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South Side company uses marketing to get edge in crowded self-storage business

Self-storage growth

• There were 48,194 self-storage facilities in 2012 in the United States, up 15.5 percent from 41,750 in 2006, generating $22.5 billion in revenue.

• In Pennsylvania, there were 1,620 locations last year, up 15.3 percent from 1,405 in 2006.

• In the Pittsburgh region — Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties — there were 314 in 2012, up 15.4 percent from 272 in 2006.

• Nationwide, occupancy is about 85 percent on average.

• Rental rates nationally for a 10- by 10-foot unit range from $100 to $120 a month without air conditioning to $120 to $140 a month with air conditioning.

Source: Self Storage Association

Tuesday, Sept. 3, 2013, 10:38 p.m.
 

Demand for self-storage and a clever marketing ploy are helping a young company grow in a landmark Pittsburgh building that was instrumental in moving materials and food for much of the past century.

City Center Self Storage in the RiverWalk Corporate Centre in the South Side, for years known as the Terminal Buildings, has almost doubled in size since opening in January, said Nick Lackner, who manages the business.

Here and elsewhere in the nation, more people are seeking self-storage units, and City Center's business has grown from 60 units nine months ago to 110.

To spur that growth, City Center borrowed a marketing gimmick from Progressive Insurance, which uses enthusiastic TV sales cashier “Flo” to highlight the fact the company helps consumers comparison shop by giving them competitors' rates. City Center's website offers customers information on pricing and services for at least 21 of its competitors, including rating summaries from reviews on Google and Yelp, and a broader listing of 61 of its 98 competitors in Allegheny County.

“We found that more and more people are consulting online directories for information,” Lackner said.

Each week, he checks websites of competing businesses and compiles pricing and other service features such as air conditioning and elevators into charts that he posts on City Center's website — a “Price and Value Report” and a “Self Storage Directory” of competitors.

“We can't satisfy every customer, but if the information is on our website, and if they can use it to choose where to store their goods, that's great,” Lackner said.

One competitor, Guardian Storage Solutions, remains the largest self-storage operator in the area with 12 locations. Its marketing manager, Christina Alvino, said City Center's listings are just the latest twist on self-promotion in their industry.

Guardian and City Center are among hundreds of operators who pay to promote themselves on sparefoot.com, one of several sites that collect information from self-storage companies nationwide.

“Such aggregators allow a customer to reserve a unit online from anywhere in the country,” Alvino said.

Michael Scanlon, CEO of the Self Storage Association in Alexandria, Va., the industry's primary trade group, said City Center's marketing technique of providing competitors' pricing may be unique in the self-storage industry but not in the business world.

“It's the Progressive Insurance model — we'll tell you what competitors charge and what we charge,” Scanlon said.

Lackner hopes it gives City Center an edge as competition grows.

A report by Cushman & Wakefield Inc. found “robust” self-storage industry market conditions, citing significant gains in occupancy and investment of more than $2.5 billion in the past three years. Growth since the 1970s has been fueled by a mobile population moving to new jobs, retirement condominiums and apartments, plus businesses that now account for about 30 percent of use.

Other experts say most self-storage facilities have a sphere of influence of three miles or less, and saturation in many markets requires operators to market themselves to much smaller areas.

The Lackner family and partners bought Pittsburgh Terminal Properties Corp. from the Hillman Co. in 1963. The Lackner family owns Paper Products Co., a wholesale distributor that is a major tenant in the building.

With about 1 million square feet of space, RiverWalk is about half the size of U.S. Steel Tower, the region's largest building. A typical floor is about the size of a football field, divided into smaller spaces. The building has 48 functioning freight elevators.

Designed by architect Charles Bickle, the building opened in 1906 as a state-of-the-art warehouse. In May, the National Park Service listed it on the National Register of Historic Places.

Though it appears to be two buildings when viewed across the Monongahela River from Downtown, it is one building with two towers rising four floors above a shared two-story base. One tower was converted to offices and warehouse space years ago; the other is still used for storage.

Lackner, 32, said his family last year decided to convert sections of the then-unused tower to self-storage use: “We're sort of bringing it back to its original use.”

The family has committed three floors for self storage, but these have not yet been fully converted. Occupancy is about 90 percent for the self-storage units that have been installed, Lackner said.

The entire building, including the self-storage business and office tower, is about 66 percent occupied. Its 73 tenants include Green Building Alliance, Dollar Energy Fund, the Leukemia Society and a mix of computer software, artists, photographers, and industrial and wholesale distribution.

John D. Oravecz is a Trib Total Media staff writer. Reach him at 412-320-7882 or joravecz@tribweb.com.

 

 
 


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