Public Storage (PSA) 30 Oct 192019 Q3 Earnings call transcript

Company Profile

Participants

Ryan Burke	Vice President, Investor Services
Joe Russell	Chief Executive Officer
Tom Boyle	Chief Financial Officer
Shirley Wu	Bank of America
Jeremy Metz	BMO Capital Markets
Smedes Rose	Citi
Todd Thomas	KeyBanc Capital Markets
Steve Sakwa	Evercore ISI.
Ki Bin Kim	SunTrust
Ronald Kamdem	Morgan Stanley
Eric Frankel	Green Street Advisors
Todd Stender	Wells Fargo
Michael Mueller	JPMorgan
Michael Bilerman	Citi
Jon Petersen	Jefferies

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Public Storage Third Quarter 2019 Earnings Conference Call. At this time, all participants lines have been placed in a listen-only mode. [Operator Instructions].

I will now turn the call over to Ryan Burke to begin. Please go ahead.

Ryan Burke

Maria. you, Thank Hello everyone. for us third XXXX joining quarter the call. for earnings you Thank Tom Joe with here Boyle. Russell I'm and

Before we included want to could than are begin, cause we statements a statements statements that forward-looking and of other number all actual of historical uncertainties are fact that on risks call to this subject remind that you are earnings results materially from business These and factors other and affect reports to the those our statements. filed yesterday's differ SEC. could future and described in our that results risks release projected by in adversely with the

otherwise. only is of a reconciliation no as any included the of speak call statements forward-looking measures to We or release. these XXXX. of October result assume of All provide GAAP to revise A update on financial as this or non-GAAP in today new whether XX, we earnings information, statements our obligation events future

SEC of Instructions] on an that find and audio reports can website replay webcast our press You call conference publicstorage.com. release this [Operator

that, With call Joe. to over turn I'll the

Joe Russell

you we volume and move-in property our revenue our same-store and reported consecutive you, growth. and sixth to Ryan, marketing another accelerate saw We us. busiest lease-up our with for between did as In XX% growth good joining the NOI quarter expense X% X%. in quarter, our with utilized drive growth non-same-store Thank season thank quarter

open like call questions. for to I'd the With that,

Operator

of Bank [Operator Instructions] America. Wu Our first the of Shirley question comes of from line

Shirley Wu

guys. morning good Hey,

Tom Boyle

Good morning, Shirley.

Joe Russell

Good morning, Shirley.

Shirley Wu

morning. Good

quarters marketing expenses. continues it XX% this almost So a has and my to call of up already. first to in be the elevated has with few It question do XQ marketing been

whether versus of you side, discounting, and levers more expense? XXXX think the your forward the you that's about are few like as these in XQ the effectiveness into of marketing on about how or going quarters the marketing some strategy So rate thinking the traditional last

Tom Boyle

we have This tools the throughout used We that Shirley. third similar the take I'll is in Thanks, mix of quarter year. Sure. Tom. that one.

rates promotional won't lower into year-over-year. on confident the less spend as received through incrementally speaking as and channel. we've our grown demand But those details particular, been increasing discussed lower the go advertising, I more on XXXX in XXXX discounts we've in and we've but calls, that previous to So response move-in move-ins we've or through directly

So third We up incremental quarter advertising this pretty like move-ins get the been on in move-ins August The lever we're We September. was we've the during July, order quarter to XX% busy included. seasonally cost. in quarter. the pulled the period returns from achieving advertising this for in and getting move-in hard incremental

be expense marginal the are over As customer while advertising value returns attractive, will earned upfront, that is time.

half us two-thirds. of of from as drive directly searches come well our to paid portion move-ins synonymous as we're kind term and which back search our name has Public first the Storage within away And stepping with our meaningfully efficiencies search taking our volume real which of top And brand channels a unpaid online advantage of of comes is in paid almost a on about conversion. product, sector those advantages brand

is The second component scale.

States, We at conversion top and shares local a markets which shopping market the the richer have level. in for customers good for top United better our metropolitan experience in the allows

ending work this use up We'll XX in to continues this So lever lever to occupancy continue points. plan with quarters. to the basis quarter coming

Joe Russell

we to amount spend. pleased activity this knew environment, made very have what quarter traction. we're of customer the clearly, a but competitive and drive not that good able were into marketing the and third in again Tom's strategically decision to amplify spend we're to we by season, to busy going the just we speaking fact we confused challenging get again because the lever increase could the the again And about And we through

XX Because up sets we're as well was traction us leasing are that not the end to go up activity. where of QX marketing traditionally basis see quarter to get lowest much the and again, said likely at very are by points we QX, like into but volume that those our that level quarters, as spend we into continue putting efforts. and Occupancy value to Tom

Shirley Wu

color. Got it. Thanks for the

the on and So on of XQ? of rates? could the side, you little street bit also well move-outs you in speak in the for what side to seeing as volume-wise And terms and a volume terms move-in for rates were rate move-ins

Tom Boyle

Sure.

the hitting volumes So, first.

were flat and down X.X% more. volume volumes So, move-ins were for roughly move-out was down

well. year-to-date as Move-outs and last were really So, through seen a X.X%. trend down year consistent we've

base continue to have from very performance have stays of good So, as see extended we declined. tenant a length move-outs our existing and

is base which and So, solid tenant environment. existing great macro supported labor really by a stable

terms rate, our a this move-in down about were In of the mentioned moment for rates X% I quarter. ago,

second saw pretty move-out modestly the in So, what consistent with X.X%. also quarter; we rates were down

So, XX-Q. the all of disclosed that's in

Shirley Wu

Great. Thank you.

Tom Boyle

Shirley. Thanks

Operator

the of of BMO Metz from Capital Markets. line Our next Jeremy comes question

Jeremy Metz

across start view great it'd with get just on more your there. expected some to And look here Joe the we broad markets, top as supply in back the be of as generally were supply your ones of we state maybe today. to or sit less weaker

the can to in we're across they may be your to and your in we your supply you battle? the and the As still at may are markets relative maybe where some recover start look impacts of where own footprint year talk that current portfolio, peaking heat where cycle of footprints next specific about versus

Joe Russell

a years now, in nationally is to now Sure. is to number Okay. many $X by all doubled the obviously, about markets billion; been been of that in time talking to elevated came what for billion going accounts when $X some in XXXX the XXXX. then level Again equal starting markets XXXX XXXX, that's supply of into billion; and we've $X to XXXX for coming

down. better, hoping our to continue clearly others to decrease We're to us and in, we guiding it's even XX%. as be XX% some are likely but again, statistics say again, And of we XX% it will deliveries markets may XXXX track are many that is that, to view that see XX% or about from anywhere and XX%

this that properties holistically, take square particularly supplies time you've our again, X,XXX again see elevated over anywhere from consideration you X,XXX headwinds. feet. where seen million this in XXX into we And have So, about the markets, market-to-market new that's to commanding period most

with Those question Charlotte, So, tougher of front, Denver, supply. the where are elevated volume maybe cases still to some in Austin, good more been have have specifically decrease level lingering amount markets and and for we Jeremy all that these news child supply your operating to pretty been On poster markets so elevated today? like the the Houston, see effects Chicago. markets, of we're in But of we're dealing starting deliveries now but dramatically. deliveries

a XXXX. that XXXX, time you X of going market. likely into down feet half holistically period this has in Denver, The little So, existing about over for than that take good news is to compared year it's to market went less instance, again; of million square it notch in seen assets. increase and base in XX% But a that supply that was of

activity. got elevated to level of continue So, to around maneuver that you've

maneuver market examples about question, deliveries; Chicago, using markets Again Charlotte, $X hit how going big we no hit level of Austin, Houston of the dealing like square again, to But again but feet It's continue one of we're with to a to those million down like impact and in pricing, of ratcheted acquisition, around, plus where Houston it customer as have any completions and XXXX. et X.X extreme. that. we're million cetera. more markets It's

in are going to development, in more in see motion, with go impact because not aren't Florida, we're is assets and into of or still side going tracking, you we're or isn't York. what's plus $X and potentially Boston, what's about coming that D.C., prediction of planned woods many these that in about And this contemplated. out tied and again, statistics we're flip okay? deals you're So, XXXX billion back the New Seattle, impact parts happen the see So, as are Minneapolis, okay? markets. to minus -- to to our Portland, construction The again going of to these under They're

So, lot we're revenue the that need acquisition. customer got in we the do We've maximize playbook. opportunity maximize to to We're can things to going likely that of we're a good opportunity things continue a drive clearheaded about to there. to

element, is that third well development fact our in seeing we we're I'll what like talk the to own as we do The have pipeline. and

of activity Houston and a we're get into good now where But degree years we we've these number in part are markets into developments. we Austin. a of seeing to Texas of got the three $XXX like a put today's last of So million about pipeline. shifted markets lot for We've development as traction to or into Dallas where two the going new whole again out opportunities broader most lesser a both

call today continues XX%. to look that about It $X.X then you Collectively quite a our And it's pipeline roughly about legacy investment this comment XXXX. if saw XX% quarter even or to development it's about the that we've that that if growth in at NOI you mentioned we portfolio. delivered want since in my I opening well. lease-up at billion and

occupancy because So in develop mature we've more part traction which we assets. matured and is revenue coming strategy and got as good we've clearly the we again of like that quarters successful got opportunities, our and we'll of again again impact out very of see both these

Jeremy Metz

Cali on quickly can in that And context touch well? you as just

Joe Russell

what? sorry Touch on I'm --

Jeremy Metz

the we're what at? for of where -- California? are context What in across views of Just your your supply on kind

Joe Russell

itself? Calling California

Jeremy Metz

Yes.

Joe Russell

So okay.

in most the very good California is for So part shape.

elevated some south markets of eye keeping Diego to County. Now north Diego San some County of the there's close a in San there's parts deliveries outer we're on because within to going

I the little Orange and out development metro L.A. little standpoint a in activity available part new find expensive Empire. the County because bit pretty, more from for in L.A. primarily market if most may very there's fact the in say you're would to able be very a anything right County here inactive here it's Inland and land are

little the into amount market go but heavy San there. close Bay the a base. on, in keeping Francisco, of again you of Jose -- again worries no South San percentage San bit inventory existing big activity a eye we're on of not A When Area again a that Francisco

repeating we really most again the to take leasing said are expansions really what So in existing opportunity well. expansions. own we've had that markets traction And the up continue pretty in I some around our for activity from development the we're to meaningful we're just do that where these pipeline part and assets see doing getting the

seeing the very very that we're would in shape. good I say is and pretty by again for So good pleased traction part California most

Jeremy Metz

color. me quickly. And the that Appreciate one second for

in sense you to back a two past even looking context Just basis rising few I here the points roll bump past move-out just quarters. down at that's which rent back the makes or in-place now you've the mentioned traction XX Tom, years the to flipped the had to go rates. want least of and rents historically here

So is to in-place how of the in there? customers just bringing strategy you're widening wondering at? rents rents a shift you spread reflection pushing reflection the at given is it of that more in and all overall Or in are just a aggressive market

Tom Boyle

I to driver strategy there. No lower fact strategy out contribution the think -- shift which lengthening it's rate existing stays about talked the coming folks that's tenant of rate as at tenant has lower real there. move-in but are length real contributed shifting rates existing at biggest in that move-outs on no rates increases. largely from We've modestly move-in increases, the

lower at decrease coming in rental is So driven Vale the rates. move-ins rates by

Jeremy Metz

for Thanks time. the

Tom Boyle

Thanks, Jeremy.

Operator

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

Smedes Rose

still newer about in talked of your strong I older And is of with I'm take just appeal what the generation redeploy wanted earlier ask very Thanks. some fifth pricing stabilized essentially of coming that the growth maybe you wondering opportunity and talk about markets are advantage in to kind you is Hi. assets your to Q assets of the the apparently in to an for market. portfolio there you facilities? products

Joe Russell

Smedes. Yes, sure

areas So talk a to couple of to different there.

and every benefits of So even use you bit they itself they so today's the first assets can product on in in of were vibrant of all, is and through the type than world that decades one go be can known it's of well many originally developed. cases I more think, as our

in anywhere So seeing portfolio. there's very we're little obsolescence that the

rent at a through locations. technology issue of taking about opportunity of or We're old. signage taken asset we're had. putting we first-wave through much that even them to which though property our curve performance again properties. again the the They're assets modern fifth-generation more What They strategies scheme more of we're them we levels, drive into continue customer years point to XXX we've program going but see with a brand-new actually generation is the might and in or these areas what enhance talked going through and of a elements where your very in paint, XX properties occupancy property improving program technology even of phenomenal one Tomorrow say through which older our would some point good we've doing bit where some standpoint, where that our assets four be we that of many call basically generation this about of with enhance and that and is appeal attributes those little streams to we're to the to stages the – through amplify we've the various we've our revenue California of can three from hopefully property XX office once some would include some taken or we're of align going

So customers already touched We've nationally, and well. working all the parts the instance reception go We've rolling also good from to properties will our boroughs, include first We're of parts that Chicago Florida. like which the number for gone employees well. and now those of then, in of a And that's New many into other getting not going we're quite of program we're markets Carolina. of markets quarter both into into if parts as York.

pretty we're we're what excited anyway about So, doing.

we of get we in a portfolio. as $X.X Again, ultimately spend a the to. million the about have standpoint spent the I or through on we once XXXX little from XXXX, the talked in will likely touch billion entire cost more this Now, about program. markets $XXX about And bit talked being we've context more. program even we'll

far So we're very pleased.

doing efficiency, properties, we also we're where energy some and as environments. on making as again better assets updates both we're to relighting technological interior LEDs Now, this for speak the customer

have that centralized we is number a based had never now to which changing data to adding had of We a control customer a solar of begun systems going It's out activity. lot properties. before. we've our which on us access give good haven't We're system around

of like good in elements I it So very And overall of we're we've got a the number from the motion. mentioned and program feedback results. different like getting

Smedes Rose

you platform mentioned to in largely geared development last Great. that then you wanted just to And I the ask third-party management too and – you was quarter predevelopment properties.

markets like kind looks that to is deceleration aggressively Just Or trends there bring given of independence is convert - what multiple an there on to opportunity in your your a more is across more continued to or platform? strategy, I guess

Joe Russell

industry seeing continue that is assets in typical for of whole a pretty build. again dominated various we're what has to Again, by The development. our kind stages platform this That's pipeline from pipeline a definitely of the as are again seen.

our that also that however come and brand generation a see into to because provide metrics of stabilized weave purely platform search, And the the have can to to whether interested into again based opportunities all scale and we've on more again, like We amount optimization are that seen too. through, able based program it's revenue bring number we're some the owners them we the that assets on again clearly are efforts of anxious into our we they got assets markets. marketing in to their get our the

we're signed we've momentum relative additional in pleased program that a So it's XX in assets. it. got We again, to quarter the the

today, mentioned, So program. backlog as to the XX about properties the got we've And continues in build. I

Smedes Rose

you. Thank Great.

Operator

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

Todd Thomas

Hi. comments for the Thanks. Thanks supply. on

down down here. Tom since move-in rent the move-in follow-up were the rents in to in XXXX They've and bit late be decrease on on a and quarter. mentioned seems wanted X% increasing rates. you that to been Just

but new As with the think occupancy place you think it you that? like where seeing process rents in side, to thoughts are the on sounds regards some that's cycle traction industry about supply where of seeing we you're of and do the in absorption across asking taking good we the any on the are adjust supply still

Tom Boyle

of several years, market-by-market consistent move-in It a I a do rate drive think volume. really trend dynamic. back had we've order in is to go you if Yeah. using

lot we those think what will a happens future in as years So, be going markets. about of on it's in where dependent it

being Tampa, got XX%. just and the Los impacted rates markets are new it going like Florida up on flip So markets to quarter have looking you've you X% mid-single side Angeles and by example, which for Phoenix, given move-in third supply at digits where move-in down you're The it rates Miami those on low for there. to is, or are move-in what's call like rates call

into Houston throw I as well. bucket that

move-in really more areas drive volume are using competitive not a And in in environment. customers a we're tactic where competing we're it's the board, new rates across so the for to

we those XXXX, shift. we're to into As markets see to move to of – likely the mix continue

spoken we've some Chicago about markets were meaningfully impacted the was actually like improve as year. more that in in seen to of traction earlier the markets we've on or the looking more a were that last year those year, at challenged prior is So than this past D.C. cycle, in back maybe they better seeing Washington market

a to revenue be we by speak pretty seek As I'll markets. supply we to on But in let to submarkets. dynamic management new head mix local those XXXX, Joe end I a it's of think different market, within into maximize our going but aggregate as it's

Todd Thomas

the But the of environment sending into which remind far experiencing cause above might much how number increase of it increase the whether then suppose you consider send rates? in And or leasing you're that can you rate us Okay. letters, off-peak on sort around existing rent a And percent you governor to here push? also out Street you'll using in a customers season. you does at there of current place does is little fewer to customers' market, that I realize I you bit a up letters the might be the

Tom Boyle

Sure.

consistent So season. strategy-wise on slow through plan plans the the first using fourth in next we quarter year's and

rental do rate we'll we so So, in throughout do and send coming year, the quarters. the increases

of to out. terms tenant quantity, in on we We In looking think the the the level. year and do at year and better optimize that that we're magnitude

do So, we're is to seeking maximize ultimately revenue. what

et So the vacate as that of tenant, probabilities that cost and as we vacates consideration the take replacing into well cetera. of

but the we more So, things few the year, change vary throughout aggressiveness or into next get strategies quarters. or more as no conservatism consistent and

are of that use in terms In a maximizing over that order governor, there we are place revenue in things make we to that sure time.

And so environments. of is there's the which governors strategy. new we different and move-in in rate different strategies, customer But key use types of place would component certainly, in different with rate the Street and a the

tenants rate the higher Street that tenant higher. of as is get So, cost above leaving

Todd Thomas

Okay. Thank That's helpful. you.

Operator

Evercore question next from comes Steve ISI. line of Our Sakwa of the

Steve Sakwa

good morning Yes, out Thanks. there.

realized note just it strong a I of quarter, question you First at period things of of the the and revenue the And curious guess relates to trends in the was as kind I'm of saw is on throughout how of end the occupancy kind was in anything monthly up kind just sort the that trended there noticeable of ended terms trend third quarter. XX%? occupancy same-store average the

Tom Boyle

Sure.

traffic, year September We of moving Labor terms that typical quarterly, standpoint and ultimately the including improving like in operating that in forward. as drive we quarter did things a to in some extended July did through revenue we trends as So that bit from this through Day aided well September. a both that sale we from our actually trends the the do see

July trends from September, October, and trend. a So, we through did into see we improving generally the consistent as quarter modestly head through

than… nothing to So to other speak really

Steve Sakwa

a thinking occupancy. for realize growth kind you and don't quarter guidepost kind sort third next occupancy but and has at Okay. foot it's below you sort call XX me, about bit at would and And revenue the And it number Is sort you in contract a little the XX came at head gave year? guidance, of basis look there basis range kind further for the provide of into that fourth that the of I something X.X% as historically as QX which in And should been quarter slowdown. to rent for we're be to of that. kind annual end penciling to and about per look average of points, look of of of we of be X.X% excuse guys -- points actual period the that into the XX

Joe Russell

meaning No. and those create to you the Steve metrics there variation I be And what XX October, saw quarter to zone. what the And are out that we can would XX% of of at through consistent we that mentioned well, different some point the guidelines. as But within that point that's Tom occupancy I or I obviously increase. point they're seen would in conditions. that relatively think impact. basis we've again, mean, day, end in the intentional

And it's moment, zone. in at that the same about

So something strategic continuing the that things like in broader environment don't be do. do -- to with it things still same acquisition generation. around ultimately this a is environment we customer that to acquisition ties which capabilities may lift of many have gives really revenue do us a And intent others we're occupancy the that to tough again,

I we've do. QX think well pretty as So, for continuing And that. to the stage set intended do to we're we

Steve Sakwa

there guess the actual to Google Google I expense, the of search lastly and actual search of the sort of separate cost just kind of increased any is stuff. the the per of usage on marketing type sort from cost kind And way just help paid kind of Okay. versus the or advertising search click

disaggregate So sort trying to I of I'm usage? of pricing the increases guess just versus volume

Tom Boyle

volume. I or bids to increased as good of drive well click as strategies -- otherwise, would per a it's I into around cost keyword both mix specifics without Sure. say would bid getting increased

mix So both. of a good

Steve Sakwa

me. Okay. Thanks. it for That’s

Tom Boyle

Thank you.

Operator

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

Ki Bin Kim

questions. Steve's on follow-up to wanted Just

this year, I'm numbers, norm we surprise. new First these head as on be should is artificially might level the just for purposeful, here expense. this strategy we unique as higher Or level from it's because the on This of level part curious up? elevated going and the we is increases -- a next high lower forward? comp kind though, part of normalize into this is shouldn't a of expect today obviously that

Tom Boyle

Sure.

couple the and there's I'd I level. dynamically in is spoke So pretty some much quarter hard a think Bin managed the from at lever One think third things strategy back Ki revenue of thinking it just stepping we on local a keyword the clearly to But pulled of highlight. standpoint. I very it's this behind

as thereafter. to we so, And monitor oscillate what the our returns going are, we're strategies

So happen we forward. can't predict exactly what's going going to

I provide back spend of terms from we of context. you and about and a and acquisition just step where little would standpoint customer historical we're kind are think in what advertising a battling

you in between of end if beginning as the percentage X% cycle for advertising call X% it of So the back Public and the of last Storage, of revenue a hover go cycle time at revenue.

example, part acquisition cycle, spend customer were middle X% pool. our of decreased the very XXXX, we this same-store advertising beginning in the solid was certainly advertising just and environment, touch revenue fundamentals spend. and for over of in As the got healthy very In a

hovering under X%. year-to-date now looking We're it's just

we've and a we're and past occupancy. XXXX, the move-ins new environment we're XXXX, in that some XXXX. it competitive acquisition challenging like in in a we And marketing certainly and context more have environment what using increasing low very to we've tool a attractive now you base a drive So in been was yes, from doing spend, gives that so while been customer

Ki Bin Kim

Street going the And question and helpful. back revenue to rates. That's Okay.

move-in down your X.X%. were rates quarter this So

You extended sale the little longer. Labor Day a bit

occupancy you're for the gains lower rates advertising. and got looking You with that higher

yourself you've I'm the Because curious, your rate. are maybe that off So if growth setting reaccelerate up same-store the company fourth drawn quarter? your for paying in -- XX% to just you're customers revenue potentially into

Some some will one. higher the will move-out, Maybe they'll isn't get cash rent. flowing and stay the day occupancy

I some gains XQ? big the might look XQ to question So it just better than maybe fourth a maybe quarter. recapture in but like feels know that's there's built-in

Tom Boyle

quarter. So used Ki third the obviously I'd is, we in say what the maybe like strategies we Bin

looking Certainly, manage impacts. through Some ultimate to of longer-term them we're customer to have medium- that lifetime and short-term lifetime. revenue value

accelerating markets, of standpoint, to to challenges continue as impacted into going see that's terms in not through we the operating move-ins from change continue real fourth we supply quarter of many where we're we In that whether decelerating, on or particularly an our get October. and face to

You're like had as quarter. more that the going revenues that fourth markets been be to challenging continue and see a have we Atlanta into move-in that drag third looking we're example a fourth at more into quarter on quarter. get and challenging the you well certain as volumes markets markets for that And look to at will has like both

Ki Bin Kim

Thank you. Okay.

Operator

from of [Operator of Instructions] the Our next question line comes Kamdem Stanley. Ronald Morgan

Ronald Kamdem

Hey, two quick ones for me.

First is or you supply. of seeing out job did maybe laying that sort just some of a elevated you good the markets mentioned

standpoint supplier changed the it all? have I you too the cycle? from appetite much early do class equity at product -- may sense -- has investors, of Or had attractive the even in of have is those out of their a Just when on sort think that still private asset about capital pretty for maybe and markets in private

Joe Russell

basically amount positive a a at investment entrants that be in wants variety More for into We're type most the very can more Yes, Ronald, I as ways Cap capital different vehicles terms. variety type where of in look we're or but a that come of yes industry come continues seeing to still think from scale, that definitely part, a of of to often the come really fair into the for which haven't time looking in to rates either adjusted than kind investor to not seeing market. product there's they're challenging again of different time. self-storage again scout markets.

could say, that make And of would terms sense. thinking those may that basing they some not it because off of I buyers may or in may maybe somewhat be risky proformas be

ago on have years of based were that certainly be that change. levels two one or continued to May traction seeing

new a different it's sector. the into anytime And shifting dynamic and we by that's accounts So come all see soon. that don't

Ronald Kamdem

second the My mentioned of opportunity previous you maybe increased. calls acquisition that sort question, I on had Great. think of sort

auction. I think off you mentioned buying some of assets

update ramp something Is an on you that seeing? year? that? volumes we give potential you can maybe what could that acquisition see mean next for And does this Just something Is significantly?

Joe Russell

Sure.

So of likely the in of $XXX then we've closed year. for the again you can acquisition about acquire we've for plus through, this quarter what quarter. -- again We're instance. And what third and got or our Xx we've contract assets we did or obviously in million what minus statistically that's already under fourth our see XXXX pipeline done volume and from whether in to

making the and variety first coming in be or got They're I anxiety-related flat-out owners revenue They it to that may already last they've point, more stages of of more stress wouldn't they've this pro of but call conversations to and talked more call would of different anxiety. lease-up. definitely see the pronounced there's assets. -- at I've either us not built projections as we're formas And two couple I level do in or it year in we some quarters, a having. whether

is volume that By already some has done reasonable acquisition clearly And markets see continue of this nice of virtue that we've to come some we're our number assets what capture and come. to valuations. of way. anticipating We've build there we more really that in to wanted been more the to being we're that That's to seeing around that sellers scale led of into. year able a far

entitled particularly we've And would may even I the more is that and returns reassessing whether of they felt about you piece there. potentially X clearly engage again than actually we're opportunities years ago. to percolate a bit years their development more opportunities X X, land, or and property is have a Again tell I to recently other and that or starting confident acquired X ago, call, X an factor shifted. seen interesting owner what seeing things would that find anticipating some -- have They're X proformas own

Ronald Kamdem

Helpful. you. Thank

Joe Russell

You bet.

Operator

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

Eric Frankel

just do What valet it click Thank per practice you. but you some want competitiveness more more like causing expense is I search? issue storage? or I that's think is understand better and to the on to larger Is of to a -- something just issue? something more Is Is cost it the to monopoly overall the beat the to just the market phenomenon. Or it marketing else? is supply marketing in space? maybe people it rise that aggressive be would related don't death, to

Tom Boyle

No.

you I a to traditional combination It's your think more highlighted. more customers. of a it's the being to a good of acquire willing lot of spend mix operators factors

increased we've As volume and suspect as our seen incremental others well. spend, we've I have

your And that based. great existing the its fact being more folks the Certainly a Google platform one action of a so component is and there's competitive.

So us they their sandbox. within let compete

their so folks click. more cost competitive you per more environment the in is And see and aggressive being

click been with operators also are per cost valet your REITs, for been your regional in but aggressive instance storage those aggressive as public of some not as operators only that more nontraditional of folks like also as have There more well. your some big well have

the level if bids that's adds So do a we do we what of to that a we're What But that all that's like the we get at then need do we component at click get higher environment we decrease? spend it. as again we're if seeing? and local per we increase? which And to managing. What the we volumes cost our look

of And we returns. ultimately returns the earlier, higher, rest click but I rest per and as the we like we're competitors to as what the the environment seeing. see continue like like cost of the whether go spoke our We'll

Eric Frankel

Okay.

foray if guess, regarding model? how have any storage expand valet a obviously storage. quick initiative impact valet Just the another a forward, that their Do thoughts you I on self-storage quite is sort It's the that follow-up announced that into UPS going to model -- an might that of new business. industry initial

Joe Russell

Yeah, on-demand of customer to concept this whole we around see far we've type between traditional our very continue of platform. compared variety in little done thus We've different a Eric differences announcement. tracked. surveys valet self-storage disruption to And that And product see an to continue and/or We've definitely experimented. offering behavior, change is because customer distinct is. own pretty what what we interesting

bin others that The not concept. of a one prior more right now the has a So is UPS, that on have logistical platform network. is based thing obviously,

might testing what it time. not over So way one clearly understanding evolve market. out it They're in

have we're platforms. continue the and watch to with understand So going we other as to

every want traditional whole a more to to as a we might type see self-storage be to But for overall that day, continue And one where customer you A a akin and model, big versus the moving storage traditional valet customer. you each are. the goods. even is access end they at literally time know pay your self-storage and of then you the model don't difference

get basically so. So to customer to knowing again what, traditionally fees wants, those access their having goods again to again core are without self-storage pay two can do relative pretty to which that they big hurdles and a is

it So we'll evolves. see continue track what to and

Eric Frankel

Okay. Thank you.

Joe Russell

bet. You

Operator

of of from next Stender Our question line the Todd Fargo. Wells comes

Todd Stender

thanks. Hi,

Just elevated hitting up you get territory, the to not long-term. where outsized a into when about expectations? some for expectations set guys it's But just you same-store right an definitely marketing get thinking forward? tipped that as just to metrics negative maybe the are running it to sense wanted know. to you guidance, expense on wanted this But the just sense right trending you're you the business that Obviously, to back spend, guys going a item stock of setting a NOI get basis the quarterly pops key today your like negative, of for maybe does it's contribute

Tom Boyle

Sure.

manage guidance the for we advertising quarter. talked we provide about we've the short-term spend the about you're So and for we right, don't don't thought how and

and it items. what through walk it. In expense expectations XX-Q obviously, of within phone can go through read detail point MD&A, terms folks won't do to trends where because, are line of you the through particularly each line the in we for by those I on our I growth, in would the go the

pressures the it mount the think I taxes, continue be payroll to property like. expense property generally level and But

no expenses, under to we're question for this some have So continue we terms likely even away in that's and of that I'd been to there's you XX-Q But as operating point guidance those year expenses think more headed. items. where to marketing pressure from many line of

Todd Stender

you. Thank it. Got

Tom Boyle

you. Thank

Operator

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

Michael Mueller

Yeah, hi.

growth prior we of other if I realized the Because in growth. compared to back a what the little marketing well, spend even the We REVPAF a pickup up with going the as from going ended look coming better and but was the QX, rent in rate. to then saw pickup QX saw different QX rent bit in maybe growth quarter in than at topic of QX a to Just mean, we QX? half was. guess what I it

abnormal a be that I of QX the -- X.X% print? realized in -- Or abnormal to in was was what hindsight and levels guess So growth REVPAF and anything you appears rent in print that QX X.X% with the there see something there growth?

Tom Boyle

wouldn't to I point Sure. in particular. anything

As this seen move through the that the you've you've a move-in is on big quarters through quarter, you seen season into busy drag in as second And the that well. rent previous years growth. contract lower year, and rates third quarter with it those

really So there's nothing new there.

second in Maybe were a X% look third maybe quarter second almost worse and bit trends in pointing were revenue, quarter. the a are quarter if the you made down, X% of to that the component for one little discounts down at about bit factor which the quarter discount in maybe better third little example, a

in our simply moving volume rates that quarter the growth growth back that there, time using because in of if been lower over third contract this as quarter, many folks drive summer period in battling during second pretty rent of So while new move seen generally between we've declined. to we've those order supply and markets been contract that there's pieces lots we've rent decelerate look you but

Michael Mueller

That’s it. helpful. Got

Okay, you. thank

Tom Boyle

Mike. you, Thank

Operator

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

Michael Bilerman

on Shurgard Michael capital market, $X.X you've some Europe So for as U.S. put in Last tapped you're Hey. of out unsecured the in Bilerman from stake you've couple right? of billion years natural sitting It’s your on a unsecured and hedge debt Smedes. about well.

in but know is the appetite I know raise to how your if appetite I to what an you Sort take and reissued, low are preferred rates didn't was redeemed of debt? there capital? that additional today curious given

Tom Boyle

Thanks, Sure. Michael.

uses talked past, we appetite as preferred do as we debt to have think we've I add incremental about have well in as capital. as the incremental of

this we've far so year, billion issued over So, capital. of $X

our largely the we you've preferreds, to do to is to opportunity activity As hopeful been have highlighted, refinance we're and preferred that. existing continue

the As through callable we becomes fourth that there's in move series a fourth quarter. the quarter,

we from is a strategy point, But historically offering your can we get plan stepping very rates right achieved in stock now we attractive historically on using what back attractive to preferred a which is unsecured standpoint, speaking well a cost. sub-X% higher September. as is debt, But both as which coupons,

going both and we So, like forward. markets both we on plan using

Michael Bilerman

right? maybe flow increase to an operating to of there take can XX, and help take of advantage when the or a year spreads spread some So, advantage offset little points fundamentals of preferreds weaker, your being cash weaker appetite bit are get is the in guess XX of at dilution XX paper I lock refinancing positive basis to a you able even core portfolio? least XXX from capture

Tom Boyle

Sure.

could So, permanent by outstanding. we of refinancing use extreme, preferred the it's think in good But standpoint, the Taking that $X very like preferred preferreds. we some our said reducing a redeem from of of permanent what we the capital portfolio capital. to cost we We have our like have you been the source it. the stack. billion We and revolver

earlier it did better preferred. to seek forward, as as debt we and refinance both in acquisition will year to in fund be going development rates. activity, well will using we And to We as order the

Michael Bilerman

just going Have Mountain seen that the discussion, then, at Iron have in? to mix a into as perspective And impact a network gave deeper Vale the didn't from you're the they've logistics markets before. distribution gone strategic a back basis others it's them any of combination lot with you all, and

Joe Russell

anything It characterize I the a Yeah. seen to pronounced the way different. we've goes Michael, still I say back and whole. product as wouldn't

again continues the and disruption benefits little self-storage of very in seen change -- again we've product. to the core that again, all look for customer So a

went realignments direction on. It's actually So, we're going traditional to very see different is are a assets, to actually that of in different that a these any model. which going from hard continue monitor comes even from Clutter and what and interesting Vale bought

in a that again, it. there be continue space from see of we'll evolves to a as lot to So movement whole what seems and

Michael Bilerman

of hope I and going right safe. all a coworkers demand. friends, And then, And drivers your are maybe drive there's there demand Is power? your one else are does be is of terms this fires on there family of your do any anything of facilities Disaster within then market? sorry, from is given now. of just perhaps California and your it my a what A, thought last in closed no could because sort California I the largest -- unfortunately and one lack lot of recognize doing, of And is just

Joe Russell

a we is be seen a lot have direct obviously portfolio. and really at we northern close own that yeah, and can good what eye stress keeping California season fire on to moment, of impact areas any fire we're don't the I But our Yeah. traditionally the with activity. events the haven't the unusual in with elevated they southern because there's Again, And wishes at of both a this themselves appreciate hand. create lot of in some

obviously, -- where upon it's what always are. to what So degree the with dependent specific fires it. And comes

way. disruption a this, a it's of there's through there. out lot impact see But different very particular broader like-for-like -- where But our They get events. fingers a And to say that a in seem more, keeping can stress a to we California be crossed hurricane, we're or lot market. good

Michael Bilerman

Thanks the for time. Yeah.

Tom Boyle

Sure. Thanks, Michael.

Operator

last of from line come Jon Petersen of the Jefferies. question will Our

Jon Petersen

Great, thanks. it one. I But make good

to public you So some guys capital, way grow given a something to just business owners. management cost position if a your as doing you've to your out wondering, self-storage in have the I'm industry? got of like that lend and do that's considered players your that a possibly few third-party other the leverage there of

Joe Russell

now. at space There the capital I point of that's in you an tell lot Yeah, right of intentional that's a ours Jon, wouldn't is large. focus

we our continue direct cetera. growing through portfolio own on going to et be our focused So investments to own more are

And lending And can haven't arm. that more we you far balance see sheet. things of our really into with a different tapped kind continue

Jon Petersen

Okay, got it. Thank you.

Joe Russell

you. Thank

Operator

over remarks. turn like floor management any for to or that additional to back And the our final I'd was question. closing

Ryan Burke

today. Thanks weeks. you to us Maria. in couple forward you of Thanks joining to of of many for all Look a seeing

Operator

does Ladies today's conclude and this gentlemen, you. conference call. Thank

disconnect. now may You

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