Glossary of Terms
Discover essential self-storage terms with our comprehensive glossary. Learn about climate control, rental agreements, storage unit features, and industry-specific definitions. Whether you’re a first-time renter or a storage facility owner, this guide helps you navigate self-storage with ease. Stay informed and make the best decisions for your storage needs!
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
- Abandonment
When a tenant fails to pay rent and does not retrieve their belongings within the legal timeframe, the unit may be considered abandoned, leading to a lien process or auction. - ADA Compliance (Americans with Disabilities Act)
Storage facilities must adhere to ADA regulations, ensuring accessibility for individuals with disabilities, including accessible office spaces, keypad heights, and unit access. - Ancillary Revenue
Additional income streams generated by self-storage facilities beyond rental revenue, including sales of locks, moving supplies, insurance, and administrative fees. - Asset Management
The oversight of a self-storage portfolio, including revenue optimization, property maintenance, financial reporting, and long-term investment strategies.
B
- Broker Price Opinion (BPO)
An assessment conducted by a real estate broker to determine a storage facility’s market value, often used in loan underwriting or potential sales. - Business Interruption Insurance
A type of insurance that covers lost income if a self-storage facility is temporarily unable to operate due to disasters such as fire, flood, or vandalism.
C
- Capital Stack
The structure of financing used for storage facility acquisitions and developments, which may include a combination of senior debt, mezzanine financing, and equity investments. - Customer Retention
The percentage of tenants who continue renting units over a specified period, influenced by pricing strategies, customer service, and facility amenities. - Cushion Period
A grace period offered to tenants before a late fee is applied. Some operators allow a few days past the due date before enforcing penalties.
D
- Delinquency Rate
The percentage of tenants who have overdue payments, directly impacting cash flow and requiring proactive collections strategies. - Dynamic Pricing
A revenue management strategy where storage unit prices fluctuate based on demand, occupancy levels, and market competition.
E
- Eviction Process
Legal procedures followed when a tenant fails to comply with lease terms, particularly in non-payment cases, leading to auction or unit repossession. - Expansion Potential
The ability of a facility to increase rentable square footage, either through land development, vertical expansion, or reconfiguring existing space.
F
- Facility Audit
A systematic review of operational, financial, and security aspects of a storage property to ensure compliance with policies and optimize performance. - Fee-Based Management
A third-party management agreement where a storage facility owner hires a management company to operate the property in exchange for a percentage of revenue or a flat fee.
G
- Gross Revenue Potential (GRP)
The maximum revenue a facility could generate if all units were rented at the highest rates without concessions or delinquency. - Ground-Up Development
The process of constructing a new self-storage facility from the ground up, including site selection, entitlements, and project management.
H
- High-Risk Tenant
A tenant profile associated with frequent late payments, history of default, or violation of lease terms. Some facilities implement stricter policies for these tenants. - Hybrid Storage Facility
A facility offering a combination of climate-controlled units, drive-up units, vehicle storage, and business storage solutions to appeal to a broader customer base.
I
- Inventory Management
The tracking of available unit sizes, occupancy rates, and pricing adjustments to maximize revenue efficiency. - Investor Reporting
Regular financial and operational updates provided to investors in self-storage properties, including key performance indicators (KPIs) and return on investment (ROI) analyses.
J
- Joint Venture (JV)
A partnership between two or more entities to develop, acquire, or operate a storage facility, often combining financial and operational expertise.
K
- Key Performance Indicators (KPIs)
Measurable metrics used to track storage facility performance, including occupancy rates, rental income, delinquency rates, and conversion rates.
L
- Long-Term Lease vs. Month-to-Month Lease
Some storage facilities offer long-term contracts at discounted rates, while most operate on flexible, month-to-month leases to maximize revenue management strategies. - Lost Rental Opportunity (LRO)
The income a storage facility loses due to vacancies, delinquent payments, or underpricing units.
M
- Market Penetration
The percentage of a given geographic market captured by a self-storage facility, influenced by branding, customer acquisition, and competitive pricing. - Mixed-Use Storage
A facility that integrates self-storage with other business operations, such as co-working spaces, shipping centers, or retail components.
N
- Net Rentable Square Footage (NRSF)
The total area within a storage facility that can be rented out to tenants, excluding hallways, office space, and other common areas. - Notice to Vacate (NTV)
A formal notice provided by a tenant to end their rental agreement or by a facility to terminate a lease due to non-payment or policy violations.
O
- On-Site Management vs. Remote Management
- On-Site Management: A facility staffed with a full-time manager responsible for customer service, leasing, and maintenance.
- Remote Management: A facility managed off-site, often using automation, security cameras, and online leasing platforms.
- Operating Expense Ratio (OER)
A financial metric that compares a facility’s total operating expenses to its gross revenue, helping evaluate profitability.
P
- Performance-Based Management Agreement
A third-party management contract where compensation is tied to facility performance, typically including revenue growth incentives. - Pipeline Projects
Self-storage developments under construction or planned for future growth within a company’s portfolio.
R
- Rate Yield
The difference between existing tenant rental rates and posted street rates, impacting revenue optimization strategies. - Rent Roll
A detailed report listing all tenants, rental amounts, lease start dates, and unit types, used for financial analysis and valuation
S
- Shadow Market
Competitors that may not appear in traditional self-storage data, such as garages, basements, or peer-to-peer storage platforms. - Smart Storage Units
Technology-enhanced units featuring Bluetooth locks, climate monitoring, and mobile app access for tenants. - Street Rate vs. In-Place Rate
- Street Rate: The advertised rental rate for new tenants.
- In-Place Rate: The actual rate paid by existing tenants, which may be lower due to discounts or historical pricing.
T
- Tenant Insurance Penetration Rate
The percentage of tenants enrolled in a facility’s insurance program, impacting ancillary revenue streams. - Tenant Satisfaction Score (TSS)
A measurement of tenant experience based on surveys and reviews, affecting retention and word-of-mouth referrals
U
- Unit Turnover Rate
The frequency with which units are vacated and re-rented, influencing operational efficiency and revenue planning.
V
- Vacancy Drag
The financial impact of unoccupied units on overall facility profitability. - Value-Add Strategy
Investments in facility improvements, such as security upgrades or climate control additions, aimed at increasing occupancy and revenue.
Z
- Zoning Variance
A special permit granted to allow self-storage development in areas where zoning restrictions might otherwise prohibit it.