Most REITS control unit rates from a central office, not at the facility level. As a smaller operator, this allows you the ability to adjust facility rates and specials at a faster pace. Consider using the revenue-management function built into your management software to help you with this process. Regularly conduct competition studies. In addition, most REITs have rates posted online, so use this information to your advantage. This must be a part of your operational strategy.
A number of the independent operations people in the self-storage industry, including myself, have worked for a REIT at one time or another. REITs are corporations and are managed as such. The manager at the facility level of a REIT will never be allowed to be as fast or creative with his location as a smaller operator.
When I review each of my stores, the REITs aren’t what scare me. I can compete with companies that are actually trying to maximize revenue and NOI. It’s the small facility owner who decides to run a six-month half-off special, or another who promotes that he will never raise rates on existing tenants. These are the issues that create downward pressure on smaller facilities. Use the tools and speed that’s available to your facility, and you can compete with anyone.
Matthew Van Horn is vice president of Cutting Edge Self-Storage Management, a full-service management company specializing in management, feasibility studies, consulting and joint ventures within the self-storage industry. He’s well-known for finding hidden profit centers in self-storage operations. For a complimentary “Hidden Profit Discovery Session” and a free whitepaper, e-mail firstname.lastname@example.org . For more information, call 866.970.EDGE; visit www.cuttingedgeselfstorage.com . Follow the company on Twitter at Cuttingedgemgt, and on Facebook at Cutting Edge Self-Storage Management.