Other articles by Stan

by Stan Colona

Case Study #10002

Recap

In Part 1 we discussed a property we called Sister Road. During a tour of this market the Regional Manager and Divisional Manager discovered a puzzling situation regarding the Sister Road site. The occupancy of smaller sized units (5x5's and 5x10's) was inconsistent with the overall occupancy of the facility. The smaller units appeared to be what is typically considered a 'problem size.'

However, the facts did not support an issue of a 'problem size' unit. This site was a mature property and the demand in the trade area had always been consistent in the past. The space mix at the site had always been appropriate before.

The demand of a trade area can change, but there was no evidence to support it had. The competitors and the operator's other site were not experiencing issues in renting smaller sized units.
You may have noticed that the facts given about the facility were oriented toward the following areas; market trade area demand, competition, another nearby facility owned by the operator, and the on-site manager.

The actions that were taken to revive the site involved only one of these areas. In this respect, the approach was extremely focused and it is not difficult to isolate the variable that impacted the improved performance.

Actions

The Regional and Divisional Manager gathered all the information in this situation by touring the competitor sites, surveying their other nearby property, speaking to all of the managers, and mystery shopping the Sister Road site by phone. When they walked each site with managers, close attention was given to the smaller units. The focus of their discovery was oriented toward what was causing the Sister Road site to exhibit a demand different than the past, and different than the other nearby self-storage properties.
During the tour of the Sister Road site the Divisional Manager formulated a 'hunch' regarding the smaller size spaces. He noticed that the Property Manager, Betty Sue, had a very timid demeanor. When he asked Betty Sue about the smaller size units her answers were overly measured and brief. Furthermore, he noticed the smaller units were located in a long, dark hallway.

The Regional Manager had the Sister Road property shopped a few days after he and the Divisional visited the location. The shopper was instructed to ask for a view of any smaller size units that were available. The Divisional's 'hunch' was correct. Betty Sue told the potential tenant that she did not have any smaller size units available.

Betty purposely mislead the shopper because she was afraid to show the units in the long, dark hallway. The issue was discussed with Betty Sue, the lighting was upgraded, and other measures were taken to ease concerns regarding her safety. Within a short time the occupancy of the smaller units was approaching expected levels.

Analysis

The first reaction of an owner or operator to this type of issue is outrage. There is a tendency to immediately terminate Betty Sue's employment. A clearer assessment of Betty Sue's overall performance can be gained after the anger dissipates.

Betty Sue was performing above expectation in all other areas of managing the property. A new manager may not have been as effective as Betty Sue in all areas of managing the site. Creating a win/win situation for the property and the employee is always the best approach.

The solutions in this example were simple, relatively, inexpensive, more desirable for the tenants and better for the manager. A motivated manager can always make a difference.

Remember, smiling faces rent more spaces.