COVID-19 Impact on Self Storage Rent Increases

COVID-19 Impact on Self Storage Rent Increases

Many businesses are facing particularly challenging times. Exogenous shocks such as COVID-19 have direct, powerful impacts on the revenue management efforts of companies across many industries. Banks are foregoing service and penalty fees. Airlines are waiving rescheduling fees. Car dealers are discounting heavily.

Self-storage operators are no different. Whether they have more, or just different pricing issues to consider than companies in other industries can certainly be debated. What is clear, however, is that the revenue management efforts of many self-storage providers are affected by certain unique considerations. Not only must they adjust their rental rates due to demand impacts, but they may also need to consider branding, legal, and social responsibility factors.

More than any industry we have worked with, many operators in the the self-storage community work together to support a wide variety of important causes. The SSA Foundation Scholarship Fund, Kure It Cancer Research, and St. Jude Children’s Research Hospital are only a few of the causes that the industry strongly supports. Many operators are also highly involved in community-based initiatives.

Recently, there has been a strong need for self-storage operators to cancel planned rent increases. We at Veritec Solutions have witnessed first-hand the efforts of operators frantically doing just that.

Rolling back rent increases is really difficult, but it doesn’t have to be.

Rolling back rent increases in a typical property management system (PMS) may not be trivial. It is not uncommon for an operator to make rent increase adjustments for each unit one-at-a-time.  Such a process is not only time-consuming, but it is urgent, arduous and error prone. For larger operators with dozens or hundreds of stores, such an effort could easily require several days of full-time staff—days that prevent staff from focusing on other important needs during a crisis.

Using Veritec’s self-storage revenue management system VRMS, rolling back rent increases for an entire portfolio takes about 30 minutes. This capability is primarily due to two reasons:

  1. VRMS is a dedicated revenue management system for self-storage. Its architecture is optimized for the adjustment of prices and rents.
  2. VRMS is tightly integrated with our client’s PMS systems. Data changes made in VRMS automatically update the data in our client’s PMS system.

VRMS’s revenue management focus coupled with tight PMS integration yields the best of both worlds: Efficient control of revenue management with PMS data synchronization.

In fact, a recent VRMS enhancement enables self-storage operators to actively manage their rates for new customers, while facilitating adherence to each state’s regulations related to allowable price increases during a state-of-emergency. As you might imagine, this feature is proving to be especially valuable for operators with stores across the country or simply in numerous states. We’ll provide more information on this feature in an upcoming blog.

During the past two months, we have found ourselves to be not only revenue management solution providers, but also crisis management assistants. Such an experience just further reinforces the fact that we are all in this together. As always, to our clients, our partners, our employees, and our community: We wish you the best through these trying times.  Support your communities and stay safe.