owners dream of the moment they conquer their lease-up timeframe. The proper
schematics for a lease-up timeframe used to be so reliable 20 years ago. Today
the market is inundated with competition and ripe with change, making it
incredibly difficult to pinpoint a proper lease-up schedule. It’s so difficult
that a number of industry experts are unwilling to approach the subject in a
roundabout manner. In fact, it’s so integral to a successful business strategy
that a few industry leaders neglected to share information about a successful
lease-up strategy for this article.
you are the proud owner of a revamped self-storage facility or you are looking
for coastal expansion, your investors are going to want to feel comfortable in
your lease-up strategy. Applying a broad spectrum schedule to a nationwide
chain will undoubtedly lead to several failed ventures, and it’s a huge caution
for someone looking to expand outward into new territories. Understanding the
proper lease-up schedule requires a deeper knowledge of a number of factors. Experts
such as Ken Nitzberg would say that in order to properly follow a lease-up
schedule, it requires at the very least a knowledge of the market, the
competition, the marketing budget, and the company’s online presence.
blends together in such a way that it is important to know how the industry
works before setting a concrete lease-up timeframe. Robert Francis of The Heron
Group agrees. “Your specific market conditions are what control the expected
rate of fill for the site,” he says.
It takes a lot of patience and determination to identify the customer base.
Self-storage isn’t a division of territories, customers are not blocked in
sections like pizza delivery zones, and your customers are certainly not
limiting themselves to a radius based on their home address. “What defines a
market is generally closer to drive times and convenience to prospective
customers,” says Francis. Customers may be considering a storage facility that
is on their way home from work or outside of the area they live because of
preference. In other words, consider broadening your definition of what you consider
your local market to outside of residential neighborhoods within a radial
distance from the property.
continues, “Self-storage is a micro-market business, and we are not a
destination point. If we were developing apartments we could entice customers
by having lower rates.” This may be one of the biggest challenges. The way
to stay on track for a lease-up schedule begins by connecting with the local
Rivals For Revenue
Competition is arguably the biggest obstacle in earning the appropriate amount
of revenue during the schedule. A saturated marketplace dilutes the available
customer pool. Inexperienced or desperate self-storage properties drop their
prices and have an immediate impact on a quarter’s performance. Seasoned
properties are likely to earn more through their steadier income and are
likelier to hold a larger marketing and advertising budget. Or they have a
stronger foothold in the community. Understand how to identify your property
were plenty of sites developed that were in fringe or ‘green’ markets,” says
Francis. “These sites tend to fill much more slowly (if at all) and are also
subject to the last in first out phenomena when the markets weaken or new
products open.” Since competition is such a predominant factor, learn what sort
of properties are in the market, and keep steady on the path of filling out
occupancy through solid revenue management. A lease-up schedule is more often
derailed by falling behind the competitor in this aspect. Francis says, “The
best rule of thumb that I use in projecting fill rates is one developed by Dean
Jernigan years ago. ‘In most markets, stabilization will require three
marketing seasons.’” The more effective marketing campaigns and sales grinding—and
especially proper revenue management—will speed along the lease-up. Francis is
adamant that this rule of thumb needs to be weighed against the market
variables along with a few key questions:
Is your market expanding or stagnant? Specifically, determine
if the population is expected to increase or stay static.
What is your market’s definition of “full”? Determine if
your competitors are truly at full occupancy and compare this to the available
unit types on their website.
Are you able to accept delivery of the site in a realistic
manner? Avoid if possible an overzealous timeline.
Best Practices The best approach to maintaining a reliable lease-up timeframe is to educate yourself on how your market operates and how your property fits into the needs of the consumer. This keeps the lease-up strategy on its intended course, but an enthusiastic self-storage operator looking to expedite their market’s typical lease-up timeframe will inevitably want to exhaust their marketing resources and maximize their online presence.
Francis strongly recommends a qualified site manager to help maintain good
business. “The one thing that is true from market to market is that quality
managers can significantly improve the site’s performance,” he says. “While
it is true that many companies use services to answer the phone at some point
in the process, most customers enter the office. How they are treated and the
impression the manager makes on them sets the stage for their entire occupancy.
Find the personality type for your site. You are in fill up and an
aggressive sales oriented manager is what you need. Taking a proactive stance
on advance sales and reservations, putting a friendly face in front of
prospects, and never losing the attitude than ‘nobody walks’ will set you apart
from the rest of the pack.”
feels that understanding the marketing budget is an integral piece of the
lease-up puzzle. He feels so strongly that there are instances when a marketing
budget can overpower some of the smaller market variables: still tied into a
self-storage operator’s knowledge of their community and competition. There are
self-storage companies with much deeper pockets who take advantage of their
resources and market themselves everywhere. This all drives business to a
property, away from the competitor, and helps control an intended lease-up
timeframe. Think of some of the faster growing self-storage brands in your
market, and you’ll be quick to realize the ways in which they market to the
community. This kind of production can ease an investor greatly whether or not
the lease-up timeframe is rapid or not.
most self-storage operators are working with a smaller marketing budget, there
are several alternatives to throwing money at the problem. Francis recommends
little things like placing up a “Coming Soon” sign on the lot as soon as
possible, updating the sign as it gets closer to the opening day. He also
recommends becoming involved in the local or small business communities such as
the local chamber of commerce or similar “business social groups”. Several
experts again refrain from operating at a discount in order to drive in
business as this can backfire in the long term if you reach full occupancy with
unprofitable low rates.
says that proper marketing will help control business flow and help maintain a
strong, competitive presence, but it’s just as much about managing an online
presence. Imagine for a moment a web page with your self-storage facilities
address, telephone number, and email. It has a picture of the front and a tiny
blurb about your company’s history or a brief bio. If this describes your web
page, then your website is in desperate need of an overhaul. A proper website
is so integral to controlling the moving parts that keep a lease-up strategy in
industry is sometimes far behind the times when it comes to SEO and
understanding the importance of online presence,” says Nitzberg. Search Engine
Optimization is a general term used to rank a website’s place in a search result.
Take for example a web search for “(your city)+self storage+best”. Search this
right now. If your website isn’t anywhere near the top few pages of Google or
Bing, then it is time to consider utilizing the services of someone who
rewrites web content. Consumers can be impatient especially when it comes to
finding storage units. Help them find you by updating your website.
be afraid to change and modify your plan,” says Francis. Many experts agree
that a lease-up strategy should remain fluid if you plan on being successful in
a timely manner. No loss of business should be attributed to a
self-storage operator’s inability to adapt. Remain aggressive in sales, know
the local customer base, stay vigilant in marketing campaigns, and strengthen
the property’s online presence. These are today’s best ways at executing a
successful and efficient lease-up strategy.
Khris Golder is a freelance writer based in Phoenix, Arizona.