Short answer: Not necessarily. Mark calls it a myth that large public operators always beat smaller owners. Recent public REIT same-store revenue growth has been flat to low, and their size brings weaknesses: reliance on fees, bait-and-switch move-in pricing and aggressive rate increases on long-term customers. Smaller owners can compete by pricing fairly and keeping customers longer.
The weaknesses Mark points to #
- Fees. A meaningful share of large operators’ revenue growth comes from fees, including their own tenant protection plans. Smaller owners can waive or reduce fees when needed to win a rental.
- Bait pricing. Offers like “$1 first month” followed by sharp increases are drawing new transparency laws state by state.
- Customer-centric rate increases. The longer a customer stays, the more and larger the increases, until many move out.
How smaller owners can win #
Mark’s approach is the opposite: educate customers, charge fairly and raise rates steadily but reasonably. In his experience, longer stays plus fair increases can produce stronger revenue growth over time. If a REIT is consistently outperforming your facility, he suggests looking for gaps in how you operate.
Results depend on each facility and market; past results don’t predict future performance.
Related answers #
- Why do fair, transparent rate increases matter in self-storage?
- Why should self-storage operators sell benefits instead of competing on price?
- What trends are shaping the future of self-storage?
Source: Mark’s post Self-Storage Myth Number 2: REITs Outperform Small Self-Storage Owners
