This facility is located under a freeway on leased land. Although it has 500 units, they are all one size: 5’x10’. When we took over, the occupancy was about 50% and net income was not covering the property’s debt service.
Threatening this lackluster performance even more was Caltrans’ announcement that they planned to expand the freeway overhead and we would have to close the facility while they did. We took an aggressive position with Caltrans regarding our impending revenue loss and were able to negotiate a deal with them whereby they paid us a monthly subsidy check for the difference between actual and 90% occupancy – even though until this point in time the property had only achieved 50% occupancy.
We negotiated a 5-year subsidy period but got the facility back after only 12 months. We went to work reviving this site: a new name, new logo and signage, interior lighting, a website, local advertising and promotion and, most importantly, refining our sales techniques, given we had only one size to offer.
We achieved an 8% revenue growth four years in a row which doubled gross revenues and resulted in a 98% occupancy rate.