During the recent SSA Fall Conference and Trade Show, we had the opportunity to engage with industry experts, gaining insights into the current self-storage landscape. James speaks with Brett Copper of Copper Storage Management, discussing their new C3 Call Center, how it can help benefit smaller facilities, and the challenge of REITs slashing rates post Extra Space Life Storage merger.
James: Brett, always such a pleasure to speak with you, thank you for taking the time to talk with us, and congratulations on the Copper Self Storage Call Center. So I just got a curiosity, what we're seeing on a high level with the Extra Space Life Storage acquisition is a lot of these REITs have been slashing their asking rates, average price per square foot is dropping a lot to really drive occupancy, but what solution does C3 provide for facilities that maybe can't afford to drop rates so dramatically over these first two months?
Brett: Yeah, I'd say it's a great question. So we designed the C3 solution, which is just all call center only stores, exactly for those smaller stores that either can't afford management, or maybe they're in a place where they used to be able to afford it, rates have gotten so low, they need an interim solution to get them there. And so we created a platform where they can still rent units, have that extremely strong sales force, be able to make sure every single call gets answered, that way they're not missing out on rentals. It's very competitive, and it's been successful so far. We launched back in May, and people are coming on because for that exact reason. They just can't afford full management or a style of management that maybe they can when the market rebounds.
James: I love that you guys are offering almost levels of management to these facilities. Who would be your ideal candidate? What kind of a facility size and what market would be ideal for C3? What areas are you looking at?
Brett: Yeah, that's a great question. We really cater to two different groups of people. If you're under probably 150 units or so, just dependent, then C3 is a great option for income-based. Because you can't afford management fees, those full things. Or if you are a facility that you want to keep management in-house, where you already have an infrastructure, you might have 70 stores that's built out, well then it's a good solution. Because at that point, you can take all of the onus off of the managers you're currently utilizing where you're having a heavy load for them to have to run those stores, do revenue management, marketing, and be your sales arm, and you can operate. Whether you're really small or maybe you're a big operator that runs your own stores, it's a fit for either one of those.
James: Great that you have a huge customer base out there. What we're seeing though is a lot of acquisitions and consolidation in the industry. What are you seeing from your end, these small mom-and-pop stores being able to stay competitive with bigger REITs, even in tertiary markets? What are you noticing from your side?
Brett: First and foremost, the heavy markets, the really competitive markets, when REITs are slashed where they are, if you've bought a big site, it's very difficult to make the numbers work right now, especially where REITs are. We're actually seeing the tertiary smaller sites are performing much better because they can afford to lose 20, 30, 40% in pricing because you're not carrying a heavier note. You're not carrying those big burdens and liabilities. We're seeing that those stores, people aren't having to retrade currently. Some are, if you've got a variable interest rate loan, if that's coming back up, but overall, they're able to survive it because they can keep costs low. They're not carrying a heavy note. The big stores are really hurting right now. It's very difficult to base your numbers on COVID numbers, and then now you're here and your store's bleeding, and it's hard to make it survive.
James: That's a great perspective about how the tertiary markets are able to drop it at less of a hurt. That makes a lot of sense to me. Brett, thank you so much for your time today, and congratulations on launching C3. I look forward to speaking to you again. Thank you.