Monday, June 25, 2012

Occupancy Over / Under

Strategic Storage Trust, fresh off raising $46 million of equity in May, disclosed in an 8-K filing today that it has agreed to purchase 16 storage properties in the Southeast, called the Stockade Portfolio.  The acquisition has not been finalized and is subject to various considerations before it closes.  This transaction reminds me of the 12-property Homeland Portfolio that Strategic Storage closed at the end of 2011.  Like Homeland Portfolio, Stockade is a multi-property portfolio in the Southeast, and like Homeland, Stockade's aggregate occupancy was not provided in an initial 8-K.  After the Homeland Portfolio acquisition closed, Strategic Storage disclosed that the portfolio's occupancy was 46%.  I am curious to know Stockade's aggregate occupancy, and I'll start the over / under occupancy guessing at 52%.  Comment with your guess.  (I am not making a distinction between physical or economic occupancy, just whatever occupancy Strategic Storage discloses.)

Here's a hint or just useless noise: I checked the Stockade website and Stockade is offering a web promotion of $15 off the first month's rent at any of its properties.  This is not much of an inducement, which could indicate a stronger occupancy than I am estimating.  Specific properties, however, may have have their own specials not listed on the internet, I don't know.  I'm sticking with 52% occupancy, for the simple premise that if it was higher Strategic Storage would have touted disclosed it.

Update: Who took the over?  Strategic Storage filed a supplement to its prospectus this morning, and in it stated that:
The average physical occupancy of the 16 properties in the Stockade Portfolio was approximately 70% as of May 31, 2012. 
 As I noted in the original post, I'll take the occupancy as listed.  

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