Unit Mix
September 29, 2008
If you decide to build your self storage facility in phases, it is important to track your occupancy rates. We made the decision to begin construction on a new building when we reach 80% occupied on the last building. However, as time went on, we realized this was not an effective way to make our decision. Why?
It is not effective because it does not take unit mix into consideration.
Not only do you want to know your overall vacancy rate, but you will want to know the vacancy rate on each unit size. You may find that your 10×10 units are filling up quickly, but your 10×20’s are sitting vacant. If this is the case, you may decide to go ahead and build (more 10 x 10 units) even if your overall numbers are not yet at 80%.
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It makes sense if all of one size is filling up quickly to go ahead and build even if the overall occupied rate isn’t what you think it should be to start expanding. All about $$$ per sq. ft. Great info!