Some 73 million jobs could be eliminated through automation by the year 2030, according to a recent report from McKinsey. Advanced robotics and artificial intelligence threaten to slash work opportunities for everyone from insurance adjusters to fruit pickers.

So, just how vulnerable are self-storage managers?

Self-storage kiosks are not a new phenomenon – they have been around for several years. And while they are not yet mainstream, automation has been picking up steam lately as a new generation of tech-savvy customers embrace transacting over a screen.

Anna Taylor, loan officer and industry expert for the Live Oak Bank self-storage team in Wilmington, NC, said that she’s seeing an increase in the number of people requesting kiosks as part of their financing all over the country. Taylor is also seeing an increase in operators seeking loans to build unmanned facilities that don’t include space for a manager’s office.

“When I started lending to self-storage facilities in 2015, the consensus was that automated self-storage systems would never work,” she said. “But we’ve seen that rapidly change.”

To Taylor, the change was inevitable.

“If you look around, there’s more kiosks everywhere – such as airport check-ins,” she said. “And more people are doing things like ordering coffee via an app, or scanning their own groceries. It was just a matter of time that automation made it to self-storage.”

There’s an app for that

The increasing use of automation is sharking up an industry that has seen little innovation since its inception, according to Taylor.

As existing unmanned facilities have proven to be successful, reluctant operators appear to be thinking twice.

An increase in younger, urban-centric self-storage customers also seems to be a driving factor in the heightened popularity of automated facilities.

“Younger generations are used to using their phones for this sort of thing,” Taylor noted. “It’s more an adjustment for an older customer who might want someone to help them understand how large a unit they might need for two mattresses and a couch, for example, whereas a more tech savvy customer can figure it out using 3-D images that are provided on an operator’s website.”

An automated 10Federal facility in Belmont, NC

Facility of the future?

Raleigh-based 10 Federal Storage has raised $5.5 million over the past year for the sole purpose of buying manned self-storage facilities and converting them to unmanned facilities, according to Clifton Minsley, a principal of 10 Federal.

And, it hopes to continue to raise more.

So far, 10 Federal operates nine unmanned facilities in North Carolina and is in the process of purchasing another.

Of the nine, it had purchased manned facilities and converted them to automated. It built the other three from the ground up. Existing facilities are located in Lowell, Belmont, Asheboro, Gibsonville, Graham, Hillsborough, Chapel Hill, Durham and Wilmington.

“We just like North Carolina as a market,” Minsley said. “We’ve been blessed with a. good backyard. When the time comes, we will assess if it makes sense to step into states that surround North Carolina.”

10 Federal also currently has three more unmanned self-storage facilities under development. It’s broken ground on one, and will break ground on another in 60 days. Minsley expects to begin construction on the third in late summer.

He estimates that the existing stabilized properties are on average about 90 percent leased.

Man vs. machine

“It’s going great,” Minsley told Sparefoot Storage Beat. “The concept of eliminating a payroll line item from opex helps numbers. We trade that off for the cost of our call center.”

He estimates that 10 Federal is able to save on about one-third to one half of a manager’s salary by replacing them with automated technologies.

“Our goal is to be able to offer a customer service experience that is as good or better as a manned facility,” Minsley said. “We think our facilities are welcoming, clean, sophisticated and advanced.”

If a customer arrives and wants to speak to someone in-house, they do have the ability to dial into an in-house call center.

“It’s been appealing to folks who like technology,” he added. “They like being able to use kiosks at facilities or a sign a lease online.”

Early adopters

Being automated has had an ancillary benefit that 10 Federal didn’t necessarily expect.

“We get email notifications about people singing leases at all hours of the night and morning,” Minsley said. “So we’re seeing a larger catcher’s mitt for traffic, and as such, we’ve seen traffic numbers increase which exerts good pressures on occupancy and in turn, rental rates.”

Overall, he believes the self-storage industry is in the “very early stages” of automation but that it will “undoubtedly” be moving in that direction.

“I think you’re hearing a lot of that conversation occurring right now,” Minsley said. “Sometimes smaller players like us can be more nimble than the bigger players (such as REITs). And maybe they’re just waiting to see how things go with companies like us.”

For her part, Taylor believes that REITs see the value in automation.

“We have seen some REIT facilities with kiosks that allow for online reservations, rentals and payments,” she said. “Especially when it comes to online reservations and bookings.”

Mary Ann Azevedo