EXR - Earnings call transcript Q4 2017 | Extra Space Storage Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Extra Space Storage Inc. Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. to conference like host, to now Mr. would turn over the your I President, Relations. Norman, Investor Jeff Vice Sir, begin. you may

Jeff Norman

Thank you, Andrew. quarter and Welcome to Extra XXXX call. Space earnings year-end Storage’s fourth

supplemental release, due In Securities our prepared Litigation the results forward-looking remarks your Actual Please we statements financial to management’s information could answers Reform may have remember addition Act. that on press differ Private furnished questions to and as website. our in unaudited materially the contain defined or to the company’s stated from contained SEC, implied encourage listeners the associated forward-looking forward-looking statements which in with and by with our risks those to company’s statements our uncertainties are cautionary the These business. review. filings we qualified latest by statements

management’s XXXX. date as conference February because to turn to Joe estimates would no obligation Margolis, of Wednesday, today, other call now The over the like of or or conditions assumes Executive circumstances represent update forward-looking Officer. XX, revise Chief of after changing this Forward-looking any statements I the company statements call. to market

Joseph Margolis

operating time, supply the that motivated year talented and new on growth. in. of be That together forward exactly by future. with Hello, growth We learning for and these meet talk discussed X.X%, our valid, call, the and produce return time, ago the have at with a to the XXXX. lot throughout XX.X%. XXXX the and seeing people excited would new Thank X.X% said towards the about core and each enjoyed historical with guidance talented and diversified of meeting I’ve that the move play confident what our revenue revenue FFO customers Space were of I’ve We I’m we characterized and soft portfolio, are projected while would working concerns this Extra dialing is same-store solid levels. I happened. over landing healthy, over I learned was results. to growth over were occupancy now. year of a and to for you little team Strong At rates One in NOI great enjoyed exceeded platform been towards CEO categories sustainable that and you, I’ve and Storage industry deacceleration best-in-class our many concerns to and these led a people gradual increased growth revenue and we and Space. to of rental year a out. continue of growth everyone. look for about year existing And we predicted we Extra and But of NOI mostly, continue

with the to the added XXXX, third-party to XXX half we over a the before we platform, We and is XX large have pipeline stores along stores which approximately of opportunities. new management would XXX challenges supply XXXX. add come year we have In expect brought presented managed over. new Year-to-date, also we well stated on by were our and for developments,

density scale, us markets dataset. give stores in managed these a streams, revenue to and addition In larger

new Despite ventures important were well of and of acquisitions, performing pipelines with in acquisition over to managed opportunities. us joint growth. XXXX future of market, previous O ahead Occupancy as XX% as over portfolio, our coming acquisitions provide a our fuel These acquisition of which volume like we assets are in competitive Our XX just deals helped Certificate years valuable projections. key that were of relationships invested off-market XXXX C to our in from markets, $XXX pipeline million a our

purchase various see from developers increased stages new of opportunities to to stores We lease-up. in also continue

fourth was guidance exceeded Our presented by quarter off-market of that $XXX one to partners. in portfolio million, the due our million longtime our late $XXX of acquisitions to XXXX us

As in occurring the projected, quarter. fourth were largely our XX% we with loaded, back-end acquisitions

XX-store We sold existing properties, on one would interest update provide a portfolio that joint an in the for TIAA we remaining $XXX estate million. retained Finally, our into and to on XX% XX%. venture of a like the real account, I the partners, November joint XX purchased venture

to XXXX next the for work day the over age demographics. through rate into average strong continue manage We of return three of to transaction years have foot average to exchange properties from We’ve properties promoted a fee an all These and put exchanges other the and have now rental $XX a XX we proceeds a venture. series opportunity the earn in the XXXX properties. and joint square a

part existing XX-storage of XX% the promote, our our and we us enabled with to of in TIAA embed a this revise joint the agreed and terms increasing transaction, from monetize and to As This ownership to venture XX%. venture. extend

on portfolio new the market We debt including and modernized preferred the also current placed levels. its return to terms, reducing

of they the with transactions value outcome and for shareholders. pleased long-term the create our mutually beneficial are these We

also pleased our renewed TIAA to now over long-term. the to would for turn relationship are We to with and like time have Scott. I strengthened the

Scott Stubbs

and you, Thank Joe, hello, everyone.

our we have As a you FFO well as release to last FFO may as results, provided made as change have We’ve historically night, earnings noticed one adjusted. in term.

latter to refer will core we forward, the as Going FFO.

we of with have provide publicly the changed our we types the other make, consistency methodology changed REITs. traded name to not have but We adjustments or

FFO the our increase was due increase. was rates XX new to to beat year for Occupancy share. was mid increased the in continue of low basis at $X.XX per quarterly we by than core rate FFO customers and $X.XX quarter to we single the stronger digits, and guidance our program core per existing share, performance. Throughout customer expected exceeding primarily The pool same-store Our the point year-over-year a for high-end $X.XX changes. the ended property quarter, quarter the without for the XX.X%,

our unencumbered evolve We pool increased We have our added by to plan remain unsecured in $X.X year continue and the billion. leverage-neutral throughout sheet and to debt balance XXXX.

capacity multiple guidance to have We provided growth. and Last plenty of our future fund we XXXX. night, for annual have assumptions access sources and capital to of

XXX Our XX to pool same-store total new increase will a by stores. of

same-store between revenue to the to pressures points is to pool and positively also revenue expenses to increase property difficult over XX growth XXXX. the change X.XX%. expect The with taxes We growth year. is is expected from X.XX% X.XX% the increase X.XX% Illinois, specifically comps, in Same-store between our in expense driven impact increase growth by Same-store Texas. in by Florida, basis to expected mid-Atlantic and to XXXX

same-store and REIT sectors. X.X%, and sector of expense to X% and revenue guidance be the the compare favorably results other towards self-storage of Our high-end NOI in will we believe between which will

million we $XXX million of For which to in contract. acquisitions, invest under $XXX closed is expect or XXXX,

Our expectations Units for $XX we’re guidance through still million remainder Seller being assumes pricing in acquisitions to committed OP disciplined. and debt. high are the be financed and

We will only at transact create prices that for our value shareholders.

to $X.XX from we core per XXXX, $X.XX. share. be dilution FFO $X.XX estimated dilution total C an stores between In full-year for of and is $X.XX from of of anticipate acquisitions $X.XX O dilution of value-add and Our additional

the Joe. C investment our long-term O to Our growth and our back improve to and now of I’ll of in stores for the turn time portfolio value-add shareholders. continue quality generate acquisitions

Joseph Margolis

Scott. you, Thank

to look As in expect this to similar forward we move I year year. last XXXX,

and rental demand, strong solid to steady existing occupancy, and new continue rates customers. We to increasing fundamentals, experience

expect We external solid third-party and growth management. through acquisitions

revenue heavily technology, systems management improve. invest and in on and focus digital evolve marketing to in our and continue to continue We

the levels all second at company storage I step to bench been never our none believe the Our has team and of stronger, in is sector.

some share our a impact disproportionate way, this demand supply and on have for XXXX. focused track without you XXXX, the share vary business investors’ in to these is a factors record and this return our not, remain I from long-term benefited will strong as creating on new team continue in I to the trust risk. any And want unacceptable consistent from our market we to put growth of operational maximize want diminish order We ability to per micro your in you thank stewards our challenges. on capital Space capture taking New But will to management stores. the will as member, a present strategy of partner, I the team ever our continuously this as ability to as across before, confident been of its and with since as supply about with of of XXXX, as now impact I’m company Board involved I capital. same I And team’s do Extra portfolio. we our execute. in of execution. diversified have highly benefit believe In and portfolio, CEO. said as a FFO a

the time over session. to now turn to Q&A start the Let’s Jeff

Jeff Norman

ask follow-on our their have Andrew, your questions opportunity In I has questions. initial address go with everyone time we And allows, the to had session. and Joe. time once ask start we’ll brief. If questions Q&A order everyone adequate ensure ahead everyone’s address keep that questions, Thanks, would to that, initial to

Operator

Raymond Hughes Our sir. [Operator you, Thank with James. Jonathan first comes Instructions] question from

Your line is open. now

Jonathan Hughes

afternoon. time. Hey, good you Thank for the

So about I’m accelerating midpoint outlook of decelerating actually calls same-store most, of of of this point growth curious the slowdown into the your top guidance year. in to year? just that basis growth markets XXX-ish XX your the revenue contributed the for which end eight saw

Joseph Margolis

ahead. Go

Scott Stubbs

budgets, impact affects or our One the looked budgets, and implied looked in ground deceleration supply up single new The of it couple of did the same-store at obviously the in so markets. burn-off as impact supply. Jonathan, the pool the areas. the we SmartStop, is from of at Yes, change done also a every in that from obviously, Okay. certain then we’ve is store, benefit

some I ones others. the If Florida. you, you look at those individual tell than hear about would for impacted But more more a are it’s probably of you lot, overall, instance, markets,

Joseph Margolis

ones Miami, bottom When revenue look are XXXX are New the projected for large the markets York us our contributors that Metro, I to XX at D.C. growth,

in bottom others markets. small our The are relatively XX

Jonathan Hughes

And this actually maybe negative impacted growth those store the revenue at of your be take a revenue Okay, and supply? on how stab quantify that to lower maybe then stores. impact may you relative growth number by stores that’s level Could the one peers at much is provide did at helpful. non-impacted

Joseph Margolis

each that’s do that competitors real opening. have any analysis a difficult really new to our So stores We with study that specificity. hard of

have new a sometimes, competitor has mile And absolutely within no effect. it opening a and you

you have large effect. it sometimes, very And and has trade on of opening a the a competitor area the outskirts new

up, will try and that’s that to store of on the opening it competitors a based thing. to how roll tough So every number monetarily affect predict

just going into guidance, who’s is a it’s The a patterns, But You account approach. other our bottom-up across take are at rolled trade to there’s or and we open the managers each the competitors competitors, when new up management top-down competitors, create are need side, from The both we store. And that bottom-up budget each river, the going we created to the distance, the variables. created individual used is the of identify number said, the district the to the impact. to projected with store’s run impact and of each to all top-down many traffic store being many, is and that whether that’s their of create that revenue guidance. And in with, on team’s area. that our know provided based

Jonathan Hughes

appreciate for Okay, great a off. that’s time. I it. the Thanks I’ll jump color.

Scott Stubbs

Thanks, Jonathan.

Joseph Margolis

Thank you.

Operator

next question from RBC Wes Capital with Our Golladay Markets. comes

line Your now open. is

Wes Golladay

impact radius? Hey, the supply. the Is and the important? that what I XXXX a yes, rationality determine the point guys. then, it take Actually the had think is maybe a most of price is at? you that your the what question actual it Is But be, outlook on developer? guess, do those And that variables XXXX? you’re of actual would And for supply follow-up one. Is it

Joseph Margolis

a certainly, distance very, very important is factor. So

you Is and into question the and of factors, think of lot development compete factor. other that important all of saturation a about than the very traffic that We mix. have our public then and rather much mom-and-pop things is was the one outlook? very, growth, also peers. We with correct? a that, After go a operator kinds And population patterns other second would

Wes Golladay

markets seeing outlook, supply deliveries? the for I and XXXX. delays still maybe guess, you a bottom-up’s XXXX your from Yes, on Are perspective, maybe

Joseph Margolis

have, not our on seeing at of deliveries, intuitive that’s true. delays we look still really many interesting results. are you cases, kind in the we supply So It’s markets, outlook on when

you bunch examples, gobbledygook. of of give I’ll a So a because that couple was real

market new a was development. in example, of a XXXX, we stores how are Atlanta see there deal to when great Atlanta, XXXX. of So and our number we by look XX is impacted in in that be many at going is for have six development only stores. And But we two that

projected fact, So where revenue our at our a growth coming we’re when even that lot supply of locations portfolio of look it’s our little we though more It’s And market, average. of in there’s because that’s a market. above our the for optimistic market, about a above guidance. stores, that

we the like in three spectrum, in stores other new competitors Portland, face end new look of market XXXX. and XXXX, going at them a competitors XX them the where XX to you could are of On after facing of have

So our projected we go could growth give we that’s And it guidance. below how stats, markets a a created market, revenue and average. you you all portfolio where our those of through is our but sense XX gives

Wes Golladay

we’ve answers yes, on you done someday. But the a presentation Maybe Yes. that. thank for

Joseph Margolis

Thanks, Wes.

Operator

Our next with comes from question Jeremy Capital Markets. BMO Metz

line is Your now open.

Jeremy Metz

guys. Hey,

in Just on of the as development are here? following you shift rent buyers some or growth commentary, adjust expectations yields, presumably even some up supply acquisition seeing your any of

Joseph Margolis

movement haven’t acquisitions. really I for rates seen any in cap

this there from up. of pushing developers the us we’re bank. I seeing and sectors, it’s aren’t meaningful that that in enough, we’re expansion a more One so a rising giving interesting and when we budget haven’t they question. cap any rates. of they’re kind the the to landscape because still budget pressure seen that lot the other interest think, getting to operational pretty we just need an to compared is But You going a projections in bring rate our ManagementPlus rates, interest development sector, developer, the better thing much would cap The and for produce yields good be should a is our is good think platform,

a costs, So budget their me projected required given telling yield. doesn’t that’s that our hit

of a development. control the is that to me somewhat that to pipeline going is So something

Jeremy Metz

remarks, lease-up. your And in talk opening you Okay. stores about increase for that opportunity did seeing are an in

taking deals? So wondering of what’s C today in I’m appetite for O additional is those of just your lease-up really on type some of

Joseph Margolis

Yes.

provides certain developers for in have good feel gone off we’ve requirements. lease-up, that buying of market the price execute. to a the they’ve beforehand. stores, to return stalling chips to we at a maybe to want seen appetite enough a capital that they number is powder, the if willing But negotiate table to can’t we’re in shareholders, delivered enough get sell So out, just our point going meet price on value a And and to think we sidelines. we deals we strong they they’re their take can to have then it’s our If we dry that maybe what sit

Jeremy Metz

how they the Appreciate in baking the is year? for to me for quarter effective did rents that. – movements discounts so as net well? Last those then just last fourth how compared one So of terms into far in are and the XXXX trending quarter, baking in the just

Scott Stubbs

Yes.

So our been have for that current rate and the about the X%, achieved as to then this our into year into in closer has fourth well quarter, Street and and X%, the as year. quarter rates been

Jeremy Metz

Thank you.

Scott Stubbs

time amounts, terms everyone in you, just of this tenants. tell of discounting but larger I year, then about giving And anyway. at to But discounts discounts, would dollar we’re you’re fewer

more. slightly discounting are we So

Jeremy Metz

you. Thank

Scott Stubbs

Thanks, Jeremy.

Operator

Stender Todd Wells from Fargo. comes question next with Our

Your line is now open.

Todd Stender

Hi, guys.

compete your the scale a mom-and-pops. of versus Joe’s are opens against just some defense REIT’s seem be how and sophistication potentially at that you new me term for look measures able any offering match roll you maybe price better the of out up? talk the the remarks lack would competing they to than of when than and competing the you’d It the longer or discounting build? to can, new Just What a store that you when size, about write new competitions that are out longer

Joseph Margolis

Sure.

mostly because a – out we that think you tell new all actions faced that undertake I reactionary, we a that as much series a playbook little it’s that I with we could it’s plan sets we when as could stores know, have that different. tell they’re development. a So developed you do of

willing Specifically you what what we really do, our to tell I’m not plan is.

Todd Stender

the about along as just you’re until sure not talk you stabilized just yields an that in had talk if to how REITs, demand appetite kind guys the C had that And O stabilized projecting, but then guess, of, this, XXXX get occupancy? you then missed Can of waned and obviously deals about I went but QX. Okay. we I you long seen for the

Joseph Margolis

Sure.

XX C So XX in approved the Seven that’s of off our us a stabilize we XX yield we deals O drop was because enhanced C do in we’ll and that months. within months. of to to we’re little They’re a management of The XXXX. deals control insurance. fees from XX allows XXXX, got all and outperform get still to we XX of tell O to and approved big XX in deals you, pretty those stabilized the reduce that between dilution, underwriting ventures, risk But underwritten rate on cap continue and number, I’ve those but tenant XX X.X%.

Todd Stender

you. Okay. Thank

Joseph Margolis

Thank you.

Scott Stubbs

you, Thank Todd.

Operator

Our comes next SunTrust. question Ki with Kim Bin from

Your line open. is now

Ki Bin Kim

Could morning, least. everyone. maybe you about were or year? is thus sure in talk promotions was the change good lot I noticed and on wasn’t during bit changes and a less there the the it Thanks, just little and I usage larger advertised that down if promotion timing? at philosophy, a that web, far to this a quarter

Scott Stubbs

I through We’ve would a it’s philosophy. change always tell discounts in you various large channels. not used

just look channel, you actually the if discounts overall, one up. think, web our are but I that’s at

that’s the So and at down, they’re only you’re web one looking if channel.

Ki Bin Kim

train promotions, or that? reason that, the And to were what customers because was used you to be behind the trying was so not or program to getting

Scott Stubbs

vary channel we’re and channels times. you all revenue. to I by market, on bit the tell in at as the those by an that that’s trying would of day, to maximize But margins adjust end we to at trying little do it’s what we’re a all mean, I the effort going vary go. to

Ki Bin Kim

market. know your and question. If last at I is a look LA market LA just big And Okay. I

is Your rent square about XX. foot per

anything them for large say and use is at help number Your rent lower XX% going New of absolute same-store versus peers. York your momentum your I some forward? because they’re in the XX, just competitor. PSA your there of is And rent revenue a Is XX% might that to

Scott Stubbs

you of a tell that’s mix would I properties.

at where think a our they properties different. it’s I if you that look compete, not absolutely lot

are probably and a Inland bit also thing. of that into of little Empire including type the You Riverside

Ki Bin Kim

you. Okay. Thank

Scott Stubbs

Bin. Ki Thanks,

Operator

[Operator Instructions] Rob Simone from Evercore Our next ISI. question with comes

is Your now line open.

Robert Simone

the thanks for question. taking guys, Hey,

forward? XXXX to Just similar that that deal TIAA on then if of all funding and Is could is now? was have be going what guys I on like a And I then TIAA table choice you’re on of a size source quick anything also comment premiums question deal, of or a look follow-up. there just could a.k.a. kind there for at portfolio the right seeing out wondering the the what you type

Joseph Margolis

be We don’t it’s being have. quality. choice. it’s always and of I certain a always up that the segment up, of repeat do type deal. capital we could What portfolio we for where But to many say, one rebalance to of packaging that want an portfolio We of an options it’s to currently position we’re option improve I a transaction would of was that have wouldn’t teed to said, its effort us. second a the in a say, avenue in portfolio a repeat question? have the

Robert Simone

of or at there? was how base I Oh, comment market point capital all just now, right much could is out given you on out the we’re in yes. seeing spread what portfolio premium wondering if kind

Joseph Margolis

question. I XX – that’s Yes, hard But guess, difficult points. that’s basis a question. a it’s

Robert Simone

Got it.

varies. really it So

Joseph Margolis

lot whole real with. up points could transactions not where you’re comfortable a of give to bunch something of come if you There’s a with you data

Scott Stubbs

portfolio. XX? is Is think, a you And it depend a it on what there’s difference. also or I properties, big four call

Robert Simone

Right.

guys. Thanks, I appreciate great. Okay, it.

Scott Stubbs

Rob. Thanks,

Operator

Citi. Our Smedes question from comes with next Rose

is now line open. Your

Smedes Rose

section. number come you, properties at and against of competition that an as Hi, in if changes. approach thanks. space, are how have addition management saw of them looks business well to PSA after you a at you’re announcement I’m the you an that I’m a made up sure into thinking your years, bunch ask management all that as you curious like as there’s they in going third-party nothing platform? wanted I about to just

Joseph Margolis

question. Sure, Smedes, it’s a good

and in the other D&A, been good people. the we think if for you will, we’re we it. since It’s XXXX. business, our pretty we’ve partnership it of our longtime So manage for and We’ve part at done

to us market argument also entry that we and So, for is And getting compete management to are have they people long need share compete a obviously, numbers we I can very professional think management. they to more put can the as up market is as the them. bigger. for recognizing not that with about thing, the that good that why REITs. having frankly, another into exceed we’re our More should choose good But a with compete competitors, going and pie overall can’t people have

market also a then while So – new at the is while I same difficult PSA, capable I it is getting pie see to one like think the entrance, that’s bigger time.

Smedes Rose

ask I then just wanted a you, And Okay. there’s to lot.

As you know, supply concern. big remains a

in You do But as peak sort terms year you a it feel of little supply of later? I more just XXXX event or touched on deliveries, a not do this new the have of to mean, nationwide or it’s like or you view a whether will bit.

Joseph Margolis

rate It’s shovel going given and the don’t can Yes. fallout view. delivered think in and strong in XXXX the ground. have quickness, see I transparency markets properties be of the these to which what’s and some entitled difficult to have be really stuck into we a some

Smedes Rose

Okay, fair Thank enough. you.

Scott Stubbs

Smedes. Thanks,

Operator

Thomas Our next Capital from KeyBanc with comes question Markets. Todd

line is Your now open.

Todd Thomas

on a bit for would comments say, shortfall be needed and in they’d budgets And Maybe to Hi, opting big the are developers sort thanks. your higher about is they where getting What’s of those average, you afternoon. forward? What Are back work developer where thought the need? projections. still you little moving situations? Are to between Good be? in someone financing they or your with experience else? they sort how happened been those pushing of situations? or higher the Joe,

Joseph Margolis

some But talk about we to a we – that. – answer I to do our can’t do have the to have our to last budgets to deliver. don’t Unfortunately, obviously, move we to developer, have Yes. satisfy go the one. bank have I we or because didn’t guys got

the only we and delivering higher budgets can rate. seeing on, fallout produce So we’re that comfortable we��re

We’re projects, least, – done. of them with us. that get seeing more at They don’t

Todd Thomas

they’ve being? those far you So tracking to know as knowledge, for been projects or as abandoned your sort deferred time of the that

Joseph Margolis

probably other abandoned. portion abandoned. out some leverage deals of get And them see of of get greater think there’s there. good high ways being a a We to sources But capital other done. number them I There’s

Scott Stubbs

companies mean, there’s for things local Well, local are also there’s like that. I management opportunities still I getting banks. but management done companies. you, There’s tell things them, other would with

local the of that well are difficult. think is it and lending, still relationship the as doing some I as more more banks, large banks but a

Todd Thomas

comments you landing could that that that at about do head Okay. And context of we comments. your the for the your you’re talk in forecasting XXX revenue Joe, as means Can deceleration we what or is fundamentals? to XXXX continue in points, think of about into then, beginning you basis at bottom, that deceleration just see The the XXXX? additional soft growth

Joseph Margolis

early year, it’s we industry start XXXX. So there. think to to And of about would return going revenue would to the growth But said end we that, be talking by the the is believe I we’ve pretty numbers. historical

Todd Thomas

Okay.

time, is to expect And longer-term right? X.X% – your – you said in expecting growth historically you’re in expecting to be I to period range, growth of sort that growth XXXX? growth to So be of revenue XXXX. so X.X% – so believe would revenue you’re over a we’re average a that out that below slightly You’ve longer in bottom

back end the longer-term by so into And XXXX, you’d expect that to range? of get

Joseph Margolis

that our Yes, is expectation.

view shock we view. all our currently, But something Now we that’s that economic don’t could have happened. some or

Todd Thomas

just is tell occupancy how and looks Okay. And year-over-year on can today, where basis? just a that lastly, you Scott, us

Scott Stubbs

to slightly So cyclical just year-end of is close the year. from It’s the pretty with occupancy where product. ended the we nature down

Your different January, is our from accordance lowest but and plan. it February, not year-over-year, year-end typically occupancy with that is it’s in it’s

Todd Thomas

Okay, great. Thank you.

Scott Stubbs

Todd. Thanks,

Operator

you. Thank

Bin next with from comes SunTrust. Our question Kim Ki

now Your open. line is

Ki Bin Kim

again. question, my taking for Thanks

the performance noticed between you of age a or difference Just different one. any by of quick assets equality, of the quality Have or physical age asset?

Scott Stubbs

on depends asset, feet I than the the asset. more in think it it’s market, the to the person quality, the just it square per lot the of the age of a location

Joseph Margolis

capital if care have perform into hasn’t one of, is should mean, much brand-new How capital stock assets the can markets. is brand-new and But taken clearly, the two one I better. point it. same in you well one old market and in your been exact has some do other put been old, that, in asset and very

Ki Bin Kim

Yes, already developed I it equal. they’ve do I developers mean, are at the that’s you moving right. all down in generally And markets or else was MSAs? or them the doubling on submarkets looking different different in, see to

Joseph Margolis

inundating us a markets, all to seeing more. I they they’re now spread that’s people is, ask before question. people saw great some us they costs, Well, of observations out kind ManagementPlus guys just of and their and gave one these our give that was previously of the observations

trend. So yes, that we see do

Ki Bin Kim

Okay. Thank you.

Scott Stubbs

Bin. Ki Thanks,

Operator

you. Thank

comes Stanley. Vikram Our next Morgan question from Malhotra with

line now is open. Your

Vikram Malhotra

you. Thank

off the or that XX from points pool. I benefit in is wanted of? XX combination any there the that SmartStop impact about from that clarify So separate, a ongoing of that disposed And Is the you is just the basis in there comments to stores your no changes benefit? Is number?

Scott Stubbs

some is from benefit There pool. and change SmartStop – a some from the then in benefit

a acquisitions, of So XXXX The Two, of amount, the acquisitions XXX as are the many well ended going XXXX to from large some we’re ventures were deals add joint stabilized. now previously we that as we’re adding those occupancy are managed. growing the or not year as that certificate at.

little well benefit So of it’s combination as added, primarily the the a being added C from that of SmartStop. deals are as O

Vikram Malhotra

And that basis total is XX points?

Scott Stubbs

going closer start end of the the year, the of at the higher It’s year. Correct. zero to at

think the at XX. terms of end in you it points XX at basis line, average start zero if of a and it’s of an for the So

Vikram Malhotra

you’ve just Any then you of changes in Coast, second, terms do sense – Francisco or And West of see in LA seen LA new in any either San thanks. supply. Okay, to of turning weakness? of terms maybe thought. last just as any the sort are And market who maybe at folks to deceleration was it than, the strong least, seeing of I being of year? more some as pockets Are there multifamily comparing more

contrast to and want two Just compare markets? those

Joseph Margolis

a see than Los So projected in supply Los deacceleration stores. lot what there’s in a Francisco, that at markets. Angeles. we XXXX or Angeles. San is that’s is no new in we a to A other are in seeing it higher Texas revenue we of little see is actually of XXXX. or but Francisco none bit nothing affects – in least, Irvine – And Florida and There is we some San market anywhere supply, few our in is our accelerating new close

markets these are XXXX So XXXX for still they averages. two be very forever, those portfolio markets very strong as think still and as above like strong into I performing were markets that but don’t they’re our can strong us. –

Vikram Malhotra

to the markets And just, clarify, said Francisco just you that’s if of accelerating. I may, one San is

Just band sense in give top can that us are your other you that of markets in two a maybe accelerating guide?

Joseph Margolis

can accelerating I you are Florida, markets, exactly other markets. other Maryland we three. Naples Yes, give because West and have two

Vikram Malhotra

Okay, great. you. Thank

Scott Stubbs

Vikram. Thanks,

Operator

comes next Nick Yulico UBS. Our question from with

open. now is line Your

Trent Trujillo

how boroughs Jersey. quarter seeing of and your possible to the you’re Is your market I combined, performance out question. the for this Trent the with supplemental for Maybe on here in on performed fourth Trujillo taking another ground is looks Hi, guess, you trends into New break Nick, portfolio it just York New thanks like the in now? on the the getting and disclosure

Joseph Margolis

Sure.

our expense, revenue NOI so stores, had York, X.X% growth. borough Jersey X.X% the absent New XX% New growth, market So

in pretty eight limited the have boroughs, stores exposure. so We

negative X.X for Our revenue negative in was X.X and NOI. the a boroughs

Trent Trujillo

have they’ve brand? kind under acquired on And just how those or took since the stores tuck-it-away the of since EXR Okay. you performed stores been mid-year,

Joseph Margolis

storage needed significant a that, transition, the expectations. of we physical attention time I doing overall, getting in they in our to assets. But And early still no have lot at the spent would We’re are people say, performing there.

Trent Trujillo

Okay. And if may. maybe one more, I

for On potential taxes opportunity? reduction side,. spoke know expense offset there’s I expense line other property perhaps a an with items. pressure there you an than is the But that same-store or about

Scott Stubbs

We’re is but typically items. always it those, looking for smaller

or plus. is one and expense anything drive comes coming of just accounts needle which taxes, your X%, below, the property doesn’t – then north your this there’s about very Our is inflationary payroll of expense coming largest your in much. largest in not year pressure item a from and for is third But it’s else next it of biggest which

Trent Trujillo

Appreciate Okay. very much. time. Thank you the

Scott Stubbs

Trent. Thanks,

Operator

you. Thank

Hoglund comes question next Jefferies. Our with George from

now is open. line Your

George Hoglund

what guys, two Hey, the mean, facing me. questions had Portland, and XXXX facing the portfolio have of on many supply. are I and number gave new generally, in you properties in the are many for across One mentioned XXXX? you just numbers side. how supply two properties do a how number was you supply And Atlanta new markets, where

Joseph Margolis

So closer it’s in in maybe little XXX to properties under XXXX XXX a and XXXX.

Scott Stubbs

on And that depends geographic… the

Joseph Margolis

numbers, a I’m Yes, not we within in type is supply that’s consistent of – to is back new of In let three what a three-mile affect sorry, City, used. areas, And supply miles that will is But some a new opening recognize In three is radius. you. a accurate approach what have me up. convention not small. New this is other and that’s York irrelevant. This miles we description – too perfectly that totally

George Hoglund

be for lower greater XXX? or best your was than guess XXXX And

Joseph Margolis

a for have at XXXX don’t this I guess point.

George Hoglund

XXXX Okay. just demand certain have And the disposable your overall, income, on of deliveries in greater you how as affect such economy, demand side? side, that kind what’s will the influence strengthening how will apartment on then demand more factors things sense

Joseph Margolis

of we is strong top see the that that steady, funnel we as and feel demand us experience to tells many as and and is indication very demand very job Everything no our very, convert that and have possible. The is and there’s growing is Okay. – waning.

George Hoglund

guys. Thanks, Okay.

Scott Stubbs

Thanks, George.

Operator

This today. I Joe any back session Chief Margolis Officer, further for remarks. to our Executive like call turn the now Thank to Q&A conclude Mr. would does you.

Joseph Margolis

to in for thank, interest today Space. good day. everyone, their want participation I you. Extra and a Thank Have

Operator

Ladies gentlemen, concludes the This you your and participation in thank today’s program. conference. for

disconnect. You have may a all day. great Everyone,

Extra Space Storage (EXR) 21 Feb 182017 Q4 Earnings call transcript