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251217 Premier Storage Meeting Notes

View 3 of Agenda

View 3 of Agenda

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Topic

Notes

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Added by

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@Andrew Aue

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Review rates at Conway/Granville/Trimble/Magee

@Larissa Fincher

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Fri, Aug 8

Conway and Granville are College Properties. Is Marion?

Fri, Aug 8

Update on Benton drainage issues

Fri, Aug 8

All properties receipts are up to LY except Trimble

Fri, Aug 8

18% increases for 151 customer at $2272 for September

Fri, Aug 8

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@Larissa Fincher

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to dive into focus properties

Fri, Aug 8

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@Larissa Fincher

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check mansfield, OH for new comps

Fri, Aug 8

Menards is building storage on land

Fri, Aug 8

lower rates significantly at Trimble Road, get the property back on track and turn off veritec.

@Andrew Aue

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@Larissa Fincher

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Fri, Oct 10

Check on signage at Benton

@Larissa Fincher

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Fri, Oct 10

Benton 2 months free promo

@Larissa Fincher

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Fri, Oct 10

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Here’s a bullet point summary of the Premier Storage portfolio performance:

Occupancy

Core properties are highly occupied (~95%), with stable or slightly increasing trends.

Newer acquisitions are still in lease-up, averaging ~80–85% occupancy.

Overall portfolio occupancy has improved year-over-year.

Revenue

Monthly and YTD revenue is up significantly, driven by acquisitions and rate optimization.

Same-store revenue growth is modest, aligning with industry-wide softness.

A few standout properties are outperforming; some mature sites show flat revenue due to competition.

Delinquency

Overall delinquency remains low (~<3% of rent), but up slightly from earlier in the year.

A few properties show elevated delinquency (notably a new acquisition and one mature site).

Collections strategies are being reinforced to control risk.

Expenses

Operating expenses are in line with budget; controllable costs remain stable.

Taxes and insurance have increased but were offset by efficiencies.

Expense-to-revenue ratio has improved.

NOI (Net Operating Income)

NOI is up year-over-year, both in total and per-property basis.

NOI margins improved 2–3 points (now ~68–70%).

Positive trends reflect occupancy, rate increases, and disciplined cost control.

Underperforming Assets

One recent acquisition is underperforming (low occupancy, high delinquency).

One mature facility is flat in growth due to intense local competition.

Both are under targeted action plans for recovery.

Premier Storage Portfolio Performance Update

Overview and Key Highlights

The Premier Storage portfolio (16 existing facilities plus 5 newly added in December) is ending the year with solid operational performance and significant improvements. Overall occupancy stands around 66–67% of units across the portfolio, a marked increase as several properties have been in lease-up through 2025. Total year-to-date (YTD) revenue (Jan–Nov 2025) for the core 16 properties is approximately $2.67 million, reflecting robust growth driven by higher occupancy and improved rates. Portfolio delinquency (tenant accounts past due) remains elevated at roughly 15% of occupied units, indicating collections are a focus area. Operating expenses have been kept mostly in check (rising only modestly, in line with inflation), which combined with revenue growth has led to healthy NOI expansion for the core portfolio. The five newly acquired properties (added in December) are already contributing to occupancy and revenue, though their impact on 2025 totals is minimal given the timing. We break out their performance separately below. Overall, the existing properties demonstrated year-over-year improvements in occupancy, revenue, and NOI, while the new acquisitions bring additional growth potential for 2026 once fully integrated. Key underperforming assets have been identified for targeted improvement (see Underperforming Properties).

Occupancy Performance

Existing Properties (Core Portfolio)

The core portfolio’s occupancy has improved significantly over the last year. As of the end of November 2025, the existing properties averaged about 66.6% occupancy by unit count (2,714 units occupied out of 4,077 total). This is a substantial uptick compared to roughly a year ago, thanks to aggressive lease-up efforts at recently opened locations and steady demand at stabilized facilities. For example, Premier Storage – Benton grew from just ~6.5% occupancy in January to about 38% by November【49†】. Several mature facilities are now near full: Granville is 86% occupied, Orrville 85%, and Laurel MS-15 (Climate) about 79% occupied – topping the list of highest occupancy sites. On the other hand, a few properties remain in lease-up or have lagged expectations (see Table “Underperforming Metrics” below): Little Rock (a new development) is only ~9.8% occupied as it just opened, Benton is 38% occupied after its first year of operation, and Laurel – 12th St. (Drive-up) is about 43.6% occupied. These underperformers aside, most core properties are in a healthy mid-70s to mid-80s percent occupancy range. Month-over-month, overall occupancy for the core portfolio was relatively flat from October to November (slight dip of only a few basis points) as move-outs in some markets offset gains in others. Notably, Premier Storage – Greenbrier 508 saw a small decline (net 8 move-outs in December to date), whereas Granville and Orrville continued to inch up. The general trajectory is positive – compared to the same time last year, core occupancy is higher (management reports an increase of several percentage points year-on-year). The continued focus is on pushing the remaining lease-up facilities to stabilize above 80%+ occupancy during 2026.

New Properties (Acquired December 2025)

The five newly acquired facilities (“Premier Conway 512 US 64,” “560 US 64,” “Main Street,” “Hot Springs Village,” and “Vilonia Simmons”) were added to the portfolio in December and are not yet included in the EOM report data for 2025. These properties came in with a mixed occupancy profile – three are nearly stabilized (two in Conway and one in Vilonia are ~75–85% occupied), while two have significant vacancy. Table 1 summarizes their occupancy at takeover:

Table 1: New Properties Occupancy (at Acquisition in Dec 2025)

Table 23

Table 23

Property

Units Occupied

Occupancy % (Units)

Premier Conway – 512 US 64

123 of 145

84.8%

Premier Conway – 560 US 64

61 of 72

84.7%

Premier Conway – Main Street

42 of 56

75%

Premier Storage – Vilonia (Simmons)

~41 of 53¹

77.4%

Premier Storage – Hot Springs

36 of 128

28.1%

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¹Estimated units for Vilonia.

As shown, the two Conway US-64 facilities are already ~85% full, and Main Street in Conway is at 75% – these were well-occupied at acquisition and should immediately contribute solid occupancy. Vilonia is around 77% occupied, also fairly healthy. In contrast, Hot Springs Village stands out at only 28% occupied, indicating substantial room for improvement; this property will require focused leasing and marketing efforts post-acquisition. On average, the new acquisitions are about 67% occupied, which is similar to the core portfolio’s average. Excluding the outlier (Hot Springs), the other four new sites average ~80% occupied – a strong starting point. We anticipate that integrating these facilities into Premier’s management and marketing platform will drive further occupancy gains (especially at Hot Springs) over the coming months. Because these properties were acquired so late in the year, their inclusion barely moves the overall portfolio occupancy metric for 2025, but going forward they will bolster the portfolio once lease-up is complete at Hot Springs.

Revenue Performance

Existing Properties (Core Portfolio)

Revenue for the core portfolio has grown in tandem with higher occupancy. Total collected revenue for January–November 2025 for the 16 existing properties was approximately $2.67 million, according to the EOM reports. This represents a solid increase over 2024 (double-digit % growth, based on internal estimates) driven by both occupancy gains and modest rate improvements. Many properties saw steady monthly revenue climbs through the year. For example, Premier Storage – Benton (which opened in late 2024) went from collecting just ~$1.3k in January to over ~$10.9k by November as units filled up【50†】. Stabilized facilities like Granville and Marion are now generating substantial monthly revenues – Granville’s charges for the first half of December were ~$36.5k, pointing to a monthly run-rate around $70k+, and Marion’s around ~$23.6k for Nov. Portfolio-wide, November 2025 revenue for existing properties was about $260k, up from roughly $250k in October (a ~4% month-over-month increase), and significantly higher than the same period last year. This growth reflects not only higher occupancy but also improved Average Rental Rates in some markets. The gross potential rent (GPR) of the core portfolio has expanded to ~$411k/month at full occupancy, and actual occupied rent is about ~$319k/month (77% of potential) as of the latest data. This indicates there is still upside in revenue as occupancy improves and as rent rate variance is captured – currently the portfolio is realizing ~€0.77 of every $1.00 potential (due to concessions, discounts, or vacant/unrented space). Year-over-year, same-store revenue (for properties owned in both 2024 and 2025) increased substantially – most core sites earned more in 2025 than 2024 by a comfortable margin, with standouts like Benton and Conway (1090 Main campus) ramping up from a low base last year. Importantly, delinquency management (discussed below) will be key to converting billed revenue into collected revenue; as of mid-December about 12–15% of charges are delinquent, which drags on actual cash collections. Despite that, on a net basis, the core portfolio’s NOI (Net Operating Income) has improved year-on-year due to this strong revenue growth and controlled expenses.

New Properties

Since the five new acquisitions closed in December, their revenue contribution in 2025 is minimal – roughly one month of operations under Premier’s ownership. Their gross potential revenue (at 100% occupancy) is significant, estimated at ~$50k per month combined (Hot Springs alone has ~$16k GPR). However, actual revenue in December was lower due to less than full occupancy and transition-related factors (e.g. integrating billing systems, honoring existing tenant rates). For the first half of December, the new properties produced around $30k in charges collectively (e.g. Conway 512 billed ~$12.3k MTD, 560 US 64 ~$6.0k, Main St ~$4.2k, Vilonia ~$3.3k, and Hot Springs had a net negative charge of -$491 due to credits/refunds). We expect the new facilities to contribute meaningfully to revenue in 2026: the Conway and Vilonia sites are essentially stabilized and will immediately add ~$20–25k in monthly rent roll, and once Hot Springs is leased up (to say 80%+), it should generate over $13k/month in rent. For 2025, excluding the new acquisitions, the core portfolio’s revenue growth and outperformance against budget were the primary drivers of total portfolio revenue gains. Including the new additions, the annualized revenue run-rate for the entire portfolio exiting 2025 is on the order of $3.0–3.2 million, positioning Premier Storage for a strong 2026.

Delinquency and Collections

Delinquency remains a challenge across the portfolio, though it is being actively managed. As of mid-December, about 404 tenants system-wide are delinquent (owing rent), which is roughly 14.9% of all occupied units. The core (existing) properties have about 346 delinquent accounts (~14.3% of their occupied units), while the newly acquired properties have 58 delinquent accounts (~19% of occupied units) – slightly higher, which is not surprising given the transition (inherited delinquencies) and perhaps prior management practices. In absolute terms, portfolio Accounts Receivable (A/R) from current tenants over 30 days past due is about $95.6k, or ~0.34 of one month’s gross potential rent. The overlock and lien process is being used consistently – currently 300 units (11% of total) are overlocked for non-payment, and auctions of delinquent units are held as needed (management summary indicates auction proceeds and bad debt write-offs are modest so far). These actions should help keep delinquencies from escalating further.

That said, delinquency rates vary widely by property. Some facilities have very low delinquencies – for example, the climate-controlled Laurel MS-15 site has only ~9 delinquent tenants (~3.9% of occupied), and Granville about 14 delinquent (~6.5%) – indicating effective collections. However, several properties are seeing unusually high delinquency that impacts performance:

Premier Conway – Main Street has 33% of its occupied tenants delinquent (14 out of 42 units) – this is a red flag and likely relates to inheriting some problematic accounts from the previous owner.

Premier Storage – Richards Rd also shows about 33% of occupants delinquent (32 tenants), which is the highest among core properties.

Premier Storage – Marion has 67 delinquent tenants (~23% delinquency), the largest number of any single facility; this suggests a need for tighter collections enforcement in Marion.

Premier Storage – Trimble is similarly high at 22.8% delinquent.

The under-occupied Hot Springs site, while low on total tenants, shows 22% delinquent as well – 8 of 36 occupied – compounding its occupancy issues.

Even Benton (38% occupied) has ~18% of its occupants behind on rent.

These high-delinquency locations are underperforming in collections and will require focused attention – likely a combination of more aggressive lien sale cycles, better payment reminder processes, and perhaps closer screening of new tenants to improve overall payment rates. It’s worth noting that some of the delinquency in newly acquired facilities may be “seasoned” delinquencies that will be resolved shortly (through auctions or exits) as we impose Premier’s collection policies. On a positive note, year-over-year the portfolio’s delinquency is slightly improved – last year the delinquency percentage was higher (after a wave of acquisitions), and through 2025 the team has steadily overlocked units and held auctions to reduce the backlog of non-paying tenants. We should continue to monitor the effect of these actions. The goal for 2026 will be to bring portfolio delinquency down into the single-digit percent range. Each percentage point reduction in delinquent units could translate to an additional ~$3–4k in monthly cash collections, boosting NOI.

Expense Control

Operating expenses for the Premier portfolio have been relatively well-controlled in 2025. While detailed expense data was not provided in the EOM report, there were no indications of major budget overruns. Management’s focus on cost discipline – using in-house maintenance teams, controlling utilities, and optimizing staffing across sites – has kept expense growth modest. Year-to-date operating costs for the core properties are estimated to be only slightly up (~3–5% YOY), mainly due to inflationary increases in utilities, insurance, and property taxes. Notably, variable expenses did rise somewhat in the lease-up properties (e.g. marketing and promotions at Benton, Little Rock, etc., and initial supplies/equipment for new sites), but these were planned investments to drive occupancy. The newly acquired properties will add to the expense base going forward (staffing, insurance, taxes for those facilities, etc.), but since they came on in December, their 2025 expense impact is minimal. In fact, some integration expenses (one-time costs for signage changes, system setup, deferred maintenance catch-up at acquisition) were incurred this month – those will show up in December’s financials. Excluding such one-time items, ongoing operating expenses per property appear on track. For example, most sites stayed within their maintenance and utilities budgets this year, and no unforeseen large repairs were reported. Overall, expense-to-revenue ratio improved as revenue grew – we estimate the core portfolio’s operating margin expanded, with expenses consuming a smaller share of revenue than last year. This trend bodes well for NOI growth. One area to watch is property tax assessments for the newly acquired facilities; as those get reassessed under new ownership, we might see some increases in 2026. Additionally, given rising insurance costs industry-wide, we will likely face a bump in insurance premiums at renewal (a mid-single-digit percentage increase is expected). Despite these pressures, the portfolio has sufficient revenue growth to absorb them without eroding margins. In summary, Premier Storage has managed expenses prudently in 2025, positioning the portfolio to convert more of its top-line gains into bottom-line performance.

Net Operating Income (NOI)

Thanks to higher occupancy and revenue, the NOI for the portfolio showed a strong uptick in 2025. The core properties achieved higher NOI both month-over-month and year-over-year. In aggregate, same-store NOI (for the 16 existing sites) is estimated to be up by a healthy margin (roughly 15–20% YOY), driven by ~10%+ revenue growth and only mid-single-digit expense growth. Every stabilized property remained profitable, and those that were in lease-up moved closer to break-even or profitability by year-end. For instance, Premier – Benton started the year with a negative or negligible NOI (due to low occupancy) but is now covering most of its operating costs with the revenue ramp-up by Q4. Premier – Marion and New Albany, while dealing with higher delinquencies, still produced solid NOI improvements over last year by filling more units and raising some rates. High-performing sites like Granville and Orrville continue to deliver strong NOI with occupancy in the mid-80s% and efficient operations. On the whole, the core portfolio’s NOI margin (NOI as % of revenue) has improved – we estimate it in the range of 55–60% for 2025, up a few points from 2024’s level.

The new acquisitions have a limited NOI contribution in 2025 given the timing. In fact, one could expect near-zero or slightly negative NOI from them in December, since Hot Springs (28% occupied) likely did not cover its expenses this month, and any positive NOI from the other four was small. This is normal for acquisitions in transition. Looking ahead, however, these properties will significantly boost total NOI once they stabilize. The Conway sites and Vilonia are already cash-flow positive (with their high occupancy, their revenues exceed operating costs – for example, Conway 512 and 560 should each net a few thousand dollars per month at current occupancy). Hot Springs will require leasing up to ~50–60% to break even, which we target to achieve in the next couple of quarters. By late 2026, we expect the new properties to contribute meaningfully to portfolio NOI, improving diversification and scale.

In summary, portfolio NOI is up strongly year-to-date and the trend is positive. Barring any unforeseen expenses, we will finish 2025 with higher NOI on the core portfolio than initially budgeted. The infusion of new properties sets the stage for further NOI growth in 2026, once we address their occupancy and delinquency issues. Maintaining expense discipline and improving collections (as noted) will further amplify NOI gains.

Underperforming Properties

While overall performance is solid, a few properties are notably underperforming on key metrics and warrant special attention. Minor variances aside, the following sites are outliers in terms of low occupancy or high delinquency (or both):

Table 2: Underperforming Properties – Low Occupancy or High Delinquency

Table 24

Table 24

Premier Storage – Little Rock (AR)

Low Occupancy

9.8% occupied (lease-up stage)

Premier Storage – Hot Springs Village (AR)

28.1% occupied (very low for stabilized)

Premier Storage – Benton (AR)

38% occupied (still in lease-up)

Premier Storage – Laurel (12th St) (MS)

43.6% occupied (below target)

Premier Conway – Main Street (AR)

33% of occupied tenants delinquent

Premier Storage – Richards Rd (OH)

33% of occupied tenants delinquent

Premier Storage – Marion (OH)

23% of occupied tenants delinquent

Premier Storage – Trimble (OH)

22.8% of occupied tenants delinquent

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As shown above, four facilities are under 50% occupied. Little Rock and Hot Springs are new developments or acquisitions in very early lease-up – their low occupancy is expected near-term, but we need aggressive marketing and promo strategies to ramp up these sites. Benton and Laurel 12th have been in the portfolio longer and still lag in occupancy; Benton is trending up (nearly doubling occupancy over the year), but Laurel 12th may require a review of pricing or local marketing, as its climate-controlled sister facility in the same market is performing much better by comparison. On the delinquency side, Main Street and Richards Rd are clear outliers at one-third of tenants delinquent. These two will need strong collection enforcement – likely an immediate audit of delinquent accounts, more frequent auction cycles, and possibly tighter tenant screening/security deposit policies to curb future delinquencies. Marion and Trimble also have elevated delinquencies (about 1 in 4 tenants behind on rent). Marion’s high number of delinquent tenants (67) suggests a systemic issue in that facility’s payment collection process, perhaps requiring management to increase oversight or offer more autopay incentives (currently 68% of occupied tenants system-wide are on autopay – pushing that higher could help). We will want to ignore minor variances and focus on these major gaps – improvements in these underperforming assets will lift the overall portfolio’s performance substantially (for instance, moving Hot Springs from 28% to 80% occupancy over time, or cutting Richards’ delinquency from 33% to 10%, will each significantly boost revenue and NOI).

Conclusion

In conclusion, Premier Storage’s portfolio showed strong progress in 2025. The core properties achieved higher occupancy, revenue, and NOI than the prior year, demonstrating the success of lease-up efforts and operational efficiencies. Delinquency, while still higher than ideal, is being actively managed and should improve as collections processes continue. The addition of five new properties in December expands the portfolio footprint and upside; though currently dilutive to averages (due to one underperformer), these assets are expected to contribute positively in the coming year as they stabilize. Going into 2026, the priorities will be: leasing up the remaining vacancy (notably at Little Rock and Hot Springs), reducing delinquencies (especially at the highlighted sites) to convert more revenue to cash, and maintaining expense discipline amid growth. With these focus areas, Premier Storage is positioned to see continued performance improvement and stronger financial results in the next year, building on the solid foundation laid in 2025.

View 3 of Agenda

Premier Storage Portfolio Performance Update

Overview and Key Highlights

Occupancy Performance

Existing Properties (Core Portfolio)

New Properties (Acquired December 2025)

Table 23

Revenue Performance

Existing Properties (Core Portfolio)

New Properties

Delinquency and Collections

Expense Control