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30 Mar 2020

Self Storage Auctions Shift Procedure Amidst Pandemic


This story originally appeared on SpareFoot.

The gaggle of bidders used to stand shoulder to shoulder in narrow corridors to catch a glimpse of the goods stored inside, now they wait their turn in line standing six to eight feet from each other.

Like all things, the coronavirus pandemic is changing the world of self-storage auctions.

“The protocol now is a manger will open the unit and the will buyers will stand back… and go in a single file line spaced about six feet apart,” said Dan Dotson, co-owner of American Auctioneers with his wife Laura.

The Dotsons are regulars on the A&E reality series Storage Wars, which brought the phenomenon of self storage auctions to the mainstream. When tenants fail to pay the rent on their storage units, facilities seize the contents and auction off the contents to recoup their losses.

Dotson said they are taking additional precautions amid the current pandemic to avoid the potential spread of COVID-19 at its live auctions, including limiting attendance to 50 persons, and barring children and spectators from attending. They are also asking anyone with cold or flu symptoms to not attend any auctions.

Then there is the question of handling cash money that could be contaminated with the virus.

“We’re going to Lysol the money down,” Laura Dotson said.

Smaller crowds

Dan Dotson said crowd sizes are already shrinking on their own, with about 20 to 30 individuals turning out to their auctions held over recent days. One reason that buyers of self-storage units, who resell the items they find to the public, are pulling back is because they expect sales to slow down in the short-term.

“Some of the swap meets are closing, which is one avenue that buyers have [to resell items],” said Dotson.

Dotson said some facilities are cancelling auctions all together, including one planned in San Francisco where authorities have issued orders for citizens to stay home except for essential travel until April 7.

“We’ve got a lot of postponements,” Dotson said.

Extra Space halts auctions

Among those self storage companies cancelling auctions is the country’s second-biggest operator: Salt Lake City, UT-based Extra Space Storage, which operates more than 1,800 facilities in the U.S..

An Extra Space spokesperson confirmed that the company was “delaying all storage unit auctions” until further notice. The company is also providing a grace period for late fees and pausing rate increases on current customers.

The company said it has moved most of its auctions online, but nonetheless will be halting all auctions “to offer a reprieve to customers.” The spokesperson also added that employees affected by government mandated closures or quarantines would receive 2-weeks paid leave.

At this point it is unknown if other top storage operators will place a moratorium on auctions. A spokesperson from Public Storage, the country’s largest operator with more than 2,500 facilities, declined comment. The company had several live auctions scheduled across the country at press time, however it is noted that all sales are subject to cancellation. Other large operators, CubeSmart and Life Storage, have moved mostly to online auctions.

The show must go on

As of now, many self-storage companies are still planning to proceed with planned storage auctions.

“We’ve got an auction tomorrow in Seattle,” Dotson said. “[Facilities] will still have to move out the non-payers to get keep their businesses above water.”

Washington Governor Jay Inslee has ordered a temporary shutdown restaurants and bars, as well as gatherings of 50 people.

Self storage facilities have to move out delinquent tenants in order to replace them with paying ones. While government mandated lockdowns could hamper their ability to hold live auctions, the Dotsons have a solution for that as well.

The Dotsons run an online storage auction site, storageauctions.net, that managers and independent auctioneers can use to post units for free. Buyers pay the 10 percent commission. They also have an iPhone app that facilities can use to list units for auction. He expects demand for those services to increase as more operators decide, or are forced, to cease holding live auctions.

“We’re offering all of our live auction clients the ability to conduct their auctions online,” said Laura Dotson.

They also offer an online pre-bid system where bidding can start on-line and proceed at the facility, which could help limit the length and crowd size of in-person auctions.

In the meantime, Dan Dotson said they will continue to hold auctions as long as local guidelines permit.

“We are smart people and we are keeping our eyes open,” Dotson said. “We don’t want to be part of the problem, we want to be part of the solution. Since auctions are quaint small gatherings, we are going to continue to do this until they say you shouldn’t have more than 20 or 30 people gathered, then we’ll relook at it.”

Story: Alexander Harris Thumbnail: PayTheLady

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