With hundreds of properties coming online each year, the lease-up trend is one of the biggest topics in the industry. For new property owners it has become a stay ahead of the curve or struggle to catch up game. For existing property owners in the immediate trade area, the new site adds downward pressure on rates and occupancy. In a risk averse market like we are in today, there are key points buyers look for in a lease-up deal and some strategies to maintain trajectory.
Accept the importance of the lease-up trend; there is no better indicator of new property risk than the in place lease-up trend. For example, property A opens into a market with a waiting list and pent up demand while property B opens simultaneously with a REIT managed deal around the corner. Which deal is going to be more attractive to a buyer?
Consistency is key when approaching the buyer pool. Some owners look to increase occupancy and then normalize rates. Buyers understand that there will be discounts and lease-up specials. The key is to steadily add a few percent each month.
Leverage technology as every industry is being impacted by new technology and storage is no different. The top owners and operators are constantly strategizing on how to improve technology and gain customers. Not adapting to technology puts you behind the curve.
Every market will respond differently to new supply so try to understand buyer sentiment. Demonstrating a lease-up trend trajectory shifts risk from a potential buyer to the seller. The ultimate buyer will believe in the product and stabilized rental rates that initiated the investment in the market.
Ultimately there is no magical buyer. It comes down to running a thorough and methodical process. Working with the right group to help you achieve your goals can make the difference in today's market.