Why I Do What I Do Series: Dan Hogan on Working in the Self-Storage Industry

Dan Hogan represents the epitome of what hopeful self-storage newbies dream of becoming when they enter the industry. Owner and founder of Hogan Self Storage in Pennington, New Jersey, Dan’s business embodies the success all facilities are chasing.

When Dan bought the property in 2000 that would become Hogan Self Storage, it had a small garage, an office for his primary business in security, and a barn for its warehouse. “A couple of guys I was friendly with who are real estate investors said the unused land was perfectly suited for a self-storage facility,” Dan explains. And there it was: the lucky turn of the screw that introduced him to the self-storage industry.

Dan was attracted to self-storage for two reasons. “With the self-storage business, I saw two things immediately: managing the facility was very simple and could be done with one employee or one and a half employees. Second, the facility would get to the point where it would throw off cash flow. And it’s proven to be true,” he says.

While Dan was fortunate that somebody brought the industry to his attention, it took eight years of his hard work and investment to come to fruition. Although his property met most of the municipality’s zoning criteria for the town, it took a lot of sweat equity—and cash—over three years just to get final approval.

“The good news was we got approval to proceed in April 2008 when the financial world was melting down,” Dan jokes. “Banks weren’t lending money to anybody, but because of my relationship with my primary business had with the bank, we were able to secure the financing. We had a strong credit record with them, and we had prepared and successfully executed business plans previously.”

“We opened in March 2009, and the economy wasn’t so great then, and I had to continue to support the business while it was stabilizing. So as far as luck versus hard work, I was lucky that I made the investment in the location that I did, but before we got to a point of stabilization, it was years of angst,” he says. “On the front end, like any new start-up business, there was a lot of hard work. It was a marathon, not a sprint.”

When Hogan Self Storage reached stabilization, Dan’s projections proved true, and the value of his facility continues to increase. Dan knows, “I could do nothing more with this property, and I’d be able to take an annuity out of it for the rest of my life.”

“Personally, it is nice to have the comfort that we have equity in self-storage. There aren’t any guarantees in our other business whereas the self-storage model has demonstrated for years continuous incremental growth with incremental profit. And the peace of mind that brings is infinitely valuable,” Dan says.

At Hogan Self Storage, Dan is not involved in the day-to-day operations. His role is in strategic leadership. For several years, Dan and his manager reviewed operational reports, unusual issues, and changes in the marketing plan. After discussing high-level changes, the office manager executes them.

Dan’s advice for new owners in the industry is to be conservative with projections, perform a lot of due diligence, and be prepared for many challenges in the beginning.

“For example, the first year we opened, we had back-to-back-to-back snowstorms,” Dan remembers. “I think that first year we spent $20,000 on snow removal. It was to the point I was almost ready to buy a front-end loader with a snowblower—I could have bought one for what we spent on contractors. Being conservative is always going to bode well in the end—when it rains it pours. It can be very stressful in the beginning when you’re 10% occupied and you have all your regular bills, and then a major snowstorm hits and you get a bill for $5,000!”

After eleven years in business, Hogan Self Storage possesses a stellar reputation. Their primary source of new tenants is word-of-mouth referrals. At over 90% physical occupancy, Hogan Self Storage is expanding to add another 65,000 square feet this year, and Dan is looking forward to many more years of success.