As we approach the end of 2024, many self-storage operators are experiencing occupancies at the lowest levels in many years. The reality is that today it’s not about getting the rental, it’s about taking the rental away from your competitors. It has been well-documented that there are 10%-20% fewer storage customers in the market today than there were 12-24 months ago and the large operators are spending more to capture every rental that they can. Operators are at a crossroads with the decision on what to prioritize, and it is clear that the REITs are prioritizing occupancy over revenues in today’s market. Their thesis is that self-storage customers are sticky and will continue to absorb very aggressive existing customer rate increases, and when demand comes back and rental rates start growing again, they will be ahead of the game with higher occupancies. This will allow them to drive revenues higher and faster with their larger existing customer base. The question today becomes: is achieving higher occupancy at lower rental rates worth the reputational risk and monetary cost?
X-2024: Third Party Management – Is it Right for Your Facility?
