During the economic downturn in 2008-09, the self-storage industry appeared to be in a “race to the bottom” in offering big discounts and concessions to stabilize degrading occupancies. Street rates fell dramatically as “one month free” promotions grew to “three months free”–and beyond.
As vacant space filled, facility managers continued to give concessions and discounts, even while some unit sizes approached 100 percent occupancy.
Industry pioneer Paul Darden saw this disturbing trend and set out to fix it. He created District Manager™, a software to uncover lost cash, inefficiencies, and excessive discounting.
“The industry dug a hole with more and more concessions trying to get to the lowest price,” says Darden, president of the Paul Darden Company, which specializes in self-storage brokerage, marketing, feasibility studies, and development. “We designed this software to help fill the hole by finding where money is dropping through the cracks.”
District Manager is an income maximization software that currently works in conjunction with SiteLink management software and will soon support other management software. District Manager is designed to be affordable for operators who want the same capabilities as the industry’s largest players. More than 1,200 self-storage locations throughout the United States, United Kingdom, Australia, New Zealand, and Hong Kong, including over 30 of the top 100 operators, use the software.
DRM Add-On To Be Unveiled
A powerful add-on to District Manager will be unveiled at the September SSA Fall Conference & Trade Show in Las Vegas. DRM, for Dynamic Revenue Management, promises to take facility operations to a new level of profitability.
“DRM gives the individual owner the ability to do revenue management on a level equivalent or exceeding what REITs can do but at a nominal cost,” Darden says. “The goal is to change how we handle rent increases and do it with more knowledge and comfort than in the past based on precise data and a clear understanding of our tenants.”
The software, offered through Dallas-based Qstrom, LLC., identifies places where facilities leave money on the table. DRM’s computer analysis sorts through thousands of variables to find where money could be overlooked and detects possible theft or where a manager is too generous with giveaways or late-fee waivers.
DRM conducts unit-by-unit analysis to identify spaces that are filling up fast and may be eligible for rate increases or where discounts need to be eliminated.
Analyzing Individual Tenants
The software also drills down and analyzes individual tenants to determine who may be due for increases and make recommendations on the new rates to charge. It can even look at the wherewithal of individual tenants and see those who can afford to pay higher rates.
“With data available on the Internet and what we’ve learned from our customers, we can perform tenant-by-tenant analysis. We’re going inside the unit and analyzing the individual tenant and their capabilities so we can make better decisions as to who to raise, when to raise, and how much to raise,” Darden says.
The industry standard is to raise every tenant by a predetermined percentage across the board, but this has a tendency of forcing out certain customers. DRM analyzes over 100 parameters, the majority of which focus on the tenant, the store’s rent increase history, and assorted behavioral patterns.
“DRM allows us to maximize rent increases and feel confident about it,” Darden says. “It gives us a comfort level that we have a high probability of enacting rent increases without any impact on tenant move-outs. We analyze every move-out the facility has had to reveal what the customers’ tolerances were and pinpoint the upper limit of what we can charge individual tenants.”
DRM employs programs that can scrape the Internet rates of competitors and integrate that data with DRM software to automatically suggest standard rates for each facility. Facility owners set their own parameters to choose the rate range relative to competitors. Some owners may choose to mirror market averages, they may want to be the market leader on certain unit sizes, or they can be positioned lower than competitors’ rates.
Once owners set their parameters, the computer will automatically adjust their rates depending on how the market changes. With SiteLink, DRM feeds rate data to the facility’s website and automatically adjusts online rates.
Dynamic Revenue Management (DRM) offers these advantages:
• Empowers the individual owner/operator by giving the ability to manage revenue on a level equivalent or exceeding what REITs can do
• Unparalleled ease and speed of use
• Drastically improves the efficiency of facility and upper management, saving you invaluable
time and money
• Analyzes historical data to uncover economic facts about a facility and its local market and adapts to the specific facility’s economic nature
• Uses advanced reasoning to generate the best courses of actions to increase income, removing human inefficiency, thus increasing profitability and property value
• Generates an associated confidence with each action item, monitors its success, and will
adjust its aggressiveness to the results
• Provides easy-to-read performance reports for owners, investors, and financial institutions.
About Qstrom, LLC.
Paul Darden and Ian Velasco started Qstrom, LLC. in 2009 to create the District Manager software, an income maximization tool analyzing self-storage operations. For nearly 30 years, Paul has been involved in buying, selling, owning, developing, managing, and auditing hundreds of storage facilities. Based on years of his deep-rooted experience and feedback from his peers in the self-storage industry, Paul has developed the criteria, thresholds, and algorithms underlying Qstrom’s products. Since its first release in 2010, District Manager has become a favorite with hundreds of clients across the world.
To schedule a free demonstration of District Manager