Public Storage (PSA) 26 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Ryan Burke	Vice President, Investor Relations
Joe Russell	President and Chief Executive Officer
Tom Boyle	Senior Vice President and Chief Financial Officer
Shirley Wu	Bank of America
Jeremy Metz	BMO Capital Markets
Smedes Rose	Citi
Steve Sakwa	Evercore ISI
Todd Thomas	KeyBanc Capital Markets
Ki Bin Kim	SunTrust
Ryan Lumb	Green Street Advisors
Michael Mueller	JPMorgan

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 2019 Earnings Call. At this time, all participants have been placed in a listen-only mode. And the floor will be open 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. begin. may you Ryan,

Ryan Burke

Good fourth Thank I'm quarter and Joe Maria. us here for for Russell Boyle. our XXXX Tom day you you everyone. joining with Thank earnings call.

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

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

You to our that and initially of yourself audio replay do questions. our SEC call publicstorage.com. you release, can on that an this ask website limit reports at find two press We

to in questions additional those, course, you if Of have queue. please jump feel after free back

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

Joe Russell

for Thank with same-store quarter consecutive us. you between quarter We and and reported thank X%. our seventh joining where revenue Ryan, you had we a good X% growth

refer X-K share for filed an REIT any per this won't of disclosed storage to previously updates we Australian-based we XX, Australian X.XX securities entities dollars. the X-K XXX% AUD its in February stapled and acquire a controlled and we call. provide the As proposal on to on submitted of Please non-binding national

open I'd Now, the call be for questions. to like

Operator

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

Shirley Wu

for guys. question. the Hey, Thanks taking

Joe Russell

Shirley. Hi,

Shirley Wu

the marketing So is my spend. first on question

roughly up XXXX. XX% it's So in

you of I And any your was to trend in effectiveness XXXX? the are thoughts how incremental think what So that's to spend? on curious going as

Tom Boyle

the Shirley, then Sure. as bit head little in we quarter and speak advertising spend I'll Tom. outlook XXXX. it's a about our into

communicating advertising liked So a with what spend XXXX. been we've consistent XXXX. strategy the throughout increase we've through We've pretty in seen on

spent received customers. the we as liked more from money, response we we've demand so And

fourth was XX% from as during to quarter of during That season customers the rate up Advertising last discussed attract in call, more the the the in did harder advertising we quarter. period. pulled on quarter busy moderate proactively growth our we've time and lever third on the that third

continue have we back, real to online. advantages Stepping

synonymous a channels. is a with or of product our term through move-ins come Those largest move-ins which name our channels. are through direct unpaid top-search our brand channels. two-thirds drives site our and Roughly Our either unpaid of meaningful to portion

through advertising, move-ins our addition come half that paid which In about of at search to brand a comes lower cost. and brand

those So online. utilizing are we give which today us with some advantages

strategy similar utilize We social local talk Google is we we it's set so on a our primary and pricing very to affiliates and as given a really our spend, how that granular, we that, advertising level. bidding managed to dynamically tool our But we a and portion of in lot media very like can do addition Google. local and well. set about

of a lot a spent plan. we marketing about So time it's but talking broader Google,

like to advertising spend. to would that we'll from we're XXXX, into I spend head anticipate if seeing the that incremental we the traffic that As we continue continue

XXXX, in what far seen. so we've like to And continue we

-- along on challenging pull stores that environment. that rate what what So, and in to we to we a would operating lever continue discounting changes our rental a drive traffic with anticipate to remains is

Shirley Wu

helpful. That's it. Got

XQ as in on can seeing rates for XQ, terms in far street bit as what of talk then and you your well flip into side, rates? little move-in -- So you're the and a so

Tom Boyle

Sure.

know think We really don't that valuable. as move-in rates So, to you are rates. more really like street about we talk Shirley,

X.X% move-in is quarters. lower volumes bit quarter the have in which were to move-in the we volumes. So down flat did But were third in in The the and a quarter. what quarter, rate the second little third in we better saw second and move-in roughly than X.X% compared

while So, existing continued tenants. by be X.X%, down volumes stays move-in existing to good were we of by lengthening very and benefited performance continue tenants

were And as X.X% down volumes so, move-out well.

existing acquisition -- challenging initial So of there remains continued tenants, but good operating environment. customers or amongst trends good in initial this the

Shirley Wu

Thanks guys. it. Got

Tom Boyle

Yes.

Operator

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

Jeremy Metz

can't back about to what to Hey, go lot have you I in expansions. the on question as the you Joe. the is Tom. developments related. process and that's not guess think understand NSR. going on you have where a U.S. I Hey, in comment I on the going Joe, wanted I and here,

on You've acquisitions. been increasingly active

CapEx broader program. the have You

while You a initiated ongoing. back still and that's

pressure the U.S. I You and time move We why that in tech expenses. big a now know a all got in you take on look some would be supply about the the market, guess outside to initiatives. way? together, make revenues the to all

Joe Russell

a Well, characterizing standpoint. I looking capital things good we're a Jeremy, do to appreciate, variety of that allocation and job the from you did

borders along a our our So lie may it's different of or whether always an we borders. opportunities be entity, have number as will and here where of fronts outside within inquisitive

the ago. that platform the into see we Shurgard that made investment from can of You number a obviously years

opportunities talked for the continue our We outside to arise. with markets outlook and to that over understand as we're about, desire our part borders. to the they have again of to And going years on and look vet those the continue

attractive to volume that million We're seeing acquisitions, XXXX opportunities Looking over of properties. XX particularly bought or we amount we that of volume particular uptick strong had of the specifically particularly at we tied have we've yeah, in to in talked year acquisitions. done, approximately where healthy a amount the kind about, the the last of to did lead things continue separate in that $XXX you

years. that again in prior higher the And four volume than that's the we've done

our that vet of and So, leverage leverage opportunities market we relationships, and seeing amount good continue we're in out the trends. the seeing we're to

XXXX. going backlog into We acquisition also have a decent activity of

on to everything So, the of to look that And to continue then too. strong we're focused States. from be right here take our time outside a happen United borders, that at we things within going time if happens equally

development You And mentioned part combine about or development of the again properties and redevelopment a that our ground-up brought We vibrant too of activity if XX from that activity, for million redevelopment; you with $XXX investment. again, XXXX business. about online whether again to as fund additions and from platform we're attractive to activity, opportunities. redevelopment that in with they're the great XX We we acquisition -- finding think standpoint additional business into the continue we again the portfolio. brought the assets will

seeing coming certain of of good than those relative in seeing that to We're now sites little the spec on last is has rewinding markets. some or been two are right development a frankly, we we're land there us. of that bit tell you the have would three because I more in years, to going

a additional attractive. that seeing are of we're sites land So number

we're to look that. going to So at continue

been continues initiatives. shareholders. capital our And has fund from overall good we've whole kind very to ready to we've sheet range of of be -- embrace our So the management to way I is and mean that volume allocation can The drive standpoint, got returns a the team a capital allocation we and no a balance again confusion, happening. positive of to number different well-prepared things

encouraged I to we're of the got out continue said, momentum good by at what we this at be we've looking there. hand. So beginning seeing And year like some

Jeremy Metz

but getting Prop to color for if on what or did if XX-K share us on Thanks that your question if the it Or alluded could for uncertain, you like timing Thanks. any the do passes granted reassessment, ballot there you your anything that. there with in tax assets happen -- And there? is XX potential of to actually me, the on it pass? mark-to-market look the impact the is second side? on initiative any it can And

Tom Boyle

Sure Jeremy.

benefit markets. company acquired we XXX years in gives of in properties in and State a many were portfolio us of locations our a many which So about the very great and assets competitive of or do here built those ago, great California position are by the from strong of

we we So portfolio. -- the like really like

you include In highlighted we did the some disclosure. XX-K

the best underwrite what you think would be you the be. to impact allow you to able can that's to we think I give information

net So you in to income the for we is California risk taxes also property provide operating and that our California. of factor our XXXX of State what State

will period be. what be So, model impact depending time you will can think you what or valuation the think on strategy you employed,

Jeremy Metz

Thanks.

Tom Boyle

Jeremy. Thanks,

Joe Russell

Jeremy. Thanks,

Operator

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

Smedes Rose

more thanks. ask just to you on the side. Hi, wanted a I little acquisition

you last last this could volume You up starting expect year? you were out the had volume I kind looks year mean, same at that you that able is volume in it like activity pretty ahead of -- you put where and to would were acquisition time XXXX year. And high this of see XXXX

Joe Russell

Yes tough that try Smedes. of driving the predict. number are around. set things just Again always It to that capture. answer opportunity to been the the I'll to able we've question

with to many seeing point. the pro have assets certain last expectations, sellers not of in at this years forma of over of it or the higher a three are either either they we put have basically position sets five acquired in the level into So them met have expect that coming not that to which market -- built the or say be

deals the so we A these relationships how and in we've deals of we market, much that with off got of XXXX in the get And to predict question of that did comes harder again majority some some that's well volume number of see might to XXXX. this your to were with enduring the frankly owners.

to with thing motivation of it more So anxious think theme a out, that coming talked was pronounced owners right? I get to with and last that, quarter-by-quarter again it's us the more arena. is year vibrant to The more we

opportunities at Our circumstances of acquisitions very that I of the busy, looking a number is described. with team kinds again

and also to too different for number also owners of us we great of who have they have And to right. said, is a a business. come it's hey, been variety want Timing exit reasons. a And

evaluate pricing We assets. quality the the these continue to and of

frankly are over as as the ever year years development that's good of collection determined, through tight mentioned that has assets been. and the you the How into place come many And and histories to to step exits. entities nothing with And there Our to have acquire of much do with seen look volume commitment plays been out to the returns in the for our business. at to lot in of that the who we've again a investments. of see for of activity last view there of with or we're balance long-term storage from be good quality is come in are of start that particular a ultimately a taken as appropriate amount filter off it strong again four And there's those ownership by looking pretty the XXXX. if the that markets five various have and you but assets wave that through the we've pleased back time

Smedes Rose

I Thank development out wanted lined you've just Okay. to you. ask you And spending.

this you curve feel feel a for look still now -- Just you from guess older bringing I perspective? do effort kind to portfolio done when a the you you the quality past of Do looks -- in pretty guess facilities to -- still you've portfolio year? lack improved talked of of the word. at more of of about more better I the needs how is much some your big have Or that be did a like be

Joe Russell

Yes, sure.

of So program. what yes to Property call Tomorrow speaking our we you're

markets. So so Last you or assets million if program look $XXX about XXXX. of take step at another And in the we a platform into that put approximately retooled launched size variety we where up. different year of XXX that will in XXXX that

to the So the of assets things a but assets overall instance; on our assets We're assets; appeal in our environment; the some got impact, multiyear that asset generation to the the where enhance many retooling cases existing it's get we're program. curb not only quality into embedding phenomenally physical optimization solar optimizing a customer putting number doing relevancy of lighting, and again characteristics we're we've some to different the do of frankly a because we're latest number continue for to of well. brand; of

Customers most to And well five we've recent ultimate to that the just we where appropriate. generation think very to is standard our gotten lift responding it. quality are point

through ratcheting employees We're well it. the responding we're Our are portfolio. as to prioritizing full

investment. seeing this five likely even again But impact at that better or program years we're And we prioritizing concentrations higher revenue from get more around to is the to large. where are through market take markets portfolio

we're over considered like next things seeing few in all program the it and good the traction mentioned So continue years. from investment the I will

Smedes Rose

you. Thank Great.

Joe Russell

Sure.

Operator

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

Steve Sakwa

know number don't the And you kind sort towards you that right widest bit? continue feel Tom, I I kind average is if wondering like backed does morning. in about sort Thanks. a the a or quarter like probably XX-K number you the seen feel rates XX% guess those? the statistic. right? getting a decline. got sound Good that think provided XX% just move-in of I of we both numbers was guidance fourth that can for do Or about but you explicitly on of that Because the out of to you provide don't bottom? do into that of had if those widen the we've move-outs. Or I is was that and

Tom Boyle

The did on square You a fourth XX%. and move-out in rents between was the with gap numbers. foot good per move-in our rents a quarter basis job

prior it If you was XX%. look back at year

And get That's little so bit while wider. seasonally period. it wider a a did time

quarter And in sounds so vacancy we that occupancy the our to as like first a the seasonally dips fourth but and have we fill. large rental and lower number reasonably rates through quarter obviously

for that's year. this a strategy we've So year-out again employed that a saw you of and and years year-in that number

market I terms been at look to by and a a it's have quarter, of is going really we the new trends, volume. performance talk lowered for proactively where XXXX. at In it we're level markets what overall impacted fourth hard see you supply it's have move-in think high of rate But if that to about rates, different markets drive to move-in you the in story

seeing first come Houston into it's quarter the as rate. that we lower some through move-in at market but we're a trends to So encouraging I'd the relates in year-over-year performance fourth is it and highlight went Houston quarter, as a and

down move-in Houston quarter in rates fourth So were XX%.

XXXX volume But first we started for see a time to the in real while Houston. little in in

was So quarter. we're first and go X% up the Houston of move-in north traction we better as in volume seeing through

like we're in those and markets where we're Houston utilizing supply rate we have continues of power felt Atlanta be pricing markets We and fill advertising to have where new or utilizing little occupancy. the impact in to

my year-over-year this is, we good just good we're news at looking occupancy, traction. sitting occupancy getting points morning. Right The in Houston now are basis at plus XXX dashboard

it's some at good So getting coming but occupancy traction, rate. a lower

flip move-in rent to like L.A. positive going fourth the in then had a And where market growth quarter. side we

flows stepping supply So new going back, think as through to by we there's markets continue impacted XXXX. to be ebb in and they're

fourth Just in as XXXX, of growth. revenue we snapshot same-store another the quarter reported X.X%

the reported X.X% we of revenue XXXX same-store quarter In growth. fourth

are and if barbell growth. from revenue actually and different consistent year-over-year contribution got look pretty you've Dallas that the growth, like a the at revenue So but in markets, Chicago, Denver it's the markets change best you

that supply a laggard; And the highlighted flip in impacted have new continue Houston was XXXX by side to be that I us. impacted Boston and Atlanta is, you as

consistent shift contributions we So the through quarter, as tough as in to fourth environment. market operating another -- continue growth quarter revenue but of a the navigate reasonably

Steve Sakwa

Okay. or question second of big I maybe picture maybe Joe. you just kind guess for

the little terms bit. it's in in Just than a be that it like or QX in from revenue And to pressure we I thought. growth growth interesting supply. of bit a was see seems decline revenue stabilizing to better frankly mean

and pressure feel a do here? how change of question mix beginning from side? more there here? the Or will it competitive then markets worse And still you how the realize move footing And I kind get it lot like I supply coming XXXX? the is the find feel like the and to doesn't maybe overall from as on speaking, can pressures And into a competitive Generally around. sort supply But into new more improve spend play we 'XX in advertising does Google you are of beyond? do quickly that there's and is guess -- the

Joe Russell

And maneuver seeing have you're all are between to kit feel things, we markets. of supply less those through tool we like higher to a deceleration. strong Well lot there's correlations Steve. We a right continue

shifting some nationally. the Tom of supply picture mentioned is that As

strong of from range from XXXX. say a into deliveries XXXX. saw billion We'll another or what we Again the be are of elevated have fourth that we're construction year $X in It $X plus minus down levels to going of now XX% deliveries. could year these in in of billion anywhere

definitely to all, opportunities not that's And again, with if you well. could say of X area, some we impacts you deal supply pretty have down particular deal don't our have continue some with. the And that right acquisition trade frankly playbook to X as see strong to to some but as headwinds where to it assets right mile

and the ironically of markets cetera own brand, Austin the that. starting to like resiliency resiliency some thing down et Charlotte, and Denver, the see some and those come in we of is now are Chicago; percolation, ties we're by overall interesting product decent and that actually deliveries it we're of The Houston, to the encouraged not seeing are markets our

own to our we mean, improving assets the to relative have these own that again, we revenue we're supply quality higher pricing to management continue I ways using way ways the strong themselves, Now quite conditions. components the brand, our open that year, and through development going the Portland, comments Tom walked of next our because there's eyes like just into through Boston, time. haven't this more in had D.C. wide those some the of some some on York, But which reflecting Miami, activity markets, strategies, the New our feel are Seattle, markets got we've of work the of coming kind directly deliveries strategies. that we're marketing we're you on doing to ways

more the outlet this even outlook year -- murky. or is beyond The

delivered deals get We are the to C/O market. seeing fewer

tapering buyers was get you That development And could down too. that that's because market rents spec look the an that be empty flipping part volume again and of it's were out basically -- just of as probably at asset the developers encouraging down of it's I down, driving on a reason just say some many there thing are may the facilities. aggressively to were bit. part sign. it an quick is just based a return, think is healthy down taking quite down a There trying share and this there again,

land acquired they maybe So making they up. that intended the they're tied of not formas pro had when piece that it to or

a hopefully will the to are of there a last that's to three set of that still lead starting balanced again, been over lingering work built So But number XXXX, to things year the through conditions. we the that got two years. supply are impact of more say market-by-market in this

seven for a But uniquely We'll this by to have again, It's in see capabilities and things If hopefully performance tough year. things use keep tools again last continue we'll of the we'll that we've But pretty the quarters conditions. to too enough then encouraged improving highly to this actually can number least you've soon at the we're that all upside seen got. of tell. that market we what do start deliveries own our those again band too.

Steve Sakwa

Thanks. Great.

Joe Russell

Thanks, Steve.

Operator

[Operator line of the from question Instructions] of Markets. Thomas KeyBanc next Capital comes Our Todd

Todd Thomas

Thanks. Hi.

step the revenue X% it's company. quarter on for it back continuing question Just of a growth. a in hold? seventh you you X% level, Do a that your prepared there growth taking commented remarks, quick between thinking and follow-up and again see Steve's high and to just at revenue mentioned straight about that you about Joe a Maybe

Joe Russell

we dealing again, environment forth Steve's years. last with But ways we've Todd, with have it to was again, and set with going question deal plays very that tools. point over we've deal continue that, eased. we to I the how fact deceleration that right the give that forward. three yeah, feel and the to that Again, strategies conditions ease? got not Will the confident got or The two were we'll continue had capabilities the see that to again has higher of just supply to and see. We'll to we've made We've going tied to got Well, guidance. we're to

Todd Thomas

and investments Okay. And then an overseas. expansion -- thinking so about switching to

in about investing of help you obvious have the But and platform just You're us a terms that the of Europe understand U.S. in synergies the invested across outside globe, from there. be investments can may of outside halfway U.S. the for not thinking self-storage? or

Joe Russell

speak really It's number years, a always, to is is we've we beneficial The likely of which a different not consistently for Yeah. not what evaluate some continue to only kind of a markets. thing market Todd enter I of we're will variety to through in but but platform. any said likely,

not. at do can certain was That and the look okay Shurgard. a advantages? that that it? only it does platform to -- that's way okay? So Is mean the Absolutely way Yes. So one have

mentioned and specifically going opening in my at. So any transaction -- that then beyond we're to more we're particular really comments as not about talk I looking

be specific the that will But evaluate we'll right what are that we a be the if that it's likely with was many here is to through, way again perfect to and example again thematically tied that come type will to a the States. continue in opportunity right has that. United do platform it but not platform that any of Shurgard aligns well inherent of benefits there

that a was point to and successful that's -- So say playbook. can very that I just

Todd Thomas

have something you capital lot the materialize? capacity sources something has funding company to excess XX in the to a over if the were but extent about of think a should of were about to how think And should -- next large larger Okay. of and obviously, make to acquisition how capital say access you months, a investment approximately we we that the

Tom Boyle

Europe. We was good line of billion issued debt raising the preferred. year U.S. for the preferred. sheet very, Yeah. billion issued debt good extended We're We year recently some us. shape. But a capital We of in redeemed credit. any We to in $X not going in We comment specifics. balance very issued is Last $X

is So at today. fingertips of a our we've capital priced lot and attractively sources got pretty capital

the year be to. our allocated heading like will we of what capital overall, the sources regardless capital into So

Joe Russell

sheet never And point on balance that put shape better the so. maybe to in the exclamation been has

Todd Thomas

Okay. Thank you.

Operator

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

Ki Bin Kim

Thanks.

give Just discussion. Prop us going sense basis California? in you XX year a back average their Could of to tax the

Tom Boyle

I to to underwriting. you Well, feel we disclosed do be think we've for is some what able adequate

can you do we I through our in NOI. $XX we on taxes to But If that. basis certainly think of disclosed XXXX want talk disclosed that million a California we one-off property paid and

that to So values give values different compare to what those taxes year. you and should ability an ultimate paid assessed last assessed we underwrite and

Ki Bin Kim

Okay. expanding of And sense parameters set? going back and a get have incremental you're for are Or IRR -- parameters to just assets basically strategically your you acquisitions, the also I'm in our if just your trying growth? more looking to the Or been for? that that thresholds? there's are deals to trying you thinking always about get in fitting the excellent a sense any of And change

Joe Russell

additional our Yeah. never underwriting I to made we've wouldn't -- I and widened been mean. what historically. say done buyer some never any we've we've We're in an Ki But no way, always IRR accommodation Bin.

pretty disciplined and seeing to are Again, opportunities methodology stay the quality by working and our volume a have -- we're acquisitions. focused of And for frankly to amount them we're by that that's good that just hard. team that we're thresholds. assets range there us. out been to again And is of going the we've come continue we're the pleased we're on We of stringent pleased more -- meet we use

these And situations notice. a don't at evolve many of moment's

right got whole many years us. cases whether mature assets collection of combination continue range we've the so different opportunities they're and with the more Some seeing around not some as like of kind assets and a into we're types to we're some evolve assets. And quality portfolio. or the in determine them well. It's going some a of deals to vet that of of to the to new We of relatively bring take

good I additive and assets. very kind in transition. mentioned to platform XXXX, And it's the again a seamless of again quality, in good So XX like location, he overall, pulled --

volume to absorb all is that well. team it's and ready continue So very and ops to going more

Ki Bin Kim

these And years And replacement I cost? case? cost. buying that some below pretty replacement you the big remember on of had emphasis still guys do ago, how to compare Is a things deals

Joe Russell

understand a have we just public being -- back the the them in that far with that replacement it activities. literally It's ties strip definitely we own deal we're daily the development a So great as We biggest and look redevelopment for development States. again out okay? to well. financial a and step at And one, costs, to looking we United price the development the factor factors platform only and we on to to Yes we and We evaluate basis have at. assets. quite benchmark that point it I continue of lot our platform arena us a compartmentalize different is mean, key by that in

Ki Bin Kim

Okay. Thank you.

Operator

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

Ryan Lumb

Thanks.

labor costs be of if or And if in what higher trend? if anticipate you it quarter? was longer-term expand sort Just sort during some on the of onetime drove could you to nature wondering this

Tom Boyle

Sure.

was tight in ourselves costs for than market quarter, now The some today we've in find look numbers. the number about on-site are you years payroll labor the as was talked wages. of the labor we national very drivers that of up So at even about manager nationally. And tighter X%. largely There's a certainly that pockets property that

possible. And as time being over is as make efficient sure so what we've we're done

good continued of some initiatives that to number we've reduce some and to ultimately efficiencies service customers but Champ able down X. period increase to competitive a give customer at attract including last a and to time the our employee year wages provide for employees that to property utilize we tied Web comes to And of level. and were a And that package otherwise over hours, of competitive the

I wage wages would that pressure anticipate to we So go short as continue we is through XXXX. answer. the have

the that pressure looking anticipate would utilize we're to at be a hours we always, ways and more As have wages will but best that efficient the XXXX. be in

Ryan Lumb

on Or regardless Sure. decision more it more of asset-by-asset Some Or suited then is made Tomorrow expansions, an well you of suited And basis? a think market-by-market initiative. on comments I guess it based about to you how for the that the sort that a the When are is expansions? basis? or there? made related an Property expansion markets for assets Some made are market. decision the apt is is of

Joe Russell

Yes.

the condition. So of like-for-like expansion. That's to tied isn't yes directly to program Property asset Ryan, Tomorrow tied really

we our separately to all So have expansions. which redevelopment, would do initiatives tied include of

does go So to -- that and down a basis. case-by-case right

any face So prime actually asset through are may zoning go a and might just with the can't roadblocks you there depending to you host candidate, is what may site a an like the opportunities zoning comes expand to appropriate kind that but look of expand itself. condition get whole on have ability to value and it that of frankly that at a where be approvals

that's hurdle through. have work one you So to

There you quite in because hurdles current dilutive that some going be if we're to and into economic an work asset cases. through have disrupting income, are can it

to it of the in into you again by of So basically larger some size new you opportunities additional counterbalance building gen with have single, property an putting a entire or actually the site. get it's returns as tearing five down would existing properties and or some then that well that whether through and cases measure understand kind and multitude a

a host whole but to go into down base. it case-by-case a that goes of there's right So property-to-property parameters that

Ryan Lumb

Thanks guys. Sure.

Joe Russell

Thank you.

Operator

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

Michael Mueller

the continue basis. absolute the up we levels, XXXX. on an Tom, expecting mindset a notch you talking think, you've in I Hi. about, be dollar in to of spend ratchet marketing spend were to Yeah. Should levels spend seen

level? on absolute year you're it more growth? thinking of a And move accelerated And maintaining top notable again. we just growth about have up could of pretty Or that see

Tom Boyle

Yeah.

back if through good liked XXXX did you well. XXXX, But in So And we've what XXXX. we've growth, go continue as we accelerated to see ramp spend actually in we seen.

that more question no there's we So, XXXX. XXXX, in we did in than spent

So your as point into is around XXXX, get fair comps, a one. we

it, what manage the We spend, what last getting based it. year. based the don't period. on, for current we're we on advertising manage is spent on our return it what And in it We is

if if even the we like we're We in spend to to we're what won't so, like, And do more that, going hesitate returns. we seeing, XXXX.

we're it is, dynamically. managing side flip And the

we've likely as So, markets be XXXX. advertising get we there will ones toned we increase, down where spend. into where And

Michael Mueller

Okay.

Tom Boyle

fact cycles. was I thing percentage revenue. was it previous a and about in the the historically thinking last stepping advertising back one as highlighted The X-plus call on And percent, of just, that spend

low on in X% years. XXXX, we're didn't as we increasing of if about you frankly And comfortable well. to the increase XXXX, got it look spend. in historically, were when for in fall it But need several XXXX we that a spend as been past and range we And revenue We've consistently advertising over as anticipate it marketing.

Michael Mueller

would -- the on acquisitions looking if kind under those are Joe, then, what earmarked at the And have I okay. here's and I buckets what what looking that for what mean, it, fall right be consider properties XXXX versus guess lease-up. of just you you Got the now. to that's between contract have been? market it you split Can of stabilized the walk -- split here through would something into, bunch that a kind what in of clearly

Joe Russell

are XX-plus one assets to that for And There years. years combination. from Mike. some place been three It's that have then, are stabilized a more anywhere are old. that newer, in Yeah, say,

motivated So, comments. many in it's of the by it's things my outlined combination. And a earlier I

Some or able a owners come be profit into asset. they quicker thinking were get to to going the an turn market,

continue and a were exit". want mature a step to time And a pro looking some forma of whatever hurdles exit. I owners variety good and And quicker to is reasons at look kind too "No, have let's achieve more then, are this at they of said been that don't for saying back

So it's a combination.

Michael Mueller

it, okay. mixed total Got bag, so,

Joe Russell

Yeah.

Michael Mueller

you. That’s Thank it.

Joe Russell

You bet.

Tom Boyle

Thanks, Michael.

Operator

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

Steve Sakwa

one kind of might just have made. Google and Google some On changes spending the just guys. ad just follow-up, Sorry,

about, the a level XX-K your field. playing in think, was there maybe I reference

is maybe in you there? we curious the about with anything about? how can there Is just maybe that dynamic that playing things ad leveling any field searches just real that working? share I'm be just there us are Google And should thinking change are

Tom Boyle

search and on last that describe platforms, search Google the Yeah. other of paid just No, couple the I think, to years. we of over the frankly evolution included

I business. a great they've think that got

into to people can. and fact as competitive keyword And pretty more And a the we're seek it. doing as in garner good getting gotten doing the that just more And they're auctions, good it's of job job highlighting they're those competitors they I obviously many of a they auctions. think

Steve Sakwa

Okay.

the wasn't there general It's more trend? recent it that really changed. So is that something just more

Tom Boyle

they've and there trend business. General great a got Yeah.

Steve Sakwa

Okay. Thanks. That's it.

Tom Boyle

Steve. Thanks,

Operator

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

Ryan Burke

Thanks to interacting a joining week. of progresses. you for Have all the good as us look today. We to forward year

Operator

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

You now disconnect. may

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