Self Storage Development Life Cycle

(courtesy QuickStart Self Storage)

Below are the events that a self storage investor/developer expect to occur when venturing into self storage. The timing will vary dependent upon the exact development. The diagram illustrates the various stages that transpire in addition to the milestones that are achieved along the way.

Break Even Point: The occupancy level at which the level of monthly income matches the level of monthly operating expenses. Net income from the operations is neither positive nor negative.

Absorption Point: The occupancy level at which the level of monthly income matches the sum of monthly operating expenses and debt service payments. Cash Flow from the operations is neither positive nor negative.

Stabilization Point: The occupancy level that the facility is expected to generally maintain over the long term. Upon reaching this point, the fill-up period ends and the stabilized period begins.