ith a new year ahead, it’s an opportune moment for self-storage businesses to recalibrate strategies and fortify operations in the wake of the shifting market landscape.

The current economic climate, rife with high inflation and interest rates, has steered the self-storage industry into choppy waters. Rates have seen a downturn from pandemic highs, while occupancy levels have staggered due to a sluggish housing market, making growth a daunting challenge for operators.

After a year of decline, record pricing gains made during the pandemic have virtually disappeared. Reservation data from the Storable Marketplace showed the average monthly self-storage rate was $86.71 in November 2023, a more than 17 percent decrease from the same month a year ago. That is also the lowest monthly average storage rate since June of 2020, when the national monthly rate was $86.02.

Amidst these winds of uncertainty, self-storage operators have two primary pillars with which to defend their business and pursue NOI growth: increasing efficiency and maximizing revenue per tenant.

In the current climate of declining rates, the imperative for self-storage operators is not just retaining tenants but maximizing the value derived from each tenancy. Moderate price increases over time can help achieve this goal, so long as the operator is careful not to push increases so aggressively that it increases the rate of churn.

• Strategic Revenue Management: As street rates wither from their pandemic highs, the implementation of robust revenue management practices becomes indispensable. This strategy allows for steady adjustments to rental rates, not only to meet market demands but also to optimize income. By intelligently and dynamically managing rates, operators can strike a balance between competitive pricing and maximizing returns from existing tenants.
• Insurance Optimization: Beyond being a safeguard, tenant insurance holds untapped potential as an additional source of line item revenue. By offering comprehensive and tailored insurance packages, self-storage businesses can enhance tenant satisfaction and protect their business from reputational damage. It’s pivotal to reassess and fortify existing insurance programs to ensure you are meeting your goals. Leveraging automated solutions can remarkably boost enrollment rates without placing additional burdens on staff.
• Expanding Revenue Streams: Consider the untapped potential within your existing units; converting spaces into specialized offerings, like climate-controlled wine storage or business centers, can diversify revenue streams significantly. These ventures not only cater to niche markets but also present opportunities to extract premium rates, thereby amplifying overall revenue.
• Value-Added Services: Augment tenant offerings with value-added services. This could encompass establishing partnerships with moving companies, providing packing supplies, or even offering concierge services, thereby enhancing tenant experience while generating supplementary revenue.

By using these diverse approaches to “average up” the total revenue generated from each tenant, self-storage businesses can smartly offset the impact of reduced demand and frosty pricing.

Efficiency is doing things in a smart way that saves time, money, or energy while still getting results. It’s about finding the best and quickest method to accomplish something without wasting resources.

During good times, businesses often forget about being efficient. They’re too focused on growing and expanding, not paying attention to how they could do things better. When things are going well and there’s plenty of resources, there’s a feeling that efficiency isn’t important.

Also, when there’s a lot of demand, the priority becomes meeting those needs fast, not making operations smoother. But forgetting about efficiency during good times can cause problems later, making it hard to adapt.

Reviewing your processes and systems during this climate is so crucial. This will ensure you are getting the most bang for your buck when it comes to all the technology you’ve invested in to streamline your operations.

Consider these timesaving and revenue-boosting strategies to fine tune your business and reduce the administrative load of your self-storage operation:

• Power Up Management Workflows: The potential of facility management software transcends mere automation; it revolutionizes the way tasks are executed. Reevaluate and optimize workflows to capitalize on software functionalities, streamlining repetitive tasks and ensuring maximum efficiency across operations.
• Collections Revolution: Implementing automated collection systems transcends the conventional manual chasing of payments. This not only saves precious time but also significantly mitigates delinquency rates, fortifying tenant retention and stabilizing revenue streams.
• Maximize Online Rentals: The current consumer landscape leans heavily towards digital transactions. That is why capitalizing on this shift by offering online move-in options via your website serves as a pivotal strategy. By facilitating hassle-free digital transactions, you not only meet consumer preferences but also expedite the rental process, potentially sealing deals faster and more efficiently.
• Seamless Access Control Integration: A frictionless experience for tenants begins with an integrated access control system synced seamlessly with your facility management software. Such integration not only ensures a hassle-free experience for tenants but also enables contactless move-ins.

By optimizing these operational aspects, self-storage businesses can navigate the current challenging market conditions and also position themselves for sustainable growth.

With a laser focus on increasing efficiency and maximizing revenue per tenant, your self-storage operations will be well-equipped to weather the ups and downs of the market. But if you are looking to gain a competitive edge while protecting your business from outside threats, get ready to fire up your marketing engines and build up your cyberdefenses.

Diversifying marketing strategies is crucial for reaching as many potential storage users in your area as you can. Being easily discoverable when people search for storage options in your area can significantly impact the number of potential customers. One aspect is ensuring visibility in Google search and map results. Additionally, appearing on various marketplace sites, such as the Storable Marketplace or other platforms where people search for storage solutions, expands the chances of attracting interested individuals who might not have discovered the facility otherwise.

Being present across these platforms improves the chances of capturing the attention of those actively seeking storage solutions, thus increasing the facility’s overall visibility and potential customer base.

To ensure you are maximizing the efficiency of your marketing efforts, review these key elements:

• Website Optimization: Conduct a thorough website audit, focusing on speed and functionality to enhance online rentals.
• SEO and PPC: Leverage SEO and PPC strategies to bolster online visibility and analyze insights from tools like Google Analytics and Search Console.
• Update online directory listings: Expand visibility by activating facility listings on platforms like the Storable Marketplace. Make sure all information on your various listings are accurate and up-to-date.
• Cultivating business customers: Tailor storage solutions for businesses and forge partnerships to augment the facility’s reach.

As digital engagement becomes more prevalent, cybersecurity vigilance is a paramount concern for your business. A successful cyberattack against your operation could lead to financial losses and reputational harm. Use this time to ensure you are protected from such an incident.

• Staff training: Equip employees with comprehensive cybersecurity training to fortify defenses.
• Two-factor authentication: Implement two-factor authentication to bolster system security.
• Incident response plan: Regularly review and update the incident response plan to ensure preparedness against potential cyber threats.

Diligently addressing these crucial areas across all areas of your self-storage business will ensure you navigate the challenges of a subdued market and seize opportunities for growth. For additional support, connect with an expert to align strategies for success in 2024.