DECLARE @Owned INT = 0,
        @OnRent INT = 0,
        @Sequence INT = 0,
        @Category CHAR(3);

-- This form of the UPDATE statement has some particular rules.
-- See Jeff Moden's article at http://www.sqlservercentral.com/articles/T-SQL/68467/
-- for a complete discussion of how this works, and all of the rules for utilizing it.

WITH SafetyCheck AS
(
SELECT Category, 
       Class, 
       Location, 
       RowNo,
       Owned,
       OnRent,
       Sequence = ROW_NUMBER() OVER (ORDER BY Category,Class,Location,RowNo)
  FROM dbo.TestTable
)
UPDATE t
   SET @Sequence = CASE WHEN Sequence = @Sequence + 1 THEN @Sequence + 1
                   ELSE 1/0 END,
       @Owned = Owned = IsNull(Owned, @Owned),
       @OnRent = OnRent = ISNULL(OnRent, @OnRent),
       @Category = Category -- ANCHOR COLUMN
  FROM SafetyCheck t WITH (TABLOCKX)
OPTION (MAXDOP 1);

select * from dbo.TestTable;

CREATE UNIQUE CLUSTERED INDEX CX_testtable_ImportantForQuirkyUpdate
    ON testtable (Category,Class,Location,RowNo)