Public Storage (PSA) 4 May 222022 Q1 Earnings call transcript

Company Profile

Participants

Ryan Burke	VP, IR
Joe Russell	President and CEO
Tom Boyle	SVP and CFO
Jeff Spector	Bank of America
Michael Goldsmith	UBS
Ki Bin Kim	Truist
Juan Sanabria	BMO Capital Markets
Samir Khanal	Evercore
Keegan Carl	Berenberg
Ron Kamdem	Morgan Stanley
Rob Simone	Hedgeye Risk
Smedes Rose	Citigroup
Todd Thomas	KeyBanc Capital
Spenser Allaway	Green Street
Caitlin Burrows	Goldman Sachs
Michael Mueller	JP Morgan

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Public Storage First Quarter 2022 Earnings Call. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions] It is now my pleasure to turn the floor over to Ryan Burke, Vice President of Investor Relations. Ryan, you may begin.

Ryan Burke

Thank you, Katie. everyone. Hello, joining first for call. XXXX for us you quarter our earnings Thank here Tom and Joe I’m Russell Boyle. with

assume within may we as Before begin, forward-looking federal because call no statements matters economic These of subsequent to only obligation forward-looking and we you of statements statements included update, securities this constitute and today, release. May to supplement untrue X, are laws. call earnings revise remind non-GAAP that we reconciliation that A speak want we become uncertainties. certain during the All financial discussed statements the of XXXX, the meaning certain events. subject or is to of provide our risks to GAAP this in measures on forward-looking

supplement limit our We SEC questions. to to replay that, over our find an audio call release, queue. call in initially this publicstorage.com. After I’ll website Joe. to of at please can With turn you and yourself press of the that feel reports conference free on course, jump two back that, ask report, do You

Joe Russell

Good morning, joining for and you thank us.

hand areas for I are highlight QX will metrics, the the five discuss to call I to Before Tom stage XXXX. a specific robust setting that over

business remains very First, market-to-market strong.

are elevated also months extending length Now demand that average the we we Existing see year, are customers four stay. from into across continue to the portfolio. new customers of

XX% rates very We our have well. healthy up customer and rate pricing move-in with program and existing increase performing dynamics,

vacant customers seeking sales the clearly drivers Both, Second, tight students. which include demand X%. to Inventory more and are our affordability, see with a metrics. market work tight throughout for is the vacancy year, markets. hybrid additive taking of for about busy business We space this time traditional are and environment college hold. performance and with commercial traditional Home at along outsized home consumers aggressively is season units

feet are These note, contract acquired now and XX%. deliver is activity a of XXX standpoint. we ahead already totaling average our million after nearly quarter. presence assets to we billion and well. acquired year the exceptional growing complementary we occupancy portfolio NOI approximately large as a across is square have Non-same-store $X.X anticipated, year with assets assets, Of from ezStorage $XXX the of revenue highly portfolio $X.X under XX the are occupancy to to returns yield due the non-same-store expectations year. performing outsized has move-in fewer Third, portfolio, The continue XX our market achieved significantly during All ago sales Year-to-date, two. Storage closed for Fourth, this anticipated million. market have billion entered assets as recently or tripled

increased with our XXXX lease as $XXX to as deliveries anticipate March, PS milestone XXX the two million. desirable millionth a move-in. unit. than them XXX Our to years. next And intact industry-leading embraced will to assets to development approximately The remains XXXX of our stable relatively customer platform experience for be delivered industry-leading and digital national continues forecast be we giving of fifth, each reached tenants. property X includes new half digital a of as centralized digital by our a are leasing, more app. choosing our access eRental option Today, In we customers well eRental, significant This

a both, Our win-win. experience customer employee public digital are ongoing in the improving investments platform storage and Clearly, efficiency.

to Now Tom.

Tom Boyle

over for of XX.X% FFO quarter, the first Joe. growth the XXXX. representing reported We of $X.XX Thanks, core quarter

fourth an quarter results to quarter. Our from year the the start acceleration first strong a represent and

to XX% from performance XX% is contributors an the same-store, demand the and Let’s achieve of In XXXX. two to the range move-in XX.X% increased revenue leading strength: quarter. allowed look first us factors contributed our our we stays increases with quarter was up to First, rental rate existing of rate inventory, at tenant in impacted lengthening the with rate for was XXXX. in continued second, customer when were compared accelerating the a Angeles that markets. acceleration Growth the rates of the XXXX XXXX; to That by as strong in second largest which XX% half driven January by to strong well same-store that On versus note, regulation were also growth XX% X% some same-store from to a in as Los period comparing contributor March. revenue revenue growth limited in particularly

cost operating had up marketing same-store net operations, savings of We with X.X% on items. the on in the up In pool XX.X% other Now the good stabilized line a on quarter, offsetting growth income in in of for to quarter. was expenses. total, expense quarter expected properties

In addition developed facilities and the remained acquired as performance lease-up to and the Joe in standout mentioned. of recently a same-store, quarter, the

Now shifting the outlook. to

roughly introduced XX outlook core strong FFO days We XXXX. growth from We’re when a initial the our guidance midpoint, $XX.XX for on XX.X% representing we our reiterated from XXXX year. with yesterday

customer are strong of and we traditional with year ahead. as our that April another into mentioned, Joe experiencing setup through very leasing months good a from self-storage, anticipating demand busy We’re

with levels, over Shifting by As our PS acquire the Parks Business into gears, past for an growth record rate. the year, occupancy rental it announced agreement I’ve will company. near Blackstone driven outlook where highlighted entered is

recognize requirements cash. anticipated we Upon $X.X to And distribution is for agreed would year. of have shares our $X.X that tax would receive our for transaction. closing, $X.X billion the the vote in of increase gain a that billion, which billion quarter, We third the

PSB FFO in our approximately core million quarter first filings, $XX.X As or X% we noted FFO. in the of company-wide in contributed

you capacity plan are this time, Last but and by more PSB. the and not to balance is sheet the sale, details that, at Katie, markets, XXst. turn billion gives preferred stock distributions Perpetual sheet in it perpetual have we’ll so you to $X ranges low And not with is $X to questions. cash progresses a is leverage least, long-term capital our against to We it us and laddered rate with and provided environment. on growth capital updated our I’ll transaction at reflect fixed update of well fixed debt as good the March rising for fund guidance billion same with to rate open of very today’s up but balance

Operator

Instructions] Thank of from Jeff you. [Operator Bank will Spector with America. first Our come question

Jeff Spector

Great. If And we Thank about talk to please me questions. question, we you. are, could if limited sure know. we’re if guess, let not I’m My first I April.

April. so You on into seeing continued commented demand what seeing you’re additional comments in any you on Can far April? provide

Tom Boyle

month. in good seeing Web the quarter. board. visits seeing through month Yes. consistent April. heading Joe into are really over up sales calls momentum strengths I’m move-in a we’re from rates, Sure. sure move-in good in which month. And up up in in, I across know the We that interested transactions, about pretty were and is the mentioned, little XX% the momentum you’re second we’re saw were a Market the or topic are that

the see and saw that off quarter. in first the occupancy We trade we rate to continued

So, points occupancy XXX about ended really April year-over-year, down rate against growth. again, but basis of the strong backdrop

Joe Russell

more strong. And, sheets, seeing and to on levels remarks. a my made little balance of in I still quite we’re to comment environment strong. everything bit yes, maybe the statistical Consumer are perspective Jeff, very is by consumer business that add opening relative customer health The

fact, balance pre-pandemic. today In consumer they are sheets were better than

as Tom end, length of to spectrum. across well. activity the quite business stay the as good very of continues seeing demand, funnel increase back Top is mentioned, vibrant. We’re on And

So, queue, through the we’ve seen well, front business one quite and the encouraged question. how and of let quite next space out we’ll of we’ll on consumer enduring on to the spoke more, utility bookends question play that I the your the month on then two side in strong. the of demand what the by then is both Many questions and we’re move utility of continue factors and April. ask to To you of to many

Jeff Spector

you. really you to is on Thank easy expected. I are start guidance then year guess, me. I Okay. why now? or a to Can guys even the you explain incoming follow-up conservative. great. right maintain great been It know than like That’s the That’s the better guidance. seems just maybe the question top

Tom Boyle

year has to start only really characterize uncertainty XX since half take here When the is into we right communicated try specifically maybe we in to had highlighted in for out encapsulate our last i.e., initial anticipated. ranges. that, we the inherent is that to lease the that’s business more year. the as it’s where range happy year we we of with I’m narrow the second the And we busy to guess, I the been range. line the widened reason what upside a into season plan, ranges that. the days and but we the strong, compared largely our the of the And ranges month-to-month set strong width get uncertainty I’d And, started Sure. in

provide likely will and the we as going our that’s we how narrow the months about lot expect over good to we performance strong and updates we go this a outlook feel next year. we that would so, year, play learn about for we’ve to forward, point, certainly three anticipated. did last the through move or the date, going We’re to out we’ll year. ranges seen But, as like And at we

Operator

from Our next Goldsmith come with will question UBS. Michael

Michael Goldsmith

the rates market on quarter understand rates and get how think more kind growing much progress starting is through April? are I to of think they given do the more is trying comparisons question the comparisons? difficult how and first street difficult, into My on these to just I are

Tom Boyle

against speaks and question the rents tight as busy those through momentum season inventory. to see date, move-in to willing in we good the move-in mentioned good accept rents we’ve a uncertainty clearly as That’s customers of to here. continued Joe Yes. move To higher environment, an and

as growth tighter we’re tight. only that move-in gives season. quarter. a So, occupancies, about From move strength us gets We standpoint, year-over-year, saw on here the we rents get we pretty while through into when near-record occupancy first month-to-month will pricing from inventory is consistent call anticipate mid-teens it, busy off talking year-over-year, which the still inventory

we’re a April, we’re starting comps already move-in year-over-year. XX% And face As I noted tougher touch on those to rents. over up in

have So, we as here. clearly Joe mentioned, momentum

how rents play kind will be reset? several months the they will to potentially or higher reset out that over does where next question the Now of

Michael Goldsmith

And piece goes of Understood. the this guess, along is kind with of that trajectory ECRIs. I the then,

you in occupancy that kind relatively ECRIs stable of past? applying market was -- just the the how to rate as more Thank as do are the same the about difficult seen And compresses growth think Your now, rates in street remains strong. given you. quarter, suggesting you to of that prices we’ve length first street face -- prices that necessarily extent customers, rising comparisons, the stay

Tom Boyle

Sure. Thanks, Michael.

mentioned well the that to modeling our earlier expected. derive the year. mean that is through And And optimize increases, tenant behaving existing are behavior year. to specifically is expected rate that what run continue by as Joe consumers through we continue going program So, we the will and

you’re rates seeing and restrictions put we rate rental that "catch-up" otherwise catch-up trends to versus other asked growth rents do add I good our what and in if predictive a similar in markets rental sent Angeles, item have in Francisco which to markets the they had inputs the on of we’ve instance, a are one to grow San outsized to tenant as certain of category generally wrong have if markets. maybe like highlighting, as speaking, even York maybe time and expected. is period out The one part New for to to I’d clearly, into analytics. is and we’re replace with So where got move XXXX for what But Los would we some because a what the XXXX or we date. see cost don’t where much highlighted line moving need you do in we to those we’re

in Angeles acceleration would and quarter the And that so Los you continues. anticipate in that see

Operator

Ki question will Bin Truist come next with Our from Kim

Ki Bin Kim

promotion to So, any just just details. in be rates? been supporting back that that or curious was thanks might trend, all in marketing if for dollars move-in increase activity the going I XX% there’s the April change

Tom Boyle

good a Ki strategy No Bin. Yes. It’s there. question, changes to

play comps given anticipate in overall, was lower of that April moderate in I’d March, that than out for move decline year. first the advertising promotional instance, we through were saw lower the year had the we we You starts quarter. marketing in we adjust to had last through into that that this lower, well. But spend seasonally as as year, move saw as and dollars April time discounts we

during the ordinary, nothing good for well businesses April, into So, the demand up which as consumers of just out to as overall May we note store of get really and set helpful as June. continued to there month is

Ki Bin Kim

this you Got down, at kind terms COVID work from COVID kind it. dissipating. did take throughout might Amazon that be might And happening notion you’re obviously, I and changes market portfolio of call little Amazon, but that Squid step of home winding demand anything sitting all happened and and some at the that, and of home your self-storage in is starting just the a bit the on the dynamic, to down? of that suggest to shopping drivers trade, that supply profile. seeing different And and if a there’s may winners a in Netflix concern be of of if days and and part definitely help watching -- what’s curious margins demand the if the those back I’m look on to wind that demand Game and want it or

Joe Russell

other you’re affordability mentioned, from peak you additive if to price purely a for by a whether or have a or Bin, call some That’s unit, financially Ki very financial of we’ve point. the a the an standpoint, always the driven driver compensated say, balance that of by include, was it, of lower of, a intensity which I Yes. would periods pandemic, acquiring storage an pandemic, as been owner wind-down seen renter. living good I things, benefit

time certain to Even not a see adopt that sales, though on sale a home might seeing continues many potentially back pulled to likely that student time the year, supportive we’re rates very evidence a are to demand back and the and environment, of activity. being a year. home still up, full interest are very seeing good the more at driver. Today, to are this pulled what workforces. for continuing very, this traditionally we basis. we’re healthy they’re from very Statistically, we being work continues be active time are of too, that level So, even companies maintain movement there’s There’s environment everyday relative flexibility work, That still of when seeing. employees of college continued hybrid

additive, of many down, pandemic, through again, seeing eased customer drivers have the very reasons, demand. the compelling still more other of seeing intense So those we’re some like good we’re

Operator

question with Capital come next BMO Sanabria Juan from will Our Markets.

Juan Sanabria

sunsetting the on restrictions. of curious rent Just

initial a in update progress on the just same-store could a results, recapture ‘XX? over loss just with guidance and that? any of you revenues quarter you the have but for maybe If COVID to around provide to or the fourth curious to You was expectations provided ability prior bit update what impact for color if an

Tom Boyle

picture, around Sure. The trends to Los would the of rent expired the I And I’m end same-store of going think Angeles that concentrate that my largest Angeles. our We likely market, year. in the add the accelerating. market, it’s on big at the last anticipated commentary restrictions Los because X% seeing strong and Company it’s our story. call Los largest we’re to clearer we event to outlook. is revenue commented overall Angeles X.X% long-running

recently completed quarter. growth well our Property noted, The of team through revenue capital Tomorrow the that market acceleration as I program. investments the within As same-store in

was Xst and to with properties January poised ready for accelerate. the team good-looking So,

that. So, seeing potential commentary we the around And market coming growth from the reiterate are specifically. that I’d

Joe Russell

of only top our largest occupied but on our not market, nationally. it’s And also highest market, that,

we’re close occupancy. XX% So, to

again, another states are So speaking kind to. strong opportunity the that very Tom revenue of is for that

Juan Sanabria

Okay.

off, coming from rent X.X% to So, to the X% benefit, and just restrictions guess, other L.A. no I change to...

Tom Boyle

That’s right.

we the We’re strong seeing acceleration anticipated.

Juan Sanabria

that just the you view geographic as think product anything subscriber the Sunbelt of this indicator Sunbelt. curious are in but kind guess, tough a we markets, a from will leading And to dynamic plays York seen Are it’s markets, Okay. go, just perspective? I How New markets mean, mean and whether lag, the comps like across some will a maybe markets I it all ‘XX? you do guys then, on in where that New to is out into sounds out and the kind go normalize definitely some we’ve the led the geographies, you other or think of plays of how of i.e., you bullish pretty York,

Tom Boyle

Yes.

there point, our is across you highlighted markets. think some variability a good which is I

perform demand date, et they perform Tampa, growth, Miami, like in face strong markets really well continues seeing similar a in to year-over-year. the you Miami We’re Palm XX%. and up Florida in West Beach, incredibly some really And continue cetera. were in And population first mentioned, that’s meaning trends To but the pretty already we’re tough to procyclical drivers give move-in Joe activity, to rents to sense, starting home demand that quarter well. in comps April.

over to trends be of population which many think, place elevation the strong growth into base, our we’re mentioned, processes, in for the that temper do will and markets supply, through activity seeing today. challenges and the good overall, process, building a we’re supply in as costs, not anticipating I comes new that et growth near-term there thing really kinds a Joe customer we’re that that healthy industry-wide, anticipating So, that trends. that’s getting And time, incremental good home But is that’s are the the And we for given seeing there. industry those construction likely city to serve still cetera, markets. to taking of today. Sunbelt related rent

still there. good strength So, seeing we’re

did and restrictions. see on commented catch-up just to Francisco, terms acceleration New some markets that rate the partly side, on San York I around In the of in maybe flip earlier we of attributable was rental those

that markets or still the of does do drivers but momentum Atlanta today. have really are sort performing well, there. we procyclical does overall, an have some And same those Miami So, a don’t they

Operator

next Our with question Samir Khanal from come Evercore. will

Samir Khanal

that the here, out of on of X% second your York. It’s and about rest here portfolio. know portfolio. sort it’s expand pick New lagging to to do held supply the you half a of up works up Curious I still kind a sort the it move right? I bit sort any about how So, of think mean, of little or return well, are Tom, of is only out the seeing back maybe folks thing you city? really as talk

Tom Boyle

anything That’s question for aren’t second around a outlook I say, returning related people Yes. not city. to the good But half to to and would concerning I’m particular. specific going seeing asked markets we in question. you speak move-outs specifically the to overly

is continues would to that again, I overall, get revenue that of So, in absorbed. that that’s supply we’ve supply growth north and be fourth some New a does a Queens. anticipate There parts quarter Brooklyn the pretty absorbed driver York. quarter X% of But And new not first same-store date. seen is from a like that big of in quarter accelerating in to good place market to the be

Samir Khanal

what Got it. gears little said you’ve transaction million And a $XXX done so market I for bit. about the then, to sort the think of year, just is I know shifting it’s you far.

still the provide is at out acquisitions. of of well? guidance and pipeline there, Maybe kind in color what of Your sort $X on of seeing sort pricing what’s about billion as you’re

Joe Russell

or those portfolios the market that big, portfolios tied to came Sure, transactions were billion was to XXXX going of saw the meaning at level the year. of market, $XX large XXXX took we’re strong, that was it place very and minus that unique them activity almost various that XXXX. trading overall we were the in stages billion-plus be in last of number thing to half likely in to Samir. see into of The XXXX The volume plus unlikely comparable was drove of the same

of haven’t say the into we market million or market portfolios same term have As quarter likely smaller healthy in of year, or coming a amount $XXX large that even individual now come months earnings $XXX range market into million seen and that still is of There into come last either both, emerge. near back and two. don’t quarter, we kind to in, activity in anticipate the the the in number portfolios, the will call the X coming we the this in the mentioned

competitive. in of come with level there’s that Pricing cap XXXX. activity the wants smaller the say of still into sector. how we interest but in see to rates matches of is that self-storage even elevating, there’s that we’ll any rates, I very a yet saw amount wouldn’t surprisingly movement activity fair kind pent-up So, capital

So, aggressiveness remains. from buyers

in We’re seeing markets. some assets good multiple

transactions, quarter is second of see a little it’s bringing this level out owners saw that but figure busy A a first or number or not relative the quarter to playbook assets to different take the the maybe it’s market. to We’re to we first underwriting their that But, elevated own deal XXXX not year. of quieter. sometimes in lot even annual same likely of flow either

we’ll of how QX. and So, see that volume see there, we’ll into trends kind through. what from going QX plays And

Operator

from next Berenberg. will Keegan question come Our with Carl

Keegan Carl

economy your on of Have I going just think demographics preferences? in concerns. broader change seen inflationary first, given what’s and the in you customer any macro guys

Tom Boyle

question, that is through do, That good saw dynamics changes of I’d Yes. a watching them. watching and closely typically highlight dynamic very closely year. we’re there’s that this few a we the very number first but particularly a we’re the given quarter, of as we

demand to group as we On demand. shifts any in And see to of broad see the mentioned demand. a we’re Joe watching continue earlier, side,

for demand, But, shifts demography we not watching. are healthy. for We’re year-over-year new in cohorts customer and by income that’s shifting instance, or seeing

is are sales at seen home well home are are moving through and we decline of driver new home part as this levels move higher. a existing above basis, that rates activity mentioned, month-over-month Joe year. to sale which on As sale demand. activity still a pre-pandemic Interest We’ve levels, sitting supportive the but

watching that we’ve seen date. again, So, that nothing closely, to but

there. existing spoke relates points our the behaving consumer, as tenant about earlier the it fact we consumers to activity rate increase As pressure other are and expected that on

there. shift no So,

activity. good would continue point to balance consumer sheets payment other support activity. The be And pain payment

or a bank for two homeowners I they well. still from consumer as wealth up households. equity, supporting creation the American nearly event what center double that So, is at looking some is ago, cash home There’s sheets And a been were data balance balances other the highlighting component think American pre-pandemic we meaningfully, a right? were are money for week

supportive. are those So,

during Now, that we an are I but also delinquency off checks saw seeing would stimulus the environment say, we’re where are out. pandemic, we the lows going in not

so, better to good in in we than date. a remain and a bit where it’s but a And delinquency, were place to little of natural see lift we certainly pre-pandemic,

drivers closely watching but continue we’re to pretty strong across point, to those this of see the trends board. all So,

Keegan Carl

it. just Got example, bit a more on pricing and maybe in And bit then, reasons your changed for gears in their you customers leaving? maybe of Have shifting a leaving for mention at little all little length the color stay. people For more are recent seeing reasoning months?

Tom Boyle

change driver they no biggest think customers is You situations meaningful move living people sense, they longer space, need cases storage the which no or because that Yes, when The need there. no makes use some right? about they space, at many longer the for highlight point, that cetera. et their the either leave change,

So, driver that the there. continues and no to change biggest be

average is of our And average, are that XX highlighted that XX of Joe length on tenure a metric. that of XXXX lengthening the place, terms to pre-pandemic months. compares and customers about their in around average stay, of in In today, months

increase we tenure, supporting tenant our pricing as So, as see continue strong programs. to existing is which well both, strength really rate

Operator

question Stanley. will with Ron Kamdem from next Our come Morgan

Ron Kamdem

Hey.

points sort you’d XXX back item. of L.A., original I to guidance, basis to Just line going think contribution mentioned revenue the same-store the I of think

XX%. really some same-store comments gave just opening You remarks good the hitting at about

there? sort expiration those a below this are you us changed of And, sense of post anything is, rents question or market just price give how can changing? the So, Thanks.

Tom Boyle

right from highlighted start in X.X% that I what earlier, restrictions rate of reiterate which of just when range. a the January we I’d a period rental standing still We expired. is those were sort is to X% Sure. obviously starting believe

some it new us, tenant to rate and see higher coming the will program. then rents, from existing customers older in play so, time take acceleration leaving customers both that through, And at

that the in quarters But, to January acceleration just XXXX. gates of So, season March here the of in. to the we’re out seeing highlighted I to some take speak that will trend level to specifically

Ron Kamdem

sort And at average Great. then, looking was occupancy. question my second of just

that the much We comments rates. or sense like have get of pricing about during be seem about the more of you season, see just year sense you leasing your points trying much, doesn’t quarter-over-quarter. down, that occupancy of harder all sort sort is push to peak could it XX is acceleration there’s had I a when of sort down to potentially And here? this basis which appreciate how

Tom Boyle

think we’ll on next that quarter. you update I

Operator

next Simone come with Hedgeye Rob from Our question Risk. will

Rob Simone

getting I if back did, successful kind to and hasn’t about had I yet, checked higher-level how guess, mean, box of changes -- you the like unlike Thanks. a But versus things be? had where year about all last at to the like a been the Board business. you for its think when and you. was what can’t obviously, and of affecting you left left like accomplish without PSA of these those has question you of that year you for share scorecard changes the discussed on in kind had run wanted do kind strategic to transformative the communicate what to obviously, you what fairly over of and Company past hope to you I what’s it said and level. what’s -- looking are kind kind of

Joe Russell

the that had bring assets time we opportunity Sure, Rob. the development we The was data standpoint, a in year Day program, our now many we of transparent only technology the investments that of variety business. and relative the in using through impact from portfolio, could Yes, May that were the about our that that saw initiatives initiatives. different market goes opportunities Investor for with that we’re an saw back thing not formation were but we of to this expansion the our last of pronounced we the did outlining the and of some the the been relative when to strategic way analytics, very almost the approaching digitization quality into year

is about. that So, tell very the working number at of we’ve more much continue intentionally each transparent that large different areas that would you areas. of those the I a in been optimization to we’ve checkmarked aggressively team

We’re continuing business. relative that running only very way more optimization good deliver on the to on not to the path we’re

with eRental You’re from very virtue we very that, through, Tomorrow and things Gen Property of reverts satisfaction these way the customer solar size investments that around team from area our properties, to existing an and that doing putting we’ve seeing properties, in and program, efficiencies that X Gen through we’re also for amenities program, right opportunities ties where been that very delivering then instance, many X the continue again, include and effective of by that the retooling mine the standpoint, that back to development industry into our we’re our our capabilities, and we’re effective the we’re which uniquely adding of what doing that and an portfolio, efficiency employee to standpoint.

very the powerful to and growth of business. the points all that So, different a business, that the to and parts strong very in investment the we’re ongoing making commitment of

We’re pleased by the traction.

by we to Public pleased business brand With always, results. that brand. as have continue like to are challenged Storage, a We’re expand we the we more. do at very But can

into those the many average the in they assets effectiveness You’re occupancy put the couple last of and buying and public operational into tools well. seeing We to that was years do of right say, even XX% right particular, that XX% as put storage we assets, the efficiencies tremendously in, range. we’ve them over where the invigorated the been brand, of the

continue we that got. large, invest at very That’s prominent team to the another we’ve in. So, strategy

too. through retooling put the additional we’ve the throughout seeing good our of from into teams operating and thought results a lot we’re very teams and Company, particularly that, So,

hold. the great taking we’re business, environment that drive to of the many things So, and are by to pleased continue

Operator

Smedes from next comes Rose with Our Citigroup. question

Smedes Rose

just some outlook. I’m it out in wondering, -- seen haven’t up, I you because remains has going very I to than of how in you just circle a just point, more pricing just maybe that do that so And expectations? changes mean, But, rates know that know bit very being reflected on have from pricing you interest will holding at clear. mentioned -- are I back kind seller you the change, the we start little or back you are right? that to wanted what acquisitions that’s mean, playing that see on expectation far just any seems been perspective, might otherwise in competitive. your that I

Joe Russell

Yes. we’ve approach the mean, different Smedes, investing. or way I been wouldn’t taken a we’ve that I that pivoted to holistically say

we’re of We from can opportunities, that from as outlined continue for say quality can that driving bringing to putting we’ll them get see success the see own based look opportunity just and then our scale the kind that performance to that in platform, we particular additive we our we’re relative I to to market. the any returns, factors into the there, the from portfolio, going on -- of assets what

to fair our approach going activity. to is to back betting said There’s market we’re the believe a of sense assets and looking that portfolio. competitive working at make hard. amount into relative So, the the or seeing, some we’re come the to stepped where of of going team But because me, shifting haven’t we that and be we’re of to down shift out

assets. may competitive asset may we or And underwriting busy price very trade always that very lot point there’s a not for it of playing feel cognizant relative activity on where forth bring an may tipping a we’re that There’s the a through. best us. of returns We’re

continue So, to what we’re can we’re of But very still opportunities. optimistic we’re play through. that, And too. to very overall, be seeing reflective about going

balance mentioned, our continues very be in to sheet shape. Tom strong As

This flow. We’re million another $XXX million cash. sitting we’re billion on generate $X likely of in cash year, to to $XXX free

and the grow to continue vet good to we’ll asset positioned very well to continue and very seeing opportunities, them. So, portfolio

Operator

come from Our Capital. will Thomas [Operator next KeyBanc with Todd Instructions] question

Todd Thomas

to for sort a maximize little occupancy a little for more I quarter. from you’re compared of challenging occupancy the up I bit appeared a bit know general, atypical first further to to the back are you side and average decrease point seeing this rental just are revenue. know But, quarter-end occupancy occupancy at but The maintain? here during go the the in to is peak build at -- the or of goal formula season, wanted rates, a second. you occupancy just I very-high in to at seeing

Tom Boyle

think, a I points. Well, Sure. of I’d make couple

revenue that have. I one, comments maximize made important there think the the available that which inventory was seeking from we’re one an to of we you is

weakening our inventory. And occupancy you is your we’ve already asking down we you, call, outlook occupancy weaker of I And so, are question, the a consumer occupancy trends. guess, maybe managing I’ll as reiterate we’re rate the is rental component. trends. comments That into reading a said, is lower on a consumer think points clearly, we’re component overall think XX tell not because about And revenue I year. of is seeing small component, basis to made the relatively

then demand available We’re the revenue from demand. for we maximize customer the can seeing that and good seeking and that inventory space to

that I it’s would there. So, this I year start occupancy the say, to level highlight of year. with wouldn’t we had the anything unusual

And the is bit it’s but unique which doesn’t year. that so, as I change is year, point one, our fair a strategies through a head of your think, a we

Todd Thomas

economic ahead? you then, That’s of Okay. it’s the gauge for maybe level of vacate anticipate a sort across quarters vacates the from where indicators portfolio? that might at there in there are any activity that potential the to Is helpful. give if And you activity here any sense way slows down

Tom Boyle

mean, is I activity very teams closely. our Yes. that watch vacate something

And heard and of level methodologies. on Craig and you inventory, the analytics available Kim, Part around on to pricing to market. the and methodologies Day have anticipated you Investor understand Philip inventory understand Richard drive team from those inventory. of our need to available on So, you vacates

year. have vacate And since predicted pandemic. unusual But communicate. would versus been the things a we the vacates we’ve to was date, certainly activity shifts time And that behavior say obviously pretty looking to to everything to But something is, we’re I have levels. teams visibility anything that is we’d say metric into daily. that highlighted internally a that’s in manner, it’s if good vacate not what seeing So, I’d unexpected we an at start shift related pretty really onset anticipated it’s the the predictable. And through unique of pretty in actuals has only then, big as the really period. time was saw I what were the

Operator

come Our next Green from Street. with Spenser will question Allaway

Spenser Allaway

in on Most guys REIT management lot third-party speak buyer to been I churn questions assets? just a terms you been have the of the pool is There’s recently? just you side. sector the two is buying maybe asked. these my Can who Thank or any pools. the ancillary had changed peers, revenue across Is of of it maybe

Joe Russell

it’s market. of any and Yes. out in the all Spencer, typical buyers that the are

they’re a management pretty commonplace amount the of platforms So, there’s third-party private whether see and a as through third-party well. component that’s operators, the you platforms, fair the public platforms of

can take equity, the come private within platforms So, those public from either a activity can that place trading private investors. operator,

So, that of pretty teed as third-party of before of of got typically, we typically are in that optimization. they’ll up -- is different The levels year these asset owners to we trade. platforms back Last to of own of on there the periods of own is in goes market business, typical activity it’s ownership assets not of get the to many place. that. range the these takes the just assets being a In that of out on reasons point, certain third-party out which amount assets for may that bought they’re out just look the structurally, a tied of time. quarter, fair do They’re first bought looking number and platforms. -- trading one. platforms, of these right bought to at their They’ll overall take also even of amount buying some long for the We’ve platform. management fair our third-party we a But, management

typical kind overall what of So, with third-party of the happens very management. dynamics

Spenser Allaway

on Thank pool you. to tenant a as you And pool? rates non-same-store same-store then, great. Okay, penetration for can compared sense the give insurance, your just maybe the of

Tom Boyle

that’s lot in overall. past increasing is Sure. non-same the that. for little the don’t who are many bit choose that little then to insurance find I’m the been actually little lower going bit than been the coverage we to tenants tends pretty the bit And basis than punch It’s our that a the value it’s to same-store in acquired of years. stable our speak place to higher stable. couple maybe a a as pool that’s offering. reach coverage as of in to development in for It And over longer coming maybe same-store a in offering. a more takes and tenant that Coverage And intuitive are upper properties, in store, XXs, customers pool properties. it utilize have see new

lower. So be overall, it tends to

not in the part of also And obviously, the quarter, years off offer top upper-XXs be non-same-store strategy up it the to think was I non-same-store lease that only tenant versus the to that my pool but product of same-store pool. for the base. head, in in over for that coverage XXs will pool, the coming that the

Operator

Our Goldman from come next Caitlin will Burrows question Sachs. with

Caitlin Burrows

just seems be is talk think was you on is supply. I if demand would to said it brought real maybe could wondering And bit ‘XX a ‘XX. it you Supply a little I or is. on wind strong, often like more it didn’t previously think and you’ve

what macro like So, give demand. factors could just costs versus this drivers, your storage-specific on wondering good next, view supply that, example, you and year and may construction if current be for impacting

Joe Russell

than over seem you that of be several new amount last in good of I way, And as I the opportunity. cases, name is constrained labor, are we’ve tell that are of with development Sure, with Yes. staffing feel, going whether one to today from risk And the some at there’s quarters, that, to get in both the very pretty it we’re standpoint, would elevated. thing volume staffs easier through with complexity a was there’s any that processes containing Caitlin. when the stable. still development, are city, elevated we to spoken steel, can’t for is deal a nationally meaning then hand, And entitlement instance, that a headwinds seeing from timing it’s interest from rates component in and pre-pandemic. then, far standpoint, at risk dramatically, costs City time increase, concrete. And a to some more a construction

In accelerating. fact, they’re

risk factors pretty So, different headwinds. that some meaningful very create

and what the point, of I is that seeing success a sector which the healthier a our us we’re good is spoke team for pipeline. of mean, the been of overall So, come discipline to that’s business seeing still I It’s into of do active, our for that to you’re the window of own XXX by there’s next. still many but factors do, properties through playing amount to grow and some market year the self-storage, level however, to. obviously, that’s likely driven development continue being to to To demand development the this XXX your for

less seeing in activity for land We’re certain sites certain competitive markets.

that to pressure the got able to developer But points and a first-time the with opportunity capture for a that’s you’re probably and that developer overall, of that potentially as the think deal just some We’re mentioned, scale, we we’ve some lot good the opportunities you’re to. degree, industry. conservative I doesn’t or to have because a wherewithal efficiency the deflect the going more -- spoke factors, a be I these if risk to thing

Caitlin Burrows

the it. also it’s eRental on earlier talked continuing to I you And then that Got platform. know grow. maybe

but you of or So, expenses going, result sorry kind what incremental this see up any are employees that? go that on through there less leasing if or the other just as of you I Could line? a missed the has stat. where portfolio of portion Like, your bottom what shift also it makes impact

Joe Russell

Yes.

we’ve So, continued of seen eRental. adoption

XX% from an of standpoint. using customers election channel are our that over Now,

our to managers, demand specific own in you’re their powerful. of a We’re XX-plus-percent not coming when can spent to frontlines us digital the that they’re electing digital the gives self-directed the actually being of things that half play or more property customer redirect done of team, on of labor of on move-in they’re property, the the it’s By It relative on, that is that and to focused opportunity property effects to through efficiencies virtue process actually priorities but choose utility at amount it, that management to basis. activity seeing and when pushing the our of would pretty process. particular, historically that, have property them time self-directed the of leasing the out potentially

So, powerful a tool. it’s pretty

some can a that more they of consistent we’re choose the to but and tool though the more growing customers. much move And It’s flexibility to property. options we’re when frankly, actually cost through see from as even You’re seeing use very labor, specific digital costs continued we benefit a of getting who amount and up, alternative well. preferred even from give there’s are much that transact. the experience, and a customers our labor that It’s that increasing efficiency that feedback it giving customer to in good

to all it look depending tool, its we’re So, choices. considered, ways things continuing again, it’s been powerful of utilizing customer and different at very a expanding on and use,

Operator

Capital BMO will come question Juan with Markets. next Our Sanabria from

Juan Sanabria

for Thanks back letting queue. me get in the

Just costs. last to one you year, payroll Investor of of XX% question tying Day the kind talked At of couple in previous ones. back goal about cutting a the longer-term

curious just inflation you higher. So, Clearly, is have if on update that. a an lot

saw we R&M quarter, and costs in This centralized same-store the management on the high-teens. pull up

be commentary an what’s you previous obviously? we light can thinking that how update on just give about changed, of So, us should in if

Tom Boyle

Yes.

opportunities that around find drive along to what financial a Investor about further. over a bit just at to put And guardrails the XXXX some that from to just but and standpoint. XX% Joe highlighted anticipate by reduce good I’d hours halfway a levels say, to that we So, highlight did continuing we’re We would little Day. strategy journey, from

So, anticipate XX% we’re or and to to through get on year track there two. that coming in the

Operator

Our come JP next Morgan. Michael will with question Mueller from

Michael Mueller

land through support? many you’re spend, about that positions, ramping your little worth could Curious, -- bit starts how up Yes. as Hi. talk of development a can that you years’ your and

Joe Russell

to take take buyer ownership entitlements site. actually give balance is looking of the take putting through Mike. the or land give without happen reentitlement or It’s land primarily a their through opportunities the obligation or onto the pretty types the us they actually that we sourcing inventory as that we the of our the we’re flexibility that owning we’re on stages typical approach It’s Yes, actually sheet. us layers opportunities typical time time. we’re for in property way not site to the right where What’s directly

through to far, more site risk actually of not we efficiency not, each we’re entitlements but that’s the put of the with before processes, resources knowledge, contractually, majority pretty So, and well. business that land approach. contain amount time, And typical ownership reduce are take we than to that the approach. we’re to every these taking It’s landowners a often only costs not doing and by a but of agreeable kind certain of that with as into layers

we’re with site with to ability closer the more holding frequently, more large start -- And So, construction. that, or the actually not much a acquire when timing going we’re and land it’s to positions. to

Michael Mueller

it. Got

way or about if the I -- works those many And do what’s how mean, give the many same our just you control, of have think would of do what So, or in in size have? land, something? lead with you of you development up? time or years how frame year does under you I worth that thinking one we’re three sort terms I that you’re in we about two owning guess, years mean, how agreements that

Joe Russell

about. Yes. Mike, I would say, it aligns exactly to timing the you’re talking

might So, market-to-market, take you’ve or got you a two. some processes that year

three You’ve than that got longer even take four. be could And could not, or that others or some that. it believe

into the and So, sites we’re time invest matching have deploy before resources and control that up. of we’re starting those sites. And to contractually, we

control land got of sites themselves. we’ve the So,

So -- exactly what matches you’re to. and speaking it to

going sets same that to. through that sites the about pipeline that of if are today, we pipeline think processes there land spoke you that are the components So, have I of those exact

but we itself the site have the have full get entitlement So, land the acquired contractual we’ll to we site. we take certain And may those ownership. in once control through not process, ability cases, actually of

Operator

have It turn remarks. questions Burke at to like we over for further time. would back now Ryan to closing you. this the any I Thank appears no program or additional

Ryan Burke

to Katie, day. all joining thanks and us. good Thanks, for a Have you of

Operator

this Ladies and gentlemen, you. Thank today’s concludes program.

disconnect. now may You

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