Apple Self Storage can trace its roots back three generations of Allan family members to David Allan’s grandfather who came up with the idea of building a storage facility at the back of his dairy farm.
Today Apple Self Storage, like its owners is also in its third go round with the second rendition of the business having emerged after the tech crash at the end of the 1990s. To start the new century David’s father, Phil Allan and his two brothers (David’s uncles) saw storage as a safer, non-tech business alternative. They built up a 1-million square foot, 11-property portfolio before selling out to InStorage REIT and InScotia Developments for a reported $112.7 million in 2007.
The three brothers started up again not long after the sale and have built what is now a 28-facility portfolio spread across Ontario, New Brunswick and Nova Scotia with more than 1.4 million sq. ft. of rentable space.
David’s father, Phil Allan, is 65 and is president and his two uncles are in roles that neatly fit their skill sets.
“It worked out well. My father is a sales guy and then one of my uncles is an accountant, so he is the financial guy, and then another of his brothers is a builder, so he is the development guy,” explained the youngest Allan.
The secondary generation trio are showing signs of slowing down and bringing in David does point to an orderly succession. “They are slowly starting to move into more of a passive ownership role and I am taking a lot more of the day to day operations and the acquisitions, things like that.”
A data driven approach
As director of business development and acquisitions, David is charged with utilizing computerized analysis to determine which markets to target for expansion and which to avoid.
“My background is in data modelling. So what I brought to the table is more of a data driven approach to our growth and acquisitions.”
He has data on every storage facility operating in Canada and can layer on demographic data such as population growth to determine the best markets to enter.
“There are a couple million square feet currently under development in Toronto,” he said. “So we are pretty sensitive to over development in the market. We are going to be pretty hard pressed to development in Toronto.”
He noted that the U.S. is undergoing a huge storage development boom, with Canada somewhat behind with the possible exception of the Toronto area.
“We are pretty aware of the over development that we think is going to be happening in Toronto and the GTA which is why we are starting to look at other infill areas like Kitchener-Waterloo and Cambridge and other markets that don’t have the competition that Toronto has and will have.”
The Aurora, Ont.-based company this month announced the purchase of two self storage facilities in Niagara Falls totaling 458 units and 46,437 rentable square feet. As well, the company has approximately 350,000 sq. ft. under development in the form of two upcoming properties.
The company’s ideal property measures between 90,000 to 140,000 gross sq. ft. “That’s the magic number.
“With storage facilities it is a bit of a tricky thing because it takes about four years to stabilize a facility. Which is one of the reasons that a lot of people initially want to get into storage and then when they find out some of the metrics behind it and they find out they need to spend $10 million and four years before they get their first rent cheque it makes it very difficult for people to invest or buy into storage.”
Don’t expect Apple Self Storage to be sellers anytime soon. “We are definitely a long term hold kind of company. I know a lot of the guys that are in the market right now, they are developers that are looking for a six year exit. That’s definitely not us. We had no intention of selling back in 2007 but when the offer came along we just couldn’t say no.”
The youngest Allan’s success in pushing growth can be measured in his time with the company. When he joined two and a half years ago, Apple Storage had 14 properties, about half what it owns today.
“We are definitely on the more conservative side of storage operators right now, just because we are a family firm. I need to get my father and uncles on board and convince them that it is a good idea for them to spend more money on something, which is a bit of an uphill battle it seems.”
What’s in a name?
The family company adopted the Apple name because “back in 2000 is was so important to be in front of the Yellow Pages.”
There was a more famous corporate entity operating under that name at the time, although in 2000 it was far from the tech darling it is today.
Apple Inc.’s lawyers have yet to call about possible name confusion even though “storage” is now so closely linked with computing. “We are a little bit surprised actually but we are content that we are operating in different areas. The only thing we are waiting for is for them to come knocking about `cloud storage.’’