The first 90 days of owning a proper - ty are typically the most time inten- sive, and if completed right, allow a quick execution of an operational overhaul so that the property is on a gliding path to success. The first 90 days entail immediate transition of utilities, evaluating vendor contracts, rate adjustments, initial improve - ments to the physical condition of the facility, and ensuring legal compliance. During this time, expect turnover and friction at the prop- erty due to new policies, increased rates, and changes in management. Evaluate street rates for a property by increasing rates if a particular unit type has strong occupancy or lowering the rate should a unit type require movement towards higher occupancy. Once street rates are adjusted, look at the economic occu - pancy of the facility, occupancy of each unit type and then determine if rates need to be increased for exist- ing customers. We look at market rates during this process; howev- er, we are never afraid to lead the market if our demand is there. Initial improvements are key to a business plan for an operational value-add facility. Often these improvements are key to the customer experience at the facility as well as to ensure rentable units. When a facility has been set on a glide path after 90 days of the initial turnover, focus on rebuilding the occupancy and rates at a facility. This is the stabilization phase. Our definition of a stabilized facility is 80 percent occupancy. During this time, efforts focus on marketing to get the right customers in the door at higher rates, as well as incremental price increases to continue closing the economic occupancy gap. Through this stable phase, constantly evalu- ate ROI for marketing and amenities offered at a facility. Streamline staff-

“Managing the lifecycle of the asset is vitally important to maximizing performance and positioning to sell for the highest price.”

ing costs and assign team mem- bers with additional responsibili- ties. In addition, ensure funding for the facility is at the most attractive interest rate. Lower your expense ratios and strengthen DSCR for a property. This is the time to also exe- cute any additional revenue stream options as well as execute a poten- tial facility expansion should the site and demand numbers allow. This is typically executed when a specific occupancy or revenue goal has been reached at the existing facility. Throughout owning a facility, do not take your eye off the disposition of the asset. Ideally you want to start preparing for disposition of a prop- erty one year prior to your intend- ed sale. Don’t be afraid to engage a broker who can evaluate your property financials and the overall facility condition to provide feedback on next steps to sell your property and at what price point. This is also the time to consider completing any outstanding capital expendi- tures or rate increases. Internally, ensure all paperwork and financials are in order by obtaining a trailing 12-month Profit and Loss Statement and Balance Sheet, ensure bank statements are separated from other properties you own and expenses are clearly identified. In addition to the financials, get all contacts and leases together in one place and be ready to pop open the hood on the facility to a potential buyer. When offers are made on the property, consider other factors besides only the highest offer. Ensure the buy- er can obtain financing and deter -

mine the likelihood they can follow through on their commitment by reviewing past transactions. Con- sider timing of the transaction, see if the seller is open to any creative financing options such as seller financing that may also protect your financial position in the long run. Managing the lifecycle of the asset is vitally important to maximizing performance and positioning to sell for the highest price. The lifecycle starts with the acquisition of the facility, and moves through a turn- around phase to stabilization. If you focus on the right things through each phase, when you get to the dis- position, you’ll be sure to maximize the price you can sell for. •

Scott Lewis is the co-founder and Chief Executive Officer of Spartan Investment Group, LLC (SIG). To date SIG operates over 5500 storage units, 200 RV pads,

has completed $11M in development projects, has $115M more underway, and has raised over $42M in private equity. As the CEO, Scott is responsible for the strategic direction of the company and ensuring it aligns with SIG’s mission to Improve Lives Through Real Estate. In addition to Spartan, Scott is also in the US Army Reserves and a combat Vet. Scott graduated from Michigan State University with degrees in Chemistry and Marketing, from Catholic University with a MS in Management, and from Georgetown University with a Certificate in Project Management.

Jackie Gibson is the Director of Asset Management for Spartan Investment Group, LLC. In this role, Jackie is leveraging her 10+ years of logistics,

procurement, project management, and engagement experience to increase quality, profitability, and efficiency for SIG’s projects. Jackie graduated from Mercyhurst University with a bachelor’s degree in Hotel Restaurant and Institutional Management.


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