EXR - Earnings call transcript Q4 2021 | Extra Space Storage Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2021 Extra Space Storage Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded [Operator Instructions] I would now like to hand the conference over to your speaker today, Jeff Norman, Senior Vice President, Capital Markets. ahead. go Please

Jeff Norman

Welcome earnings Victor. Space fourth Storage's Thank to XXXX call. quarter you, Extra

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

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

Joseph Margolis

you, loss our our some on our outlook our for will we and company. war ways, thank and [less and perspective tragic this business Events company some discussing and growth, to economic are Europe. ultimately thinking of is and the up this the everyone, certainly interest prices, performance important]. oil to this give Jeff, joining this morning news It and affect makes our of in today's in us ignoring rates inflation, like lives, of business how Without incredibly and Thanks, suffering sad human call. wake also entail, event will

in times, all is do and historically types and the economic of company cash real don't economic prosper produce are out, play has prepared and a balance in flow bad structured good sheet more other know know how been this will While so product needed many we that of that stable, than that to very much we and self-storage estate, our all conditions. we

Revenue to cap off another exceptional a in performance results. remarkable board. Property Now Extra the our fourth X of year-end level growth high by row. We factors: remarkable, which XX.X%. Extra was the turning had in primarily first, was growth revenue was XX.X%, same-store second strong a Same-store at was Storage. Space driven across for occupancy year quarter Space for quarter year the to a

customer resulting NOI rate in Secondly, growth growth. X.X%, same-store at strong check in existing XX.X%. of new and remained Expense growth

external or XX significant wholly quarter. of stores ventures Extra million. owned acquired $XXX Space was primarily total for investment relatively a billion, $X.X growth the small year We in transactions. We investment in for from also the approximately full acquisition on basis had in Total joint a

the bridge million total million. the $XXX to loans also in We quarter, $XXX closed annual bringing in

We a our our portion of lower-yielding continue first our to on to execute balances partners. significant strategy debt to mortgage sell

our to of We loans stores acquired buy owned but also through stores either platform day for To onboarded million. XX sourced originally for our or third-party we of through leaving We have business the higher platform. the wholly acquisitions, one including per with were dispositions platform XXX partners. with properties a venture we in able properties, selling date, give XXXX. we in quarter properties our owners To these $XXX We management joint experienced context, added sourced X.X to of XX stores to full lending more total for due continue year. acquire our properties to XX

strong they the I Extra have XXXX, growth XX.X% to efforts for another There am in XXXX. and our of year Our the in property core NOI FFO plus proud contributions for are of in our external in team. how resulted Space quarter. many positioned growth us growth

are have we have sustainable nature recognized We for of performance, the only not but built. the company proud also to been our

row, one storage this we to year leaders be named second proud light award. the the a For of are we received in company for were to have sustainability our only NAREIT's in efforts, and the

us at same-store in Looking of increase strong. and forward, year-over-year. remained execute customers. high strength, industry our FFO to double-digit dividend In revenue light power market pricing again difficult XXXX, to fundamentals in growth very XX% growth very of guide and our strong Despite this Occupancy we fundamentals the the resulting a per levels the to to raised and to remain ability at historically elevated confidence new levels, existing give comparables, XX% midpoint. $X.XX team's share, over

We to quarter Storage. Space of another walk Scott expect time to start like Extra exceptional some year over XXXX, in great I for fourth as of a to are to details the off the and performance now XXXX through as turn guidance. the in our would we well

Scott Stubbs

Thanks, Joe, everyone. hello, and

in fourth coming FFO above high and our of with great guidance. quarter mentioned, XXXX Joe had end As year a $X.XX our the we core

Our to was performance our by offset higher-than-expected income interest by -- interest and property by property driven outperformance partially relative higher-than-expected guidance the expense.

was in sales Our from external by disposition $XXX growth proceeds the in stores. million capitalized the of quarter XX

credit. $XXX We also units, issued on drew and our OP in revolving of we million lines

-- be our revolving debt will our further balances. the Our maturing debt will our never issuances. of our debt we balance focus over over been maturity And next Currently, has to sheet to only through X% lengthen and term out ladder balances X average our mature years. next maturities the unsecured stronger, future and

Xx. EBITDA Our unencumbered over and at to billion, is our XX pool now $XX net debt trailing is

to many We provided XXXX. guidance continue for we access capacity night, Last types and annual future us significant growth. to for assumptions giving of capital, have

by higher XX.X% tax growth payroll, driven primarily primarily rate is pool a new marketing by relatively redevelopment. property with offset driven Same-store is to expected Same-store same-store expense year revenue due to a small disposition of to stores, additions removed increase includes XXX increase X% and last expected be sites by total from net Our partially to X.X%, growth. new or to XX.X% expense. expense

Our and disciplined competitive, opportunities volume acquisition plan revenue and we continues XX.X%. NOI strategy acquisition range opportunistic. our venture results remain We a our capitalize in The to same-store looking to plan off-market and to to of partners. portion of joint with a of for will expense be guidance net market continue XX.X% but

Our which guidance assumes contract. closed $XXX million Space in Extra already approximately or is half investment, of under

We in $XXX million plan also to in $XXX retain XXXX. new and close bridge to expect of million loans balances

as run if XXXX made property our in contributes invest plenty the find of our investments years we and in higher long-term payroll significant XXXX technology. to come. rate and for XXXX. The create primarily will will G&A growth sector. we creative additional and To G&A pandemic, have driven by paused to deploy to return a capital growth, our during our and in advance anticipate this expenses quarter, expense technology resulted infrastructure in increase. higher This we We for capital value of temporarily in and be that people, our R&D, historical that support which opportunities is we the support to fourth This also continue initiatives our shareholders, we will the

due it Interest C of will income the estimated $X.XX weighted and of of Our to anticipate XXXX properties to volume FFO $X.XX be in and to from significant somewhat $X.XX We share. from is potential of great XXXX. acquisitions to value-add O dilution due and $X.XX acquisition fourth per stores quarter. non-stabilized up NexPoint between are was be core the Victor XXXX over quarter sales year the to first on timing turn of for note modification our we investment. that, strong and let's already Q&A. way to With in Extra start the our another a Space, to our year

Operator

Instructions]. [Operator

on Bank first line of Our the Elvis Rodriguez of question from America.

Elvis Rodriguez

out there an strategy Joe, year. and perspective. morning quick and quarter question the Good on acquisitions congrats on from a

million type recall seeing did at -- of closed have and the I if about more maybe it, seeing as in correctly, think million progresses? of XQ, gives -- had guidance billion. million and of comfort sort at What opportunities or your and opportunities are pause you year you call you you $X.X already type but shared the the being $XXX you -- what on, able on I the your end that some $XXX to do $XXX year-to-date. What of are

Joseph Margolis

you, Great. Elvis. Thank

motivated a execute -- a quarter, almost on or and kind groupings all to were tax number them of single So them of of in Most very good properties. able come those. the of number we of fourth we of properties year-end saw small transactions were

were were seller able But that were to also allowed the we we the We able units us to X portfolio not larger capture where on offer the bidder deferment, shares, as and to transaction well. through which tax some OP do high portfolio.

more way it. and If deals. forward, do pretty or But lots million to $XXX far of there debt there. million. opportunities target certainly to capacity is are in it, capital do is the to sources getting guidance $XXX lots -- of of we'll have and Looking different do X what's guidance an and our We're We assumption. our along

Elvis Rodriguez

Then rate you cap share acquisitions? a your just a follow-up, able on are to as XQ

Joseph Margolis

yield expense you deals And deals. fully So can XX And almost those reassessment, for a we When deals. This in tax little this wholly average those XXX little in those months first all was year. first lease-up maybe XX basis stabilized structure loaded. over quarter in to owned a acquisitions the XXX add on joint do with manage, were basis was and a mid-Xs to to venture to points the fourth and a unstabilized CapEx, year, numbers. the same structure, to -- basis, of includes mid-Xs our our year over is in stabilization low points you cost

high and stabilizing first So in Xs. mid-Xs the in the year

Elvis Rodriguez

some this credit comfortable variable unsecured debt. how Great. But as are portfolio? doing and about you about Scott, you And to term rate overall the debt given your part line of I then can sometime in year an rates? maybe your debt you out can talk second potentially floating the deal the of mentioned question, know for my you rise talk structure, the for a in of

Scott Stubbs

Yes. prefer they're you to I mean today. but falling, be rates rising obviously,

XX% always variable have we rate year. gets year, drawn a out. some have about debt. higher some component $XXX our drawn we of on our debt. This at part It end strategy XX% have and when have lines are been things variable So of to rate little terming the typically We the more we of has of credit, million operated to

be variable about to XX% caused So rate us debt. that

ways that we look we have natural one hedges of loan we money. hedge, that is we do do in forward the As

instruments. bridge and rate of We different investments loans are that types have variable these

term So hedge there bond draws is year this to somewhat we but the a market. on through credit on a will our look of out our that, line also of natural portion of

Operator

from from line come Markets. Capital will question next Our the BMO Juan of Sanabria

Juan Sanabria

any us benefit, ask any, give what represents of rent is color upside? Maybe or where lifting assumed to that the on most you wanted if from Just if the expected [restrictions]? can

Joseph Margolis

Juan. Sure,

the we will believe primarily answer So of a portfolio state that is the of have lot in the obviously, And in points give us future XX assumptions that the California stay go length these across length lifting increases. into to the of gotten there's short stay, lift. emergencies the the of this, of tenants what's of basis about

So our XX assumes guidance basis points.

Juan Sanabria

that XX revenues, I'm And assuming? is

Joseph Margolis

Yes.

Juan Sanabria

then for on Okay. your bit of 'XX side, major much items little guidance? a to just expecting the into the kind you're embedded talking about move out line And ballpark expense you how flush that's could

Scott Stubbs

negative it's close is more And closer about marketing, had and but Last staffed. to property growth. is to we're number, fully then that only X.X% about assumes operating the growth. you assuming so wage tough X% that payroll comp. year, XX% And taxes, then guidance really our payroll actually a on inflation, and Juan, not

Juan Sanabria

Great.

Operator

Goldsmith Our Michael from of line will UBS. next from come question the

Michael Goldsmith

half, NOI influencing gains XX% those You point you had have and year? to It's upcoming strong growth, from how -- XXXX revenue are same-store your the the that year the in the strength of much the year of about how within clear harder but XX.X%, you that, for same-store comparisons revenue growth the peers last of second the from guidance in that half? wondering report a been very is guided, nearly first or guide should same-store how your XX.X% performance in the we influencing this expectations versus the And XX% think is XXXX, at considerably and performance upcoming given like half back from in XXXX.

Joseph Margolis

Yes.

a high for of we performance us strong strong pricing in have a reasons. see power, a clearly, diminution So very demand. One gives particularly with number no we influences XXXX in is occupancy, which when demand still XXXX

flow a takes into as we flow performance. -- that tenants to go Secondly, up rates put and new in, that while takes while to a rent into roll

of But half year, with that And we expect right of half we then tougher that the in that ECRI. the our strong rise throughout throughout helps XXXX, the as you're put gives back tenants later are So performance even already a at XXXX. we us comps the mentioned the year.

kind rate of year. even the of should performance it? frame Are year growth the though able greater do to So Or have high guidance kind low line the you of at we strong will or Like end the that? than the at guidance moderate end throughout difference difference will and start of in? we the kind of the be of help the the the

Scott Stubbs

Yes.

really So strong. we obviously quarter finished the fourth

last rates And expect as of to tougher comp get to but down be our to we I year it year. partly through really good. you difficult, first quarter be from that as growth go We the we necessarily strongest moving pricing we more significantly, expect of would first to we power easier to would throughout quarter we declines rate to expect year. have see So the then the because decline therefore, don't comps. the comps backwards, mean move rate don't had and We quarter. growth be our expect the

Michael Goldsmith

touched as customer existing little on on And bit follow-up, increases. rent a Understood. we a

For piece. them same-store increases leasing rent given frequently to any are the approach XXXX, to push by some magnitude surrounding rent understand driven increases Just change better or harder prior maybe revenue more like pull environment, to level the is growth rate of get to of or trying there confidence the looking that's up in your the you given the the the environment peak season?

Joseph Margolis

people Do to get protocol by paying half the with imagine respect increased stopped which back second would time, of gap a we're period government voluntarily I a it So in the sorry. where What repeat Can had growth, long you off street ECRI, you in to more where rent restricted for a what question? would we the rate. Scott? the really ECRI. of current where we question? unusual, coming 'XX, second the we normalized between was for half were where were remember, we the was I'm outsized

Michael Goldsmith

was related you vacancy magnitude the more leasing -- most to like rent captive frequently. peak potential pull increases would prior Or some the create the to Just when create the to for audience? season most of it have vacancy increases to rent you

Joseph Margolis

Yes.

you that So -- repeat and I'm sorry, I made question.

maximize revenue not I think the we're bread always on trying to and shelf.

we planning are create to I think So don't vacancy.

more we'll in leasing So have peak vacancy season.

and churn increase. We customers’ have rate natural every existing month the ability to raise

at year. So we're look trying particular to and continuously months of the maximize revenue, not

Operator

question And Bin Truist. from line our next Kim come from the will of Ki

Ki Bin Kim

back your of O there. fully Or similar question eye? C of size C the change? of quarter obviously, your did deployment, curious, a your high deals bull's just question really that similar noticeably, expanded I end O just XQ. going And capital fitting robust your pretty you to you guys for seeing Also up noticed did your in So had more pipeline level, deals,

Joseph Margolis

any it's So at back-end if look the in you loaded. acquisitions year, think of pattern I

were season there sense it for saw -- was underwriting didn't a 'XX. We again, pronounced probably was be that of C deals Os made us. -- And We it or we that more just to discipline. those seasonality. we think did more 'XX, I And we year. change of now. made our normal We this opportunities. more in able more sense. where happen is nowhere just more do to opportunities our And more near 'XX, capture see have But

Ki Bin Kim

was what what rate your street in thinking guidance, same-store it you Got it. in XQ? And compared growth are implicit XXXX to revenue for

Scott Stubbs

you the can and seeing our I see in terms for assumptions, a growth we're So what rate quarter. tell street of in about first little bit the we'll year.

in our been so to the So achieved very rates the first similar fourth quarter far have quarter.

in Our achieved that the rates year. into XX% up seeing quarter. fourth We're this were

We seen significant occupancy. in degradation haven't

Our were before. occupancy below slightly is where we

expect in mean rates. month, prior as XX% what pushed depending by on as depending rate comp And to Our of street terms will We XX% XXXX. of the slow I is don't we the on that that in year. much from growth the rates

look that XXXX. do that So growth we don't but of kind decrease necessarily in we rates, we expect not will -- think

Ki Bin Kim

get I of more answer. more Any to -- If try you little out could bit range a the can provide? pick kind a of little

Scott Stubbs

the going They're of quarter better in half year. be first to than back in the the

back I we that think all in half year. with of has front the that's really can versus And the provide. the to part half do comp the of

Operator

line of from comes next from the Stein Stifel. question Kevin Our

Kevin Stein

just reason them Or any that? the I really strategic wondering, pricing. it just for was you properties. was was just selling like $XXX of so reason good for sold million if was wondering there I

Joseph Margolis

both. do our I we of half into lows where mean keep -- markets portfolio out and able half to assets. to assets historic to say but have sold rates exposure. prefer XX we're rough we a and We optimize to venture a less management I our time or And other at were those to cap properties. period did very always some the in is sold of of year the to XX management, select right, so of the last where individual able we sales would about look we exposure advantageous. keep we either And where are

timing. it's both also So happen to good strategic I think and play be market

Operator

will line question Todd from come next Our from Thomas KeyBanc the of Capital Markets.

Todd Thomas

to could yield, much can you 'XX? if about the non-same-store? FFO the the embedded NOI wondering an you that's in that of from on growth share guidance was And you're anticipating how contribution increase in talk I non-same-store the

Scott Stubbs

make So question. understand I the sure

non -- that for understand is trying or property the from. where the contribution NOI, addition in where to property? You're of outside the Is coming same-store to growth the

Todd Thomas

year, NOI NOI the for sort the the mid-X was of cetera. initial think uptick the on same-store, the non-same-store for in deals, I the of sort the plus non-same-store in some the full mid-Xs of other -- mentioned yield O remarks, anticipating acquired during in What's yield you of a you're embedded Outside stabilizing assets, Yes. et on prepared C guidance so outside -- in what of ‘XX? that

Scott Stubbs

you're Yes. you that. same-store is higher NOI you the Maybe the and at than growth midpoint, FFO the think FFO your and best given take if it, -- look the to we've then of there, at performance, your which way look growth Todd, XX is our and slightly at

are that expense non-same-store So effectively, going interest going of G&A your properties up, is up. that all is the the level to contributing the

effectively it's wash. So a

terms store other the non-same So is awash in the offsetting of increases.

happening have you increases several other So here.

You have G&A going up.

You and have lease-up up, have amount the of stores that end then interest you additional from expense at an we some of bought year. going of last dilution the

$X.XX have dilution We from versus this year year. our last

Todd Thomas

on and terms on are I tenant you of there. based for And guidance What's how to that -- throughout year? net ads the the management the growth third-party fee anticipating growth, income management in the Okay. platform? many mean reinsurance

Scott Stubbs

management the year both stores So tenant what joint net is by additional as increase our ventures for increased fees as guidance XXX insurance year. next and in last well assumes from an

Todd Thomas

Okay.

'XX. up in it. net Got stores So XXX

I Scott, year-over-year year. fourth similar to Okay. that you looks were just the spread when you And and you rates occupancy think, Can quarter, mentioned then think a like? where the lastly, just to that where here talking and just little start occupancy you tell what today us bit slipped I achieved is year-to-date mentioned were about

Scott Stubbs

different -- negative. numbers. to slightly Your I'm way best the spread, we have to it's it, trying X explain

about XX -- bps you're but negative a same-store have pool. new also comparing you're a year-over-year, You

occupancy. And to exact we're solving not not amount. for make for again, just we're want solving the So sure

we is of But good view a we're today, hard this. being so are -- really occupancy pushing we're at and component this as rates X in And as XX.X% we as still spot. when

Todd Thomas

Okay.

same-store So as for that's XX.X% occupancy the of is new today?

Scott Stubbs

correct. That's

Operator

from comes of next Evercore. Our line Samir question Khanal the from

Samir Khanal

the on of to mean, that decline? just sort occupancy in the Scott, of baking the peak year end year, you I the summer in second question. what are sort of half of

Scott Stubbs

Yes.

I then maybe we exact that year, not just a assuming experienced XXXX. points this from in ended believe I XXX you no starting got think give we little a basis where giving ending year the Last -- I that we occupancy year. negative can slightly where in input. XXXX, benefit benefit to from bit in of And occupancy, without we're benefit occupancy. year But of we're get XXXX. So the We're we again,

is so being occupancy do And see in we still strong XXXX.

Samir Khanal

guidance guess I I Okay. it on up. did go And for G&A, then mean the

it I about million. $XX was think

of I anything trying and sort But about to onetime I you return normal. you well. Just kind if talked there's in there? know of see about talked technology nature payroll as in investments know to and --

So as we nature of we in 'XX? to anything about that kind need is think there think sort onetime of about

Joseph Margolis

longer-term in payoff. I'm but not investments we're certainly sure nature, don't have an making that immediate if they're onetime

continued also in don't It at side, payroll. So infrastructure the or And which in and increasing that our growth company I technology we're is making want. will that And add flip pace is growing R&D will XXXX. we're very and certain fast. we think investments making beneficial anything is temporary The won't the investments that long-term accretive. -- facilitate be

think to a going ongoing my just and I environment, new opinion. we're in that's payroll be in

Operator

Our Rose line from of Citi. from next the is question come Smedes

Smedes Rose

is you from activity. it seeing I on wondering, just there just bit the there little last elevated market year? on the pullback others for stuff -- of for a a I'm more ask sale? Is on acquisitions and outlook, maybe you quality sale? of a of last the you're Or what's less little you're about the changed pretty Is anything talk a -- and your sort it since just wanted year's assets seeing part? slowdown are to purposeful more could seeing, what are just maybe sort

Joseph Margolis

early the slowdown Smedes, a this, there's a as in year. said I I earlier, there's seasonality to and think natural

enormous I industry, for There's some of XXXX I'm in overall less of was year some your the very right. necessarily But talking hard thesis years. the sale. in about is and quality and was think still not quality different XXXX. transactions. think the for of us. I It's good it will That that is an than number stuff match year just market quality. imagine volume stuff last to are don't We prior

Smedes Rose

is you length Right. now? been it happening then maybe as on stay? of was what's Right. could us update a pre-pandemic it Where And just where with And the reminder?

Joseph Margolis

Sure.

of of year, to customers . have long-term never we're beginning has our the now We've X/X with steadily have about all-time now customers with longer had the maybe been stay absolute than length increased X XX% and or years, -- are than level our of XX% that So pandemic at and X from us of of those highs. been in portfolio. the

Operator

Our Goldman next comes of line question from Sachs. Burrows Caitlin from

Caitlin Burrows

through think a Wondering on supply. visibility for point? you this just go shaping Maybe current you And if in supply And you have and question maybe those views? at could how guys even much what's your expectation 'XX 'XX?

Joseph Margolis

So new at look our deliveries to a -- in We store affect we see moderation supply. that stores. continue

in steady stores statistics markets moderation. you of we're been or we're national XX% a in new our affected kind XXXX. XXXX, is And XX% XXXX; last not about of our into And that XXXX. if So in. in it's projection and the were supply in not best years XXXX; XX% look over XX% X by

the for, hasn't which is to don't at still will We the a lot predictions manage that. would capital know performance yet. development. to loans. amount any moderation like the in to surprised tremendous to class thing XXXX. it not of exposure We've I opportunity supply through see I of that of we'll am awful pattern reverse given of make or new new is concerned before, But XXXX, be O seeking C manage Stores itself that moderating. opportunities So of And this for gone for uptick are delivered. being and have I we or us. But provide how our deals an an in to all participate good bridge storage done us, the get either asset in those, stores and deliveries manage see away. that

Caitlin Burrows

it. Got

rent same Okay. in on just and decide 'XX expect you seeing or some And of whether of in maybe 'XX. up of high But occupancy don't you that amount And impacting I such mentioned what growth the then up price rents, they as maybe how prior with you stay following ends to are customers? know go? sensitivity terms points. currently

Joseph Margolis

we us, that who they Well, get increased notices has time. after increase track and vacate rent certainly folks from over

have So us notices, because yet sense as to so see easily those to hand of a the it's We're number demand But tenants. out backfill sent make not that because more very we to that. it these strong. not problematic for that's rate And doesn't vacating out we able is tenants increases.

Caitlin Burrows

At I rent that the new being guess, between ends spread that up then Or those higher and rates? what proposed person increase?

Joseph Margolis

higher Yes. At those rates.

Operator

Our next David question from the will come from Green Balaguer Street. line of

David Balaguer

hikes market a just Just environment, that you on expect touch a interest market that's expecting capital new I rising seeking rates a would The year. as and . there of just you wanted But to you lot exposure. cap cap rates rate certainly of transaction rates. number this in is imagine mentioned yet. given rise rate to how the is haven't seen bleed storage before, quickly in

Joseph Margolis

But Well, there's right? very as important and rates unknown, that cause up. rates react line to that the And mentioned so to self-storage a traditionally, not you invest and go rates it's cap fact go immediately. it's rates lag, interest question. capital up, go in an the that to to may much may But question, up cause right cap

David Balaguer

more extent, on that would a if bit see equity acquisition and to capital your you perhaps to to be little front? rise aggressive mostly unchanged, that And the entice we rates cap cost of were

Joseph Margolis

cost be went same Sure. more of was If and the active. rates up, our cap us to capital that spur would

David Balaguer

suggest pre-COVID was that of a quick of to data the some they moving real about from a has since Is levels. the led than little stickier hasn't seems something that brought sort bit have be there number driver in last that several one And activity migratory the customers on there changed seems specifically to it. sensitive and Got just in patterns materially mobility question being residential that to also There a past? is side out really quarters. as on participants moving demand national activity last market cite

Joseph Margolis

would are the So space it, of stay for we've where moving pause cite not customers. stickier The those increase lack storing, reason the who customers the that customers are length as of the most cite not moving. customers I seen a

someone the a at and a kids some extra room need So don't was. to to they point, what home is back who's move to bedroom into turn all, slower or simple tend it it go kind to who school, If anymore. then to of at for individual do be turned the the storage office moving that and example and

Operator

question next come from Stanley. Kamdem will our of Morgan from the line And Ronald

Ronald Kamdem

Most just been of and to back I to wanted have revenue. contribution my go on asked, of the expiration comment sort the but same-store to questions the

talked think I points. part that mark-to-market we color. basis more that of maybe L.A.? Is get think XX what little on mostly bit do And the is of Hoping you business a these you with can about expirations? sort the

Joseph Margolis

I'm of mostly their Yes. I XX state points sorry L.A. clear That us, is lifting as if wasn't for was a was -- that of result basis which was emergencies. that, California, -- the

Ronald Kamdem

the what conservatism little any so on could portfolio, get sense -- be what how of trying then sense and the rest? the that Any to And -- of into to that. compares it. idea baked that of Got that seems a mark-to-market a

Joseph Margolis

raising The the between what in-place gap we're mark-to-market being and to? people

Ronald Kamdem

Exactly.

Joseph Margolis

what this year. So we it's for adds tenants. notices we we're number up not revealing obviously a those all out but that increase And know rate sent

Operator

Our will Mueller from of next line come question JPMorgan. from Mike the

Mike Mueller

Yes.

couple ones here. quick of Just a

potential then was in talked fourth about with know in quarter all, the a acquisitions, the lot what of lease-up acquired yields focus of average First as I 'XX on occupancy quarter? to is buy what well? but And the fourth you for assets you

Joseph Margolis

So questions. I'll those in Yes. answer reverse

right? be of some lease-up, occupancies below some try most stores up to opportunities will to gotten that Because I Average look be not think XXXX -- to like high number. they're times, occupancy close that have don't I that You've are stabilize, our an many meaningful by you to a I'll continue at up stores stabilization, but have market. it leasing they're that to high economic in very going look value-add. quickly. it's occupancy real think But

uplift not is moving in of to a rates in the necessarily So occupancy. lot market, gaining

Mike Mueller

other And That question. then, guess, one Got sense. I it. makes just

there terms you O a typical deal, that a that what versus there different -- property target return across when amount decent would returns, of of of looking at may a come is operating has a if In sitting C potential? be of that you're is how and typical lease-up

Joseph Margolis

of be there. properties that C that compare it Obviously, months of each to a bit get it out O kind you to So just property to years depends stabilize out, are a at time, XX right? months lease-up you compensated if additional stabilizes for property you you those, is going stabilizes to little that looking that time or for out. want you think of be simplistic, to that XX on lease-up a X takes the more and So

those strategic the your months in the yield And maybe buy factors So our will be X factor the in or not X numbers CO on other risk achieving the on and stabilizes months. view of property lowest or of store by highest the this. and that is to then other

Operator

Berenberg. Carl is question from the Keegan of next from Our line

Keegan Carl

investment, little we it's on for you compares a wondering of more in more could if Can of dive things being maybe historical expense how allocated to and how bit your some the color side the average? it Just R&D tech.

Joseph Margolis

you Could again, please? that question ask

Keegan Carl

Yes.

R&D, color to can average. and give you tech So just with how if on any regards of spending on kind us it how historical curious allocated being to relates your it's your

Scott Stubbs

terms And been not that historically. it's us would something gives feel has in about into call is competitive say something because like what that, public we'd it's the potentially feel like I getting we talk we it probably a like investing a on we're advantage. So of than of it things details higher in

Keegan Carl

our seat I longer permanent? guess maybe of from it. you're the Got I expecting over future your that of investments offset be fair payroll some can it then, mitigate just and of sort these some term mean assume that is expenses to to

Joseph Margolis

way looking are say efficient staffing part would of would at more in I we're store or understand they store terms in item, the and in business. giving revenue increased care in certainly have have the it. importance of We become managers at to managers up also don't and on or taking amount on and revenue are the various of our right that's But stores. I store So they value we no what a et ways that's add this store, terms cetera. probably kind on of the of of to the focused minority what line innovative say participate a of

Operator

the of [Operator America. Instructions] Our of Bank comes Rodriguez line next from from Elvis question

Elvis Rodriguez

spend. a just marketing Scott, follow-up on quick the

the online of XX% impacting the happening that how Can et sort spend? impact are cookies, changes privacy cetera, year-over-year. of search share word said with are you You your plus

Scott Stubbs

now. Yes. as It's of not impacting us

Operator

showing to back closing And the the remarks. queue in Instructions] I'd like any not further moment. at over for to I'm questions any speakers this [Operator turn call

Joseph Margolis

in set thank for you much, want to you well our for and I the Clearly, today. XXXX. And everyone and a interest we We're in questions excited very up talk a your healthy throughout are for performance year. we're to good Space, very Thank great day. about to business. your Extra Great. very have

Operator

call. this participating. Thank conference And you for concludes today's

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

Extra Space Storage (EXR) 24 Feb 222021 Q4 Earnings call transcript