What Effect is Storage Wars Having on Local Auctions?

It’s no secret that the wildly popular show “Storage Wars” has been drumming up storage auction frenzy all over the country. What started off as an implausible effort to get a new series up and running has, even to the surprise of people close to the project, exploded into a semi-phenomenon, increasing public awareness of self storage facilities and their services and swelling the ranks of auction attendees so much so that property managers everywhere are buzzing about the shows, even if they’ve never watched an episode.

Increased Phone Calls to Properties

Indeed, the sheer volume of phone calls coming in just to ask about storage auctions and the next time we’re holding one is staggering. It seems as though half the town watched Storage Wars one night and decided they were going to start buying up delinquent storage sheds the next day.

The Beginning of Storage Wars

Lance Watkins, who owns Storage Outlet in California was one of the first test cases for the Storage Wars dynamic. He agreed to allow his property and his delinquent unit auctions be filmed and turned into episodes for the fledgling show. At the outset, he didn’t think the show had a prayer of succeeding and expected it to flop hard. Nowadays, however, he’s reporting that auction units which once upon a time went for only $75 to $125 are being aggressively fought over by highly motivated bidders, and sometimes earning up to $500! This is obviously great news for the company, which relies on the public auctioning of these troubled storage sheds for a chance to recoup their financial losses after a tedious three months of not receiving payments from their tenant.

Increased Auction Attendance

Indeed, self storage facility managers from Maryland to California to Hawaii have been reporting quadruple the attendance at their local public auctions. Sales that might have only drawn in a handful of interested bidders before the advent of Storage Wars now draw the eager attention of 20 to 40 bidders, numbers that can sometimes overwhelm small operations!

Where is all this new bidding firepower coming from? Network metrics put the viewership for Storage Wars, hosted on A&E, to be at around 2.5 million.

The Inside Scoop on Storage Wars

This surge of success is even a surprise to the two men behind Storage Wars, Dolph Scott and Dan Dotson. Dan has been involved in auctions for 35 years and is stunned to see the kind of attention that a popular network television show can bring in. He has been asked to sign autographs for people he’s never met before, which is unbelievable at times.

Storage Wars has shown no signs of slowing down, either. As of the beginning of this year, the show could claim an additional .2 million viewers, bringing its total audience to 2.7 million. In light of these impressive statistics, the network has agreed to host a second season, ordering an additional 20 episodes.

Criticism for Storage Wars

There are two main fronts of criticism brought against this unique show. The first comes from people working within the industry, whether they are storage facility owners, management companies, property managers or self storage legal specialists. The main beef from their vantage is that the show inaccurately represents the actual day-to-day of a storage facility.

While it’s true that only a very small fraction of all storage tenants ever fall far enough behind on rent payments to be sent to auction, the entire purpose of Storage Wars is to showcase what does happen once a delinquent shed makes it to the public sale stage. After all, the overall purpose of the show is to entertain with a mind toward making money, so filming the actual day to day occurrences, like sweeping out dirty units, performing minor maintenance, haggling with prospective customers over monthly rates, making collection calls on your entire rent roll, would probably not be half as watchable. The exciting part is the treasure hunt, the “what’s behind that” moments and the ultimate cash-in. It’s not a documentary on life at a storage facility!

Many storage owners and managers that ultimately agreed to have their facilities filmed were squeamish at first about putting a spotlight on what can be the least pleasant aspect of the job. Often times people that end up going to auction have desperately tried to keep up on their monthly rent payments, but have failed because of unbearable financial hardships, layoffs, recession woes and more pressing monetary obligations (like buying food). Facility managers don’t always relish selling off people’s units. Many times they will have spent so much time talking and working with the people that end up on the chopping block that they will have a personal relationship with them by the time auction day rolls around. Insiders were understandably suspicious about the show’s core concept, fearing it would paint the entire self storage industry in an unfavorable light.

On the contrary, many managers and owners that were featured on the show now say that deciding to go along with the filming was the best decision they ever made, business-wise. It has increased their visibility and exposed an entirely fresh demographic to their facilities and services. Meanwhile, it has shown people the serious consequences of falling far behind on monthly rent payments and encouraged current tenants to keep up with their financial obligations so that their storage sheds never get to be at risk of sale in the first place.

The second major criticism levied against the show comes from viewers that have a sneaking suspicion that the entire spectacle is staged. Not necessarily being familiar with the entire realm of storage and its general rules and procedures, some Storage Wars viewers believe the entire auction process is a fake! While it’s understandable that folks who’ve never even set foot on a self storage property might wonder as to the plausibility of the entire situation, it is a raw cold fact that delinquent storage units are sold off in an attempt to recoup financial losses the company incurs by hosting non-paying tenants for an extended period of time. These auctions are done in accordance with applicable state lien laws, which allow a company to take possession of a non-paying tenants belongings, usually after 30 days.

This is done so that the company has a chance to stop losing money on a rented space that the tenant is not paying for, since the tenant has their own lock on the unit and their stuff crammed into it, meaning that the company cannot re-rent the space to a new paying customer. Keep in mind that companies don’t particularly like the auction process, even from a purely financial perspective focused on the bottom line. It’s far better to have someone who pays less, but pays each month on time (generating revenue the company can rely on for expansion, maintenance, salaries, etc) than to get nothing for months on end and then maybe get $100 to $300 during an auction, which might be a fraction of the total bill by that point. Most of the time, the company is simply happy to have the space open and rent-able again.