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Revenue: ~$80KExpenses: ~$60KNOI: ~$20K (positive despite lease-up phase)Net rentals: ~15 gain in Q3 (21 YTD)Leads: 217 YTD, 58% conversionOccupancy: 52% of units vs. 71% of sq ft; economic occupancy 76%Total revenue: ~$200K (insurance adds $16K; fees $13K)Expenses: ~$159K (mainly payroll, repairs, professional fees, marketing)NOI: ~$60K (27% margin)Concessions/Write-offs: $35K (lease-up promos, delinquent accounts)Larger units are leasing up quickly (70–80%+ occupied).Small lockers and 5×5–5×10s remain underutilized (under 35% occupied).Gap: High sq ft occupancy despite half the units vacant → revenue strong, upside in smaller units.
Supply/Demand: Market is oversupplied – ~13.9 sq ft of storage per person, almost double U.S. average. Vacancy has risen into high 80s–low 90s% occupancy vs. ~95% peak in 2021.Rates: Street rates have softened – ~$15/sq ft/year, down ~3–4% YoY. Discounts and free-month promos are common.Pipeline: Over 1.3M sq ft new supply (12% of inventory) under construction or planned. Competitive pressure remains high.Competition: Mix of REITs (Public Storage, Extra Space, CubeSmart) and strong locals. Many new climate-controlled facilities in 50–100K sq ft range.Outlook: Demand drivers (population, military, retirees) remain positive long-term. Rents expected to stabilize in 2026 as new supply is absorbed.
Units affected: 60Average increase: +$17.52 per unit (+16.1%)Total monthly increase: +$1,051 across all units
Units affected: 28Average increase: +$19.32 per unit (+33.1%)Total monthly increase: +$541 across all units
Vacancy & Occupancy Rates: Pensacola’s overall storage occupancy was exceptionally high a few years ago (hovering in the high-90% range in 2021 amidst strong demand). However, a wave of new development has increased availability and softened occupancy. The Pensacola-Ferry Pass-Brent metro area now has an estimated 9.87 square feet of storage per capita vs. ~8.19 sq ft of demand – i.e. it is over-supplied by ~1.7 sq ft/person. This translates to higher vacancy: while exact current vacancy % isn’t published, market occupancy has likely normalized to the high-80s to low-90s% range (vs. ~95%+ at peak). In Emerald Coast’s trade radius, competition is stiff; for example, a recent survey noted 12 facilities within a 3-mile radius of a downtown Pensacola site, offering 12.8 sq ft per capita just in that area. Such density of facilities inevitably puts downward pressure on any single facility’s occupancy – especially a newer lease-up like Emerald Coast – as operators vie for tenants. In short, Pensacola’s storage vacancy has risen from effectively zero a few years ago to a more typical level due to new supply.Rental Rate Trends: After several years of rapid rent growth, rental rates in the Pensacola market have recently been trending downward. In 2021, street rates saw double-digit increases (e.g. +12% YoY for 10×10 climate units at one point) due to strong demand. But as of late 2023, that trend reversed – the average Pensacola storage rent is about $15 per sq ft/year, which is below the U.S. average (~$16.60) and represents a –3.4% year-over-year decline. This decline reflects aggressive price competition and concessions to attract tenants to new facilities. Notably, Pensacola’s rent drop is in line with the broader Sun Belt region, where surplus new supply has forced slight rate cuts. Nationally, rates have flattened out (+0.7% YoY as of July 2025) but Sun Belt markets (including Florida) are still seeing rent softness. For operators, this means slower revenue growth: street rates for standard units are a bit lower than a year ago, and any rent increases on existing customers are modest. Emerald Coast Storage’s offering rates likely had to stay very competitive (and include move-in specials) to achieve its lease-up, given that several competitors in Pensacola are offering discounted rents and free month promotions in light of the supply glut. The good news is that industry analysts report rent declines are bottoming out – by mid-2025 the rate of decline had narrowed to only a few percent year-over-year and some operators even saw positive rent growth returning in Q3 2025.New Supply Pipeline: Pensacola’s self-storage construction boom is a major factor in market dynamics. As of early 2024, nine new facilities (totaling ~557,000 sq ft) were under construction in the Pensacola area. By the end of 2023, the development pipeline (projects under construction plus planned) equated to ~1.38 million sq ft – about 12.6% of the existing inventory of ~11 million sq ft. This huge influx (on top of ~711,000 sq ft delivered in 2021 alone) has rapidly expanded supply. Many of these projects are high-end, climate-controlled multi-story facilities by major operators (e.g. CubeSmart, Extra Space) aiming to capture the region’s population growth. For context, Pensacola’s storage space per capita is ~13.9 sq ft now – nearly double the U.S. average (~7 sq ft) – reflecting how quickly new supply came online. Going forward, the pipeline is tapering (2025 new deliveries are projected ~10% lower than 2024), but the impact of recent openings will continue to be felt as those facilities lease up. For Emerald Coast Storage, this means operating in lease-up mode alongside many other new or expanded facilities, all competing for tenants.Competitive Landscape: The Pensacola storage market is fragmented but with a strong presence of REITs and large regional operators. According to Newmark’s Self Storage Almanac, the metro contains ~125 storage facilities in total. Major national brands (Public Storage, Extra Space (which absorbed Life Storage), CubeSmart, U-Haul, etc.) have established locations, especially in high-traffic corridors. In addition, there are local/regional players (e.g. Climate Control Storage, Move It Storage, and Go Store It – which recently opened a 503-unit facility near downtown). The competitive environment is characterized by modern climate-controlled facilities in the 50,000–100,000 sq ft range clustered near growing residential areas and retail centers. Many new facilities are adaptive reuse or multi-story infill projects, indicating developers targeting prime locations. The West Pensacola submarket (where Emerald Coast is located) has a mix of older drive-up properties and new climate-controlled entrants; for example, a CubeSmart-managed 115,000 sq ft facility opened in 2024 nearby, adding hundreds of climate-controlled units to the immediate trade area. This high supply means customers have ample choice, and facilities must compete on price, security, and service. Emerald Coast’s strategic response has been to emphasize features like 24/7 access, security systems, and promotional rates to attract customers in this crowded field.
250926 Update
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Increase rates on smaller units to market and put a deeper promo to drive small unit inventory
@Andrew Aue
@Joseph McClendon
Fri, Sep 26
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Emerald Coast Storage – Performance Summary (121 N. New Warrington Rd.)
Q3 2025 (Jul–Sep):
YTD 2025 (Jan–Sep):
Unit Mix Insight:
Pensacola Market Conditions
Key Takeaway:
Emerald Coast is performing well given market headwinds—positive NOI, strong insurance penetration, and high square-foot occupancy. The focus should be on filling smaller units (pricing/promotions) to close the occupancy gap, while continuing to leverage competitive marketing in a tenant-friendly Pensacola market.
Rate Increases
October 2025
November 2025
Key takeaway: October has the largest impact in terms of number of tenants and total rent dollars, while November shows a higher average % increase (reflecting sharper adjustments on fewer units).
Emerald Coast Storage – Q3 2025 Performance and Market Overview
Q3 2025 Operational Performance (121 N. New Warrington Rd.)
Leasing Activity: Emerald Coast Storage saw steady tenant demand in Q3 2025. The facility logged ~15 net new rentals during Q3 (approximately 60 move‐ins vs. ~45 move‐outs), bringing the year-to-date net gain to 21 tenants. Lead generation remained strong – ~28 inquiries in September (as of 9/25) and 217 leads YTD – with an overall conversion to move-ins of about 58%. This indicates effective marketing (top sources included online aggregators like Storagely and SpareFoot) and on-site sales efforts.
Occupancy: Physical occupancy improved slightly over the quarter. By September 25, unit occupancy stood at 52.3% (265 of 507 units occupied) while square-foot occupancy reached 70.6%. This modest rise (up ~2 percentage points in unit occupancy from the end of Q2) reflects the facility’s ongoing lease-up phase. Move-ins have been concentrated in larger unit sizes, leading to a considerably higher occupied square footage relative to unit count. Economic occupancy (rent collected as a percentage of potential) is even higher at 76.4%, suggesting that revenue management tactics (e.g. premium rates on certain units and additional income streams like insurance) are helping boost effective occupancy despite vacant units.
Key Drivers: The facility’s Q3 operational performance was driven by robust demand for larger units, aggressive marketing, and improved tenant retention. Notably, move-out volume (14 in September MTD) nearly kept pace with move-ins, indicating that churn is still a factor – likely as the facility stabilizes and earlier promotional leases mature. Continued focus on customer service and rental rate incentives will be important to convert inquiries to rentals and reduce move-outs going forward.
YTD 2025 Financial Performance
Through the third quarter of 2025, Emerald Coast Storage generated approximately $200K in total revenue and maintained positive NOI as it builds occupancy. Total operating revenue (including rental income, fees, merchandise, and insurance) was $196,714 YTD as of Sept 25. On an accrual basis (Jan–Aug actuals), total income is about $219,137. Monthly rental income has hovered around the mid-$20K range, ending August at ~$29.3K. Q3 revenue was roughly on par with Q2 (~$80K for Jul–Sep vs ~$82K in Apr–Jun, reflecting flat occupancy growth).
Expenses have been well-managed relative to revenue, though they reflect the fixed-cost nature of a property in lease-up. Year-to-date operating expenses totaled ~$159,230 (Jan–Aug), averaging about $20K per month. Major expense drivers included payroll ($39K YTD), repairs & maintenance ($32K), and professional fees ($25.7K). Marketing costs were also significant ($14K on advertising/promotion) to drive leasing in a competitive market. The property has incurred some one-time costs (e.g. initial repairs, legal/professional services) typical for a newly acquired or opened facility.
Net Operating Income (NOI): Despite the half-empty physical occupancy, the property is cash-flow positive. YTD NOI stood at $59,847 through August, implying an NOI margin of ~27% on total income. For Q3 alone, NOI is estimated around $20K (with revenue roughly $80K vs. ~$60K in operating costs). This positive NOI is a result of gradually increasing revenue and controlled expenses. Bad debt and concessions have eaten into topline performance – the facility booked $35K in total allowances (uncollected rent write-offs, discounts, and credits) so far in 2025 – but these appear to be largely upfront lease-up incentives (e.g. one-month-free promotions) and some delinquent accounts being written off. Going forward, as promotional discounts burn off and occupancy rises, the expectation is for revenue to accelerate and NOI margins to improve toward industry norms (~50%–60% for stabilized storage assets).
Table: Q3 2025 vs. YTD 2025 Financial Summary
Table 2
Metric
Q3 2025 (Jul–Sep)
YTD 2025 (Jan–Aug)
Total Revenue
~$80,000 (est.)
$219,137
Operating Expenses
~$60,000 (est.)
$159,230
Net Operating Income
~$20,000 (est.)
$59,847
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Estimates for Q3 2025 are based on monthly run-rates; YTD figures are actuals.
Performance Drivers: The key financial drivers in 2025 have been the gradual absorption of vacant units and ancillary revenue streams. Strong lease-up of high-square-footage units (discussed below) has kept rental revenue growing, and the facility has sold tenant insurance aggressively (over 92% of tenants insured, yielding $16.2K in YTD insurance revenue). On the expense side, management’s control of variable costs (e.g. automating operations to limit labor and using remote marketing) has helped offset the high fixed costs (property taxes, security, etc.) inherent in a new facility ramp-up. Bad debt from a few auctions (shown by 118 move-outs vs 139 move-ins YTD and ~$24.6K in write-offs) did weigh on net receipts, but this appears to be stabilizing as delinquent legacy accounts have been addressed. Overall, Q3 and YTD financial results show improving revenue and positive NOI, positioning the property for stronger performance as occupancy grows.
Occupancy & Unit Mix Analysis – Unit vs. Square Foot Occupancy
One standout aspect of Emerald Coast’s performance is the gap between unit occupancy (52.3%) and square-foot occupancy (70.6%). This ~18 percentage point difference is directly tied to the facility’s unit mix and differential demand by size. In short, larger units are leasing up much faster than smaller units, so a relatively small portion of units (just over half) accounts for the bulk of the rentable square footage occupied.
Occupancy rates by unit size category at Emerald Coast Storage (as of Sep 25, 2025). Smaller units (e.g. <25 sq ft lockers) show very low occupancy, while larger units are 70–80%+ occupied. This disparity explains why square footage occupancy (orange) far exceeds unit count occupancy (yellow) in aggregate.
The facility’s rental mix spans from tiny lockers (~4×4 ft, ~16 sq ft) up to large garages (>200 sq ft). Analysis of the occupancy report reveals: the smallest units are largely empty – for example, lockers under 25 sq. ft. are only ~18% occupied, and units in the 25–75 sq. ft. range (small closets and 5×10’s) are ~35% occupied. By contrast, mid-size and large units (>75 sq. ft., such as 10×20 drive-ups and 10×30 units) are ~73–76% occupied on a unit basis, and even higher on an area basis (the largest units are over 80% occupied by square footage) – essentially at stabilized occupancy levels for those sizes. This disparity means that most vacant units are the small, low-square-footage lockers, which drag down the unit-count occupancy%, while the occupied units skew toward higher square footage. In effect, the facility has filled much of its available square footage even though many individual units (mostly the small ones) remain vacant.
Several factors drive this pattern: market demand in Pensacola favors larger storage spaces (for furniture, vehicles, business storage, etc.), and smaller lockers may be less attractive or competitively priced relative to their volume. Additionally, management has likely focused leasing efforts on larger units (which generate more rent) – evidenced by large units achieving high economic occupancy quickly. The result is a high average unit size among occupied units. The implication is that as leasing continues, there is substantial upside in occupancy gains by focusing on the smaller unit segment (perhaps via price adjustments or promotions) to close the gap. In the meantime, the high square-foot occupancy has supported revenue despite half the units sitting vacant – a positive sign that the facility is capturing the high-value rentals first.
Pensacola Self-Storage Market Overview – Supply, Demand, and Competition
Emerald Coast Storage operates in a highly competitive Pensacola, FL self-storage market that in recent years has shifted from undersupply to oversupply. Below is a summary of current supply/demand conditions and how they impact performance:
Market Outlook: Despite current challenges, Pensacola’s demand drivers remain favorable long-term – the metro’s population and housing stock continue to grow (13.6% population growth 2010–2020) and military presence and retiree inflows support steady storage usage. Industry data show about 11–12% of U.S. households use self-storage, and Pensacola’s usage is likely at the higher end of that range. As the excess new supply is absorbed over the next 1–2 years, vacancy rates should trend down and rental rates should gradually firm up. In the interim, however, Pensacola is firmly a renter’s market for storage. Operators will need to remain price-competitive and marketing-savvy. For Emerald Coast Storage, the key will be to continue its lease-up momentum – capitalizing on its competitive advantages (convenient location on N. New Warrington Rd., mix of climate and drive-up units, and affiliation with Go Mini’s for portable storage) – while carefully managing rates and expenses. The gap between unit and square-foot occupancy actually positions the facility well: as smaller units begin to fill, even at discounted rates, both occupancy metrics will converge upwards, driving incremental revenue with minimal added cost. Coupled with an expected stabilization of market conditions, Emerald Coast Storage is projected to finish 2025 with improving occupancy and financial performance, aligning it for a strong 2026 in a normalized Pensacola storage market.
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