Self-Storage Facility Checkup: Performance and Competitive Position

Following your visit, use the checkup form to rank various criteria on the list such as location, visibility, access, signage, traffic counts and appearance. Be as objective as possible as you rate each item on a scale from 1 to 10. Obtaining each competitor’s rental rates will also help give you a better picture of the marketplace. If you can’t get these during your visit, try calling the facility to get an idea of their salesmanship and special offers. You must be careful how you obtain rental rates because discussing prices with competitors could be considered antitrust price fixing. It’s best to do this anonymously.

Last, but not least, perform the same evaluation on your own facility. Add the scores and look at the various rental rates, noting where you rank in relation to the competitors on your list. If your scores are lower than the average in any of the categories, consider those items to be a priority for your next maintenance project or capital improvement.

Perhaps you will also find that new or planned projects will significantly enlarge the market and that you must take some dramatic steps to remain competitive. Even if you have the best property in the best location in market, you will know better how to sell your facility against the competition and where you can benefit from the pricing structure.

Let’s review the sample checkup to see what the future looks like for this hypothetical market. The property at 8th & Main earns average scores among the group and also has competitive rates. Its greatest advantage is high traffic exposure, which is a factor an owner has little control over.

Ash & 4th is pricing units significantly higher than the group, which is likely hurting its occupancy. If the owners bring their rates down to a more competitive level, they could impact the market as they enjoy a high-visibility location with excellent access.

The facility on First Street is a strong competitor with good occupancy and high scores in all categories. The New Project entering the market has the potential to do some major damage. It has a high-traffic location and an appealing appearance, plus the facility will likely have all the bells and whistles to attract new customers.

Our Facility is in a relatively good position for now. Our occupancy is the highest among all the competitors and rates are average for the market. Once the new project opens, we will have to address the low scores in signage and visibility to avoid falling victim to the inevitable drop in occupancy that will occur.

An Apple a Day

We recommend completing the checkup process at least once per year to be sure you don’t miss any pricing changes or competitive threats on the horizon. A completed checkup provides you with some very powerful information to prepare for the future and, over time, you will possess a tremendous amount of information about the trends and intricacies in your market.

With a potential recession looming and problems in credit markets, these steps—taken now—will help you weather tough times. Being proactive, rather than reactive, is the best way to ensure your self-storage business will be strong and healthy for years to come.

Amy Hitchingham is vice president of the Argus Self Storage Sales Network. Created in 1994, Argus is one of the nation’s largest networks of independent real estate brokers specializing in buying and selling self-storage facilities. For more information, call 800.55.STORE; visit www.selfstorage.com.