By Amy Daniels
When you own or manage a self-storage facility, you’re likely quite concerned with your occupancy rate. You could probably tell me what your rate is right now. The question is, which occupancy rate are you using?
When industry experts evaluate recent occupancy-rate trends, they tend to speak of the ratio of occupied to total units, commonly expressed as a percentage. For example, if I tell you my occupancy rate is 86 percent, I’m probably saying that 14 percent of my units are currently vacant.
I sat down with Tom Cox, director of marketing and technology with Strat Property Management Inc., which manages more than 34 self-storage facilities in California and Texas, to gain some valuable insight to different occupancy types. He says there are three: unit occupancy, square-foot occupancy and economic occupancy. Here’s a breakdown of each, with basic examples:
With three separate ways of measuring your facility’s occupancy, you can develop a thorough understanding of how it's performing, as well as discover areas where you can make improvements to your marketing strategy.
Relationships Between Rates
The best way to conduct a comprehensive analysis of your occupancy is to examine the relationships between your three rates. While your unit and square-foot occupancy rates likely hover within a few percentage points of each another, your economic rate tends to trail behind. All those specials and discounts you’ve been offering may have brought more people to your facility and ultimately increased your unit and square-foot rates; but while your units are filling up, you’re charging below full price, which has a direct impact on economic occupancy.
Your unit and square-foot occupancy should be pretty similar, but you can still fine-tune your marketing by comparing them:
Square foot > unit occupancy = Larger units are more popular
Square foot < unit occupancy = Smaller units are more popular
Why is this? Allow me to demonstrate with a simple example. (Naturally, your number of units as well as unit sizes will vary.)
In this illustration, 10-by-10 units are the most popular. If I pulled these numbers from my software and I was only looking at the total occupancy rates in that right-hand column, I would be able to tell instantly that my larger units are more popular than my smaller ones.