From Oil Prices to Storage Units: Building a Business You Control with Karl Graham of Luminus Capital

Karl Graham, Co-Founder of Luminus Capital, joins Matt Engfer to share his journey from oil and gas exploration to building a growing self-storage platform across the heartland.

After spending a decade making high-stakes investment decisions in a volatile and capital-intensive industry, Karl realized he wanted something different. He wanted to build a business where execution, discipline, and team performance had a greater impact than external forces. That shift ultimately led him into self storage.

In this episode, Karl walks through how Luminus Capital scaled from individual syndications to launching a fund, why geographic focus creates a real operational edge, and how disciplined underwriting and risk management have shaped their growth. He also shares how his team is leveraging data, marketing, and AI. This includes analyzing tens of thousands of customer calls to improve sales performance and building more advanced revenue management systems to stay competitive in today’s market.

This conversation is a practical look at what it takes to build and operate a successful storage business today and why the days of easy storage are behind us.

Key Takeaways:
(0:00) Intro
(2:19) Karl’s background in oil and gas and transition to self storage
(13:34) Why he chose self storage over other real estate asset classes
(24:12) Why geographic focus creates a competitive advantage
(28:22) How Luminus operates remotely with local teams
(33:20) How Luminus creates value for self-storage businesses in today’s market
(36:33) Growing the Operation and Taking Next Steps
(42:36) Using data and AI to improve operations and sales
(49:10)  Revenue management, pricing strategies, and AI agents

Resources Mentioned:

Luminus Capital | Website
https://www.luminuscapital.com

Cubby | Website
https://www.cubbystorage.com

Thank you for listening to “Students of Storage.” Be sure to leave us a 5-star review and subscribe so you don’t miss an episode.

#SelfStorage #StorageInvesting #Entrepreneurship #CubbyStorage #BusinessGrowth

Transcript

Introduction

Hey everybody, Matt Engfer here, CEO and co-founder of Cubby. Today on our students of storage podcast, we have Karl Graham of Luminous Capital. We talk all things self- storage, how he got into the industry from a crazy history in the oil and gas business to building a private equity fund uh after syndicating deals. We talk operations, we dive into value creation and his kind of heartland thesis for his uh portfolio build and then we dive into a lot of things AI and technology.

I love this conversation. I think Karl is one of the the sharper more critical thinking operators around. Hope you enjoy it.

Meet Karl and Luminous Capital

Hey Karl, thanks for being here.

Yeah, pleasure to be here. Thanks Matt.

Absolutely.

always uh enjoy our periodic check-ins and uh this time we got the microphones on and the and we're recording it. But uh for the folks listening, I always like to start with your story. Um but before we get there, tell us a little bit about just like a snapshot of who you are, what Luminous Capital is, and what it is that you're up to today in the world of self- storage.

Yeah, sure. Um, so who am I? Primarily a husband, father of six children. Uh, and live here in Tulsa, Oklahoma, where I was where I was born and grew up. And Luminous Capital is, um, a boutique investment firm here in Tulsa. We have two primary investment strategies. One we're here to talk about today is self storage. Uh, and then my business partner Chris, we've been partners for a while.

Uh we both actually share a professional background in the oil and gas exploration industry which is where um I spent the first 10 years of my career and so we also have a mineral energy uh specifically mineral right investment strategy that's that he champions and um so that's kind of us in a nutshell. We've been Lunas Capital started 20 really end of 2020.

Um, and it's kind of a side project that's kept kept snowballing and uh turned into a full-time full-time endeavor for me.

And then Chris joined full-time um about a year ago, a little less a little more than a year ago. So cool. And uh you own and operate how many facilities today?

We have 25 locations um primarily here in Oklahoma. We call it the Heartland and we have we also have a footprint in Missouri and Kansas. We've owned in Arkansas. Would love to own some more there. Um we we sold the one location there. Couldn't just didn't have the scale for where it was in Little Rock. And um yeah, that's but probably 75% of our assets are here in Oklahoma.

From syndications to Fund One

Awesome. And walk me through the structure of Luminous like is it is it funds that you're deploying? How does it work? Yeah. So, principally uh until this time last year, we we principally raised uh we would identify an opportunity, underwrite it, put everything together, and then we would syndicate the equity to um a group of really high quality partners that we have. And we kept doing that. We did that for the first four for four years.

And that was really by design. Um we we could have explo you know we could have raised a fund or um you know blind pool or something like that but we really like the idea that especially even compared to what we're used to in the upstream you know exploration space really high risk really high uh capital intensity uh we were able to get these these opportunities under contract and really understand them in their entirety um understand and remove as much risk as possible.

and really put it on a silver platter for our investors um and allow them to make the investment decision for themselves and that's they like that. It was good for us. We got good terms that way because we're able to reduce a lot of the risk before they make the decision.

Um and so we did that for for four years and that is uh about 18 of our assets are owned that way or were acquired in that in that way. A couple of times we might package two or three properties together if we were acquiring them about the same time just kind of depending on timing.

Uh and then right around Thanksgiving of 2024, uh we began raising our what we call storage fund one, limited storage fund one. And that was we we kind of in a way in 24 was a slow acquisition year for us and and most people. Um our portfolio has maintained, you know, has been very healthy.

Um, we were kind of waiting and just looking for great looking for the window to open up for the bid ass spreads closed and knowing our next step was going to raise a fund just to give us some more more strength as buyers, be able to um act quickly as buyers and also reduce some administrative just burden that comes with managing I think it was like 15

partnerships and lots bank accounts and lots of loan agreements and um and so so we began raising that fund around the holidays which I wouldn't recommend if you can avoid that timing.

Uh you might you might be able to relate but uh we got that money raised pretty quickly and so we've been busy through 2025 deploying fund one. We we're about 65% deployed and uh yeah looking for we're looking for more opportunities here. Um we acquired eight properties last year uh in Missouri and Oklahoma and um that's what we've been up to and so so that's kind of gives you an idea of the ownership. I think we'll continue that model. Um we see it I I don't see us raising like a really big fund.

Uh we we marketed this and raised the capital as more of a tactical fund like most it's a lot of the same investors we have. It allowed us to bring in some new investors, which we were looking wanting to do. Um, but we still see it as a pretty tactical fund. Like, this isn't a big five-year, like a drawn out five-year commitment. Um, where your capital's locked up for a long time.

We're trying to be very surgical and and deploy. We tried to raise the money we thought we could deploy in about 18 months. So, we're 12 months through that. Um, 65% pretty much on track. So, um I think we'll continue to do that. Maybe the scale changes just to meet the opportunities that we see in the market. So, cool. Awesome. So, um I want to rewind.

Life before Luminous: a career in oil and gas

Uh that's a good kind of point to where we are today, but uh you mentioned mineral oil and gas. Walk me through kind of the life before Luminous and and what it and and how you got to this point.

Yeah.

life before luminous uh corporate corporate America I guess is one one way to put it but I yeah I was a I went to undergrad at Colorado school of minds and was a geological engineering uh student graduate so I have an engineering degree but professionally I would tell people I was a geologist um and my my job I worked on usually a team of two to three other professionals engineers and and business people uh and

And our job was to find economical oil and gas reserves that we could drill and produce and and um generate shareholder value. And my role on that team was really identifying opportunities. We usually would be responsible for a geographic area like say like western Oklahoma or the Peran Basin or part of the Peran Basin or something like that.

Uh and so as a small team, a multi-disiplinary team, we would be responsible for kind of managing any assets in that area and then also looking for new opportunities and trying to grow the business in that geographic area. My role would have been principally to really um come up with ideas or uh evaluate any ideas as far as this what we call the subsurface risk.

So really the the the technical risk of trying to understand how much oil is on there is two two two miles underground and we can't touch it, we can't see it. uh but trying to get the best best answer on what's what's possible and then as a team presenting that to management presenting opportunity uh presenting the risks and the potential rewards ultimately trying to get the capex approved by executive management or board to then go go drill

and find oil and gas and um and so I did that some form of that and kind of as the career progressed for about 10 years all over most of the lower 48. Um sometimes more focused on an area where there's existing assets and we're really just um um kind of developing those assets.

Um you kind of know what you got and you got to keep proving you know every well we drilled was uh depending on where like we're talking about a 6 to 12 million hole in the ground at the end of the day uh with pipe and cement and um some facilities at the surface when it's all done. So that was the nature of what we were doing. So our team of three or four people might be responsible for getting 50 to $150 million of capex approved and deployed each year.

Um so that's what I did for 10 years and I went to business school towards the end of that. Um thinking I wanted to I was trying to position myself to be an executive at a big publicly traded company most likely. Uh that was kind of my my aspiration and the track I was trying to be on and um graduated from Booth in 2017.

And towards the end of that I really just realized uh the company I was at they had closed several offices where I was interested in working and I had worked at all the other offices and realized I didn't really my family didn't really like those places. Um and by that time I had four children. We were in Houston and I just realized we were my my career track and my employer and my family were just kind of misaligned.

And so I took an opportunity to join Chris, my I mentioned earlier, my business partner back here in Tulsa at a privatelyowned oil and gas exploration company. Um is is backed by a private equity company. And so I moved back to do that in 2017.

been here since then. Um and that kind of scratched I call it stepping down away from the mothership kind of you know like um it was a progression towards entrepreneurship and in oil and gas space that's about that's what entrepreneurship looks like. You go get 200 $500 million commitment from a private equity fund. Um you're really a mercenary management team. you have very little ownership because most of us don't have that kind of kind of capital to put to work.

Don't lay it around. Yeah.

Um and so that scratched the itch. We got to, you know, you got to wear a lot more hats. Very dynamic, very fast-paced. Um I got to use some of my new commercial minded skills uh that I that I had been honing and really enjoyed that. And that was coming to a close and ultimately um still wanted to do my own thing somehow. And anyways, so one thing that's what ultimately led to what we're doing now.

COVID and figuring out what's next

Um during COVID, we were we were we had plans to sell our our oil and gas business in summer 2020. We kind of accumulated our assets. We were in the end towards the end of our business plan and COVID happened. And I was at spring break uh in Phoenix at spring training and um and yeah, like the bottom fell out. The capital markets closed. Oil price went negative. I have a screenshot on my on my phone of that that I'll never forget.

Uh and so our plans for sale and everything just completely stop.

um our mission for the next six to nine months was basically a survival mode to get through that so that we could figure out what to do next. And uh so we did that, but in the meantime, I had already been thinking about kind of what do we Chris and I both what do we want to do next? Um we wanted to be in business together. Um and Chris is a smart guy. He kept bringing up real estate because you know there's so much cash out there and interest rates are really low. We should buy you know, long-term assets. Probably inflation's coming.

Why self storage over other real estate

We don't know when, but it's coming. And uh that sounded boring to me. I wanted to do I I had been looking at buying an operating business. I really I like tinkering. I like optimizing things. I like uh I like challenges and I like betting on myself and on a team. Uh and I had gotten used in the oil and gas business. It's very very cyclic, very capital intensive, very high risk.

And so at the end of the day, the things you can control uh can end up being a pretty small part of the equation. Uh and and like our our venture was a perfect example. I mean, we did most everything right, most of what we said in our business planed out, but then co happened and there's nothing we could do about that and it completely uh dominated everything. So, I was ready to make a bet on ourselves and not just on a market or not just on a commodity price or something like that.

And so, um, that desire plus Chris's continued wise input about looking into real estate led us to eventually realizing there's a couple of real estate assets, you know, niches in the industry where there's there's a lot more operational leverage available.

um where where you can be rewarded for being a good operator um for being doing the hard work. Um as opposed to just making a good decision on a market or on timing um and so we looked at marinas actually which I'm still fascinated by would love to get into that space someday. um RV parks and then storage and uh ultimately storage.

We discovered there was you can buy a bite-size kind of storage facility like a starter kit storage facility and it's self it'll sustain itself. A some a small marina is not really a it's more of a lifestyle thing. You can't really manage it remotely. Um it's more of a ret kind of thing. And um so that was we so we bought one and just kept I committed to focusing on it for six months to see where we could go and here we are. So cool. So um I'm going to double click on a couple things you said. Yeah.

The grind of finding oil

Um, you were out there with a team of three or four looking for plots of dirt that had that could justify a $6 million investment, $12 million investment with a team of three or four for 10 years in what sounds like a pretty small territory or tract of land that had probably been picked over for the last hundred years, right?

Yeah.

Um, often times it sounds like a It sounds like a grind.

It was. Yeah.

Yeah.

You get rewarded for um for relentlessly pursuing your your curiosities and not accepting defaults. Um for being contrarian, but in some you know that can reward you. but also um just not leaving any piece of information or any rock un overturned literally.

Literally literally in my case rocks but um yeah I was very successful because I was somewhat I'm curious to a fault. uh it cost me a lot of time sometimes now, but uh but you often times can be rewarded with a little nugget of information or something that um that could be very valuable if if you follow through on it.

So yeah, it is a grind though and and that the industry that industry and that profession has really transformed even while I was still active in it and still today that's continued. Um it's the nature of what they're doing in in upstream, you know, oil and gas right now is it's turned more into a manufacturing mode. Like most of the reserves for these unconventional plays that that are kind of the mainstream source of reserves right now. Um most of the reserves are understood.

The land is acquired. Um it's more about how do you how do you extract it the most cost-effective way possible while unfortunately um you know regulation has made everything more hard you know more difficult more expensive um and the capital markets have made everything more challenging as well so

it's really changed um the nature of what my role would be in that industry so I I feel like I got I was able to I'm thankful I was I transitioned when I did I wasn't looking to transition, you know, it wasn't an intentional thing, but I'm thankful in hindsight about it.

Business school with a growing family

Yeah. Cool. And then you had you had four kids when you went to grad school.

Did you do that full-time or were you going at night?

So I had three when I went and I had four when I graduated. Um and I did it I did at University of Chicago. They have an executive NBA program. Um and so I I maintained my job through that. I had it was pretty big deal. I was able to get um support from our our CE the CEO and kind of COO at the time and um and so I would fly to Chicago from San Antonio and then from Houston.

In their infinite wisdom, they my employer decided it would be good for me to move two months after I started business school to Houston, which completely disrupted. I had, you know, I had it all I knew the flight schedules like it was all figured out and then all that changed. Um, so anyways, I would fly to fly to Chicago every other week for three days basically.

Um, and it was kind of like two lives. cuz I mean I Yeah, it was it was the most most work and most intensive time in my life by a mile. Um and then we Yeah, we had our fourth child was Julie was born um about halfway through and uh Yeah, it's wild times.

Wow. Wow. So, your wife, we need to interview your wife, too, because I'm sure she was equally grinding at that point. Wow.

Okay.

She's she's way more impressed than me.

Yeah.

And then so and then you're like, "Uh, honey, I'm gonna quit my job. We're moving back to Tulsa and we're gonna start uh going to business with my good buddy." Yeah.

And uh trust me, it'll work out.

Yeah.

I was pretty miserable at that time. I mean, there's just so much misalignment and it was just so um so obvious that it was difficult cuz we had moved several times and we didn't have, you know, it was difficult. Um, but ultimately no community and Yeah.

Yeah.

Wow. Awesome. Well, um, I have a lot of respect for you, man. That's that's incredible. That is a that is a grind that everybody says they they work hard, but when you describe that period of your life, I'm like, wow, man. There's times in your life where you're really really up against it.

But you got through. We have a one of our the guys on our team is a Booth graduate. He raves about that experience. Um, yeah, it was it was everything I wanted.

It was very transformational. Um, it suited me really well. Um, so anyone there's a lot of haters on business school out there. So, I'll just take, you know, the opportunity to say that I think if if you know what you want and you find the right fit, uh, it can be for me, I was looking for transformation. And I was looking for um to diversify my skills and and my brand, my personal brand a little bit.

Um I didn't want to I I didn't want to be a geologist, a technical contributor my whole career. Um I knew I could do more than that. Um and Booth was a really good fit for me. Um just academically and um and from a network standpoint. So yeah, it's great.

Yeah. Cool.

Cool.

Talking storage: the Heartland focus

Totally. Totally. Um, awesome. So, you uh I I I it's so funny that you described that experience and then you talk about uh investing in real estate and actually what you wanted is something more hands-on. Um, and that's what led you to storage. You're a glutton for punishment it seems.

I think cool. But it's also I think your curiosity you described I think like of all the people that we work with at Cubby like I think that's when I look at your operation and I see what you guys are doing and how you're constantly tinkering and moving forward it seems like a superpower rather than like you know something that that uh I think you know I admire that about your operation when I look at it. Um cool. So, so, uh, okay.

So, let's, you know, you'd you'd you'd be hardressed to say that we're on a a podcast that primarily deals with self storage. Let's talk some storage.

Um, that's great, though. Um, tell me about uh let's start with maybe like the Heartland. Obviously, you're from Oklahoma. You know, the you know the you know the region.

Um, is that the reason that you like it or is it is it is it more than that? And why did you continue on that path after acquiring that first facility?

Yeah.

Um, yeah, I like it. Uh, I suppose yeah, we're biased. Um, however, you know, the original original reason for being focused here, it was really just out of necessity. Now when we started, you know, in 2020, 2021, really, we started looking um

at the at the asset and really starting to understand valuations and trying to try to find something we could we thought we could invest in and buy before valuations and the capital inflows had really come in in force. And so we saw just a glimpse of what storage used to be like from an investment especially, you know, secondary tertiary market storage where you just everything traded on in place 10 cap.

Why geographic focus is a competitive advantage

I mean that's that's what you that's what it did more or less you know and and it it it rapidly transitioned from buying in place 10 cap in a in a in a market with a 100,000 you know person population to trading on a trading on a proforma at all and then a proform 98 seven cap you know the sky's the limit kind of or the floor is the limit I guess.

Um so we were able to watch that and and see the difference. So that um was interesting and the capital. So like there was so much capital and so much fervor we and at first we looked at a much larger area. We're just looking at deals all over the country and it became obvious like we really just need to I need focus is very helpful. Uh, and so ultimately that's what we decided is like this is what we're going to focus on. We're not going to look at Georgia.

We're not going to look at, you know, Colorado or whatever. We're just we're right here. If we get a lead here, I can go drive and shake the owner's hand today. Um, kiss their baby, whatever, and get the deal done. And that was empowering. And as the market got more and more competitive, that that became sometimes like the only little tiny edge you could have over over increasingly increasingly competitive market and more and more capital who was more and more frequently far away.

So, if I was competing with someone in in Cal Colorado or Idaho and I could actually see the site before I make my offer, then uh that's advantageous because the broker knows like my I'm not assuming um I'm not going to come back and retrade because of some deferred maintenance or something that they didn't know about that I didn't know about.

So that's what ultimately led to the our portfolio being where it is is it just that was where we could get deals done. That's where we had a a tiny bit of an edge maybe. Um today we we could we could look for their field and I we we've expanded our our radius of where we where we look.

Um but it it is still helpful to have some focus and have and now with from an operational perspective with what we're trying to do all the all the all the tools that may maybe we'll talk about some some of our you know methods and how our operation works but um there's definitely value to having some scale in a market or in an area. Um we appreciate that more now than we used to.

Operating remotely with local caretakers

Um, so that's kept us what what is what is the the value of it operationally for you and maybe use this as a jumping off point to talk about how you run storage? Um, so there's a couple obvious ones. So we we manage remotely primarily, you know, exclusively. We don't have full-time employees on site.

Um, but we do use local contractors basically to help provide whatever what what services are needed on site for getting units ready for for customers, keeping an eye on things, meeting vendors, um, picking up trash, you know, basic basic stuff like that.

Um, and it's easier to have a good local contractor if you have a little bit more work for them. if you have, you know, if you can pay them thousand bucks a month instead of 500 or whatever, you know, whatever it is. So, um, and and larger or more facilities just make that easier. Um, that fixed what is ultimately like kind of a fixed expense. So, that's just one simple thing. Um, the other is marketing. Marketing has become increasingly important in our business.

um especially as demand has come come off well off of all-time highs and is now I would say below the mean um it's just really critical and there is there's value and scale from a even just from a digital marketing standpoint um in in a in a in a in a local um whether

that you're running ad campaigns if you can afford a larger budget because you have more locations in an area um Google rewards that or even just having numerous Google business profiles in a market. That's the that's the best return on marketing effort that you can get because it's free. Uh it's high-end headache cost to manage and everything.

But um but if you have three of those in a in a market, it's way it's really valuable, really powerful. Um those are a couple of real practical examples. I'd say it it I mean they're practical and like the first one you mentioned with the contractors is is it sounds obvious if

you're like new to the industry and um but it's actually the thing that's the hardest part to actually consistently pull off I think to deliver quality on the ground operations and it makes sense that you know a focus on certain markets where you can have a a significant presence pays off.

Um there's so many folk Yeah, go ahead. Go ahead.

I was just going to give a couple examples on that in case it might be helpful for some people, but we certainly have gotten away with having one small facility in a in a place 4 hours from here, which might as well be 10 hours from here really. It doesn't it's basically the same for us.

So, uh you can certainly do it and a lot of people do it. Um, but as you add more and more locations and you're the kind of the center of that hub, whether it's, you know, you and a partner or you and maybe one or two employees here, you know, locally in the office, so to speak, um, the nature and quantity of

things that come up, if you have 10 of those 10 locations with one individual each, um, the quality of that individual out there and what they're able to just kind of internalize and handle, whether it's if they can be good enough to figure out how to adjust door springs or if they can figure out how the gate works and at least do, you know, very basic troubleshooting, which is going to be inevitable or or, you know, basic repairs on on the

facility, whether it's gutters or um broken latches or things like that.

That's where from a operational scaling standpoint that's how that's what if they're really good it enables you to stay lean in the in the office so to speak because they can just internalize and handle a lot of issues that otherwise are going to end up a work order and something you got you have to call the vendor now and you know you have to coordinate the vendor to get out there get them a gate code all that and if

that person boots on the ground or we call them a caretaker if the caretaker can just handle that it that compounds big time once you have more than three locations, say um okay, that's kind of a specific and at at the peak we have in the Tulsa area like eight locations and we have a full-time employee who who robes and does all sorts of stuff and it just makes those facilities are for from kind of the

property manager standpoint, they're the easiest because you have a guy who just can get it done, just takes care of it. So cool. Okay. So that I I can see how this becomes it compounds as you said and it becomes an edge that other operators who are who don't have the same advantage that you've built can't take advantage of. Right. Um and marketing was another example you mentioned.

Luminous's edge: rigor and risk management

just talk to me about the unique like if I was an investor or a potential investor in Luminous. Um talk to me about the edge that you bring to the market and like how you um how you create value uh above and beyond what you know an average operator might be able to pull off in one of your markets.

Yeah.

I mean there's there's a lot of good investors and sponsors in our space and it's attract a lot of really smart people. Um so I'd say some advantages we have specifically are um I think our our our background being from really coming from a very very complex industry like oil and gas. um

our default approach to things tends to be more sophisticated or more technical maybe just as a bias. Now sometimes that's sometimes we waste time on that. um we have to be careful about that. But um so so I think there's a there's a with that comes a level of rigor and just attentiveness to detail that from a risk management standpoint is is a big a big big deal to our to our potential investors and our our partners.

Um, I think I can't remember there's a lot of quotes along these lines, but you know, avoiding bad deals is a really important um part of having overall returns that are above average um over the over the long over the long haul. So that's that's one thing I would say just our approach our approach to risk management given where we've come from is is naturally um pretty rigorous and pretty thorough.

Um this is a much easier I can attest to that. I can attest to that as as as a vendor who served you for a very long time when you came on in the earliest days the rigor was apparent to us and we're very grateful for it.

Yeah.

I think I mean you guys I appreciate you saying that you guys though you used it to your advantage and and honed your product and um reacted and were open-minded like I've shared with you and um I think the result has proven itself. You know, you're all you're all's work and attentiveness to input has has definitely paid off.

It's well when you're when you're as rigorous and and clear of clear the clarity of thought and rigor that you bring to for example some feedback on a p on a software uh some software functionality is one expression of the the the the secret sauce that you're talking about.

I mean, I'm sure I know for a fact it's applied in your marketing and how you're looking at Google and how you're looking at digital and um I'm sure there's other places where that's happening as well on the deal on the buy box on the on, you know, returning capital, whatever it might be. It makes a lot of sense. Where is it going? What what's next? You know, like what is your your operation look like today? And where do you think you need you where are you excited to evolve it at? um operationally. So recently we've been growing the team quite a bit.

Growing the team and LPM 2.0

I was overdue and I um had a really good end kind of period of end of the year reflection. I was really deliberate about carving even just a few days at the end of the year to really think and plan for this year. um because we were fundraising the prior year and I just totally missed that window because of that and I feel like I paid for that almost all last year just

um and there was a lot of other change just in our business and um starting up a mineral strategy and having a fund for the first time that was just a little bit different um managing capital calls and things and it's just different. Um, anyways, so we hired hired some more specialists on the team. Um, and I'm really excited about what they're going to be able to take on and own and and probably do better than me. Hopefully hopefully do better than me uh in some in some ways.

So specifically like you know data data integration kind of business intelligence expert expert um finance financial analyst um recently um I like I like getting in the weeds and numbers and I like finance and I like underwriting and um and I one of my roles in the past company was a um I was in oversaw data strategy and software in our in our oil and gas business.

So, I like that we I wouldn't say we're on the bleeding edge of things, but we I we we have pretty good vision as to where where software and where technology can make a big impact and we try to focus our efforts on those high impact efforts. But, uh so I like all that stuff, but I'm eager I'm really glad to have some new members of the team to help push those push those subjects forward and really own them um um operationally. So, yeah, just leaning into that.

I'm excited about what Cubby's bringing to us and going going to enable for us on kind of on the data side on revenue management side um on our our customer support and sales center um right now um we second half of last year we were focus we called it um LPM 2.0 I know our internally our property management company we call Luminous Property Manager LPM.

So one of our operations our operations director went on maternity leave and had had twins actually and they're healthy. So we're really excited about that. She's just came lots of babies. Lots of babies at at Luminous. Yeah. Perfect.

Yeah. Twins. Yeah. Identical girls.

Great responsibility. Cool.

Yeah.

Um anyway, so that that prompted us to like really look at the organization. We hired some people and we really overhauled some things um operationally that have we're starting to see the results of that and now she's back. We've hired some more people uh and we have some of these overhauled systems in place and we are now a laser focus on on basically sales and sales and revenue management I would say. um with a heavy emphasis on on sales.

Um and so I'm really excited about where that's going to take us because we've been fortunate that a lot of the markets we were in um even over the last two years the demand actually stayed pretty healthy. It wasn't until really last summer where we saw pretty much all of them come down below kind of below average. We've been able to maintain revenue pretty much. Well, I think we have two locations that were down like 1 or 2% over prior year um by at the end of 2025 and the rest were all up.

So, that's that's we're really happy about that. I'm really proud of that. A lot of hard work.

That's not not everybody is in that boat.

It's not nothing. Um, and we do have we do though have also some newer locations that are, you know, definitely behind behind our forecasts from last that we that we acquired last year. Just not really. We just didn't ant most of the market didn't anticipate the headwinds and the on the consumer demand side of things that we experienced last year.

Just interest rates went down, but people just didn't buy homes and move as much. And that that puts a huge huge damper on storage demand. But anyway, so I I'm excited where this effort in sales, this focus on sales and revenue manage revenue management is going to going to take us. Um things like just hing and refining scripts.

Um going to kind of version two of value based pricing and upselling.

Um um I'm trying to think of the others. Oh, managing leads. like we've had kind of external lead management for for storage customers and we're trying to get that as integrated as possible. And um the other thing I would just other subject I'm I'm excited about is really where AI is taking us.

Using data and AI to improve operations and sales

Um yeah, I'm I'm heading I'm heading right there because I think of everybody that uh that we talk to and we're we like I want to dive into this. We we don't have all day, but we could spend all day talking about it. But um yeah, you you talked about it like you you you get the people doing the right things, the sales uh organized and dialed in with a process. You have the technology all in place. You said you're not on the bleeding edge.

If you're not on the bleeding edge, you're pretty close to it as far as storage operators are concerned. You're very modest. But um so you got this data structure in place.

You have now the talent to help you make the most of it. You're ready. And I I know we've talked about it. You're uh you know, you're in Claude every day and and uh pushing it to do more um and interacting with your data. tell me about what what you're excited about excited to unlock with with AI here.

Yeah.

Um I think just continuing on the sales and revenue management subject. Um two things come to mind. One is having our call data um live in a in a structured database because we use cubby cubby call. So we have that and we can easily relate all the all the call data and metadata to our FMS data, you know, rent rents and pricing groups and everything else.

Um, so I'm really excited about being able to get live insights from our our actual customer interactions to our managers from a coaching and and training standpoint, uh, from an accountability standpoint, like are they following our scripts? Are we upselling, you know, even even more qualitative measures that AI can provide like that Cubby also helps provide, but um, are they being friendly? Are they being efficient with the conversation?

um that kind of thing. Um and I think yeah, there's just the the call the voice transcript data is it's really exciting to think about what all can be done with that. Um yeah, so that that's a big one just in general. I'll say you know we're we've been we spent the last two months we had uh 60,000 transcribed call. We've been transcribing our calls uh since 2021 just for this exact reason.

Like I have a history of understanding that if you even if you don't know how you're going to use data or even if the the technology or the tools not here yet to maybe put it to use very clearly there's going to be value in having all those transcripts.

So um and we've been doing little things over time with with that that our previous call center allowed us or software allowed us to do. Anyway, so we spent the last two months going through all that and we've established, you know, what are the top frequently asked questions per location. What are the FAQs that are that had the lowest quality score from a customer satisfaction standpoint? What that, by the way, that's uh calls about rent increases. Why do my rank go up?

But um the what are the FAQs that have the highest satisfaction? um what are the most common complaints we get? So all that we just now we just have a report from all 60,000 calls and just instantly we can turn that into content on our website obviously um SOPs for our team. So that's just even static historical data that's not even like live data coming in.

So anyways that's that's a big one I'm excited about we're we're focused on.

Um and then another is revenue management. So we we've been active on that subject for for many several years now. Um, and I would say and Cubby's helped facilitate some of, you know, the features improvements y'all are developed and continue to develop, help make that like time efficient for us, like possible for us with with having 5,000 some odd units to to somehow look at and manage every every every day.

But um but what we have what we've lacked in up to this point is really being able to look at results in a systematic more analytic way. The way that that I would be satisfied with um as opposed to kind of looking at it from a okay how many people moved out like do we think it was because we rent or like you know kind of from a gut fuel standpoint.

So, um, anyways, there's a lot of lot of ways, a lot of lot of hypotheses we're eager to explore, um, as we get all that integrated and we get our new teammate kind of, um, to attack the problem. So, sure. Yeah, it's so exciting.

AI agents and the future of storage

I'm uh I'm giving a talk on this at the SSA in the spring and just like where agents are headed and what we're seeing even just how we build software or listen to our calls for instance with our prospects and salespeople our recordings.

The same thing on my end. It's just like it's so exciting and yeah and I'm there's examples creeping up in other verticals and other pockets of uh the economy that are really really remarkable and uh I don't think anybody understands how fast it's coming actually.

Um I and I'm not like like one of these guys who's you know uh promising we're going to get to the moon in in a short period of time. like I'm I try to be very measured and realistic about this and I know self- storage is um maybe not the poster

child for technology adoption but I do think we have a a unique opportunity in the industry because um at compared to other industries where AI is already making monster inroads

storage is simple um relatively speaking you know we all know on the ground it can be complex dayto-day But um yeah, I think it's going to be wild to see that like anything you do at a computer in the storage industry in the next 12 to 24 months is just going to be completely 100% automated.

Um and so like you're talking about revenue management, we've historically focused on like the machine learning aspect of what we bring to our product. like basically what everybody in self storage has tried to do which is guess the right rate with with data science and a lot of smart uh thought that goes into it and that's still valuable and it will always be valuable but actually when Carl you have the ability to

you know leverage this alien technology to be really smart about your rates what becomes valuable is not just like the analysis but the picks and shovels because you have your own analysis that you want to run. So like how can you you know show a rate to someone on mobile versus desktop or you know you know just just things like that as opposed to um or take action.

So, if you've noticed that somebody is going to move out, can we have an agent send them a a rescue offer? Um, you know, maybe downsize into a smaller unit with a discount instead of completely vacating or something like that.

So, there's all these thoughts that are flying around and we're working on and and folks like you are just kind of out there doing it, you know, um, you know, on your own. It's been very ex exciting the last like nine months. I mean we we have been using AI kind of like as I described earlier just aware

can see the the possibility but pretty early on I could tell there was kind of there's what I was able to do with like chat GPT or whatever and then there was you know I'd see evidence of it videos you know or papers or whatever of like

if you know how to code there's there was like you to do expert mode AI and that was a whole another thing and I was like well I don't that's not me so let's just play with this and understand it use it how we can um and basically and I have some friends in the space that invest in that space and right keep my ears open and towards the end of

last summer it became I think it was tool called the agentic stuff started coming out and it became really clear that expert mode was now accessible to kind of the fifth graders of the world if that makes sense. I kind of put myself in that you and me both that grade level as far as like software goes.

So um so I was like okay it's time to like get get serious about this and then and even since then you know then you like agentic stuff still took you know a lot of manual work and a lot of just yeah it's a lot of work still and now six months later

it now it's just even that friction is gone and uh it's it's it's pretty incredible um I I think yeah I I have a lot of there's a lot of interesting thoughts about it but um we're excited about about

the utility of AI voice agents I mean one one big operationally just going back to operations a little bit yeah a challenge scaling we have a we have our own call center and so they they serve our customers seven days a week 12 hours a day and um that's better than most of our competitors and most of our markets which is a big strength for us.

Um but you know you scale that by the person right so it's in the step function and um so from an operating you know overhead standpoint that can be kind of a challenge and and also when you buy a new facility which we did eight times last year you generate a lot of phone call traffic um for the first six weeks and so that really impacts your service levels.

It's impossible to plan for that, especially like especially if we're requiring a facility that has uh an um billing at the first of the month.

You know, it's it's inevitable you're just going to get flooded for like the first two months, right? Then when we we do anniversary billing specifically for this reason to spread out our call volume because it's impossible to scale a call center if all your call if 90% of your volume comes in like 4 day period.

Um, however, if you have a computer answering the phone and can and can provide the service the customer needs, problem solved, right? Um, and so I'm really excited about where that's going.

Um, just to help us never miss a call, um, help some of those customers in the middle of the night when we're just not going to have someone on the phone. Uh, we've we actually had as a part of our LPM 2.0 goal. One of our goals is let's hire one or two people to work the night shift just so we have someone when the inevitable things come up. You know, gate internet goes out while someone's on the facility and then they can't get out and it's like um and no one's there to answer the phone for example.

So, but actually we realized like well an AI voice agent can is a much easier solution for that.

Um yeah. So yeah, and they're they're they're getting so good so fast. We see it every day, just like literally within a day. Um you'll you'll see some noticeable improvement.

And I think that you know I think a year from now you these things will be like water. you'll just they're they'll all converge on perfection and um you'll just be able to rely on them and not not just to you know let them open a gate but to you know to pitch somebody on some upsell feature or get them on autopay or um you know um rescue somebody who's

moving out. do all sorts of stuff that seems very complex today, but these things are getting so good. It's crazy.

Yeah.

I mean, I think the is is the reaction time and the the actual voice, you know, the actual interaction is that improves. I think that's a big critical is an agent really good or not like aspect right now. But even just like for sure if it can if it can speak clearly and interact with the other p person on the other line well it knows how to sell.

Like these these LLMs have incredible insight on handling um objections on a sales call or coming up with ideas and how to how to upsell something. You just have to make sure it doesn't hallucinate and you know offer something you don't have. Um, but right when we when we've used them to look at scripts and stuff, that's what gets me really excited. It's like, wow, like this this knows more about someone is storing it and how to handle a sales call than I do. I'm not a saleserson.

Um, and so if I can marry that kind of quick ability to quickly generate an insight or or handle an objection with a really smooth sounding voice, that's going to be pretty powerful.

Closing thoughts: the vacation is over

It's going to be great. It's going to be great. you guys are going to be one of the first ones to uh kind of master that if I if I'm looking into my crystal ball uh based on what I see and how and how uh again how rigorously t tuned in you are to the the little nuances that really matter. I know you're already pushing us. You're pushing you're testing a lot of different things. So, um bring it on and I wish you the best for it. Um, God, I want to do this for another hour because I know that there's a lot more to talk uh talk about.

Maybe we have you back on some point in the future.

Yeah. Episode we do episode two later.

Sounds good.

Um, thank you so much for hopping on. I really appreciate it. Um, I always enjoy it, but I think everybody will take something away from this. Um, and uh, anything else you want to you want to drop while you have the mic?

What I'll say is um, maybe this is useful, usable or not, but um, there's everyone has a story of some friend of a friend who's just made a killing in storage and uh, I don't want to be a naysayer. I don't want to discourage people, but that's our biggest risk right now is um the people thinking this industry is the same it was 10 years ago. Um and it's not a lot of those people people who are trying to sell properties right now and and not able.

So try to the tourists the tou the vacation is over and the tourists are going home now and and it's a lot of work like to do it well like if you're competing in our market in the small town and you think it's going to be mailbox money

um it's not no Karl will run you over if if you try to if you if you come into his market and try to compete with him that with that attitude one If things are good enough, I might give you some tips, but uh it's going to have to wait till we're crushing it. So, okay. Well, I'm sure that I'm I can see it in the numbers. You're doing great.

So, thank you so much for for hopping on and and we'll uh we'll catch you on catch you on the next one.

Sounds great. Thanks, Matt.