Public Storage (PSA) 5 Aug 222022 Q2 Earnings call transcript

Company Profile

Participants

Ryan Burke	VP, IR
Joe Russell	President and CEO
Tom Boyle	CFO
Jeff Spector	Bank of America
Michael Goldsmith	UBS
Ki Bin Kim	Truist
Ronald Kamdem	Morgan Stanley
Steve Sakwa	Evercore ISI
Michael Mueller	JPMorgan
Spenser Allaway	Green Street
Juan Sanabria	BMO Capital Markets
Keegan Carl	Berenberg

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Public Storage Second 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, Chelsea. everyone. Hello, joining second for call. XXXX for us you quarter our earnings Thank here Tom and Joe I’m Russell Boyle. with

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

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

additional to Joe. Of free With have feel queue. in if to over I’ll back you turn call that, an question, the jump course,

Joe Russell

a cover metrics I you, highlights as morning, Tom Thank Good Ryan. achieved and of thank you us. second quarter milestones. joining number for record will and we and performance

Now the to year, which raise. that resulted the of in we midpoint six has next of the our view happy our share are guidance are past we months,

of self-storage a that quickly store formula was name, the determined significant go great Wayne up Company, that August moment synonymous a our would a in I the Before the doors and Public roll El Public entrepreneurs, The Ken simple so those orange Storage with Public first the became XXXX, opening takes much XX, Storage powerful facility two for like take and acknowledge Hughes new. by to location to But I paying place created California. creative details, the brand this grow On of a color milestone stuff Storage industry. Cajon, to brief so concept month. and launched Volk, was and to painted

iconic million on Public the dedicated cater to focused the empowering entrepreneurial Storage inspired basis. the X,XXX-plus later, our daily stay team brand and employees five on customers Now X.X pursuits, a Public as just expanding and decades Storage that I are to

shareholders, bright are We over appreciative equally we right ensure that to our an knowing their culture those have commitment particularly Public future. of the have Storage history, our to while continued

results. in year-to-date our same-store to remains quite robust good, Now non-same-store with portfolios. Business QX both, performance and

customer of New through stay the season customers. growing has as in This, markets. as demand against length deliveries typical existing exceptional of backdrop leasing with summer the new well property most muted been

pricing move-ins adoption are highest alike significant the are customer milestones a to with space like historically. Customers, dynamics $X that owning businesses would in of have home, more reasons to Arguably, seen hybrid of We of inventories of or pleased movement include place tight to time of demand, of typical consumers a variety both, the a have work of We new particularly rent customer decreasing a levels and handful in year. levels number we see space, highlight quarter. and need the that are but on and we our existing in good of increases, of and receding, elevated business leading still longevity use. rate drivers affordability environments this to achieved I for revenue. renting nationally the takes first or commercial billion pandemic-related

XX%. now average exceeded Our months. margins stay length is of Operating XX

Forbes as Work employees. by has Best pipeline Place and to our $X being reached development Our billion by named

XXX over are XXX is portfolio properties non-same-store pleased fact, ahead a to XX% was feet. approximately the all accounts, volume. for XX above acquisitions. expectation capture performing in more the total square the These were and assets sector XXXX historic now that with in well, By we growth Now of year, million to entire

the entering shifted XXXX fewer volume anticipated, market. acquisition down with portfolios large we has As

and brokers playing sellers some We Cap calls are and further. opportunities field, also a have buyers interesting move up we with getting in sheet a over could It’s the rates with and different and sector behavior. of market. resilience for reputation fewer billion cash, The from in of balance and anticipate as adjusted last growth more too buyer. economic history are degrees. including a in point own self-storage prime demand preferred shift customer our of change, interpret to varying We a in for ways all recessions looking times and $X any

scale for and XX positioned we customers our in well the the with are across to all states compete operate product We of in. markets offerings exceptional

non-same-store we may poised positioning whatever us deliver to XXXX. results XXXX, through second of and are same-store assets Our as enter play half for well strong through the

is exceptional deliver Our well returns. and leadership team shareholder equipped to grow

Tom some well. share Tom? highlights will you as financial Now with

Tom Boyle

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

half XXXX. the results first represent strong start from and Our year acceleration a to an

to driven a leading factors same-store, increases same-store Los XXXX; by in the second into growth with Let’s the tenant the from rates to again XXXX. rate contributing In once and revenue quarter existing secondly, the second Angeles first, lengthening contributor look was compared contributors at the third. XX% two the XX% revenue stay. versus in were accelerating a continued customer and will with accelerate rate particularly to first strength: the strong strong continue our quarter move-in quarter of quarter. for that increased was XX% to Growth the up XX.X%

Moving were cost utilities down Same-store X.X%, operations payroll, up property driven by growth marketing. of P&L. the and in

was utility quarter. a and of and net total, in investments Our pool portion with helped including same-store efficiencies the income XX.X% LED model operating stabilized strategic wage solar operating and the initiatives, inflation. the In offset properties up of

In and to properties in good of growth this from standout the There quarter. acquired ahead developed lease-up the addition as recently pool the performance is remainder year. a same-store, remained is which for of significant our and a to outlook of facilities well, the the segue

our paid but Parks is of We and improving. impact for non-same-store outlook with expectations, the Overall, resulting share as second of our in the performance corresponding improved the remain outlook or and And PSB In business reflect mentioned. to sale pool is growth shareholders. a has April, position lesser a mentioned, associated FFO. improved PSA capital by On new outlook driven Joe core X.X%. by outlook $XX.XX Joe of we and capital line in for liquidity net, impact to our performance with midpoint. core ancillary raised provided $X.XX FFO extent, PS we $XX.XX did half. year-to-date $X.XX reduction The As of sale, Business per assets yesterday, strong, the dividend, half the The our of our a our we second $XX.XX been outlook a and midpoint a returning special with expense. interest our in strong from our a

fixed well up distributions. well $X questions. We and to hand profile have finance long-term billion with EBITDA quarter ahead. open stock preferred we’d positioned for the a like laddered at preferred With to cash end of on and X.X growth that, we’re billion With initiatives debt and times debt $X of it net perpetual to

Operator

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

Jeff Spector

heading I second a Great. how Thank out could that guess, ‘XX, on into you. comment question, And -- how impacts that then Good -- the ‘XX? bit for discuss morning. does outlook please? I the your setup guess, is into your thoughts little improving, how half the my we flesh more, first maybe

Joe Russell

Yes. Jeff, Good morning.

to the business. continue I encouraged and we health by of be the Tom As highlighted,

good. demand. customer Quite You start with

their We’re encourage using robust customers that self-storage customer The to been is adoption us seeing continues across space of relative longer of if anything, markets. consistent, continues top time. us behavior and to needing our that periods the existing demand has of funnel encourage and quite to for

getting to that to are XX deliveries any Our market behavior again, new average an length any million Compare good in And supply. levels the unusual relative of encouraging. level of by a months, burdened about that particular base standpoint, cohort quite And was months. cohort. change we’re, elevated spoke XX we changing across, customer seeing that always national and I from as a not the or stay a the dynamics by it The to with ago, seeing go not the year that business. stress a now X.X healthy, or we’re That’s again, we’re for that is measuring things have. thing meaning of really whole also very muted around market heavy

So that encouraging. too very is

you but XXXX. year of to I mentioned, as all the with our all a coupled little going So not said, Tom half store, the And the that continue thinking fact what poised perspective second very well. through do continues of quite the going give on through into non-same well that perform same-store is to only can of with we’re to bit us basis, good XXXX? our positions this exceptional results, deliver and an on to year, that what end said, With into

Tom Boyle

Joe. Thanks, Sure.

two we’ll and particular, same-store XXXX out non-same-store the think as half in they’re go as then think because the play the So, through both about we I’ll as important. I’ll I and highlight where well into second both hit on elements

year. we along from as the acceleration you XXXX or of same at same-store strong as look we’re the So, frankly, we initiated right illustrating demonstrating recall, store, executing And at outlook for start that a the path.

in same-store half given strong more occupancy that particularly as consistent half the the year expecting pattern rates, the on couple. and with move have, are on second this So, the that typical second pretty than the last but comps we seen we’ve deceleration into quite the also the modest assumptions so into we tough seasonal we’re

So, call it a occupancy decline. basis-point XXX

outlook within half with it, outlook implies too digits where trends year. second low an and of what strong to you this first revenue store. just half, the dissimilar if look the started growth performance which is for not we So frankly exit the at is the same level implied it an or And double on

half also expecting XXXX. the good which I’m good the is same-store XXXX, a a the second So, to through then is leading in outlook your setup question and for

non-same-store, remarks, number highlighted times exceed the expectations. of our in we’ve to our a continues now On as prepared

activity. million. for lift And importantly, pull But non-same-store forward assets in outlook raised our $XX wasn’t our of so actually what did those a stabilization the the just will that by of year outlook with. We stabilize we

XXXX a for of in growth there continues capital that that so be And deployed date. from to we outlook level beyond and to strong

all as look to we forward encouraging trends So, XXXX.

Jeff Spector

season information, rates you today then still a But can Great. debate cap asset you earnings saw -- maybe I on ago? where guess, important let’s commented are your NAREIT, key Thanks. versus, say, storage comment values is little do asset really I’d think you limited a up at somewhat say most still Very Joe, like I are on and values, we think across talk guess, about helpful. months bit on six one rates? you more I there’s do think And this sectors. all follow-up. you cap but my

Joe Russell

go there’s Jeff, elements into a few Yes. that that.

this at So, as volumes a different trading at definitely year-to-date XXXX than mentioned, we in time. place I were

of or mentioned, any I size more hovering either come traded. portfolios, far to As $X fewer, or if billion big the market jumbo the

they’re are the relative rate the Bidding of stabilization the interest that there’s less as relative going interest way levels buyer impact on smaller to types market do et how to quality, much we’re the our the expect, So, aggressive as meaning is Fed through, we’ll through level a activity asset, impact have or cap additional to segment and be smaller, But assets. aggressive whether i.e., that depending there’s playing we to for of the increasing and asset on downstream, cetera. themselves. would you they’re rates certain the of to is individual information continues particular no see portfolios, behaving range tracking plays what of what just depending they rate a are assets, goes question,

gives sector. So, our bit at trend, could of that’s our or sellers in subject buying we’ll plus trend They call still of to need what elevated they’ve going that seeing opportunity say, certain see to XXXX transaction. is was good part but view always is amount little a calls. a more the to to the maybe feverish mentioned activity capital a higher. actually into That how in some to the relative team come of meaning cap minus, the engage with last rates XX But it’s continue would again, basis market anxious I softened. a points. the think to end day, us thing, is We that’s to different be that I of -- do the their

better We be As many buyer. are upon the at owner, asset. a maybe may clearly quite submarket typically the know even might an I the either well asset we hand or preferred mentioned, tied looked in to very the as opportunity cases, than that know

that cap that for rates. and mentioned, into knowledge I a time seeing we’re very buyer can a be can affect lot a too and like So, a the buyer degree. particularly that with activity think But things of can And we an be engage mix are, compelling as that and healthy deep-seated well-heeled I to owner. that come very to

to alone, there’s we’ll what rates. see change plays movement continue you rates going in be cap through. But would So, some interest with in the expect and pace as change to

Operator

Our questions Michael from come UBS. next will with Goldsmith

Michael Goldsmith

that that? a properties that, your does acquiring I move to pool the the start to stabilize level? higher little process as non-same-store how wanted earlier higher stabilize or on was to are made properties stabilize bit dig a into in expecting more comment some provide at I your level. change information Can And of to that you a related your of then, guess, and that at a about higher, portfolio underwriting

Joe Russell

few a with things. start I’ll Mike, Yes.

think we’ve asset entered or a plus, additional upside the with priority the finding bringing now you around into about that entertaining that deployed we’re last two in any strategy transactions years portfolio. for if First, either the we’ve acquisition

the acquisitions of $X.X So, in XXXX, XX%. did hovered billion around average to XX% of that we occupancy asset

the So, of that state be we or clearly or either a assets we’ve we optimization that clearly of can may expectation at feel taking fill-up optimization we state by been that a finding that and once hasn’t asset. focused an on design, very level own the achieve, either met owner’s

much year, that, we the one-off us is transaction many another as portfolios assets. well. is we we’ve drive playing of bought in year, fourth strategy the examples, that quarter, seeing transaction, fill-up Storage, a only we through further a much we the et that we even then, honestly results with base, little playing maturation opportunity given playing And portfolios color, of good when storage with $X.X specifics. the A expectation. the types and on optimization last part with through you first focused bring very the through definitely we elevated that in assets Tom has better expected and bought the very portfolio thing took identifying April are the All compelling did and Tom, through can smaller bigger that So, type easy doing couple we not in only even by bit into revenue the simple XXXX, than base, very relative about to billion cetera. of that, portfolio the the expected the more like of two been spoke we’re to that again, in portfolio. But trajectory give that very the a of down lift same design, if that’s the in of cases, of but same than And drive of returns to existing some can customer you again, relative large the to not

Tom Boyle

Joe. Thanks, Yes.

to this be a little some the order in easier. we’re that that to you in to give able components I’ll bit Michael, So of guidance we providing included financial model

outlook, core a NOI occur is to contribution NOI below providing the of a after in addition line number. FFO that, So, And the core our year, stabilization, there’s as we’re item that FFO to for will which part non-same-store XXXX. non-same-store

And can NOI adding of think our two together that you those to so pool. view stabilized of numbers about reach

midpoint April, XXXX the of and of if for to our a And our was NOI in the incremental you bottom stabilization. we guidance back million so, of non-same-store at included $XXX NOI in contribution look million, page $XXX

of numbers $XXX So, those million you’re get add if going together, stabilized to NOI. you two your

at this to million that midpoint. by we outlook non-same-store compare our lifted you quarter, the If $XX

contribution then $XXX also $XXX we line at that calendar the below So, to you’re of NOI year looking pool item NOI But non-same-store from the incremental retained XXXX. in stabilization. a million million at

million. add So, those if together, million, you $XXX you get and two million $XXX the numbers the $XXX to

in So, for ultimate million. to stabilization by million our raised effect, we $XX $XXX outlook

It’s forward also again, The versus So, this of seeing outperformance outlook. an stabilization. improving a is pull just not we’re performance outperformance expectations. and year

Joe Russell

whether Mike, beating developer two the are are have product the returns. by performance to, the the to identifying but job far, The markets, we doing and/or very to data development more only developer growing in nice public drive And elements land space is good of continue very the haven’t very advantage lease-up, performance assets. unique and being to using We mature to they’re that add, relative drive of a returns, expectations continue the not sites, of those in uniquely the pockets sector. spoken largest team level and we of that prime other those of assets asset. our opportunities, the I’d again, thing many find only have the good markets of clearly to And one very

I our hit time first development billion. noted, As pipeline $X the for

we’ve has that got encouraged allocate we’ll as and nice We’re capital to been in find continue fruitful. to that continue compelling opportunities, to arena a window which well, very

Michael Goldsmith

then, outperformed your helpful. And the non-same-store very has with expectations. That’s line the same-store The in a pool been expectations. as pool follow-up,

non-same-store ahead, of of maturation store XXXX the portfolio the stabilized As how we pool a -- in through is these look assets? of much we kind of think as same

Tom Boyle

Thanks, Michael. Yes.

So, highlight them focused adding the first we they’re about thing pool, our I’d we’re to adding think same-store stabilized. on properties when as is,

I as the they before NOI come reach those stabilization walked there’s to from coming so, in just assets meaningful contribution years. through, And

pool so, we won’t until stabilized level. they’ve And add reached same-store into those the that

and there’s versus move we’ll And time. ahead as the growth track development so, But that we that will and vintage, today that disclosure acquisition non-same-store And XXXX. be do pool we see in same-store by provide into significant of that as there over sit added. you we the level just will to some performance demonstrated, the can properties continue so

Operator

will Our with Kim Ki come Bin from next Truist. questions

Ki Bin Kim

seeing. any about trends income discernible your type a of kind maybe weaker Are be in customers, a Just versus demographic of are there higher of they customers trends responding comments similar get you increase that any kind going when they between to might rent letter consumer back all or fashion?

Tom Boyle

Sure.

that customer back specifically think been running We long obviously area time, So by customers about the and overall a existing use I’ll well in then that I rent an that send increase talk rent that million investments and increases, science manage over X.X and a that in we a maybe years X rate hit has us mentioned but something year, extensive may we instructive. use really for it’s as to step gives it’s and I’ll driven program and today. as is around continue trends The couldn’t tenant in over take be we ability to dynamically testing. make program have Joe increases a today data million way that past. very frankly,

program improve, rents. our we of in ultimately, that benefit that program so the and continues And see to realized to continue

is, the of we’re customer reaction, terms part we what understanding to In to that’s tuning in program models better, a move than are And there’s any if through fact, be, frankly, behavior we good customer ultimate is in year. behavior. our the predicting I’d what have the or behaving as them for and say predict year-to-date important been shifts customers really of understand and as constantly

of there trend our really mentioned, are to to customers is from behavior the increases So send as length Joe continues customers. extend, to favorable good stay which continue program that too. see more for as And a

are across versus are base few data-driven your any to is want broad-based that really metrics strength. question we’re existing if shifts look on short around played we last year, deteriorating. second second in from even And see demographics. behavior There that not customer seeing and they’re So, that think that at approach? to well. demographics, component the answer continue I seeing the customer then, you them a by or away operating focus the out around I And And anything all is tenant

us So, think below and things for low like the move-outs right, they’re well pre-pandemic that incredibly and off still move-outs, sector, across higher are I levels. but bases

continued thing nothing dice segments, and around the you et that concerning, customer cetera. delinquency, could overall that’s around being or as slice we’d highlight other You frankly, strength the percolating But broad-based that same there demography base. as customer by say

Ki Bin Kim

topic on the pushing same can frequency? there? just you high what describe level, the you’re on of ECRI, increases And And maybe out types

Tom Boyle

Sure.

spoke And what’s reaction expectations better they’re So, or frankly, increases that better increase. as is and magnitude both what as And we’ve replace versus driven higher magnitude of our anticipate to components. than do really our to the good based of second history. two And highlighted are the in to, frequency the by an optimization than pointing component performance frequency the we cost been what One if the that I to is instances has levels, the increase. be the and tenant. on in out, to past and, both is moves pre-pandemic customer just

And XX% term we we’re to tenants, so, if frequency. sending and increases higher higher in longer sending to were the today past, X% increases our

Operator

you come is will Ronald muted? your Morgan question open. next Kamdem with chance Ronald, now Stanley. Our line by are from Ronald,

Tom Boyle

we don’t in Why question, go and we can to queue. the back jump Ron let next

Operator

right. All

with Steve Next, Evercore we’ll ISI. take Sakwa

Steve Sakwa

I guess to I up. just wanted circle

you didn’t Your results of obviously commentary highly tough I range the up the were need strong, first it given be like but talked that comps. even back the I guess, seems with the to to And half NOI, about, end hit X% on just the know you’ve of guidance, in you unlikely at year. half XX.X%. change low very

And So is sort of the you’re end the at clear this just or just midpoint, high very I guess sort you’re of it what of the unfavorable. in are end we pretty low that that just low the but seems end range? point, missing at still sort at

Tom Boyle

several outcomes. and performed broader That’s how the last lease the well range as years. the of I appreciate it outlook low reaffirm we business given beginning a to continue frankly, what has year obviously, end, month-to-month to is a I’d wider change both on range is and high industry here outlook wanted I’d call. we we’re the we set end what the over when But going the on of the set say the Steve. Thanks, to to dynamic guess, is not I uncertainty the at the the as encapsulate of characterize question. a

second And move set outcomes in so, still reasonable range. And out the broad we play as that did a could a environment. there’s through half, we the of range

so, touch right first and frankly, strong our range. to we has point, And half on But your didn’t the the been expectations.

like, to all are and as -- as around well demand right? say into comps, the some half, into well And at so are half. set the do year. second the things the similarly same-store growth pressures. head We the we saw customer and the start on up tough our points And expense left moving into seeing And accelerating on but trends rents occupancies level I’d expense both pretty we expenses, second face the the second same as We quarter. at we of positioned inflationary

have there’s the is how is in the don’t But initiatives look mitigate any labor pressure. question labor morning market of the out to to no and tight jobs to of further environment. you this this multiple indicate than impact number the some market have came We that inflationary tight the

encapsulating there And the we’re so we to want expenses make as on outcomes sure well.

Steve Sakwa

Great. you Joe, the And $X a at unchanged billion. guys left acquisition then, guidance follow-up,

sort closed close you’re or to include quarter going If you $X.X about -- you end, billion. of to

do just just be you all-cash buyer, even market? that there’s pipeline. on product more opportunities wondering, if you’re I’m know can your and accelerate I maybe little about seeing balance to actually the the expect talk a bit volumes an given So, sheet, certainly given you less

Joe Russell

subject, on be factors. a to number going Steve, Yes. of That’s

to predictability quite this that tracking as limited to for of What’s big market of a being level year, different range target to in Very, point, all. I As of if or because time the as volume to last than this unpredictable well guidance from the of XXXX, very year we’re far even amount opportunities typical going market, different is you’re the your of knowing see year that an at billion standpoint is mentioned. potential $X portfolio fact coming volume. outlook, the

continue going of to a look to whole We’re range opportunities. for

As we’re very mentioned, confident. I

are It with depend We’re and months. again, what’s see in that, to be look on, particularly The anything to creation X been part compelling. say, mentioned, of play seeing value from well. as I particularly that we to that arise. to to and clearly of look very of kind of the acquisitions that types That’s well continue opportunities we’ll the those as clearly engage for, and completed going unlock other things continue as we’ll are set standpoint. or next, we just for upside assets a through, asset we that what guided are opportunity to, opportunities would that will pending And X set have

as different could play So, different and out could to Tom that there through points some shifting there’s things this -- pressure relative us well. an owners with for mentioned, that as opportunity be interesting

excited hard. And very the that. about So, is working team

additional We’re markets, play see what and highly to we’ll virtue through engaged across multiple continue volumes by of that.

Operator

JPMorgan. move All We’ll Mike [Operator Instructions] Stanley. right. with go on with back to now Kamdem Morgan Mueller to Ronald We’ll

Mike Mueller

Can looks bit of feels raised where pretty deals like It it. being looks the you it like been getting about you a hasn’t a about you It since The the like be can forced it. good. for darn to dividend been XXXX. you’re to growth has quarter potential you little just talk at increase? looking And on dilution fewer PSB the It have to accelerate raise have now close big expenses. fourth

Tom Boyle

Thanks, Mike.

the fourth XXXX. So, drivers that And consistent for introduced intervening bonus increasing taxable in we’ve to has relates some $XX.XX. income the this income that, growth law been in And the it income. talked of and big your of which quarter in point, send period. depreciation and the effect of yesterday, highlight the XXXX time we lowering regular the But consistent been or relatively has did our strong, about as has growth past first out flow that our cash is to changes one to a just has been is point, since I’d your some for dividend thing been shareholders distribution tax dividend, taxable taxable to

in capital move will at over return in we’ve though, of income retained our increase terms allow And reinvest us and several out. benefit coming to the dividend to the will and business. notable go, to into taxable phase in XXXX, that to years amount retaining bonus ultimately more element a depreciation that we received same of cash we the time, that the significant is go As while shareholders our will that as years the lowering away, flow begin last

we as And been time as something highlighted over around, taxable move been point forward to to your dividend that Day begin increase income the well and And likely shareholders. move be that topic. it’s as at something has to It’s be some increase we income as increasing poised that well of time as so, into XXXX, growth that increases. that’s as Investor to taxable we here is will to return more forward. our strong. our that is, current We’ll a And

Mike Mueller

it. it. And follow-up. a then Got Appreciate quick just

at pipeline development annual the what’s rate With level? spend development now at $X that billion, run average your

Tom Boyle

pipeline. right Well, the obviously, development of now, we’re increasing level

to continue or next higher. going $XXX that’s so, But like we think we’re which of to this probably implies it with about come So, and the for for deliver spend. going year, increased this spend deliveries increased cadence about that’s to $XXX annual move going but to developments year, million as you year, instance, million

we at to deliveries XXXX. in million to next increased year spend the $XXX of and reach into objective annual as XXXX. then on that annual million we probably million, to lead Day outlined by Investor the will pace which $XXX is get spend $XXX So, deliveries All

Operator

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

Spenser Allaway

CapEx just back from had Maybe front. question operations. just a stepping the on I

get But ways So, like the space? just thoughts the of the preserve important understand crucial isn’t competitive I how other as as sectors. properties in is to supply sector to given in just on to in reinvest the positioning, it CapEx that your wanted inevitability commodity

Joe Russell

Spenser. product the Clearly, Sure, tied Yes. of parts the asset of quite is, you that’s model of design whole the to one enduring is compelling self-storage if locate the it an significant. lack well, and and obsolescence frankly,

required of to and of were in initially It and/or to So, years years product. history we much today as are annual and XX-plus now were in that were not built desirable XX just have that assets level when simplicity the developed the they capital. consistent our functional ago ties users they additional as have markets of many

things back existing generation years development the One putting the many is our attributes into holistically, of called over Tomorrow program. assets. of speaking the we’ve been of of That’s are products Property stepping of strategically we to couple our in that latest last the

year, we So or this so that $XXX will million program. spend about into

even We’re years finish necessity that to that additional about but we is that add or only a not much functionality that’s lifting any The asset. again, more brand, got feel thing by compelling property, particular three-plus portfolio. the resetting halfway through another to are to attributes that property, We’ve up.

is too or a that something cetera. intentionally reactions set that we’re So, existing employees, et from doing customers new getting nice and of

an see years. to ongoing that continues coming that be investment you’ll the make So, us in again

our we’re of years. three into that half we of solar the adoption component hundreds is two is next portfolio on to early solar goal least or Another in of put across the speak. The to properties as more at

intentional well. and very a playing So that, efficiency-related, is is environmentally-related investment too, that

finishing That’s project just started up a We’re lighting. years five-plus actually that ago. LED

As efficiency, you relet we’ve real interior entire just and the energy the a of nice exterior as to conservation. And to good assets imagine, adding to now well, are touch, of all LED of lot but again, another up attribute LED, properties estate our themselves. finishing can

compared more of and value and traditional again, design functional that. can to step back think location, other very the type of little, play through very, spend you it’s effectively about it And to if the itself, great So, asset with any akin CapEx sector. enduring again,

Operator

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

Juan Sanabria

California and had have much those if you rate and revenue on able how the contributions gap markets markets been are and in could you your to result relative the Just those lifting? you remind to wanted Jersey, existing about portfolio, how come that recently restrictions have that off just the to drive with current growth have as the to of market two us a same-store rent two New And and fairly restrictions ask rate? to current market that close

Tom Boyle

Sure.

So, thing segment spoke I’d two the first markets to. say you I’d the is just

a detail around into little going to California. I’m bit So, go more

state pricing New shorter time cap. have much Jersey place of a does period. duration of California emergency was for similar state similar But in that a restrictions and upon price emergency to

we an on place in Angeles little for a impact nowhere in was which has particular. it So, that Los near revenues over County, a certainly so, experienced year in or impact multiyear but the

overall in more So, modest. our Jersey the properties impact New to was

is again, say County. nowhere Los same a COVID to some declared Los little in impact and year, Angeles. So, story had gears the shifting for Angeles Francisco that were near particular, emergencies in to I’d that place particularly around San Angeles relates to San were the Los the County, as state it in place difference over a of Francisco but between

the Angeles, of So from getting emergency fall the place beginning the to of in this XXXX very year. of through was state Los

take benefit will get to and XXXX, XX% San at Los differential, given Orange within little And still Los more revenue we’re to growth This have or to are say growth. that our instance, longer to with County go a you growth X.X% contribution metropolitan there. going X% recoup indicates And Bernardino County revenues area. to between significant on because the limitation you’re on I’d just will seeing date. to those same-store into so, XXXX, the us bit price getting as say, Los we to Angeles revenue performed year, as I same, I’d all a into Angeles markets, to how be noted And Los And acceleration incremental obviously, was compartmentalize is basis is for But we where same-store in strong par about to has earlier, revenue which incremental or that. as still is we move counties point and it we a an look County team that recapture. compared the accelerating being Angeles to County obviously, executing of good performance hear again the there growth on revenue this a bit Riverside if the we Angeles. talk overall of that

Juan Sanabria

just it’s portfolio we about, maybe data the you NOI expect a could bit talk revenue perspective, about a do much if to on have of as able the expect a that as What would external “run-of-the-mill not recession”. but to business recession, little do pressure? same-store you more you you financial or bad how Great. perform And the in get kind to of given fact, your be history crisis, assuming face in would the of and how a

Tom Boyle

key Juan, Well, same as recession one another. points, I think the is clarification is the no of

and that going recession to but what going of that on can the could to So, the date a we’re seen that been we’ve to. looking just the that high and lots spoken that as severity recessions, dip the depending Certainly, impact around to we would move revenues what the the ultimately, time, But I’m what here. what of mid be business or it’s nature recession recession. same-store into like. are dip potential on not territory kind recession. same-store growth seen depend look is negative into But back sure a typical a indicate of to any haven’t we our there’s we’ve There’s into would digits drivers over categorize otherwise, NOIs of headlines single sharp

and low high-single-digit get kind we’ll revenue impact out, I So, those mid-single-digit of same-store again, mid the at as back guide. think But hypothesizing looking what previous is to impacts probably could we there. best recessions to NOI play see and

Joe Russell

and dimensions, more continues to which think storage a to bit frankly much makes a on I definitely of color just more an some recessionary of home. compelling, put extension points environment, there’s multi be And Yes. little in to history the storage even the dynamics that that

if As Supply I very home been is storage affordability pressure that. benefits has a point, muted. mentioned, by

with could may speak, coming numbers pressures very fluid came very a different out So, picture The in as but dynamic. out other level if we’re there the certain that not very as today. on of be same Tom mentioned, supply recessionary employment there, is dealing we were that have recessionary strong environments

So such with we that employment some with strong into even going be could commentary recession how data. a

So, a lot of different crosscurrents.

We business. month-to-month have a

can cost very operate at continuing have serve factors us very business. We well. a a demand pricing calibrate the standpoint. efficiency will We business around to and from nimble high And that we’re

mentioned, our are XX%. now I margins As over

otherwise. play good components very again, continue or whatever us recessionary through to could So to for maneuver

Operator

will with question Carl Berenberg. next Keegan come Our from

Keegan Carl

Just you growth is how a bit prospects? little of demand management platform. I shaping color how tend and long-term mean, on more Maybe the a construction think And new regarding supply, third-party slowdown to in potential up? your do

Joe Russell

Yes, sure.

has a grown whole the to additional third-party assets -- as backlog and has management platform pipeline this last through and XX as has continues Third-party to quarter, build. added our to development. it We as continues management build the

So, some this of is time-oriented.

actually these the to continue we’ll delivered. platform build of of some are assets size So, as the newer

continue We’re been to has of for opportunity some building also different through us that source on will an relationships. It to acquisitions and top and those relationships. be likely new

Getting existing as growth So, we’re actually our speak. good come many pleased properties are additional through customers, to that from trajectory by the we platform. the feedback third-party continues and management very bringing us whom of

on for again, approvals just last to far would this of have been I’ve few more the somewhat put a of tied quarters. themselves. call have number lid it and talked supply a there’s beneficial complications As I about that accelerating. factors supply, as That includes

and or in can’t many it markets, it’s than easier today was either historically. even I that efficient We’re name nationally more one pre-pandemic building and

more financial wherewithal of more through, of levels. on are increases more rate the loans of you Construction very complicated inflationary delay that to decide it, of top out go have time to complicated. et on interest an that cost clearly, Many So not the or cetera. may access top not some then, in build. that, actually that unexpected pressure front. in hurdles may may expensive, the those And absorb frame, lending either to of sets time of we’re are at actually Then that be type delays, on looking market developers

amount a So, the all on lid those things development discipline somewhat of of are and through through. keeping actually putting more coming additional

land bids a And as mentioned, a very good compete we’re and come do I doing us entitlement seeing as certain instead percentage still and More its it’s we’re not owners have as and sites, land often that, thing. trade in of come us holistically taken to seeing the a of see we site development actually on want healthy to for differently. some either to that not, process themselves. than through maybe very or also land actually So, many a window

Keegan Carl

portfolio apologies of disclose guys And you earlier, if percentage is but missed I it. currently… Got your did this what

Tom Boyle

a types is how rent what that something the characterize, back operate. do is as bit roll-up trends be disclose I than terms and in-place we a as leases not we move-in could rates What a that’s the disclose. self-storage amount in and property step We take and you’re would move-out what compared or getting And levels. information other of well different to maybe otherwise? little manage of Keegan, to around think and revenue I opportunity healthy how

think of So, base, revenue self-storage the the aspects as tenant one about of great across is you managing month-to-month leases.

only revenue focused is team well. the the not also the leases, population So, managing on moving and on signing entire as existing but new

us odd reiterate for you so, other you which you but a saw sound and is quarter, may -- can little see to that that again this self-storage property historically, out, And that see rolled it in a bit what that’s is a successfully ability have rent tenants sign length for types, stays ultimately we’re growing, as are that customers which the that existing spoke to data-driven do increases to and more in-house. tune our that to on been earlier, based and we gives a of send And existing approach. managing

but rents move-out today, to here of also good we as So anticipate sit where and rents rents the above year. our again, rents our are continue this are above our move-in are, where a we bit quarter move-in through are that’s rest And in-place that and our healthy. the

Operator

Ronald Stanley. Morgan with Next, we have Kamdem

Ronald Kamdem

Hopefully, Hey. can you hear me.

charm. a time’s Third

Ryan Burke

Yes.

Third a charm. time’s

Ronald Kamdem

error. user Quick definitely one. It’s

just any anything the at just there back two rent-to-income step at at to of pricing or try leverage pricing just get cycle a portfolio sort do the is activity, levels. taking different you sort of which unprecedented move-out you is this pricing monitor, of sort end. of customer’s is the than differently measure you’re So, record to power, sort it’s my way picture, have is on of operationally, ratios to record at all power that other try whether the big the rents, quick to to power, you look sort when ones of One data there sort

Tom Boyle

Sure.

testing. testing in just both well we new understand will that’s you of in. forward. new the tenants, terms that’s be. elasticity both basis. about as we testing, we’re price overall, to how the So, have existing continuous periodically, tenants different do tenants than not by customers we look Keegan, platform tenants speaking levels our customers and conduct I as of more by for day-to-day it And managed frankly, ability on unit continuous as we to or to as and manage markets here. new couple what look at the are think rent-to-income market, those there’s about And way is dynamically. of trends a it higher things price macro One ultimately we for for is sets business that expect But And why moving pay affordability a more that the acute tenants a for what price think of type with And which otherwise, housing kind look elasticity that that’s is, we day-to-day manage and elasticity existing driven we on much customers existing segment than is is is see by across

no question sensitivity past, quarter today or new that, the up is is, there’s So, terms in a what in to and move-in our for today, basis. which built rents said, units seen -- our XX%. price in day-to-day seeing we’ve how in that’s of we’re the That continued price were on what compared we continuation customers of yes, a there’s

ability continue have move-in And face so, an July, rents rent were in to of the that increase in to up elasticity. we X%. And

seeing strength continued move-in in are but we moderation rents. So,

at in I’d see And So think spend nothing of resetting that nominal one the income. from I is micro. as sector that a all-time that a elements standpoint, overly versus the to continues from macro highs. benefit it’s we self-storage concerning rents think the I And highlight the key consumer’s is

Ronald Kamdem

good of there half going going is we as year run potential this following up that year on revenue think out end questions as to the sort into same-store the just into to as be? function? guidance implied deceleration rate figure the about on comp, there And again, of Great. a on of terms for behavior is growth, second we’re year, And about in anything, the then, -- the next if sort is anything to we’re we’re growth of think what Is trying next rolling sort that of XX.X%. customer

Tom Boyle

Yes.

which terms play I that view going think right, visibility. we’ll into terms in XXXX. to the on when we how out more well have XXXX, is us give think, cadence hit of year. you of setting a we a But is as second up next it strong But, you I we’ll of in for maybe half move XXXX save

Operator

any I’d additional closing now back like over remarks. Burke to for turn or to call the Ryan

Ryan Burke

of and us a joining Chelsea, Have weekend. great today. all to you Thanks, thanks for

Operator

Thank you, and today’s This And your conclude gentlemen. we conference. does ladies appreciate participation.

You time. may disconnect any at

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