The cap rate on a storage acquisition tells you almost nothing if you do not know how the seller measured occupancy.

The 45-day cut is the right threshold to request, and the framing you laid out is accurate. The assumption doing the most work in a misrepresented occupancy scenario is usually the revenue-per-occupied-unit figure embedded in trailing NOI. If the seller ran their T12 using scheduled rent on physically occupied units rather than collected rent, you are not just looking at an overstated occupancy percentage. You are looking at a revenue base that includes phantom income from tenants who have not paid in two or three months and will either lien-sale out or vacate before close. The cap rate compression from that alone can be 30 to 60 basis points on a thin deal, and across a portfolio it compounds.

The piece you did not mention is the auction pipeline itself. Units headed toward lien sale are not just delinquent, they are temporarily inflating physical occupancy with tenants who will be gone within 90 days. If you inherit a facility with 14 percent of units in the late-delinquency band, you should expect a material occupancy decline in the first quarter post-close regardless of how well you operate. That decline hits your debt service coverage in the period when lenders and equity partners are paying the most attention, and if you used a bridge structure with a coverage trigger, you may be defending a covenant breach on an asset you just acquired.

On portfolio acquisitions specifically, I would want the 13-month roll cut by facility and then sorted by vintage of delinquency, not just days past due. A tenant 47 days out might resolve. A tenant 80 days out with an active lien process is an occupancy reduction event, and lumping them together in a 45-plus bucket obscures how many units are actually at risk of turning vacant before your first rent statement.

What does the purchase agreement say about occupancy or collections representations at close, and is there a rent-roll certification with a warranty behind it?

The distinction you are drawing matters, and the 13-month roll with payment status is the right request. A current snapshot tells you what a seller wants you to see on a given Tuesday. The trailing 13 months shows you whether delinquency is structural or seasonal, and whether a lien-sale cycle is already eating into the revenue you are pricing.

One thing I would add for anyone reading this who is newer to the vocabulary: physical occupancy means the share of units that have a tenant in them. Economic occupancy means the share of gross potential rent the facility is actually collecting after you subtract delinquencies, concessions, and any units set aside for auction or internal use. A facility can show high physical occupancy and genuinely poor economic occupancy at the same time, and a cap rate built on the wrong number mismeasures the income stream you are buying.

The 45-day cut is a useful early flag. Lien-sale timelines in most states run 90 to 120 days, so a tenant past 45 days is already moving through that process. On a portfolio deal, I would also want that delinquency data broken out by unit size, because a handful of large climate-controlled units carrying unpaid balances can distort the picture for the whole facility.

One thing worth confirming with your own counsel: how the seller's management agreement handles lien-sale proceeds and whether those ever appear in trailing revenue. That affects whether the NOI you are underwriting is repeatable.

Everything here is a starting point for your own due diligence, not a substitute for it.

What state or states are the facilities in, and do you know yet which lien-sale statute applies?

The other side of this worth adding: the unit mix interacts with the delinquency picture in a way that aggregate occupancy completely hides. A facility where the 10x10 units are current and the 10x20 and 10x30 units are running 20 percent delinquent has a revenue problem that is disproportionate to its headcount problem, because the large units carry two to three times the monthly rent. So a rent roll that shows 8 percent delinquency by unit count can be 15 percent delinquency by dollar, and the NOI gap between those two readings is what actually moves your cap rate.

The number I would want before anything else is the delinquency rate cut by unit size, not just the facility-level aggregate, because that tells you whether the collections problem is concentrated in the revenue that matters most.

@op the 13-month rent roll ask is right but I want to add what I actually look at once I have it, because the raw delinquency percentage undersells how much the unit-size composition matters. On a deal I passed on in Stockton last year, the 60-plus bucket was 11 percent of occupied units but it was concentrated almost entirely in 10x20s and 10x30s, which were 38 percent of gross leasable area. The revenue drag was closer to 19 percent of potential collections, not 11. The headline delinquency rate told me almost nothing about the actual cash hole.

The stabilization story in a value-add pitch is where I think sellers are most deliberately sloppy. If a facility has been running a lien-sale cycle for more than two quarters, the units clearing auction are not stabilizing, they are churning, and the replacement tenants frequently come in on a promotional rate. So your occupancy number stays roughly flat, your delinquency rate stays roughly flat, and the seller can keep calling it 84 percent occupied for the entire marketing period while the economic occupancy drifts lower every month. I want to see the auction log and the concession schedule for the trailing 12 before I believe any stabilization timeline. Sacramento-area operators I know are seeing 90-day re-lease times on large units right now, so any pro forma that pencils a 60-day fill on auction-cleared inventory is already wrong before you stress the rate assumptions.

Physical versus economic occupancy is the right split, but the unit-size distribution inside that delinquency number is where the real exposure hides.

Say a facility has 400 units: 300 are 5x10s at $60/month and 100 are 10x20s at $180/month. If the twelve units more than 45 days past due are concentrated in the large-unit tier, that is 12 units producing $2,160/month in scheduled rent against roughly $1,500 in phantom NOI, which at a 6 cap adds about $25,000 in phantom value. Spread that same delinquency count evenly across the small units and the phantom NOI drops to roughly $720/month, about $12,000 in overstatement. Same unit count, same headline delinquency rate, 2x difference in cap rate impact because the dollar weight per unit is not uniform.

The reason this matters for the stabilization story specifically: large-unit tenants who go delinquent and reach lien sale almost never replace with an equivalent-paying tenant in month one. The auction clears the unit, the unit sits, and the lease-up clock starts from zero on your highest-revenue tier. Pro formas that model flat lease-up across unit types without knowing which type the delinquencies live in will overstate stabilized NOI and compress the actual timeline to that NOI.

When you pull the 13-month roll, ask them to break delinquency by unit size, not just by count or percentage of total units. What does your roll show on that cut?

West Roxbury capes have trained me to distrust any single-line summary number, and this is the same problem.

What share of those delinquent units are climate-controlled versus drive-up, and does the split hold across all eight facilities or is one property carrying the rot for the others?