National Storage Affiliates Trust (NSA) 8 Aug 232023 Q2 Earnings call transcript

Company Profile

Participants

George Hoglund	VP, IR
Dave Cramer	President and CEO
Brandon Togashi	CFO
Michael Goldsmith	UBS
Jeff Spector	Bank of America
Smedes Rose	Citi
Steve Sakwa	Evercore ISI
Keegan Carl	Wolfe Research
Eric Luebchow	Wells Fargo
Wes Golladay	Baird
Ronald Kamdem	Morgan Stanley

Call transcript

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Operator

Greetings, and welcome to the National Storage Affiliates Second Quarter 2023 Conference Call. At this time, all participants are on a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded.

pleasure Investor your Affiliates. Relations my Vice George now of President for is to host, introduce Hoglund, It National Storage you. Thank Mr. Hoglund, you may begin.

George Hoglund

the Trust. thank us Conference to for of second for Call Affiliates like Earnings quarter Storage We'd National XXXX you today joining

with today are line Dave and NSA's here Brandon CFO, and Togashi. me the President CEO, On Cramer;

to you prepared management will one analysts. more questions your limit question remarks, accept and financial if Following to and follow-up the questions. return then Please have questions from queue one registered

In addition release nationalstorageaffiliates.com. be at section press results, detail the furnished Relations our distributed website may we to on yesterday supplemental found which additional Investor our afternoon, in the package with on our

forward-looking statements represent statements uncertainties assumes are risks call, and estimates The X, to other management's that The prepared On date changing answers today's those to contain update of market management's subject forward-looking and of and or because obligation projected to company XXXX. cautions remarks in that or company today, this any as of no differ actual August your results any conditions may materially questions revise may the from forward-looking conference after statement. circumstances call.

public statements, concerning filings details to For additional with please refer SEC. our forward-looking the our

supplemental the website on definitions will I call package encourage listeners section core the our to income available turn reconciliations We Relations FFO, also financial in Dave. in Investor our review and information over such operating SEC non-GAAP in now contained as the the measures of FFO and net to filings. and

Dave Cramer

team members at It and to appreciate continued by to drive success for PROs everyone's we of today. to NSA I efforts. our Thanks, all and our members is contributions our dedication like here joining our team thanking and thanks call from significant work. George, and our acknowledging and the hard start everyone for their would

and challenging we focus and improve on unusual platforms process as allowing very us performance our sector. continued navigate environment our comps to Our for people, is

Our available environment the job a drive changing all using levers create teams to opportunities good and demand did balancing rental by effectively conversions.

portfolio self-storage long-term focus remains Our the to enhance leader healthy, a in will on customer remain our very well and base sector. success, ability positioned key our is initiatives for

second points we we growth sequentially rate were at had a rate the operational contract X% street number quarter, Looking with, of X% of including quarter, X.X% and the that year-over-year. data pleased growth first increased over

remaining With greater customer current now existing of Our base XX with average that well for years. remains over has XX% has customer length now stay months. than on historical two base average, perspective, resilient us for been us with our norms. base with our of above been tenant

is and to Our above It improve, rates rates and pre-pandemic areas, contract to many were the below were levels. revenue revenue, levels XXXX above XX% remained July ECRI pointing debt implement both ability was customer over our in base At concessions strong X.X% over continues were and XX% of strong and year-to-date. of July that Three is above our insurance in XX% X% in still worth XXXX levels. pre-pandemic out increasing stable Overall, quarter. at performance levels remain penetration operational

levels resulting a Movement activity our leasing several due projections. than below to initial of we levels meet external spring season had our anticipated not in areas below was originally The did factors. had were We expectations. we couple weaker that forecasted, was that the occupancy

for our season. across spring self-storage, our a most the demand sales of disappointing impacted amount change the experienced markets. are down housing in which to of slowing temporarily we volume of First, decreased change sales leasing This market. the housing Home move-in has in due demand

trend pressure our on short-term Although put business. has to we subside, expect housing eventually this it

of had new environment competitive We very acquisition the for a also customers.

along with the environment put Our The FFO street teams interest expectations. on rising dynamic only rental to spend pressure our generated rate elevated were across expense, interest leading on quarter. demand, the below And core the for number less-than-expected storage did second was sector. marketing also pressure rate put our environment opportunity navigating a it

rates the interest to factors expect to We a our remain in us later which discuss remainder the call. of will revise for led have headwind These year. guidance, Brandon the

half areas are future in and we external As on tough we growth comps, success. delivering focused positioned highlight for both remains forward. I past are few confident year, historically want cycle well where back the we of portfolio our to internal going the a

and platforms. First, we revenue acquisition remain customer our process management on and focused enhancing

initiatives and team, our strengthen and experience the pricing. optimize to the we're about to excited continue underway We front-end online customer

our an continue the use to in which improve the our technology of door. net customer investment in will and revenue program ECRI the growth AI improved is our once Second, drives warehouse

right. Third, we strategies sourcing will become capital are our sheet. exploring actively balance is time that more working the us on We're various the opportunistic when repossession enable to

healthy our deliver as we demonstrated in position the will IPO. growth our NSA confident are We strategies to since have

will now turn call I over Brandon. to the

Brandon Togashi

the X% X.X% $X.XX interest on Yesterday expense and same-store rate rising year XXXX, growth revenue Dave. driven the you, second environment. share over a FFO core positive reported Thank which prior afternoon, period. the due X.X% same-store year-over-year The We of in represents by growth of for NOI despite basis, quarter a per growth. X.X% to decline we adjusted growth of contract in given EBITDA X.X% delivered primarily decrease was rate elevated of

basis last the points XX%, from points up points which QX finished XX Occupancy unchanged occupancy basis basis Similarly, July down and below also XX.X%, July. year-over-year. at XXX at relatively ended quarter is XXX

growth a declined our period, were X.X%. Payroll the from did while property taxes the X.X%. job down X.X% just such was prior that second expenses quarter year Our in team tremendous controlling

grew X were savings call. we renewal last and on market, due cost a XX% These tough grew that by marketing which discussed we offset on the to had policy April expenses in insurance XX% our that

growth. lower slightly for guidance allowing OpEx We to will our range minimizing on our us same-store continue to focus expenses, controllable

the elevated cost and spread On the wide of quiet acquisitions bid-ask was capital. front, fairly the second given quarter

acquired store therefore, our count. quarter, run the existing During million $XX we that totaling increase to locations be not Annexes will facilities two as and

was from The our our quarter acquired $XX larger of one pipeline. out these we property of pipeline. Subsequent for end, to captive million, captive also acquisitions

Going to will to grow externally. opportunistic we and forward, we patient continue as look remain

balance Turning sheet. to the

rate quarter to a $XXX resulting a net Subsequent new of swaps in we expired the of $XXX entered During to floating hedges. of million X.XX%, quarter, the with we of million million effective pre-issue as million, of previously placement value announced, rate $XX notes second and of issued unsecured a private swaps into $XXX coupon and a an of end, us notional in inclusive impact exposure. five-year face of with X.XX% incremental

Today, mostly approximately our revolver. related debt is XX% total of variable rate, to

up forward, first leverage times take will debt some our X.X on Going to of X.X end, was as credit, from of steps which at quarter EBITDA, of net to the to exposure. capacity X.X and further will range reduce mentioned, comfortably free our line within down times X.X times quarter our sequentially our floating naturally Dave we the At times. rate end

on Now moving guidance. to

and assume hundred full February occupancy As return been year Dave QX remainder all caused mentioned, and of for peaking with typical This when led basis Instead, to trough relatively would patterns more year. has occupancy year. in the we a be expectations then to our in to the us summer guidance that few for the results internal XXXX, rising until the seasonal below flat points initiated we months. revise projections our

guidance release ranges outlined earnings updated follows: as the Our in as are

NOI of now expense midpoint And year a X%. growth X.XX%. a to to midpoint per we project of with growth $X.XX. X.X% FFO growth This to to X.XX% from with of modestly same-store with of midpoint. down share new X.X% same-store a Same-store of new a midpoint X.XX% leads the $X.XX Full core revenue operating of to $X.XX range X.X% and of X.XX% previous

expense, XXXX represents While our the our XXXX, of and from impacts over decline due a midpoint business. the also per primarily XX% to an FFO in results, increase on the interest pandemic related year represents X% prior share to

into to basis from X% modeled move Any occupancy would our points street up year-end again seasonality. down midpoint XXX joining we've for the of the from deviation by revised from XX% of away normal Thanks includes quarter. of a end loss is rate of midpoint. to that our This XXX return Assumptions to moderation guidance second today. or the the call us assumptions these and

take Let's to now operator back your to Operator? questions. turn the it

Operator

Instructions]. [Operator

Our first Goldsmith question. question line comes of with Michael the with proceed from UBS. your Please

Michael Goldsmith

for Can you do Thanks taking your you and little question. afternoon. up bit a you you into to free more provide Good to how the what were sheet. remarks, that's detail to prepared looking going capital? mentioned expect balance my reposition In

Dave Cramer

bit. call. It's Dave. that the I'm in joining little dig for happy Thanks to a Yes,

built growth, external in since diversified I our of multifaceted markets. increased think driven the has relative acquisition has primary that NSA growth Much we've a and our we've been leader with of of secondary straits XX basis. this been a that our IPO, really substantially. size on way, nicely through in portfolio Puerto company strategy, exposure Rico, a in it and across With

given That attractive are time growth even in NOI And to portfolios our very properties there we intend has if external focus. portfolio in evaluate growth look determine has at external as to to growth, all Currently, our the our and going limited today, management. or of we are internal closely asset it's which are led opportunities our obviously we're to FFO benefited forward, really time look shareholders. or strategic that noncore the markets

deleverage to expansion our asset we're hard value, opportunity to strategies and help higher and will occupancy properties us unit inside by studying opportunities if push attractive looking selling to unlock can core see really to opportunities our us FFO levels in the recycle this reconfigurations. opportunities grow Now and very creatively give sheet. portfolio, and balance we find Also, or configurations at unlock opportunities, unit really doing growth even the an capital redevelopment

of continue to capital. avenues explore their We

These abundance You as a possibly private present get into venture markets. to equity access partners, future themselves. we to ventures of growth, to have is people an into capital without capital look capital industry. The looking give at capital fund opportunities going to access this delever us portfolio opportunities great joint would with capitalization

opportunities that We balance position institutional could our wholly we and venture will sheet Adding that we properties if private our initiatives process opportunity. these investor. contribute leverage that's for have, believe the and focus redeploy success. and well then people, -- with right owned capital new future to us platform and a areas opportunities on vehicle focus the new can to joint We and

Michael Goldsmith

my second it. Got And on really ECRIs. helpful. question That's is

that As above street to street role the customers back understand rate. we rates look ECRI you move in strategy as a to play or

on need to may start you magnitude point from point the the what rent where ECRI strategy pressure street it? reduce does So increases rates to on to the the weigh of

Dave Cramer

We're report, to I that we're pre-pandemic that pleased levels, happy Really alter the would groups. cadence think type had level cadence rate consumers, above from and activity isn't good the and of haven't pressure all. we as changing What again, the still any and of far question not I'm remain our getting today giving Michael. I our -- and with as is what groups at increases non-test move-out test we're to

we're pleased so, that with And cadence.

We're members the us into platforms. rate year, people think this give the team new strength rate have strong And of far a base. rates of not dollars will go more the around had. afraid we think is and we've be lot will program volatility, volatility a rate. their I've paying ECRI year, mean settle as volatile. as really, street We've than half to are bit. will year the I of better street little ever we and And footing right that on hoping I existing and customer in half time. us that platform members now, a And I dividends volatile but street down invested they've a very we're long been seen find back above team for back new our as additional that in the And really

Michael Goldsmith

half. the you very luck much. in back Thank Good

Operator

of Jeff question. Spector Bank Please Our your line proceed America. next with from comes of the with question

Jeff Spector

Great. Thank you.

markets some that the a bit last weaker. On were discussed you call,

markets talked you what Springs. strong those guess, Vegas, think are seeing are or discuss? you Portland, other new in I weak opposite markets or I there markets about maybe Phoenix, Colorado to today even

Dave Cramer

actually We've occupancy. we're we've having Mark Very I'll traction and had the been traction of of of growth of number talking starting before question, quite pandemic, Portland in Portland for Portland positive some pandemic. we've found for help as of lot Jeff, and where got of have the discussed. second a as around the break supply, come of pleased out down thanks pressure. we little with. obviously, And good years a supply We while, joining. for around quarter, that pandemic which rates done a about bit it mask you revenue kind little some a a actually traction supply And little a

Still through a little still -- supply was grow pandemic. markets to lots coming maybe grow, those ways There they are 'XX, supply the bit really just footing lot come to existing piece, to during markets. and Vegas maybe Phoenix red work of the we some of have stabilization think now needs supply. and we'll in online 'XX and but 'XX both hot a of that in we've to of were

supply face the portfolios the near-term that's really country. markets. well happy in both the going diversified in market slowdown, They're also around and are but those some going markets, to We're on from really and feeling good housing the because change pressure pressure markets, housing in our of very our the with they're movement

out having decreases Texas on still of And talking Brownsville pointed pleased largest portfolio X.X% well really revenue basis with probably about average would an around also supply of but had our We one XXX average I to above growth. to McAllen hot we've down above those pressure, some point but a market, well in markets. Atlanta occupancy We're places, some portfolio points out Oklahoma average. been South City, put Atlanta and

think in balancing marketing wonderful against teams rate, our a occupancy So, market. a I did tough job occupancy very comp that spend

Jeff Spector

helpful. Very Okay.

focusing a exactly bit confirming there it have is severe year-to-date? maybe you guess happening because because occupancy So, in like, occupancy on peers. the I pick that exactly my on the loss Atlanta what anywhere heard the just We guess, is what and customers. or talked your existing about from with more then is what's happening follow-up strength your seen than loss the then, peers I

Dave Cramer

it and we question talk good a often one our It's Yes. about shop. in

probably we we we're about how If to where an of finished, portfolio are from our it we as that double perspective settle we mean our think in occupancy found from that XXX you group. And for was game we operating the think of pre-pandemic down talking landing? started, our which uncharacteristic run-up and I where portfolio our about the our peer pandemic, markets. occupancy, grew that our where points basis is think level our markets come we comfortable out we pandemic, do we do occupancy most and -- to be find going back soft going where in. And of to are

prolonged ways, in some a think has season might in all started and so, coming you of And that XXXX off this highs. way we're through half now it been ran those the back where summer XXXX

pretty we when within occupancy I -- the because our portfolios typically And comfortable going markets because markets between most trying solve footing of our were think so, we're us, the that and what revenue of the for that's think our as And operating to in in. we're we're in. goal operate occupancy looks markets our loss occupied not operate finding And today, are levels and our we the rate. occupancy for, of balance well worse

Brandon Togashi

this is Jeff, And Brandon.

thing I is would outperformed The Sunbelt just quarter, the other the second belt. add our for non-fund markets

outside So, the that growth our secondary Sunbelt call the markets the rev And in non-Sunbelt below. outperformed They They growth. portfolio, were it, were markets then NSAs average on that XX XX. that below X.X%. portfolio X.X% markets, markets average. portfolio above were our were above similarly, which The of top revenue top

the just some on for those point and are QX, how because we've website. like back the Nareit taken So just wanted secondary to in consistent about very that about point information peers. markets out case performing trailing to relative with our splits that the QX, and we -- I five-year a across your included from was those same-store to questions June performance

So, I that out. just to want call

Jeff Spector

to feel stability let's you're I on the sounds questions, have rest I stability, of you very occupancy, know through ask that today could you where found stand, interesting. saying say, That's if just two you then confirm. the you it's year? It just but like like

Dave Cramer

forecasting. still are We

our in year. we seasonality in we around summer. you the the high be things forecasting we our this of fall historical if really conservatively, thought points environment the and of the in what we're the going would occupancy the consistent loss of of the pre-pandemic. half half But of we occupancy of season. trends discussed We did not moving And at our spring year, in rate XXX stuff look midpoint still were So, leasing normal a the off back as which as peak XXX to think around back that on country forecasted back half year, guidance in in the guidance that's all to around the of and have basis

Brandon Togashi

Jeff. than year, last lower But

last the do So projections, of and year-over-year the we what midpoint will to that's tighten, we midpoint delta still of lost at negative we do points, XXX but year, occupancy end basis where -- negative guided we've that it believe on will the that do. guide

Jeff Spector

Okay, thanks for clarify.

Operator

comes Our Please with [ph] Fiber the Truth next from proceed Securities. line your question. with Cassandra of question

Unidentified Analyst

Hi, taking thanks for my question.

in in mentioned rates were remarks the year-over-year prepared sequentially. us and up what you cadence that in You rates X.X% second Can your July? tell the quarter street were street

Dave Cramer

cycling comp. question. we've some Yes. X% little July, down In fell X%. about rates are still all the around bit talked are street about year-over-year that's rates large comps, so The they straight and really comps more, and a street about, Good as this occupancy still rate

very through the street third you If held remember last quarter. we year, steady rates

negative more the rates back into back year, next we look rates, the I at of the for really where comp our going adjusted we then we and the street down half of we're started of quarter think back this bit year, little against show months, street as so, couple year. a going comp And to at the

Unidentified Analyst

Okay. July strategy maybe what XXXX? marketing there Got in promotions your comment in then quarter, And it. and on remainder dollars is the second can and of you also the for

Dave Cramer

question. Good

ever So markets. a in than we've done sector. It's a very seeing certainly, the got the programs team marketing in market and than had. generate seat sophisticated We're dollars We're elevated. themselves using seeing ever the good And lead activity. that We've across more our we've members we've dollars more marketing that got been lot of have job specific, to have teams had.

the way through And with on dollars, our balance the lead so, pleased deployed of generation. and spend finding footing year the first we're half we the really marketing of versus

better levels, remains discounting pre-pandemic now is muted better of X.X% little historical, rate that's and was just right to discounts more telling now, us is our muted below The why the pre-pandemic, that's a And around the tools discount. and X% than trigger probably I little bit and a information bit revenue of think seeing X%. fact it better you're having information. Right versus

Unidentified Analyst

Okay, you. that’s helpful. Thank

Operator

next Our KeyBanc Todd question. from Please question Thomas Capital proceed comes of line with your the Markets. with

Unidentified Analyst

A.J. Todd. on It's for

Just a couple questions. of

been So, in a follow what's already sense. asked up

into decrease the a Did shopping inquiries. and going little more marketing or there and being you sensitive? back more sense see a just web dollars, perhaps that conversion phone are web customers So hits rate the with rate lower and were was the the around

Dave Cramer

activity session the top Good joining. funnel the question. Thanks very, less The very expected. of than we was for at

last dollars. you a consider to big we got year-over-year dollars. weren't of And But deploy so, marketing careful marketing increase. to year, lot spending we It's very over a were not

little looks increase large outsized. a that So

the quarter, did particularly you the the But as job in funnel, good the amount sluggish and team felt expectation, would I May our month of focused rate top of conversion well. the our it we second moving spend. you of sessions. with April comfortable through is on sessions on, the -- has around improved keeping on we probably But was where and early to conversion and June July top activity as a and But our improved on rate, funnel sluggish was tell touched what

Unidentified Analyst

a That's to question back And just going helpful. then Portland. Okay.

next the a So, other should indicator sort good how way leading about perform a few bit markets may portfolio of over the overall of of map Portland quarters? as Is or think the a road to we think a it? that about for perhaps

Dave Cramer

that because some I think of supply kind Portland is of Portland traction. a buildup. one We're tough has still an found it's happy overabundance

you you City, So But over would mean, City, markets years look relatively to the of Oklahoma Oklahoma Tulsa, four new more at South that's good. even past that or low I the Texas. like point some I three supply if years.

all markets the it have in pandemic, you implement on of as red didn't as that's the a what hot today, of if other our activity years management ability look influx of then last cycled stable was In because the at that's what's the really revenue platform. not market to some performance they its And kind couple really our of gone and the housing. of

Unidentified Analyst

That's if Okay. one in And could helpful. quick, more. I squeeze then real

Just where of occupancy July? end what at the it year-over-year? And was was

Dave Cramer

was it was I think, as and down it Brandon year-over-year. XX.X stated, points still basis XXX

Operator

Our Rose line with with Please question of from next Citi. your Smedes proceed comes question. the

Smedes Rose

second already rate going that you're wondering I'm pronounced back talked kind people saw your of level kind But driving in occupancies the the of low for to answered of to missing the why are to see NOI will then trying high -- I'm wanted I'm if at even yours I piece And You've levels. I are think increases for your understand to pushing a half just what this same-store NOI if overall half? more these, seems a I we same-store the group the you end think, have a what but and lot like, the out pre-pandemic reasons end. through guess sounds it right, of bias, little more downward because I a second at guidance the doing seen of more figure that's lot we've about. and same contraction contract

Brandon Togashi

a little relative for the comment tough us peers. it's Yes, Smedes, to to Probably Brandon.

on when what did to question his response kind it -- all volatility, three think the for to -- things year that in remarks that was so us, And got earlier across of I in looking growth in especially starting the the they've a had like. basis ago you four-year a really parse everyone because through I been sense dealing and hit XXXX, really way and much frankly, at with we've look you year a markets in now. mean, certain

our think growth the half implying, relative tough that's So, is decelerating we're peers, of is in to so, I the rate the first year absolute mean, growth to and answer I starting right? peers. as lower. we're on moderating And below if everyone

And half that's so, might lower imply than I where the others. the back think

I can tell point you, XXX-basis just decrease on whether a do, I dependent lost to that give a little for basis that, not more point occupancy. in do we XXX if color certainly occupancy mentioned And when on we back to experience of the we somewhat good the or what it's do we I remarks. we that chunk are half. expecting experience mean opening

occupancy I year. spring And that came see Dave typically summer didn't in typical said we year might. last lot it we that mentioned points of earlier, August a XXX that uptick basis this September. that and

And today And and predict question I going historical. asked we naturally, much very as to are as ourselves challenging think, so, we've expecting lose occupancy a now. a to we right question it's were is,

We've baked that midpoint. the into

I that XXX-basis decline won't the well -- it's occupancy. high do end, think a me we XXX little get and some that conservative see and there's to if optimism in ask we're point I think basis point we to how maybe you opportunity

Smedes Rose

of reinsurance are I quarter. the tenant Okay. And then wondering what is penetration just percent now? -- taking what mentioned increase was you the had customers in insurance just in

Dave Cramer

at to XX% Over level as it and have that take portfolio move-in, Good pushed we question. well. our

initiatives. a we've done So, team's job -- with a lot good of

so, those we -- above today. sitting And are both metrics XX

Operator

with Please line Markets. with from Capital Our Sanabria Juan next comes question of question. your BMO proceed the

Unidentified Analyst

expenses. I take Robin from expectation here touch can over the just the R&M What's many how personnel on for down Payrolls And here? Adlan out and more were Juan. with want you to year-over-year. [ph] both balance year?

Brandon Togashi

Good question. Yes.

Personnel the So, next X% specific speak we to maybe pointed out, full broadly. on the expenses X% answer in the property line just six taxes biggest was Operating to months. line flat you I'll the relatively forecast item, year, but for for range. be the as first items,

We year. expect growth the be or And going in items biggest the other side terms you saw then to either year. be actuals similarly would percent to on QX minus flat, two in I half which up of essentially marketing in plus over the that line and say insurance, of a the prior are back

comments about doing the controlling with at great level spend is team that a and job the earlier we R&M my controllable, the other To store contain.

In we've on terms talked incremental employee efficiencies, remarked I tremendous time, the the working has the expected potential the at of for done a staffing say Look, insurance a in all would what stores. staffing on Dave of is tenant team and per a average the to it be store would that been team this new year along the the I we're pretty us terms lot administration that's credit past on, we've would ago have already on part better I to goes about year. of that focusing a model job internally fronts, say further operations, low. at on than

that. only you on make so additional So, room can there's much

our say scale the at will pointed couple of portfolio, beginning, is benefiting we've I that over Dave from the years. last out the However, as added

Our million this couple same-store past benefits pool from is scale of to last that that square year the it the XX up year, over and years. added we've feet what of goes was

Unidentified Analyst

is M&A have Well, does and wondering in the rights an structure, poison what PROs And a deterrence and does in as a it change way that, PRO follow-up any pill the of control? act in or scenario? on to

Dave Cramer

And Good thanks question. then, for asking it.

constantly. focus value, on that Our Board is shareholder keenly and on focused they adding

previous that does prevent and structure we've deal NSA PRO with covered from the not a Our place lot calls. taking a from

at And so, it I that. I'll think leave

Operator

comes Our line question. with proceed Sakwa question ISI. next Steve your the Evercore with Please from of

Steve Sakwa

would on Dave. does Pros, what following I just I'm net be To of to they guess who that gone a their able dynamics don't now potentially Pros? been you've that that extent business have lot capital, the given a concert curious, good on capital And with and being likely change in the up with signed that the asked change the your to starved now thinking with But the buyer answered. really that A grow dynamic access have PROs seller. and question net does being to questions you? up big from how

Dave Cramer

still And Yes. with XX we changing. PROs time rising of has spent as this a our a capital this at disconnect a PROs seller They've are really our have and even there's realize moved also Really though saw question. properties very environment. lot capital They started cost around disconnect when long ago wouldn't of rates buying be and months cycle there's good this this been And interest happened, time. you we in where And these buyer. seasoned. we've things between and

what stabilized properties. you PROs REIT. is is tell of properties. REIT, out the job outside buying and the less Given that, or buying wonderful They may properties, growing the development maybe they're be a working They're development what would outside do less I of then occupied about on they're those

still to And have so, available resources they them.

as we this. pipeline. Captive good very look at at the our restocking And it They're

of sits good are don't to build the the of so, of know, if pipeline. that $X today in our of the the And quarter acquire one we then that's in -- I strength will captive or $X.X we billion two bought, to working the in REIT And which come of it about assets properties, that that actively eventually new which yet, bought and thereafter, almost, think one you that came outside quarter very not find properties, into good out ours REIT notice are the we the we properties Captive at pipeline. billion PROs properties talked

Brandon Togashi

And still is we're model to outsized allows net us buyers. Brandon. in just do PRO that add, Steve, an the very way. term, much And long would this I

to of we're we management that managed in we advantage these some of because Dave corporate that stores think portfolios selectively opportunities could assets take talking one-off that I the actually, composition to and that characterize think near what portfolio the is weighted the of be us more little is way that asset heavily this card generally acquired on to would way corporate alluded I allows a evolved we've strategically. about it our term fact it's the

I PRO together everything going a what our things to allow quarter been And acquired PRO year pointed much story when think we so of can. pipeline back that part of as all has said. last we very grow and us captive or to they're pretty so, Dave much fourth from the source, with out, he have that still And

Steve Sakwa

would you down is or with long maybe that's Okay. dispositions going table? I about, and see enamored that's that are, take a your markets to And acquisition, one-off, maybe as then money that just debt be I into not I if pay new share all be that know follow-up comment things in the perhaps term. guess, kind redeployed or don't at of more guess, pursuing are guess, on kind if Dave, sales of on a asset all I buybacks --

Dave Cramer

We that And properties a question. have don't assets XX when large this we and last have plan. to you the been to of market, long the grow. picked and not Good as strategic certainly we've through two able a know have see billion scale, markets you portfolios in your assets in bought one up have enough go may but aren't there also been that $X in that or certainly that be months, around

because we Or leave think in a not that may market we want in you we market. and decide so, of amount we scale may there's of to assets. to redeploy look where that capital around couple a just a reposition into that market And able assets to have grow we're where better massive

it, of kind guess, I we you, capital. want how mean rank recycle I I to If deployed

We greatest to buyers be buyers. the in. is want We Today environment buyers. are not be to

smart and a taking of in these think one-offs, management, see markets. one-off a some assets. activity of we being quite -- We selling are transaction of our there asset it's good we're sell bit advantage to with So, time these

You down a different at debt and pay you to your deploy time. it now

have think this, to patient think And way, we're ourselves. be a our very to and set doing it's come this. to really external want properties time return to doing so, that conditions market for we be around we our buy attractive good a see we to time that they're we and smart it's the until and We media hurdles be going activity acquisitions

Steve Sakwa

That's Thanks. it me. for Great.

Dave Cramer

you. Thank

Operator

you. Thank

line Wolfe Please comes Carl question. of next Our proceed your Research. question Keegan from with with the

Keegan Carl

with Steve's on just question following I Thanks. mean buyback. the share up

environment. Just the curious what thoughts current are in your

lot multiple back a obviously, the in bought now. You QX and is lower

at. curious where So, head is your kind I'm just of

Dave Cramer

backs to option approved, the buybacks has have an has certainly approved. that available share that's us. We still It's additional Board Board the that

answered I as the us. of at look all kind we'll think I previous I question, think opportunities to the available

to of that to is important should positioned come take our that opportunity we advantage it's ability the have balance it. think I sheet make an sure

things think more do our might I revolver on so, talked all just a availability. more a bit leave little towards have we we capacity about us And the little

opportunity our saying towards I'm that work bit at list Share we as would way, come what little I exercise our point. on a opportunity. think trying about an lower think could just no we if So, maybe we're to to buybacks. this it. not

Keegan Carl

then platform. And the you're your NAREIT gears, of it. shifting guys potentially is third-party that you at one Got starting up meeting, at our management brought looking topics own

in curious that Just process you're at where today.

Dave Cramer

it. team really member our initiatives, one third-party It's management. to is will a evaluate good question. plate We PROs added that's Colin, look Derek his really with constantly this of cons at a We've along on and and evaluated of the to strategic

it are we still see PROs not more what today. scale point, see And an that Our than it do a this enter meaningful under limited it opportunity, We do would worth if But I'm evaluation. of an at that we market we today, evaluation. is is think I on opportunity us a surprised to lot be today. doing

Keegan Carl

Got it. Thank.

Dave Cramer

you. Thank

Operator

instructions]. [Operator

from Eric comes line Luebchow proceed Wells your Fargo. the question of question. next with Our with Please

Eric Luebchow

year the not we for forward based my yet, of providing you guidance of I could and great question. some puts on the starts guidance, more at. at they've from growth a rates, with getting in the year, But street end new you'll where rate. construction next constructive the like lessening on does Obviously, XXXX just Hi, seem know takes for been negative quite to lower as maybe fast of maybe business kind XXXX. but it taking comps you're the frame run thanks supply

could of the XXXX. the how kind So, just evolving and kind maybe you trajectory little bit into talk see a of of things about you business

Dave Cramer

about the on how XXXX you're finished the half Yes. talk we of we're guidance. Certainly, going back how not But question. Thanks for about the to thinking year. we're

comps our easier. are getting think I

for the elevated last to some power the of One level free pricing months of best push is occupancy that and we've ability on this the things been XX had we've ECRIs. battling really as far rates as

the occupancy. pretty look back felt of And we half year, if portfolio, in at the substantially so, our you

rates We pretty substantially. street to actually adjust treat

that And in the part will level far more you're comps to as as rate. think positions to get of next us year field our occupancy better. So, first little we a where playing and

would loss what's little right So, a to us we're foggy occupancy Brandon's or to unknown right the you going have in seasonality. normal have now is now point for that earlier, the normally

as footing their have And to you a XXXX. well. if think I the don't bit And their you would start how finds environment that bode calms they then maybe projections, as revenue on where if want land well on everybody little down rate

comps is -- you towards I better say. and at that less would little And things what hopefully that XXXX, so be would I as look guess, think looking we're a more that volatility, I

Eric Luebchow

Can talk it It more even levels. at touch to that's just are would on length think to further, stay Okay. you Great. which do of topic. a elongate kind very starting the we're at remained about And that's the or on I peak room of And ECRI whether program? healthy you to like extend then Could see sounds you you run plateau? appreciate you that. to levels continuing there? give

Dave Cramer

of it's tremendously. as There the this that's time starting if was not out, people but opinion do a changed number, grew months. seen who've far on higher of As believe that than that, at it's nothing we've stay changing. length moved We our the a you at and off bit to it stabilize north point, XX look little falling

think we housing around housing new talked positive consumer the may I is And all health movement occupancy of healthy. base our a about, As and out consumer be strong. There very remains our of very but of the demand, that's some occupancy, this.

do computer is And that things all base within we the want to that sticky.

point, buckets And so, of anything in any years, we tracking, that this a over over whether two the at stay portfolio. or that's total it we're length see be of don't disrupting year

Eric Luebchow

Great. Thank you.

Dave Cramer

to Thanks you.

Operator

question Please next the from with question. Golladay comes of with Bard. your proceed Our Wes line

Wes Golladay

debt opportunity in or the look maturities about right maybe with want the just anything when sheet now to the go Are some potential I seeing getting down the road. to position your maybe for balance operators? for part you distress you conversations at

Dave Cramer

The seen deals the market. seeing, product now. term We've to of to in in they partners types months. We're Wes, to months have come underwriting more certainly want we're some get our bit stay long the six than more they little we Good deals of eight been capital last of or those do want represent for for what a deciding out the to question.

portfolios some around how a I where properties but are the are, some think properties up mature the people individual we've Some seen that's properties, decision. making how and filled are,

write we the chips and take do particularly And try in quite on activity, try a I it decision don't our distressed. effort for years do we fill the one-off sell properties. to a seeing to off it a day. think the profit wouldn't of markets, property call and smaller transaction table bit it's I out more two We're

So, transaction bit underwrite want a -- activity, We're up. still a we as when not to buy yet, spread we and that take we're being want we think picking time. believe, still to still little is patient we still buy very about and bid-ask there's this and has materialized we will of what

"All time right? just sometimes sellers expectations on up, that" takes If all, rates just returns just right, enough will and that to They adjust pricing people's to or and to of sell hang say, of don't interest stay we'll have it. it

Wes Golladay

aggressive assets as then legacy well? they Okay. competition aggressive new customers. starting of get some owners these as still Are maybe of you more more get for mentioned to you vacancy, this see And lease-ups? from mainly Is start to

Dave Cramer

a than where I lot markets be it's stable been there's and product markets market-specific. and to lot markets. more more Certainly, there's product introduced, pulled of We've be think a in seen up. of obviously those more needs volatile

been hasn't some brought that's of not so a cadence -- little a on -- because Oklahoma fill referenced levels there, before, to power pressures don't I so, and maintained these amount our reasonable City tremendous our and of based in occupancy don't I to history, up. pricing think more and have bit they supply have properties And

And so, I would answer it.

putting where it's think is in really in. more supply pressure volatile markets I

Wes Golladay

you thank time. for Okay, your

Dave Cramer

Thank you.

Operator

Thank you.

Morgan comes Our Ronald question with next your with the Stanley. of Kamden question. line from Please proceed

Ronald Kamdem

quick Two Hopefully, you hear Great. me. can ones.

the first the is one So, back guidance. of to sort going just

XXXX, look call. historically, think about for of at the a rate others mentioned good of sort the of I sort sort we as talked on run end-of-the-year have

I suggests second the year, negative. guess the on the of be should guidance question based XXXX really it in half the is So, NOI

that Like puts what you takes just what with think do cost? and year the can comfortable remind how are the the to us of were So, highlight? that I that next you you get are trying offsets

Brandon Togashi

obviously, in I if I'll agree not speaking anything exit for Yes, much we too too different you what XXXX, from be rate we'll of say thinking kind I that XX. of mean, of big don't I too of a see how know not year kind sure widely Ron, the I'm half said in that's but determined so earlier, and what up the said sets have about as terms how back 'XX that's much unknown I more comment unfortunately. this will to about plays if from Frankly, be earlier, we out. we lot the

Ronald Kamdem

just are then think portfolio the a highs. is at probably big average and taking I it. back And rents question my all-time Got second step

juice Like get on ratios? at to comfortable be sense little get I the pricing that to right? tenants rent-to-income point taking side? are get not do trying bit of test they're still Just had that to of sort a a more you any guys what pricing, are so you're more not you that what of the look sort Like comfortable what doing at internally, where

Dave Cramer

mid-level a or increase this the do risk question. is studying or what's And potentially data move and this, forward risk the have smarter increases risk the we higher-level out looking effects the do if that we gets good react tenant machine score. and they or is have more test and a is the on times a a test it? maybe we gather and Certainly, to rate And and consumer level, certainly do we're going rate more this these the and Really what at the group really then those increase, no that we're experiencing base. it maybe we're Yes. the little we of at maybe to looking groups

don't years Thus the tool, ago, back doing reaction job far, do I we're didn't and would rate XX pulled tell you, do was have the doing don't this we of and gosh, I knee-jerk and our today. increases to the that be some still technology needs-based The here fact here, ECRI obviously it's needs it have a we the work that be program out can proving is need is we effectively we business. to that because and the The cycle. during customer things

better I of are and actually having and think it. us results determine better so, out our tools make And we're helping decisions,

not enough, to it or maybe of do rate out you elevated them increase the we they're put Nothing that the fourth running have have may above fact some and really except cost risk who been long be customers the you replacement take want in door. I time, us at point on you the has off the top mean, guardrails knocked yet third with end.

guardrails some now. so we're the And of that's reinstalling

Ronald Kamdem

thank Helpful you so much.

Dave Cramer

Thank you.

Operator

floor Cramer Thank that you. our Mr. gentlemen, for turn session. and comments. question-and-answer back final Ladies to concludes the I'll

Dave Cramer

Thanks.

confident on us process, position remain that exposure attractive As market housing for with we markets, move we platform and people, our well continued past on impacts Sunbelt the success. near-term challenging combined focus initiatives to comps and demand, our

interest to in thank NSA. the call continued the your today and all want I for you joining for

Operator

call. This conference concludes today's you. Thank

time. your at You this for Thank participation. you your lines may disconnect

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