What do you get?

Welcome to the self storage blog, where we look at the self storage industry through the eyes of storage insiders.

I visited a site the other day that was brand spankin’ new and looked beautiful. The site was nice, the office was professional and had that retail feel we all seek. I looked at the rent rates and found they were twice the competition, which was all first generation and unimpressive. The first phase of the site was almost full and the second phase was just starting construction. If you were calling around for prices, you might be tempted to go to the old first generation site and rent. If you toured the two, you would forget the old site and rent at the new site, even if it was twice the rent.

A site like this has a challenge with phone traffic. Our job is to figure out how to paint a picture of the site, so callers can see and feel the differences over the phone. Our job is to get price out of the caller’s mind and get them excited about new , clean, well-lit, state of the art security, great customer service and easy location.

What I don’t know is the cost basis of the old site vs. the new site. The old site may be very profitable and have very low expenses. It may be a wonderful business on paper. But what is its long term potential? Will there always be room for a “low end, low service” product? Will consumers become so used to nice and new that the old and unimpressive sites become empty? What is the long term potential of the new site? How far can you push rents without hurting profitability? Are we seeing market segmentation? Where there used to be just self storage, is there now beginning to be high-end and economy?

These are the questions you see people asking themselves on either end of the spectrum. What are your thoughts?

bye for now,
Tron

Tweet This Post 

Disclamer: This entry is intended to promote our partner StorageMart and some or all participants received compensation.

View admin's Profile      Subscribe via RSS