Will Retiring Baby Boomers Find Second Careers in Self Storage?
Did you know that 2008 marks the first year that baby boomers can retire early and collect Social Security? As a matter of fact, there are an estimated three million of that generation turning 62 this year. This wave of retirements is causing concern among some industries that face labor shortages. Although some companies can replace these workers with younger—and usually cheaper—labor, others are looking to hire retired boomers for part-time and even full-time positions.
A recent CareerBuilder.com survey reveals that 22 percent of employers plan to hire retirees this year because of the shortage of qualified workers. In addition, a 2006 Manpower Inc. survey indicated that 18 percent of U.S. employers had a strategy to recruit older workers. What these numbers don’t say is that about four out of five companies apparently don’t have a plan to bring in these experienced people. Employers have legitimate concerns about older boomers fitting in with younger workers, but generally these mature workers offer many intangible qualities such as life experience, wisdom, and reliability.
While Social Security Administration offices may be filling up with boomers anticipating retirement, many retirees are starting second careers out of necessity or just plain boredom. “I’ve talked to a lot of people that have been disenchanted with retirement because they think they’re going to love it,” says Tom Litton, president of Lodi, Calif.-based Litton Property Management. “They say, ‘I miss having something to do every day.’ There are only so many things you can do in a day when you’re retired.”
Not so laid-back
Self-storage may be one industry where early retires look to hang their hats; but baby boomers looking at self-storage as a laid-back profession, where they can while away some time before permanent retirement sets in, may be in for a surprise.”A baby boomer looking to turn down the burner, in other words they had a career as a firefighter, military, or maybe a middle manager at a Fortune 500 company, and self-storage looks pretty easy, he’s not going to fit in our system,” contends Stuart Wade, director of sales and marketing for AAAA Self Storage Management Group in Norfolk, Va. “There is not a sense of urgency for that person to be the right fit. We run the current generation store as retail stores. Give me a recent college graduate that wants to sell, sell, sell.”
The Manpower survey shows that companies’ top two concerns about older workers were high salary expectations and healthcare costs. They also were concerned about teaching older workers new skills.
This is also a concern in self-storage, which relies more and more on computers to run facility operations. “If you can’t get past computer literacy, you will not be with us,” Wade says. “That’s one of the things we test for. The reports you’re going to have to generate with our system are going to require you to do some Excel spreadsheets.”
While coping with technology may have been an obstacle to older workers in the 1990s, more mature Americans are being exposed to it both at home and work. “There was a lot of resistance to it in the mature age group,” Litton says. “It became so ubiquitous that we had no choice, we have all been forced to deal with technology. The senior crowd has seen the value and power of it, so they’ve actually done quite well in adopting technology.”
Less stressful environment
Self-storage generally is less stressful than other high-powered professions, and retirees may find a place at a facility where tasks might be less demanding yet they have autonomy. “In storage, we look at a person’s maturity and ability to perform the didactic functions of the job,” Litton says. “Storage is a type of job that you could literally walk into a facility and teach yourself the job in a couple of weeks.”
Recent retirees who work well with people may find self-storage a comfortable environment. “People that start in the storage business fall in love with it because they like the interaction with people,” Litton says. “You get to see a lot of different sides to people. I think that’s why it appeals to the person who wants to get back in the workplace, but they don’t want a high stress position.”
Karl Hammer, who retired as a freight manager with an airline following 25 years of service, fits that description. “I got into the storage business by accident,” says Hammer, who manages Totem Lake West Self-Storage in Kirkland, Wash., with his wife, Barbara. “I answered an ad for a relief manager and three weeks later the manager quit,” Hammer says. He eventually was offered the job and he hasn’t looked back since.
Litton hired Hammer as facility manager in Monterrey, Calif., and discovered he was a natural for the job. “He was probably one of the best managers I ever had because of his life experience and maturity,” Litton recalls.
The Hammers managed several California facilities before moving to Washington. “We’ve enjoyed our time in self-storage,” Hammer says. “We’ve met a lot of nice people and there is always something new going on. We have an excellent property manager who lets us run it and the owners treat us like family.”Investing in Self-Storage
Besides the management side of self-storage, more retirees with fat 401(k) plans may find the business a good fit for their investment dollars. “You’re going to have a large number because there is so much wealth in the country that people are going to look to place this capital,” Wade predicts. “You’re going to see a lot of people retire at 58 and they don’t want to quit working. You’re going to see a large number of boomers that are going to have capital and look at this product as a way to invest some of their capital.”
One retiree who invested in self-storage was Harvey Roberts, who retired from his CPA business after 35 years. “I was a tax accountant and went through 35 tax seasons,” Roberts says. “My standard line is, I did it for 35 years and loved it for 33. From Jan. 1 to April 15 it was not unusual to go straight through every day. Tax seasons with extensions got to be almost year-round.”
One of Roberts’ clients was self-storage pioneer Tom Nicholson Jr., of the Nicholson Companies based in Norfolk, Va. Nicholson introduced Roberts to the business and in 1975 the two firms partnered on self-storage acquisitions.
“We put deals together and syndicated them and this is more fun,” Roberts says. “I did other real estate, like shopping centers and apartments, but to me the mini-storage business is the best of all. It’s a real estate investment with business characteristics to it. It is more of a business than renting apartments.”
After retiring, Roberts dedicated more of his time to his self-storage interests. He is now part owner of 12 facilities in Virginia. “I work seven to eight hours a day and I enjoy it more,” he says. “It keeps me busy—as busy as I want to be. I think it’s important to keep on working and keep the mind active.”
The baby boom generation, with its propensity for excessive spending and acquiring stuff, is credited for turning self-storage into a booming industry. Now as the boomers begin to retire, they may create another phenomenon as their graying ranks take up new positions as managers and owners in the industry they helped to cultivate.