — achieving more rentals per month via automation than it had ever achieved with a manned facility.
The company plans to raise a $10 million acquisition fund in 2017 —primarily from outside sources — to acquire and convert existing self-storage facilities in the Southeast to full automation while continuing to develop its own fully automated product closer to Raleigh.
More automation to come
While automation in the self-storage industry has been around for more than a decade, owners/operators have been slow to adopt it.
“We believe the peak (in self storage automation) hasn’t come yet,” says Robert Chiti, president and CEO of OpenTech Alliance, which has produced unmanned self-storage kiosks for 14 years and has 1,000 kiosks in operation at self-storage facilities around the country.
“I’m happy that people are starting to figure it out,” Chiti said. “People are seeing that automation works.”
Outside the industry
A small self-storage player, 10 Federal operates just four storage facilities currently, but cut its teeth on automation in its multifamily holdings.
For its automated storage facilities, 10 Federal went outside the storage industry and contracted with Advanced Kiosks, which installs self-service kiosks for the healthcare, human resources and retail industries and also for churches, schools and governmental agencies.
Will Manning, marketing manager at Advanced Kiosks, said 10 Federal is the company’s first self-storage client but said the company has been designing and building self-service technology solutions for other industries for 15 years.
Open playing field
“Automated self-storage facilities are unquestionably the future for the industry, and pioneers like 10 Federal are getting a taste of that future today,” Manning said. “There is no doubt that the impact self-service technology will have on this industry will be profound, and we are excited to help that happen.”
Manning said existing patents related to self-storage technology have limited the options for owners, but said those patents are expiring, which should open the doors to more technology innovation in the area of automation.
The patent protecting OpenTech’s line of INSOMNIAC self-storage kiosks expires in 2017.
“As they (patents) expire, organizations like 10 Federal can look forward to an exciting and increasing number of options for automation, as well as the increase of competition in providing them,” Manning said. “Competition in any industry is the impetus for innovation and, from that, we learn better ways to help our clients help theirs.”
10 Federal purchased a commercial grade kiosk from Advanced Kiosks that takes payments and prints receipts. It includes a handset for customers to contact a 10 Federal call center if they have a question. Advanced Kiosks provides cloud-based management for the kiosk, automated power management and usage analytics.
10 Federal’s Minsley said it opted to go with Advanced Kiosks because the company was able to customize the technology to fit their specific needs, which included the ability to operate its own call center and to avoid a monthly subscription fee on the kiosk.
As far as other aspects of automation, 10 Federal turned to well-known self-storage players including Janus International and PTI Security Systems.
For example 10 Federal facilities feature Janus’ SecurGuard Electronic Lock, which has been on the market about two years, said Terry Bagley, vice president of business development at Janus.
“One of the holes (in self-storage automation) was the ability to automate the locking and unlocking of individual unit doors, which is something that we’ve solved,” Bagley said.
Janus partnered with PTI Security Systems on the lock, which is installed on the interior of a storage unit, and which can be locked and unlocked remotely through a smartphone app, a remote access code on a keypad, or with a fob. The lock provides continuous monitoring, automates the process of restricting or granting access, and supports online, call center and kiosk rentals.
An automated future?
As self-storage automation technology improves, more owner/operators will consider automation, Bagley said, which could result more construction of small facilities in tertiary markets where labor costs previously would have made such projects unprofitable.
Minsley said 10 Federal believes fully automated, unmanned facilities make good sense for the customer and the owner/operator.
“Rewind 40 years and consider the following three transactions: Getting money out of bank; washing a car, and storing stuff in a box,” Minsley said. “Tell me which of those things, in 2016, wouldn’t be fully automated. It’s staggering to me that storage is the one that isn’t fully automated.”