Self-Storage SOLUTIONS for SHIFTING DEMANDS

Is your storage facility leaving money on the table? 

Scott Meyers sits down Greg Ellsworth—president of Toy Storage Nation and founder of Self Storage Consulting Group—to explore the evolving world of self-storage and RV/boat storage. 

Greg dives into why the old-school "build it and they will come" model is outdated and how data-driven design and multi-use flexibility are the keys to maximizing ROI. 

From RV amenities and pro-storage for contractors to the booming demand for truck and toy storage, Scott and Greg reveal how innovative development, smart entitlements, and reading between the zoning lines can unlock value in overlooked land. 

WHAT TO LISTEN FOR

1:22 From College Grad to Storage Consultant

4:41 Why Operations Must Influence Design

9:11 The “Crystal Ball” Approach to Feasibility Studies

14:19 How Rising Interest Rates Reshaped Solid Deals

23:27 Why Boat & RV Storage Demand Isn’t Slowing Down

33:49 Turning “Worthless” Land Into Storage Gold

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Chapters

• 1:22 From College Grad to Storage Consultant
• 4:41 Why Operations Must Influence Design
• 9:11 The “Crystal Ball” Approach to Feasibility Studies
• 14:19 How Rising Interest Rates Reshaped Solid Deals
• 24:37 Why Boat & RV Storage Demand Isn’t Slowing Down
• 34:59 Turning “Worthless” Land Into Storage Gold

Transcript

Announcer (00:03):

This is the self Storage Podcast with the original self storage expert, Scott Meyers.

Scott Meyers (00:12):

Hey everyone. Welcome back to the Self Storage podcast. I'm your host, Scott Meyers, and in today's episode we have Mr. Greg Ellsworth, both from Toy Storage Nation and the self storage consulting group. Greg, welcome to the show.

Greg Ellsworth (00:24):

Thanks. Happy to be here, Scott. Thank you.

Scott Meyers (00:25):

Greg, you and I have been at this for a long time in storage, and I can't believe that we haven't had you either on the podcast or that you and I have even had a personal conversation. I know we are walking off stage at the ISS or SSA shows when the other one is walking out and we haven't had a chance to really get to know each other, but I'm glad you're able to make it today.

Greg Ellsworth (00:42):

Yeah, thank you. I'm excited to get to know you. We've crossed paths many times before. A lot of similar coincidences have happened that we're tracking with one another.

Scott Meyers (00:52):

Yeah, yeah. Well, we've had an awful lot of folks that are working with you on the consulting side, and obviously we do the mentoring side as well as a little bit of a consulting, so that's when people are looking to get into the business, they find us. So that being said, tell me about how you got into self storage and how you got to the place where then you began and decided that a consultancy group and then being a board member of toy origination was just the way to go. Those are two hats that require an awful lot of work. So tell us a little bit about your background and your experience and how you got to where you are now.

Greg Ellsworth (01:22):

Yeah, it's an interesting background. I graduated college, had a family member working in self storage. They were developing a couple sites. They asked me to get involved and helped take those from conception to building. And we worked through the construction portion, we worked through the management, a lease up, and from there we kind of grew the company. It's an interesting story because we were third party managing for a long time, and I had a client call me and say, we're going to build a new storage property, and naturally I said, congratulations. I look forward to managing it when you're done. And they said, no, you're going to help us with that. And I said,

(02:02):

(02:02):

Appreciate the offer, but I don't do that. And they said, you are now. So from that point, and that was about 10 years ago, 12 years ago, we started doing general contracting, third party management, architecture and feasibility studies. And what we have found is by understanding each one of those steps, we're better able to foresee issues later on down the road, make early decisions that benefit us later on and make informed long-term decisions that allow us to save money at the end when we're in the operational phase that appreciate the assets, make it more valuable, make it easier to refinance, make it easier for the bank loans and so forth. So self storage consulting group is involved in that full circle of conception to reality. And then as far as Toy Origin Nation, it's a great media group that helps teach individuals about boat and RV storage, subset of the self-storage industry, help them understand how to the best practices and gets them together in a forum that allows people to bounce ideas off one another, get to listen to the industry experts that have been doing boat and RV storage class A for a long time.

(03:17):

And we've seen a lot of value, both for us as vendors and myself as the board president, but also the attendees that come with a lot of great insights and experiences that they've had that I necessarily may not have had. And so it's a great form.

Scott Meyers (03:32):

Yeah, yeah. Well, I want to hit the pause on Toy Storage Nature for a minute. We're going to come back to that because obviously just like gangbusters, the market boat and RVs, there are certainly not enough facilities out there, but I want to go back to the consulting group side and 10, 12 years ago when this owner was pushing you to get involved on the front end when you were going to manage it as well, that was right about the time where I would say it's almost a little bit foreign, and the reaction was the same as you had for most people until we recognized that, oh, it probably is important if we're going to manage this and operate this successfully, that we do have a hand in the design and the unit mix and anything else, traffic flow, I mean you name it on the front end, but to your point before that, operations was completely separate from development and it was almost like the Henry Ford approach. Customer can't have any color they want, as long as it's black, well, we're going to build it and you just have to fill it. So I think the fact that you were forced into doing that is probably a blessing in disguise in terms of thus a consulting group was formed. Would you say

Greg Ellsworth (04:41):

Absolutely. It's interesting that just like you said, they bill, that we fill it, the idea that general contractors in architects should be designing your business and your income streams through the unit mix and the layout. Now you look back and it kind of seems asinine that somebody that doesn't understand the market demand is deciding what your unit mix is. However, the other portion of that is, is that when you start designing projects, you understand how you can save money longterm, even if it does increase your construction costs upfront. And so if you can compartmentalize those costs in your construction loan, but save it on the NOI side of the project later on, your project will value better, you'll cashflow better. And it's just, it's a better approach understanding the full life cycle.

Scott Meyers (05:31):

Yeah. Well one of the benefits of storage is that we can phase it in as well and scale it in depending upon if you're building a single story non temperature controlled facility on a five acre site, we could build a couple of buildings, three buildings and then see what the market holds and then be able to alter and adjust after that. But I'd say one of the more attractive types of facilities being built now is single story temperature control because people want the drive up if we can make it work on the land. And so really taking a step back to the drawing board has forced a lot of owner operators to take a look at the business model and say that, yeah, this big box three four stories hall isn't necessarily the best for this market.

Greg Ellsworth (06:07):

Yeah, I agree with you. I think what tenants are finally understanding is the more they have to touch their items, the more they get frustrated with the process of storage. And so when we look at these facilities and having a diversified unit mix, we're able to weather the storm depending on what that demand may bring in whatever season the facility is in. And self storage has always been a seasonal business. There's a cyclical nature to the way that inquiries come in and movings happen. And as you look at the project from the construction side, we're able to understand what we should be doing first, how to quickly phase that in, even from a sea of O certificate of occupancy approach, opening the office and a building first and then designing everything beyond that. But one of the things that is interesting that we have found is by getting involved in the architectural side, as you mentioned Scott, the unit mix is important in modifying that unit mix as you go along, finding out what units are most in demand, we can design the buildings so that your shear walls are in specific locations and then you know better how to move walls within your facility that doesn't degrade the structural integrity, but we can design that upfront so that we can have a 10 by 20, 10 by five or five by 10, whatever it may be. We can design that upfront and have that flexibility long term.

Scott Meyers (07:30):

So let's talk about the ways that you look at a project like what you just mentioned. When I look at the role of a consultant and many here in Storage Nation, I think if you pulled all of 'em, they would've a different view as to what your role is. I think in many cases, most people's familiarity with a consultant is, Hey, this is the price of admission. I have to get a feasibility study done, or I have to have a consultant guide me and produce a piece of paper before the lender will give me the money. And I think that is one piece. I tend to look at consultants. I think there are two types of services I think that I would go to a consultant for that many people do that we do. And one is, Hey, we've got this idea. I wouldn't even say an idea.

(08:16):

We've got this plot. We have the idea that we're going to put single story on that. We're going to put a multi-story, whatever this looks like, and here's what we feel in terms of the size of boat and RV on the back end of it. And then we take it to a consultant to say, what are your thoughts on this? And then the other side is I know people reach out to you to say, Hey, a blank slate. I got a bunch of money and I want to be in this market and either maybe I have a piece of dirt or I'm looking to buy a piece of dirt. What should I be looking for? And maybe even taking a step back at a 30,000 foot view and then come to you to really guide them as to what is the first step? Tell me what does that look? And that's the crystal ball approach I guess, which is, alright, Greg, what are you seeing in the market right now and what should I be chasing after and what should we be doing and how can I utilize you in the future? So can you speak to those maybe two sides and there's probably maybe a third and a fourth that I haven't thought of.

Greg Ellsworth (09:11):

Yeah, and you're absolutely right, Scott. A crystal ball approach is what a lot of people call for, whether they have the dirt or they don't own the dirt.

(09:18):

Everybody

(09:19):

Wants to know whether that crystal ball is projecting 3, 5, 10 years out in the future.

(09:23):

So the way that we approach that is the same whether they come to us with a bunch of money or come to us with an existing site either owned or under contract. And that is that we come with data and we analyze the data, we look at it objectively and make decisions based on what the market demands are. And I'll give you an example of that. When we do our feasibility studies, we take a three step approach. The very first step is a market study. We analyze supply demand in the market, what units are in highest demand, and do the rental rates follow that demand? There might be a huge demand for 10 by thirties in a specific market, but if the rental rates do not justify building more of 'em, then we take that out of our design and we go towards a 10 by 20 or we do covered RV or we change that approach.

(10:10):

But after we're able to quantify the demand in the market for specific unit sizes, then we pause the data collection and then we pivot to our architectural team that then designs the project on that specific parcel. Now we have our FAR, which is our floor area ratio. We have our easements, our setbacks, a lot of the code compliance issues that hurt a project, how much surface retention or below ground retention. Once we have that site plan, we now have our revenue stream, our unit mix is our product, it is our revenue stream. Now that we have that site plan drawn, then we apply financial numbers to that, then we put together the proforma. And a lot of times we'll complete that proforma and it doesn't work. The numbers just don't pan out as well as we'd like 'em to.

Scott Meyers (11:04):

And

Greg Ellsworth (11:04):

So before finishing the feasibility study, we stepped back to step two, alter that site plan and make that unit mix as good as possible for the return that we're looking for.

Scott Meyers (11:17):

And

Greg Ellsworth (11:17):

So historically speaking, a feasibility study was looked at as some hypothetical number, the amount of coverage you can get of certain units on that project. But we don't take that approach. We take a data-driven, a realistic approach. We apply a site plan to that project that way when we are completed with the feasibility study, we are creating the crystal ball because we have the data from the market study. We have a site plan that is actually buildable and that meets the city codes and compliance issues. And then we have numbers that back up that site plan so that when you go to the bank, it's a far more complete project

(11:55):

And there isn't the back and forth. Well, the return isn't so good or the lease up is taking longer because we have, what a lot of guys do is a banker mix, which is a lot of smaller units that have a higher price per square foot. We're going to go with what the market demand is. Typically what that lends itself to be is a quicker lease uptime, better absorption across that property. We have better rentals in each unit size instead of being heavy on one size and another size sits vacant for a while. But when we see that that return is better when you approach it with more data and more specifics instead of hypotheticals,

Scott Meyers (12:37):

Well, that's what a good consultant does. And we have an education and mentoring company and that's what we do as well, which is we say no a lot to our clients and now they may not like to hear it, but at the end of the day, we're not going to give you a big glowing green light and tell you to move forward knowing that the thing is going to fail and doesn't do anybody any good. And usually the lender's going to spot that anyways. But if you give a glowing review with a unit mix, that's not going to pan out just to get it through. And we're not doing anybody any favors. And if we're in these businesses for the long haul for a marathon, we're not going to be in business very long. But that's okay.

(13:12):

We have big shoulders and it's okay to say no to some projects these days. So let me ask you this, A couple of side note questions, just hopefully for benefit of the folks that are listening, how many projects are solid projects that you've looked at in say maybe the past three years, I guess since 2022, since what we consider maybe the tail end of a call it the heyday. How many solid projects did you have to say no to just because of the cost of capital or did the actual investor, your client say no to just because they couldn't put the capital stack together? And I guess what I'm asking for, is there some solid deals out there that you ran across, you say, what a shame or that are still there that just couldn't get done because the capital stack was too expensive?

Greg Ellsworth (13:55):

Yeah, I would honestly say since 2022 and even in until today, the cost of capital is obviously increased. And we're seeing that individuals, the prime acquisition product was a value add facility. That's what everybody wants. I want to buy an existing cashflow, I want to add onto it, whether it be a new building or another RV component.

Scott Meyers (14:19):

And

Greg Ellsworth (14:19):

Those were not very plentiful around 2022 because people were still in their low interest loans.

(14:26):

However,

(14:26):

We're coming into a season where those five year notes, those 10 year calls are coming due and they're not able to afford the project because they can't get the three, 4% interest rates like they were previously.

Scott Meyers (14:39):

And

Greg Ellsworth (14:40):

So we are seeing more deals come up that are a little bit more distressed, the margin's a little bit thinner.

Announcer (14:46):

But

Greg Ellsworth (14:46):

To your question, how many that we see that don't work usually issue is that the cost of capital is palatable, it's that they have the wrong unit mix, they have the wrong type of storage for that market. There is demand. We can go into almost any market and find demand for a specific unit type that isn't being quantified. And you give you an example, in Gilbert, Arizona, we built a project where we have drive up temperature control RV units, insulated doors, they can pull in their prevost million dollar RVs, close the door behind them. It's kept it 75 degrees year round, and the demand is unsatiable. We cannot build them fast enough. They're filling up. We have a waiting list. So it's not that the market doesn't have the demand available, it's that we are not providing the right product in those markets to attract the

Scott Meyers (15:40):

Individuals. So that's a perfect lead into my next question then as we in the past, we've, I would say pivoted only because we were forced to, if we were going to get approval, zoning approval, city board approval for some of our projects, unless they had another component added into it that the city liked. If it's an infill location close to the metropolitan, downtown metro area, they wanted retail on the bottom or they wanted a multifamily mixed into it. We had to get very creative with a building. They weren't going to allow zoning at 100% of all floors. And so we've had to get a little more creative within the confines of what is going to be fiscally feasible. So we've come from that place to seeing, okay, some of these things work. We don't necessarily like to take those measures because then it limits our buying pool on the backend.

(16:33):

There's storage facility owners, they're in the storage, business owners, operators, and they don't necessarily want to run a multifamily component or retail component or anything else. And so that we don't necessarily shoot ourselves in the foot, but it's a little more difficult. So now what we're looking at is altering the unit mix to going even larger. Everybody knows that there's a race for the last mile right now from the Amazon to the drop shippers of all sorts, and we're offering these 2000 to 2,500 square foot units that are ground level. Some of them could be storage suites that have an office component to it, or it just could be a larger unit for these, the Amazon folks, the eBay folks, even the independents out there to be able to be in the neighborhoods and again, at ground level. And then we're seeing traditional call, traditional self storage on top with our 10 by tens and five by tens. Are you seeing that in your design? Are you recommending that in any of your designs or are folks coming to you with a different unit mix that combines in SME or a small to medium sized enterprise intermingled with a traditional retail cell storage?

Greg Ellsworth (17:38):

Yeah. Scott, you touched on something interesting two points that maybe you didn't mean to touch on, but one that we have found is extremely important is really a game changer, and that is the entitlement process within these cities. What we have found is that the zoning professionals, the community development managers within these towns and cities that we like to build in, they don't know the code as well as they think they know the code. And I'll give you an example. We just recently built a project in Arizona and it was a value add project. We were building a two story building on top of our existing project, and they said that we were too far from a restroom that we had to put a restroom in this new building. I said, that is completely crazy. This is a non occupied space. They're not going to be here for more than 10 minutes. I don't want to do a bathroom. And what they had said was there was recently a publicly traded REIT that built in the market. They converted an old Walmart

Announcer (18:34):

Into

Greg Ellsworth (18:34):

Self storage, and they too did not meet the criteria and they had to put a bathroom in the back of that building. And upon further research and upon pushing and pushing and pushing with the city, we found out that there was an exclusion within their own code for self storage. And so the reason why this is so valuable and important is it's not the fact that we didn't have to put a bathroom in.

Scott Meyers (18:58):

It's

Greg Ellsworth (18:58):

The fact that this building was so far away from my sewer tap that I would've had to have my grade go down to a certain point and then another sump pump up and then down to the sewer. The bathroom costs me $400,000 to put in. I just save that cost. And it's all because I read the code.

Scott Meyers (19:16):

And

Greg Ellsworth (19:16):

When we go in front of these cities and may have these entitlement questions, the best person to answer those questions typically is not an architect. They don't understand the inner workings of your operations.

Scott Meyers (19:27):

And

Greg Ellsworth (19:27):

So when we are going in front of the towns and cities, we are setting the standard for the operations and we're able to better answer those questions for good or for worse. It's almost a frustrating experience for the planning commissions and for these planning departments because we have every answer in the quiver ready to go,

(19:46):

And

(19:46):

We're not able to throw these outlandish requests. But to the second pointer question, are we seeing that they're adding these extra revenue drivers into our projects? And the answer is absolutely. I hesitate, Scott, because when we do an enclosed boat in RV storage facility, we have a lot of contractors, a lot of businesses that they don't need the office component. They need a warehouse in space. And so a lot of our bigger enclosed units, over 50% of them are not being used for boat RVs. They're being used for goods

(20:25):

And

(20:25):

Business product. And so there is a diversity of the tenant

(20:30):

Base,

(20:30):

But the facility is designed to be nimble to whatever that demand is in the market. And I think boat and RV specifically, we can build in a secondary and tertiary market, not pay the higher cost per square foot or per acre for land. And an infiltration, and it still works just fine, but my numbers suggest that 34% of our RV tenants

Scott Meyers (20:55):

Also

Greg Ellsworth (20:55):

Have a storage unit somewhere else. When we're designing these, we put 34% of our square footage on that facility as traditional storage so that we're able to capture all of their self storage needs at our location instead of having them go somewhere else and increasing that headache and diminishing return for their own dollars spent.

Scott Meyers (21:17):

So I told you, we get back around to the boat and RV space eventually, and that's the perfect lead in that we've seen arguably maybe three new classifications, if you will, or just terms new self storage lingo within the past several years. And one of 'em you touched on is the RV spaces are the larger spaces that you had that were set out aside for RVs, but you have contractors coming in. And so we've recently heard pro storage being that new coin term for these contractors that are coming in that need a place to store the tool truck or their trailer or just some inventory and tools. It's the guy that hangs a shingle out and is a one man shop or two man or three man that runs a plumbing company or runs something else in just tools truck. And his trade is located in a larger unit.

(22:11):

We're seeing an awful lot of that recently. We've also seen contractor yards, which are the open air. So instead of an open boat or RV area, it's kind of cordoned off within. It may have walls, it may have a separate fencing inside. And we developed one of these in Colorado. It's a contractor yard where there's just multiple open air spaces for different contractors and businesses to come in and store things. And so we've seen a couple of different nuances to these now and then again, these larger spaces inside which are storage suites because they may have an office included in them or not. So I think we're seeing a little bit of a morphing of the industry as it continues to grow, but no bones about it. Boat and RV storage as a result of COVID. We've looked at the numbers. This is something that we've looked at in our mastermind recently.

(23:00):

One of the guys did a huge, well, he did a presentation and a huge data dump and tracked, and you've probably looked at this as well, Greg, is the amount of boats that are being produced on an annual basis and the amount of RVs that are being produced. And you're nodding your head, I'm going, and there's nowhere near the amount of development of square footage to be able to store all these, nor is it in place right now. And for the foreseeable future, we're talking years. I don't see that catching up. What's been your experience with that?

Greg Ellsworth (23:27):

It's interesting that I think everybody is talking about this. And one thing that Toy Stores Nation has done well is they've integrated in with the RVIA, which is the Recreational Vehicle Institute of America. And we're actually collaborating with the RVIA this November at the Dealer Association Network show in Vegas and having a spot on boat RV storage within their dealer networks. And what's interesting in how they impact us as much as we impact them is that in traditional self-storage, the amenities weren't as valuable as they are in boat and rv, correct? We would sell boxes, we'd sell mattress covers, we'd sell locks. And that was really mostly the extent of what we're selling tenant insurance. But in Bowen rv, there's a wide array of different amenities that we can offer that the dealer network has recommended to us and we've had to expound upon. And some of that is the tire fill stations, the dump stations, the various amenities for servicing URV, the wash base, those types of things. And what we're finding is that there are significant source of revenue within these properties, and we can better distinguish our property in the market if we have these amenities because listen, where I live, there's one dump station outside of my storage facility in our city. And when you go there on a Saturday after the 4th of July, you're waiting 45 minutes to dump your black and gray tanks. Whereas if you're storing at our facility, rarely do we ever have two people waiting for that speed up station.

(25:05):

And so thinking of these things as a potential revenue stream and an intrinsic value or a competitive edge both benefits the user as well as the facility on the financial side.

(25:18):

And

(25:18):

The dealers are giving us a lot of these recommendations because listen, the better you keep your batteries topped off of the trickle charger, battery lasts longer other than you keep the tire air pressure up the longer those tires last so they don't get flat spots and have these cracks and issues. So there is a reciprocal symbiotic relationship between the dealer work and the facility that can keep these RVs and depreciating liabilities as I like to call 'em in better conditions. So they last longer to create those memories.

Scott Meyers (25:51):

Yeah, well, we call them amenities, but I would say that's almost functional obsolescence if you don't do that. I mean, nobody wants to go anywhere else. I mean, the last thing they want to do is when they get ready to pick up and go is they have to go to three other places to get it serviced, to get it washed for dump stations to make sure that if their battery isn't charged and there's no way to do it there, there's no electric or anything else. I think before long you're going to lose those clients and nobody's going to come back because anything new being built down the road or anything being retrofitted, I think that's just a must. I think it's a necessary, not really an amenity, because people just don't want to have to go to those places any

Greg Ellsworth (26:28):

Longer if they don't have to.

Scott Meyers (26:37):

So are you seeing that same demand then, Greg, and what is the future of the larger, call it the nine, ten, twelve, twenty acre sites for boat and RV and pro storage, outdoor contractor yards, these larger spaces that are required, are you seeing no end in sight for the uptick in the demand? Is it limited or is it going to morph yet? Again?

Greg Ellsworth (27:00):

I think it is growing. It's still in its infancy and I think the demand is continuing because of the numbers of boats and RVs that are still being developed and manufactured out of Earnhardt, Indiana. We're seeing that there's actually a pivot now into more truck parking, which is a completely new concept within the self-storage industry, which is a place to store the semi-truck. There's a lot of independent operators that have nowhere to put their rigs when they're not out on the road. And specifically where I'm at in Gilbert, Arizona across the freeway is an industrial zone identified for international tax havens, and there is a distribution center for almost every major Fortune 500 company here. And so the number of semi-trucks on the road without a home to store their trucks in is an increasingly growing issue that we as a storage industry can capitalize on and meet a great return. Because a lot of times if we're in a tertiary market, we can acquire land in, like you said, the 10, 20, 30 acre portion, and we can phase that in. We develop what is our core industry and core competency in self storage and covered rv. Enclosed RV and the semi-truck are not as in demand of the covered scenario. They just want a place to put their rig that's safe and secure that it's not getting graffiti or damaged on damage to.

Scott Meyers (28:32):

And

Greg Ellsworth (28:34):

That's a significant revenue string for us at a couple sites where we're able to handle the bigger boat RVs, or excuse me, trucks. And so the demand is continually growing, but I think it's actually morphing into casting a wider net on potential renters, which is great for us as we continue to be the leader in the real estate field of the lowest defaults, the highest returns, the most secure real estate assets.

Scott Meyers (29:03):

And that just makes me smile everybody. It's nothing exciting to talk about at a cocktail party or when somebody asks me what I do, but all you can do is smile because I just love this industry and it's just the simple nuances of finding the next niche or the piece that is underserved or I dunno, I guess like any good entrepreneur, you see a pile of money in the corner and you just go pick it up and there seems to be many, many piles out there right now for us to be able to look at. Alright, Greg, so I want you to give away your services for free, but what are you seeing right now that people should be grasping onto or what are you seeing an influx of calls and requests from the consulting side that people maybe should be leaning into as call it the next big thing or something that's on the cusp of maybe underserved in the marketplace that we should be looking at?

Greg Ellsworth (29:46):

An area that a lot of people call for that we're able to help with and that the industry is in dire need of is being able to leverage lower demand pieces of property within an info location or rural market or even a tertiary market. And converting those into cash flowing ideas, whether they have core drive by traffic or environmental issues or drainage issues, boat and rv, we can encapsulate various environmental issues, we can put underground retention. Ultimately, we're able to utilize land that no other industry is able to. And seeing through the weeds and seeing a piece of property for what it is or what it could be and not what it is, is one of the big values that we can bring. And as an industry we should start to exploit because we can be in a secondary location, tertiary location within a rural market and still have good demand, good returns. And kind of going back to some of those amenities, if we have the dump station in or no, it does. It doesn't matter where we're located, they will rent with us. And so we have this weird innate ability to leverage lower value properties into higher returns because of the nature of our business. And that's one thing that we're able to look at and look through the weeds better than most is

(31:04):

Because

(31:05):

We have the architectural team and the professionals within our company and the construction team, we can sit in a room together, look at the issues on a specific piece of property and create a plan that makes sense because ultimately, as I spoke before, your unit mixes your revenue stream. Similarly in boat and RV storage, every square foot of land you buy is a potential revenue stream as well. The better we can utilize that land, the less we lose to environmental issues or underground retention or surface retention or city crazy requests, the better off we are at creating an asset that establishes returns, that makes this a business where people want to continually return and recycle their money into the next project because the cashflow is good on the first investment.

Scott Meyers (31:56):

And honestly, Greg, that's what gets me excited the minute my feet hit the floor in the morning is doing those projects, the fun stuff. I mean there's no other industry. Probably the best example I've seen of this is I saw the first time, this was probably 20 years ago, the first time I saw self storage facility that ran parallel to a highway right in between the railroad tracks that were running in parallel, tandem, and then there was a self storage facility on a piece of ground, a strip of ground there. It was just like they paid nothing for that ground because nobody else would want it for anything. Nobody's going to build apartments or anything else there, but it is the absolute perfect use and you have no greater billboard and advertisement and marketing for your business than those doors. And it was all in one single, it wasn't even a four acre square, it was one single line and it was just like, this is beautiful.

(32:44):

And then anytime that we take adaptive reuse of an old building that all the condo folks in the apartment guys and gals looked at and said, no, it's not going to work because it's overlooking the dumpsters and we got too many issues from habitation and not enough windows, well, we can use that and we pay pennies on the dollar for those as well. And the same going back to the boat and RV storage sites. Scott Whi, are you building a facility? Why are you buying nine acres in the middle of absolutely nowhere? Well, because it is directly in between halfway point between the metro area and the biggest lake that everybody goes to. They go pick up their boat and their RV on the way out there, and it's the cheapest price per acre than anywhere around to be able to do so. And it's two minutes off the highway. That's why. And so being able to sit around in a room and find these sites, search for, find these sites and then do the math, reverse engineer the math problem to find something that works given the market rental rates and what you're paying for the project and to develop it, that is just fun. It's just flat out fun for me.

Greg Ellsworth (33:49):

This is an industry that consummate entrepreneur should gravitate towards

(33:56):

Because

(33:56):

It really is a blank canvas that allows us to find the best returns. You're able to be creative with the safety net of a product that's in high demand right now,

(34:07):

And we can figure out how to best leverage that land. I think it's an enjoyable, fun, creative kind of, I look at myself in the mirror and I say, do they really let me do this all day long where I just get to come up with fun ideas that make money and we have fun doing it, but ultimately self storage and boat and RV storage, the demand is there. It's finding that right unit mix, it's finding that right mixture of different unit sizes that are going to attract the individuals in your area. And you touched on a part that we talk a lot about during Tow Storage Nation, and that is we can develop a boat RV storage site along that path of pleasure, meaning between the metro area and the recreational draw, we can develop anywhere along that path. And there's demand. Therein lies one other issue maybe for another day, and that is how do you get the banks to sign off on a project in the middle of nowhere? No population, no cap bank income, no real drive-by traffic on that fronted road, no other businesses. There is demand in these rural areas. It's helping the banks understand what we all know. And that is path of pleasure is the golden road to profits.

Scott Meyers (35:22):

Yeah, just saying, trust me, it'll work. Doesn't necessarily get through loan committee eating. I have tried that though. Doesn't work. Yeah, me too. Because we've done it before and it worked over here, that's why. Well, Greg, let's do this. Thank you so much for your time. As we draw to an end here, again, going back to the first part of our conversation, consulting means a lot to a lot of different folks. So if people were to reach out to you, state specifically how you can help them in the storage industry and then if you would share your contact information so people can get in touch with you.

Greg Ellsworth (35:55):

Thank you, Scott. It's been a pleasure to be here with you. Your thought, very highlighted the industry. I appreciate your time. Thank you. If people want to reach out to us for various consulting needs, my information is Greg Ellsworth at Cell Storage Consulting Group. My email address is greg@ssgone.com or ultimately on our website, which is SS cg, the number one.com. Have more information on that website as well as the ability to get in touch with me or anybody else on the team and the architectural, the general contracting, the feasibility study department that help you bring to life your dream or your conceptual idea of a new self historic project. But I appreciate your time today, Scott. Thank you so much.

Scott Meyers (36:38):

Oh, thanks Greg. I appreciate your time as well. And so I'd like to leave Storage Nation with this and that is, you mentioned consummate entrepreneurs. This is an industry which really breeds that and one where we can thrive. Tell me what you do to keep that entrepreneurial edge. Is there a particular book that you've read in the past or a podcast maybe that you follow that continues to keep that entrepreneurial fire burning?

Greg Ellsworth (37:00):

I read one book that changed a lot of my perception on business, and that is a book called Outwitting the Devil. And it allows you to kind of look from an outside party of what we're doing, making decisions decisively. That's one thing that we see a lot of times that slow down our inhibit growth is indecisiveness and ultimately trying something new within our facilities to see if it works and what the return is. So that's what keeps us our creative juices going, is trying it and going out and looking at it differently or talking to the tenants on the property that keeps things moving on and it keeps the tenants happy, it keeps us happy, and ultimately it creates new revenue streams that were not previously thought of or exploited in the past.

Scott Meyers (37:45):

I would agree with that a hundred percent and absolutely good read, that was gifted to me by a staff member winning the Devil about a year ago, I think. And so, yep, I second that as well. Well, Greg, thank you once again so much for your time, folks. You can reach out to Greg in the show notes. I'll include all of his contact information. And Greg looking forward to picking up this chat again, either on round two the podcast or at a self-storage show near you very soon. Thank you, Scott. Appreciate it. Alright, thanks Greg. Take care.

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