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Expected Occupancy for New Facility

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  • Expected Occupancy for New Facility

    Hello everyone,

    Question: Planning on opening a new facility later this year. What is a reasonable timeline to assume to reach occupancy (let's say 80%)?

    Some of the location details:

    -The immediate road has 4000 cars/day. A nearby, visible state highway has about 30,000 cars/day.
    -The area population is in between residential and rural.
    -Other facilities in a five mile radius are full (i.e., 95% or more) or on a waiting list.
    -The facility will be the nicest in the area but not the most expensive.

    I've been told that a new facility will experience a surge early on then plateau. The facility will start off with about a hundred units for the first phase. I'm wondering what a reasonable rate of occupancy will be for each month. For example - maybe there will be about a unit rented a day for a month or two, and then it will drop to a few a week.

    Any advice, personal experiences, etc. will be greatly appreciated.

    Thanks in advance!

  • #2
    A local new facility In Eugene, Or. opened early Spring of last year. They hovered at about 50% vacancy for the longest time after 6-8 months. Then they had a surge and are now at about 75% after almost 1 year. They have more traffic than that. Close hiway, 1.5 miles away. Main road in the area. Lots of businesses and homes and what they are really counting on, the owners are real estate management, is new apartments complexes going in to the area in the next 1-2 years. Likely 6 complexes. They really are by themselves within a 10 minute drive to the area. The kicker is that they are by far the most expensive in the 20 minute area. My 10x10 units are $100 a month and my facility is in a very upscale neighborhood, I am talking about $750k to $1.5 million dollar homes. His 10x10 units are $135. His biggest drawback that I think will cause major problems is a large local park that lots of druggies and homeless have set up camp at. Within 1/4 mile away. Him and his wife have already told me some hair raising stories about all that.
    "Never let the inmates run the asylum!"

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    • #3
      Thanks for the information. It sounds like they started out a lot larger than I plan. I have multiple phases for my project. Do you know how many units or square feet they started with?

      Comment


      • #4
        They did the build all at once and have 450 units.
        "Never let the inmates run the asylum!"

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        • #5
          Ok, I only plan on having about 100 units for rental initially and 40 units for vehicle parking. What would be an average estimate in your opinion to get to capacity (i.e., 90%)?

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          • #6
            I am not following what you mean by an average estimate? Do you mean average time? If so then that means I would need to know the size options in the first 100.

            Where are you located at? What kind of signage do you have? A website?
            "Never let the inmates run the asylum!"

            Comment


            • #7
              This really depends on the strategy. Are you going to "give it away" to get filled up and then raise rates? Are you going to move them in at a normal rate and give expiring discounts? Are you just going to sell the heck out of the facility and move them in at a normal rate? I've seen all 3 utilized and work. It really depends, IMO, how quickly you need to pull cash out or want it to cash flow. In some markets that would consist of 2 months to fill. There are so many variables. I think you need to set a time line up as to how fast you want to fill and then decide your plan of attack.
              Chasing Perfection to catch Excellence

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              • #8
                From our experience in this industry we have seen it vary quite a bit due to several factors that I'm sure you are aware of: competition, location, time of year, etc. However the facilities that fill up quickly almost always focus on having a solid and balanced marketing plan. We have seen clients get really serious with their online presence and usually work on their SEO a few months before they even open and then when they open they have a better start to the process. Getting found online is going to be a major factor for a lot of facilities in growing their occupancy as quickly as possible. In my opinion that needs to be a major focus for you or whoever you have in charge of that. On top of that a little luck goes a long ways too! We have some clients in really competitive areas do really well and get to 75% - 80% really quickly and they are ecstatic. However we have seen clients in the same exact area take much longer to fill up and they did almost everything the same with their marketing tactics. Good luck with the facility and here's to hoping you fill up quickly!

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                • #9
                  Originally posted by pacnwstorage View Post
                  I am not following what you mean by an average estimate? Do you mean average time? If so then that means I would need to know the size options in the first 100.

                  Where are you located at? What kind of signage do you have? A website?
                  pacnwstorage, I'll send you a private message. Is that ok?

                  Comment


                  • #10
                    Originally posted by Advantage IT View Post
                    This really depends on the strategy. Are you going to "give it away" to get filled up and then raise rates? Are you going to move them in at a normal rate and give expiring discounts? Are you just going to sell the heck out of the facility and move them in at a normal rate? I've seen all 3 utilized and work. It really depends, IMO, how quickly you need to pull cash out or want it to cash flow. In some markets that would consist of 2 months to fill. There are so many variables. I think you need to set a time line up as to how fast you want to fill and then decide your plan of attack.
                    Advantage IT, the plan right now is to offer minimal incentives (e.g. 1 month free). It may be tentative though depending on initial response. Thanks for your take on this - it is appreciated!

                    Comment


                    • #11
                      Originally posted by RIZEmktg View Post
                      From our experience in this industry we have seen it vary quite a bit due to several factors that I'm sure you are aware of: competition, location, time of year, etc. However the facilities that fill up quickly almost always focus on having a solid and balanced marketing plan. We have seen clients get really serious with their online presence and usually work on their SEO a few months before they even open and then when they open they have a better start to the process. Getting found online is going to be a major factor for a lot of facilities in growing their occupancy as quickly as possible. In my opinion that needs to be a major focus for you or whoever you have in charge of that. On top of that a little luck goes a long ways too! We have some clients in really competitive areas do really well and get to 75% - 80% really quickly and they are ecstatic. However we have seen clients in the same exact area take much longer to fill up and they did almost everything the same with their marketing tactics. Good luck with the facility and here's to hoping you fill up quickly!
                      Rizemktg, I really appreciate the feedback and experiences you provided. This is good information, and I will take this into consideration.

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