Recent Case Study – 1st American Storage – Ft. Worth Northwest
January 1, 2012
1st American Storage-Ft. Worth Northwest 564 units
Ft. Worth, TX 63,025 SF
Upon assuming management of the property in January 2010, the property had a unit occupancy of 59% and the property was set for a $500,000 shortfall on it loan which matured on January 1, 2011. The property investors had not received any distributions since June of 2009 and did not understand the financial condition of the property. The property had several deferred maintenance issues including un-rentable units due to door damage, peeling paint on doors, and a necessary office remodel.
Darren Kelley, ASRM’s National Self Storage Asset Manager, took over the property management and began working with onsite management personnel to address issues. Operating Systems and Training were put in place to ensure customer service and property operations were being handled effectively. While improving operations, ASRM, along with American Spectrum Realty Advisors, focused on successfully negotiating a one-year loan extension to January 1, 2012 in order to give the property more time to improve NOI and increase value. ASRM implemented aggressive marketing strategies, leveraging lower entry rates and discounts such as the $1 Pays First Month campaign, to increase the move-in velocity and grow occupancy. Additionally, ASRM employed tactical revenue management strategies aimed at building income without losing occupancy. All of the deferred maintenance was completed by the end of 2011. Throughout 2011, the occupancy increased to 86%, revenue climbed 20% from 2010, and NOI improved 40% from 2010. This operational and financial performance provided an opportunity for AS Realty Advisors to negotiate a dollar-for-dollar refinance and .5% drop in Interest Rate. The successful refinance resulted in a return to distributions for the investors.