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W W W. M A I N E B I Z . B I Z 23 F E B R UA R Y 8 , 2 0 2 1 C O M M E R C I A L D E V E L O P M E N T sell, so now he has two properties. ese are individuals who are starting out." She adds, "It's a very fragmented buyer pool." ere are different types of storage facilities, notes Dawn LaFlamme, Maine Self Storage Association's treasurer and owner-operator of Swift Storage in Rockland and Belfast Self Storage. LaFlamme grew up in the industry. Her parents built both facilities, which would count as mom-and-pop opera- tions, when she was a teen. Facilities can range from basic rows of metal units to multi-story, climate-con- trolled buildings. LaFlamme's business offers additional services such as portable units with delivery and heated storage for recreational vehicles, which requires more employees than basic storage. Minimal management e sector has various levels of opportunity: established facilities with stabilized cash flow; opportuni- ties to add value or expand and then raise rents; and the chance to find land and build new. Some buyers, like Pride, are looking at that "chapter two" opportunity; others are diversi- fying their commercial portfolio or starting their careers. "One thing people like about stor- age is that you can run a large facility with two people," says Neville. at doesn't make local economic development officials happy. "ey want jobs," Neville contin- ues. "We say, 'Sorry, there might be three if you count the snowplow guy.' Otherwise, it's low impact to the com- munity and provides a great service, but it's not a lot of employment. But communities do get tax revenue from previously undeveloped land." Management isn't complicated. A typical facility runs with a manager and perhaps a part-time employee, says Robert LeBlanc, a specialist in self-storage facilities and an associate with Colliers International in Portland. "A number have a just a software system," LeBlanc explains. "e own- ers of one in Portland have a remote access system that allows people in." "Probably the biggest expense is real estate taxes," says Plourde. "en it's just a matter of security, main- tain the property, insurance. Plowing, shoveling the doors so they don't freeze up." "Snow is our biggest enemy," says LaFlamme. Fixer-uppers How profitable is self-storage? Very, especially if improvements or expan- sion mean rents can be raised, says LeBlanc. Many investors, he says, look for fixer-uppers in stable markets with a dependable customer base. at's part of the approach for Patriot Holdings, a Las Vegas-based real estate investment firm whose spe- cialties include storage facilities, with a focus on New England. Acquisition criteria include exist- ing facilities of at least 30,000 square feet with the ability to expand to 50,000 square feet or more and the potential to increase rents, according to Patriot's website. In recent months, Patriot's Maine purchases included a five-acre, 122- unit facility in Naples and a 130-unit facility with an adjacent five-acre lot in Fairfield. Both have room to expand, says Jeremiah Boucher, a principal with the company. "e real profitability is when you can scale," he says. at's because management costs are fixed. e company aims for year- over-year returns of 12% to 18% and sometimes better. "What we like is that the operat- ing expenses are low," he explains: a minimal workforce plus taxes, utilities and other costs are typically less than one-third of revenue. Another attractive aspect of the business, he says, is that up to 70% of customers tend to stay for at least two years and some for 10 years or more. "So it's not as operations-intensive as you'd think," he says. Boucher notes that 65% of customers are women. Patriot caters to that seg- ment, he says, by developing upgraded sites with safety measures such as good lighting and security cameras. Overall, he says, the market has become more active over the last year or two. "I think traditional real estate has been through pretty chaotic changes in terms of retail and office being turned upside down with current trends," related to factors such as online shop- ping and the pandemic, he says. Rural trends Additionally, he says, there's a trend of people moving out of larger metropoli- tan areas to lower-cost housing markets and remote work, which is driving new opportunities in the storage market in smaller, more rural communities. ose trends are propelling Patriot's own investments in places like Naples and Fairfield, he explains. "We believe that trend will con- tinue," he says. "We're having a lot of success even in less dense areas." New opportunity inherent in Scarborough's residential boom was the motivation behind Pride's development. His general contractor Diversacorp and their subs have been going full speed; he expects to open this August. As a busi- nessperson who likes to keep operations "lean and mean," minimal manage- ment required by the business suits him well. At the same time, he enjoys his customers. "I'll drive there at 10 at night for people who call and need a unit," he says. "So I'm very hands-on and will- ing to do the work." Neville notes the industry appears to be inherently stable — able to weather, say, a pandemic. "People need storage," she says. "ey might not need it today, but they'll need it tomorrow." Laurie Schreiber, Mainebiz senior writer, can be reached at lschreiber @ mainebiz.biz P H O T O / C O U R T E S Y L A F L A M M E FA M I LY Dawn LaFlamme, at her multi-generation business Swift Storage in Rockland, finds the business has value-add opportunities such as portable-unit rentals. F O C U S

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