Sold a 190-unit facility I'd held eight years, here's what actually got it done

The stop-the-ECRI decision is the interesting one and I don't think it was obviously wrong. You had occupancy falling seven points with no visible cause and no replacement pipeline, which is exactly the condition where an increase program converts a soft patch into a hole. The counterfactual isn't $40,000 of free revenue, it's $40,000 minus whatever incremental move-outs a 7 percent increase would have caused against a market where you couldn't backfill. What would have made the call cleaner is running the increase on a test cohort, say 15 percent of eligible tenants, and reading the move-out response before deciding on the rest. Did you have the reporting to do that?

$9,000 on a sign and map listings turning into twelve points of occupancy is the part I'd want to hear more about. What was actually wrong with the map listing?

$71,000 for 22 covered spaces is $3,200 a space. What was the site work, and did you have to touch drainage? That number sounds low to me for a slab and a canopy unless the pad was already flat and already draining somewhere.

Third-party management in 2020 and TPP penetration goes zero to 58. That's the manager's program, not yours. Worth saying out loud that you paid a fee for that and the fee was probably worth it.

The pattern @orchard describes matches what the sector data shows, and it's useful to separate the two forces at work.

Relocation is one of the primary demand triggers for self-storage, along with the other life events, downsizing, divorce, death, business change. When home sales fall to historic lows, that trigger weakens and move-in volume drops. That's the seven-point occupancy fall with no local cause.

The same housing conditions produce demand in the other direction. PwC and ULI note that elevated prices and mortgage rates keep households from upsizing, and some of those households rent storage instead of getting the larger home with a garage or basement. Roughly 60 percent of surveyed users now expect to stay in their units longer than a year, a new high. Longer stays change the economics of an increase program, because a base with lower turnover intent has different price sensitivity than a base of short-term movers.

On the specific question of pausing ECRI, the answer depends on which of those two populations dominates your rent roll. A facility filled by relocations has a base that leaves easily. A facility filled by households in long-term storage of overflow goods has a stickier base. The move-in date and tenure distribution on the rent roll is where you'd look for that.

New supply has moderated after the pandemic-era development boom, which supports stabilization in most markets. Yardi Matrix projects gradual and uneven recovery favoring low-supply markets with improving housing conditions. A single competitor within six miles puts @orchard's facility in that category, which is part of why 88 was enough to trade.

Coming from zero here. Eight years and the price roughly doubled, but how much of that was the improvements and how much was just cap rates being different in 2017 than now?

@halyard that's the clearest breakdown of a hold I've read on here.

The $9,000 sign and map fix still amazes me. Twelve points of occupancy for less than a month of rent.

Buyer giving no credit for the trailing 91 is the standard move and worth noting for anyone selling. They underwrite the trough or the current, whichever is worse for you, and you don't get paid for a peak you can't hold. @orchard, did you try to sell the 91 in the marketing and just get ignored, or did you not bother?

What's TPP? I've read the whole thread and I still can't tell if it's insurance or something else.

@rigging tenant protection plan. It's the coverage a facility sells the tenant on the stored goods, usually a monthly add-on to the rent, and the operator keeps a share. Not the same thing as the tenant's own homeowners policy.

The line I'm taking from this is tracking move-outs against every increase cycle. I don't do that on my units and I should. @orchard, was that a report the manager gave you or something you built yourself?