Public Storage (PSA) 31 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Ryan Burke	Vice President, Investor Relations
Joe Russell	Chief Executive Officer
Tom Boyle	Chief Financial Officer
Juan Sanabria	Bank of America/Merrill Lynch
Jeremy Metz	BMO Capital Markets
Ronald Kamdem	Morgan Stanley
Smedes Rose	Citi
Eric Frankel	Green Street Advisors
Todd Thomas	KeyBanc Capital Markets
Ki Bin Kim	SunTrust
Tayo Okusanya	Jefferies
Mike Mueller	JPMorgan
Steve Sakwa	Evercore ISI

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Public Storage Third Quarter 2018 Earnings Call. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions] It’s now my pleasure to turn the floor over to Ryan Burke, Vice President of Investor Relations. Sir, you may begin.

Ryan Burke

Thank you, Holly. everyone. afternoon, good morning, Good Thank you earnings third XXXX for joining us call. the quarter for here and I Joe with am Russell Tom Boyle.

in new Before you that and of want subject to to filed earnings release other to and that and of future A forward-looking we the or revise on forward-looking statements our risks the measures of otherwise. of impact included call cause financial non-GAAP information, and described number other GAAP risks are included update historical XX, could differ to the our we reports that statements than provide fact our that These as and yesterday’s or reconciliation results on speak uncertainties we results XXXX materially are today, from could call any obligation adversely statements this a October statements. to in all is with actual only forward-looking begin, All those events as business whether a no statements assume future projected by release. we SEC. of earnings factors statements result this remind are

website, will of Joe. our You audio With replay reports on release, this turn I publicstorage.com. our conference and press webcast that, the call call to an SEC can find over

Joe Russell

open Thank Ryan call questions. the to good for you and I’d for thank quarter. joining Great. like you, a us. We had

Operator

Juan America/Merrill Sanabria, [Operator Instructions] of of Our first Bank line come question the will Lynch. from

Juan Sanabria

which earnings seen all-encompassing. update and speak was little initiatives, think that launched just benefits I on Hi, could web impact a have core how time? good just tech should an is you your the over and us I morning. bit you results about guys pretty am have that you you platform a and I hoping give hoping guys could new

Joe Russell

what to Thanks Juan. are system frontline Web is Yes, or the X. interface call we talking customer you Okay. Champ

fully inventory our in We to over from to X we finish also and XXXX number of started the of attributes throughout now year. a end implemented both that properties the employees the the into it’s system. it Champ is years It our early interface have Web built and customers it has So by integrating several company.

are levels we use. benefits it year are tied up full of now its to And So a of coming several. the to

very of around First all, of interface. it’s built degree a customer high

we knowledge customers So, only of other not district the which it’s the speed to customer, our manager that but which paperless in activity, transactions, our with property it of encourage and can a us. stay tools includes ways use can to movement manager And the in ways enhance system. also

has as So, well. just other of to operations advantages day-to-day it the relative a number

Now, the headlines those are of the system. of some

time will and that in The knowledge customer and continue grow other XXX,XXX to the year-to-date, the not pool customers, X.X things behavior it in million that we moved us so today nearly we to are relative have which even only ways but around we big we that have benefits the existing customers, over a existing about customers, plus of customers. or got minus give understand

the working is system So great.

sourcing, of a we gain highly continued optimize and us But knowledge and to pleased a inherent its over it. proprietary. bringing We is you getting time to management continues can customer system in of design again, are very good system is a with included lot we mentioned revenue enhance and can integrate out traction a I the things, but that’s efficiencies are we like that that It’s overall continue, environment. of to success number we from, that our that I other tell to and things the lot of

Juan Sanabria

point do the from same-store will if just that’s consistently kind easier perspective? last from front at stabilize that occupancy least think occupancy will same-store a mind you then don’t of the you follow-up what And at you the that declined Great. a comps perspective question few have on and quarters,

Tom Boyle

speaking. Tom the frankly it’s throughout so Juan, basis. Occupancy year on trends Sure. have a been year-over-year encouraging

have declines some mask of the in hurricanes momentum And some we positive seen while this quarter we had there. So that have year-over-year particular benefit.

you look at which So system hurricane down at occupancy at whole if a for as the if X.X%, end markets you it’s quarter X.X%. down was the look example the excluding

trends have there. there So been some positive

off speaking, where which in have as no otherwise. have with supply markets a past I this about as think we we us has north by facilities. system them really won’t XX% is you started occupied more of whole impacted rattle here know been than and been XXXX opening I in the occupancy before the generally In was many talked question there impacting of new impacted

are some Looking Francisco Los looking at think step through San markets at quarter system this Angeles XXXX. we trends we are seeing encouraging And our very healthy so wide, XX.X%, occupancies. still we XX.X%, as again I

Juan Sanabria

Thank you.

Operator

of line Capital Metz, will Markets. Jeremy Our question next BMO from the come

Jeremy Metz

wondering us any if in tail get deals you supply a into so give outlook update Joe. an still still per market on lending have margins and Hey, developers at out where changes, look out look basis of and guys. just for of XXXX off would are square sort rest there? the building supply foot your these looking more today, if year that Hey, Can trading available, can this I here the and remains at less is would on spread and where just pretty why are you I attractive or

Joe Russell

Okay. Yes. Jeremy. Thanks

we started environment little you less now into or into of the it’s a a going ‘XX will give that So perspective carried supply have yes, that. way of level on really to you deliveries momentum give me we view build and the consistent and but some me to more bit we and when little on track XXXX, XXXX supply coming let the let color began in XXXX, bit of feel a an of

billion. nationally that, So $X you coming might went in to range, to have XXXX XXXX higher plus say decade or to into had be guess likely XX is $X minus billion. is best to data we equivalent it’s slightly billion XXXX in track $X.X XXXX $X plus XXXX that And billion, we plus top doubled the say overall XXXX. to is deliveries our prior obviously been our And us then or for in seeing telling markets or minus a the be minus going

square In back million we step goes today is is to overall square you the okay this is you inventory a on properties or hitting that that the of facility on to that and market look relative a magnifying, it that’s a just on has with so even say feet. total XXX plus other to element a Tom size minus at that And basis inventory to pronounced, markets XXX let’s So you we amount talked are if or it also year, tracking plus impact been or can XX relative evaluated foot about minus see per occupancy. be market volumes nuance also heavy.

question margin. today out a for plus we’ve still some margin and that So of There we or clearly to this shift rates. may to to some X%, again into past, for is part build say to even in about talked pretty product of cap, developer investors your still ability still are type a sell a today or that’s XX% minus to can tied motivation that’s but a markets. and motivation see low again sell with own want go X%, out developer maybe product. And be funds the build of The an lot put there assets those down, they at to cap they a can continue sell a a at XX% this it, an X%, X% at X% you

So, to that, the enough eased not is there. going really be has shift that there’s down that developer motivation momentum to

or what construction as a Denver, over projects. somewhat there are three these and Dallas, anything in is Austin, data encouraging consider development And have going is the is This markets been that said, mode. isn’t different some pretty little that we Motion properties into we’ve XXXX. pointing in deliveries accurate launched because full This statistically that Jeremy of these we the last to that’s I'm that because most years, are with into which actual are – transition include the data really see planned. fewer we Houston and seen those oversupplied bit Charlotte, Tampa, Now of markets news two

pretty again, obviously we’re have So some seeing that hard benefit hopefully been hit. in those there markets

levels in again, see when XXXX, deliveries Boston, – in Raleigh, at amount however, Portland, of again that still holistic deliveries. markets seen that equal like New to we’re plus likely Now look Miami, going is Beach XXXX, take slightly you and to and elevated Riley to we’ll Palm that York, we’ve West that’s what of place think or minus see we likely

monitoring those actively. we’re So,

it overall can that inventory to continue new I not track going about deal and somewhat to the And react at and day this of environment for that impact ‘XX. again, probably We’re market-to-market. a think to similar we’re – is the an end to XXXX confused with again have

Jeremy Metz

that’s color. quarter, in were the move-in X% I X% they quarter. rates, the they about No, into Switching down look Appreciate little bit, just great gears that. a the in if down were last

rent negative or October, in continue tell? you comps, see it far at comps the if spread all a those – read on from how directionally in is wondering could down on talk traction so is to easier and and So, is right trend too whether about quarter the we that early be trended just read to then better that

Tom Boyle

So let me take apart. that

second Jeremy. down So in to in the footage on X.X% basis the quarter. the you – quarter highlighted move-in as compares thanks, square The rate X.X% a

markets but quarter down So where supply continue not amount so that month. many that they’re in that quarter hold push you more second consistent the rate rate. in ability markets for X.X% sale have through as lower, have more or second new to the and challenged did had down and even though some environment quarter improvement. would in X.X% activity there's variability markets have pretty significant those quarter, a less rate other traction see to a by We in overall a in impacted is the drove say is see we of I some that we the supply, move-in it’s

So highlighted year will in we less other forward may year it be did more. than this supply be and it markets as move some Joe next as impacting impact markets may

down volume go are to to call question see broader supply we and the to move-in So, good. I will good impacted no think line, too there's macro continue The is demand it's be flipside rates markets. the in but some move-in pretty in where is, going by early environment

are So is well. growing is and pocket, the our whole great. and consumers which in Wage are and dollars as putting so job GDP a their increasing more pressures helpful, market customers is

tenant existing base Maybe all in also factors by just that's demand demand taking general supporting they not group being further is the supported around is step same that past our if as in So and a of customer have our better. those customers situation. behaving that the base,

little occupancy a improving. talked trends earlier I So, about

that actually declining existing One and of an is year-over-year. the even of actually drivers move-outs customer with stickier base

So pushes I the those would and say are pulls.

going early are move encouraging as the here, too we call to you in as to exactly it’s end trends think highlight. up some I where but we quarter forward

Jeremy Metz

time. for the Thanks Great.

Joe Russell

Thanks, Jeremy.

Operator

Stanley. Our Morgan Kamdem, question from come next will the of Ronald line

Ronald Kamdem

Hey, thanks the for taking time.

to you going you the existing as the can helpful? XX-Q know the that XQ you just are pushing of in I could be that in the in back what previous customer you color were you and sort increases of base, more it in increases type are year. talk would seeing was Maybe through maybe of Just similar mentioned reaction terms just about provide

Tom Boyle

Sure.

change quarter by is increases sending us received for out there. our customer rate tenant were third well quarter the base, a and those no so busy So existing

or average reasonably on again depending to of range we of the magnitude there, can increases. terms no the the testing kind be our single-digits as increases for and strategies, tweaking always generally strategies but of changes market, speaking, we customer, code In are modifying high dynamics, but the in ZIP and you approach distinct point the large a

Ronald Kamdem

is standouts improvement, sort all the the contract notable bit, that are some in markets rents, think of on Got sounded XQ little for this fair like touched it. a say so or were to it in And there terms helpful. improved you versus it and forth? XQ then of markets I That’s that

Tom Boyle

very certainly is this No, a business. local

of in LA, a much our like would than of higher of the market, even So pockets we LA. our markets Even are other a one market others. with have rate largest within doing market rates that that Valley, within Inland Empire in say will have parts you better in able than see you to at that’s out it’s a demand where strength San at differentials there as Eastern push market Fernando move-in been system, we strongest

is the is down local meaningful. take I is further, and which it business even the would that So this variability

local are by We pricing obviously very unit but a size level on dynamic, very decisions also driving property.

Ronald Kamdem

last Got when the it. a noticed maybe was you if do is list little abating I Alright. markets just challenged one that of more the me just can and you Portland sort maybe bit added of The outlook, color quarter, on so about that supply on? talk from this see what’s to

Joe Russell

to entering a amount the is a for be with challenged the starts Portland we talking again and next the or one an certainly of yes, the inventory. last two. taken poised market in of inventory hold in construction it’s that positioned market Well, that have that of is year that level quarters have outpaced to market couple And again been has as been

our have only there a that We by what properties that’s and talk to, on examples percentage average square are coming that XX of On likely of from radar on is a speak. we quantity, hit that into they inventories. footage is more existing again market properties not as statistically bigger to there I are are roughly number

to Portland, you stress if the market of to a the to likely relative deliveries list level the So, rate of again themselves. it’s an near tied elevated top that’s stack see

those have thing happening have new because that in located. the about we is positioning of outer good some do have got competitive have market, the properties developments We there the the think the Portland. a of portfolio of parts some of XX in Now, well properties, we of we specific locations

we demand, customers to with the do market-to-market, on relative the encourage mentioned, impacts to stay we Tom as the submarket-to-submarket, way we potential to react way again, as have So all evaluate we we individual price, us. how things customer to

inventory eye portfolio that the the new front to got and product, necessarily news we market So, be going have, existing in are to not keep the close the on or impact we at to on sustainable going that up potential think to budding a we this have large. adjacent it’s our good is is good going a most of in to but market

Ronald Kamdem

much. Thanks Helpful. so

Joe Russell

Thank you.

Operator

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

Smedes Rose

bias you sort thank just going pricing acquisition as in seen you. rates of an ask Hi, I wanted bit your a expectations interest at you have any little if and opportunities or to you forward? look in pricing changes upward maybe around

Tom Boyle

yet. I Yes would say not big change Smedes. a

correct to of relative they of but that don’t to are up have potential again the impact in they the higher want investment that You environment have returns in may not interest put owners rate to the with, at a are moment, that picking could to create the tied some deal back decided certain either opportunity we market, their got or stress meet seeing because they level lot that. own properties unfortunately,

happening. were X rates not assets, set years ago, up, a seeing that formas to pretty thinking fringe, assumptions, and market imagine pro few into X yet. some really could be not most but that you seen again taking shift pressure to to place points a areas the And the supply we tied can relative the we be material part, that of only we reverse say, aggressive lease are of owners with the where but the probably stability On are talking have that come may for inquiries, haven’t about, or the that

that markets $XXX When no stabilized there lot sector wants at a us. the and at $XXX, As mean to lot assets make of end come of the still of sense makes I can’t mentioned, I in sense really you trading $XXX, the foot, of square we, the is see a to it day, valuations. certain capital into a

Now, and $XXX have markets to a to can do presence say things shifted good in can we is that that look We out continued have $XXX rounding obviously part the of opportunities foot. minus for we are that or to for our assets scale. increase square that we buy plus have we

number a of have theme year-to-date. the the of amount of buying seen we that’s and have really We that those done

decision another other that allocation into pivoted years to make we to capital our the continuing thing it ago is that made we redevelopment validates completely and Now, the feel and are pipeline. that we investment we have development few

we $XXX value for state-of-the-art that say, square same well. facilities building foot, these like per range, X, can have in new properties. great a square foot So is lease and been A Class in generation $XXX, are are really locations. The They going up

of built benefit short-term which a but look look all that market also XX if months, we and was lease to poster number portfolio continued we just at a and only Houston, to strategically. If the like a it’s in very a and demand over the are in And hurricane XX couple you it’s had related hurricane delivered you that up ago last X of we particular at child there, is we submarkets have of deliver properties that seeing extreme clearly going that there the to even take have properties well core a market. isn’t for say overdevelopment, related, a years not of market this

So seeing way the disciplined are acquisition again, until interesting environment. we we we be continue start very to the opportunities, to approach in going that some again

Smedes Rose

on developers to just all migrate that MSAs into a poster child out or guess of as migration of and helpful. smaller the wondering amount fair dollar you about talked in just Thanks. a the then just biggest levels maybe portfolio, markets you seen obviously development spend, focused people That’s not.. I markets in since super on maybe have well are you of for I those kind be at a so have while And of was some many markets

Joe Russell

deliveries about to go that statistically developers relative level oversupplying markets. some maybe play it’s developments encouraging certain slowing necessarily market, a discipline market see few Yes. markets again that’s ago forward we of say to I those relative to some think XXXX. of oversupplied leave end one I that some the migration, next I that will of relative tapering think of day And wouldn’t down news to a in some the that hopefully but minutes some I these again of at talked to the down

next encouraging. of the see how continues So year discipline will that play through. to we year only through how that’s some after, not again, And but

Smedes Rose

Great.

lot. a thanks Okay,

Joe Russell

Thank you.

Operator

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

Todd Thomas

thanks. Hi,

are development thinning up topic you development both which Just first projects question, this online, as that front a here bit opportunities them pipeline I to are just shrinking? or pipeline bring projects to complete you your is really some the such related seeing the of of guess, development speaking you on and backfill of and specifically inning opportunity set following redevelopment timing the for and is in

Joe Russell

take I Todd, that wouldn’t shrinking. Yes. it’s holistically

continue We well-placed to sides. have, quarters to properties. existing of that, opportunity another with have have look And expansion is or redevelopment the priced the and over for last which continued we land talked we few concurrent about also

has there the shift a the part portfolio. to into investment So been of redevelopment even and more expansion

out so up mentioned ended that because specifically the things hurricane in or some market accelerating that few place is came we the properties. of I potential on Houston of that X ago of a we minutes rebuilds damage that One in as took the of saw the

to close have So, fully are completed. those or being

value a years. but is confident although new good where continue with expertise opportunities for an in of that years, But into natural of and couple So properties. see focused couple team create have put the to not bit going Texas the development Houston, XXXX but in investing in little next to of we again, existing enhancing going it’s last of lot we and balanced. shifting, construction, with that area have and the develop great Dallas expanding feel product shift size and the of a of our really still ground-up we into, over about we instance, there is only more on but the into pipeline it way, Again, is a

going and have Minnesota Washington, Florida, into got properties other We markets.

we construction we the And good capital really But again, ticking decisions a So close we again, of are well, very need that at as the keeping we again, costs and and and our that see are that very we things includes tying part can other look continuing to strong are value. value to make opportunities. create. on allocation which going find factors vibrant to we eye to it be I really sure are as we think a continues

stages at vintage of again likely of with ‘XX, still look particularly to of me, XXXX single stabilization. these and up developments lease develop only to or look between the that the you acquisition, but And range if low we we at from high again of similar in are continued not the how you most to return stack they are in to excuse early them or again acquisitions As population returns. and of minus XXXX today, developments are did up, not plus that double-digit generate that still assets levels really

So, it’s continue around we a good business to for us that. opportunities and good very see again

Todd Thomas

have room I new system improvement And state-of-the-art the how circle and that’s standpoint? biggest system just that that to am and opportunity up helping And technology maximize customer stacked an implemented. wondering for behavior before helpful. where from implementation wanted how of also much your terms understanding the do utilizing back am in of ultimately you is there across system? is that Okay, data and I think then is assuming to just I revenue, your technology just the operations you

Joe Russell

all frankly, in our today drive a higher Yellow center centers ago buyer, to call again say, go even again, there had wouldn’t today a customer was it terms which a Well, predecessor, tied is because of a was that, failing where Web took on deficient Todd. sizable perspective, years Internet, around the I acquisition, where We okay. dominance factors again, a intentionally a with system. we the a decade you X, that of a was Pages, number investment very that its in world world live based a of tied things Champ or different to or and into lot

to backbone, company a can to we’re effective. saw the these to continue so can to like things and continue initiatives, in we’ve we systems and is drive standpoint, continue we proprietary whole evolving. amount knowledge from the fair continue to firm that And tools by in around not of and use but customer in We it's version. able very evolve. design it’s mentioned to that system enhance the with base, even we’ll – we I and technology a that very the it to its that commitment encouraged And as standpoint market current the invest are vibrantly do So, we as very things again, from have a but a the that we only in place and continue got

encouraged by it. So, we’re

Todd Thomas

Okay. Thank you.

Joe Russell

You bet.

Operator

line question next come from SunTrust. Kim, Ki the Our will of Bin

Ki Bin Kim

Thanks.

following on up Todd's Just question.

the where you that so as pulling place, is to? ultimately however way allocation platform, suggesting in versus improved or does the you new change that that in it where CEO, system you in new the invest use platform some should put different towards? incremental the improve mobile lead Is So, or avenues you

Joe Russell

center, Yes. wouldn’t we Those together that. again tools Ki, buy that Internet world I can in drive, got that say okay. because and that resonates other, drive call itself we and again, that a initiatives through does uniquely tied pulled to I ago decade was interrelated very effectively are would one Yellow all drive say to a the even Pages the we've versus system brand

customer. to Internet got We’ve We've tied it’s got that. our search strategies. around we've got engine So, knowledge optimization

again, think vibrant, So, look fine, that we’ve our set of got and the but of not tools, most retain And great continue we initiatives. types very interrelated but valuable we’ll it’s customers. only to improve to opportunities ability a

Ki Bin Kim

have over on or million terms $XXX year. think $XXX capital about year uses sitting million of I you near-term redeemable have of equity some the allocation, you're just curious would cash, think – in where next in you And best plus the you Okay. about forward? going for capital I’m capital of about preferred of be use preferred and obviously is that next

Tom Boyle

Sure.

on capital about the I can have maybe for about talk our talk were uses existing component cash, Bin The maybe we is of cash balance – second of the for, most $XXX Tom, sitting We in question. million So, complete the required part. largely the you Ki as we the highlighted about spoken as there it’s can pipeline. $XXX that's to and million and cash allocation

So next will that to months months. XX over the XX be spent

for highlighted made So company we value returns decision. think and we that good have that’s the and Joe will capital that allocation

we $XX have acquisitions about today. addition, of In contract million under

So, as you add a cash our you those portion of get balance. meaningful together

XXXX allow a front do We’re to capital would on hopeful some change opportunities here from standpoint. at that rates point will the and bring acquisitions back cap acquisition maybe more a allocation shift

what But We earlier, are our that opportunity, that. we today, if financing were and to multiples compared Public $XXX that's there to and new as and today, we not said location value of need which seeing A build look but out $XXX certainly back a to for that seen lot environment picked Joe case, an the the would locations able we’ve Class at allocation to capital more that. go acquisition Storage being a that's at foot is designed square we

Ki Bin Kim

you. thank Okay,

Joe Russell

Thank you.

Operator

line of Advisors. Eric the from Street come will question Green next Frankel, Our

Eric Frankel

the posed like is tax to understand Prop your either be and question if I’d – NOI implementation but comment Thanks. property ballot. uncertain, portfolio – at wanted portfolio? looks to management maybe the hit – get you. will this what eventually, obviously be like a market, at were that team of or in if last how will PSB your growth impact brought to passes bases the obviously expense terms to the on XX Thank I impact you the be XXXX week, that’ll on take I could would ballot split to and roll initiatives

Joe Russell

mean, I come Eric, many, the happening the or we’re three Yes, many this over times. last and decades literally Sure. two gone potential of has tracking

a there we we’ve so that question point closer size, it be there's standpoint. California. have. of no a There an idea it point would frankly, got gotten no what be have but – evaluate happen, where even impact high owned portfolio that could we would to at So as that what What likelihood we impacts it in from could the to is is think haven’t this impact, get a we’ll sizable and question. for that no complexity We've years, a number we a timing continue

that's what relative to us play of think all forward. I ahead to

it's change have it's – no if a it's going idea a frankly to that we happen. So,

more So, out, little perspective it point if potential off putting too more hold point to see give it of We’ll impacts, a realistic, this tell. relative frankly on at something impacts track we a it. know soon could don't it’s but lot we’re potential be to that just what becomes yet. going we’ll because We’ll to at

Eric Frankel

the betas Thank to had. continued. to you. Okay. – That��s be all This I

Joe Russell

Eric. Thanks, Okay.

Operator

Our comes of Tayo the next from line question Jefferies. Okusanya,

Tayo Okusanya

as to see morning starting interacting? regards kind moving acquisition of – an now Hi, Cali. to and talk may there just just are also yes, you issue, over continues have about bit missed good sellers supply you're this versus you a of could I little rates just kind on, outlook, the but be what how I see cap how in earlier in whether buyers to

Joe Russell

very day expectations yet think been a what a and disciplined, the are think been more buyer I end the light I We've year transaction to for environment. there's us appropriate. would expectations at we the to the some at of acquisition not and day talked be create to in that's a Yes, vibrant XXXX say that really material end going shift of both Tayo, seller I relative at length, what but

better of costs. a that So, tied that’s putting in development excess we're heard, instead And lot pipeline, our to far as where into are much can create of sense valuations have seeing our we’re may you value. energies more we far of replacement not

Tayo Okusanya

Great.

with for Shurgard source become also public now capital of an being then does you And not company, Okay. a guys? attractive

Tom Boyle

and went conference the obviously first very we’re for team They had investment since public there. XXXX. Shurgard we’ve hosted happy that time, yesterday. management their Over call

a we have the that that public all company. monetize the there we plan but we’re new team wish today, said business to and As as in best no certainly believers position wishes

Tayo Okusanya

Got it. Thank you. Great.

Joe Russell

you. Thank

Operator

Mueller, [Operator Mike Instructions] of comes JPMorgan. from line question the next Our

Mike Mueller

the just an third-party Hi. can wondering, give roll-out business? Joe, you the on of update us

Joe Russell

Sure.

Mike, us. been build business quarters, team we've talked building we’ve for that’s that the the and as of So, focused couple dedicated last to

rounded Pete has a got fully Panos So, out team. now

whether the So are have in or – national recently SSA. a X started Texas basis now at are markets really X the they hard the over they shows, last hitting participating out SSA on or months

that of transition more outbound process So an begun. has to

are by are We our receptivity we because of the into etcetera. level system of advantages of obviously, operational capabilities platform, encouraged brand coming our getting and our to the

market. third-party management last team We so signed larger encouraged but a We however are and it or portfolio coming have has development new decision fit offering the that backlog imagine mention of into we weighted heavily properties the to those the properties made very into intentionally well. one quarter yet, that are coming feel up. integration new got we component into got to itself brought separate We moment So, more continues can platform. hadn’t you was for by properties properties new program. not pending good that far the really we It’s that did and/or the a as at resonate XX on the a decided

some on amount current properties but are ability time good we good those integrate actually them to pull seeing into once it of we open, that, takes of they to into quality, our our operations. seeing part are because So system

we very So, the by feel platform. encouraged

Mike Mueller

the just next have thus at the you looking million, for And mean, visibility you years few running $XXX million that that out have expansion $XXX on I it. over maintain what’s Got to been separately far? the pipeline,

Joe Russell

got we Many of kind And properties. Mike. as development are obviously, locations good question in It’s prime of a this for activity. X,XXX have candidates them

on The easiest we facility just to So a parking what’s that land put areas X-plus either have ground. got we going already where have is say storey to opportunities into number we always a complement the can tied factors. and/or expansion of it’s depend on or basically

many So, we of touch. have opportunities we yet to have that those

down those. So, to parts the And and actually complicated take existing full what make we be little when a that’s great properties. decision can is then or more bit are to you evaluating need

continue on those. look again, So at case-by-case a we basis, to

not Another in that enable zoning we get of or factor kind may play that into us comes locations. the to would may certain is density like

but part continue development a the so real by pleased vibrant do So be I going think there together am this, able processes been we to very team that to our what estate program. put far relative candidates of of I right to is for number development overall our a and has to it’s

Mike Mueller

Got it.

Okay. you. it. Thank That was

Joe Russell

Mike. Thanks bet. You

Operator

of question next America/Merrill Our of will the Sanabria, line Bank from Juan come Lynch.

Juan Sanabria

Hi.

Just in in a about toady how think XXXX and follow-up on percentages that on exposed X-year you supply, have sense is lease-ups, what of your a XXXX? do changes how you rolling given portfolio basis the that’s

Joe Russell

just deliveries look we more year. X-year Juan, are really on it I tie would rolling Yes. by it what to we in seeing really raw this year basis. at don’t

are then starting I mentioned, is are as up. some in start certain that others which that deliveries shifting So, is and likely I named place shifting that taper markets, take to to likely in there down to

So, as be always top our or I is it to XXXX markets. overall not property pretty nationally, similar track immediate an we it’s to specific mentioned likely again, impact, a to but XX And direct by XXXX.

Juan Sanabria

more the you Okay. are for and mind, rates quarter the in net if wouldn’t far fourth? And so you straight the then guys today third got just one trend question the what on

Tom Boyle

disclosed XX-Q quarter. we the for rates square were per the So, the foot in what

we move-in an on foot are square For basis. annualized rates, per XX.XX

into rates out the summer As lower. fall have will seasonally the of that get and we we

etcetera. many are summer in demand maybe product more a like our As things business, years is case you and would expect, and college the students, moving where the spring the given seasonal used school we for months customers between that, who for in there summer months

through So and we go rates do the into winter as decline. fall the

would And so you that expect. are seeing we as

if consistent standpoint, I October compared asking quarter. I a pretty you year-over-year third say to think into month trend trend would the are from the

Juan Sanabria

you. Thank

Operator

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

Smedes Rose

just follow-up ask thank you. Hi, I a to question. you quick wanted

much, year-to-date has are your guess, been guess, just like lot industries am getting context? that hourly you there I skilled, discipline that on-site talk lower a payroll kind a to I of, lower wondering expectations how have I maybe able that other bid payroll that slightly supervisory follow and Your how cost about in is The of here? labor, and managing been And you’ve broader real worker maybe essentially I even you maintain Could down. flat there? so just that

Joe Russell

there that questions there are no is pressure Smedes, Yes. points.

takes to a We We optimizing give relative to look again, again and burden for competitive size, arena. ways challenging relative can’t no and found the markets, and I our through an teams to base. out of opportunities tough look and that’s on there’s both not very for that throughout optimizing we question that the from a and employment employee use continue again are the operational in avoid to That of supervisory then hourly the environment our ways efficiencies, have what place in. we lot there. to plays do productivity, basis, where are have said, of nature avoided credit we

of and effective that So continue very well markets to a our wage I vibrant and assist with rates a raise HR deal we way that. need with lot us we that have as to think team

levels we help that at a productivity to creating balance of lot ways of can to and optimizing look continue degree a So of, again, that.

we XXXX, to with and forward tough be work we’re play economy continue going to ways are unemployment to very that forward a with find team everything very in environment, again, seeing helping be likely of us of going it’s through a today’s into markets continue as again, we’ve Going that dealing and to this we’re leaders got, is to throughout which environment. sensible great our challenge

Smedes Rose

Okay, thank you.

Operator

the Eric Green Street line Our Advisors. next question of Frankel, comes from

Eric Frankel

you. Thank

but of like looks Dallas. asked, data. follow-up questions some about One talk you could weakest your our markets two maybe It were if Chicago market-specific already was and

lot And market much online seems much is as as we But and so be been inventory that of hasn’t supply under the recently. is that supply. the coming or impression Chicago understandable experiencing Dallas a recovering there are to in

can the comment you trends of maybe Thank you. on there? So some just

Joe Russell

low hopefully, crossed, and are economic there signs Eric. Chicago change, Sure, of we’re deliveries forward that deliveries hoping quarter of over that been is two there there. of the your going burden improvement. only to and has years couple correct. pronounced Yes. the see, point I one next as of there rank market Again, Dallas year. stack deliveries not to deliveries fingers that that pretty last fair sustainability some relative supply product is on Yes, degree many or hopefully, relative well. that to statistics Again, is was fewer particularly It’s going the that see is we some XXXX, needs but hope Again, it’s are showing highlighted some amount to fewer we well. as The of continue into as that going still absorbed. to deliveries. recovery but into we to be to But point

the pressure too. hope we again, that on So, front eases

Eric Frankel

fair hit increases to there? NOI principally it Is to due say big the was tax that property

Joe Russell

right. that’s Yes,

Eric Frankel

Okay, thank you.

Joe Russell

Eric. Thanks,

Operator

the Sakwa, Our come next question will Evercore of ISI. from Steve line

Steve Sakwa

us some guess maybe September where November? was quarter. Thanks. about I kind I the you maybe just through down then there. And guess of more hoping about XX walk we are maybe just July, trends I I the how a of still start sort Tom, good talk could quarter. October little out? give could us of was on morning occupancy third average played and you the know just to August, the look the into out kind bit throughout

Tom Boyle

Steve. Sure,

is you XX of the points. in throughout So, average down the quarter, occupancy terms highlighted, as basis

calls, more the on comparison prior talked at number we’ve the of over the toward comparison month of leads year move-outs the As average the to on the about tougher to that we have last period-end an end compared seen middle month basis. a

of part period-end. between that’s So differential driving average that what’s and

is other before. as thing The hurricane highlighted the I

print. finished XX basis the So period if prior you the sequentially numbers from June compared markets, year, have would and hurricane exclude down for end to X/XX improved points the September to

consistent occupancy July, pretty As those August, September, through months. we throughout look

into got in much Florida, we tougher then occupancy September saw in particular, a As Houston in comp. and we

that And earlier, comp eased, in crica the a So, the occupancy has points. basis to trends as I XXX Across little give rest you moved the year. was occupancy as down bit, difficult Houston. meaningfully in improving a a portfolio, at through but October, Houston sense, lower highlighted have been X/XX through occupancy of still we’ve

in basis the we’re we that the year-over-year, as basis the XX at look down So, points and again, points third comparing XX average to XX. quarter impacted period-end down non-hurricane in about today, occupancy markets

Steve Sakwa

the just and And points Houstons be is to the Okay. blended down Floridas? XX of that kind with clear, basis

Tom Boyle

points No. Houstons excluding basis XX Floridas. is the The the down and

XX the points October. down the basis and If you Houstons you include in XX, are Floridas,

Steve Sakwa

Got it.

Okay. Thanks very much.

Tom Boyle

welcome. are You

Operator

will you. I for comments. closing call Thank back now Ryan over Burke turn the to

Ryan Burke

of thanks of today. you you Holly to forward We all you, to for seeing many joining week. look Thank and us next

Operator

Thank Public you call. participating in for Storage conference today’s

You disconnect. may now

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