Rental Conter: Location, location, location

A1 Rent It’s main store is located on an isthmus on Lake Minnetonka; through acquisitions, it has increased rentals and sales 330 percent in two years.

Chad Wagner, co-owner of A1 Rent It in Wayzata and Brooklyn, Minnesota. He owns it with his wife Vanessa; he’s a third-generation owner.

A1 Rent It is located in a rather unlikely spot on an isthmus of Lake Minnetonka  in the western suburbs of Minneapolis. However, its location works well for serving its clientele that are 65 percent DIYers and 35 percent small- to medium-sized contractors.

The expansive showroom and counter are on the ground level of the building. Behind the wall, is an addition that accommodates tents and other party rental goods.

The three-level rental center has its shop on the lower level, rental desk on the ground level and administrative offices on the top level. The three levels provide 15,000 square feet of area under roof with more than 4,500 square feet of covered shop and storage area.

by Clair Urbain

While realtors claim the three most important factors affecting real estate price are location, location, location, A1 Rent It, an equipment rental center located in the hamlet of Navarre, Minnesota, disproves that notion.

While the United States Postal Service lists Wayzata as the mailing address of A1 Rent It, the equipment rental center sits on an isthmus in what is part of the Lake Minnetonka area in the western suburbs of Minneapolis. It’s an unlikely address for an equipment rental center.

“We’re a third-generation rental center,” says Chad Wagner, who co-owns A1 Rent It with his wife, Vanessa. “My grandfather, Frank Wagner, retired from John Deere in 1963 and had some friends in the American Rental Association. He also had family members who needed assistance in the Minneapolis area, so he decided to move there and begin A-1 Minnetonka Rental in a small building just south of our present location. It was a real mom-and-pop independent rental center,” says Wagner.

Wagner’s father, Steve, took over the business in 1978. It was a general tool rental business as well as some party and event rental. Chad helped part-time, but rental wasn’t in his career ambitions, so he went on to college and became a high school math teacher.

“I taught for a decade, then circled back with my dad that I was interested in re-entering the world of rental,” Wagner says.

That was in 2014 and by 2016, Wagner and his wife purchased the business; Steve Wagner was active in the business until recently. “This year, he has really embraced retirement, but he still likes to handle some projects for us,” Wagner says.

Unlikely location
Most rental centers are in industrial parks; A1 Rent It’s original rental center is located on a busy street that meanders along Lake Minnetonka in an area known more for its well-established upper-class neighborhoods and trendy shops. Sitting on about 1.5 acres of land, the lot is not flat; instead, it slopes severely and backs up to a wetland.

“This is a very atypical rental location. Geographically, we are in a niche area. There is a five- to seven-mile radius around Lake Minnetonka where customers know where we are and what we offer. About 65 percent of our customer base is homeowner/DIY and they don’t want to drive into Minneapolis to get a piece of rental equipment. If I could have gone back with my grandfather 60 years ago to pick out a spot for this rental center, I think we would have picked a different spot with more yard space and easier access from major roads. However, this location is on the major road that is the only way to get in and out of this area,” he says, “About 15,000 vehicles go by this location every day.”

 The original rental center was in a smaller building on the back of the lot while the front building housed a jet ski dealership; they moved the rental center into that building in 2003 following a two-year remodel to expand event rental storage and update showroom facilities.

The steep slope in the back of the lot allows the main building to have three levels. The shop and equipment storage area are on the lowest level, the showroom is on the main level and administrative offices are on the top level. “The way this is set up, we have about 15,000 square feet of covered space with more than 4,500 square feet of covered shop area. Being in Minnesota where we only have nine months of active rental business because of winter, the storage is a good thing,” Wagner says.

The original building is also a two-level structure that’s used for additional warehouse space. Customers can drive around the main building to pick up equipment. “We built some small trailers that we rent out for $5. They allow renters to drive lawn and garden equipment on and off the trailer without loading it into their truck bed. It’s been very popular,” he says.

Most rental units are under 10,000 pounds; most customers pick up their units and most are daily or weekly rentals. “Our main categories of equipment include aerial units that include towable buckets, scissor lifts and bucket trucks; earthmoving equipment such as compact track loaders, skid steers and standup track units; and outdoor power that includes dethatchers, aerators, stumpers chippers and trenchers,” Wagner says. Present fleet value is around $4 million.

“The stand-on units are very popular with the DIY segment; they aren’t as intimidating to operate as compact track loaders or skid steers and disturb the ground less. The downside to them is that there’s a very limited demand for them in the winter months, but they also don’t cost as much as a larger sit-down unit,” he adds. Attachments are a popular add-on rental. “Augers are the most popular, but so are trenchers and brush cutters.”

Trucks and trailers make up a substantial portion of the company’s rental business. “We have utility-sized 36- to 56-foot bucket trucks that are popular with local electricians but have a seasonal appeal for landscape contractors that install and remove holiday lighting displays. The bucket trucks, along with the pull-behind bucket lifts fit well for this use. Contractors working on grain handling systems also rent the bucket trucks regularly,” he says.

A1 Rent It also offers a variety of trailers, many of which are rented by contractors transporting rental equipment to their job sites. “We also have some specialty trailers. Because we are so close to Lake Minnetonka, our pontoon trailers are popular at the beginning and the end of the season to get boats into and out of the water.”

A1 Rent It also refills propane tanks, which is popular with residents. “Almost all of them are tanks for gas grills. We typically do more than 2,000 cylinder refills per year,” Wagner says.

Changing complexion
Wagner thinks the complexion of independent rental centers is changing. “In the past, independent rental centers tried to offer everyything to everyone. Now, I believe the successful independents are moving into specialty verticals like aerial and outdoor power. We are making stump grinders, chippers and stand-up loaders the staples of our fleet and creating more depth in those areas. For years, tile saws and wet tubs were rental staples, but I think that ship has sailed. With most items that can be purchased for less than $1,000, customers are more likely going to buy it instead of rent it.”

Another area that Wagner believes will continue to see growth is in the aerial segment. “It’s due to operator or worker safety. In Europe, ladder use is already almost non-existent. I think all-terrain aerial equipment that is navigable and safe to use on residential property will continue to grow.”

Wagner continues to watch the development of battery-powered equipment. “Battery powered chainsaws and chop saws will be ubiquitous. They offer a great advantage for the operator, working as well or even better than engine-powered tools. Rental has been slow to adopt this technology, but I think it will be common in the next five years,” he predicts.

Expansion-minded
In the middle of the COVID 19 pandemic, Wagner approached a local rental center and inquired if the owner would be interested in being acquired. Brooklyn Park, which is about 20 minutes from the original A1 Rent It location, fit well with Wagner’s expansion plans.

“I was fortunate to be teamed up in the Peer Executive Group with rental centers that have multiple locations. They provided good insight and advice as to why I should consider expanding,” he says. He has been part of the group for about six years and continues to look for opportunities to further expand his business. The Brooklyn Park acquisition increased rental revenue 330 percent in two years.

The Brooklyn Park acquisition also included an event rental business. A1 Rent It already had an established tent rental business that offered pop-up to 30-foot-wide tents in the western Minneapolis suburbs; the acquisition included Broadway Tent & Event in Fridley, Minnesota, which has been around since 1956. This division offers a wider variety of event rental equipment such as catering and concession items. “We offer dance floors, staging, concession equipment, chairs, tables, dinnerware and other event items. We focus mostly on corporate events, city and church festivals and gatherings, with less focus on weddings, which is not our primary niche,” he says.

The Brooklyn Park A1 Rent It location is a larger facility than the Wayzata location. It has about two acres of flat lot space with a U-shaped drive and a 10,000 square-foot building. “It’s on a main highway that’s just off Interstate 694,” he says.

In total, the three operations employ 35 people year-round. “It’s a good mix of seasoned employees and those newer to the operation. Typically, the more seasoned employees mentor new staff members,” he adds.

He cites several differences between the event and equipment rental business, and they are staffed very differently. “The event rental business requires much more planning and longer lead times. You also only have the once chance for a good customer experience with events; on the equipment side, rentals are more spontaneous and if there’s a problem, good customer service will result in a happy customer. On the event side, if something doesn’t work correctly, fails or shows up late, it can ruin the entire event and result in very unhappy customers,” Wagner says. 

Wagner says the challenges of finding and keeping employees has been easing in 2023. “I think it’s because of our core values,” he says.

A1 Rent It’s core values include:
Be uncommon. “This cannot be a team of common men. Because common men go nowhere. You have to be uncommon,” according to Olympic-winning USA hockey coach Herb Brooks in Miracle on Ice. “We display unwavering commitment to our coworkers, colleagues and peers,” says Wagner.

Last 10 to no end. The last 10 percent is just as important as the first 90 percent. “We take pride in our work and the last 10 percent is what sets us apart from our competition. We are the ‘A’ players who take pride in the details, knowledge and physical fortitude that each of us bring to complete every day’s work.”

Keep it real. Prioritize company excellence over personal ego. “We are free to speak our minds; and we trust our guts,” Wagner says. Employees are encouraged to prepare and act like a true professional. “We understand our personal strengths and how they contribute to the success of the team,” Wagner concludes.

This article orginally appeared in the November-December 2023 issue of Pro Contractor Rentals magazine. ©2023 Urbain Communications LLC. All rights reserved. 

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