Seth Bent is at it again.
The founder of Red Dot Storage, owner of fully automated self-storage facilities around the country, has launched a new interactive brokerage platform. The new venture, called Storage Exchange, aims to help sellers and buyers of facilities to more easily conduct transactions – and pay lower brokerage fees in the process.
The “operator-centric transaction platform” allows sellers of self-storage facilities to sign into online accounts at Storage Exchange, research extensive market data provided by the exchange, list properties for sale, and connect with potential buyers of properties.
“The platform is basically a brokerage service that’s less about showmanship and sales and more about data and transparency,” said Bent, who soft launched Storage Exchange this past fall and officially debuted the service this month. The new venture currently has eight employees.
Institutional quality service, less commissions
The Storage Exchange hopes to regularly attract both sellers and buyers to its online site. The service is mostly aimed at helping small and regional self-storage owners sell their properties without hiring traditional brokerage firms that can charge up to 6% commission fees. The maximum brokerage fee is 2.5% at Storage Exchange.
Bent said Storage Exchange is targeting self-storage owners in “non-NFL markets,” as he describes them. These secondary and tertiary markets are less dominated by large self-storage investors, such as real estate investment trusts (REITs) and private-equity companies.
“We want to provide these market with institutional quality service,” said Bent.
During its soft launch, Storage Exchange had a number of listings – and the early response seems to have been positive for some.
Walter Galdenzi, who heads Scotty’s Mini Storage in Texas, listed one self-storage property in Oklahoma on Storage Exchange – and ultimately got three offers.
“I was very pleased,” Galdenzi said. “I got my asking price. I’ve given them other listings since.”
Jon Salanis, owner of LocalStorage in New Jersey, said he used Storage Exchange to buy a self-storage facility in upstate New York.
“I think what they have is potentially disruptive. It’s going to be very competitive,” Salanis said.
Guiding sellers from start to finish
Bent stressed that Storage Exchange transactions are not all fully automated. The company provides experts to guide sellers and buyers through the transaction process – and it encourages in-person talks among participants when necessary. The company also has licensed real estate personnel to assist people with often arduous and time-consuming real estate issues.
Storage Exchange offers participants to a valuable trove of market data – such as information on demographics, competitors and area prices — and to better help them assess the value of properties. Sellers can input specific information about properties that potential buyers need and want to know, he said.
“I think it’s a much needed improvement to brokerage,” said Bent. “We want to put as much information forward as possible to help people make decisions.”
Bent, a long-time veteran of the self-storage business, started Red Dot Storage in 2013. Red Dot is perhaps best known for its lobby kiosks that allow customers to sign up and pay for storage without interacting with employees.
“We developed a lot of proprietary software at Red Dot,” said Bent, who retired as CEO of the company in 2019 to start working on his next venture, Storage Exchange. Bent retains an ownership interest in Red Dot, but he no longer is involved in day-to-day business operations.
“I knew I wanted to stay active in the industry,” he said of his preliminary visions for starting a new company. “I thought there was room for improvement in brokerage.”
Bent said Storage Exchange has tentative plans to introduce management and financial services, perhaps later this year, in addition to its brokerage services, but he declined to provide details.