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260218 Meeting Notes

View 4 of Agenda 2

View 4 of Agenda 2

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Topic

Notes

Date

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A big thing would be to focus on any lease ups stats this month and the plan to keep getting new tenants.

Thu, Sep 18

An update on the ad spend ROI would be great too.

Thu, Sep 18

Review rates at both Verona and Ocean City make adjustments to drive rental growth

@Larissa Fincher

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Thu, Sep 18

Auctions contributed mostly to vacates

Thu, Sep 18

Aggressive Promo

@Andrew Aue

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Thu, Nov 20

Rate Review

@Larissa Fincher

⁠

Thu, Nov 20

Track Cube Smart

@Andrew Aue

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Thu, Nov 20

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2026 YTD Performance Summary

(Financials through Jan 2026; Operations as of Feb 17, 2026)

1. Portfolio Financial Performance (January Close)

NOI:

$43,778 actual vs $46,189 budget (–$2,411 / –5.2%)

Key takeaway: The NOI miss is not broad-based operational weakness. It is largely driven by a $14,824 insurance expense posted at Pampa, which appears to be a one-time or annual timing item (needs GL confirmation).

Property Highlights

Ocean City: +$1,517 over budget NOI (+7%)

Verona: +$3,048 over budget NOI (+21.9%)

Amarillo: Beating NOI budget due to lower expenses despite revenue softness

Pampa: Under budget primarily due to insurance expense timing

Without the insurance spike, the portfolio would have been much closer to (or at) budget.

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2. Occupancy & Rental Activity

Portfolio Occupancy (Feb 17):

73.1% gross

82.1% rentable

The main constraint is unrentable inventory (136 units total) — especially:

Amarillo: 85 unrentable units

This is suppressing both occupancy and revenue more than demand alone.

Net Rentals YTD (Jan 1–Feb 17):

43 move-ins

80 move-outs

–37 net units

All four properties are negative YTD, indicating early-year churn/retention pressure.

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3. Delinquency (Biggest Operational Risk)

Portfolio delinquency >30 days:

$41,632 = 52.2% of rent roll

The issue is not recent slippage — it is aged balances:

51% of delinquency >30 is over 360 days old

Amarillo and Pampa are driving the majority

Property Risk Snapshot

Amarillo: 190% of rent roll delinquent (>30 days), 88% over 360 days

Pampa: 101% of rent roll delinquent (>30 days)

Ocean City: 2.1% (healthy)

Verona: 13.8% (manageable, mostly early-stage)

This is primarily a process and lien cadence issue, not a new performance deterioration.

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4. Six-Month Trend

January was:

The highest revenue month

The highest NOI month in the past six months

Also showed the expense spike (insurance timing)

Ocean City and Verona are providing stable NOI. Amarillo and Pampa represent the largest upside if operational issues are corrected.

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Bottom-Line Owner Talking Points

Financially: Slight NOI miss in January, primarily due to insurance timing at Pampa — not structural weakness.

Occupancy: Acceptable on a rentable basis, but suppressed by unrentable units.

Net Rentals: Negative YTD — retention and churn need attention.

Delinquency: Largest operational risk; heavily aged balances requiring structured resolution.

Biggest Immediate Value Levers:

Return unrentable units to service (especially Amarillo)

Accelerate lien/auction cadence on aged delinquency

Improve retention to reverse negative net rentals

2026 YTD Performance Update for Managed Properties

(Financials YTD through January 2026 close; Operations snapshot as of February 17, 2026)

Executive summary

Portfolio performance for January 2026 (most recent closed month in the accounting exports provided) was slightly behind budget on NOI, with the miss largely explained by a single one-time-looking expense posting at Pampa (insurance). Operationally, occupancy is acceptable at the portfolio level but is being dragged down by a high count of unrentable units (especially Amarillo), while delinquency over 30-days is concentrated in very aged balances (especially >360 days).

Portfolio highlights to use with owners:

NOI (Jan 2026): 43,777.90 vs budget 46,188.60 (−2,410.70 / −5.2%). Revenue was slightly under budget and expenses slightly over budget.

Primary driver of variance: Pampa posted 14,823.65 of insurance expense in January, which explains most of the portfolio NOI shortfall vs budget (this looks like an annual/one-time posting rather than a recurring monthly run-rate item, but should be confirmed in the GL).

Occupancy (as-of Feb 17): Gross occupied 73.1% portfolio-wide; rentable occupied 82.1%, with unrentable inventory a key limiter (portfolio unrentable units = 136; Amarillo alone reports 85 unrentable units).

Net rental change (leases started minus ended), Fiscal YTD (Jan 1–Feb 17): −37 units portfolio-wide (43 move-ins vs 80 move-outs), indicating early-year demand/retention pressure.

Delinquency >30 days (as-of Feb 17): 41,631.68 = 52.2% of rent roll, and >360-day balances represent ~51% of delinquency >30 at the portfolio level—this is a collections/process issue more than a “recent slip” issue.

Portfolio financial performance vs 2026 budget

Scope: Accounting statements provided appear to include January 2026 financials (P&L) for all four properties, plus trailing-12 detail to support trend context. Budget sources vary by property (see “Data sources, gaps, and assumptions”). Currency is not explicitly labeled in the files; figures are presented as provided.

Portfolio summary table

Sign convention shown as Actual − Budget (Revenue/NOI: positive = favorable; Expense: positive = unfavorable).

Table 1

Table 1

Property

Rev Act

Rev Bud

Rev Var $

Rev Var %

Exp Act

Exp Bud

Exp Var $

Exp Var %

NOI Act

NOI Bud

NOI Var $

NOI Var %

Amarillo

9,246.19

10,174.83

-928.64

-9.1%

8,574.41

11,895.41

-3,321

-27.9%

671.78

-1,720.59

2,392.37

n/m

Ocean City

32,166.23

32,849.16

-682.93

-2.1%

8,998.53

11,198.91

-2,200.38

-19.6%

23,167.7

21,650.25

1,517.45

7.0%

Pampa

19,600.7

21,372.77

-1,772.07

-8.3%

16,650.9

9,054.46

7,596.44

83.9%

2,949.8

12,318.31

-9,368.51

-76.1%

Verona

24,011.54

22,556.1

1,455.44

6.5%

7,022.92

8,615.48

-1,592.56

-18.5%

16,988.62

13,940.62

3,048

21.9%

Portfolio

85,024.66

86,952.86

-1,928.2

-2.2%

41,246.76

40,764.26

482.5

1.2%

43,777.9

46,188.6

-2,410.7

-5.2%

There are no rows in this table

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Owner-ready interpretation:

The portfolio NOI miss (−2.4k) is not broad-based weakness. It is heavily driven by Pampa’s expense spike with otherwise solid NOI generation at Ocean City and Verona.

Ocean City and Verona are producing strong NOI vs budget in January (favorable variances of +1.5k and +3.0k, respectively).

Pampa is materially under budget NOI on paper, but the expense variance appears dominated by an insurance expense posting that is likely non-recurring in-month (needs confirmation).

Property-level variance drivers and recommended actions

This section is written to be read aloud quickly: what happened, why it happened, and what you’re doing next.

Amarillo

January financials: NOI 671.78 vs budget −1,720.59 (improvement +2,392.37). Revenue is under budget (−9.1%) but expenses are well under the budget model (−27.9%). The budget appears to include heavier “setup/initial” costs than actual January spend.

Operational flags (as-of Feb 17):

Occupancy: 128 live occupied / 275 total units = 46.5% gross, but 67.4% rentable due to 85 unrentable units (a major constraint on physical and revenue occupancy).

Net rentals (Fiscal YTD): 5 move-ins − 22 move-outs = −17 units (demand/retention pressure).

Delinquency >30: 21,411.10 = 190.0% of rent roll; ~88% of delinquency >30 is >360 days, indicating aged unresolved balances.

Recommended actions (next 30 days):

Unrentable unit recovery plan: identify root causes of the 85 unrentable units (damage, delinquency status, offline inventory, lock cuts, etc.), prioritize quick-turn repairs, and set weekly targets for units returned to rentable status.

Aged delinquency blitz (>360 days): accelerate lien/auction workflow, resolve legacy balances, and consider write-off policy alignment where collection probability is low (after confirming legal/ownership requirements).

Retention + fill: because net rentals are negative YTD, tighten follow-up on leads, increase conversion tactics, and revisit street rate vs competitor positioning once unrentables are addressed (inventory first, pricing second).

Ocean City

January financials: NOI 23,167.70 vs budget 21,650.25 (+1,517.45 / +7.0%).

Revenue is slightly under budget (−682.93) largely because Parking Revenue is budgeted but not recorded in January, and fee income (late fees) under-ran budget, while rent income exceeded budget.

Expenses are significantly under budget (−2,200.38) despite advertising being over budget, suggesting several budgeted expenses did not hit in January (timing/classification/payer differences to confirm).

Operational snapshot (as-of Feb 17):

Occupancy: 74.4% gross, 75.9% rentable (only 6 unrentable units).

Net rentals (Fiscal YTD): −4 units (7 move-ins, 11 move-outs).

Delinquency >30: 639.80 = 2.1% of rent roll, concentrated in 31–60 days (early-stage, manageable).

Recommended actions:

Parking revenue validation: confirm whether parking product is active, priced, and being billed; if it exists operationally, ensure it’s being recorded consistently; if not, reforecast to remove budgeted parking until implemented.

Advertising ROI check: advertising ran high in January; confirm CAC vs move-ins and rebalance channels accordingly (especially since net rentals are negative YTD).

Delinquency early intervention: maintain low delinquency by tightening 31–60 day outreach before it ages.

Pampa

January financials: NOI 2,949.80 vs budget 12,318.31 (−9,368.51 / −76.1%). Revenue is under budget (−8.3%), but the main issue is expenses over budget by +7,596.44.

The accounting detail shows Insurance Expense of 14,823.65 recorded in January, which overwhelmingly explains the expense variance and NOI miss. This looks like an annual or one-off posting timing issue rather than a structural cost problem, but should be confirmed in the GL.

Operational snapshot (as-of Feb 17):

Occupancy: 82.0% gross, 89.7% rentable (31 unrentable units).

Net rentals (Fiscal YTD): −9 units (16 move-ins, 25 move-outs).

Delinquency >30: 16,711.00 = 100.6% of rent roll, with the largest concentration in 181–360 days (40% of delinquency >30), plus additional very aged balances.

Recommended actions:

Normalize reporting for owners: confirm whether the insurance payment is annual; if yes, present “NOI before annual insurance timing” alongside GAAP/cash-basis reporting, and implement a monthly accrual view for budget comparison.

Collections + lien cadence: delinquency levels indicate a backlog; implement a strict weekly schedule for notices/overlocks/auctions and track units returned to paying status or vacated for re-rent.

Unrentable review: validate why 31 units are unrentable and expedite returns to service.

Verona

January financials: NOI 16,988.62 vs budget 13,940.62 (+3,048.00 / +21.9%) driven by both revenue outperformance (+6.5%) and expense control (−18.5%).

Operational snapshot (as-of Feb 17):

Occupancy: 85.1% gross, 89.2% rentable (14 unrentable units).

Net rentals (Fiscal YTD): −7 units (15 move-ins, 22 move-outs).

Delinquency >30: 2,869.78 = 13.8% of rent roll, concentrated in 31–60 days (44% of delinquency >30), suggesting a “prevent aging” opportunity.

Recommended actions:

Protect strong NOI: keep expense discipline, but check whether any budgeted seasonal/quarterly costs are pending (to avoid later surprises).

Delinquency prevention: focus on 31–60 day accounts; early action should materially reduce >90 day aging.

Address net rentals: with net units down YTD, evaluate churn drivers (pricing moves, service issues, competitor offers) and adjust retention messaging.

Operating metrics and owner-facing scoreboard

Note: These operating metrics come from the Management Summary dated February 17, 2026 with “Fiscal YTD” counts through that date. Delinquency >30 is derived from the aging buckets and expressed as a % of the report’s “Actual Occupied Rate” (used as a rent roll proxy).

Property and portfolio operating summary

Table 2

Table 2

Property

Units

Occupied (live)

Occ % (gross)

Occ % (rentable)

Move-ins YTD

Move-outs YTD

Net rentals YTD

Rent roll (as-of)

Delinq >30 (as-of)

Delinq >30 % rent roll

Aging concentration

Amarillo

275

128

46.5%

67.4%

-17

11,268.4

21,411.1

190%

> 360 days (88%)

Ocean City

297

221

74.4%

75.9%

-4

31,065.4

639.8

2.1%

31 - 60 days (100%)

Pampa

362

297

82%

89.7%

-9

16,611

16,711

100.6%

181 - 360 days (40%)

Verona

302

257

85.1%

89.2%

-7

20,762.64

2,869.78

13.8%

31 - 60 days (44%)

Portfolio

1,236

903

73.1%

82.1%

-37

79,707.44

41,631.68

52.2%

> 360 days (51%)

There are no rows in this table

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Owner-ready talking points from the table:

Occupancy is constrained by unrentables more than lack of demand (portfolio rentable occupancy 82.1% vs gross 73.1%).

Net rentals are negative across all properties YTD, suggesting a churn/retention issue early in the year.

Delinquency is the biggest operational risk, especially at Amarillo and Pampa, and it is mostly very aged, which demands a process-driven resolution plan.

Six-month financial trend

The six-month view uses the trailing-12-month schedules (T12) in the accounting exports. For properties that began reporting later (e.g., Amarillo/Pampa), earlier months may be effectively zero/blank in the export and therefore appear lower in the portfolio aggregation.

Portfolio last 6 months (actuals)

Table 3

Table 3

Month

Revenue

Expense

NOI

Aug 2025

48,720

22,615

26,104

Sep 2025

54,008

20,930

33,079

Oct 2025

54,350

16,227

38,123

Nov 2025

64,418

32,209

Dec 2025

63,928

31,565

32,363

Jan 2026

85,025

41,247

43,778

There are no rows in this table

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Interpretation for owners:

January step-up reflects the portfolio’s strongest month in this six-month window on both revenue and NOI, but the expense spike is also visible (largely driven by Pampa’s insurance posting and any other annual/semi-annual items).

Ocean City + Verona provide stable base NOI; Amarillo and Pampa are the primary operational upside/downside levers (unrentables + delinquency).

Data sources, gaps, and assumptions

Primary sources used (as provided)

Accounting exports (actuals):

01 2026 Financials Amarillo.xlsx (Profit & Loss; T12)

01 2026 Financials Ocean City.xlsx (Profit and Loss; T12; Budget vs. Actuals)

01 2026 Financials Pampa.xlsx (Profit & Loss; T12)

01 2026 Financials Verona.xlsx (Profit and Loss; T12)

Budget sources:

Budget - Amarillo Storage Center (J&B Self Storage).xlsx (Expanded Budget)

Budget - Pampa (Previously American).xlsx (Expanded Budget)

2026 Verona Storage .xlsx (Budget - Verona)

Ocean City budget was taken directly from 01 2026 Financials Ocean City.xlsx → Budget vs. Actuals

Property management / operational report:

Management Summary - Consolidated - 2026-02-17 through 2026-02-17.xlsx (Consolidated + property tabs)

Data gaps (important to disclose to owners)

Bank statements were not provided, so cash verification and deposit timing reconciliation were not performed.

Rent rolls were not provided, so delinquency is stated as the management summary’s % of “Actual Occupied Rate” (used as rent roll proxy), rather than a reconciled rent roll total.

Prior-month operational snapshots were not provided, so true month-over-month trends for occupancy and delinquency cannot be shown beyond what is embedded in the Feb 17 management summary as-of view.

Key assumptions applied in this report

Financial YTD is treated as January 1–January 31, 2026 because January is the most recent complete month of financial statements provided.

Operational YTD (“Fiscal YTD”) is treated as January 1–February 17, 2026, per the management summary column header.

Delinquency >30 is calculated as the sum of aging buckets 31–60, 61–90, 91–120, 121–180, 181–360, and >360 days from the management summary; % of rent roll uses “Actual Occupied Rate” from the same report as the denominator.

Budget comparability: Amarillo and Pampa budgets are drawn from underwriting-style expanded models (monthly projections) and may not match accounting classifications perfectly; comparisons are therefore made at the total Revenue / total Expense / NOI level only.

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