Public Storage (PSA) 5 Nov 202020 Q3 Earnings call transcript

Company Profile

Participants

Ryan Burke	Vice President of Investor Relations
Joe Russell	President & Chief Executive Officer
Tom Boyle	Senior Vice President & Chief Financial Officer
Alua Askarbek	Bank of America
Smedes Rose	Citi
Spenser Allaway	Green Street
Todd Thomas	KeyBanc Capital Markets
Ki Bin Kim	Truist
Steve Sakwa	Evercore ISI
Ronald Kamdem	Morgan Stanley
Jonathan Hughes	Raymond James
Juan Sanabria	BMO Capital Markets
Rick Skidmore	Goldman Sachs
Mike Mueller	JPMorgan
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 2020 Earnings Conference 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. Ryan, you may begin.

Ryan Burke

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

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

earnings over SEC find Instructions] our at that, [Operator replay the on our release, conference can reports website publicstorage.com. audio and With turn I'll of to You Joe. this call an call

Joe Russell

thanks you, we'd solid quarter like today. Thank and and for We Ryan, now for call to us joining had questions. a open the

Operator

question Alua of Askarbek America. first from And is you. your Instructions] Thank [Operator Bank of

Alua Askarbek

questions. Good morning everyone. Thank the taking for you

deals. and XQ and transactions there market, alluded alluded activity right the the also about seeing recent -- in at contract any call. going seems rates that XX the And cap -- any of guys color now? some what Can forward? your deal in the you of surprising a portfolio under market us also amount was color then of portfolio property give on opportunities you're that currently just So you amount during But to portfolio a there and looking it like was XQ good to

Joe Russell

-- Sure tracking reverse early has anxious One interest were acquisition a opportune clearly a sector low is that. pandemic clearly as the at market. of more up. they've opened been very sector. of about The Okay. The where lot to where properties to a arena. reticent time do the sidelines sellers this continuing the sitting perform fuel and the Alua. into thing the capital, months of into to a number to availability time to to it's the We've many through get seen spoke it we've frankly, the continues there's well. But been on do are assets still of looked that's a number acquisition environment bring There's good storage market trade. things very storage into and rates bring paused an capital And the

they're location they're and of a that things in assets are our you want thing presence as additional product add prime meet and and as to XX we're total, them set call that that markets, other demand. asked three looking requirements operating, into years, that are for relative standpoint excited the good will very The location to was locations, knowing a to in round very age we out the also to encouraged have quality markets two them new. in is Class and us whether to think bring assets we that to. assets opportunity and properties XX customer that good or under we by different because properties unusual for XX quarter been we've to great we're properties very In of markets be it's is core bring from our portfolio. that set us contract The increase we states. we very XX that across do last to XXXX. well portfolio a opportunity have of there's sizable a over the have positioned look Average single well particularly into opportunities very I So to active seen that the open a but to are for relatively window month continue that particularly would the up we're lease-up A portfolio good

well-located first and XXXX. some XX portfolio anticipate and be to and total opportunities think in by and they'll properties assets growth development we which interesting be I With poised that the Class we're integrated ability by portfolio. capture we're various the A those assets So also really easily year. performance look the there's pleased that of Again through closing additional for as the XX of will end completed well phases of that to capture

of was an portfolio, part is deal. off-market it interesting -- Another the it

look play So may has This relationship we to over that for where speaks opportunities relationships of across level sector. it evolved to longer continue build through. to the the we period they of those and storage time continue a

Beyond the opportunities, about, talked we're smaller saw through and what seeing we've seeing a frankly of I number even large that also XXXX we XXXX. in portfolio been just which

And continue any very of rates clearly acquisition the that. have really and so you of the and standpoint I with not tell capital. cap capital. to rate strong from capital seeing a to We easing that this have we're that good amount access monitor year. of would cost with poised to to year, cap we'll have a We're

Ourselves capital our color you to look seeing additional acquisitions Tom are hunt continuing what for later preferred some funding to about or opportunities to put very through But going capital we call either forward. we're market and the debt of and can clearly that to see a relative attractive. work own cost markets. we little to the good be give the in continues

Alua Askarbek

are I not you're to guys expectation just be able on increases be in you're much Great. up, did Thank that a the you beginning cases guess rents back customers, -- get as to then you. historical prior to but bonds? you know now is to And bit you rent to an do I noted -- going in going going years. existing increasing when little as your there with have But

Tom Boyle

give me Well, Yeah. through and of tenants we've existing bit been Tom, is context, this then on the around what we what the outlook you little is. quarter doing let think a

of did and did more have we confident in the increases noted in increase grown rate resume did those we on the discussed in in send rental backlog we any potential XX-Q Since the that increases our increased test a tenants. send call, existing tenants basis initially and have tenant to we've clinical As the increases catch we sent and on rate We on rate existing we've the resumed third last quarter. since third out volumes didn't those we as quarter, of second increases. in performance the the rent we did rental a of we up quarter, so

out mindfulness very those with As given regulations a lower many base magnitude our increases local and dynamic, in and as of overall increase state as markets. environment of went out in customer highlighted of crisis you well still price this you noted as our

as has has Stepping a back, activity We board. drag forward. to been dynamic environment growth existing will expect That's certainly rate be just modest We the we I we in-place on the of expect highlighted solid. good. move And continue unpredictable. would been tenant customer rent continue some navigating that the this across as move increases performance existing tenant through that is health care quarters, future to

So new have stays that move-outs collections and accelerated, are are solid. of better, down, demand are payment patterns length is extending customer

to been continue But be a seeing activity going move-in existing tenants drag good trends will has we're So good. there. forward. And overall modest

Alua Askarbek

Great. Thank you.

Operator

you. Thank

Your is from next question of Smedes Citi. Rose

Smedes Rose

just move really My out about thanks. question is activity. Hi,

always how activity? few things do bias note some the of move-outs the have to might normalize, those to just guess? higher but quarters just based maybe I mean, slowdown normal? encourage portfolio of you to might on in a if move-out to what about in occupancy Your you change have customers your stay kind as trying do over back of sense had an I'm I next And get that may much generally things And slowed. think is wondering I'm upward how you occupancy occupancies, be did

Joe Russell

Sure.

So I'll we surprises period. it pandemic around provide the because this a as move-out through little the one of context has been activity, move

was in it's decline, bans opposite actually We've And experienced geographies, the in pretty health tenure are about highlighted care talked move-out you and May, but move-out rewind MD&A, we the we move-out through environment. segments. I move-outs recessionary volumes. the point the of into the third geographies, into that to XX% each June early fact May move-in remained has current you and in the play quarter, that higher with driven XX-Q had and and customer in we've given across customers the fact volumes tenures, has April were increased, the consistent, as we lower, not customer the moved of move-outs this give deceleration the segments across And months then, a that it really sense discussed dissecting in through, the volumes environments, likelihood stress. But And by and consumer activity other lower. moderate saw and to quarter, As and activity will it the third at clearly And with time. and to move-in the in XX% we we calls muted. rate as mentioned, the previous and being across quarter customer third at which is board seen

really we've decline with to-date. collection rate in broad-based sent activity that So move-outs, accepting good rental and paired increases the

dynamic We very the continue playout, that by in lower. this as do do have be what environment. we But through encouraged on, eyes tenants. And we October, move we've move-outs could watching existing to closely. So our

Tom Boyle

that And meeting Smedes, factor seeing driving right and a another Work now the seeing consistent home we're sustained so portfolio. what's from that playing from is decision. we're behavior. survey what's standpoint, consumer yeah to relative additive, customers month-by-month to through the And coming that more is again,

to tax our right, see that New occupancies. employees, the urban high-density And of You've you even they're we localization, for home and and whether label as temporarily or Thousands of with or allow instance, at highest of completely market, impacts York, that they've of the move, dealing the to out have either different the of use and/or level of got are self-storage, permanently. either assets. markets, of need amplifying got heart at related crisis a where to work concentration similar either them Area potentially flexibility in system-wide again set as, given shifting seeing or Bay been the that for health number

housing always And and it's our year-over-year But sales a speak, we additive. for housing That's market a very basis. were on as that's now. driver The strong XX%, very So up over good business. right is driver. a traditional

pointing that layers patterns playing prolonged that So through, and consumer space. are different need sustained of you've storage got more are for to

degree, it a to "normal activity shift of what that to don't crisis sustained of month good. and we will back seeing So the amount eight quite know now when we're this environment", continues but to the into be health

Smedes Rose

wondering, of, Okay. changes the color. overall? before in on, last of seeing great that broadly, what And versus then, any Or I'm nationwide seeing if kind development, just maybe just you just on you're typically supply you've kind That's the outlook your overall update dollars about? supply you're on increment talked talked

Joe Russell

say, to something wouldn't do is in of I that States. out set our to was shift United the a down materially XX-or-so into minus to billion here of -- anything range markets think anticipated not or percent. in of across different. all the plus We be deliveries XXXX that XXXX about deliveries in calc The point $X-or-so will Yeah,

continues still in and into the the and an deliveries. continued performance we high. that it's product interest see base, with degradation self-storage even investor still this to And from get could frankly the itself challenging sector environment. to But have type So that,

a into As there acquisitions or fair capital even to is whether earlier, wants of development. it's that mentioned the space, still amount through get

on we're hasn't keeping eye but much it outlook. really So, it's changed that prior something that from to close our a

Smedes Rose

Great.

Okay. Thank you guys.

Joe Russell

bet. You

Operator

Thank you.

from Your Green Allaway next question is of Spenser Street.

Spenser Allaway

year? provide guys And trending of spend balance see where you what the quarter? marketing bit this more material the Can you of you. a the drove for deceleration in Thank the color on

Joe Russell

Sure.

tool marketing over past rates on and along was that discounts tough been back spend acquisition environment. stepping move-in promotional with customer a that's years and So, we've a utilized what several the

many of Given the new supply in impact markets. our of

utilizing attract brand did we've returns to across And spend surge use do television a our paid the of media the that online. quarter using new we as approach seen the second in presence advertising kind have advertising it last advantages in is and social We name we years tool spend and customers. broad-based and given a liked over so real our increase that really have advertising several

will And we top environment. improved given top and the we into too of you lower second was not of that that marketing spend. that navigate advertising saw But to tool up like the demand aggressive did funnel continue third use need dynamic on through quarter environment of the we advertising what's moved X% trends. we as support funnel funnel some of of note this will about removed but and so top we we And demand were more support. it second or quarter, quarter we as we in as In to level as improved a play given our use in dynamic as the spend we we the X% continue quarter

Spenser Allaway

of on this been the transaction to deal acquiring we a you large Okay. And interest a And simply you whether with at? comment saw lastly, then storage maybe would looked recently portfolio portfolio. just guys have Blackstone Was you? the can

Joe Russell

and So, to all we're markets the most look in at opportunity have active deals.

entrenched highly of on and the transactions are as small. that that level I to we're was different activity. track if of in or large they're whether continues but most deals So going and be incredibly points marketed are to acquisition not I'm view perception all team which that to not in deals comment are our we our engaged portfolio we're deals any I'll portfolio see one of earlier. and types on the comment continuing marketed particular particular the really happening entrenched to talked about not that and variety highly And is of

Tom Boyle

through Joe transaction emblematic that because in highlighted of performance looking self-stored like around earlier capital institutional what is its invest I to cycles. Maybe of Yes.

so it's see put sector. player significant And a institutional to interesting into of capital another the amount

Spenser Allaway

you. Thank

Operator

you. Thank

next Markets. Our Todd question is Capital KeyBanc from of Thomas

Todd Thomas

of rates in rates with higher in the your was Did some growth years. quarter sort quarter Tom in the strength throughout on significant. the trends. of cadence your rent quarter through helpful the Or then move-in several comment rates commensurate in like? that you what more They push the on where just the October and rather was during been market And Hi market given were than was Can move-in view? is? move-in they've occupancy thanks. move-out color increase above were you trends the

Tom Boyle

Todd. Sure

about in really I phase into June. moved internally we stepping that of first And We October inventory across our we the up persisted certainly country. lower And quarter in improved been occupancy so XXX that April. of kind move-out occupancy of move-in we activity with March reduced move back rates. down of points here. seen saw means has that since XXX up the trends XX basis that And in with recovery May and in So, up I had. higher allowed kind levels really then have inventory, on really in in an achieve see points July We We basis markets like quarter and it call to in We highlighted that and us the top trends the moved trends. reduced did as did really through improvement good pair funnel being and move-in quarter. activity all slow kind finished third move-in occupancy customer finished that occupancy. the of just We in move-out second with surge proceeding demand third a the move-out finished that's basis higher points

to rates, up in you move-in top rates X.X% to were about XX%. move-in give in October continued, has funnel up and the the volumes in have strength and which trends about up quarter, the October, sense, of X% of move-out be move-in Our a led

who Joe reasons, existing continued benefit storage, for obviously well storage both and use to new So, demand our many of space. environment to continue seeking for tenants seeing this customers new from in mentioned the have as want the trends as as

Todd Thomas

Why mentioned New of lot a Okay. to have And York, work I'm out where of ins and San like workers of obviously, out when the and market to move markets, a risk I that you activity or expect strong to in suggest that from just high-cost you demand headlines view? about unwind, you Is markets? of these translating And moderate happening. that But think migration of flexibility guess curious guess those Francisco, I a home and sort in outs, is in extent over demand. there's lot Joe, a some do is data some which time? your into maybe

Joe Russell

Well, it's drivers, a spectrum Todd. of different

for when So, can many tech part a of of is, to have the for you their if flexibility many -- could signals That year, been one pulling for gives and/or else. months, anyone that of employer or big us somewhere look whom given to the employees not Bay giving frames at to point you Area be coupled instance them a workers may they flexibility back, with full not time months be where six vary. two

impact some what the or So, in be may relocations or question of for will some back. about quarters permanent a depending and come degree it, itself. these unknown to will it our then timing units be question whatever still become and pandemic the on it of to keep And keeping on know. in employees several that then no the several again There's months can commensurate particular that, don't but goods they're one need predict market

opportunity difficult to you look well-placed Area again, stand because there. portfolio. for we've It's supply instance, a have new add at if Fortunately, Bay out the we to very an very got there

And build There's in term no that high. market So, about the is question long different it. to it's space there. need for quite that difficult

this occupancies seen a where of that got demand we’re where a about I we've mean, system before. mentioned means an cetera. unusual this XX% a I high time year. have never standpoint just elevated has we XX%, et any that so has by market This it's from environment So, oversupply not very concerned been been

determined. whether it's predict. or time urban to required across to system. built year. seeing We very So, more mentioned, our dense to market hard And have particularly our the very active, occupancy. healthy time is be employees, the flexibility strong. we're it's office traditional the change demand users just in entire they're demand continues which lease-up these as we're consumer tech-oriented is percolate be It's It markets in over frankly continues don't and and very, to Tom in of newly But other to be a or seeing a down And way that's -- determined. this for assets

Tom Boyle

Todd, to of for instance, from Even Markets a seen Yes. good you. a San Area, Bay in seen make demand just San seen anecdotes been peninsula market maybe had housing couple And good last improving market occupancies, like several the years. Francisco improving can in We've there. provide city customer case urban the strong supply for new a market and and lease-ups Charlotte instance rates. you incoming new within other the very for in we've San a over Jose for a that suffering Francisco, clearly of very we've our demand, strength while

-- the around as that placed inflow. country good demand are those portfolio in and that we're seeing outflow So, we may see there's well a well have markets as both seeing

Todd Thomas

larger as are interesting. to Is a units demand for maybe of individuals time. the or looking their you larger homes for apartments sort seeing That's rent Right. spaces are of period that for --

Tom Boyle

versus smaller year-over-year strength larger opposite is spaces in believe it actually is not. has been it which or spaces Actually

Joe Russell

Yes.

a a demand tied or think it's an of needing theoretically it back So tracking. not that's tied also leaving work extra from come demand. that holistically very of layers layers is apartment, healthy entire the or maybe it's to an it's from extra family of again may area just But that demand there or you solid that bedroom only said, closet to home just level you house work home be if factors as we're not somebody that demand members And whatever. that just are argue or could because and we've

Todd Thomas

you. Thank All Okay. right.

Joe Russell

Thank you.

Operator

you. Thank

Ki is Your from Truist question Kim next Bin of

Ki Bin Kim

morning out Good there.

your color acquisitions of parameters you at fourth or the and around portion? back you yields, some more quarter in stabilized quarter, provide Just to made some just the going for least can

Joe Russell

space cash-on-cash to this would to and would mentioned X% that. about occupancies Bin, ranges stabilized X% the about on the is you you not didn’t specifics portfolio time plus quality demand as Ki we'll the thing look to seeing, actual I tied which give I relative yield. of lease-up XX%. again that I'm that a over quarter on for going factors about these it's the of assets. basis the similar a yield or assets are at be on looked a tell that the The north to that the thing that we've locations be based great closing very We we're the good to opportunity to that

assets once into get for have own to So it's opportunity like stabilize And feel the very strategies our put and operational a very we good we good to us marketing them. tactics those returns we'll and stabilized. assets

As years can revenue you on that from to to not at get stabilized only stabilized take occupants more basis, normalized and three a four metrics. once well know pricing you anywhere

the So again of But continue very a quality, our assets or in mentioned, assets. could to as like consider high developments recently look those you part. delivered adds solid near-term it good ways on many for almost we'll more and I stabilization

good value drive to opportunity good very from them. again So

Ki Bin Kim

and your Obviously, like up underlying last negative X.X% are drivers from much I things at revenue, pointing Okay. quarter. same-store place, that. look when where slightly X%, Thanks. right And minus better it better towards to occupancy rates a improved the are X% fee-based

going And rate going wondering expect normalize? much underlying nature was contributes in XQ how that understand details magnitude same-store that customer not revenue little provide in you I'm how forward drivers to Just a didn't? things to transitory how like behind increases. some better? we particular normally do it whereas I So and might sure it the forward, just that could the if more existing of benefit

Tom Boyle

Sure. Bin, it's Tom. Ki

– and have I pandemic, how of some quarter. forward that pick the around which see we Operating growth than we of spent time and metrics was quickly of third lower as move-out combination equation. financial and more think volumes. metrics a we to earlier of a we funnel part trends impact activity last move did revenue well with the top rate impact have commented likely into improved continue let's better I quarter removed occupancy occupancy the as cumulative as talking around to trends the

trends. that's our occupancy our improved are of occupancies in many XX%, have occupancy is so industry. we frictional, markets are month, In And the the in reached that middle XX% we at which friction meaning of

matter So move rates what of some it's through forward. in play with a of those we markets as

June and forward you contributing lower rent are just to increases we As customer rent finished than earlier, magnitude to quarter. by existing – was looking down increases move negative a highlighted the in-place be not we quarter more June rate to in-place likely spoke from impact going just to that trends and tenant XX XX said, tenants improvement fourth and That were down of are X.X%. be that of we at offset contributing improving at And the as reduction through factor roll improved about September rents the activity rents XX, existing down. X.X% with given the the not

the and you the as of that XXXX we to third of was roll about about quarter third If XXXX, look at moved down X%. narrowed into XX%, quarter down rent

rate degradation quarter. existing increase than So offsetting improved from tenant drag rent down the more in the roll

Looking aggregate contract recovered. forward, rents

we to contributor a quarters, degradation in driven third anticipate continued trends negative to October have so but Fees good and a to and which by rental forward and trends. we is revenue rent, revenue as to and great see thing, positive growth. a so second occupancy customer continue to and rent do September been through XX the their points combined So really growth income customers that's we've which the paying is better in at XX both basis move

the think, we on the through I that about Ki we last quarter we'd call that spoke to but continue the quarter fourth Bin, and year. first into a anticipate next see So of and bit little that

Ki Bin Kim

Okay. Thank you.

Tom Boyle

Next?

Operator

is Sakwa Evercore question next ISI. of Steve Your

Steve Sakwa

everyone. morning, Good Thanks.

balance quick sheet, a on Tom. the Just question

with $X.X are like of, preferred XXXX. I guess, got I'm billion replacing about throughout your new You've just that, curious callable them preferred. thoughts on sort

preferred sort your where some you X%. you how of for kind are? maybe think more think debt debt And comparable kind deal issuance the today putting versus I do that was a on offering? be given weigh leveraged how of of, you the last do just balance sub And sheet lowly say you, XX-year against would

Tom Boyle

sure. So,

in So is refinancing potential good Steve, is opportunity highlighted year which activity you preferred it another preferred. debt XXXX, a what be with of or

Looking like opportunity We for preferred cycles. around through perpetual preferred at the capital the $X good our to optionality billion both having the a the And we have it's the balance, if balance ability business capital think the capital this in them and stack, stack. did for next call like at the decrease you're but over to year. highlighting time same time interest year, rates we in

about we've throughout redeemed $X.X billion So preferred. of this year,

have the sub-X% that Financing is as January. quite we market presents in access that great debt we for highlighted to capital as earlier Joe opportunity were active and are yet attractive Europe much issued too. Preferreds bond been. in which We low, us ever which they and markets, as have in record haven't a today, are

we'll XXXX utilize said move as fourth financing development debt incremental and activity previous earlier we to for acquisition accelerating as settings quarter. for is As we look the highlighted potential opportunities in refinancing preferreds through move Joe which as as both as both for well clearly, through and preferred we

we in the XXXX to and So we like that and XXXX in both XXXX. did good utilize access opportunity and have hope capital refinance we'll we to

Steve Sakwa

sense a to on the, pref So of, just a compare do XX-year wanted bond where you offering? sort curve go a longer like how for have that out offering, to if you would

Tom Boyle

is XX-year even bond even XX-year cheaper be than X-year A cheaper going to A than bond is be that. to that cheaper. bond going

lots we've So tools toolkit. the in got of

Steve Sakwa

time U.S. the about time outside just spent where and from front domestic your opportunities looking international in Joe, Australia. Okay. time for of curious, And some outside just is looked to on guys the of, today then have you head opportunities. the obviously, acquisition I'm sort

Joe Russell

internationally. and to going both we're domestic Steve continue Yes, to look

clearly, our types the opportunity have both Shurgard learned feel and to grow we be going base. enter whatever over reasons to and subject investment. from attractive appropriate internationally. the set domestically here through can we We've either for the point It's an find we and to of of a different success or a And So market from involvement through opportunities time lot that continue that knowledge opportunities. well-timed to always may particular be

assess and internationally. going here we're to opportunities continue So to both domestically

Steve Sakwa

Great. Thank you.

Tom Boyle

you. Thank

Operator

Thank you.

of Stanley. question Your Morgan next Ronald is from Kamdem

Ronald Kamdem

Thanks the Hey. time. for

circling just The first is, back the one on demand question.

a looking at sort what of it stay just just And and timer? sort to the about get and the it one lot from leaving normalize? of that students, presumably, trying in in trying to the going terms there thinking Thanks. the stands college of obviously new is, drivers just a normalizes, once more analysis, not is, demand businesses, Just anything of here we -- questions maybe demand people we is we be and understand drivers are of whether get city. or really drivers driver around reason really small And this were at I once ask which in work vaccine which thematic for may the one pick terms again out be home, looking period, to the that is

Joe Russell

are or Many factor. something are the after way likelihood or that of already It's from determined. a employee or is work-from-home of enhancing bit down. be satisfaction. hard magnitude. certainly and continue talked these platforms Yes. little going some looking pandemic whether the at permanently standpoint demand argument a at predict new down work-from-home that's sustains through And them the or I not there through. they’re against that here new demand That's Ron, opposite and different different to stat the to to the be settles up about as clearly as of productivity is level that play the to going companies this and that not, factors too. demand going shift to theoretical sustainability But we're may track,

as additive this and is they're and The product thing customers to it's to about, drive set a predict. to healthy going the brought just at the frankly So these before. all to the survey hard interesting we're optimized and learn talked And it's never little from continuing and understand sector, very new see to moment into We'll we've storage a continue of performance. used continue drivers. and bit they're

So The continues that's the a product to I product it. the that effective, things we The much decision do interaction it's once ways adoption is customer making it think, the find a grow thing. transaction. that easy that adaptable And of and highly statistically. of again more like term, it good more highly also resilient, much long consumers is are, making proving continue to and

pandemic. was and in the came quarter because putting capture just in about, easy many to great and frankly we channel that but percent the transaction love into that from volume of tools pandemic platform It's e-rental unit. customers a that's So third serving a for five been of technological move-in well, And our and of us the our a not about before XX-plus moved that customers mode in about takes we've that options test our statistically storage channels it. XXX,XXX and are just came minutes consumers the way through directly

or this, are that got environment about challenging capture test is used very different were things levels that easier we've in than facility, a think able So to of different we customers that lead more before a very because even with very again to new are that doing us storage in to with tools could dealing and different and frankly like effective. way to a giving we're also cost ability aligned that needing much it's even more much their different positively that

Ronald Kamdem

little Great. just a acquisition. deeper into my question bit was, And second in digging then

Is factor up, more mitigating opportunities even harder to that when sort get and take like team. Or it. The what's of Clearly, cost quantifying and trying for competitive, identified just that? the tomorrow the for to the of least numbers sort it mitigating enough of take -- to at deals maybe $XXX company trying to decided of million that question of are sellers? about capital too talked Is what but the billion Is million. getting be you your at there you step acquisitions Just is of $XXX sort there is, just a to a there at would year? back a look the pipeline acquisition $X number factor? have the PSA, not company understand

Joe Russell

said, get saying as turned Well, buy switch I can just whatever wouldn't say we and and go simple as on. we just on let's our hands

We the to have guidepost This opportunities a relative. capital. that. deploy we is, would I window timed disciplined to are analytics that the better do very say And to moment, use at good us that give say right the these

good. is capital, of reiterated, Tom as cost very Our very,

the we Our that most much We than access to markets of good. do. is better very in operate others capital know

and acquisition for understand us our different activities. we drive not So relative performance environment only ultimate step capital development have our allocation, back value but redevelopment the and ability to ways to through and

So, those tools. all have we

were We about got the of multiple that continue that to accommodate them. a clearly even we've analyze can quarter. And balance volume talking this sheet we factors

to and see particular to any don't I the a continue a fit one. it's or limiter, the sizable portfolio whether acquisition, of anyway whether So, timing quality that we're and as going medium-sized the a it's and evaluate one-off,

Ronald Kamdem

you. Thank Helpful.

Operator

Thank you.

next of Jonathan James. Your from question Hughes is Raymond

Jonathan Hughes

leverage preferreds of are Yet Hey. from Good a But question. Board extension the to basis. morning. leverage? is share low-double-digits is than believe what sheets range REIT more Steve's legacy earlier on appropriate the at including turns you PSA an turns self-storage total All and up of peers. year-to-date three prices for This amount six return four are of balance

at leverage most recession all months? -- mattered and pandemic sheets views XXX-year eight just hasn't if during balance have it changed really when benefited So the past over PSA. have towards should curious I'm

Joe Russell

have this year throughout. has in that been And throughout year have That allows say to in is I is cycles. capital our I should around held been us financing What would us that to balance we markets that invest as fact deep access a allowed belief we're leverage conservative long-term a and recession perspective And that sheet through Yeah. attractive you somewhat think highlighted. unique. this

that I highlighted we sheet we've the acquisitions, fund this we're also second this think to balance that in year. have like capacity and in to half times that doing of utilize

And have we we're leverage. as from forward. doing definitely here we move that incremental capacity to add So some

leverage, capability. REIT conservative rating an long-term and of a view, In our of is appropriate size a single scale think amount terms of place and a we A the for appropriate

Jonathan Hughes

preferreds I exact you earlier cap $X more? you of do stack. So to you said in over you the the guess why having you number, alluded said, like billion how I you mean $X back of turn? I to do XXXX, leverage you more are turns use use. in preferreds talking range share, but so another was think upwards consolidate any you could can billion we go not have

Joe Russell

it Jon, the maximum. be billion. that the is liked I I billion. $X having $X that yes, range I So more highlighted would meant that didn't mean

because we say over consider amount would It's and to I Meaning and outstanding. the have have grows and as to EBITDA and that. about our grows. would $X And billion? continues currently balance anticipate the So to anticipate we the time grow, I I the outstanding did debt grow our that why like would grow amount company business

Jonathan Hughes

arbitrary. to make wasn't like want just it sure I Okay.

leverage-neutral low just about I something realize been four in, acquisitions, to NAV, like four But a much. cap on actually that. What implied You possibility? leverage-neutral raising like by Is equity. more it be other or would the still common me. and the raise and think figure I one decade. hasn't that I to done funding I that -- equity up as stuck on that to your plenty a above basis number -- then large And common accretive a grow given NAV. basis, REITs four of trading to

Tom Boyle

is could equity. Common At time Sure. debt something cheaper it's that in and common finance toolkit is highlight. do debt we have than equity capability same you markets to as the preferred in the the and we utilize with and preferred

preferred the as to strategic to debt So so. over it's company have as ability and But over the But has time time. been it's preferred the NAV in company toolkit. an well certainly toolkit. opportunities. do so capacity it option in certainly we've more finance, But and certainly that have The to it's debt grows, recently, we used we utilizing as for do the because

Jonathan Hughes

it. Got Thanks time. the for

Operator

Instructions] Markets. is Capital from [Operator you. Thank Next Sanabria question of Juan BMO

Juan Sanabria

morning. good Hi

little a you if believe you hoping earlier the a but talk you during up, mentioned could bit that about perspective, increase a "recession". in normal move different see move-out Just from call typically I

to just point at if onetime pass So of cycles? help that could some are through these has think been the And some give of what to historically about you your actually? nature benefits us many again, downside that maybe in

Joe Russell

current position find that a Sure. impacted know trends crisis in ourselves healthcare And navigating obviously we we're we would by where don't move-outs do accelerate. think may through. the We are that when that the

of at in for we quarters several back financial terms up digits. In prior crisis, crisis, look you the the move-outs if saw mid-single

an is that's -- is through what unique. everyone example. so experience And we've But learned certainly that, this

of because of very virus. what our in so, And to to we of it's the terms government be reduce as the eases, spread the through it's ability will move is, happen certainly I I unpredictable well say future pandemic as going the think we're consumer to point what that And this and as activities unpredictable. like activities watching And healthcare the quarters. would to nature crisis, when closely be will limited is of

time would don't last digits like something this So mid-single to We increase. be it's like know. point unpredictable past Will recessions time?

Juan Sanabria

on at And what at And stay? that brought that you And the Fair assuming the you magic if well. where how length portfolio? one point, of in enough. today at increase, of more of Where we rate length cross your kind median as just kind a trended? you of of stay maybe kind all up number sneaking are has

Joe Russell

Sure.

And length move okay, rental longer-term to to as rent been the out we we in this of been half of the on us. at the length extending well. sending we been I trend But will magnitude if would replace to those of move-outs have already over We state, impact for that's see beneficial And don't and stays have you we've increases the rate which moved through have that of with would this them this that as terms lower time. And the in it that's been the offset get year to highlighted fact of accelerate. I as their And year. And the that's increase this we’re year of XXXX. an it tenants opportunity stay benefit get is of margin to say eligible and the point. increases somewhat earlier, started highlighted rental rate with last rate continues anticipate into The rental we been more sending beginning increases. last more playing of into the and year as continues, year. XXXX customers decreased we So if next second

Juan Sanabria

the length or average medium of is stay? what So

Joe Russell

months. about It's XX

Juan Sanabria

was Did that… the average acquiring Great. not that's just in one And Is the the you're that you say my occupancy portfolio that’s, quick for XX% development? one. super on

Joe Russell

are age. There's -- yes XX there's that at an XX properties operating two most three that average years are to

early So in of are lease-up. they phases

that occupied. So there about XXXX quarter-by-quarter. XX% under XX portion are And portfolio is properties XX in that the will property delivered construction are of be that

is very good. So the lease-up the opportunity XX existing up on

Juan Sanabria

NOI perspective? necessarily not But yielding like an Yes. anything today from

Joe Russell

A and confident they Class of across No. relative that positioned of stabilized I that are quite and well do the location mean, and performance. cure as we're with we're very to them. markets they've we'll the levels mentioned I quality the But buildings confident to the got very

Juan Sanabria

Thank you.

Operator

you. Thank

Rick Our next Goldman Sachs. of question is Skidmore

Rick Skidmore

morning, Good and Joe Tom.

to is from just you Just we forward kind lower that pattern? seasonal. happening? over that should seasonal quick as the And that expect help -- move-outs line, do a second was the personnel atypical What on really of we time? one. of do quarter, which lower third Is cost? look expect down to the kind you normal the bring Operations then line declined for Or to

Joe Russell

whole and of tied to as it's opportunity moderating the and/or definitely whether seeing standpoint an supervisory. for Rick. a pressure We're find payroll ways optimization looking property Yeah, to from

some of saw you quarter. that the in So

quarter fronts. and intentional We tied nicely. LED ways standpoint. an to That's down also were are that of we've finding some optimizing for on number investments in a looking operations of the from made Utilities

So we've now from an and entire so standpoint far our to got third on lights, about transitioned a LED. maybe LED exterior portfolio we X,XXX-or-so the portfolio interior

little of That different So repairs utility seeing relative were nice maintenance over across down. the Repairs were quarter-to-quarter X% savings a saw the and utilities there. a look down good necessary too. the of our of depending Tom's been have and can new vary cost. some marketing to on spend in for portfolio, on we're Again, we the we quarter. optimizing optimizing costs. metric ways ways continue overall, at And to looking but focused

as wasn't quarters. it's So, although, it the was much up as last it few up in been --

So, again, optimizing we're looking for different ways of spend that too.

Rick Skidmore

Joe. Thanks,

Joe Russell

you. Thank

Operator

Thank you.

Mueller question from Mike of JPMorgan. next Our is

Mike Mueller

you Most give just been but trending? that's how Hi. us Yeah. of on have can questions and management quick been answered, a third-party update kind

Joe Russell

Mike. Sure,

whole a front. direct matching got the in we've in is backlog the program activity the The own our from and on kind standpoint quarter. program XXX acquisition as So a standpoint in properties seven delivery the we of we're ways some added activity seeing

continues been are of seeing business program the finding system. interested into high-quality the as since we has we're good it The the came we and percolation into is dominant new build. assets that So are deliveries. tied to And in factor to coming owners

So next portfolio assets pipeline into growing we've will coming the quarters. also over a healthy the new that of got few be

Mike Mueller

Thank Okay. you.

Joe Russell

you. Thank

Operator

Our Peterson Jon Jefferies. of is next question from

Jon Petersen

Thanks.

guys how portfolio The management they for is from And first. that business? if this you had are Sorry your buying you said third-party are branded? currently

Joe Russell

their Okay. have They own.

Jon Petersen

going forward? Okay. in the of And for guess guys third-party terms about pipeline should business an management how of we then I think takeout kind you acquisition

Joe Russell

to one how have one-off relationships they're see they only that multiple owners But I think business multiple assets other plays to a front. markets. two great or on with situations have it's and percolated a assets in it over owners we've handful natural whether of owners, time. We'll a or build that it's own add overall that opportunity had junk that

So will out it's pool owner been be and our of different a to broadening a tie to healthy continue way there.

portfolio, for not portfolio the look too, closing on program to kinds So, quarter builds. platform. we'll as and that continue the we're is this relationships our of develop large those in the But

Jon Petersen

it. That's it. Got All right. Okay. Thanks.

Joe Russell

you. Thank

Operator

of Sakwa ISI. You from have Steve a Evercore follow-up

Steve Sakwa

the of it pay, auto inability how what's those back trying sort much to cash are maybe and it that understand, charge were wanted an Thanks. fees fees, light is portfolio? much that. of how on trying left late more just pandemic? of understand pay just therefore is of of just I paying kind to and to of normally less customers much have circle to the was in How customers driving and down naturally the I'm drop

Joe Russell

Yeah, Steve.

around bit fees down. So I'll provide are the a primary is more little collections aggregate, that why reason in customer color because

starting solid. persisting rent in collections, really through And second very quarter have so, as been the the we look third at and

percentage. are And and in away AutoPay patterns fees. payment customer at charging contributing you higher a have from AutoPay modestly is we're accelerated highlighted some terms But less even i.e. of of tenants the things

you And to not it, don't so it. if you're collect going obviously, charge

delinquency receivable down around tenants We off period down quarter that to be about XX% about meaning through Our XX%. rent. the and wrote receivables through for less XX% that's the persisted

We fewer in auctions quarter. have XX% about the

and which So a period, grace period into has but overall, within fees to lean in not customers also period improved, of by lower for customer delinquency delinquency. their rent that the health but driven and charged patterns fees, customers have month payment grace contributed lean the from late first led sale from the and ending fee late longer primarily fees, paying primarily fees are

Steve Sakwa

more expect you down permanently? time Or in of you at change? look bigger cyclical? as more look you So just, kind at a would this as a to structural it's stay Or this point us do

Joe Russell

by that on stimulus and certainly have benefits was was early through think the April like. been government thought that case it and unemployment we transitory may I in the customer and there being pandemic, the supported more

have in closely October been of been November and we're part well. very watching patterns that, rearview as some continued. put has trends the of through payment It's good tell would something that have through you mirror, the early And continued very the I trends month-over-month.

or least, term, to we're will at like we're case, that the medium future closely. for but the feels near watching very it anticipating it foreseeable So be

Steve Sakwa

Okay. Thanks. Great.

Joe Russell

Steve. Thanks,

Operator

any the or Burke closing you. I back additional hand for will call now remarks. Thank Ryan over to

Ryan Burke

Thank all joining Have of for you, good Christy, and a thanks today. you to day. us

Operator

does call. This conference conclude today's you. Thank

may You disconnect. now

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