Easy
Profitability
Self-Storage
Practice this beginner-friendly profitability case interview question in the Real Estate sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
ProHub Comment
This is a straightforward break-even analysis case where the candidate must recognize that NatEx operates with high fixed costs (operating expenses + interest = $98M) against current revenue of $70M at 50% occupancy. The solution requires calculating the revenue needed at break-even and then converting that to an occupancy rate by dividing by the hypothetical revenue at 100% occupancy ($140M).
Estimated Time
15 minutes
Difficulty
Easy
Source
PeterK
10
/ 100
Our client, NatEx, operates 200 self-storage facilities in the U.S. Recently, their operating costs have increased, leading to losses. The team believes the client should focus on boosting their occupancy rate to regain profitability. What is the break-even occupancy rate?
Clarifying Information
- NatEx’s revenue was $70M in 2022
- Operating expenses were $79M in 2022
- Interest expenses reached $19M in 2022
- Their current occupancy rate is just 50%
- Both operating expenses and interest expenses are fixed costs