Public Storage (PSA) 31 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

Ryan Burke	executive
Joseph Russell	executive
H. Boyle	executive
Michael Goldsmith	analyst
Steve Sakwa	analyst
Spenser Allaway	analyst
Juan Sanabria	analyst
Jeffrey Spector	analyst
Todd Thomas	analyst
Bennett Rose	analyst
Eric Luebchow	analyst
Keegan Carl	analyst
Ronald Kamdem	analyst
Caitlin Burrows	analyst
Ki Bin Kim	analyst
Michael Mueller	analyst

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Public Storage Third Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ryan Burke, Vice President of Investor Relations for Public Storage. Thank you. Mr. begin. may you Burke,

Ryan Burke

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

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

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

Of feel free over back I'll With jump course, after queue. turn call Joe. to that, in that, the the to

Joseph Russell

for thank for all at Storage Thank QX third and in advantages few environment is demonstrated then performance exercising competitive for as Tom the you through you will by team XXXX. remainder quarter Ryan, for a highlights today. joining our and up our platform-wide open and questions. the you, outlook Each I call us walk successfully raised Public a more of and

mortgage the rapid sector entered sales to existing lower, in softening saw move-in home particularly home we new customer demand As year shift rates. for the and this we expectedly, due rise with

from proven particularly solid that very been customers to new perspective. length customers have well, renters. On the are flip side, has a stay as and good of be They from increased there demand

are these public analytics our users and technologies brand, leading team, rates. clearly by self-storage Drawn choosing of storage. and appropriate right mix determine to tools, the have along top-of-funnel marketing, promotions the rental We with

volume, narrowing as coupled occupancy the in behavior September points the move XX today. gap led at strong to in-place with of basis to XXX year customer at the of from points has points with basis to Our occupancy and healthy end of trends basis same-store XXX better-than-expected our beginning

transformation entire and digital options a our journey. experience be model profile. operating from digital their to continues Customers significant to fingertips Our and enhancement benefit their across at financial having customer

Our app financial we and through compelling digital running platform, reason with profile choose our XX% leasing our than a ecosystem is as users. to have And us well. benefits today, over our of online PS million more proprietary X.X customers

digital service for We particularly is a tools and of labor in to our are in-person putting these better customers and in when on-site with combined enhanced customer needed. is The employees it regard the efficiencies. experience where hands margins, result customer convenience and

portfolio growing also market broader amidst are We dislocation. our

industry-leading Our growth-oriented margins, us of operating put NOI and position. in-house in and capital balance very multifactor unique platform, a cost access sheet

properties, billion year, we the Storage portfolio XXX properties. Simply more have $X.X comprising Self far including of this worth billion So $X.X than acquired

was welcomed property public on and fully new X integrated day over every storage As practice, we into approximately is and our regular customers. associates the XX,XXX XXX platform

benefit reimaging entire portfolio from public also to on the of the ensure industry-leading We to ahead storage are schedule maximum brand. our

deals trade a acquisition the sharp has likely last with up backed asset closings. over Since years. $X year-end be of typically billion delivered fewer have of the year-end, We rates X and next we delivered updated you market development busy quarter, time by million to interest a of development will also pipeline by have in $XXX to year in move the for nearly

of full range will cost adjust capital that increased. confidence some as sellers' us owners actively are of with give the We engaged expectations a has that clearly

and can't. acquire to us others when Our advantages develop enable

have strong to execute. to have we portfolio expectations to a and as seller a matching correct, ability grow We appetite our continue

over the Now to Tom. call I'll turn

H. Boyle

reported We Joe. PS core excluding share the Parks. Business per year-over-year, $X.XX of contribution Thanks, representing for the FFO from X.X% third growth quarter

at the quarter, increased components for same-store the X.X%. key revenues Looking

us rates As strong rental along Joe we're continue volume spend to with right mentioned, be move-in lower industry, the and of marketing the for mix in move promotions. but seeing and

volumes as as year-over-year well Our to mentioned. customer quarter. perform occupancy Joe with XX the in gap continues These points trends this existing narrowing base October of move-out with today, further continued largely to moderating basis

operating were expenses, cost leading X.X%, On same-store at of to XX%. same-store operations stabilized margin industry-leading up of growth an X.X% NOI

lead X% on to of continues in limited grew Angeles, demand new and properties the XXX Los facilities. same-store market, pool largest steady our portfolio. The by Our NOI supply

lease-up In addition facilities with the in and of to standout be performance nearly store, XX% and increasing continues the developed year-over-year quarter. NOI acquired same recently to the a

$XX.XX contributor future. the square to and high in than This the we today is here high again, FFO million growth low range portfolio low end. outlook, XXX of increasing XX October, pool total ends our core the and into end raising at of to the comprises Shifting $XX.XX and to feet today FFO and both properties more once nearly sit strong our at a toward XX% the

remained but and solid. Last our rock least, position not capital liquidity

up with positioned the a open are that, for with dynamic Rob, to We Q&A. please capital growth, well in markets environment. ability coupled appetite it to let's strong execute with a

Operator

[Operator Instructions] Goldsmith question Our with Michael first UBS. comes from

Michael Goldsmith

guidance You same-store quarter and into continued for though midpoint. continue revenue both the the same-store navigate well, the turning to growth negative deceleration at growth fourth with NOI environment implies the

you year viewing last play And So what the out. will of are you to point? the seeing in how months X are October this how

H. Boyle

Michael. Thanks, question. Good Yes.

little on then the year for specifically of of a to context revenue I'll remainder outlook the the and bit provide same-store So October. speak

to move-in look as rates, through good the assumed circa give rates, in well exit move-in assumes down growth. side, here promotions On the has for our competitive, are half the at and rates So are as last staying the assume and sense XX% rents in second spoken existing move occupancy and of in outlook. we're Those what's than as industry strong. When a and that's responding been advertising. that with rental the year, for midpoint. seeing lower rates October. you we volume continues on We at XX% sit end, our outlook to move-in our we've the persisted longer be as flip are the remarks, environment high new tenants tenant the we and move-ins in XX%. prepared we low to midpoint base the year-over-year decline The end But

obviously, assumes the the the high year. the year-over-year. to we about of year last nearly range, closed points At end occupancy decline the hold at the basis the the by On midpoint year-over-year backwards we go September at end, side, December. of end towards the that we occupancy end decline on low XXX gap of the And from

volumes October, rates. lower to specifically good seen, but we've at Speaking again,

at the apples-to-apples October. Obviously, volumes. look decline units the of in in up on month. we'll some of As the the overall, little rental month. We very XX% down, wrap ran we move-in on the in Volume October others bit rents cause good up is half towards to back X% a and select basis, that will month the But rate nearly date. move-in it, back of today, that a seeing an decline in in half Halloween sales call fall

down continue would Joe Joe XX again were down And or basis that highlighted about So performing existing occupancy well. to to month to point actually year-over-year as work down date. has And customers improved the very highlighted, are the this today. I well. Move-outs points tools to gap,

So existing we're tenant seeing traffic good in performance.

Michael Goldsmith

on is existing my That's customer. question really helpful. And the follow-up

You've the about the they price quarter, ECRIs on rates, replacement a philosophy back with cost, move-in given price think into in past pressure half respond or talked are the the and existing through of customer, given customer? function sensitivity? the just a of seen the sensitivity about function you've from how heading as into your year how what the you fourth do heading the the of ECRI

a to end. least through your high end philosophy, any moved as at hasn't now pretty the the high first change your the you been been follow-up guidance flat the finally up. there separately, And is the to the guidance of as low then able year, hold raised part, touched in end guidance you've has And

in well. any on change as philosophy the guidance So

H. Boyle

lot, a That's Michael. Okay.

through step Let's that.

increases, the met through first on on would is reiterate existing is component, highlighted, we've I the year. frankly, the what customer we customer rate be customer move for been as -- which our which year, continue which expectations So you or exceeded, to and all saying really behavior behavior

then get the side that It's to one been year. so equation better challenging. the through cost of to drivers the that's quite replace strong. of second component more And to been performance has led And continues the

magnitude lower highlighted we've But points. terms that's change to no of have the and to frequencies in year to throughout customers. increased real as lower led there date, talking So

of The second your component to question related guidance.

lower lift pretty and as through end well we did end the the And so describe And were we as this our different could range take year. February, the of that guidance upfront in quarter. we pathways the higher

higher I ultimately upon further quarter. strong end and I are We've the to print surprised we're third been end macro again, economy used at reinforces economy encouraged time executed pleasantly I of the the end as that frame high this pathways by the high well think the macro and performance that of guideposts that all GDP a by that original And towards range. the somewhat obviously, the And that we've the think lifted outlook. and towards some around guidance range quarter

Joseph Russell

through. seeing, behavior a Tom month, just customers. We're or delinquencies, been year, customer context yes, prints et We're pleasantly additive one stress any the base economy just consistent And seeing all we've any we're thing, to stress again, emerging coming existing quite of month quite tie our on cetera. little to new mentioned. well. looking not not surprised support by existing continues more that through level Michael, this the But customers. bit of The and Again, by

very, see to is business. very very continuing customers, behavior the for which from So consistent good existing

at shape, to in of and then economy this up We think XXXX. it's rest the we're quarter again, through going for good do continues what large setting the doing. assuming again, And very

Operator

Our Sakwa ISI. with question next from comes Evercore Steve

Steve Sakwa

criteria side, side? talking It just wondering, some Maybe bid-ask Joe, you're have growth I'm guys do underwriting IRR spread you the starting see sellers your wide changed revenue just cap first, market. NOI on Great. And capitulate. the the is to sounds think rate maybe side, how transaction you on today? how like

Joseph Russell

Steve. Yes,

clearly lot moving we And conscientious again, parts cost in as of very of spoke you there. a to, need to capital. be So change of

points or may pressure step by different trading pressure to the a step, things maybe market types particular to of tied not we're bring and/or market. have owner some that an existing dialogue Clearly, the very alluded performance but One structure likely of play of all with with the particularly starting realization very points to that as portfolio, capital the I with an or different is having the a deal entities asset of to through. through may to be emerging, degree more different more environment of a high and actual the would go tied that the reset tied to, a owners, event any capital to asset how to that different portfolio to again,

has we So realization that environment and the clearly seen the changed. have migration the

entities iterative bit. As very today things we've the But discussions for been particularly of the between the somewhat a I quite many end trading seeing with which anticipating year, of quarter. changed volume the is have with what levels we're realization fourth that mentioned, the unusual, is low and

own our put relative in different should. which those hurdles underwriting, to have In we place we facts,

we So to and particular and and hope a changed, ask, I of very we actually good puts has again uniquely, gap this own will mentioned, cost the bid are a our in depending I of shifting, most a to seeing us on tell in difference you environment but situation as too transact very that that can owner others. is do in shape we different unlike capital

continue to opportunity achieve we our the ability that is have relative types hurdles very exercise to capital available, as hope sheet, transact well, quickly balance and us we're the serving this to to fit trading different going through very that we see we the of environment. So to

Steve Sakwa

are clarify I'm what guess, for true, clear, first your just versus QX is talking I QX just to I'm bit at XX%, I move-in look the move-out what into a Tom expectations to And that Okay. curious in just trying out rents you widened of QX. moving be rents year And the between -- spread down to in moving the just And rents and and out the talked in the about ago a think 'XX. rents half because rents that maybe threw numbers that's when move-in period. if you're moving just few about maybe how

H. Boyle

Yes. Good question, Steve, and clarification.

about number then about and individual was analytics driven understanding right, to and on about year-over-year rate that tenant sensitivity can our specifically, second was I move-out about and we're we yes, and So the the by think don't side, And differential flip how past, of speaking rental existing on right? program predictive the rates, managing I units we So XX%. talk talked over the of third between that there. the rates. difference customer And dynamically in component a time metric the being customers move-in quarter, we in influence your question that. And manage as expected increase we've that

move-in through combination maximize and and customers volumes. attract rental of to trying were so rate revenue And a

spits dynamic on gap. continues that differential we're earning level again, gap quite that to the And suggests perform out more that existing at tenant management is good revenue that And that well. local what so base of in the

To your a question the think in, around how we've range past. in operated in it's that about that today. gap do Clearly, we

where gap gap a that assumptions based that's fourth likely dissimilar quarter, about we're operating the first XX%, not more. move-in suggesting, you're as now. the to bit And first increase we move again, as quarter XX%, are was in. the into we're around that we little the think through I and rents, to comfortable see And something on quarter so

Operator

Street comes question next Advisors. Spenser with Our Green Allaway from

Spenser Allaway

are to acquisitions you're provide as or completed so able cap you rates relates that acquisitions color XQ but Apologize the guys contract XQ? some to missed the this, I on and if it the far have in under

Joseph Russell

from rate environment the back depending to and on a cap then we of potentially to or perspective standpoint, deal, trending, rate so in we're say XXXX, cap X% to little asset itself look Spenser. a shifted But trending the to a on actual et be handle plus are step cap the were range the up X%. stabilization basis, And if range how a by year, would portfolio there's maybe to rates or So back where a kind cetera. deal in you was at to This a going X% X%. of XXXX I on likely

capital. again, cost So in reflective of the change of

but bit a we've situations into period got it takes expectation continue we're confident from about take trade, of question points And mentioned, the seller. as of a that to that this opportunity as standpoint, we time will assets point through trend bring gap seller the see do particular from Steve's using that different continuing. timing And portfolio. depending just does time to priced a an little the some of realization standpoint, on to a find number playing I pressure likely and we're of appropriately a some at

Spenser Allaway

your new are then of integration any, very is the you if insurance helpful. guys tenant And provide That's to there Okay. any on update, able platform?

H. Boyle

Sure.

to savvy program. speaking you're think I So our

Spenser Allaway

Yes, right. Exactly.

H. Boyle

about in intrigued that what other with really program month it's tenant launching our in the offer And announced stand-alone they've but on the Can in by we dialogue, operators, we dialogue they came to that to our but our This business portfolios "Hey, some be So we third-party to insurance basis, said, next launching operators. we're the of tenant they've management here piece? and an that would November. continued talk in initiative, out program about insurance themselves operate a industry to were of that like that.

of we share the premiums third-party properties we know, managed owners that portion of facilities. those our the with As a on you collect

easy we couple making have the our including the been working to from. tenant customers benefit can to our over and So embraced simplify years, it and streamline past something of use digitally, insurance we've process, industry think

management been in going their November. here experience that is working in that be we're software, be property launching industry release, software the in Storable, that press So on we to we've the starting provider and same that noted which to able with largest to offer

market, say In could another be owners in next but could getting than insurance for component, to the back, launching relationships the are it tenant early those frankly, fruit that win-win just stepping addressable third-party a month. ways of larger in days. it's a a just But started the different very build terms opportunity, way with other in there. bear interested And industry different obviously We're of and for it's create I'd time. us that multitude management over

Operator

Markets. Sanabria Our with Juan Capital next BMO question from is

Juan Sanabria

follow prior a to on the hoping point ECR Just on up commentary.

existing has to -- not, that of current at do do next to increases happen point expect in expect And and year? 'XX into looking quantum some continues that So to the throughout through year? you you you're environment the moderated and/or customers this pass if pace if

H. Boyle

to back Yes. back where more we unusual years replace. is that in time component there's in ago, cost replace, throughout point benefit sector, has pretty the in Juan, and a moderated to where an had I as of the right? costly, year gotten to many it's environment stepping replace mean cost a right, we're now markets, we're a which couple in to a

And year, grew. the through last we we to and through frankly, year, so too, move as replace as cost this move

And contributions increases customer on has a existing modestly declined year-over-year year-over-year. so from rate the basis,

over more tenants that The is those receive over will volume in Because coming of the move-in flip year are right? really side the increases is that supportive, that new been we've time. last getting the

benefit given moving will as the significant And seen. half activity the back XXXX, volumes so XXXX of well that as we've

Juan Sanabria

kind off. a is Where we year? going any spend Los Is you the And roll minutes benefit done? starting year are off couple wear of know that that as calendar forward on last that? benefit the to some we had rental in rolled just was could I a then Angeles. you I And as restrictions hoping

Joseph Russell

step Yes. Los largest in Diego, as Juan. Yes, know, Sure, San properties but the Angeles Basin, just XX L.A. another is got We've here our XXX properties to you market. back, in as that a the X-year period. full the we're on correction constraints or was for hand Southern had that beyond price California portfolio, opportunity the L.A., at in based that particular, we

outsized existing of the level of degree, customer which and healthy a healthy of and a also portfolio, here presence strong So some provide, again, a to new market that in Property size you're about very we've Tomorrow the see dynamics Southern we location of the market levels performance truly it's very this of strength customer overall of only We've quality that but to not very very that in is very, indicative continue of again, have level seeing we activity, behavior the California a is, that, now portfolio. recently, levels talked program. portfolio touched from holistically our but the

Property We've into of a Tomorrow attributes et to added we've assets invested in appeal, pull to million them very position $XX-plus enhancements, through cetera. ideal the other relative curb that

So well. good all things along quite think going And good humming the we'll considered activity forward. continue we market is see and to performance

Juan Sanabria

last mind. if you quick follow-up, don't one Just

was you occupancy mentioned down What's at points mind don't the the absolute year-over-year if end occupancy October. percentage, XX You of basis sharing that?

H. Boyle

month. The be. directly we're are a I'm out many at towards getting percentage occupancies to our end occupancy of the Today, going today, the move Obviously, to is what sure, the we relevant sit facilities. here as we'll day be of not period-end

the where we today XX% were finish expect to I XXs occupancies we the be day as So north to I that here. are The dissimilar business too up September. but suggest in of not in guess, them

Operator

next Jeff Bank Spector question with Our from of America. is

Jeffrey Spector

are and how your do not about the 'XX. general, national an on that to alleviate like care just trying to about the Like point the is ask I I know wanted because something rates? think into occupancy, about there Or you forecast where, thinking listening your new you really if to I coming are so and guess market pressure comments about I don't as it's equilibrium we're thinking strong? volumes to months some in just --

H. Boyle

environment think there. be would if expecting there's the lot you led more guess And outlook and record with this year, our move-in is demand. this a high, about mentioned, suggest came that -- into I a were Joe seeing, no slowdown we what to question, was jeff, competitive. having housing Yes, that I'd right, we -- that in on what as component of that's based last XX-year record mortgage a year rates,

seen rewind right? turning move-in facilities, but in The the we've flip more environment a activity as if is full, competitive, frankly, has highlighted, And side you were years, good we're in rate. pushing away renters were gotten were Because particular, from so full. Our couple we and XXXX. of we we customers we've

where taking a the a where overcorrection maybe their to dynamic volumes a combination so moving are in markets rents, now, of And environment and the reacting whole we it softer has as where X correction. an certain is where And maybe move-in operators that environment I of in overall think typical is to led an terms than years larger the and little demand are ago. was the industry

continues it if at just relatively to as that what led rents. be move-in near And has to declining question in this through nowhere healthy demand we year, performed you XXXX. that's And no has business been look what thing component The to But self-storage, move-outs rents time is in moderated. how for have back was we on our notable expectations, volumes, revenue the underpunched have go existing one anticipated. has than that been have algorithm side, been moving i.e., been good tenant lower of your good, the moving The point, has the it's behavior strong. flip

outlook as particular from us to leading been a through to soft I that the want we move obviously, So fact spot but away we through rents the move-in increasing don't the our move as year. year. shy have

Joseph Russell

rely depth owners tools ability of different the and right spoke reflective in promotions them Tom to, we tools we are of knowledge those deep on to that data that of tools and not, years relative the just that demand, we to using way that customer frequently. yes, the frankly, have, we're better volume with we've continue per we to to most or again, with good tools. near even any are any of whole of the X have to judge a And our arenas. We're on to unlock Jeff, are and marketing, had we area. often those highly to very at have down seated. all of relative to. These, utility Clearly, economic that, rates. very than to a competing relative rental efficiencies the basis continue the those variety to used trade the and/or of far become can operators last we'll particular amount term More over you the the knowledge need any that each interrelated that and to Those property typically react And speak top data, frankly, optimize tools dynamics as relative that that own have the are of few We've to be have, per utility tools operational X and of so, that well.

top-of-funnel keep but encouraged using drive sharp very to active. feel we demand, and we're continue that those So we're not we're to the and going that to them reporting, very activity conversion to tools only move-in

Jeffrey Spector

one Great. Very clarification, please. helpful. just a And question,

average? state points end period the of you it If occupancy, or On for the that period, of end the was was XX-basis year-over-year can the average?

H. Boyle

points. We're at of down the month up started month XXX XX October. basis the For points. basis finishing down we Well,

average the in So about right midpoint is the there.

Operator

Markets. Our from with KeyBanc question next comes Thomas Capital Todd

Todd Thomas

And an even up that from mentioned expected. maybe competitive guidance last stabilizes foresee In really if move-in sounds being occupancy for environment, and in really industry lower guess which a Joe, demand, you about than Tom, to environment, the ability it moving follow they customers more. think stabilizes stabilize until portfolio, your remarks this to operators. at other to I do continue end like in find on volumes are about stabilize you've drift wanted will in talked just overall stronger public begin question. I taken occupancy or you sort I without you and more choosing storage overall more prepared the bottom? to of move-in share or question, a First Storage's increase now Public assumes year-end, rents of high the your rents.

H. Boyle

Yes.

I a that number we at time for think rents, as giving environment where in that the moving back. period, were there's a and we're in up of certainly, in market significantly pick Miami, I XXXX, And And noted, rents of some in XXXX, instance, I you And play. that's an component move factors through. we're of think But no XXXX housing to question, think playing lot 'XX has an airtime at different its head demand. as been the year play and components a No gotten as that's question we about a we 'XX, impact softer. this around that's industry, as into of demand.

today, range look If the down you crisis market the million sales financial consistent. at has other home X X over it, pretty go or time, million at where a back sales existing they've you -- periods and look call if been to per existing X trading is which home in million of, year. We're housing slowed right that around

that -- how we XXXX. existing likely So we leg that take move And home as we fact lower. significant think decline another as worked and see and so 'XX we'll setup about obviously, aren't through the through to into plays sales the helpful that out. 'XX that's But

side other instances, renters in have is to good The movement. people longer there's in some many they and those running are tend customers, and are our frankly, of at length storage home, And instances. stays that less space

been good industry for customers, we've which and stays overall. year And move-ins of year, have occupancy, 'XX, through again getting benefit move and supports length this for longer that as so 'XX this we the supports seen I think,

move the environment challenging that environment quite understaffing processes fact the challenging. capital And And and to lower to delays. over as 'XX. into we 'XX cost lending years, is deliveries as in of Construction no development are the lead construction up levels to several to helpful with go we 'XX continue city question, I'd all costs going and 'XX. be into to of last are those and the So that, be add continues

in some rates as maybe of those I characterize instances. overcorrecting things we even as think rental All are some the in stabilizing of markets that helpful maybe about

season getting going into helpful, attributable busy much environment. quite seasonally, of year also to housing season, you're I where will go year, time into see next a spring think be didn't in a the period We to the partially right? the have demand. This we more

of from and dynamics we'll standpoint rates a year. And into moving to 'XX have seasonal year May benefit through with next the April rental are So plays to heading of easier. the in March, next little a comps the what

Todd Thomas

Okay. decreased That's and quarter is that necessarily a in I'm challenging it's which rents to more helpful. quarter, either versus just or look a realize today. start new the pipeline, stabilize the one to the it's lease-up maybe And is But around development current if related. in then trend, but And have all quarter. my at environment. your wondering not or little certainty really just other around timing curious projects at is expansion as changed return if you the really, bit environment greater last question all just just if for requirements intentional I

Joseph Russell

a capital to into and and again, continue standpoint. capabilities. to, full invested the we be priority redevelopment on vibrant focus our It yes, development give most continues perspective opportunity from So return our on the to put

and for land work So are this us environment that certain is development others or through better a and; processes entitlement even ironically source a, and for: properties b, we think actually where to counterintuitively, compete retrenching. sites

construction constrained. continues loans to to environment The much particularly be lending tied more

to where meet for on, the of the any regional the portfolio fact, banks lending over differently tied for several differently for good pressure particularly a years. opportunities construction very for for to whole. compete self-storage, one-off seen be very to ideally most In tough loans us expansion than opportunity and This goes hurdles construction as again, to developer very continues very, with into look a we've last the

from launch get game that The place. then slight reduction, a point, the years from working is -- being with to but a where, yes, operate long not Todd, construction that impact them development only just a was as to only environment a well. to approved particular asset just an quarter continue of multiyear We're was adjusted, are very stabilized. get hurdles hard and standpoint, deliveries some not some is beyond a but But to one-off processes team to a number the of dealing your in that took

time environment, capital market got But at skills, strong this to through to us you've very the get cost market. as the sheet this those being balance an frames, to with in of So for different. our look to knowledge very leverage continue and fortitude we have particularly, to opportunity particularly strong ideal

is nationally. seated team well The

hard to only new to across unlock We ground-up but opportunities and well. the as to continue country, going by and find to activity not work different region redevelopment development, we're continue region

be So part a vibrant to we're continue very business it to very strongly. continues to of the focus on that going

Operator

with Smedes Citi. from Our comes question next Rose

Bennett Rose

coming growth 'XX. another where the you can particularly to in up think, looks just see space a you one invested meaning like little mentioned it or I supply? dollars follow for growth? little seeing and of there of you in any industry-wide are in markets or wanted deliveries, I percent quantify And 'XX either you're Is up, outsized there favorable, expectations that terms a or very -- lower just anywhere existing reason more in increase

Joseph Russell

a to then now we've And funded. approved lot to getting some Smedes, again, parts there, into hurdles We've been b, and I projects, spoke but for the this lending unusually speaking production them to Yes. been seeing step, the you difficult go constraints environment, in the with time. and get just step by of themselves. moving a, through

slower accurate the is notch overburdened or out starting or degree, been as and nationally, well. Phoenix so number going to plus a assets the to couple going of that to down are to $X minus an deliveries really point deceleration basis frankly, the standpoint information market amount last or level shrinking Portland of our 'XX whole. spoke a delivery view of that most over deliver are a that's billion minus from years per likely of had of in It's good the new outside more had But from the time pool year of industry deliveries down Las deliveries. to as a of think Vegas, of to outstretched in market at ratcheted of by a work, a not going a continue least thing to step-by-step because has the XX% moment to that at to From just the annum of that of plus good this into volume very of to think we annual kind assets for constraints on Can't the predicted get news and likely a probably that and couple continued little I standpoint is the the reflective next from 'XX, based it's continue the to statistically, to. into been we there level come all not XXXX in So XXXX any that frame, it's but in have slower, on or to markets years. the basis. We bit potentially delivery a

Bennett Rose

you, I that stay. then of And think a that longer you tend length Great. just I to ask wanted renters past to mentioned in have the

that portfolio are just stay So more bit you where be you about Could might you talk and of the length seeing? seeing in little a the is now? changes

H. Boyle

Yes.

length overall, In stay to continues of strong. of quite be terms

terms that's of a spoken on of years over XX, how it, couple from, we've average. the So call last months extended lot XX in

adding we're all and down. you average persisting obviously take pre-pandemic If that's environment today. in our persists of more that XX to snapshot an brings tenants in new that of place like which XX, tenants, a more And

the pre-pandemic and where be the the have and continue in percentage been of than that us for with a X most continues see trends to we that well were strong total punch So tenant the XXs stable as of component to important . Customers base. continues years tenant above base to there. longer

Operator

from Our Luebchow next question Wells with Fargo. comes Eric

Eric Luebchow

to the back go to wanted I ECRI earlier. from discussion

I you're cohort push customers Can of given harder push lower degree. ECRIs lower rates? now presumably cost to all, in-place replaces that is at think new through and more them ability for But you to shift than you to higher replace talked ECRIs moderated your does loading about at customer? given your dynamic the slightly this some cost somewhat faster with

H. Boyle

Eric. on, spot That's

the years in this with to and replace 'XX same right, likely that So as year, more we talk customers and in moved XXXX those prior replace tenant new cost dynamic magnitude higher. have increases, gone the cost we 'XX. don't have base tenants are to like right, frequency that lower are in But has receive into more and of which overall, a about higher and to customers is as move through supportive

Eric Luebchow

on Maybe then you cost And touch Great. last one one. the just could side. Okay.

be manage for expenses, continue especially how NOI into aware backdrop in how seen your be items year? you'll will points utilities and be pressure costs You've with line cost marketing can of your payroll, uncertain you year, to should that increase, about any -- effectively demand next able to maybe an next growth we talk that outlook

H. Boyle

Yes.

guess, starting marketing, the Marketing one this that I So with notably. right? was up quarter most is

earlier. and on is to continue level get utilizing. the as marketing we're local Joe at rental dynamically with We good rates, highlighted we the promotions that a very in manage spend that returns And that process conjunction

X% We X% historically think all we you of been marketing. X%, of, the way in sat in so X.X%. at And over spent revenue XXXX. right down got look If quarter, time, X% this I to marketing say, to range or spend we've a on around

to do be that lens continues us and return that. good a least continue see and to at room associated a we'll with from historical there that for to So increase

on growth, investment line certainly higher given the levels will NOI be positive we're but seeing. I create an the going would think expense returns about expense that's item marketing to of spend

other The strategic we to items, at Investor continue to line areas payroll bear outlined are as Day well property continue that that initiatives utilities fruit. as be

at helped as as Day. payroll meet that are and experience. around initiatives technology and specialization good through as XX% hour leading centralization efficiencies offset advancement That's good we we as So highlighted to career to of close gone our property as XXXX, we've as will well roles customer and reduction Investor opportunities that we well

we're continue is will with to on pressure. there, And our around solar go help be one that's carbon over will to side the programs. power those today, We'll more to offset We'd emissions. complete put through And roofs. with So finish good for solar XXXX like us. year the XXX and sitting in solar. And which benefit X,XXX that environment other we to of think addition our utility and the there's that,

Operator

Research. Carl question from next Our with Keegan Wolfe is

Keegan Carl

Yes.

for the on all at that plan typically XQ And So year? historical does to hate belabor when the the operating just but maybe you in environment change particular, point I on rates levels? do ECRI, sending current guys various stop

H. Boyle

No.

several stable as expected, prior base As frankly, the perform I've the noted, encouraging. years, existing continues very customer to is and which versus

program 'XX and manage in change. not won't It we change And our change quarter anticipate So continues. that's don't It's how shock any it of the revenues. to part significant going or barring into fourth change. to

to continues be So to I there. it wouldn't anything and significant as to the overall relates strong that a point customer point base,

Keegan Carl

that was increases entire Like though, I a going the holidays. not the thought the around comfortable just stop guess to in you're clarify trend I year. storage. typically throughout to sending quarter, present you're that's

H. Boyle

throughout send the year. increases No, we

Keegan Carl

just gears shifting And then Okay. here.

the on to to your on quarter in closing obviously interest So income and the hold prior cash guys over simply. you given just on

good a what run forward? for going rate be curious this Just would

H. Boyle

question. a that's good Yes,

are since hindsight, period obviously good cash because But XXX of financing in transaction associated both match is Monday associated fund period. rates sat In well everyone same on that for acquisition other pretty with the it. looks So over the Simply the benefit transaction with on aware, the time. on a as we to financing which that did as that points that day, was the time was as announced basis interest the we July, up meant we

we on to well home quarter as to points, a eked we not, -- costs we led interest cash, as on of expense given certainly And earn financing it a income nothing we period we cash. X spread the actually that write can had or positive so interest believe for and on basis that cash our time. versus higher out it About it But about. for raised because both sitting higher were where

no certainly but real drove FFO, to So impact incremental.

sitting and in just cash other X%. simple a math, billion on $X.X about some then little and that it income line, And earning if think right, doing you over interest you're

think for numbers we during of about million days the benefit get quarter. $XX a I XX the

as that quarter. fourth the billion cash about recurring. sitting think not on that could won't $X.X be you So We of in

Operator

Morgan Our Stanley. Kamdem next question Ron comes with from

Ronald Kamdem

ones. quick two Just

were think that about first go to sort this it use your and XQ you year And guys of of the as that one wisdom obviously, of talk same-store the could does revenue we we're guidance sort thinking year. implies of the next negative. in about I potential think I to

in suggests which XX% If things that, worse, decelerating. that back to are I a it down got move-out still that of in spread bit XQ, of sort move sort go little

should Like question we're year, it get thinking about occupancy of say? into Is of the year? it as trend next a response? we sort is the factors like really what of be next same-store length So of to is, sense the direction watching

H. Boyle

significantly I the Well, higher. Ron, pick been I've case and played we the few particular But some strength that we on. a certainly, have out the rents I of quarter negatives I'll One through as and have that's in third through on there's certainly commented of is, things at there through than this commented rates, expected. fourth point started particular, the rates think comment here. year. the think growth move were no year. a I and that And softer and XXXX positives move-in on have question, moderated

through talking the Going going of a to second things specifics, the that the XXXX And XXXX not through a as as work eased XXXX because the a we would into in about second this half I'm earlier also rents bit that, we softened XXXX, of was well it's time suggest half that started that of on year in but good move-in one spent to year speak that's comps last environment that and to as XXXX. not change declined year. demand through environment into I just thing,

second initially some up are Maybe XXXX. tenants of comps of of dynamic. seen for that rate discussed easy the the performance rental comp the the that so reasons half in existing And much but haven't that of same as make seen and we envisioned, deceleration we also as levels moderation we've we

midpoint at growth your to still, were point, negative we revenue highlighting quarter, But we're same-store your to at point, in in the February. that looking the fourth

gotten we has the outlook as the Our quarter through year. for move better fourth

now midpoint same-store is the basis in XX think revenue. points I down

on So which be point And I from February much frankly think year. we XXXX, detail good fresh the I an we'll and assumptions in providing almost on probably guidance the at where to were sitting And flat, should. your bit the said is as improvement there I a starting as more year. for

Ronald Kamdem

half? actual competing assets trying actually range instead competing how the the of to Great. new it just directly it to a portfolio the but you was that a of Is with back sense going is a just supply high second my get much And guys then Just supply Is of forecast, sense quarter? question the of question, of the like supply. macro level? with do are have new

Joseph Russell

vary to going a market. that's to market spectrum. whole Yes, There's on

we're whether i.e., same than you and below a the thing Las I similar lower good parts Vegas. it's . I say here that in But of into number a frankly, that, down in market, are XX% or a the the on to, to new it's that earlier, which, and and I California, eye lower, mentioned through for to and industry mentioned, it's very to Phoenix playing to think being tougher As the mentioned I other largest on deliveries the our definitely shrink, impact. to have as less of very it be continue as develop continuing amount whole. a Southern is close keeping would spectrum, the we'll submarket to almost country known right goes a are well dynamics. end And markets of shrink below I pointed other to speak factor the supply no

Operator

Our Burrows Caitlin Sachs. with next question Goldman is from

Caitlin Burrows

a quick of Just couple follow-ups.

you've deal just Storage started I implementing? through was any you're realize could I synergies if fresh. and/or near-term But go the know you wondering, to think. whether wondering is I Simply go the strategies still pretty through

Joseph Russell

market goal It coming that with assets transaction to that in we mentioned our put in was market I with Washington, a integration Caitlin. seen efficiently on become XXX concentrated largest whether saw of portfolio on And a to standpoint was Worth benefit market. and Yes, X didn't portfolios we've that storage that which portfolio with level again, our Dallas-Fort very at comments different. opening portfolio different is XX in crosses it private market, different more -- assets, date, The to the on the from portfolio, brought where an that X market years, over or of the scale the that our But we again, is burden -- this my very basis. easy undue advantage ops bought good we've frankly, dozens team, portfolio integration whole to us. last states. or certain it much was in into any D.C.

and sizable, of were last those techniques used that integrate the to years few assets. deploy we definitely It the over many able to we've was

from data efficiency. standpoint, to relative a Now become incredibly strong our integration again, the toolkit has

As from XXX-plus continues owning so portfolio, additions in overnight. I the that of great that we're new to We those mentioned, we us assets. well to pulled integrate employees on to were platform as XX,XXX well. customers came train and to now portfolio play synergy seventh or our the able that That quite week to

day standpoint we in out to So gone margins. very synergy drive has and from a adaptability also And and we're effectively. training that do of many things leveraging day opportunity the

see us have what with got We'll customers inherent whole see any additive we've transitioning optimization, end to quite at orange we've the transition market got occupancy that us because And We properties think strength we Again, the seen ahead The to we've ability that properties. very effectively. to blue across from a spoke definite scale the going excited XX is the that with as we're is once were very about finished that well. states of of got our to to. year. later we've the portfolio that, so at to value branding to no I very we both what the from been the the continued of pleasantly that haven't all. that if for surprised transition shortfalls market, the And platform, anything, holding portfolio, really scale is

top Tom funnel very the now a and the length right again, ability synergies. we've customer, management tied this new of from using morning about existing to spoke customer the many tools revenue we're So to the by, and/or demand got exercise it's standpoint, some that of whether pleased tools opportunities. to

toggles So sideways. we those portfolio seeing into X speak as that are anything were not different deploying going that's and that

better encouraged more are we we actually that underwrote when fact, In what than even the portfolio. predicted things

Caitlin Burrows

a quick know Great. about in I And another the maybe and you've is encouraging. expected number talked one. of then different ways 'XX, 'XX deliveries which lower

start development that So to if new when you started and/or the started, is suggest how was wondering slow. you that? that of slowdown talk I it magnitude would could like that just about see

Joseph Russell

billion Well, frame inventory. hit to XXXX assets the We $X peak market, so additional of or actually it's or year-by-year say, X% added been plus of deliveries minus, were a transitionary. time the about back with again, in equates of that which

that's X%. year think We that, about billion XXXX. down As notch another to and XXXX at mentioned, going or down I year, this about it's XX% $X factor by between successive least each to

the and largest opportunity gives in your that's deliveries to get from we And point, not of a we're into By of time redevelopment the team amount and able a be to even the can scale good sensibly X% development because sector, we in And range opportunity may standpoint. XXXX, as developer but only low developer our we very the it's an got development capital many -- do thing different us things of leverage efficiently and to inventory to our we've only more the of that with the own deploy assets. public opportunities. the

Operator

with Our comes Ki Truist Kim question next Securities. from Bin

Ki Bin Kim

were those would plan was call November? I promotion of it, into past fall testing curious, some special. guys do type So just or come you Halloween activity you activity that mentioned keeping a you promotional off? on in out October, additional Or that October

H. Boyle

sales that Yes, has the company and for Ki are years been something years. doing Bin,

traction ago pre-pandemic started and sales back good I go see the Day can Memorial decade back doing You activities, going a and probably that. from more company than at look

wrap oftentimes And seen some select traction I discounts will did And And so know don't that get Memorial I or and a we've run run the And a well. Halloween sale. but demand the it a if public and our up good you big operate we the traffic. markets it we sales we REITs on see sale call Day customer this fall this traction . And it We others do, sales around we sale sale. that Labor a did holidays, in. want one, units today. as these we generally in in website, We to too, call of year. types on on will Day offer think industry good

good they're as excited so get And there. drivers, good see traffic and in the the field team and well, they we conversion

it that's so part but and in where to them in good as full for past. We we, sense, of it's occupancy we're So business for make a we're were use it it of because sense, some the lot environment utilizing frankly, 'XX, have been continue and makes back we'll around a didn't the it an to use to too time, 'XX again. we

Ki Bin Kim

due you year. have debt coming on a maturities, euro And a the note Okay. U.S. next and note

can any thoughts on Just refinancing you high-level share plans.

H. Boyle

a get as into note get million to XXXX. we plan refinance first part the year. plan we'll of refinance Yes. note as $XXX and that the is The into those U.S. to We'll floating rate we

Ki Bin Kim

be expect the I'm will I pretty should change? And spreads that similar? to assuming Or

H. Boyle

the rates note, we said. interest floating what and tenor time. of issue the on I depends the rate it's as ultimately at It But nature our

from standpoint. it's market So benchmark at rate a

a be associated significant note. with particular won't there So that refinancing headwind

mean to you It financing stock very overall, have a notably first $X as profile. refinance we we quarter. at I extent on obviously our can need but set to very have we we'll most billion the frankly, of get we rates our update interest ever, election And laddered look the tools, well And a financing balance if that costs refinance into maturity preferred will And it. change. the of be we spreads. over at don't you more around sheet that's long-dated

coming the modest But 'XX, So in given a we in in any more very 'XX. of you're we refinancing due small a 'XX, in highlighting is capital year. structure some have have overall, little bit percentage

Operator

[Operator Mueller next question comes Instructions] Mike Our JPMorgan. with from

Michael Mueller

was risk? a is that Joe, day to real one assuming rates here. if X% X%, you're you're asset? -- the X when cap that that buying more that a be a Just and about talking buying quick you're stabilized to lease-up the vacancy is rate trending you're yield if Or looking meant at cap

Joseph Russell

a that stabilized would our view, in expectation would again, Yes. be, I be. mean,

existing a zone. we stabilized in you're always I time If of asset, would going kind think, inherit, a too, a similar you're highly going doing of kind buy that knowing or again, more and dealing to ultimate yield, an going that speaking some we've extract and been that to. risk a with be comfortable gap can There's that be to in underperforming yield value we're if that, to we'll at be hurdle lower able asset the

the as right are stabilized aiming this at, that those yields arena now. So Mike, investments we're we're looking at in

Operator

comments. back no closing the Ryan to time. to I'd Burke at like over turn are There questions floor for further this

Ryan Burke

joining you and there we'll of for a Thanks, soon. great and to us Halloween, thanks all Rob, to out today. talk Have you

Operator

today's concludes This conference.

may your participation. lines you for this time, your at and disconnect thank You we

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.