Why Self-Storage Success Starts With Better Systems

What if the fastest way to grow your self-storage portfolio is to stop trying to do everything yourself? 

Joe Downs sits down with Magen Smith, CPA, CEO and co-founder of Atomic Storage Group, to unpack her remarkable journey from managing a single self-storage facility fresh out of college to leading one of the nation's largest third-party management companies with more than 180 locations across 30 states. 

Magen shares how accounting, operations, marketing, development, and technology all intersect to create exceptional storage businesses, why great management is far more than collecting rent, how one lease up reached nearly $70,000 in monthly revenue within just nine months, and why AI is transforming operations without replacing people. 

Whether you're considering self-management or outsourcing, this conversation offers practical lessons on data driven decision making, scaling a portfolio, building systems, and focusing on the work that creates the greatest long term value.

Listen For:

6:00 How did Magen Smith scale Atomic Storage Group to 180 facilities?

12:46 What drove a new self-storage development to 57% occupied in nine months?

21:37 Is the fear of losing control to third-party management actually backwards?

25:01 What was a REIT operator missing that let revenue jump 220%?

27:48 Which KPI should every first-time storage investor track from day one?

CONNECT WITH GUEST: MAGEN SMITH, CEO, ATOMIC STORAGE GROUP

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Joe Downs on LinkedIn

Belrose website | Belrose email | Belrose LinkedIn

Transcript

Joe Downs (00:00):

$0 a month, 0% occupied. That's where one of my guests ground up development started. Nine months later, 60, almost $70,000 a month in revenue, 57% occupied. I got to tell you, I want to know what month one of that actually felt like because I guarantee you it was not the highlight reel of this story. I'm Joe Downs. Welcome to the Storage Moguls podcast. My company has acquired over 20 storage facilities and over 70 million in assets across multiple storage niches. And I've seen this business from every angle, educated hundreds of students and learned firsthand who succeeds and why. And that's what drove us to build storagemunguls.ai, an AI powered community with the tools, the structure and the guardrails to teach people how to buy their very first storage facility. And that is exactly why we launched this podcast to bring you the lenders, the brokers, and other industry pros like today's guest, as well as the real people who have successfully purchased their first self-storage facility so you can hear their stories and learn this business from the folks living it every day.

(01:22):

And I am fired up about today's conversation. So let me introduce my guest. Magen Smith is a CPA and the CEO and co-founder of Atomic Storage Group. We got to get into that name. It's not on my list of questions to ask you, but I just though of, I want to know where Atomic came from.

Magen Smith (01:38):

It's a great story.

Joe Downs (01:40):

Atomic is a third party management company that now runs 180 plus storage facilities in over 30 states. And Magen started as an onsite storage manager, I think. You might have to correct the record there. No,

Magen Smith (01:57):

That's correct.

Joe Downs (01:57):

Then became a CPA advising storage owners, ran her own development company, and then built Atomic into a top 15 operator nationally. Magen, welcome to the Storage Muggles podcast. Thank

Magen Smith (02:09):

You. I'm super excited to be here.

Joe Downs (02:11):

All right. Before we get into anything, because I know I'm going to forget to ask it later because I have squirrel brain, especially when I'm talking to somebody like you because I have a million questions and only so much time. Tell me about Atomic, just the name.

Magen Smith (02:24):

Just

Joe Downs (02:24):

Where the name came from. And the evolution. I just want to know the name.

Magen Smith (02:27):

Yeah. So we used to actually hand out the book Atomic Habits and the story that I was told to tell was that it's Atomic Habits, but that is totally false. That's not where it came from. So I wanted to name it something with an A because back when we started it, it was 2019, you were listed in order alphabetically on the software websites. So it was that or Anaconda because I'm an 80s child and those were the options. So I picked Atomic. Amazing. It's not a good story, but that's where it came from and it has lived up to his name.

Joe Downs (03:03):

Atomic Habit, was that James Clear?

Magen Smith (03:05):

Yeah, James. Yeah, that's a better story,

Joe Downs (03:07):

But I

Magen Smith (03:07):

Like

Joe Downs (03:08):

The truth. 1% better every day, right?

Magen Smith (03:10):

Yeah. Yeah.

Joe Downs (03:11):

But no,

Magen Smith (03:11):

It was Atomic or Anaconda and I liked Atomic better and it sounded catchy to me and it's been an explosive company so far.

Joe Downs (03:20):

What year was that?

Magen Smith (03:21):

2019. Founded it.

Joe Downs (03:23):

Too new in 2019 you were still applying phone book rules to naming your company. And by the way, was Ardvark Management taken?

Magen Smith (03:35):

I didn't look that deeply. I only had two options in my brain.

Joe Downs (03:38):

There's always the A, accounting, AA accounting, triple A accounting. I

Magen Smith (03:44):

Was like Atomic. That sounds good. Let's go. I didn't spend

Joe Downs (03:47):

Too much time on

Magen Smith (03:48):

Branding.

Joe Downs (03:50):

Hilarious. All right. Before we get into it, as you have been briefed, we are going to ask some true or false questions along the way. Okay. So here's your first one, true or false. It typically takes 24 to 36 months for a brand new self-storage facility to reach stabilized occupancy.

Magen Smith (04:15):

Historically true.

Joe Downs (04:17):

That is correct, folks. Lease up on a ground up self-storage development commonly runs two, three years to hit stabilized occupancy. Stabilized is going to be defined 85 to 90%. And of course that makes it all that much more impressive, tripping over my words here, that you did it in nine months on a deal we'll get into in a little bit. All right. So let's start with the number that still doesn't feel real to me. You co-founded Atomic. What was the other option?

Magen Smith (04:51):

Anaconda.

Joe Downs (04:53):

Anaconda. You did right by Atomic.

Magen Smith (04:57):

Thank you.

Joe Downs (04:58):

You co-founded Atomic in 2019. That's the same year we bought our first self-storage facility.

Magen Smith (05:05):

That's

Joe Downs (05:05):

Awesome. I very unimpressively announced in the opening here that we bought 20, I don't know what it is now, 22, 23.

Magen Smith (05:12):

That's very

Joe Downs (05:13):

Impressive.

Magen Smith (05:14):

It's very impressive.

Joe Downs (05:16):

Not compared to the 180 locations that you manage in the same amount of time, you are ranked 12, I said top 15, but I think numbers 12 nationally on the inside self-storage top operators list. 180, like I said, plus locations, 180 plus locations, 35,000 to 40,000 units somewhere in there, over 30 states. I want people to understand this is in theory for you. You've built this from the ground up literally. So let's start.That blows me away in the same amount of time. Now I get that you can, and you probably did take over, maybe were there mergers and acquisitions in there? I don't even know. Was this one facility at a time?

Magen Smith (06:00):

No, that would be too easy and I don't do anything easy. So it was not. The first year, two, three years was one and twos. We opened right when COVID hit one of the... So my background, I started as a manager, as you said, and then -

Joe Downs (06:19):

Oh, we'll get into that. Let's not jump ahead.

Magen Smith (06:21):

Well -

Joe Downs (06:22):

Oh,

Magen Smith (06:22):

Go ahead.

Joe Downs (06:23):

Sorry. Go ahead. So it was onesie, twosie. Yeah, it was onesie twosie. And

Magen Smith (06:27):

Then

Joe Downs (06:27):

Was there a point where you hit momentum?

Magen Smith (06:29):

It was mine, the first ones. We started Atomic because I developed a property in New Orleans and converted. So it was mine and then we picked up, one of my partners had a store. We picked that one up and then we picked up another one. And then it was early COVID days and people were building and needed a good management company to lease up. So it was ones and twos those first few years. And as soon as we'd get them, they'd sell because COVID was just paying crazy rates. And then once we hit about 2022, so a couple of years into it, we started getting portfolios. So then we started getting 10s and 15s. And then we picked

Joe Downs (07:03):

Up

Magen Smith (07:04):

30 and 40 at a time and that just doubled our company. And it was a scary time because growth can break, but we held pretty well. And then we kept just getting some portfolios, some one and twos. I have a heart for the guy who builds the property and can't or doesn't want to compete with what you have to do to run a successful property right now. It's not build it and they will come anymore. You have to be an expert in a lot of areas. So I like that. I like the people who put in their blood, sweat, and tears to get their one property and they really want to make sure it's cared for in addition to the groups that raise money and go out and buy 20, 30, 40 properties as well and just want a really good partner in the operational side.

(07:45):

So try to always balance our books so that not any one person is more than 10, 12, 15% of our business so that we're not all eggs of one basket, but we're still serving the people who just have one that want you to care.

Joe Downs (07:59):

Yeah, no, that's great. And that's smart too because you certainly have some risk there if you have a concentration in one or two or three even clients. Looking back, it's midway through 2026. Your seven years into explosive. It's explosive. What's the one number that still surprises you when you sit here today and you look back?

Magen Smith (08:28):

All of it. I think of myself as an accountant far too often. And then I'll go to shows and people like, I don't know, it's just funny. It's always interesting to me the perception of the industry, but I still think of myself as an accountant. I forget how big we've grown the company. I forget how much we have. I don't know. I just wake up and do the best I can every day and it's cool to see it. It's been good growth. It's been good leads. Our lead flow is really good. We grow well, have a good reputation in the industry. We get a lot of referrals. We've hardly ever done any marketing at all. It's almost all been word of mouth, which is really a cool testament to - It's the best

Joe Downs (09:08):

Marketing you can have because it's a testament to you're actually effectively doing the job, right?

Magen Smith (09:13):

Yep. Even people that transition to a different, like a REIT company for their exit or whatever will still recommend us to other people, which is I think it's such a great testament. When I went to college, I thought if I could learn the number side and the marketing side, I could probably do anything. I could understand both of it. So that's why I went for accounting. I got my CPA because you might as well, once you go through all the classes, you might as well take that step. I did tax for about five years and that was boring. I did not like it. It was not fun. You couldn't help anyone, you couldn't talk to people. And then I knew storage because I managed it and niching as an accountant was big then. I had kids, I wanted to be home with them. And I was going to niche in photographers because I thought it was more fun.

(09:59):

And a friend of mine said, "Storage is an incredibly lucrative industry. You know the operations, you really need to focus." And I was like, "But storage is boring. I don't want to do that. " He was like, "No, you need to focus on that. " And thank goodness he told me that because that launched. I called myself the self-storage CPA. I started doing accounting. I'd do operational audits. I'd go travel around and help people just make more money because I could understand the levers to pull to get the results that they wanted. And then took all the CCIM classes, started developing, learned the underwriting piece of it, the analysis, did conversions in 2017 through 2019. And then needed management because that was an important piece to get the returns to our investor because if we're not managing it well, we're not making the asset work.

(10:48):

And it was the worst job I ever had. It was terrible. I hated management. I hated the grind of it. It was hard. It was never ending. The managers would quit. I'm like, "This is the worst. Why am I doing this? " And I interviewed a bunch of management companies and I was like, "We have to hit these returns and we have to hit them by proforma and I can't trust that somebody else is going to drive as hard as I will. What do I do? " And I was not sure what to do. And there was two other people I had in my life at that time. They said, "We'll help you. We'll do the operations, you do the accounting." So we partnered together. We've since ownership changes, so changes have happened. But that's what led to Atomic was needing really good management for the ones that I owned and not really being able to give up that control to somebody else.

(11:38):

So instead I built what I wanted a management company to be. So everything we build is from that owner side first. It's super transparent. It's very open. It's very collaborative. It's very respectful that they own it. It doesn't need to be our way. We're the management company, but we're running your asset, your investment, your reputation of you telling your friends and family, invest in me, I'll give you the returns. And that's our job to make sure that that happens. So that's kind of how we built Atomic. And I think that's a big part of why we've grown, how we've grown, because we've really approached it from that owner side and been very transparent.

Joe Downs (12:16):

I think I'm going to throw my show notes out the window here because everything you're saying, I have so many more questions. I want to ask you how you went from zero to 70,000 in nine months, but now I find myself more curious about how you went from, I hate this, to I should build a company around this. Yeah.

Magen Smith (12:32):

I still kind of hate it, but it won't let me go.

Joe Downs (12:38):

Okay. Well, maybe we'll unpack that as we go here. So you took over development, it sounds like, or was this your development? Yeah, no, we took

Magen Smith (12:46):

Over. It was a third party project and they picked us to manage it and it took

Joe Downs (12:52):

Off. So they got the CEO, they opened the doors. Were you the first manager?

Magen Smith (12:55):

Yes. We were the first third party management. It was sold, oh gosh, I think at 10 months they sold it for what they expected at year four. It just took off. That was the fastest leaseup I've ever seen.

Joe Downs (13:10):

What do you attribute to this? When was this? What stage was your company at? Were you operating in all cylinders? How much did you have to do with this? Was it the timing? Was it the location? I mean, sure, all of it mattered. I think all

Magen Smith (13:22):

Of it. I think a lot of timing. It was in Florida, in South Florida. There wasn't much around it. It was a really good location. They had to put in a turn lane. They fought hard, they picked well, they built quality. So the asset looked really nice. It was in a really good location. There wasn't a lot of competition around it. And it was right when COVID was spiking. So rates were just soaring up. Demand was soaring up. They had some really big units, so they had a lot of options for people. The way that they built it had a lot of options and it just took off that thing. I've never seen a property lease up so quickly. And I think some of it was, we did a lot of pre-marketing. We had everything set up. We had all of our marketing set up, our social, our signage, our systems.

(14:09):

Hired a really good manager who was agressive and loved to close, loved to sell. So I think it was just one of those perfect timing stories that a lot of things went in the right direction. And the owners were so kind. They paid us out the full contract. They gave us a bonus. They sold it within 10 months and we're able to turn around and flip that money. And it was good. It was a really good success story to be a part of.

Joe Downs (14:34):

That's really neat. I just wanted to hear about it because when I read that, I was like,

Magen Smith (14:38):

What? I know.

Joe Downs (14:39):

That's unheard of.

Magen Smith (14:39):

We'd look every day and I'm like, how many units did we rent today? What is happening?

Joe Downs (14:44):

Yeah, that's fantastic. Before we move on, what did you believe about this business in say the first year that turned out to be wrong?

Magen Smith (14:57):

I thought it was boring, but I've not been bored today. Not yet. And I've been in it, this is my 20th year in storage. So it's a long time now and it's not been boring. I think it's something... I saw somebody post on LinkedIn yesterday that they just raised rates from their couch and people make it seem like it's really easy. Oh, I just press a button. It's storage. I do it from my couch. I do it from my phone. Sure. And also not at all. Not at all. So we have -

Joe Downs (15:28):

You hit the button from the couch, but there's a lot more that goes into it.

Magen Smith (15:31):

Kind of, yes. There's a lot more that goes into it. Are all the ships moving in the right direction and are all the little inches correct? So are you pricing correct? Is your discounts right? Is your social correct? Are you closing the deal? Is your script right? There's always something more you can do. It's not complicated in that there's a lot of moving parts, but there's a lot of things you can do to make it a little bit better and storage can always be a little bit better. And that's why it's beautiful because you have 30-day recurring contracts that you can adjust rates and levers and timing and price in new people, price out old people, adjust them within 30 days, to some extent cut expenses depending on traditional or demands with AI coming. There's more resources and availability for cutting expenses, improving just a ton of things.

(16:21):

Just being more lean. And then what we have to do, which is provide a lot of data and reports, we now have all of our information feeds into a data warehouse that we have Claude sitting on top of so we can just pull from that whereas we used to have to download a thousand spreadsheets and slice and dice. Now we can just sort of pull out the data and then look at it. We had an issue the other day. We couldn't figure out a problem with a phone line and we used Claude to figure it out and it helped us solve it. So something that would've bottlenecked us for weeks. So it's a cool business.

Joe Downs (16:55):

You're speaking my love language with Claude there.

Magen Smith (16:59):

Yeah.

Joe Downs (17:00):

Yeah. And I think that's the big thing people maybe miss or don't understand. Yo didn't start with 180 facility company. Everything you just said in the last 30 seconds was developed and learned through trial and error and process and ups and downs over the last six, seven years, I'm sure.

Magen Smith (17:20):

Yeah, I started with two.

Joe Downs (17:23):

Right. And that's where most people are right now. They're looking for their first one or they have one or two and they've got some doubts about management and where they're headed. And we'll get into that in a second. But before we do, we'll switch gears here. It's long overdue for a true/false question. True or false, the five largest publicly traded self-storage REITs combined own less than 25% of all self-storage facilities in the United States. True or false? That is true. Folks, self-storage remains one of the most fragmented commercial real estate asset classes. The large public REITs are a small slice of the total facility count nationally.

(18:13):

Making true or false, self-storage has one of the lowest average operating expense ratios of any major commercial real estate asset class. Sure. That is true. Self-storage typically runs leaner than multifamily office or retail on a percentage of revenue basis. All right. I want to name something directly because I think it's the single biggest reason people never bring in outside help running their facilities. We didn't, as you know. Full disclosure, my company, Belrose Group is a client of Atomic. We've had multiple managers in the past, including self-managed. I just want to put that out there. And I'm introducing that here for a reason because we at Belrose didn't really trust outside management.

(19:16):

We had looked at it. We did our research. We talked to people. This is over the years, not in the last year. And frankly, for the facilities that we were buying, the size of them, you really couldn't find... Now maybe we just didn't find you, but at the time, and I'm talking 2019, 20, 21, 22, 23, 24, all the way up until about a year or two ago, did we really start to accept the fact that, hey, maybe these third party managers have outpaced us. Maybe they are better even though they're not managing their facility because no one will ever care like you, the owner. That's the mindset you have. These are my words, by the way. I'm not speaking for everybody.

(20:05):

But in the last few years, we did notice that you know what? Not only has third party management at the smaller facility level, under 40,000 square feet, let's say, not only have they caught up in management, but they've surpassed in some cases a lot of what even we could do ourselves. And then on top of that, we educate a lot of students. And so we talk to them. We're the first time buyers. We're constantly in front of them. Then of course we're networking with others. And I tell you all of this to say there's a lot we hear out there. We know what's going on in the industry. Maybe not at the REIT level, but at every level below that. And there's a fear we hear a lot. If I hire a management company, I'll lose control. I'll lose margin. Certainly you lose some margin.

(20:56):

I have to pay you. But will I lose margin? In other words, can you increase the margin such that you're paying for yourself? That's the question we ask ourselves. And then some, because ideally we're not just trying to free up our hands. We're trying to hopefully put our business, the operations, the control, the brains of our business where it matters where the rubber meets the road in more capable hands. So what's the actual worst case an owner pictures when they hand off management to you? Is the fears that I just talked about, are they ever right?

Magen Smith (21:37):

That's a great question. And I couldn't do it. So I started my own. I don't recommend everyone

Joe Downs (21:44):

Take that. It's a bad way to sell your company.

Magen Smith (21:47):

That's not my recommendation because guess what? It's real hard. It takes a long time. But that was my fear too. So I really, really get it. I understand it. I went through the same journey and process and I couldn't quite overcome my own fear. So what I've seen from our clients, because we have this conversation all the time, the ones that want a partnership... So you have to pick the right company for you and everyone has their own flavor. So we are a really good fit for some people. We're a really bad fit for some people and that's fine. There's a lot of companies out there.

Joe Downs (22:23):

Sounds like there's a lot of collaboration between you and the owner. As there should

Magen Smith (22:27):

Be. As there should be.

Joe Downs (22:28):

That's what you prefer.

Magen Smith (22:29):

Yeah. That works well for us because we like that. We want to make sure we're hitting the mark in the right way. We've had some customers, only time it really doesn't work with us is if you really can't let go of control, you want to hire a company, but you want to retain all the control and be in it with them, that's not going to work. You have to be able to let the professional do the thing, be there, but in the seat of the client and understand we get to make our decision. So we have some people that they want to be on meetings with the site manager. It's like, no, that's our job. We need to be able to do these things.

(23:11):

So that doesn't work well for us when somebody wants to stay too much in the seat and still control it, but have the management company in place. You can't have two drivers in the seat. So make sure that you're ready for that. And the ones that work best realize maybe they're not the best at managing or they don't like it or they're not ready for it or it's just not a good use of their time and talent. They're better suited to go do what they do, which is learn, buy deals, improve, raise money, underwrite things.That's the better use of their time to grow their portfolio. And they want somebody to take the asset that they've created and get it to the finish line every single day because management is a everyday show up and do the job. It is a very different hat than the owner growing the portfolio or the asset manager.

(23:57):

So just understanding that difference, that's a great client for us.You guys are great clients for us. You show up, you care, you give us feedback. We're on the same team, we're moving forward, but you respect that we are the management company and we respect that you're the client and it's a really good relationship.

Joe Downs (24:13):

Yeah. Well, we respect that we are outclassed by companies like yours. So switching gears, there's a scenario that I was briefed on that I'd like you to shed some light on if possible. You took over management for an unnamed REIT. So you picked up, I don't know who the owner was, but you picked up management of this facility of a facility and the occupancy was 80% when you took over. And you guys, I don't know over what timeframe, I'd love for you to tell me, but you took it from 80% to 95% and the revenue jumped 220%, which is incredible. What was the REIT actually missing operationally that you saw and what were the changes you made there?

Magen Smith (25:01):

Yeah, that was an interesting one. So the owner was a single facility owner. I believe he had an SVA loan. It was coming due. He had a REIT managing it. They also had other assets in that town and they would not raise his rates. They would not do rate increases. They had people so far under and he went to bat with them and they said, "That's outside of the algorithm. We will not do it, " from his story. This is coming from him. So he was extremely nervous because he had to break contract, rebrand, start website from scratch, start SEO from scratch. But on their proforma of their algorithm, they were not going to hit his marks and he was going to be in trouble in the business. So he had a hard choice. Which company do I choose? How do I do this? Do I do this myself?

(25:49):

I have a time clock on me. What do I do? So he chose us, trusted us with it. We went in, we saved him as much money as he could on rebranding, re-signing. We coached the manager who he was amazing. The manager was like, he had just a really good heart for customers and was able to talk to people. So we coached him on how to have that rate increase conversation, make sure all that was good. We pushed up street rate to right under where the market was, but that gave us so much room to raise rate. So we set that anchor high. So if people looked and got $150 rate increase, which was what they were going to get, they could still look online and see they were saving 15% under where we were today. So we kind of had to set all those things up and then we sent those rate increases and held our breath because we couldn't lose occupancy over it.

(26:42):

And we I think got one negative review online out of hundreds and I think maybe had one move out over it. So we were able to just amplify his actual cash collected very quickly with 30 days notice and then poured into SEO adjusted street rates where they needed to be, got his occupancy up pretty quick. And he was actually able to sell it to his friend and get himself... He worked out his deal. So it was a success story for him, but it needed -

Joe Downs (27:12):

What a great story.

Magen Smith (27:13):

Yeah. It needed the attention of the site. It needed micro attention, not an area algorithm.

Joe Downs (27:26):

That is a really interesting insight. An area algorithm versus individual attention. I love that. You've said storage is a data business, length of stake, cost sourcing, marketing spend. Is there one KPI you wish every new owner tracked from day one?

Magen Smith (27:48):

I am a fan of cash in your bank. So how much money is going in your account at the end of the day? There's leading that tells me what's going to happen. There's lagging, which is cash in the bank. It's kind of the last one. If you're going to look at one thing, how much money did you actually collect? Was it more or less? Was it what you expected? And then just start tracing back from there. So if you're not collecting it, was it in bad debt? Fix auctions. If it wasn't in bad debt, did I not rent enough units? Why not? Fix phones, fix website, fix marketing. If that wasn't it, how's the site look? Is it clean? Are the signs there? Do the doors open? Are my units rentable? I just want to see, did I make more money than I did last month?

(28:33):

And then I start going back and tracing it backwards. That's kind of how my brain works. You could look at all the leading. Once you get good at it, then you start getting as far ahead as you can go because then you can predict because you've gone backwards so much. But I think it's better, especially if you're newer, to start with reality and then start tracing it backwards as far as you can and seeing where the breaks are and just fix one thing at a time. You don't have to come in and try to fix it all or understand it all. Just start looking at one thing at a time. And if you're occupied and your cash isn't good or people just not paying, start calling. The things are pretty easy. People want these sexy, exciting fixes, but usually it's pretty simple.

Joe Downs (29:21):

It's blocking and tackling. Yeah. But I love how you lay it out there. That just makes so much sense. There's a logical process to it. Yeah. Right. So folks, the fear is real as you just heard, but the data says the opposite of what people assume. The right operator doesn't cost you control. They hand you the numbers you were never tracking in the first place in a lot of cases. And if you were just listening to everything Magen just said, I promise you if you're listening, I would be questioning whether or not you're tracking all that and doing what Magen just laid out. Magen, true or false, a cost segregation study. I Can let a self-storage owner depreciate a large share of their property in five, seven, or 15 years instead of the standard 39 year commercial schedule? I want you to lean back into your tax accounting days to answer this one.

(30:13):

I'm

Magen Smith (30:13):

Going to say true.

Joe Downs (30:15):

Of course it's true. Yes, cost segregation is a well established strategy for accelerating depreciation folks on qualifying components of a commercial property and it's a natural one for a CPA guest to speak to directly, of course. Let's get tactical for a second. I want to break down the actual buckets that run a storage facility day to day because most first timers have never seen this laid out. So you've got three management models atomic. We'll call them, maybe this might not be exactly the verbiage you use, but the categories would be traditional management, hybrid and remote. And I want to use that as a framework here. So walk me through those three models, traditional being the full onsite staffing, hybrid, I guess roughly defined as onsite during peak and then remote off peak and then remote, fully offsite call center and automation driven. How does a first timer, a first time buyer know which one fits their facility?

Magen Smith (31:21):

That's a great question. If you can staff and if you can staff by size, revenue, actual office space for somebody to go to, I think that's always better. So a person in the office, nine times out of 10, it's going to give you the bang for your buck. It's usually better, especially if you're in lease up. If you're buying a fairly full stable property, you probably don't need somebody sitting there unless there's heavy maintenance or it's in an area that would attract crime or things like that. So you might need the person there for security. The industry kind of swung from live on top apartments to now we can just be in the office then to why do we need people at all? And then they were like, "Oh, right, we kind of do need people. " So it's kind of come back a little bit to it's still a people business.

(32:12):

I've been at stores and I've seen people walk up, read the sign, pull the door and walk away. So we did an analysis of our portfolios. It's probably a year ago now, and we had 11 more rentals a month on average at a staff store than an unmanned store. So there is a benefit to having a person, the right person in the office for sure. If you can afford it, if the property makes sense. Now you can still do very well unmanned and we have all the models. So sometimes we'll staff, like you said, peak hours, we'll staff one location or an annex, that person can run an annex or we just go truly remote and the call center runs it. We have a remote property manager level built into our company. So they do walkthrough processing, they call people back, they deal with the issues.

(33:02):

They're the remote property manager. So the call center's not inundated with dealing with that and the district manager doesn't have to. So the industry is kind of split the customer operations of a store, which is rentals, issues, credits, questions, payments, and the site issues of the store, which is walkthroughs, units, lawn, fencing, those kind of things. So those are kind of the two components of how you run your store. How do you staff both of them? So if you staff it, that one manager will do both. If you split it, you need a call center to do the customer part, and then you still need a site person to do the walkthroughs and things like that. So the smaller properties we've done well. We built remote operations well before everybody else did and it's truly remote. So our first property we managed was Louisiana. The second was Maryland.

(33:51):

The third was Idaho. The fourth was upstate New York and then we infield. So we started that we had to get on a plane to go to a property.

(34:03):

So we kind of learned how to do this from afar early and then built it in and then the whole industry switched to remote, but we were kind of ahead of it. And that was part of what helped us grow. So as you're looking at what model's better for you, if you can afford a person, do it. Even if you're in lease up, you can do that for a couple of years and then phase it out. So it's not like you have to live with one choice of the other choice. We've staffed unmanned, we've unstaffed manned, we've done hybrid. We mix it up depending on what's happening at the store at the time.

Joe Downs (34:36):

I'm going to ask you a question I know you can answer, but I want to see how you respond to it. When is self-management actually the right call instead of hiring a third party manager?

Magen Smith (34:46):

No, that's a good question. Because we have had some people we've talked to that I'm like, "You need to just manage it. Don't hire anyone because you're never going to be happy."

Joe Downs (34:57):

What's an example of that?

Magen Smith (34:58):

Yeah.

Joe Downs (35:00):

When - Not the actual facility or the person, but what were the conditions surrounding it?

Magen Smith (35:05):

So if it is so small that it is a stretch for you to hire a third party company to begin with and they can't miss the mark, not even one unit. They have to get every single thing right, that's too much pressure. And if you live close or you have the time, that's probably a good model for you to continue to manage yourself until you grow to the point it makes sense to have a third party manage it. If it is something that you're not getting back more than you're giving, so it's not that hard for you to manage it, but you feel like you might just need a third party just because that's what people say you need, but it's not really...

Joe Downs (35:43):

So if someone is interested in learning more about Atomic, how can they get in touch with you guys? Is there someone they should get in touch with? If I own a facility or a portfolio of facilities, is there a review? Will you guys look at my facility or portfolio and just tell us whether you think you can help us or not and improve operations, et cetera? How's that whole process work and how can we get in touch with you? Yeah.

Magen Smith (36:14):

No, you have to just pay me day one. That's it. No, I'm kidding. Yeah. Our website is

Joe Downs (36:19):

Atomicstoragegroup.com. You seem like you know what

Magen Smith (36:21):

You're talking about. Our website's atomicstoragegroup.com. You can email either info@atomicstoragegroup.com or Magen. It's M-A-G-E-N. Daniel is our business developer, so he's the one that'll get back with everyone and he's awesome. And yeah, we do reviews. We'll look over everything. We take it slow. Hiring management's not a fast decision. So we can look at the property, we do a budget, we can do consultation if you want for some time. It's very few and far between we get a phone call and get a contract signed. It's a relationship of how does this look? How does this work? What can you do for me? Do I even need management or do I maybe not need it right now? And we're not shy about telling people. We'll say, not yet. We'll say, here's what I would do if I were you. We want people to be... It's a relationship.

(37:10):

I have been in this industry 20 years and I'm not going anywhere anytime soon. So there's people I've met 15 years ago that it wasn't time then and they come back around and that's what it should be. So we're not going to steer anyone in our direction if it's not a good fit for everyone involved and we don't really think we can help.

Joe Downs (37:28):

I love that. So Magen, M-A-G-E-N, we didn't unpack the spelling of Magen either. We'll do that offline. Yeah. We'll call

Magen Smith (37:38):

My mom.

Joe Downs (37:39):

Yeah. We'll get her on the next one. Magen@atomic -

Magen Smith (37:46):

Storagegroup.com.

Joe Downs (37:47):

Atomicstoragegroup.com. Daniel is going to be the one that reaches back out and can help go over your facility or get the process started of evaluating what you have and going from there. All right. Last question. Have you heard of the book Be Your Future Self Now?

Magen Smith (38:06):

I have not.

Joe Downs (38:07):

So I'm not going to ask you six months, one year, five years, 10 years. I'm going to ask you five years. In five years, who is Magen Smith? If you were getting a DeLorean and go into the future, what would you see? Who is Magen Smith? Is she still the CEO of Atomic? How many storage facilities is Atomic managing? How many facilities does Magen Smith own? Is she doing something else?

Magen Smith (38:37):

That is a great

Joe Downs (38:37):

Question. Who is Magen Smith in five years?

Magen Smith (38:39):

So I found a journal that I wrote. It's been 13 years ago now. And I saw it the other day and I hadn't looked at it since. And everything I wrote from my income, my lifestyle, how my kids were doing had come true on that list that I wrote 13 years ago. So it was a cool moment and I hadn't even remembered. And I remember writing how much money I wanted and I crossed it out and I doubled it. In my mind, that was so much then 13 years ago to write that number. And I saw it a few months ago.

Joe Downs (39:13):

So 13 years ago, which that means you're before Mr. B, you're Mrs. Beast.

Magen Smith (39:19):

Yeah. And the income was within, I mean, a very small amount of money, which was amazing. Lifestyle was all those. I was like, "Oh wow, I've been wanting this for a long time." It was cool. And then I just actually engaged a strategic coach and he said, "In five years, where do you want your life to be? " And we had a call on Monday. So that's been my thought of this week of how do I want life to look? So I'm right now - Well, you should have

Joe Downs (39:43):

A pretty good answer ready to go. You

Magen Smith (39:44):

Would think. We're focusing in atomic right now very much on systems processes. I asked all of my leadership team, "How do you know if you're doing a good job?" And they said, "Well, if everybody's happy." And I was like, "Nobody's ever happy. That's a terrible metric for you. " So we're working on KPIs, we're working on metrics, we're working on really systemizing the business. It grew very, very fast and it's been just kind of what's the best next thing? And you just sort of get in it and do the things for the next day. And so right now we're really focusing on systems, procedures. I want to grow the company for sure. We've been telling everybody for a year, get ready for 300. So if your department can handle 300 properties, what does that look like for you? Not that we're there yet, but what does that look like?

(40:33):

What won't work now? Then that doesn't work now. What does that look like at 300? So we've been focusing hard and heavy on getting that ready. What I've seen some companies do is scale up in growth and crash right down and we don't ever want to do that. I don't ever want to lose our service, our customer touchpoint, our deliverable, our reputation because we grew too fast. I think growth can be really, really dangerous as well as not growing. So you have to hit that right mark. So five years from now, I think we'll be at more than 300 given our trajectory. I think we'll exceed that very well. We'll be higher on the list of the management companies. I don't want to grow for growth's sake. I want to be able to offer good service to the people who have found this industry and love it because it's amazing and help more.

(41:23):

I really like teaching. I like educating. A friend of mine have a podcast that we talk about what it looks like to lead as women.

(41:34):

Just how do we live our lives? I feel like women are coming through kind of a renaissance right now and there's more of us finally in leadership seats and positions. And I grew up without a template of what that looks like to lead a company. I knew nobody who ran a business. So I'm figuring this out. So I get to help my niece and younger generations and sort of be that somebody they can talk to and ask questions from. So those things are important to me. My kids will be older and that's going to be cool. So they hopefully still like to hang out with me. But I think that's five years down the road for me is just enjoying life, helping people, building a really cool company and giving people the opportunity to do their best work that they can't even believe they get paid to do it.

(42:16):

And that's who we like to hire and they just do an amazing job for us and that creates a wonderful culture of taking care of our customers.

Joe Downs (42:24):

Well, you're certainly very impressive. What you build is very impressive. And what you just said that it doesn't feel like work, that clearly comes through.

Magen Smith (42:33):

Thank you.

Joe Downs (42:34):

Hats off to you. Can't say enough about you guys and you particularly as a person since you've started all this and did all this. So thank you so much for being a great guest today. I was looking forward to this one. Yeah, me too. Thank

Magen Smith (42:51):

You.

Joe Downs (42:52):

Folks, here's what I want you to take away from this one. Storage is data. It's a data business. Whether you're running it yourself or handing it to someone else like Atomic. Magen's proof that the fear of losing control to a manager is actually backwards. The right operator hands you more visibility, not less. And I can speak directly about this at this point now. So for the person still on the fence about whether to self-manage or hire it out, the question isn't, can I trust someone else because there's companies like Atomic out there that yes, the answer to that is yes, you can trust them. It's, am I already tracking the numbers that would tell me if I should? So step one, are you tracking the numbers that should tell you if you should? And two, is it what you want to do? Are you looking to do something else?

(43:43):

Is there another part of the business you're better at? Are you in the right seat? And I know I can speak for our company, we knew the time had come to outsource management. We used to manage ourselves internally and we recognize that now companies like Atomic were doing it way better than we were. So it became a no-brainer. Take a look at what you're doing. If you're managing yourself, there's nothing wrong with it. Just take a look at it. And if you're not sure, reach out to Atomic. It sounds like Daniel will get back to you and start that process. And I'm sure Magen will get involved at some point like she did with us. Folks, there's a seller out there right now who's ready to sell. So stop watching, start moving, drive for dollars, send the LOI. We'll see you next week. I