n the self-storage industry, 2024 has ushered in a challenging landscape where fluctuating rates and occupancies below our accustomed levels necessitate a return to fundamental strategies. As many operators engage in aggressive pricing tactics to attract customers, it becomes imperative to reassess the core metrics that drive operational efficiency and success. Each year, for the past 25 years, M. Anne Ballard, Universal Storage Group’s president of marketing, training, and developmental services, has compiled data from our managed and consulting sites, as well as from industry experts and publications, to present the year-end review. This year, Lou Barnholdt and I aided her in gathering and interpreting the data to carry the torch going forward and continue this highly anticipated presentation. In it, we showcase many of the metrics our managers and area managers evaluate on a daily, weekly, monthly, or yearly basis. These metrics are essential for continually growing our owners’ same-store sales and net operating income (NOI). By homing in on these essentials, owners can navigate the current market dynamics with greater precision and resilience. While there are numerous metrics to consider, let’s get back to the basics with 10 of the management metrics that spell success: same-store sales increase (SSSI), net operating income (NOI) increase, gross potential, street rates, insurance sales, box sales per lease, fees waived, delinquent percentage, economic occupancy, and customer rates. It’s important to note that the names of the reports I reference may vary depending on the software you use, but the process remains the same.

Consistently measuring your same-store sales increase (SSSI) and net operating income (NOI) increase is crucial for understanding your facility’s financial health. At a minimum, these metrics should be evaluated annually. To calculate SSSI, obtain your management summary for the current year and the previous year. Divide this year’s total income by the previous year’s income to determine your SSSI percentage increase. For NOI, review last year’s cash flow statement and compare it to this year’s figures. This comparison will yield your NOI percentage growth.

Next, let’s discuss the management summary rent collected numbers. At the end of each month, it’s essential to compare your month-to-date rent collected with the actual occupied unit rates. The actual occupied unit rates represent the total rental income you would receive if all currently occupied units (including complimentary units) paid their respective rates. By comparing these figures, you can assess whether your actual income aligns with potential rental income, helping to identify discrepancies and optimize revenue collection.

Next on the list is late fees. Calculate the ratio of your collected late fees and other fees to your waived late fees and other waived charges. This ratio should be less than 10 percent. By keeping waived fees below this threshold, you ensure effective fee management and maintain revenue integrity.

The switch to online reservations is not the only advancement for self-storage companies.

“Fully automated facilities are no longer the future; they are the now for many operators, as the model offers significant benefits in terms of operational efficiency, scalability, and customer convenience,” says Adams. “Online reservations with a rental completion at the facility via a kiosk where you can capture a picture of the tenant, get a driver’s license scan, and sign the lease completes that entire fully automated model.”

“There are already many operators who have fully automated facilities,” says Downer. “Partnering with a vendor that offers remote management solutions is the ideal way to do so.”

A major benefit to bringing automation to facilities is lowering the break-even point, allowing for smaller properties to exist that could not have supported the cost of a manager’s salary. This enables owners and investors the opportunity to move into key locations ideal for the storage market that might have otherwise been too small in square footage to work out financially.

“One fully remote group Mariposa serves comes to mind,” says Jose. “They have one manager for five or six properties. They do not have managers in the individual properties. Customers can go onto the website or app, make a reservation for their rental, get a code for the electronic gates on the property, walk in and show their pin on the mobile app to enter the building, go to their unit again opening it with their app, stow their belongings, and come out leaving their goods secure, without having to talk to anyone. This business started with a small, single property. They then were able to open two or three more locations, and now they are constantly expanding—all because they can do this using online reservations and the storage software. They couldn’t afford to have managers in each location, but using tech they can easily manage a big portfolio remotely.”

A crucial metric to monitor is the comparison of move-ins and move-outs to last year’s figures. Additionally, consider whether you are offering tenant insurance and what percentage of your tenants have opted in; our sites aim for a 90 percent enrollment rate. If tenant insurance is not currently part of your offering, it is highly recommended to research its importance. This type of insurance provides significant protection for both you, as the property owner, and your tenants, as well as an additional revenue stream.

To maintain a well-balanced operation, it is essential to measure three types of occupancy metrics: the percentage of occupied units, the area percentage, and the actual occupied unit rates (economic occupancy). Ideally, these figures should align closely with one another. Regularly monitoring and ensuring these occupancy rates are in balance will contribute to more efficient and effective property management and use of the units you have to offer.

Addressing delinquent dollars is a critical task for property managers. Ideally, you should never have outstanding balances in the 60-day to 90-day range, and delinquent amounts should constitute less than 3 percent to 5 percent of your gross potential at month’s end. To keep delinquencies in check, consider implementing the following strategies:

• Frequent Communication – Call delinquent tenants two to three times a week to remind them of their overdue balances.
• Automated Reminders – Invest in services that send text notices to tenants, allowing them to pay with a simple click.
• Online Auctions – Partner with an online auction company and hold monthly auctions to recover losses.
• Settlement Agreements – Be open to accepting settlement agreements (preferably 50 percent or more of their balance) to resolve overdue balances quickly, and then move them out.

These proactive measures can help maintain financial health and reduce the burden of chasing down delinquent payments.

Next, we examine the management summary to assess customer rate increases and street rates. Many operators drive occupancy with extremely low web rates, only to implement quick, substantial rate hikes soon after. We believe this approach does not cultivate long-lasting, satisfied customers. Instead, review your reports to identify tenants who haven’t experienced a rate increase in over nine months and start with them. Everyone gets at least annual increases.

Several factors should influence the decision on rate increases, such as occupancy levels and variance amounts. For those new to managing this aspect of income, implementing increases in batches is advisable. Not everyone will be pleased with the rate hike, so it’s essential to empower your manager to negotiate with customers, while still maintaining the increase to some extent.

It’s crucial to monitor customer rate increases monthly and keep a daily check on street rates. Although this might seem time-consuming and tedious, software tools are available that can automate rate scraping and allow you to set parameters for automated adjustments, making the process more manageable and efficient.

By adopting a more systematic approach, you can ensure fair and gradual rate adjustments that contribute to customer retention and satisfaction. Empowering your management team with the authority to handle negotiations can also mitigate potential dissatisfaction, ensuring a balanced approach to revenue management and customer service.

Lastly, remember the importance of box sales per lease. An entire article could be dedicated to enhancing the customer experience, with box sales being a key topic. As a professional storage counselor, you should walk the customer to their unit and demonstrate how to pack it efficiently to maximize space. This walkthrough helps them realize the scope of their packing needs and prevents them from feeling overwhelmed as the move approaches. At this point, introduce them to the boxes and packing supplies you offer, explaining which items are best suited for different purposes and box sizes. Rather than asking if they want any boxes, suggest specific quantities and sizes they should buy. Box sales and other merchandise can generate significant monthly revenue if your manager is equipped with the right inventory, trained in sales techniques, and confident in making recommendations. A good starting goal is $20 per lease. By proactively addressing customers’ packing needs and providing solutions, you not only enhance their experience but also drive additional income for your business.

These metrics are just the tip of the iceberg. Regularly analyzing them keeps your business on a growth trajectory and highlights areas needing improvement. Owners and managers must understand key performance metrics and their implications. Continuous learning through industry publications, webinars, and association meetings is invaluable. For more insights into these and other metrics, visit our website, UniversalStorageGroup.com, and read the 2023 Review under the Resources tab. Here’s to a prosperous 2024!