In the aftermath of the devastating self-storage fire that unfolded on November 30, 2023 in Cleveland, the resilience of self-storage facilities has come under renewed scrutiny. AJ Osborne, the CEO and Founder of Cedar Creek Capital and a prominent influencer in the self-storage investment sphere, sat down with us to shed light on his comprehensive approach to fortifying a self-storage investment property against unforeseen disasters.
Osborne has an impressive 20 years of experience as a self-storage owner, operator, and developer. He is a founder and board member of the largest self-storage co-op, Storelocal, as well as Tenant Inc. — a SaaS company supporting self-storage facility management. AJ has also written the No. 1 bestselling book on self-storage investing and hosts the top-rated and listened-to self-storage podcast, Self Storage Income, with latest podcast project Saving Capitalism on its way to the same notoriety.
Without further ado, Osborne dove right in with his insight on the Cleveland fire and how we can take it as a lesson in the self-storage community, because when one is anxious about the potential damage to their own property in light of recent news, the best thing to do is cut to the chase.
Don’t Wait Until Disaster Strikes
“It is such a tragedy when something like this happens in our space, and our condolences of course go out to the affected parties in Cleveland,” Osborne said. “When something like a fire or flood happens, we are reminded that preventative measures are the key step to making sure we are prepared for any given situation.”
To self-storage owners large and small, Osborne went on to explain that you should make sure you have your “bases covered” now, because you can never know if or when something will happen.
“It is important to take time to make sure there are strong standard operating procedures (SOPs) in place for your team in case a disaster strikes, and ensure your team knows exactly what those SOPs are, so they have the necessary resources to carry them out without hesitation,” he said. “Additionally, make sure to go over these SOPs often during training or refresher training — oh yeah, and have refresher training — so that everyone on the team is always on the same page.”
Recommended SOPs from Osborne include ones for preventative measures, handling an active fire or emergency, and post-emergency measures such as tenant notices, communications, coordination with insurance, first responders, and investigations.
Taking it back even further, one of the crucial aspects he highlighted in our discussion is the importance of investing in and building with high-quality materials.
“Metal buildings don’t burn as easily as wood construction buildings like the one in Cleveland,” Osborne pointed out, underlining the significance of sturdy construction to mitigate potential damages.
Don’t Get Too Flashy
Osborne also cautioned against installing electrical components in units, a practice that not only elevates construction costs, but also provides tenants with easier access to potential fire hazards.
“Think twice about installing electrical, lighting, and/or outlets in units — doing so can increase your cost of construction and allow tenants access to electrical components more easily,” Osborne said. “Those things can — and do — result in fires, increased utility costs, and more.”
The Fine Print
Additionally, he stressed the crucial role of robust contracts.
“It is crucial to have strong rental and tenant contracts to limit legal liability and exposure, and of course altogether more important that those contracts are fully executed, complete, and signed by those tenants,” Osborne said.
His companies and affiliations under the Cedar Creek umbrella are a one-stop shop for all things self-storage. For those who don’t want to deal with the overwhelm of handling the property management or contracts, Osborne recommends using advanced property management software like Tenant Inc. and Storelocal to streamline the contract process, ensuring completeness before any unit is rented.
Storage Units Are Not Apartments
Another key takeaway from Osborne’s insights was his emphasis on strong management practices.
“Regular facility audits that are actual, real, physical walkthroughs are particularly important — especially given the huge push right now to manage facilities more remotely or virtually,” Osborne advised. “Either do it yourself, or hire someone who can. No matter what, you need consistent and trustworthy boots on the ground.”
This approach helps prevent potential issues such as people living in units, which can lead to hazardous situations, like fires or sanitation issues. To enhance monitoring and security, Osborne suggested integrating technology into the mix.
“Use tech to help ensure people aren’t living in units,” Osborne continued. “You can use tech such as Janus International’s NOKE suite of products, which include sensors that go inside each unit, notifying you and your team if someone is inside theirs with the door closed.”
Monitoring gate use and access hours is another critical aspect of Osborne’s disaster preparedness strategy: “Monitor gate use and access hours when tenants come and go as needed to help ensure tenants are not living in their units,” he said.
Small But Mighty
The importance of fire extinguishers, even if not mandated by code, was also underscored by Osborne during our talk: “Even if code doesn’t require it, have fire extinguishers accessible in multiple locations throughout the facility,” he said.
Insurance, Insurance, Insurance
Insurance emerged as a non-negotiable element in Osborne’s disaster mitigation plan: “Get ALL the insurance!” he said. “Have fantastic, all-encompassing, ‘whole-nine-yard’ insurance coverage to protect the building and your business as a whole.”
In conclusion, Osborne’s proactive and holistic approach to disaster preparedness serves as an easy but important guide for self-storage owners navigating the challenges of an unpredictable world. By implementing these measures, the self-storage industry can strive to be more resilient, safeguarding both their investments and the safety of their tenants.
About AJ Osborne
AJ Osborne is the CEO of Cedar Creek Capital and has an impressive 20 years of experience as a self-storage owner, operator, and developer. He is a founder and board member of the largest self-storage co-op, Storelocal, as well as Tenant Inc — a SaaS company supporting self-storage facility management. AJ has also written the No. 1 bestselling book on self-storage investing and hosts the top rated and listened to self-storage podcast, Self Storage Income. Accredited investors can find more information here: cedar.cc/invest