Compass Self Storage’s Todd Amsdell
Face-to-face meetings are the best way to make a deal
Todd Amsdell has relied largely on “good old-fashioned hard work and reputation” to build Amsdell Cos. into one of the premier operators of self-storage centers in the country.
“We look at acquisitions and development as part of being in business,” says Amsdell, president and CEO of the family of companies. “Our theory is you have to keep growing. Growth gives opportunities to the team and it gives opportunities to the company.
Amsdell owns Compass Self Storage, which operates 77 self-storage properties with plans to continue adding more locations. Another part of the business is the construction, development and management of business parks and industrial parks. In total, Amsdell Cos. has more than 225 employees and a business that continues to grow and expand its presence across the country.
“Our goal has been to buy or build one a month, and so far, so good,” Amsdell says. “The Compass portfolio has been in existence since 2008 or 2009, which wasn’t the greatest time to start a real estate venture. But 2010 offered us some opportunities in the acquisition markets and we’ve been off and running ever since.”
Smart Business Dealmakers spoke with Amsdell about his company’s unique approach to dealmaking.
How do you get your team involved in the dealmaking process?
We are all involved in acquisitions and development. We offer bonuses to the field team for learning, finding or hearing about potential acquisitions. We’re all involved in keeping our eyes open and our ears to the ground. That’s everyone’s full-time job. They are out there constantly meeting with brokers, owners and developers and talking to the operations people to see what areas of the country are doing well and where we might need more self-storage.
At the same time, while we’re working with brokers on listings and product they have, we keep ourselves in front of owners. They know we’re active buyers. Almost half of our deals come through that direct channel. We deal with owners of self-storage properties that are looking to make a deal to sell their properties. They don’t want to have their properties on the market and have people going through and take the risk that it doesn’t sell.
What is the benefit of doing off-market deals?
If a deal falls through and nobody knows about it, no harm, no foul. That very rarely happens. We do a lot of due diligence on our prospective properties. Owners know we’re very sincere, very aggressive and very upfront. We know what we’re talking about. It’s not just trying to get to a number and see if it works. We don’t re-trade deals. That happens more than sellers would like to have happen to them, especially in the real estate world. It’s one of the reasons why sellers try to vet buyers and understand how they go through the process. We go in with a lot of information so we’re able to move through deals pretty quickly.
When we’re in a marketed situation, I would guess a little more than half of the deals we win, we are not the highest bidder. The difference between what we’re offering is usually made up in our reputation that we don’t re-trade deals.
What are some keys to making a connection with a prospective seller?
When a seller receives a bid and they haven’t seen you, that’s a turnoff. When they can’t put a face to a bid, at best, you become suspect. Even if they know who you are, if you haven’t visited the property they’re selling, there is always a doubt about how serious you are. How can you invest $10 million in something you haven’t visited? Of course, not all sellers want to meet you. A lot of companies won’t go to a site until they have some type of agreement because they feel like they can do it all from Google Earth.
I sat on a panel with some of the top owners of self-storage facilities who spend hundreds of millions of dollars a year. Two of them won’t go to visit sites until they have an agreement. In their mind, it’s not efficient to go and visit properties and put that time in on deals they haven’t won yet. We always like to make sure that we’ve done our best to meet the sellers. We feel it helps us win deals and make deals. These are all relationships we’re building. Whether it’s a one-time relationship with a seller who only has one property to a multi-portfolio deal with a big company that has lots of properties. There is still that building of trust, respect and understanding. As I tell every seller, the one thing I know is it’s not going to go exactly like we all think it is. But if we both keep that goal in mind and treat each other with respect, we’ll get through the hurdles that are going to come up.
How to reach: Amsdell Cos., www.amsdellcompanies.com