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November 20, 2023
Two years ago, you might expect a new facility to lease up in a year, or maybe a year and some change at worst.
Those days are behind us. As the self storage industry returns to normalcy, lease-up trends have also normalized. So, what should you expect when trying to lease up a new storage facility?
Tommy and Melissa spoke with Alyssa Quill (Storage Asset Management) and Jeremy Rollwitz (The Jenkins Organization) about current lease-up trends in storage.
Question: "How long is it currently taking new facilities to lease up?"
Check out the video clip below to hear their answers:
In this Gabfocus Session: Understanding Data and Reports, Tommy and Melissa spoke with Alyssa Quill of Storage Asset Management and both Jeremy Rollwitz and Cherolyn Johnson Chiang of The Jenkins Organization. The topic at hand? Data reporting and how to understand it in order to make informed decisions about your self storage business.
Check out the full Session to dive deeper!
It really depends on the property and the market. And is that market already oversupplied?
Are there other competitors opening at the same time?
We are typically right now doing pro formas that are about a three-year lease-up, and we were very fortunate in 2021, early 2022, to be able to lease up properties a year to 18 months faster than that in some cases.
But in 22 years of me being in storage, that's the only time that's ever happened in a big way. So, I don't think anybody should be pro formaing that way."
"Please don't do that.
If you're in the audience, and you're working on your napkin math to launch your new facility, your storage empire, don't look at the success stories of 2021 and think that that's replicable.
Yeah, it's a once-in-a-lifetime thing, probably, and definitely, in Alyssa's case, once in a career thing."
"Generally what we will do, 36 months on the pro formas, depending on the size of the property, and again, which market it falls into.
If it's a smaller property, we may shorten that lease up time, and again, 36 months.
There's some additional things that you can bring to a property, like a packing and shipping, a postal operation, rental trucks, other avenues that would help kind of mitigate by bringing additional footsteps, mitigate that lease up time.
But I think a fair amount would be a 36 month."