http://www.reit.com A change in business plan necessitated a change in name, according to Dean Jernigan, CEO of CubeSmart (NYSE: CUBE).
In September, CubeSmart changed its name from U-Store-It Trust. In a video interview with REIT.com at REITWorld 2011: NAREIT’s Annual Convention for All Things REIT. in Dallas at the Hilton Anatole hotel, Jernigan explained the rationale behind the move.
Jernigan said brand confusion made it important to distinguish his company from competitors. He estimated that under the U-Store-It brand, which didn’t have trademark protection, the company was losing upwards of $2 million in revenue annually to competitors with the same or similar name.
“Our name is very important to our customers,” Jernigan said. “It’s very important when they find us on the Internet that our name is not confusing, especially with other storage operators, and that was our biggest problem.”
Additionally, a re-evaluation of strategy led the company to shift its focus from simple storage to customer service, based on feedback from customers.
“Today we’re all about providing services, so our U-Store-It brand didn’t really fit with our new plan of offering services to our customers,” Jernigan said.
Jernigan said Google and similar Internet search engines were turning U-Store-It into a “commodity,” especially for customers that weren’t concerned with location. As differentiating the company’s space from other competitors became increasingly difficult, it prompted the decision to shift gears.
“We’re now offering a menu of services and amenities at our facilities that clearly distinguish us from our competitors,” Jernigan said. “I’m happy to say today we’re no longer a commodity company offering a commodity service.”
The company also decided to cater to a different segment of the market.
“We’re looking more towards the commercial customer, who need and would like to have these additional services that they’re willing to pay for,” Jernigan said. “I see that as the future.”
Looking ahead to 2012, Jernigan said the self storage sector was experiencing a consolidation cycle. In the current market environment, smaller entrepreneurs are at a disadvantage, according to Jernigan, because they don’t have the same access to resources as the publicly traded storage REITs.
“Those of us who have capital and who have access to the capital markets are buying assets like we’ve really never been able to buy in recent years,” Jernigan said.
By Matt Bechard
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