Pecos Storage

Ahwatukee businessman Rande Leonard and his Pecos Storage site are riding the crest of an industry that is nearly recession proof as self-storage continues to be one of the more profitable industries nationwide.

Rande Leonard shudders a bit when he thinks of the day he opened his business.

It was Labor Day weekend in 2009, and the Great Recession was laying waste to thousands of homeowners and business owners across the country.

“That was when we were looking over the abyss, wondering if we were going to come out of that recession,” said Leonard, who owns Pecos Storage on the reservation side of the intersection of Pecos Road and 32nd Street.

Little did the Ahwatukee resident and former oil industry executive know back then that instead of a tsunami, he was riding the crest of a wave that has positioned him well in what some might call one of the nation’s fastest growing types of businesses in the nation today.

Indeed, while malls, starter homes and big boxes have struggled to varying degrees in the past decade, self-storage has grown into a $38-billion-a-year industry. According to some industry analysts, one out of every 11 American households and one in every 12 businesses pay an average $91 a month to store stuff in all kinds of sizes of those metal units.

SpareFoot.com, which tracks the self-storage industry, estimates that 50,000 facilities in the U.S. account for 2.3 billion square feet of rentable storage space – enough to fill the Hoover Dam 26 times with old clothing, bric-a-brac and keepsakes, according to curbed.com, a site that tracks trends in building and design.

The self-storage market is on the rise throughout the Valley as well – especially in areas with residential growth or, like Ahwatukee, high incomes.

The increasing popularity of apartment housing among younger generations has also benefited self-storage proprietors, as these residents need extra space for storage. And while boomers still hold the lion’s share of self-storage units, industry analysts foresee millennials as the next dominant customer sector of the industry.

The Valley was a top metropolitan area nationally for self-storage building last year, according to Marcus & Millichap’s 2018 Investment Report for the self-storage market in Phoenix. While construction volume is expected to decrease this year, it will still be relatively robust with over 800,000 square feet expected, according to the report.

Indeed, Leonard quotes commercial developers Cushman and Wakefield in describing his industry as “recession resistant.”

For example, if someone rented out a dozen homes that provided the same income, they could experience a critical shortfall if one starts missing the rent.

“I have 1,265 customers,” he explained. “When you have 1,265 customers, your income has really diversified from the effects of any one person having a problem.”

Leonard is building a new self-storage center on Riggs Road near I-10 on a 10-acre parcel and getting ready to expand his existing location – state and federal highway agencies approve the addition of an interchange at 32nd Street and the South Mountain Freeway.

Although a decision was initially expected by now, Dustin Krugel, a spokesman for the Arizona Department of  Transportation said an environmental study is still underway and no decision has been made.

Even if ADOT decides to add an interchange, that decision must be reviewed by federal highway authorities, he said.

Leonard isn’t worried if they reject the idea, however.

He’s running at 98 percent capacity – the result not just of the variety of storage units he offers, but also the result of amenities he offers that are attractive to his three types of clients – recreation vehicle owners, small mobile businesses that don’t want a brick-and-mortar storefront for their equipment and the “mini-storage” people who don’t need temperature-controlled environments to store their stuff.

“We tell people, ‘If you’ve got fine furniture, et cetera, divide your stuff up, put your stuff that goes in the garage here, put the nice furniture that you would put inside your house at a climate-controlled unit,’” he said.

His RV storage has been a hit because he’s right across the road from a community where there are many RV owners. Moreover, Pecos Storage has 56 closed-circuit cameras to keep an eye on all his customers’ belongings and offers 24/7 access with chip-cards that don’t require tenants to remember a code punch to open the gates.

“The RV storage people will drive 10 or 15 miles to get here,” he said, “and so you want to make it convenient for them to get in. With us having 24/7 access, they can come down after work during the week, get ready for a weekend trip and get all prepped and ready to go and then take off after work on Friday. Or conversely, if they returned from a trip and it’s a 10 or 11 Sunday night, they can drop the kids off at home, bring the rig over here, park it, and then deal with it the next day.”

The contractors who rent from Leonard can park their trucks in front of their unit and even work inside them at any time of the day or night. “They can bang around at 5 in the morning and not disturb anyone,” he said. “We’ve got a heating and air conditioning guy, a glass guy, a plumber, a yard guy – just various kinds of small-business trades.”

The mini-storage tenants tend to divide into two groups – short-termers and long-time clients.

“Half of the mini-storage storage clients are in some kind of crisis – they lost their job or are getting a divorce or just moved here and haven’t bought a house yet – and they need temporary storage,” he explained. “So that part of it is a little more in flux.”

“Then we’ve got our core mini-storage that had been here quite a long time. We have people run businesses out of the mini-storage. They don’t use their garages. I’ve got some people that are E-bay type of business operators that have their inventory. They come down here, box it up and then take it off to the UPS store to ship it.”

Leonard also has built loyalty over the years by going out of his way for clients who get in trouble.

“I think my customers know if they were to call me and say ‘My trailer hitch broke at Canyon Lake, who would you recommend?’ I drive up there and get it myself.”

After all, he explains, that’s what it means to be a neighborhood business.

“We’ll do whatever we can to just help them because we run into each other at Fry’s or Safeway or whatever. I mean, they’re neighbors and friends.”

Information: pecosstorage.com

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