Poll

brownrooster

If you were starting at a distressed facility, or just wanted to make quick improvements to boost tenant satisfaction and profitability. What is the VERY FIRST thing you would do.

skinman

I guess it would depend on the definition of distressed. The first thing you do is establish a level of consistency if one doesn't exist. No special treatment. Set standard policies with no favoritism or special allowances for certain tenants, and enforce them. You may lose a few but it will be worth it in the long run.

brownrooster

Skinman 
Distressed = Not profitable, Multiple tenants over 50 days past due, of 350-ish units 90 are unrentable, only about 40% of total capacity, about 53% of rentable capacity.  Break-in/Theft of multiple units 1 week before I started.

But otherwise, everything is sunshine and roses.

skinman

You'll definitely have to pick your battles for awhile. I'd start with the past due accounts. Let them know there is a new sheriff in town... Start the auction process on any that should have already been gone and send letters to the others regarding the delinquency of their accounts. Firm but fair is the stance I would take. 

As far as the unrentable... Start with the units with the quickest turn around first. I took over a facility that was bad... although not quite as bad as you are describing. Just be patient and make a priority list.

There is nowhere to go but up. Just set realistic expectations and you'll get there. Rome wasn't built in a day.

Orkocean

As skinman said, pick your battles. You have a fun list of things to accomplish it sounds like. The 90 unrentables, Just like he said, the easy turnarounds... I personally would break down into categories and figure out which are simple/cheap resolutions versus expensive fixes as well as which if any are the only ones for that size available and actually needed before you fix others you have surplus of. If some are just "junk" units full of stuff, offer it up to a scrapper on craigslist or something to get them emptied and available to rent. Depending on the owners and their preference maybe find someone who stores there who is a handy man or something along the lines who can tackle some of the easier fixes in exchange for rent to ease their mind on spending money to get things fixed. 

I'm guessing it's either a pretty old property or it was very undermanaged for quite some time to be in this situation. You mention break in of multiple units, is the lighting/cameras/gate system *assuming the facility has all these* working properly? If the facility isn't turning a profit and is in disarray I could only imagine the overall aesthetic of the property is "dated" for lack of a better word. Doing revenue management is going to be a bit more of a struggle to entice people to pay higher prices if they're not seeing any visible changes to the property enhancing it. Make sure you're doing your comp reports of the surrounding area to see how your pricing is compared to others and what they offer/look like compared to yours. Send the past due notices and make calls to all tenants past due. Since they're used to a lack of enforcement probably I would "work" with them and tell them they have until the EOM to get things current or you will have to process them for lien at the first of the month. Depending on how much some of them owe coming up with it on the spot could be tough, but this way you can simply explain you understand the previous managers did so and so for them but this is under new management, it is a business and has to be run as such and let them know you are actually doing them a favor by extending them that much time.

brownrooster

Orkocean.  You are dead-on about property being undermanaged.  It was also in limbo for a while as in ownership thought they were going to sell it, so they didn't address things, thinking they would pass ont he headaches "as-is".  at the last minute financing or something fell through, but then ownership realized they could get this one in shape cheaper than they could buy or build so...here we go.  But I am enjoying the crap out of it, so far.  However, I will say, just form some of the terminology you used....I still have sooo much to learn just to rise to the level of ignorant!!

thanks for your input.

brownrooster

Skinman, lots of help.  Much appreciated.  list in progress.  starting with very low hanging fruit.  some of them were on unrentable list because previous did not want to sweep them.  That's almost done.

brownrooster

UPDATE:  First thanks for all of your help.  Following that, learning from others, and elbow grease we are heading to the close of August with 11 units off of the "unrentable" list.  Occupancy has climbed from the mid-40's total/Upper 50's rentable to 60%/79.6%.
Still, a long way to go.  BUT, we are moving on.
Now, if you will excuse me, I have a lot to sweep, locks to check, and abandoned units to clear.
Thanks again!