Affiliates and Fee Schedule from Offering Characteristics
The Sponsor has multiple affiliate companies which provide services to the facilities. The list of those affiliates and their respective services and Fee Schedules are listed below.
1) DaVinci Lock, LLC – 10 Federal invented the DaVinci Lock system which is a software and hardware system used to secure self-storage units. The system is both used to secure vacant units and overlock delinquent units using a patented lock and software system. The system is critical to the operations of unmanned facilities as it has a method for putting the Renter in the position to retrieve the combination to the lock and remove the lock in a self-service manner. As of the date of publication of this Offering Memorandum, the DaVinci Locks are priced at $139.00 for a box of 10 locks (minimum order) with no recurring software costs. DaVinci Lock may start a recurring charge eventually.
2) 10 Federal Storage Management, LLC – 10 Federal Storage Management is the Property Management branch of 10 Federal, specific to the Management of self-storage properties. The management company has grown to specifically manage unmanned, automated facilities and does so for all of 10 Federal’s self-storage properties, in addition to a growing number of third-party owned stores. As of the date of publication of this Offering Memorandum, 10 Federal Storage Management is charging the greater of 5.0% of Gross Revenues or $2,000 each month for its services.
3) 10 Federal Storage Maintenance, LLC – 10 Federal Storage Maintenance is the Facility Maintenance branch of 10 Federal and like the Management branch. It has also grown to specifically service unmanned, automated, self-storage properties; and is doing so for 10 Federal-owned properties and third-party clients managed by 10 Federal Storage Management. As of the date of this publication, 10 Federal Storage Maintenance is charging a monthly fee for service to each property of $450 plus the greater of $585 plus $160 for fuel or actual costs of the local maintenance technician services.
4) 10 Federal Call Center, LLC – 10 Federal Call Center is the Call Center branch of 10 Federal and has been built from the ground-up for the express purpose of supporting unmanned, automated operations. The call center is a critical component of the unmanned model, and many new renters communicate with the Call Center team during their leasing process. The 10 Federal Call Center is equipped at a level that 10 Federal believes to be superior to other third-party Call Centers in the industry, to assist a prospect in their path towards renting a unit. Capabilities include the ability to perform video calls to the Video Call Center screen in the kiosk office, send DocuSign leases electronically while the prospective renter is on the call for them to sign real time providing an in-depth explanation, 3D walk through photography of the facilities to provide a 10 Federal Call Center agent a detailed tool for understanding the local environment at the location. An example of this photography can be found here: https://my.matterport.com/show/?m=DCr8U4XMGKw. Currently, the 10 Federal Call Center charges the greater of $10.00 per call, or $1,250 per month for its Call Center services.
5) 10 Federal Technologies, LLC – 10 Federal Technologies actively develops many of the critical technologies required to operate the unmanned, automated facilities at scale. Examples of the technologies it has developed and are currently used by the portfolio include: (i) Rent Pricing Algorithm system for pricing market rents, (ii) Rent Roll Analysis tool for evaluating rent increases to existing renters, (iii) Data Science Modeler system to forecast stabilized rents for a submarket, (iv) Work Order system to actively manage the hundreds of work orders generated monthly across the portfolio, (v) Business Intelligence system to track key performance indicators such as maintenance technician work order completion velocity or unrentable unit totals at facilities, (vi) the Kiosk Software used by 10 Federal, and (vii) a software bridge to automate the collation of information from the management software and auction listing software then used to send certified electronic notice to renters in the auction process. As of the date of this publication, 10 Federal Technologies charges $450 per month per property for these technologies as well as a passthrough of some underlying services used, such as StorTrack’s software subscription for local market data used to inform the Rent Pricing system.
6) Franklin Hill Incorporated Cell – Franklin Hill is a captive cell insurance company that provides an Indemnity Loss Waiver policy to 10 Federal properties which allow our properties to offer protection policies to renters at 10 Federal facilities. Franklin Hill was formed to reduce the cost of ‘renters protection plans’ to the tenant from the industry standard of $8.00 to $15.00 per $1,000 of coverage to Franklin Hill’s current pricing of $5.99 per $1,000. Further, Franklin Hill’s policy offers a better level of protection than most peer policies as it covers damage from rodents and some water events as well as paying out at Replacement Cost instead of a Depreciated Value. The result is by being able to offer this policy at a lower cost, we have grown enrollment from approximately 33% to over 80% across the portfolio. This is relevant as in the event of a loss incurred by a customer, they receive a pay out from the property with the property being reimbursed by FH, and that generally pacifies them enough to avoid publishing any negative reviews which has a positive outcome for leasing efforts.
7) 10 Federal Construction, LLC– To the extent any 10FSSAC4 property engages in any construction, renovation or expansion projects, outside the normal renovation work required to transition a property from manned to unmanned operations, that in the cumulative costs exceed $200,000 for a specific property (i.e. a major project), then 10 Federal Construction, LLC, shall charge a 7.5% General Contractor’s fee plus General Conditions and a 5.0% Developer Fee for the purpose of ensuring proper oversight for Major Projects. For all projects, 10 Federal Construction will bill the location for the staff used to manage, construct, contract, for and deploy at rates consistent with industry standards.
Note: 10 Federal reserves the right at its sole discretion to modify the rates charged above as well as introduce new services so long as the rates charged are consistent with Market Rates charged in arms-length transactions by peers in the industry.