A list of commonly used self-storage terms
The Self-Storage Glossary
Welcome to our list of commonly used self-storage terms. A place to learn self-storage related terminology that you may come across day to day. In no time, you'll be speaking 'storagese' fluently.
- Actual Rent
- The sum of rental rates agreed upon under contract for occupied units. Does not include elements such as fees, insurance, merchandise, etc.
- Add-On Profit Centre
- The avenues of generating revenue at a storage facility outside of core rental revenue. Can include things like packing supplies, truck rentals, tenant insurance, wine storage, mailbox rentals, cellular towers, conference room/business centre rentals, laundry, artist space, moving services etc.
- Anniversary Billing
- Tenants are billed each month on the same day they first moved in. All newly purchased items/services will be prorated to match the anniversary date.
- Break-Even Occupancy
- When a facility’s occupancy level reaches a point to which their revenue equals their expenses. A facility will exceed break-even and show a profit when gross rent exceeds expenses plus debt service.
- Capitalization Rate
- The expected rate of return on a unit. A cap rate of 10 can be expected to return an annual return of 10%. NOI/Cap Rate = Value Example: NOI of $130,000/8 percent = $1,625,000 (In general, the lower the cap rate, the lower the investment risk)
- Class-A Properties
- Properties featuring above-average design and construction quality. They generally command the highest rental rates and have a superior location in terms of desirability or accessibility.
- Class-B Properties
- Properties with adequate design and construction quality, which may not be reflective of current standards and preferences. These typically command average rental rates and are generally well-maintained and desirable to most tenants.
- Class-C Properties
- Properties that offer adequate functionality but few amenities. Their physical condition is acceptable but may have some deferred maintenance. They generally command below-average rental rates and are usually in less desirable locations.
- Dollars not received as a way to attract new renters - such as a promotion. E.g. discounts, free moving truck, marketplace revenue share deals, referral fees, or unit rental.
- Drive-Up Unit
- A unit type easily accessible from the ground level. Tenants are able to directly drive up to the storage unit door for easy loading and unloading of belongings. These units tend to be the most valuable in the facility. (10×15 to 10×30).
- Economic Occupancy
- Refers to the percentage of rent that is being collected versus the maximum total possible rent that can be collected from the facility's unit mix.
- Gross Potential Rent
- The total dollar amount the facility would gross each month if every unit were rented at the street rate.
- Interior Unit
- Units located in the interior corridor of a storage building. Vehicles cannot directly access these units. Most hallway/interior units are accessed through exterior service doors or by elevators.
- Lease-Up Facility
- An operational self-storage facility that has yet to reach stabilization. 'Stabilization' for a lease-up facility can refer to either 'physical' stabilization (75% occupancy or greater) or 'economic' stabilization (75% economic occupancy or greater).
- Lock Cut Fee
- A fee determined by individual storage facilities and charged when staff are required to cut a unit’s lock. Typically charged when a key/code is misplaced by the tenant or the facility itself repossesses an abandoned unit.
- Market Radius
- The area surrounding a self-storage facility in which the facility is competing for customers, typically within a 3- to 5-mile radius.
- Mini Storage
- Another term to describe Self-Serve Storage, more commonly known as Self-Storage. These terms do not differ and are interchangeable. This term can refer to a storage locker, mini warehouse or self-storage.
- Move Out Notice
- Tenant’s responsibility to inform the facility manager of the decision to vacate their unit. Depending on the individual facility, there may be exit requirements outlined in the rental agreement.
- Net Rentable Square Feet
- The number of square feet of the facility allotted for rental units. This excludes non-rentable space such as hallways, office, lobby or common areas, maintenance or electrical rooms, etc.
- Prorated Billing
- For the initial month, this term refers to only billing a tenant for the days after they signed the rental agreement. Following months will revert to the full rental amount. Days moved in/Total days in payment cycle = Prorated amount (Example: A tenant moves in on June 15th and the rent is $300 a month. (15/30)*300 = 150)
- Rental Increase
- When the monthly rental price for a unit increases. Typically a letter is sent informing the tenant of this change - including the date of when the increase will take effect along with the new rental price.
- Self Storage Contract
- A written agreement between the service provider and the customer by means of which the customer is allocated the use of one or more self storage units, in accordance with the terms and conditions agreed.
- Traffic Reporting
- Locating where leads originate from for the purpose of marketing through tracking and measuring results - “How did you hear about us?”. Tracking is critical to determine what is working in your marketing plan so you can be more efficient with your advertising dollars.
- Transfer Fee
- A processing charge generated when a tenant moves (transfers) from an existing unit into a new unit at the same facility.
- Unit Occupancy
- The percentage of units rented at a facility. Example: Total 700 units with 546 rented. 546 divided by 700 = 78% unit occupancy.
- Vacancy Rate
- Percentage of the facility not yet rented; the opposite of occupancy. Total Units/Currently Rented = Occupancy Rate (100 - Occupancy Percentage = Vacancy Percentage Rate. Example: Total 800 units with 632 rented = 79% unit occupancy, 21% vacancy rate.)
- Value Pricing
- Refers to customer-focused pricing. In most cases facilities decide on their unit pricing based on the specific amenities of the unit. E.g. display units as 'good, better, best' with increasing prices.