Are the Best Days of Self-Storage Behind Us? Brett Henry Breaks Down What Comes Next

THE SELF STORAGE REPORT — EPISODE TRANSCRIPT Episode: Ep. 2 — Are the Best Days of Self-Storage Behind Us? Guest: Brett Henry — Founder, Trojan Storage; Owner, QuikStor Self-Storage Management Host: Chris Berg — Head of Business Development, Abernathey Development Recorded: May 7, 2026 | Published: May 12, 2026 Video: https://www.youtube.com/watch?v=AVxEHugr62Y Key topics: CSSA Napa recap, legislative/regulatory threats (NY Extra Space lawsuit, Sacramento), rate transparency and U-Haul fixed pricing, state of demand 2023–2027, restarting development in SoCal, underwriting discipline and location, San Jose lesson, Calabasas entitlement saga, mixed-use entitlement strategy (Sylmar, Elk Grove, North Hollywood), parking/retail-to-storage conversions, AI in operations, QuikStor. Note: Transcript from the recording session (speaker-attributed). Light cleanup of transcription errors only; wording preserved. ————————————————————————————— Chris Berg: We just wrapped up the California Self Storage Association event up in Napa. Always a great event. So we want to dive in today and really look at what is the state of self storage today and maybe even more importantly, where is our industry headed? Welcome to the Self Storage Report. I'm Chris Berg with Abernathey Development. Very special guest joining us today. He's been in the industry now for over 25 years. 2022 and an exit of over $245 million for a portfolio. Today owns and operates a portfolio north of a billion dollars. Yes, with a B. He's the founder of Trojan Storage. Now owns and operates QuikStor Self-Storage Management as well. Brett Henry. Brett, great to see you again. Brett Henry: Hey Chris, thanks for having me on. Chris Berg: Let's jump right into Napa. I know you've gotten a lot of one-on-one conversations. You were on the panel. In the context of self-storage, what was the single most important thing you took out of that conference? Brett Henry: You know, I think the first thing is, as a group, we need to be aware of our surroundings and what's going on in a lot of the states and kind of the government and the legislature and our perception. And I think there were some really good points made of how we speak and how important it's going to be to have professionals on our side to help articulate our message of the benefit we provide the community versus some of the negative chatter about rent increases and different things that can be a part of the business — making sure they understand the health of month-to-month leases for tenants and the flexibility, in places they can get rentals without credit, and really how young businesses thrive. And so I think paying attention to the government is going to be really important. And the other part is that AI is here, and how we're running our facilities is going to drastically change. And I don't think anyone's figured out that solution yet, but from construction to how we're building them and how we're operating them and how successful we're going to be, I think everyone's going to have to really evaluate their operations over the next few years. Chris Berg: That is your domain, the operations. We'll get to the AI stuff in a moment, but I do want to go back to the government aspect. You know, Thaddeus and I always talked about the worst — the last place you want to be is on the lips of legislators. I think Sacramento is going to come back with something at some point. You see the lawsuit in New York against Extra Space. What are some of your suggestions to the industry as far as how we better navigate this? Brett Henry: You know, I think people should appreciate how important consultants can be who have spent their lives in this area. As an operator, sometimes we use blunt force and logic and reason and we kind of have our path. It's important to get people that are professionals on the government side of the business where they can help you, as I said, articulate a message that makes sense, right? Because sometimes when we just talk, you get so focused on what you want to say and why it's good. It's good to get a professional's opinion on — no, no, no: month-to-month leases are good for tenants. These are the values, here's the benefits for them. And yes, a rent increase can come, a change can come, but they have the right to then move out and find a competitor who's going to compete for that business. And so it's not like there's a lack of storages that customers can choose from. So I think it's really, really important. I thought the CSSA has done a good job with Platinum bringing them in. I had a chance to speak to them and you can tell that they get it, and some of the different things they're going to be doing. It's just going to be really important that operators — one, we're writing a check — that operators step up and write some checks and provide the income that's going to be needed to move the conversation forward. And then I think we've got to listen. Sometimes I think people that are really successful in one industry think that always applies to everything else. And there's a reason you have these consultants, and it's important to follow some of their advice. Chris Berg: Well said. With that being said, was there any sort of marketing conversation or dialogue or language that you picked up on? What I'm getting at is: housing is becoming so expensive that to give people the opportunity to be able to store their stuff less expensively, I think would be a really added benefit for everybody involved. Was there any sort of language that people were suggesting that's going to work? Brett Henry: Yeah. When you talk about our industry, I think the thing that's jumped out — be it the New York lawsuit or the rent increases or the rent act that went through last year — there's such a focus on dollars when we should be talking about benefits. When you start in Los Angeles, you're really seeing two and three generations in houses, you're seeing ADUs go in people's backyards, you're seeing affordable housing units in our small beach city going up seven, eight stories. They're not building big places, they're building places. And so they're going to need an extra closet, they're going to need extra things. And I think people think they're sometimes trapped, like it's an annual lease that you sign with a bad landlord. If you don't like your storage landlord, you put the stuff in your car and you drive a block over and you find another one. So I think we can hold each other responsible a little bit, but it's important for us to get in front, so we're not seeing some of the — I'll call them not-positive articles that the Wall Street Journal has put out recently. There are so many businesses that I personally know, running Trojan Storage the last 20 years, that have been with me forever. And yes, they pay four or five hundred dollars a month in rent now. But they're not running an office. They're not having overhead. They're not having TIs. They're not having CAM. They're not having all these things. And occasionally they need more space, they need less space, and they can change their business. We have so many successful businesses that have been either started or continue to run out of self storage that we should be writing articles about that stuff and what a benefit we are to the community. Because fundamentally we do way more positive than negative. Chris Berg: If I could give you a high five — I'm going to just give you a virtual high five. I have been saying for so long now that if we could just frame this to the cities as: look, we are an entrepreneurial incubator. That's what we do. You've got Amazon, all these different guys that are trying — especially now, when you've seen the unemployment numbers in the younger demographic, they're not good. So hey, if we can help sustain a young person to start a business — by the way, city, they're going to pay you taxes, probably more taxes. It just seems to go hand in hand as a benefit. The one thing I want to sort of close this up on: I don't know if you were at the morning session about what Platinum is doing and that great conversation, politically, what to look at in California. But the thing that really jumped out to me — and I want to get your comment on it — is they said the most important thing when you show up in Sacramento is you must be feared. Otherwise, everything is a moot point. What are your thoughts? Brett Henry: It's right. You know, we had an unfortunate fight in the City of Commerce five or six years ago, and we did all the right things of trying to talk to people and getting our CUP back that had really been taken vindictively away from us. But fundamentally, it was when we got very involved, aggressively, in their election that they came back to the table to have a real conversation. For us — dropping mailers and having walkers and showing that we were going to be involved over the next five or six years, because I already owned the land. So we were in Commerce. We were coming. It just might have been in six months or in six years. And so you have to do both. You have to have a voice. You have to have the respect — and fear is a good word. But it is important to feel like you're mobilized, that there's going to be a reaction when things happen. And if you're not sitting and having those conversations, then you're just accepting whatever decisions people make who don't understand our business. Chris Berg: So well said. And I think there's a reason why they say politics is a blood sport, right? You go to these events and everyone in the storage business is very neighborly and nice, and then they think, okay, I've got to put my fangs out to go to Sacramento or a city meeting. I hate to say it, but politics is a blood sport. So with all this being discussed — I didn't think we were going to spend the first few minutes on legislative aspects, but you start to look at it, we're obviously on the lips of legislators — I don't even know how to ask this other than to just ask it: are the best days of self-storage behind us? Brett Henry: No, I don't think so. But the days of us being in the background and not coming up in conversations is way over. You know, the first storage we bought in Rancho Cucamonga — I was joking with someone at Napa — was $70 a foot. And I used to joke because my old boss, who was a pioneer in the industry, would sometimes look at me and be like, "Brett, you're crazy. This thing's going to be like $110 a foot." You know, I built that thing at $38 a foot, right? So you get this recency bias of — the times were so good then and you can't do it now. The reality is storage has evolved in the last 20 years. We have equity and institutional capital. We have professional operators. We don't just have a couple — you have dozens and dozens and dozens of quality operators. Westport, or US Storage, has now gone from a California company to a national company. So has StorQuest. They've become not just regional guys — they're everywhere. And you have Extra Space, you have Public. So it's not behind us, but the days of us lying quietly and just being able to operate our business and do anything we want are long gone. Which means the steps the CSSA is taking and the SSA is taking to have lobbyists and consultants and be a part of the conversation are a necessity. And I'll tell you, those checks absolutely suck to write. No one wants to write a check for five or 10 or 20 or $50,000 for, effectively, lobbyists. But it's going to be part of our business. It's also the reason we've seen cap rates go from 8% to 4%. It's a new business. So the best days are definitely not behind us. This last three and a half years — almost four years — have been tough on all of us. But you need pain. Pain makes you go back and evaluate how you're operating and how you're thinking about things, the decisions you're making. Hopefully at some point Extra Space gets the message. Public seems to be starting to articulate their discounting a little bit more on their website over the last 30 days, right? It's no longer in-store versus online with no idea of when it's going to go up — they seem to be setting some guidelines. And listen, I think we owe customers some transparency. I don't think it's right and moral to move someone in for $15, they put all their life's stuff in there, then you raise them to a hundred, then 200, then 400. Morality should be in the conversation. But definitely not behind us. Technology is going to make us better. Our buildings have improved so much. But the days of sitting back and just being in the background with no attention — that's over. Chris Berg: I want to get your thoughts on this. When I was in — I think it was San Antonio — an interesting conversation came up. I'm sure you've seen what U-Haul and Joe Shoen are talking about: you're moving with us, let's just say 100 bucks — it's going to be 100 bucks for a year. Somebody suggested maybe you give the customer an option and say, look, either you can be on this more volatile rate — and we don't know where this is exactly going to go, but you can choose that — or you can choose that it's going to be 100 bucks for the next 12 months. Your thoughts on that? Is that maybe a way around this? And when you look at the most recent earnings reports, I think you get the sense there's not as much volatility in pricing as there was in the past. Brett Henry: Yeah. I think U-Haul is a different animal, because they fundamentally make so much money on the truck side of the business. I've never considered U-Haul to be the group that's out there with dynamic pricing and constantly updating the way I think the industry's moving — and I mean that from a new-customer standpoint, not necessarily existing. But there's definitely a movement for operators, as a marketing play, of: hey, here's a month-to-month contract, but we're going to lock you in for a year. We haven't done it yet. We don't aggressively move rents in some of the ways of every four months. But I think that's the part that I sometimes think politicians can miss: when you just hear one anecdote, one story, or even two or three, you miss all the benefits that are being offered. And one of the benefits of storage is the competition. It doesn't matter where you are — you can be in Los Angeles, Phoenix, Vegas, Sacramento — there's plenty of people competing for business. Sometimes that drives rates down, sometimes that drives rates up. But it forces people to try to hook customers with new things. I know three or four groups that are starting to put right on their website: hey, for the next year, this is your price. That's the beauty of letting a customer choose. Do they not care, because they're truly going for two months and they're just going to take the easiest access? Or are they willing to drive ten extra feet to lock in a rate? That's what competition does, and I think we have plenty of competition in storage. Chris Berg: To put a button on this, I just want to acknowledge the CSSA and Gary Sugarman and what they've done. You're suggesting we go out and help language this better — but also, if you remember, Gary Sugarman and the team put together a great document that said: hey, yeah, you can go ahead and cap rates, but it's going to lower the value of our assets, and you're going to lose this much in public funding, and it's going to impact schools. I think that was a very powerful communication tool in Sacramento. So let's move on to this. You mentioned the past three to four years. I started just over three years ago — obviously perfect timing, right? But I want to get to this, because Bill Hobin from the William Warren Group in Vegas says, "I've been doing this for 31 years, it's the absolute worst I've ever seen it." Liz Schlesinger just said yesterday on Brandon Robinson's webinar that this is the worst it's ever been. You said the same thing, sort of, today — and also on Brandon's webinar. How are you reading the tea leaves? And like we said at the start, what does that mean for the future of our industry? Brett Henry: Yeah. It's fundamentally tough. You can feel demand is different, and it's probably magnified a little bit by COVID — it was so easy, right? When we were operating and you see this rate dip in March of 2020, and then by like June it just starts hockey-sticking up, because everybody needed storage. The demand was just off the charts. So you come from demand I've never seen in my life to demand on the other side that's just been really challenging. And we are a business of movement. Interest rates have trapped people in their houses. There's definitely pressure on the consumer — credit card debt and all kinds of things, and jobs. The Dow may be at an all-time high, but I'm not sure our customers are feeling that. So it's been a challenging time. I think '23 was the worst. '24 was tough. '25 was a little better, and this year seems better. And I think if you read the tea leaves — Public Storage bought NSA for 10.5 billion, or is going to — Public is a lot of things, but they're usually not behind the informational curve that exists in this world. So if anything is going to signify to people that things are going to start to get better, that acquisition starts to say they're ready. That doesn't mean tomorrow. That just means it's coming. And I think we'll see some normality. I said on the panel: sometimes people make a really big deal about how much supply is in a market. I think that's important — there's a difference between 15 square feet per person and five. But I think the biggest challenge — I'd rather be at 12 square feet per capita with no new lease-ups than be at five square feet with eight new lease-ups. We've had to absorb all that. That's usually a race to the bottom. As that has slowed, I think we'll start to find a balance where we can all utilize the demand to fill up our buildings. My group feels like this year is going to be like last year, and it fundamentally kind of has been. And then we're hoping that in '27 we start to see that demand come back in, because we're not that far off. But it would be good to see a little bit more movement through the country. Chris Berg: Yeah, you saw both REITs project NOI growth as pretty much flat, for lack of better specificity. So with that, and just your experience — my interpretation is you guys have been on the bench for a little bit with development. Now do you say, hey, you know what, we're going to get back on the field and start putting shovels in the ground again? And if so, why? Brett Henry: Yeah, I think that's right. We really started about a year ago. We bought a really good site, as you know, in Inglewood, and expanded the footprint, re-entitled it into something more efficient. And we're closing on two pieces of land in the San Fernando Valley to build very big buildings — they probably won't be open for another 28, 30 months from now. We're pursuing some more Southern California deals. We're still challenged, because you're still having to somewhat guess on what you think stabilized rent rate looks like, right? You're not going to go look at your competitors' asking rates — most of my facilities, the in-place rent is way better than the asking rate. And I think if you go ask Bill, if you go ask Drew, you're going to find that's probably a truth at any stabilized asset they have. But I've made more offers in the last six months than I did in the last four years. Development's a long lead time — for me, it's 12, 18, 20 months of entitlements, it's 8 to 12 months of permits, and then it's a year and a half to build. So from the idea at the LOI to opening that building, I'll be in my 50s. I think it is time, in certain markets. But I'll tell you — I would not build in a market that I didn't feel super comfortable is, today, with stabilized assets in the $2-a-foot-plus range. I just don't know how you make it pencil. It's expensive to build. It's not getting cheaper to build. And interest rates are going to do what they do, but they're not going back to 3%. So there's still a lot of pressure there. Chris Berg: You sort of read my mind. As you're looking at these assets right now — the ones you're about to put under contract — are you underwriting them at today's rate? Or, because of your experience and thinking "this is the worst it's ever been, clearly things are going to get better," are you giving yourself a little bit more growth in your rates as you underwrite? How do you go about doing that? Brett Henry: Never been a big fan of putting too much growth into it. I think the advantage for me is every one of our offers has been from the San Fernando Valley through, call it, the South Bay, maybe Orange County — markets we know, markets where we know what things would stabilize at. I don't consider it a guess, necessarily; we know where we think those things really are going to be. I'm not sure today is the time to go develop in a market you're not super familiar with. Because everyone always says, "Well, this is a $2-a-foot market." I don't know what that means, right? You have buildings in markets, in the same city, where one's at a dollar twenty and one's at two dollars. And yes, operations matter, but location does matter. Being on the wrong side of the street — there's a Public Storage in San Jose right near us. We're on one side of the off-ramp, Public Storage has one just on the other side, and then Public Storage has one across the freeway. Those two Public Storages get rates that are almost 75% off each other. Because one's got a homeless encampment, you have to go around all these different things, and it's brutal — I can't imagine they're doing more than 80 cents a foot, and I bet the other one's doing three bucks a foot. So location matters — where it is, how people get to it. Be very familiar with areas, and make sure you really understand what people can afford, what the income looks like. Don't just cherry-pick the highest rate you get off one site in a five-mile radius. Chris Berg: So well said. Everyone's talking about how Phoenix is being decimated, and we've got an asset there, newly opened — and we've more than doubled our pro forma per the budget we were given to Public in Phoenix, which I think surprised a lot of people who are like, "Phoenix is just getting crushed with supply." But it is such a neighborhood business. With that being said, I think people always learn a ton from your stories, because you've got so much experience. One of the great things you shared on Brandon Robinson's webinar was how you thought one site was going to be a golden goose and it wasn't — it was in San Jose. Can you walk us through that story again? Because most people think, "Brett Henry, he just nails every single asset he buys." But there have even been some times where you thought it was going to be amazing and it didn't turn out the way you thought. Brett Henry: You know, from the San Jose sites — we built really four in that market. We had one in a more affluent area: good location, reasonably visible. And then we had one where the demographics were a little bit less, not quite as exciting from an income standpoint and different things — but that one's location was pretty visible. We always stack-rank best, worst, and mid case of what we think things will be, and we were definitely more bullish on the first one that was going to be in the better financial demographic, with really, really low supply. And that site's done totally fine — it's done well. But the other site, with lower demographics and a much better location, super visible — we just do great. And we always do great: we spend less money to advertise, everyone knows we're there — you can't miss it. San Jose was a market we had to really learn. And you start to learn the impact of — you can't always just look at numbers for how a neighborhood, to your point, is going to rent. We've definitely got a New Jersey site that we built real comfortable it was going to be three bucks a foot when we opened, and we're definitely not doing that. And then we've got other sites that we thought were going to do a little bit lower, and they've just been gangbusters. So they do matter — where you put them and who's around the corner. And fundamentally, when you build a new building, the most interesting thing about it — if you do 100 rentals in that first month — is how many local people want to move into that site because it's in their neighborhood, that are stealing from an Extra or a Public and are coming to you. So I think it's important to develop in neighborhoods. Chris Berg: One of several things you said on the panel that really jumped out is you were like, "Look, I love the hard. Give me the hard stuff to solve. I enjoy that. I think it's going to give me a good asset." Share with people how challenging it is to build in California — and the prime example is your site in Calabasas. Walk us through that. You bought it, what, five, six years ago? It's just been a trudge of a process. And yet, as you suggested, when that thing finally is built, it should be a very healthy asset. Brett Henry: Right. We spent about a year — it was an entitled storage, just smaller. We utilized different zoning mechanisms to increase its size. It was not controversial — we're next to a pet cemetery. And we've been doing this long enough that it was an Uncle Bob's in front of us, then it was a Life Storage in front of us, and now it's an Extra Space in front of us. That's the process of how long we've been doing it. And at every turn of the entitlement, something added to the time — some critical piece we couldn't stop. For one period it was the VMT study — a traffic study, effectively — which should be an eight-week, ten-week study: 20 months. And when I'm now responsible for calling the city and trying to move it forward, you have a problem. Storage, of all the things we do — traffic cannot be something we're considered to be impactful on. Then, once we got it entitled, it took a year and a half to permit. Now DAI is ready to put shovels into the ground, but in 2026 the state legislature added a stormwater concept: if you don't put any of the water into your own ground and you're using different systems to mediate storm runoff, they want to look at your plans, and they want public notice of those plans. We're going to get through it, but it means another month and a half we don't get to start that building. John and I have owned that land in cash, generally speaking, for the last six years. It's absolutely impacted our pro forma. But we've always been lucky that we made that whole site work at $2 a foot in rent on our worst-case scenario, and we're super comfortable — it's a $4, $4.50-a-foot market. So it's going to be great. But sometimes you look back and you're like, maybe I should have just left the original entitlement alone and we'd be making $4 million a year with a 3% State Farm interest rate. But that's development. You're making choices without knowing the future, and they take a long time. Chris Berg: So you bought the land six years ago and it just had to sit. Brett Henry: Dirt. Chris Berg: That will definitely impact the old pro forma. The other thing that was interesting from Napa was this conversation — and you're doing a great job in this; maybe use your Sylmar project as an example — how you're coming to the cities and saying, hey, look, we'll bring you some multifamily, or maybe it's mixed use. And one of the great things you said is, "I don't mean to use this term, but those are kind of throwaways — we don't expect to make money there. We're doing it because we want to get our project entitled." Walk us through your thought process, what you're seeing from the cities, and how you're doing it. Brett Henry: We always start with: can we get a storage here? We spent three or four months talking to the city and had a pretty good response, put some ideas out. But it became apparent in those conversations, probably in month four, that the unwavering support we thought we had was definitely not unwavering. They started asking questions about — it's a big piece of land, it's right against this residential, this seems to take away from what the community needs. So we then started talking to them and said, hey, what if we did a true mixed-use building — the zoning wanted a mixed-use building. The zoning was super flexible, which — one of the challenges of storage and residential together is you really don't get a whole lot of zoning that says residential and storage can go here. This happened to be a mixed-use property where that actually could occur. So we went back to them and said: hey, if we did a building together, and we made it look — it's kind of like that USC red brick — and if we made the whole front look like this and not a storage, and then we hid the storage behind it, would you support that? And of course the answer was yes, pretty quickly. We had to replace the units we were taking out — at one point it was three affordable housing units; now I think it's 20 of the 24 units affordable. And to your point, we looked at it in our pro forma and kept those at zero for a while — if we can't rent these, is this project still good enough? And it was. It's not realistic — we're going to rent them. But we were willing as a group to modify our existing concept and say: we love storage right here — what else can it take? We've done three of those now. One's up in Elk Grove with more of an incubator-office type concept — 500 to 1,000 square feet, month-to-month or annual lease concepts for people, but a very easy move-in process. You know when you sign an office lease how unreasonably complicated it can be — I think my office lease here is 50 pages, and that means lawyers. So we tried to put in a new concept, and the city allowed it. I think there's going to be some creativity required to get these through. It's definitely moved away a little bit from "we put in 24 units and 110,000 square feet of storage" — I think it's moved away from that ratio, so I think you have to do more affordable housing. But if you really want the storage, those are probably some of the concepts. Chris Berg: So my question for you is — I know you're not really a seller, and yet everything's for sale. Did you think about your exit as you're going into these assets? Because, for example, a Public or an EXR — how are you going to sell them on those assets? Or is it, hey, we'll get somebody else to manage the office or this multifamily? What was your thought process there? Brett Henry: You know, I made the joke that there was a site in Colorado someone was selling — a thousand square feet of retail and 60,000 square feet of storage. I'm not going to put a whole lot of time into a thousand square feet of retail. I may hire someone; if I had bought it, we may have looked at it a different way. But for us — listen, you have to look at an exit, because it's unreasonable to think... Is Trojan Storage for sale today? No. If someone offered me $6 billion for it, would I sell it tomorrow? Yeah — I wouldn't even call my partner. I'd say, "We just got $6 million — that's great. $6 billion." And so for us — we have 41 assets, almost 4 million square feet of storage. So to have 30,000 square feet of office incubators and 10,000 square feet of kind-of warehouses and call it 30 or 40,000 square feet of apartments — I don't think it's going to be a big deal. At Sylmar you won't be able to carve them out of the building, because they're in the building. Our North Hollywood project — you could probably carve out those nine apartments and sell the front lot. For us, we'd rather control the front lot and rent those. But I don't think it's that challenging, and I think people are going to have to get used to it. I think you're going to see more mixed use in real estate. It's not that hard to get educated, and that's kind of the next step. Chris Berg: I want to be respectful of your time, Brett — just a couple more things. One of the gentlemen talking about the future of real estate mentioned, "I think a great potential conversion is parking into storage." What's your take on that? Brett Henry: I've seen it. I don't disagree. The hardest part is where you can convert. I would advise — we looked at a deal in New York, probably an hour and a half north of the city. It was a converted Sears. Everyone looked at it. It was entitled, and it was brought to me — this is probably 2022. My first question was very direct: I want you to go out in a three-mile radius and show me — is anything like this happening? And there were two other projects that were very, very similar. So why would you want to do storage in a repurpose, in cities that are letting you repurpose to storage? I don't think the big cities are going to be at the top of the list of who wants us to repurpose, because housing is just a problem everywhere. For those to work, in areas that maybe you want to be in, I think you're going to have to feel like the building is just economically dead for anything else, and utilizing it matters more than just tearing it down. So it's definitely doable — I'd encourage people to look. But I'm always very careful when cities are letting you redo Kmarts and Sears and buildings like that. Because part of the reason we get good rents is lack of supply. And if you look at where life is toughest right now — you said Phoenix; Sacramento, Vegas — there's more supply. And when there's more supply, there's more options, there's more competition. And when people go from 95% to 85% occupancy, the first tool in their bag is more discount, lower rate. People have to be careful of that, because when you build a storage or you develop a storage, you do not create demand. You service existing demand in a market. If there's a thousand people that want to rent and there's ten buildings, everyone can get a hundred. But if you put in 20 buildings, everyone gets 50. It may not be an equal-opportunity distribution, but it's going to be a distribution. And the way you then get more share is typically by lowering rates — or rates fixed for a year — but it's not by raising rents. Chris Berg: I just want to repeat a very important line that Brett just said. If you're somebody that's new, looking to develop: this is not like an Apple iPhone. You don't come out with version 18. You do not create demand in this business. So please know that before you put a shovel in the ground. You mentioned this earlier — I want to get your take on it. AI: how are you guys using it? Where do you see it going for our industry and making a positive impact on your NOI? Brett Henry: Yeah — AI is so interesting, just how fast it does things for you. I still think you have to be careful, because it needs oversight, it needs management, it needs testing — it needs to work. Our call center has been utilizing it. We were getting all these voicemails at different times of the hours, or at different places where maybe we didn't have enough staff, and AI — instead of having a person go through it — AI was able to, in a second, with our new stuff, just group everything and drop them into buckets. And Summit was just able to handle and eliminate them for us; Summit was able to give us responses. We're now starting to really push forward — I think this quarter we'll have a full AI payment system. There's some PCI stuff that goes into that, but listen — you can tell you're talking to an AI agent, but fundamentally the AI agent can do a lot. It can find you in our system. It can figure out which site you're at. It can look at your balance. It can get your existing credit card charged. We've got to figure out how it puts in the new card, because again, there's some PCI compliance with that. But I think that's phase one of how do we help customers faster. It's definitely helped us in financial reporting. It's definitely helped us in sifting through marketing data and revenue data and ECRIs and things like that. Accounting's been a big, big feature. We stopped using NetSuite's crappy budget system, and we're just dropping into Excel, and Claude is now doing things that are just fundamentally amazing. Obviously everyone gets it — you're just scratching the surface of what's going on. And the biggest challenge is how much do you put into AI today, because AI tomorrow is going to be even better. So there's this balance between full adoption and — what's it going to look like in six months? Do we want to do this twice? For us at QuikStor, our coders are using it — everyone's coders are using it — but it's really able to do some things to make people just more productive. So yes, it's going to replace some jobs — I agree with that — but I think what it's really going to do is make people more efficient. Chris Berg: So you just mentioned QuikStor. You purchased QuikStor a while back. I want to give you a chance to share with people what you're doing there and, more importantly, what problems you're solving for operators who want to reach out to you and potentially start using QuikStor. Brett Henry: Yeah. The two things that spawned this: the thought of private equity wanting to buy my data — and buy all of my competitors' data — was fundamentally scary to me. We didn't like that at all. Because the data in storage — SiteLink and QuikStor, and now groups like Cubby, and you look at Cubby with Goldman Sachs coming in — Goldman Sachs has big dollars. What can they do with that data on a development cycle? What can they do with all kinds of aspects? The data really scared us. We wanted to get data out of private equity and get it back into reasonable hands. I think that's meaningful. But also the speed at which we were able to operate — like waiting four seconds per click and going through, having reporting that wasn't written by operators. Sometimes people create a report without asking: who's the report for? Who's reading the report? What are they doing with it? Don't give me a bunch of KPIs if you don't know what I'm trying to look at that's important to me. Our finance people always come down and sit with us and say: what are you trying to solve, what are you trying to do, what do you want to look at, how do you want to look at it? And then they go back and build a report. They don't just build a report and bring it to me and say, "Here's the data you need." We also wanted something that was going to lean into AI and automation — how can we simplify things, how can we connect websites and aggregators and auction sites, and more importantly, connect you to your data. Because some of my competitors — and even us — we use the reports, but we dump all that stuff into Power BI or different things so it comes in exactly our way. That was the goal of QuikStor: putting the power back into the operators. I've got some good operators coming on board. We've been really successful so far. And I think it's important to have competition in the software — we have not had it — so I'm pleased with all these competitors coming in. I think it's going to make absolutely everybody better. Chris Berg: So if you're an operator out there — Brett, you do a great job — if someone's got 10 or more stores, go check it out. Go to QuikStor — you can see it on the screen, quikstor.com. You can set up a demo, they'll walk you through it, and get a chance to see if it's the right fit for you. So Brett, I could talk to you forever about the industry. You've just got such great stories and experience and expertise. We'll wrap it up here — I just want to give you the last word. Anything else you want to add or share? Brett Henry: No — you know, I think what you said about development is important. I think responsible development is going to be important. And I know we touched on it in the beginning, but be involved in the different associations, especially the ones where you're located. Give some dollars — help them fight the fight. Because the biggest threat to us is probably not oversupply at this minute. The biggest threat to us is heavy-handed regulation that makes our business really hard to run. So we need to have meaningful conversations with people. Be involved. Be a part of the conversation. Chris Berg: Very, very well said. Brett Henry, Trojan Storage — thank you for the time and the insight. We really, really appreciate it. This is Chris Berg, the Self Storage Report. We'll see you back here next time. Brett Henry: Hey, thanks for having me on, Chris. Really appreciate it. — END OF TRANSCRIPT —