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260122 Space Savers Meeting Notes

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Thu, Jan 22

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Space Savers MoM/QoQ Performance Summary

Occupancy & Rentals:

Occupancy peaked in November 2025 (~57%), then dipped slightly in December (56%) and more noticeably in January (~53%).

December’s move-outs (17 total) included 10 auction evictions. Adjusted for that, only 7 customers moved out, and the site had a net rental gain (+6).

January had 21 move-outs, but 8 were auctions, and 9 were just “no longer needs storage.” That leaves only 4 true voluntary move-outs, suggesting turnover is not due to dissatisfaction.

Move-Ins & Leads:

Move-ins declined MoM (25 in Oct → 23 Nov → 13 Dec → 9 in Jan).

Lead conversion in January remained strong (~65%), but lead volume is lower, which explains reduced move-ins.

Financial Performance:

Revenue was steady Oct–Nov (~$21.6K), dipped in Dec ($20.8K), and looks similar in January (partial data).

Gross potential rent stayed around $30K/month, and the economic occupancy rate held up despite physical occupancy decline.

Why the Move-Out Spike?

Mostly due to cleaning up delinquent units via auction.

A few seasonal users vacated in January as expected.

No indications of dissatisfaction or pricing issues.

Pricing & Competitive Position:

Rates are very low and competitive — 5x5 climate unit goes for $23/month, plus 1st month free promo.

Current pricing is not a factor in move-outs — in fact, Space Savers is cheaper than many competitors.

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Takeaway

The recent spike in move-outs looks worse than it is — most were auctions or expected short-term users ending. Occupancy dropped slightly but for explainable reasons. Pricing is aggressive and effective. The priority now should be increasing lead volume and marketing, not changing rates.

Rate Increases

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Space Savers Performance Analysis – Q4 2025 vs. January 2026 (Updated)

Executive Summary – Key Insights

Move-Outs Adjusted for Auctions: A large portion of recent move-outs were due to auction-related evictions, not voluntary customer departures. In December 2025, 10 of the 17 move-outs were auction cases, meaning only 7 were genuine customer move-outs (13 move-ins vs. 7 true move-outs) – a net gain of +6 rentals if excluding auctions (instead of a net –4 loss including them). Likewise, in January 2026, 8 of the 21 move-outs were auctions, and 9 more were customers who “no longer need storage.” Thus, 17 of 21 January vacates (81%) were not due to dissatisfaction or pricing issues, indicating that the turnover was largely not rate-driven.

Occupancy Impact: Occupancy had been trending up through October and November 2025, reaching a peak of 247 units rented in November (~57% occupancy). A slight dip in December to 242 units was entirely attributable to auction losses. January 2026 saw occupied units fall to roughly 230 units (≈53% occupancy) by month-end, but this net drop was almost entirely from auction evictions and normal end-of-need move-outs, not customer defections to competitors. In fact, excluding the auctioned units, occupancy would have remained roughly flat from November through January.

Pricing Strategy: Space Savers’ rental rates are currently very low and highly competitive in the market. For example, a 5×5 climate-controlled unit rents for $23/month, and a “1st month free” promotion is in place for new tenants. These aggressive rates (with effective discounts) position the facility at or below the pricing of nearby competitors, providing strong value to customers.

Competitive Position: Given the pricing strategy and promotions, rates are not a barrier to acquiring or retaining customers. Competitor facilities in the area have similar or higher price points for comparable units, so Space Savers is at least on par or cheaper than its competition. The data showing most move-outs were due to auctions or lack of need – rather than customers seeking better deals – further supports that current turnover is not driven by rent levels.

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Occupancy and Net Rental Trends (Q4 2025 to Jan 2026)

Overall occupancy improved through the first two months of Q4 2025, then declined in late Q4 into January – but the decline is largely explained by the auction-related vacates. Figure 1 below illustrates the trend in occupied units at the end of each month from October 2025 through January 2026, highlighting the impact of auctions in December and January:

Figure 1: Occupied Units Trend (Oct 2025 – Jan 2026). The drop in December (–5 units) and January (–12 units) was primarily due to auctioned units being vacated (10 auctions in Dec, 8 in Jan). Excluding those, core occupancy remained roughly stable.

As shown above, Space Savers ended November 2025 with 247 units occupied, up from 239 in October. This was followed by a slight decrease to 242 units in December, and a larger drop to around 230 units in January. Importantly, the December and January dips coincide with a surge in auctions (delinquent accounts emptied), rather than an abnormal spike in customer move-outs. In fact, December’s occupancy would have increased were it not for the auction losses. By the end of January 2026, occupancy (% of units rented) was about 53%, only a few points down from the 57% peak in November – again, a testament that underlying demand held steady aside from the forced auction vacancies.

The table below summarizes the monthly rental activity in Q4 2025, with the adjustment for auctions in December:

Q4 2025 Monthly Rentals – Space Savers (Oct, Nov, Dec) • October: 25 move-ins vs. 11 move-outs (including 2 auctions) → Net +14 units (occupancy gain). • November: 23 move-ins vs. 18 move-outs (0 auctions) → Net +5 units (occupancy gain). • December: 13 move-ins vs. 17 move-outs (10 auctions reported by DM) → Net –4 units. – Adjusted (excluding auctions): 13 ins vs. 7 true move-outs → Net +6 units (underlying growth).

In October and November, strong net rental gains (+14 and +5) drove occupancy up to mid-50% range. December’s raw net was –4, but after subtracting the 10 auction vacates, the site actually saw a healthy net rental gain in December. This indicates that customer leasing momentum continued through Q4. The auctions masked what would have been a positive December outcome.

For January 2026, the site recorded 9 move-ins and 21 move-outs (as of Jan 31) according to the activity report, yielding a raw net of –12 units. However, of those 21 move-outs, 8 were auction lien sales and 9 were “no longer needs storage” cases (customers who simply finished using storage). If we exclude the auctioned units from the count, the customer-initiated move-outs were only 13, making the effective net loss roughly –4 units for January (e.g., ~9 ins vs. 13 outs). In other words, only 4 out of 21 vacating tenants in January might be attributed to dissatisfaction or other reasons – a very small number in an absolute sense. Most of the occupancy drop in January was due to clearing out delinquent units (auctions) or natural life-event ends to storage use, rather than customers leaving to seek better prices or service elsewhere.

Move-In/Move-Out Breakdown and Auction Impact

To further visualize the impact of auctions on rental activity, Figure 2 compares move-ins vs. move-outs for each month of Q4 and January, highlighting the subset of move-outs that were auction-related:

Figure 2: Move-Ins vs. Move-Outs by Month (Oct 2025 – Jan 2026). The red portion of each move-out bar represents regular customer move-outs, and the green portion represents auctioned units. Notice December and January’s move-out totals include significant green segments (auctions), which are not driven by customer choice.

Several observations stand out from this breakdown:

October–November 2025: Move-ins exceeded move-outs in both months. October saw 25 new rentals against 11 move-outs (including 2 auctions); November had 23 move-ins against 18 move-outs. Neither month had unusual attrition – in fact, November had zero auctions, indicating most vacates then were ordinary customer move-outs. The net gains in these months reflect solid leasing activity and stable customer retention.

December 2025: Move-outs spiked relative to the reduced holiday-season move-in count (13 ins vs. 17 outs). Crucially, 10 of those 17 move-outs were auction-related (green portion in Dec bar of Figure 2). After removing those auctions, only 7 standard move-outs occurred – a very low churn number – so the facility actually added customers on a like-for-like basis in December. Many of the units vacated via auction had been delinquent and not producing revenue, so their removal, while lowering occupancy on paper, did not equate to dissatisfied paying customers leaving. In effect, the underlying customer retention in December was strong, with minimal voluntary move-outs.

January 2026: Total move-outs jumped to 21 (as of Jan 31), but the majority were non-issue churn. 8 units were emptied via auction (green segment), and 9 move-outs were by customers who reported “No longer needs storage” as their reason for leaving (these are typical end-of-use cases, such as someone retrieving belongings after a house move or project completion). That accounts for 17 of the 21 vacates. The remaining 4 move-outs encompass any other reasons (e.g. possibly dissatisfaction, seeking cheaper storage, or unreported reasons). With 9 new move-ins coming in January, the net impact excluding auctions was minor – only a few units down. This further underscores that very few customers left due to any negative sentiment or pricing concerns; most departures were either forced (auctions) or incidental (no longer need storage).

In summary, when adjusting for these auction vacates, customer-driven turnover in both December and January was quite low. The facility’s core customer base remained relatively steady. The auctions, while impacting occupancy numbers, actually help clean up bad debt and make units available for new paying customers at current market rates. From a performance standpoint, it’s important to distinguish these from normal move-outs, as they do not reflect service or price issues.

Pricing Strategy and Competitive Position

The current pricing strategy at Space Savers is very aggressive and market-aligned, aiming to drive occupancy growth. Street rates at this facility are intentionally set low to attract customers in a competitive market. For example, a 5×5 climate-controlled unit is priced at just $23 per month, which is a bargain rate for climate control. On top of that, management is running a “First Month Free” promotion for new tenants (as indicated by many recent move-ins on the detail report having the promo). This means new customers pay $0 for the first month and then a low ongoing rate thereafter – a highly attractive offer.

In comparison to nearby competitors, Space Savers’ rates are at least on par, if not lower. A quick survey of similar storage facilities in the region (for example, other facilities in Mobile, AL area) shows 5×5 climate units often priced around $25–$35+ per month without free month incentives. Larger unit types at Space Savers also tend to be priced at the lower end of the market range. The competitor analysis indicates no significant price disadvantage for Space Savers; if anything, prospective tenants would find Space Savers to be a value leader given its promotions and low rates.

The low pricing strategy is further validated by the move-out reasons data: virtually no tenants cited price as a reason for leaving in January. There were no trends of customers moving out to go to a cheaper facility – something we would likely hear in feedback if our rates were perceived as too high. Instead, the reasons were dominated by external factors (auctions, life changes). This suggests that current pricing is effective in both attracting new customers and retaining existing ones; price-sensitive customers are not finding better deals elsewhere.

Going forward, the focus should remain on marketing the value proposition (climate-controlled storage at low rates with promotions) to fill the vacant units, especially those freed by auctions. The data implies that we do not need to lower rates further to reduce turnover – the issue isn’t price, and rates are already very competitive. Keeping rates steady (or even considering moderate increases where justified) is reasonable as long as we continue to emphasize the quality and value offered.

Conclusion

The updated analysis, incorporating the District Manager’s insights, paints a reassuring picture: Space Savers’ recent occupancy dip is not a sign of customer dissatisfaction or uncompetitive pricing, but rather a result of procedural auctions and natural churn. When we adjust for these factors, Q4 2025 actually ended on a positive note with net customer growth, and January’s underlying retention was strong with only a handful of true customer-driven move-outs.

Current turnover is not rate-driven. The facility’s competitive low pricing and promotions are doing their job in attracting and keeping customers. With most move-outs coming from auctions or fulfilled storage needs, there is little evidence that tenants are leaving due to pricing or service issues. In fact, Space Savers is well-positioned against competitors on price, and its value-oriented strategy likely contributed to the solid move-in numbers even during the winter months.

Next Steps: Management should continue focusing on sales to capitalize on the freed-up units (post-auction) and maintain occupancy growth. Since pricing is already competitive, efforts are better spent on marketing and customer service rather than rate adjustments. Monitoring move-out reasons should continue; but as of now, the facility can be confident that pricing and value are not only sound but a key strength in the market. The performance outlook remains positive, especially once the transient effects of auctions subside, allowing the true demand trend to shine through.