Public Storage (PSA) 27 Feb 192018 Q4 Earnings call transcript

Company Profile

Participants

Ryan Burke	Vice President of Investor Relations
Joe Russell	Chief Executive Officer
Tom Boyle	Chief Financial Office
Ronald Kamdem	Morgan Stanley
Todd Thomas	KeyBanc Capital Markets
Smedes Rose	Citi
Ki Bin Kim	SunTrust
Eric Frankel	Green Street Advisors
Mike Mueller	JPMorgan
Jonathan Hughes	Raymond James

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Public Storage Fourth Quarter and Full-Year 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 is now my pleasure to turn the floor over to Ryan Burke, Vice President of Investor Relations. Ryan, you may begin.

Ryan Burke

good and Maria, you, day everyone. Thank for earnings call. you joining us XXXX quarter fourth the for Thank I with am Boyle. here Joe Russell Tom and

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

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

Joe Russell

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

Operator

Thank you.

Our of of first Wills] question from Lynch. America comes the line Merrill Bank [Shirley of

Unidentified Analyst

are bit of 'XX supply improving for markets and little maybe are and just latest your on if deteriorating? a or are what outlooks supply, So color 'XX

Joe Russell

we've entering if markets that $X took two States. billion. and over across many supply amount was particular place last the last of roughly heavy just $X for deliveries seen question in which year, of XXXX, in to billion, over at United Statistically three look amount you years, No in

deliveries. to likely XXXX to is XXXX view be it's for Our similar

at the X,XXX those of is full no feet to XX look minus entered there a that just you has The commanding, is view three is got its there it's market. of question if X,XXX or So plus that's lot properties. million square been totality products pretty years, new in

talked markets we've transparent we've most we've impact seen the quarters, all been entering. as very last around So few that over from the supply the the

are properties they've Another the I many talked these average part of not been the last than of is on properties size but of about level quarter, is bigger of complexion historically. a it the and much delivery only heavy which deliveries these of something

got them in have markets So a of number out capabilities you've a owners some in to or don't tools operate way. these that traditional of the frankly

as and So of come there disappointment challenges learn that I is ultimately these running that and an they both potentially element from the distress could of level think properties. see and larger some of

level there going that XXXX. The in deliveries changing see a and I however, near-term. So the we type all would of these many all have well you to resiliency markets those things entering. been supply of product point many products overhang those there markets Dallas, Denver, things. going But anticipated Those Charlotte, from of be Chicago, they're news, this the the shift? have absorbed about by that. that our is also lower don’t seen of continue behavior of amount we've asked is consumer of include markets the actually have a still impacted. good of new the and the seen first So of about, markets, itself a the of encouraged markets many depth again okay, this those good here really into of One we that is number delivery how are here. we to in where levels the And is couple thinking

of into better markets, Orlando. going Atlanta, our York, LA, San Francisco, include Some Philadelphia, Boston, XXXX New again,

additions. we see from again, coming that we're the The York. good into additional product supply. eyes going instance, impact And Boston, to around New news for some wide additional open is potential do has the So keep our West metrics Portland, consumer Coast, very new been overall markets, pretty and activity outside resilient of to we again, have And far from those less customer competition. supply coming just and we see good because

we quarter continue we a that of But heavy and with XXXX. through we're said So feel seen out we encouraged again playing begin on some that activities feelings the we've of by our XXXX, supply as through in the the to like all fourth environment. not be still things flipside, particularly

Unidentified Analyst

actually about talk into you XQ Could maybe and see Street well? you XQ rate in trends as

Joe Russell

more to that real masks the what quarter. rates talking like fourth Overall, moving in rates the down happened Street think about what our But generally customers they rent were impact just from really in revenue about talk about rates as quarter. us. have X.X%. move actually given down in X.X% rates about I it's the were to We move-in

as So behavior quarter, the trends about really to through move-out we saw need well. you about move-in the and talk talk and we customer that volumes as

we So positive about points the XXX quarter, closed the occupancy. in started were basis in as quarter points basis down occupancy. XX We we fourth

customer quarter fourth the year. quarter all move the year-over-year, volumes best solid And the flat so for be what in throughout volumes in will of encouraging happened trends quarter move is which through pretty

how advertising there, just that that highlighted. rate do achieve attracting so response good move-in with as And spend customers saw as combination customer well I lower that where we increased we of

that, is existing In to continued what from addition and that sticky is a XXXX customers. benefited we trend consistent throughout

occupancy again, the move-ins, in which drove quarter, lower pick-up. the So fourth

that's we're by the as the today, sit of encouraged holding through year. beginning trends the obviously, of here slow part the through quarter customer largely we quarter. overall were the first And we seasonally fourth part So, at

So we'll as busy the into watch to progresses here that in months. need next get the season we how several

Unidentified Analyst

or as take you is that that spend 'XX just strength you mentioned? to that through that maybe well, of of Do a the out function actual advertising continue beginning

Joe Russell

about little talk spend. bit a the marketing let's Well,

our by previous spent I've on gone calls. did of we search So as We've the incrementally the we've online in the we've increase quarter. the the XX% to is the that about brand to year power encouraged paid spending, driver through discovered talked Public We've that Storage was spend. customer spend, The spend that of we're throughout been reception advertising real that XXXX. and because more increased response what that receiving

as that into as and been continue get to that we So well use XXXX. tool we've encouraged by will

a And as well. we're in traffic lever was of traffic. So quarter fourth little to on first quarter that XXXX harder drive to a that decision certainly a to push drive continuing the

Operator

of question line Morgan Stanley. Our from Ronald Kamdem the of comes next

Ronald Kamdem

sticking in just I'm on tax year just obviously big guidance. you you maybe spend around Just thinking are came we can have you looking I with how -- buckets know expenses, should providing growing beyond? the as about about property on-site But talk at payroll. think property well. So is the maybe in marketing and not full touched Xs, 'XX X.X, you

Just guys that and in are about thinking you curious 'XX how beyond?

Joe Russell

and I point out would for expectations you have XX-K, items. MD&A we spend disclosure the line-by-line in the to breaks which the our

increase. it property taxes I reasonably that well, to expect is which continue to we think actually, covered you

we tight be that the at a at pressure But around marketing efficiencies, we property pressure labor expect go to very to year. grow just market be continues same wage on. we attract throughout employees I touched down there the continues another certainly some update And there. while through list time, XXXX, On-site property point level. the rates X% increase spend, On able to being manager We right the will with and out to there. as the obviously payroll

We here of expect to spend as in online response the beginning seeing to good XXXX drive well. there see we good is our to And primary did we're a traffic. and there continue tool

Ronald Kamdem

potential moving some months had? if And a can is all development, those that that on maybe with And second you opportunity coming are is see opening to making distress the Thank of question. some formas two-part distressed? delays of to Is What just about properties. projects, of being their to hearing back terms it guys, six comments are you. just supply road One the an color, development the then ground down you or piece us terms three on acquire you pro going the yourself of properties and give ago. trying in maybe the in you maybe versus for

Joe Russell

we aggressive. historically Yes, look acquiring there buy environment calling an that in is aggressive much right as with absolute start comes and the that's where opportunity right going think to basis. better we What the be And time the would is more stress. been would mean valuations of more accumulating at and and potentially much again I that time start that getting properties much to level out elevated to an

from around away ahead wants volume, we three not the acquisition formas we've sector. two markets, our We at still still price the think years, but has which the market capital to values pro through. there point And assets. played and of out very acquire If been good of for we again you where are not into at but go to frothiness that last a have the there is that look out today some into reasonable. disciplined part found shied that's the There only that or also lot XXXX come are decided

either to on moment the starting of different reality I stabilization revenue are is I we these talk expected time and population very see potential, ties returns assets. or lines timeline lease there think than a owners that ago to that up

very this for starts the some would obviously reverse stress out to meeting of not to be are different and are from a more was coming maybe and prepared and few of there those to the the inquiries time aggressive reasons, that just seeing the partners, there go it market. include ready sheet we're pro maybe would lenders right going us out more Anecdotally, when I maybe So I the to balance stress and points that very owners either saying all say or entering got we've it is some that forma wow, thought be are or than exit. now some frankly

opportunities. to going look we're for track and So continue those to

which You saw in is and of healthy a to is We that obviously where through we're and got not from really think XXXX, everything pipeline. consistent internal we a only our the our, deliver very a quarterly almost do metrics own strong that development which opportunity studying putting brand-new we've we've foot, of numbers, all could good submarket, can into for in say type structure trade submarkets very to continue that. our in to ownership today's a generation product higher build to environment this where multiple product square we got property $XXX

and of plus good focused or opportunity we very minus pivoted vibrant a into years see five ago. are a we We development So lot program there.

and potentially again, our of redevelopment into redevelopment by iconic well well have as more doing locations, them efforts very expansion. own either assets bigger make We opportunities great more our take some ultimately shifted got where profitable even performing to again or we've or

development again costs many is tools a There now. spectrum redevelopment of Part that our to it's applied of of which right and a on from the markets So shifting getting little bit to waiting whether pressure driving through what's many concrete. relative capabilities even or construction, expensive. that learned round-up land more components portfolio, are that, steel, being cost is more labor, in more we've

not very to if well, are So the we're that capital from put a us. that to strategy. very pipeline expectations. four very our close the returns they returns to then into good ahead development that And properties But exceeding use are have think on own keeping we market continue overall, will good over of that. of last three be we appropriate getting meeting or a we and that that’s very we with we continue continue deliver think the And the we years very eye

Ronald Kamdem

be that's My suggests metrics, right compared the rents. If the about revenue X.X% math end I'm annual just last in question doing did XQ. square-foot would growth X.X% looking in period of to at the the occupancy contract the you that that

portfolio sitting way the is Just the stabilize taken Does which bit starting business are here that about little like well. and trying to risks obviously what at? spend marketing I'm skewed absorbing as is get supply? Or and to some you today basically extra feel of the a being it are is the the commentary

Joe Russell

many year have of and perspective But maybe to that that we traction, shifted resiliency my of encouraged again where are use lease to in I we of were be and as say that large the XXXX, which a And seeing, to the include types the standpoint, us continued things here saw ago, we compared sector behaves we as many second we can we today the particularly are seeing the for of know well. we yes, some outlook that resiliency. products I'll give things would good way color add you more around given to to fill-ups an good from the year. some up from it that unique sitting are Tom our the that half

here today, place. feel better in a sitting are So we like we

into that moving how going see plays in Now, we through. busy season, will

We we ago. maneuver than a are few come But into continues weeks going will we that are in that. were to we And in place as all a considered, a how just markets and see to that from we feel supply out well. year the like things continue to figure around the better

are all encouraged. a little two-edged But sword. more on-balance we it's of bit considered, and So things we are

Tom Boyle

where to look the about several we at add development cycle a things would occupancies as of north beginning couple think of is to XX%. of were have I that. the you you back years One that of

the some as You markets occupancy in have look of and impacted been that supply in of those up some at last certainly we years, some market. the areas. several today, impacted given watched And we

to expect be in impacted others. We

are seeing deterioration around so put markets improvement where we on that where And are and more is and seeing based of markets new there we some a take supply.

contract around the into your think X.X% and X.X% X.X% question you did I math rent the The XXXX. you aggregate end period gives go we as math, right.

highlighted As pretty Xst as at call, we trends, on January look the since I consistent. earlier

continues XX to or have rent occupancy basis is impacted But that existing So tenant think And be I down rent roll been math up with end and did today. by trends contract time occupancy rate that increases. in period points consistent about period right. you

Operator

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

Todd Thomas

XX%. disclosed following Just that first spread on XX-K question, little you was that move-out and was a the this I morning, filed up move-in on guess negative bit. curious the was I just

we widest And then you cycle, revenue to X.X%. think Any you we may the by see So that contributes cycle. whether growth in you that sense about for spread spread? And are the during customers? that's move-in about how pricing should and rates Tom where the year-over-year lower new noted were stabilization that some can much how in talk

Joe Russell

So me let that by take piece-by-piece.

did volume highlighted highlighted, So we that quarter. call, deteriorate earlier X.X%. drive was call customers achieved it did move-in I strategy in rates that be we the to see, the move-in as down to a you rental spread That for move-out that XX% during move-in the

so we rate achieved hard to about volume because about move-in And XXXX. without best throughout volumes, it's that the talked was the talk we I achieved volume move-in that

enter those been so a And pressure both that those by in We're some we and going to of highlighted see in impact rate of markets new I'm having get of really that there many supply. the is see rental to it's certainly, will impacted some list Joe XXXX. markets new But markets as that combination we rate rental factors. sure

as outs flipside of are increases very of ability employment through is and said sticky like all But a the one. that customers busy so And the and And by on been base. perform were basis the encouraged the challenging as earlier, market, I've those volume get behavior think continues wage a the existing to well. tenant that base environment, here, we those our our macro by I tenant and we've send growth, afford remains to to the think things those performance are months customers us rental supported trends. move there I contributing existing rate So down environment the

Todd Thomas

quarter. move-in a and footage drove square you talk quarter year year that points seasonal XX% the basis move-ins, under the for is higher which the full mentioned XXX you quarter. the of on fourth business fourth the prior up storing obviously represented just And you about And so is versus basis the

So that effect can it broadly or and point marketing this year the you than less there rental was in years lot positive on spend quarter seems Was the in to you like higher prior was anything led fourth the activity the move-ins. to? that and fourth had there a that seasonality about talk more it quarter

Joe Russell

I will test more which And much and season, performance. see we on real our think we'll said, traffic stores we we as where during see volume are get pretty you factors. we impact number summarized the the as be a the busy XXXX. to a and litmus get And of we in the months summer encouraged have will by well, XXXX through it I through saw it big our

So more to there. come

Todd Thomas

seen seen first you've starting you less is the Have some to in or recent where that? seasonality materialize quarter quarters, this

Joe Russell

different business. different, think from for about seasonality to quarter the the prior There through reasons standpoint. versus year. nothing this seasonality storage a years I customer in was of is continue we the different see It different fourth times year use

in the students the You fourth college don't quarter. have

are You in in a the don't district into to have fall. folks get moving that new school the summer,

we So seasonality there be expect be to there. is XXXX that different going no will to continue and

Operator

comes Smedes next Citi. the from of question of line Rose Our

Smedes Rose

business? go in to site expense offset I to you wage And put go think was you back also to there increases. Or to about help able employees wanted need that to the you had you on on order hours wondering part for maybe in that in reduced if perhaps more XX-K it or of is mentioned how some if more the eliminates I side, there? automation of the are the the

Joe Russell

some in properties in which we put Web Smedes, into talked what our system, we XXXX X of degree XXXX. about was our did Champ all through

to were a intuitive able able much system, a X customer along Web on It's into is much training. is question to employees again new come throughout training with more were company on our no hours more There the so organization. optimize entire its labor we had we Champ year, which full interface the system program. So based efficient design, XXXX

So this saw I got good we've lot And through a some of traction we work say there. would system. that

be the is built more and level coupled adapt XXXX by to of great new around the easier same evolve from learn employees. customer with into the may It's standpoint. that use additional there not a to and timely efficient So making going all functionality standpoint efficiency news experience system much itself again benefit. But continues the and

already think thing arena talked in is So seeing a employment the toughest price I over have the XXXX. through traction which is labor that has something of in in that The the will decade. we about system is Tom overall lot we pressure that we are a well went see, seen

a looking are labor we day, So it. properties of the But many end of fundamentally with cut something can and beyond actually to of as a at we every And we point ways single force, at as person optimize our run where our many need really forward that key are to our run and thinking can't you're we day property. properties asking do the what each at size people. until is that we the

at not to a we of to that that’s the are point clearly put downstream amount But fair how time take yet. concept. figure to we will that opportunities system. into out something It's interesting So of an have those any

Smedes Rose

rates. of source that properties to mature high venture -- pricing maybe I in from the capital. you also ask, is to been very seems or cap Or a and platform? you something relatively very The doing retain no wanted an just And is of use would at to jump third-party sales it as properties more joint pricing not just that to strong we management has hearing start the and were in contracts XX-K mean sell other there interested sticky them? financing there be keep plans that I low opportunity But thing wondering, or just mentioned

Joe Russell

am think past. third-party continue would mean again evaluate you the don't that’s I Well, component a I as would strategic that in standpoint, to necessary that’s jumpstart we evolving something that’s strategy. platform. tell -- not from just our I I we to would have But

as with have that I they arise. we to structure all we're pleased direction But part, I portfolio we'll would point alternatives that size and right the the scale consider and the For full you and -- very no, most wouldn't with the ownership now. continue

Operator

line next comes the SunTrust. Bin Our Ki from question Kim of of

Ki Bin Kim

for that years? think like a your the you're I Can increasing. customers have of So talk you can past differently? how's talking if kind about the that magnitude what mentioned over over we stay year answer we maybe about and been What and couple of of trend average percent length there

Joe Russell

What and some specifically we the through was the increased of saw XX-K from saw what that move-ins the length XXXX. in highlighted stay we we of

we good a with about are in traction Overall, a we've the the saw talked metrics year. us what the there. consistent are with our So under portfolio, past, pretty little so for entire of customers XX% some

some As at overall, but we not this we've in the metrics. point fee to K, seen highlighted modest change those encouraging improvement a But trends.

Ki Bin Kim

so have and maybe rent can trying customers four I months, a sense timeframe, the meaningful three of and months or eligible is, XX% what But down? But down year, off up sure it we're that they a what similar off be? not the get a how a what letter customers their actually for And when cut I'm that’s XX% know is. letter. roll on just pool cut your increase getting letter get rolling what the a to depend over assuming been once on within to that I'm And the get of percent end

Joe Russell

the roll existing down, I'm about not question. you Bin, what with roll tenants? down understanding The talking are Ki

Ki Bin Kim

What So four that that of is call leaving actually a basically letter. my up it question months increase so get if percent theory, might… customers, ends rent of in XX% XX% within or

Joe Russell

charge can efficacy customers propensity analysis. is key around the that metrics certainly, but very factors. component seek vacate to tenant the And income on closely. program, our the rate we rental thereafter optimize that's many watch we that the to that It's to of And obviously based increase existing a we

Operator

comes Eric of [Operator Street Instructions] of Green line the Advisors. next question from Our Frankel

Eric Frankel

like you the that noticed changed third-party have there's on market Obviously, X% respectively, storage And share much I question, share share over percentages broad a five market how the and operators with of that? hasn't business? year. include of the market professionalization of more been top Just course and of lot XX% look your hand those that what your the you and if volume. what that management Do a is XX-K,

Joe Russell

hand. in that get can me. that data don't don't of have on something industry I front I It's we have talk offline. and that about some But

Eric Frankel

increased you the five it stayed Do the think U.S. top management the or versus the last versus same third-party year, all of operators of stock?

Joe Russell

don't know. I

to We in data. that have look have me. at front of don't it I

Eric Frankel

-- you think guys you you're Do overtime? you bit target today. targets have acquisitions pricey Do have that goal any obviously be of fairly what sensitive of are your guys to you a price and should a little market or think share still

Joe Russell

market on mean, You per basis? a

Eric Frankel

Yes, per nationally, and market sure.

Joe Russell

never mean, share. in share that no. that internationally, have number one XX% benefits market Well, And no see we is whether it's almost versus -- instance. XX% have inherent every or we question scientific to another. XX% it's for or market There's commanding best I that

more part, is most the better. for So share

advantageous only number cetera. relative marketing obviously that we're tactics not now our we continually can and of the a that the our Internet, in And grow through and opportunities for presence for things ways, party that look management be are the scale world all very to come but through the scale. our today's tools using in to physical third One et through ownership platform

we operator largest market, benefits and almost metropolitan constantly in we let's ways enjoy by and that every But a that for share, stage So our meaningful put see literally factor a that. the way. that optimize crossing it to the we to lot inherent of look fact do

Eric Frankel

and And market more related controlling and to more properties. share

I correct? Your guess third you party business XX-K XX third-party disclosed Is manage that management stores.

Joe Russell

we Today, okay. program, have the Well, XX, no. in

third we exactly at ago. party zero. announced you from So our literally started we a year look business And literally program, entrée if management into our

that ground announced place. Panos, has last the we leader, basically it XX Pete being not on that’s the when the had designated months. did senior So team We over up. been working And a a build place, team now have business in have to in fully he we diligently year-ago, a from

seeing our to our very include So our itself, which the business. of that traction we're into offering, the entrée we're seeing pleased receptivity brand We're obviously our the with the components from good insurance operational capabilities, to cetera. also et prowess, our the a of which revenue. sharing again, fee, ability all to tied And initiatives very of competitive part our include be marketing

offering So out that doing We've outbound a on. efforts. much and compelling. is team build got very Pete the more are now his to backlog continues

taken is place with similar what number to the get of programs think that others are into because business, of properties our being overtime take does are coming I quarters typically entrée build, So has many built. to which these to maybe the it a is pipeline

healthy we backlog a number So, well. have a that those includes of it as properties in

We of be in been that our either place into have to facilities decided properties have a come number versus themselves running platform. up the have platform that or coming another party third

opportunities good lot this and continue see going into we'll there of year. to a good we see traction So

Eric Frankel

that ask how have fast have Do time on same I the I in the Europe. just depending grow? offering, or company. stake increasing probably few after Shurgard I'll the you related last staying questions. a now over own And to XX% decreasing more foresee or just they one guess you

Joe Russell

comment same I I that capable. PSP, would thing the we and We to example, say use an and view teams sponsorship you've Well, Eric think of very would the commitment of have our a Shurgard.

we whole. as full the key I a their go to decade got to really on well. be their hard a We really And forward with went continue they optimizing entity again efforts of great that their to platform we worked opportunity think think their sponsor a and will IPO portfolio, continue and own. over capabilities. committed They've to have last be

we just the specific a very that. percentage But really to sponsorship I'm I'll to endorsement talk from standpoint strong So a entity. going to you plan have not tell that of

Operator

the of Our from Mueller JPMorgan. comes line next question Mike from

Mike Mueller

financing preferred. the Just a question, Y quick series you called

plans debt, either looking at at replace the preferreds, other are finance what et looking cetera? it, to curious Just that,

Joe Russell

the issue a redemption XX is X March. will redeem XXs and the did Y and We X at coupon. of preferred notice end we That and the series

those. redeem a view we capital good to that decision So as allocation

tools both the our many debt pretty finished $XXX market the as market. disposal. now, million we is at have cash. attractive well The And We preferred as year right in with financing

quarter, address of financing to of lots the $XXX end good. So at the the and tools million that redemption markets are

Mike Mueller

But bias preferred? or terms this debt of no at in point

Joe Russell

No.

Operator

question of the Raymond line next of Hughes Our from Jonathan comes James.

Jonathan Hughes

it on than occupancy said growth the quarter view because the in is occupancy. Has metric, prior that three using occupancy way occupancy is period at implied period revenue calls better in following a using to end releases? predicted Tom, reason the worse using end that I you the for changed? earnings average past look growth And asked average revenue and

Tom Boyle

shifted good that’s that a metric some really trends as the probably went shifting we a average at as vacate month. we through We better was And is looked for being about the throughout reason had Yes, consumer to talking trends XXXX. talked question. and

We have that. now lapped

particularly we end end period fact that metric the period the so And quarter, trend, look increased a occupancy given the is for the throughout average. on better an at year-over-year fourth basis quarter to a

to answer is as lapped you XXXX differential. going are So close end we Period to as have short is get. that

point you that indicator an to So as I would towards. to look

Jonathan Hughes

were remind preferences just changing what you could And us again? the

Tom Boyle

we've month into inventory of to of customers vacate following. electing like we allowed moving talked at was more months. part where that the the get lot saw the us more and about that end something the of before end just a And getting we customers there to towards We month of busy back the the

So that saw change XXXX. encouraging another behavior was we through customer

Jonathan Hughes

don't will this continue year? that think And you

Tom Boyle

it in so just we've lapped It's happened XXXX, will. that it. It

Jonathan Hughes

I XXXX. just what's have the guidance that some $XXX at Can CapEx this about color of a spend increase XXXX the And year, million suggests CapEx then guidance. actually bit you $XXX XX% But give might a gotten that million understand into us below last spend was some But increase? driving shifted year. looking on

Joe Russell

So going it's by initiative did number an primarily a driven lot to we product. existing testing through delivering that includes enhancements XXXX of of to that a our be on that we're

And to assets, at basically things it our components go few what opportunities the improve efficiency suited use So looking our last program like through cost physical an elements has products number well labeled think development with of from et some to well to as we've of that as years, and a five our a are utilities, cetera. of assets. do we've the really to standpoint, over a existing part generation and the that as opportunity refresh we back up come

with lines environments, things signage, of make our So of like some and it lot simple it just on more things a up a to do using appeal well, customer which only the overtime online them orange but amount efforts, for retooling again much curb them includes a paint, lot oriented. done that plays we learned we've simple not of that office testing dominant

paperless a environment now webcam have with We too.

And like So we're and we to doing things equation, more in way. and different need fewer very LED, the the external efficient space landscaping. internal a filing that and then with office side use cabinets can efficiency upgrading of

we So usage. less have water

looking are We at solar.

speak. we're solar as So on doing we some testing

and So five that good capabilities that use there's deliver meaningful I into of, portfolio. we've our as we product in existing United markets product to investments reaction now across we seen to enhanced generation a that really going States the new many as think, number our you're see

likely effort. West we're parts to year, many on of to launch this plus Coast. going spend or the that $XXX in million So about minus It's

when So opportunity in at number actually of we of end some here a year, that are while the may out and have the show for you're instance of NAREIT, to you an town. towards display

about very So And we're going excited getting benefits we're existing employees. we're good what really to We're the excited traction portfolio. in customers about see from and from reaction that this. overall getting we're

Eric Frankel

stores pool then And outside that's how not of on much you stabilized. same-store roll do XXX into last expect portion pool. one to a the on that XX the realized are feet I the But million this of square and same-store large the year?

Joe Russell

cost as in. make We'll on the the as January X, appropriate it occupancy their would rate the and that of will of to be that look with number based at rental properties and both within will well well of as when those it we as revenue XXXX And as associated be stabilized properties, operations. determination, pool growth that roll be

XXXX within will So our I stabilized we that will of versus to are them They many with properties market those are be as that the and of are. acquisitions, the in. well our same-store the philosophy would those developments ensure into XXXX that is roll expect pool. within properties properties and the some our when as other market added XXXX stabilized roll

any won't XXXX about expansions will other and are some those the that period well given properties in there categories And when the rolling are they the in be revenue talking is in. as be rolled XXXX in we stabilized with associated going So benefits that fact that they are probably in.

by are evaluate. any that As there damage, category, other as et impacted well natural we'll disasters, cetera properties

have to for a about So this at but prepared be for you we'll point, the call. certainly first don't quarter I number talk that

Operator

and that floor ladies like our the over closing or Burke now Ryan back remarks. turn And for I additional final thank any you question. to was would gentlemen,

Ryan Burke

the today. and to a of to connecting Thank And look all us joining day. you, you coming We with Maria. Have thanks for weeks months. forward in you nice

Operator

today's gentlemen. Thank conference This does you, call. conclude and ladies

You may now disconnect.

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