Life Storage Targets Millennials with New Digital Renting Platform

Posted by Danielle Lachenauer on May 8, 2019 12:00:00 AM

Life Storage has completed the roll out of its digital rental platform Rent Now, and so far a growing number of customers are opting to “skip the counter” and complete the rental process completely online.

“With on average of 8 percent of our new move-ins using this platform, already we believe that the operating expense efficiencies will be achieved,” said CEO Joe Saffire during the company’s quarterly conference call with analysts.

The Rent Now platform, which launched last year in a number of limited markets, enables customers to select a unit, sign a rental agreement and pay rent online. A gate code and map directing them to their selected unit can be sent to their mobile device.

Saffire said the adoption rate has varied by region, mostly due to demographic differences.

“I think Texas we’ve seen on the high end at 10 percent, 12 percent of move-ins and that’s where it’s probably more youthful, whereas Florida, we’ll see sub-5 percent so far, although, more aged population,” Saffire said.

The adoption by younger customers is an encouraging development in and of itself, considering the industry has long speculated whether or not millennials would embrace storage to the extent of previous generations.

“Some of the concern was that millennials wouldn’t be storage users. But we are seeing that they are big users of it,” Saffire said. “They are entering into their higher paying years.”

With many millennials preferring to do to business online via their devices, having a platform like Rent Now may help Life Storage capture a bigger share of their business.

“They expect to be self-served. And again, this is something that’s going to play really well into that millennial sector,” Saffire said.

As a result of the early success, Saffire said they are currently testing closing some stores on Sundays.

“If people do show up on a Sunday and they want to rent and there’s no manager there we do have signs and those sort of things to pinpoint our Rent Now or call center so people can actually still lease,” Saffire said.

Financial highlights

  • Life Storage acquired two facilities during the quarter: one in Tampa for $9.3 million and another in Queens, NY for $57.2 million. The New York facility was a joint venture in which the REIT purchased their partner’s ownership interest.
  • The company entered into separate joint venture deals for two properties in the Greater Toronto Area.
  • The company is under contract to purchase a 16-facility portfolio for $177.77 million with locations in the Mid-Atlantic, Southeast and Midwest. Life Storage closed on three of the properties in April for approximately $33 million.
  • The company has added 10 new facilities to its self-storage management platform year to date.
  • Quarterly same-store revenue grew 2.5 percent over the previous year
  • Same-storage operating revenue grew 2.4 percent during the same period
  • Occupancy was 90.1 percent as of March 31, compared with 91.1 percent the year before.
  • Rent per occupied square foot reached $14.04 during the quarter, up from $13.56 the previous year.