'Blind' Auctions Help Self-Storage Firms Recoup Losses

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Bad economic times can mean good deals, and you can find those deals in unexpected places. For example, self storage units. Some people who rented the units are unable to make their monthly payments. And as Oanh Ha reports from member station KQED, storage companies are clearing out the units through auctions.

OANH HA: Off this busy Silicon Valley street, a huge boxy building stands as a symbol of America's consumer culture. Here at Brokaw Self Storage, three stories of space is crammed with stuff that people can't fit into their homes.

(Soundbite of storage unit door opening)

HA: What are you going to keep?

Ms. ANN MOSAY(ph): Just the fan, some sporting good stuff here, a little stereo down there.

HA: Ann Mosay and several dozen treasure hunters squeeze into a tight hallway to scrutinize what's on the other side of the rolled-up steel door of a storage unit. A flashlight shines on a boxing helmet tucked into a corner. A man perched on a ladder sums up what he sees.

Mr. NEMO LARA(ph): Garbage, too much garbage. Garbage and plastic.

HA: The renters of this unit, like 11 others at this giant facility, haven't paid their fees for at least six months. The storage company is auctioning off the possessions so it can take back the space. About 60 potential bidders take turns peering inside. They're not allowed to go into the unit, touch or open boxes. They are, in fact, bidding almost blind.

Mr. FORREST O'BRIEN (Auctioneer, California Storage Auctions): Hundred dollar opening bidder right over there. You got to beat 25. Bid upon 125 down there, he'll go 140 there, $150 bid here, 175 over there now, too.

HA: Many have come with wads of cash ready to buy. The winning bidder of each unit has to take all of its contents, whether it's treasure or trash. Mary Kramer(ph) manages this storage facility and says delinquencies are creeping up as the recession deepens.

Ms. MARY KRAMER: People are going to pay for their place to live first, pay for their food first and storage. We're usually at the bottom of the list when the money comes through.

Mr. O'Brien: $375 bid, bid upon 375, 375. I got 375.

HA: Auctioneer Forrest O'Brien is with California Storage Auctions, which has seen the number of storage units on the bidding block jump by 25 percent from a year ago. O'Brien says he's busier than ever.

Mr. O'BRIEN: Sixty-five to 70 per month, Salinas to the Oregon border.

HA: How many miles have you done in a day?

Mr. O'BRIEN: The last two days I did 900.

HA: Anecdotally, the same jump in the storage auction business, 25 percent or more, is seen across the country from Colorado to New York. Chris Longly is with the National Auctioneers Association.

Mr. CHRIS LONGLY (National Auctioneers Association): And I think that is part of a sign of the times, but also something that's been noted from many auctioneers is that they're seeing more and more people at their auctions than they have ever before at these storage unit auctions.

Mr. O'BRIEN: Bid upon 575, 575? Yes or no? Got to go. All through, all done. Sold around the corner for five and a half, 550.

HA: But the gamble doesn't always pay off.

Mr. LARA: It's terrible, you see? Only papers, papers, more papers. You see? Plastic.

HA: Nemo Lara is an unemployed construction worker. He just paid $500 for a unit full of junk. There's an old computer, a fan and a crate of motor oil. Inside a plastic shopping bag is a child's baseball mitt with the price tag still dangling from it. He pulls out a lockbox with money in it?

Mr. LARA: No, no, no, no, nothing, no, never.

HA: Lara hopes he'll at least recoup his money at the flea market. He packs everything up into his truck and hauls it off to his own storage unit.

For NPR News, I'm Oanh Ha in San Jose, California.

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