When we hired StoragePro to manage our seven assets, we believed their existing presence in the Grand Junction market would significantly benefit our operations. Our assets are unique in that they are unmanned or, as we say, remotely managed. Management of this type of facility requires automated solutions like keyless property and unit access, a high-functioning call center, and tactical marketing. After ten months of coaching, we concluded that StoragePro could not fulfill these requirements within an acceptable timeframe. As a result, we issued a termination notice to StoragePro on September 23, 2024.

We have entered a new property management agreement with 10 Federal Self Storage. With 14 years of remote management experience and a proven track record for growth at their existing Grand Junction location, 10 Federal’s suite of technologies reduces operational costs, improves efficiency, and enhances the tenant experience, leading to higher retention rates.  

The transition date for operations is October 22, 2024. We will incur some rebranding costs. These entail installing new signs, which are budgeted at $40,000. We will also install new access controls and a new gate that will integrate with 10 Federal’s operating system, spending $166,000 on capital improvements from our existing capital reserve budget of $455,000. The need for gate access controls was contemplated and budgeted at the time of purchase. 

We anticipate continuing the $35,000 monthly distributions, potentially increasing as occupancy grows.

10 Federal’s proprietary platform, Tenant Connect, allows customers to sign leases, make payments, enter the facility, or initiate move-outs. This web portal empowers customers with complete self-service capabilities, leading to higher retention and reduced overhead. With 10 Federal’s suite of automated products, proven track record and 100% in-house call center, we believe they will improve the overall tenant experience, leading to increased occupancy (currently 82%) and higher rents.  

Despite our challenges, average rental rates have increased from $8.28 to $9.96 per SF/Year, and we anticipate they will grow to $12.96 by January 2027. While this projection is contingent on supply and demand, we do not expect any new self storage development in the market.

StoragePro defaulted on the contractual management requirements, and therefore, we will contest their $90,000 early termination fee. While we have budgeted this amount and expect some negotiations, we remain firm that their management has been deficient and they are in default. 

Please let me know if you have any questions or want to discuss.

Best
Drew