Let's talk about self storage.

I'm interested to know if others have experienced a slump in business due to the economy where you now have several units available.  The TSSA magazine recently had an article about the economy and said storage facilities are seeing a downturn compared to what we've seen the past two years.  Also, what are you doing to drive business?  I've seen facilities in our area offer up to 3 months free rent on some of their units!  We have historically stayed around 97% - 99% occupied, but now have about 12 available units on average for the past 4 months.  We did increase prices on some unit sizes in August, but we were well under market for what we were charging.

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Maralee Foster
JDLV Properties, Ltd.
Wimberley TX
(210) 349-0404
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I tend to see Nov - Jan as lowest % of occupancy in my area and I have dropped down as low as 93%. By March we are back into getting busy and back to 98%+.
This year we haven't been below 95% Currently at 97%. My rates run 25% higher than any of my competitors.
What's our secret? We answer the PHONES. I am amazed (in my area at least), no one answers the phone or returns calls.








Texas law requires all real estate licensees to give
the following information about brokerage services to prospective buyers, tenants, sellers and landlords.



Information About Brokerage Services
Thomas Kent





Parker Properties|Realtor
Cell: 972-672-2120

www.unitedstoragebowietx.com

We are hanging at 95% right now - down from 99-100% during the pandemic. IMO, this slump is probably tied to interest rates more than any other economic measures. Our industry relies on migration, and hardly anyone is moving right now with high interest rates and home values. 

Regarding discounts, we sometimes will run a one-month discount on certain sizes, but deep discounting is a no-go for us. 1) It damages our local markets by starting a race to the bottom on storage prices where nobody ends up winning. 2) Deep discounts attract desperate tenants who often end up at auction when the special ends and they can no longer afford the unit. 

Our plan is to be thankful for 95% and look forward to spring and summer when people move around more. If interest rates drop (as the Fed has forecasted) we should see a busier housing market in the months ahead. 

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Daniel Brown
Owner
River Hills Storage
Austin TX
(512) 347-8336
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I was 100% full for 3 yrs straight. I raised my rates to above the market by as much as 30% and remains so. The only discount that I offer is 20% if paid for by the year in full - no refunds for early depart.
Today I sit at 96% with 8 people on the waiting list. This is a small town 5k. A small population county 20K. YET we have over 11.5 sq ft of self storage space for every man woman and child. There have been 2 more storage facilities built since I did those calculations and we are still full.
I am happy and grateful for the business - my only regret is that I didn't build it MUCH sooner and bigger. I can still expand another 4 acres, and have considered locking that property down - probably need to do that.








Texas law requires all real estate licensees to give
the following information about brokerage services to prospective buyers, tenants, sellers and landlords.



Information About Brokerage Services
Thomas Kent





Parker Properties|Realtor
Cell: 972-672-2120

www.unitedstoragebowietx.com


Original Message:
Sent: 12/22/2023 9:25:00 AM
From: Scott Smith
Subject: RE: Slump in Business

Last year we were averaging in the mid 90% for occupancy (and since we have owned our TX facility this has been the norm). Now, we are around 88%. This appears to be the new norm.

Historically, my understanding is that around 85% has been the norm for occupancy in self storage. And that operators had to work hard to get and maintain that. With the economy, covid, inflation, more storage being built etc., I think we are just getting back to more normal occupancy rates.

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Sincerely,

Scott Smith | Managing Partner
Visionary Asset Management, LLC

Self Storage Investments, Owner/Operator 

                    

 

There are many different schools of thought in our industry about where occupancy should be. Lots of variables to consider too. Location, current economy, growth or lack of, time of year. All those are factors for us. My personal philosophy is that an 88% occupancy is the sweet spot. That gives me empty units to bring in new customers, usually at higher rates than current customers. If I am 100% occupied, I have topped out my income, which is not what I ever want to do. We got to the high 90's during the crazy 2021 season but I have risen rates enough to get us back to the low 90's. I don't run any specials unless it's a current customer getting another unit...which keeps them happy enough to give my name to anyone they know needing storage. I also like to be priced just above the competition to keep the desperate folks out that I will have to auction later. We are definitely slower than the Covid years. Less phone calls and rentals per month, but I keep raising rates on current customers (I raise everyone 6-8% around their year anniversary) and getting new customers in at the higher street rates so our income is higher than ever. Since my goals are income based, not occupancy based, the "slump" doesn't worry me so much. If there is one thing I have learned after being in and around this business for over 30 years...change is always on the horizon.  

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JoLea Conn
OnSite Manager
ALL*STAR STORAGE
Richmond TX
(281) 341-7867
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Spending more on advertising.  Google

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Doug Hunt
Owner
Owners Management Company, Inc.
Lancaster TX
(214) 742-9499
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