Public Storage (PSA) 21 Feb 242023 Q4 Earnings call transcript

Company Profile

Participants

Ryan Burke	executive
Joseph Russell	executive
H. Boyle	executive
Steve Sakwa	analyst
Michael Goldsmith	analyst
Juan Sanabria	analyst
Jeffrey Spector	analyst
Keegan Carl	analyst
Spenser Allaway	analyst
Anthony Peak	analyst
Eric Wolfe	analyst
Ki Bin Kim	analyst
Eric Luebchow	analyst
Ronald Kamdem	analyst

Call transcript

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Operator

Greetings, and welcome to the Public Storage Fourth Quarter 2023 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Ryan Burke, Vice President of Investor Relations and Strategic Partnership, for Public Storage. you. Thank Mr. begin. may you Burke,

Ryan Burke

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

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

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

have free Of it if that, to over to please turn queue. With in you I'll course, back Joe. jump more, feel

Joseph Russell

grew which through of estate installations development Advanced the to retained business reinsurance with forward so best complementary the did and in through management. growth Tom moving Ryan, today. for Public views full elevated significant Storage XXXX transformation. tenant XXXX up industry The it poised properties model customer industry one and conjunction competitive you we'll environment. will for XXX the for our Then I significant team balance quarter acquisitions, and industry's our open maintaining joining of outlook. thank year Property year and performance, lines, Enhanced existing portfolio program. sheets, you fund us was Tomorrow Q&A. XXXX real redevelopment. We flow. and cash a digital and profile you, over And fourth achievement walk Thank through is and and and financial of amidst while with including operating a solar experience third-party

across a an degree stabilized Simply that stay year. Just remains a and tied consecutive XXX to serving top properties new in include: seen and customers billion the with achieving strength average is nearly our in and the NOI improvement are move-in Place Storage XXX properties. XX% longer approximately margin up recently. team, X operations. well. perform property sustainability accomplishments third-party of and but owned Self record of platform including receiving impressive few benchmarks scoring revenues, Award, only Leader management, efficiency XXXX, customer of a in And backdrop several Great expense with to private customers. our during than properties weaker Light adding through total. income approximately from and historic brand XX% And This properties Storage reaching with a generation million volumes size length XX Public XXX pool core move-in in million X% funds properties history. Increasing an portfolio. exceeding high-growth of X,XXX overall The integrating the second accolades we comprising of base square was to of in evident trends customer now largest acquisition direct quickly our continues U.S. award Work in-place among norm. demand the collective in the of of. Acquiring operating non-same-store feet rent was Nareit's REITs. The environment challenging, customer the to capable have and despite and self-storage $X.X company growth portfolio and Achieving our our XX,XXX XXX that nearly net nearly in-place Accelerating revenue Generating

for clear XXXX strong renter home customers customers to including a the behavior. strong existing our the recent due soft and new We to to potential landing, demand for leveling stabilize home remain consumers, easing the interest resilient move-ins rates, conditions, of from and sales during expect behavior potential including macro

future of completions advantages, nationally, acquisitions, innovation the and which position was competitive team local better And fewer facilities entering focused entering broader balance include: competitive is digital redevelopment XXXX industry's anticipate XXXX. The and exercising in industry also Public sheet. our than today businesses new and complementary All development, model reducing with new management. growth advancing portfolio the across our self-storage transformation, We funding best into partnerships Storage markets. the third-party in, industry, our supply operating impact in the and it on of expanding full creating growing and is the the through

the XXXX All outlook stabilization new that in long adds further well in an in and competitive is for the trends demand, and pressure from term. existing supply at favor. our environment, over And a and move-in new numerous strong comes it less and beyond. for good our clearly the with business supply of customer potential exhibiting competitive for the growth advantages, are to With this of customers positioned near, we behavior our medium time

turn I'll over Now the Tom. to call

H. Boyle

'XX, reporting PSB. finished of $X.XX to end of XXXX over X.X% upper growth Joe. year, range the performance. impact the the Thanks, financial growth for excluding core for the for representing ahead of On X% the of quarter FFO overall, fourth the quarter year and We and our $XX.XX of guidance

fourth for the compared were properties the to Looking at same-store total, and move-in 'XX, points volume XX quarter. Meanwhile, in net basis XX% of quarter points end the driven move-in that the the support basis declined demonstrating That cost XX the quarter, grew expenses, higher of pool the strength and NOI rate and X.X% quarter nonstabilized XX% fourth the non-same-store for performance. On same-store same-store the by for revenue driven lease-up to stabilized of was at operations move-in spend of of up In increases 'XX, largely respectively, better income assets. our our portfolio, fourth increased operating in expectation. marketing and activity. continued by

XXXX. We XXXX 'XX. $XX.XX on introduced for core FFO outlook par a with the to turning guidance Now with midpoint

and year customer peaks the at than last work Joe encouraged of were year XXXX be industry XXXX. We're as the par that we we easier anticipating time. from more midpoint 'XX. Similar declines move-in rents As this heading new XXXX seen that demand We've comps entered in the to customer and demand roughly the the with the competitive on sit 'XX X XX We're on move-in of the revenue occupancy occupancies forecast at through of results towards mentioned, last to end the rates That And continue new case year, new consumer the supply. If for as we top the lower today. crossed a summer. calls as year, look lap for XXXX in through stabilizes basis biggest with same-store down paired new outlook year-over-year a anticipating clearer. midpoint macroeconomic the specifically, at becomes picture the here which through we variable is consistently on basis in points, strong well. the

X.XX% same-store growth midpoint are XX by property for same-store tax That expectations basis growth expense. decline Our points. at expense of primarily of the and marketing to a driven NOI leads

years. at will Our properties in of grow nonsame-store strong development NOI from in poised growing future midpoint contributor and $XXX $XXX and to XXXX, acquisition are contribution again million the from to 'XX a in there million be

'XX. In deliver acquisitions, million plan $XXX addition, we development activity, in of is and acquisition development $XXX to record million embedded incremental the in a and outlook of

capital position remains Finally, and liquidity our solid.

of on in to preferred at puts end very that, X.Xx debt of EBITDA cash and I'll $XXX net heading with combined leverage hand nearly strong to quarter into a turn Rob. it Our position back XXXX. With million us you,

Operator

Instructions]. [Operator

with Steve question ISI. comes first from Evercore Sakwa Our

Steve Sakwa

high could and if growth talk are Tom, Thanks I. may the that compared a you how to end wondering, 'XX. low the ECRIs was of that ECRIs bit in about in embedded and achieved the those little you be maybe

H. Boyle

Steve. that add to Happy Sure. color,

they as little Those at little That's the first a where are bit move-in pieces X looking speak going to will the the we're a customer of pretty move-in start customer combination as a going case in in of rental the is that is, performance. The strength here. things we replace are to at a similar here part about the of we year. as eligible through case, year-over-year to increases right, rent through with for increase. higher and rate to rents bit customers customer this that the a the overall, side flip which like better to And sent and January, going are think offsetting low we new more rental you sensitivity experienced little In those XXXX of little sensitivity case, rate as I'd as year. is, be vacate Such update upon existing cost down consistent volume a well the shortly, replacement price as contribution from a bit to to that at in each the to play low-end to lead of One we'll know, increases, finished lead this demand end a Joe than we how receiving give end. 'XX. year, volumes XXXX, XXXX, at that high-end you look ECRI couple February worse enter with there's drag be contribution other. costs the I in high price if spoke midpoint as to a year, weaker, we that's increases

Steve Sakwa

I sort for midpoint. talk just Great. overall were we guess, environment? you that do expense X.XX% the what you was and expense a surprised maybe have challenging then just still coming for on in given baked that? just somewhat the of you're And embedded of at growth, at demand But about how can about thinking growth marketing what's little marketing kind the in

H. Boyle

Yes.

of as remarks drivers I that property prepared marketing. in are noted key taxes growth So and the my expense

do me XXXX when in operating X% you've strong that you us and past, percentage then increased to a really So good a spend expense XXXX associated item. fourth in environment, with The very revenue or be. pre-pandemic, a step up back, in marketing and typical was minus, go that. more being to saw I is marketing our a when through a be was in demand on X%, place as the from towards anticipate X% line property returns to And X.X%. for we which really, to the marketing expense as comfortable our is year X% largest contributor. And tax back We plus of X% expense, quarter, heard is note, will taking back

going then lead we that similar And return we're ZIP what as quarter strong to so very we of and will experienced Code the advertising XXXX, are But on that the to part to from comfortable a comps fourth in levels see there. be evaluate year-over-year in the continue lapping we're growth and we'll first to higher, that go dollar.

Operator

UBS. from with next Goldsmith Our is Michael question

Michael Goldsmith

to X% with the for down guidance same-store basis points up year the your of You X%. upcoming and finished XX ranges year growth revenue from

is and presumably growth of that So in saying it think, with some line goes what been -- with street rebounds kind your dip same-store I revenue before going with the expectations rates. you've of of -- to the

-- in expecting? your kind to So much how year? of you of are the of better the guidance, how a trends of much And dip inflect through when are expecting you -- midpoint

H. Boyle

Good question, Michael.

there's couple I'll question this components to So that to. of a respond

our XX We metrics, right? points improve, first occupancy basis look started The with down at we when gap compared year to the metrics basis as our XXX operating the we to occupancy is, operating last finished we down year, 'XX. closing talked move we and through about points as are starting

quarter, the year. in December. move-in update, to down through at on the basis our were In improved rent down as January they look rents XX%. we But trends, move-in noted you a If fourth Throughout they in decelerated the quarter. XX% year-over-year

same Looking that in February, down XX% January and XX%, of at code. sort ZIP they're

through metrics, as through that metrics several will to And of heard has you lead improvement we're about to we take financial financial that to see metrics. to continue this lasting. year. I that been we tend as because some in metrics talking So our move quarters these that operating highlight as it anticipate outlook, improve, close operating meaning that

to the that going the couple shape the description about and quarters through earlier, first midpoint point, positive would to of But metrics, half metrics in the case gave flip derivative, think in the of some that reacceleration case to in rate midpoint of the lagging second second the change second to you if the the of curve your so it operating in deceleration half. I the see growth those then see this some of year. you're that going of we're and imply financial And again, is going

component of the that already The highlighted in I question is, that second markets. certain seeing just we're

but didn't those instance, a instance, high we was. And Floridas, that little operating you markets, find Atlantas, in high been accelerate in here the have high highs to so that the quarter already have our bit to the for the high, first longer Seattle, at in their maybe markets Mid-Atlantic, actually some how and turn XXXX, seeing of the would if solid those today some look we're sit high as for We're or of expect seeing metrics given turnaround that take today. But performers.

Michael Goldsmith

question, shouldn't too intimidating. And be it's multiparter, my but second it a

You you expect that you To -- say, industry-wide conditions. this improving macroeconomic comment from in the year softer due customers. that new to demand stabilize

So today? one, as -- where be that how move-in in are we crossing the insight of provide Two, about could the were you rents you're January then positive, the an able exit kind that in continued on to year? momentum to the if kind and move How of zero. seeing the you've into And that rents has you positive -- can rents move-in three, talked update provide extent February?

Joseph Russell

Okay. Apologies right. we'll some there, accepted, your liberty question. you address but took but Michael, All

into quarter-by-quarter going So seeing activity. new likely customers, XXXX. as and seeing a first Payment to strength the than We're all, revenue even been we we the that's existing sheets clear I've months change to with to advantage, mentioned, continue existing The trending and strong, saw The better performance are customer on evolving customer or into tied stress in with of even were almost really has start patterns been still acceptance are quite in we've seen our margin activity, portfolio that they we're through undue consumer of let me any not increases. quite to evidence rate in that's what year. Balance of consumer the ongoing not this pre-pandemic. any management what X healthy. see

with that areas that the the customers We tolerance ECRIs, engagement that we've too we're have guides become has pushing concerned either more not and on existing active of us different a activity that very process levels through level about. hit to of

ties and it's validating performance what with already that fact, a They're mentioned, stay the have. seeing coupled markets, us, just all that having clearly -- kind demand things the Tom good percolation to of some many confidence customer work indicating we tools activity actually did that's That through even the in we've taking that where our of certain XXXX customers activity. We're as about to new a to existing place. the with In variety relative to you've from good. talked likely of we harder quite with of

In fact, they continue to get much better.

have to We with knowledge are market to market our very we scale confident market the market. and

right We have the tools.

the We have brand. right

several We to going going and have the the continue technologies to next pull right leverage our we're to those platform, customers continue months. into to to

to, you positive residual or as those choose summer start anticipation, the that you the going questions. then Michael's additional With late summer, by the seeing Tom we're to effects to from mentioned, all tackle Tom, if efforts. And can

H. Boyle

how macro environment we our little and about bit guidance. So a back about a thought in Michael, step I'll maybe take just talk the

of that, terms about assuming through think we're to you the not it year, good end out we talking towards environment. of as in range to spent about as speaking not we last macro year, the performance that outcome time. last the this as as less a the year viewed the move we on landscape those are range time couch what we range. Clearly, sense we're proved did macro of at bit that through And probable. the midpoint the time, range, it call, the our And we the at look appropriate to improve Joe be the make the terms macro could our of the recession guidance and midpoint 'XX we of given couching as instance, in economists our Bloomberg and of what today. lines thought and would seeing for year. This the investment assumptions needs move like recession expecting the At range, year, but the XX% community what within provide of such, were And during higher environment became to a calendar around that was macro. potentially financial guidance we So expectations more

in So I then February. in asked I move-in doing that's Move-in your thought I'll down of comments you we of the on were XX%, XX%. just rents reiterate about what that January about one hope how helpful terms hit just again range. And will were and for group. the because rents

kind the and rental pretty season of with what rates to moving we're of because is the at looking consistent right, see rents. to anticipate, March, So December April in some performance, And winter here. we'll May acceleration be trough in which you'd

Operator

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

Juan Sanabria

part off in end assumed of assumptions Maybe low what year-over-year within range? when the street the changes I in just have color And of of breakeven any difference point? piggybacking if around that occupancy is Michael's high or question. -- -- break guess you of range the rates at or

H. Boyle

I'll give revenues. speaking the some Sure, both you're to specifically, low. you context And and the high same-store around Juan.

attention. So I'll that's my focus where

So noted, we rents assumes basis basis cross down XX points. end midpoint we on moving that's about the that the similar the for case, Pretty as at in to finished in at occupancy, sit XX, of we're summer sit and year-over-year points I occupancy the note that consistent down I we And that a X so where would here XX we -- basis that, year-to-date, today, as 'XX. today. with year where being

about year. assumes bit such, indications of spent to about And for high takes cross rents that longer we And when And end, is year-over-year as on and little it The assumes crossing metrics we of terms something little a more of the environment last at end, operating as a the high rebound it some in points we're range basis season high assumption end could market, the leasing X are a move-in tougher, bit at year. the which that and little time low -- summer that the the case, see of the on low in end results this be move-in to bit In end the the that. fall a here. we such, you'd down stabilize the the season, talking through going a experience The an end we're good -- basis is to vibrant spring points of spring assuming seasonally. that bit a stabilize. housing Occupancy the a expect, of in year-over-year. At year is a that down little we one, year. There XXX takes in leasing sorry, longer assuming, with of about performance XX XX in higher as occupancy, peak that XX% summer is the beginning point basis the X and acceleration better points throughout or right,

Juan Sanabria

my acquisitions you're And follow-up, then in the for assuming guidance.

you're seeing just So if environment. on color investment cap you the in to just stabilized curious the the quality where rates of opportunities quantum marketplace? speak and could Any out and the

Joseph Russell

sure, I I'll the through same at we continuing environment take we're Yes, point, would XXXX. see of to Juan. that. this most that saw say,

interest properties of much on put lot or the valuation reluctant to market. are the year et owners a price when based into the So potentially they're not expected to cap they valuations, a Knowing inflated at rate point. were that prior different cetera, that rates going achieve

is So year, which into reluctance the continues. The light, activity part very this just amount first typically the is that. of of going

"not additional of the currently of be The seller. We or anything the XXXX, whether or as number either a in on there's similar. beginning whether if in a acceptable of noted to to number And is opportunities, with we conversations to particular months, of But that the engaged not likely at the that to demand a realization We're meets team water have that properties either not we a market" in assets portfolios. XXXX next different rates would few single our for different are pent-up discussions ready some either transact busy. inbound directly But contract. or any on see we'll size to getting as that lot now or give be larger going level are term. in rate judge rates, variety that, just cap just saw have release, we'll activity do under to in prudent expectations test are into thing is that or very valuation a moment. We are with we potentially degree that seller adjusted, feel and changed right have are to not cetera. meaning the see in we'll higher see to on conversations be for by start there's But of push capital. the could moderate cap is how there's really just how adjustments, if, to trading. Clearly, going of fact, some at more trading some some that of you et ways cap what out gap going a Many and Fed interest of clear plays frankly, sense with activity one the continues, reducing to allocate the the near here level us rates the that tied impact

Operator

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

Jeffrey Spector

Great.

the all to hear. trying we end, to upper think continue lower end assumptions, skepticism, the about Just comments,

Just I how I visibility say, finally to feel year year-to-date clear, from some are you is concerns. year? the of forecast let's data you're versus, saying to guess greater there more you this on the last or that be seeing mean,

H. Boyle

through some growth we sit year. revenue I I the in year this a in way. visibility, just We're spoke through year. in demand this and to pace think, the we the that of highlighted think pretty in we couching has Last not as really I are the first as earlier year there's year, reaccelerating here how today, the the we year. environment is This deceleration year. that ranges here meaningful different year, we is were was our Jeff, slowed. clearer going last that have already we view weaker, decelerate right, than quarter, macroeconomic way. And as Yes, is which heading see today, actually we we more last sit knew portfolio ranges earlier, around markets do our couched I we that mean, very macroeconomic as environment, into as move the view And leading

a And last of so year. range from variability than less

tight fact that be start year. to still debating still is XX%, not our think be prepandemic in do the than a last rent very not That's That's years. And confident year, operating range the to be going the we've we've last that's up in they we're we down We're through this to the of But diminish talking more year about as ranges X% X% moving rents XX% typical variability. up the uncertain like did move-in environment an we'd not to Now in couched such, we environment. a being are band. several going we been in appropriately to or where that encapsulate outcomes year. the feel

Joseph Russell

like through Tom but the a one. and think times, perspective additive by it's are, went that one have we going issue, just given of us many Jeff, a, never more this single clarity year one number things And that into

cost at new to an difficult. either even from own to market operate industry standpoint, for construction trend through Funding very, entire be difficult. to to favorably entitlements, very our for very seeing, processes time particularly get business availability limited. nearly of be The reduced we that deliveries. very very continuing the continuing has are is development continued to every we're that's a The factor high in in very Another our levels or

we've confidence even year a that ago. So position deceleration a us different is this additive year-by-year in development that than putting on where even were different say another to of creates perspective been too a we very multiyear very element through different this we've deliveries, that new had now have we environment, a more even more

tea to are we think very right there, outlook tools got perspective, got the that, of right that with into the kind but got and that we leaves we've put XXXX. the So continue confident for us we've the out guide perspective variety read of our we've that to

Jeffrey Spector

worse? year-to-date? you is, better maybe doing seeing discuss are trends you're move-in, say, then move-outs Let's including February, or And Great. which in my follow-up and January can markets and

H. Boyle

mean I I as think component Jeff. the already and covered Sure, side. I've as rate the move-in occupancy well

focus of to the is on So dissimilar performance. not which maybe I'll part just market quarter the fourth too question,

strength in to for continue We see Southern instance. California,

And some of as that 'XX markets in the As strongest that highs highest 'XX of the spoke area growth. had are we giving our through back and about appropriately so. 'XX,

Florida, the markets a on rate some year et weaker cetera. markets, those basis the Atlanta, growth so are of southeastern start And to

Operator

with Our question Wolfe comes Keegan from next Research. Carl

Keegan Carl

first, pipelines where just start anticipated deliveries your you line is on 'XX? where development your Maybe the expecting end year? based development -- And your for to are in

H. Boyle

talk Yes, deliveries. our Keegan, development maybe just of some and little bit about the of then environment sequencing I'll the a

this trying looking deliver deliveries year. $XXX 'XX today, we've to our as million So noted we've were $XXX sat We're here from delivered we been year, to to delivering Last grow million and in $XXX development $XXX in remarks, business million, like more we where 'XX. million in I as my in

when delivery overall is seeing slowdown. an industry the So acceleration

that that in design in taking risk-adjusted growing have can returns think that go program, year. to in sit be a we team it's on The from team here is there. be vintages we we'll year, are and and hopefully business around year working we out the going that figuring a that levels doing out we're out there next And highest we an we've record from pipeline business. on so as same to development So backfill of backfill But construction, deliveries this return grow. that share to that have that's today, development environment. the see some on the this in-house to because growing dedicated development And capital. We're achieved development, you that's will our And all pipeline. This sub. have we we're want challenging a pipeline the looking how here

Joseph Russell

in in saw a but And little timing the of pretty yes, in standpoint, where more balanced then we deliveries bit than X a lot deliveries half differently just what the Keegan, subsequent towards XXXX, QX little had a year. hit quarters, we lighter from the a second of

that a we'll we've and on overweighted a opportunities, and development, little particularly new tied redevelopment both of complete large got So ground combination projects expansion to up good we're XXXX. in unusually

hard as continue continuing of a grow -- see but returns the both new generation only and development to markets. we're continue the A development team X variety to working Tom to tied And whole to to is overall put redevelopment. pipeline, properties into lease-up the these mentioned, activity, good again, and to So not Class very

Keegan Carl

SoCal That's of mentioned flooding? then in know Tom remind a a demand the the helpful. about just really the a gears fair it. little disaster have given then you typical is natural material storage tailwind market? what change us I'm in Got I here, just of back for shifting a on And you demand seen of L.A. curious, bit can demand. And

H. Boyle

Sure.

wouldn't call we've here I been Southern in the rains disaster. California in has week, this natural a raining winter frankly. the that It So had

So demand. see surge in a don't we

In County. healthy and tend residents are move-in demand is off activity Occupancies drivers here. fact, L.A., in to the and it's Diego, California instance, remains of in Southern roads say But healthy time to much stay San you very activity, see for or periods tend when what here I'd overall, move-out see we don't in Orange as SoCal. raining

a in set SoCal. work we busier how the up, we'll very here through the so Sun today. and about rains today shined good we feel had So portfolio is day

Operator

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

Spenser Allaway

And I you Can expect then share and you Maybe to closed more pointed going here, that transaction the the assets the question but stabilize? market. it's in a small set you a XX just where quarter. on in fourth yield the sample know

H. Boyle

-- are. yields specifics, a range -- Getting the going on I'd depending of how stabilized there's Sure. assets in the into say

negative. the or XX So the then improve some plus to get going the we're on of X%, X% with some them them yields those to assets. And consistent a assets those and about had bit And most saw are probably those portfolios get seek assets, in that were going more rather, those X% that's operations them and of profile were properties pretty what mid through where is you that stabilized of going-in CofO X yield we XXXX. to of and little to to we think return as

hopefully the gives interest capital guidepost plays a and 'XX, we'll how through yields. Joe As but see rate you mentioned, on environment into that

Joseph Russell

we continue lease-up on or standpoint, for own appetite assets to and putting stabilization our properties platform. opportunities opportunities strategy are look by a from Spenser, that those potentially And either

not So about risk. at taking shy lease-up on all

assets buying few to maturity many to the going pretty again, and tenant once sharp And base, age on this deployed actual stabilized. strategies play the an at price we are we've when cetera, properties of that cetera. But properties et of the no times fact, will put us. relative those And type our differentiation the own the to platform. even well continue over looking based we're for look those a location, In be improvement year. for clearly, we onto last et confident assets even opportunities continues into point, again, right range advantageous far see And from whole for of different years strategy very

Spenser Allaway

point, Simply that to provide for And stands properties portfolio. to in where Great. relative pool? today Okay. the on and regards same-store those occupancy an update to the Can you rent the

H. Boyle

Sure.

portfolio. our into they've improving of as rents the added have been been that portfolio So

season peak We'll of on the when as So was upper that we've portfolio occupancy, towards think that sits leasing it already think the of XXs. today, took I the spring the adding over lease ultimately some 'XXs in. into in mid-XXs, seen we in look I summer, it's benefits the there, the the The occupancy of the into there stabilization. seasonally, back it of up to and it take obviously

portfolio orange as and that to. So with on reacting for customers properties seeing signage, good spring that portfolio good we've portfolio track painted our well customers and which those XX,XXX are Public leasing with and the trends Storage added a into season

Operator

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

Anthony Peak

on I Todd. guys the is you This time. appreciate for taking A.J.

you gap anticipating on occupancy easier the year-over-year the you good would case quarters. Just few stabilization more that the noted, why your the base broader progress over move-in guess, I and not occupancy made -- narrowing in past given the throughout demand? you've call comps one, rent as around year, to first expect you're back and

H. Boyle

Yes.

those customer 'XX. you if step take through seeing back, part our level demand experienced on that And a case tenants across based sensitivity, the at occupancies price I you're maximize we at very as demands a rents occupancies. a et revenue had We're granular of seeking weaker that's in the cetera. the right, through between we what unit And think seeing, properties ultimately in in is and level, in really we're demand trade-off and 'XX, 'XX. strong managed to cycled midpoint

we And so at down maximize the to that it that XXXX. output is started there's level we at heightened compared a effect uplift to doesn't in about made the as And in level. granular midpoint of revenues. see XX big case balance here points occupancies you is real that that what up assume XX, to give sense some occupancy demand. sit of XXXX And in Again, seasonal where are basis our today,

how And so getting experienced year. we to -- you're lift big you're last kind a there not similar of

year, sitting some year end towards same year, you're today. And to going we see on probably the as but closing so about as be where through you the finished the through of may move the the we're average

Anthony Peak

data. embedded looking last XXXX? guess, helpful. And the seasonality, rental season? rental historical year. seeing for in start at you demand then pickup to the expect That's the just on in And had for Okay. do What's really the I When seasonality softer peak you guidance

H. Boyle

Sure.

So seasonality occupancy. in the I'll in couch peak-to-trough change of terms

typically -- XXXX, we further XX that even there XXXX, about year, basis June XXX last So experienced to XXXX to from call occupancy, back in XX. a step change peak-to-trough basis a a about point experienced December was In XXX we points. in taking

In points fell XXXX, basis midpoint is less down bit that case And about year. to typical XXX XXX. our XXXX, little way a a than peak-to-trough. was seasonal the it touch a all over So in

in experienced as time cry little as a what much bit we from far seasonality, period. and experienced in 'XX we more a not the So pre-pandemic but

Operator

Wolfe from with [Operator Eric Instructions] next Citi. Our comes question

Eric Wolfe

move-in positive over You summer. rents territory in talked about the into crossing late

at Just curious time. will that where rents move-in be

of that you from expect business? levels So that what's versus current just seasonality rate late contract annual the improvement is by driven much to your in how a And summer? see strengthening of

H. Boyle

Eric. Thanks,

I me it in of have exactly. instance. front we you I can don't we'll But we're for cross X. expecting up summer, were, move-in of end at get rents to to So to dig think and have what our quarter third

I at going And you quarter think is quarter or contract dig the So our rents, of so can to rents. third I'd team them. minus 'XX move-in have look third up plus

year. In we to see need there, seasonality every terms to what of get there's

So the there. of a lower June. year strength transaction through year your May year where as it question resetting where well of publicized housing very atypical as a an even volumes we driver has last and The in earlier, didn't as market been in terms being I'd so call see lot seasonal April, a

going more As is last between growth that the they're we rose going Does move-in going they're this or you're into the bit little absolute about to basis time year. rise year, gap a think rates an to then year rents the to that year the and end what end they to see year, the And on upcoming rise close and in the last now this of rental summer, make over sense? of summer.

Eric Wolfe

somewhat of sort what trying seen it's above you recovery context? pretty to No, them the sense. sort large of Is is a close close extra extra makes just and seasonality. about whether that understand you've you gap history? Like needs that relative talked -- to that normal is, Yes. period? that question past? other And in get guess it gap that the to to to relative Just it really I needs to then just that to relative that put is Can beyond in unusual it

H. Boyle

it of rents saw terms than case. in Yes. continue is And last we're seasonally I seasonal rents. we that year new guess what typically set the way means in less midpoint which on move-in through a in is see to in we demand saying we're we adjusted what expecting shouldn't uplift year, stabilization would this lows I'd characterize the

in to better, but that We we that's set dug of not question, through gap. on that get We're And about your up. move-in third as $XX. basis result the rents not the environment needs the and contract this it a closing year significantly stabilize suggesting in to going up quarter to had lows. team fresh And rather so move follow on

Operator

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

Ki Bin Kim

question quick ECRIs. on A

ECRI a with ahead, aggressive look are to your XXXX? you you projecting bit or be frequency in As compared to magnitude of program terms more

H. Boyle

So, in of and in bit that remarks, 'XX as significant Ki Bin, spoke in a been we which through a There's the don't we shift year. price remains the sensitivity, his see experiencing consumer give a this expecting about on customer little one highlighted side, We're 'XX. encouraged take that this Joe earlier. and and strong, we've a very little

So that's one side.

costs, side, XX%. rents On down the are still move-in replacement on other XX%,

on it replacement the of of So average. year than higher was is at the this cost start year last at start

and the the And I impact today on contribution And will largely midpoint not of that we move-in that side number have we the throughout sit fact offset of the up detriment so the the that's -- such were those we to a year-over-year. send positive as lot case that things a in of here pretty the moved will magnitude, going ECRIs year. that but was the Last flip highlighted consistent a increases is strong, that, about to year, overall rents more new earlier have in X%, customers. that contribution. But

Ki Bin Kim

market sure your you customers? I'm not but conversion or on customer can color how noticed share us, on any changes internally And that of you your gauged provide Okay. rate you win

H. Boyle

Yes.

Joe rates of advertising we a online. using spoke were year. the of lot the tools to and Advertising, rental platform power last So that through promotions,

we're we well, into we compared 'XX, move-ins. more both saw the walking good that which our both seeing So folks center that good 'XX trends into in, demand we ultimately conversion-related well. stronger items rates such conversion and led industry better operate than call top-of-funnel promotion, with pricing website, system, to saw both to channels conversion 'XX which through associated as also and But all higher and in are through -- in are

Joseph Russell

give we've our of about, as talked to top but platform, the digital that, Ki not customers Bin, digital ability transact continues only with center, through again care platform to through even et And now on cetera. our us

efficiency, them time activity, much speed, making that with conversion the we many now. to more intent relative activity day. Frankly, consumer business conversion transact of to that we're of So all a even itself hours from top-of-funnel that have tools and to our -- customers but actually then with effective the off us to again, get

that to that got we're going we've like Tom's we a invest tools strong So all and to capabilities conversion that, going good lead to continue very very industry-leading continue to optimize to point, good feel forward.

Operator

] comes question JPMorgan. Hong from with [ Hang Next

Unknown Analyst

Or the even are the to homes seasonal off, the end more low you no low of higher ] [indiscernible] think at guess, I is fell fair expecting I that's it you a SoCal about little guess first being just, community bit year, basically better range, demand? California. safe But definitely question than and no my is end? of first return, [ there demand last seasonal Northern

H. Boyle

seasonal We're agree the end assuming I with demand that. low less in

think that's mentioned something earlier. I I

with end. the and agree that I more So high seasonal in demand

Unknown Analyst

Okay. And then second I guess, my question.

had You've success Have you the a in yet? of from acquisitions future? grown sourcing of acquisitions your any potential you in big And platform pretty could well. how do management represent source think there that

Joseph Russell

far, we've itself. platform a XX That's close Yes. very key of assets the business. It's growth the of the out to component of Thus relationship-oriented acquired program.

in on acquisitions in the XXXX. going momentum think, owners do relationships with traction into platform right over time. the relationships, this last necessarily level been own in with a indicative assets, Over only well. of good of is this with good many a time of very it's, we've that very quarters, the efficiently. growing source But additive environment transact saw not mindset few as that transaction activity continue comfort acquisition the the to general year ability knowledge we got our their light been I to side. a Again, to a or Those We've it's itself. Again, We'll seeing the good trade. but not be of

see is our still of good that the to XXX the platform. And continue optimization goal about and noted grow I at assets. to ultimate we momentum now So program to

more year So we'll opportunities. likely in see with acquisition that the two. that next And to

Operator

with Eric Luebchow Fargo. question is Wells from next Our

Eric Luebchow

moving a that any based between consider talk the rents. little we stay should out in there? improvement about. of rent But or the of and on by length other change average on should narrow about could talked assume expect any midyear that I based customers you we variables move-in move-out the to spread gap bit just you should move-in rents start average

H. Boyle

a rents comfortable we're Eric, who to customers handle move-outs a move-outs have it revenues winter, on with to midpoint as higher. that. We're higher very again narrow move our be that year-over-year to the a basis have And and through between a QX QX we territory And you and good you're managing where achieve made a quarter sitting in-place rewiden are still going case. declining move-in that, sounds the but they're of on getting space. our going and on that. move-in end not going here move-ins to then QX in and on fourth QX to in in point the similar pretty the then the those That's quarter. probably on comments to Obviously, around in into and be the like fourth differential I that from gap placing you're will lot value helpful between there

Eric Luebchow

the And the move-in follow-up, year. newer several on just at you you've touched customers my but lower loaded past times, rates this much

about increasing You increases frequency cohort. talked the of magnitude that for the rate and

or perform of kind increases the those So started as kind have through XXXX you've in and early of rate of retention you 'XX within either customer large receptivity? to expectations those seen push toward of terms end

H. Boyle

to and the that some and continue behave good as within to which say both to earlier, program, customers I'd customers and strength, with program. see includes newer Yes, longer-term that is that in reiterate customer Joe something continue expected we well momentum as mentioned that the as

Operator

is Ronald question Stanley. Morgan next Kamdem with Our from

Ronald Kamdem

second on is just pickup half half dynamic half. a your I'm in of flat. about slower first guidance half comments and the maybe where the a trying guess to have you revenue first same-store and tie a first I is bit little second the The

end to So of you year should well sort above somewhere guidance. we of to same-store midpoint the you as the be the negative bracing of get X start year for the before sort

H. Boyle

embracing. And the likely that of the not performance. I Ron. involves see would yes, negative question, good half part a that and deceleration improvement I to then a is first on That's the year. hope that a the through through first we yes, metric performance -- But in operating the metric everyone Yes. those year-over-year anticipate of as lag the second financial between year. And starts half. show basis reacceleration

Ronald Kamdem

just, concerns. talked how hand, a Great. to macro And the second then, I is out lot trying on my year, question guidance guess, conservative we're there about or more one is last were because aggressive look, figure the you

in little to reason sort sort for did that what move set maybe up be of versus of well volumes a this that mentioned Xx at So which XXXX, year. more presumably was was the should conservative X% But also you bit you basically pricing in a power.

guidance -- think about all much you you and maybe, that? how is this could how conservatism talk maybe putting So you're together, we that or the year not built can into about when

H. Boyle

Sure.

last I I'd maybe last the This cover highlighted, way a So little couch as basis range bit there's macro it year. guess series last about of scenarios a did less uncertainty for year, ranges year what we we here, sit we was than expecting guidance -- on year. I were is our we still The points. XXX experienced same-store as what revenue

range so not points different. And XXX basis year, so the too this is far

Our last core year. about was $X.XX FFO range

year range is $X.XX. this the I think

a business. So we're similar levels of about still And lease as operate a talking range. month-to-month reminder, we

and to look judging, assumptions range or the around that the both year. be on transparent on end. And a year. play want the is in community, but leave of and we'll the out of this at the are we I've the to plan on what to could through And our and to key number plan aggressiveness the through year, what be potential how so conservatism to investment we there through tried navigating executing our I'll try low are transparent some very variability outcomes high metrics,

Operator

Our with Steve ISI. Evercore next question Sakwa is from

Steve Sakwa

follow-up, contractual half of still the move-ins year. one be It in Just your like Tom. sounds will the negative quick rent first for

quarter. XX% said you first was in running the it think I down about

quarter the I up think might fourth you mean of you I the for be negative presume over is get but fourth kind a the to that the quarter. it? you breakeven quarter quarter, expectation fourth leaves year? to overall still think Is guess, said the for expect about to that what about I way it kind third year? in right of I

H. Boyle

rents on right the move-in to the down about midpoint are average X% through The way That's it, year. I think Steve. Yes. think case,

Operator

Our next with Michael UBS. question Goldsmith is from

Michael Goldsmith

one Just follow-up for quick me.

our low at kind I conversations same-store revenue like they end with of same-store investors, think expecting of growth from revenue I your were the think guidance.

being guidance, So, kind like equal? of the what a length believe would the else ECRI get of about the or I end consumer of ECRIs or same-store see to to at know that low just of there. drive there's the all need what do same-store moving But revenue you of to stay need that of parts lot low the end revenue And get to the guidance? kind growth to it's

Joseph Russell

Well, I would...

H. Boyle

the that towards in stabilize new until cross now. -- at that Subject don't there. which I midpoint more demand case bit around we really customer move-out in gets lower a We're with To experiencing later the anticipating bit same really end to end quarter, you little the that in levels last case year-over-year right? but materially. we're we Churn XXXX. gave doesn't you the the little are of price a not that in is your demand saw different low there's what case, low-end end year. ECRIs, in of in fourth than sensitivity that mean very you and you ECRIs, is we're until centered the perspective move-in what directly rents I the we question, consistent saw a the of case, that lot year up assuming year, metrics gave in churn. answer churn levels right

that's end. what you gets low at So the

Joseph Russell

to we've our points are today validation or play more ago going the to through Michael, year economy, certainly relative employment, been we're relative even pressure were to whether was a I seeing we're it a rates, continued to, consumer-oriented they again, operating continues metrics as economy then with month-by-month beyond And than et own inflation, into seeing, cetera, speaking of, of today again, healthy interest That where at that clarity say, beginning at XXXX. XXXX. very would the of place better

something well. away to low-end So to from would pretty different give have view a that materially us shift as

H. Boyle

on Yes. think in we'll has on And you But year. through And been the remarks, last give about the lease update That the going on where I move that we is I operate the month. X% would we those business adding customers rents. seeing operating going some as said performance. variability to big of tenant end month-to-month be how very every terms something where what to up through year. this year. to I'd community we on we we're through the the two on in a that of with about revenue we'll same-store X% update you impactful our base go guideposts more Try we're that trends be reiterate we rate range. which of as focus And the through add obviously on prepared move-in my we maybe area over year going to or investment

Operator

for have over the like turn the call We the I'd reached comments. to Ryan session. back to end question-and-answer of closing Burke now

Ryan Burke

to thanks of care. joining We'll to all you talk today. us Take you and for Thanks, Rob, soon.

Operator

today's This concludes conference.

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

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