National Storage Affiliates Trust (NSA) 6 Aug 242024 Q2 Earnings call transcript

Company Profile

Participants

George Hoglund	executive
David Cramer	executive
Brandon Togashi	executive
Juan Sanabria	analyst
Samir Khanal	analyst
Spenser Allaway	analyst
Todd Thomas	analyst
Ki Bin Kim	analyst
Michael Goldsmith	analyst
Eric Wolfe	analyst
Eric Luebchow	analyst
Jeffrey Spector	analyst
Omotayo Okusanya	analyst
Brendan Lynch	analyst
Keegan Carl	analyst
Ronald Kamdem	analyst

Call transcript

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Operator

Greetings, and welcome to the National Storage Affiliates Second Quarter 2024 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, George Hoglund, Vice President of Investor Relations for National Storage Affiliates. Thank you, Mr. Hoglund.

You may begin.

George Hoglund

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

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

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

on as website XXXX. The release actual press cautions changing package of addition yesterday results, date after those statement. we furnished your be the management's projected statements contain August supplemental in revise of prepared section today, detail today's in call. to questions In obligation our Investor with any this additional forward-looking and forward-looking to represent Management's circumstances company company differ that no conditions found update afternoon, and any distributed our that statements X, and or may conference at which the results from or Relations may other to uncertainties estimates materially subject answers are call, forward-looking risks may remarks assumes the market on nationalstorageaffiliates.com. On because of our to The

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

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

David Cramer

today. call joining thanks, and George, Thanks, for our everyone,

rates most we're due reduced Similar in in from housing half our markets. Rental of slowed Street at leasing the a and down from peak to to month not the at play XX% the did supply in X.X% typical back being as customer grew second continued demand XX% last during and a Sunbelt Our declined results occupancy July, other into spring competitive season. quarter, are very pressure felt XX.X%. same-store June Historically, ending storage occupancy is and for operating the which the the but season June rate muted new absorption sequentially probably of so year. market activity with July for each July and reflect environment. seeing out operators, July, quarter in in

payment We be of half stay behaviors, remain continue back within our ECRIs current expectations. will year. the environment customer and the all activity, to existing believe We throughout with pleased our that remain operating the of length

our Brandon adjusted expectations will which further. have we year full headwinds, accordingly, these detail Given

opportunities portfolio purchase starting capital We in a are to Grande see equity, Valley the closing the assets stabilization. We The more acquisition our of $XX on occupancy XXXX, million. deploy with properties JV was an in average and portfolio in the These in the Rio to lease-up following property markets. started plan long-term purchased for high place core mid-XXs. from with we XXX% high-quality are financing to on

These XX% PRO two to our on encouraged another are be core JV. made Transition of structure, over improve the improves. overall PRO at of operational our initiatives few schedule, with we the and year. managed environment by by of by operating well stores, to web operating We on million Of progress the completed stores platforms, to opportunities our enhance of the on deals XX-property to internalization forward have stores depth portfolio XX% culminating when the is by PRO efficiencies. We've these past managed to the approximately contract the be team $XX NSA's strategic highlights the significant also of of positions some attractive platform the markets completed. rebranded, to relationship performance date. geographic quarters, totaling quality our market XXX portfolio remaining managed while and the our our been under and our which PROs progress remaining XXX is portfolio to be purchased existing due that future will the the properties. I'll and be the that increased be properties same transition corporate by further provide will us managed expect considerations. out and a the are The our XX% to we of Currently, the X% complete, have of NSA our end

internalization the from accretion NOI from adds from three to $X.XX accretion changes on expect of areas: PRO accretion management cash we primarily and effectively key of and in flow $X.XX growth, eliminating As to to every the related previously revenue $X.XX operations savings in PRO $X.XX XXXX, in structure discussed, expect of efficiencies. we split G&A the beginning dollar $X.XX

As which there stores is basis expect currently, an difference managed the a managed stores, we occupancy XXX example, close corporate PRO in point and going forward. between to

are Additionally, in the process commonizing. there are we differences of which marketing and ECRI in strategies,

optimistic access growth Brandon call we the to we platform, given the remain our discuss joint longer-term taken now ventures. I'll to on results. headwinds, generate all Although and via our over to we've portfolio financial near-term outlook steps to our improve capital optimize face the turn

Brandon Togashi

XXXX, NOI. primarily Thank FFO approximately same-store X% year decline of prior by second the we Yesterday driven core the representing period, in share afternoon, a you, decrease $X.XX Dave. for over per reported quarter the of

$X we of resulting in Additionally, or which quarter million casualty second per few results. approximately a events almost share, had impacted losses $X.XX

property for moderate and by higher occupancy. Expense driven in growth X.X% the of revenue quarter, on a going basis growth year-over-year X.X% with to remain partially expense of basis taxes same-store second due growth Marketing by being appeals. in competition single growth to insurance foot square quarter insurance, the expenses per points, XX offset marketing successful a R&M, declined digits. rent will forward to was XXX drivers by the while revenue offset a decline the basis, due increased main growth decline in average For in customers point

balance sheet. the to speaking Now

$XXX $XXX balance revolver is million us current availability. Our million, giving roughly of

half in our be back favor of before out will the to line rates year the out to next seek terming into on move to revolver Our interest of we until create credit. With a maturities to patient over debt address opportunistically the balance. starting capacity few little more and XXXX quarters, the maturities push and the plan coming was

Dave comfortable biased remainder which We net was with leverage, remain X.Xx on to are capital joint relatively with quarter deployment the to expect ventures, debt to our it the year we earlier. EBITDA and flat at for our as touched end of

repurchase shares for we million quarter, the fulfilled our buying During program, share million. X.X $XX

OP no elimination dollars cash of management insurance higher contracts subordinated will bought we simplifies stores. $XX were since estimated in million included average This there share results to distributions economics SP gross of capital weighted OP and the be XXX the and unit year denominator on the structure our structure Additionally, with SP PRO million million full shares count financials performance our the associated on FFO converted a The out an related X.X units all the or This any stakeholders. July and all tenant longer million XXX of XXXX. for PRO and units the and units. for XX X, of million of into managed payment units,

outlook. Now to on XXXX moving

the the When growth color some due guidance. typical on we high give about continued low remaining a on in same-store drivers and market; February, our introduced seasonality guidance change normalization to street me with the end, the of on relatively a to due flat of rates the the in of assumptions; talked year. modest the occupancy seasonality rate Let housing muted to we pressure return end, at customer key occupancy midpoint, throughout downward and level a on and demand; following

As the observable, our to was also portfolio was materializing and difference upper markets operating more challenged sufficient persisting dynamics half of has and Sunbelt progressed revenue across us NOI June and through that others. ranges it became pressures not realistic. our the July, competitive we such were clear with than not been customer The that in demand

For and gain non-Sunbelt example, informed in largely rates has occupancy guidance, from street I that flat our mentioned markets, been higher the throughout a concentration rates markets January for down XX about out assumption and street in But street relatively end XXX with are results our rates up year, markets. given are time. X% Sunbelt basis and that July, to has markets. midpoint the The is played these are of points diversion our basis points This up in has portfolio, the X%. only our occupancy our of sequential occupancy weighed Sunbelt the of earlier about on heavier

the have softer of outperformed outperform. housing, still back years, of term, rest long demand for And driver our term, markets are the These be them multiyear these $X.XX pressure comps, revisions now to these to we Looking in $X.XX which elevated share be over tougher our portfolio. FFO due change to competitive to growth joining today. expect primary But challenged. the per core to Sunbelt near we XXXX. for multiple the guidance and same-store Thanks due markets again over project to more call will

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

Operator

comes question Juan from BMO of line the first Our with Instructions] Markets. [Operator Sanabria Capital

Juan Sanabria

could bit internalization. PRO little a you hoping talk Just the about

gap? what the to think entail opportunity relative the stores. half that the guidance? assumed what's we that assuming to do time to you're incrementally in You should to kind close stimulate going mentioned would how an rates with the more frame of to in have drop that of going you Or or Are there you corporate back about forward demand? managed occupancy think And evolving gap

David Cramer

question. It's for a good thanks Juan, joining.

that going to in several I at think look we're ways.

around into how we'll dollars, analytics we them our AI look tools built I at the the platform right those stores the we deploy acquisitions bringing get metrics platforms, Google website, bring our around -- as stores. the marketing onto search paid to onto customer use the think

the rate and the and had to to will first to we effectively equation new very had the close that revenue the year around success. price this half drive We've tools have, try at corporate we're with good corporate a want holding a success seeking, be to but closer we that Looking occupancy, really the to gap we new portfolio as where really and close have portfolio. analytics driving that in data certainly part that discount number of be just we of

able part but So platforms close anticipating, we're gap really the market-specific, be through of back PRO we specific, level should occupancy to around first to next that course, will gains and success we and year, the our benefit see store to coming a half will year the the occupancy we'll that level of on think there. stores of from

Juan Sanabria

Okay. gears, And about acquisitive. you talked then switching more becoming

managed talked a about fund. the [indiscernible] XX portfolio You with asset

you what just and well that where hoping a of [indiscernible] little talk cap could you're if values size rates asset and kind deal, underwriting today? as dollar for get bit Just about the are

David Cramer

quarter. second assets the I sure. We very, a for million sheet XXXX $XX couple thought, balance of in did about were buy using in We three Yes, successful fronts proceeds. on

to were markets we capital far to two purchased densify portfolio. So just and redeploy look. our We lease-up it able were in market had in of wanted to more $XX Those we cap a put assets where property key added a assets we a able on component. and that also for are target had rate to million, one stabilized ads portfolio. that mid-Xs the as our the acquire targeted those markets Of us. effectively very to sold It work little as in in very were

in little closer it be in the next stabilization. the when a expected XX, Xs. probably low to XX here was the little a returns But Xs high to months that XX So to to

very of of we job it's Rio satisfy XXXX finding Grande from a Valley, team still assets capital The good use in that. did high-quality really to that ease the mentioned lease-up, the JV proceeds, assets. in So and

now, positioned, presence This it's we a us our that mid-XXs a We very located market. right control that the have large in Rio well have climate in Grande for well there. of portfolio in product the the lot has benefits Valley, very

was So it on really the The in nicely. fills market mid-Xs. a yield in that

us. improve The throughout. And to that opportunities higher X the We just the of another expect stabilized we stabilized, little also because that forward to portfolio will and market portfolio key in It have it. as bringing added us. again, due in properties to efficiencies. operational closer a looking more portfolio that very stabilize some is added it. we're new it assets a It's for market is go into up diligence very expansion they we XX is It we It's, high it's then position our portfolio on, to lease-up XX and product, That because does some than as more our mid-Xs. just for completed nice with be a Xs in. in the

So that right now. in occupancy is the low XXs

funds done So to job densify has growth, efficiencies. quarter, smart to deploying I back presence portfolio operational our we think and getting build team want markets the and where really good in a second

Operator

of ISI. next Evercore question Khanal line with Samir Our from comes the

Samir Khanal

Brandon, for I time? as guidance guess ECRIs guidance? see what you are Have you those this at assumptions your growth baking lowered in changed in revenue

Brandon Togashi

for we plan to continue to assertive have ECRI assumptions, been balance the as this Samir, of be we recently. as year

data the has not an really much those on that we're we that been Customer tells customer rate of of us response really and increases. All impact pushes strong good the regarding on that have behavior. making

right occupancy push opportunity out. you spring in the set achieve those impacted were so summer plan able your And now, based to Obviously, continue with we to is there. and to on

telling data into math. no factored But on the all is that's the behavior based changes so customer what or us. And

Samir Khanal

you in little more what about when challenged. you -- the I at guess, markets about being Sunbelt even, follow-up, a look as talked And a bit

changes You're correct? any perspective either, ECRI there not an from seeing

Brandon Togashi

ECRI run No, those opportunity of demographics Samir, markets transition nothing those letting bit. to difference previously the us a It programs. from is of or PROs to the those or one weren't fully that's kind behavior. that's in going related to in as things the that decisions the little specific is, ECRI telling big factored the If delta us anything, increase there's in a we set who markets

been pushed magnitude earlier on being new just that. increase we percentage the because increase. We've have our of may confident of that that early from move-ins change corporate stores, in managed first Some the the mentioned the as first a more not that data higher supporting what with PROs increase rate I as of rate have to reception to about

see then pieces the be half benefits XXXX, year, there. back going but quarter is into forward that we maybe really little in bit, a fourth going benefit to additive some So should which the some the of probably

Operator

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

Spenser Allaway

a Can one just getting sourced? X the sellers on there are you're just on get whether normal? ago? market. willing more of the than seeing how market sense comment And calls are in than done like are transaction if more months any inbound And more Maybe you versus deals today's to just being today trying maybe

David Cramer

Sure. the deal to Thanks for flow would flow that do and makes more sense say more think we're more deal us. I seeing question. -- I

XX, deals there would seen a the I tell think expectations months, definitely we're on we we versus where over back buy XX going sellers' think we've wider traffic also X, last but thought was multiple times. seeing to I come spread were I at you

X And again ago, so today. saw it if months we we're seeing XX it months or

to transact realistic And are at. where think more a that, so I back to on sellers' little expectations becoming they need again,

it really to so we good of opportunities for We're line second I And the of happy us. team's deal with seeing. was in we're flow lot the were of buy ability finish the our we're and across pleased a properties. some underwriting really deals amount Again, get quarter thought

Spenser Allaway

useful. back where spread you you deals the just on if And today first Great. your being they bid-ask first the versus or on yes, being maybe Can spread around bid-ask sourced? traded are could, comments quantify the maybe are that versus coming were Okay.

David Cramer

buyer would say, average, a the process I the it a as to today that from X% to seller XX% we and than on ago. probably bid, point we're with while probably higher mid-ask the off XX% start X% starting year from was

I as that tell certainly starting we underwriting we're seen probably you, So in cut have gap deal half, today. would

Operator

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

Todd Thomas

like and that specifically, provide the what now annualized G&A First that on guidance? wondering on an total forward? I synergies, could been accretion in achieve you was an time to question, whether to that revised the $X.XX achieved look has going within basis basis just annualized $X.XX mentioned the update you an line Or the if on might

Brandon Togashi

is Todd, Brandon. this Yes, question. Good

to buyouts the like was which as equity. the well $X conversion G&A was PRO also to dollars cost do to to $X.X the of buyout, $X.XX SP as equity in those $X.XX, That the that million the of large incorporated consideration things the the, the the to So other savings, we tenant but realize OP insurance the the expected to contributor million range. remember,

So math, Dave of little into savings, on course. The and all that in earlier we're really that, up was incorporated beyond. that the that touched picking a G&A be of going but comments, that's of as bit realization his XXXX is really full in to

we slightly a place but rate. agreements entered around PRO the in the were and then of at PROs management turned All into agreements revenue reduced terminated, transitionary of as short-term management percent immediately with they

that that really, is complete operations, those transition quarters. But there is XXXX. realization then has taken time, all accounting, project some team properties, and to of rate like of so quarter benefit incremental the that these two really of when a to and that's quarter benefit first seeing and be we'll oversight our office going that is corporate the administration first be accretion when And the real run realize comes it's the at back -- which next full the over we

Todd Thomas

strategies, Okay. you spoke a Would And the to then about ECRIs upside? is just additional occupancy of Great. and bringing you board helpful. that I changes that now $X.XX that or to corporate? prior closing the with of be think accretion That's the revenue the predominantly $X.XX them question from that discussed gap the on in management, ECRI to

David Cramer

the transition platforms, comes we gap, is to storage little ECRI be that's at in it underway. really that Todd, close operational we the I to and that point, the later but $X.XX of To of in well look around structure as factor, No, just we program, think will I which the Brandon's bit occupancy, part $X.XX XXXX. efficiencies think really as a occupancy our

ECRI the strategy. We will implement

half really ECRI of back see as full markets year. X payroll we ours look program benefit as So people bring X in the on structure the have mid-part of is -- because some benefit as and XXXX. savings we we into as to around made at we'll and that some But Obviously, coming overlay the the to as far well. start

Todd Thomas

Got Okay. it.

So occupancy just the will a bit earlier based program The take market on ECRI impact might little faster have gap conditions. longer closing on. a

then transition purposes, the an will little provide management for the then there? a management of you Whether detail to And more future? the will from those in bit strategy just continue And I PROs of adopt stores they there's and, stores separate Okay. remain revenue operate with eventually corporate? that management or can guess, they ECRI a strategy more to centralized are going to sort expectation

David Cramer

Really Yes. good question.

so And have they are will we be and Their term, with are longer very PROs of the that good performers. platform. a couple us stores on

from So the want on. will all They and of local they platform a certainly that the it to management. grow. the to implementation, from have to will great insights have we They'll markets. continue piece all efficiencies, continue the of people the be accounting. on They stores do operate structure platform They

this spin we these overlap. in. PROs, we markets in can to PROs lot out of they're in there's to played well be up continue that will maybe PROs geography venture continue us these where to positioned didn't in couple properties. have to be kind think of two at build than It I ventures acquire we opportunities where look well. different of have a Well-performing future with with as they where some PRO So the Geography structure

there little And operational any because we markets where challenging enter didn't more efficiencies have so be we a for would overlap. our standpoint,

we're it's forward us, of so looking them. We provide with a future a they benefit. think the we think value to and lot to And good

Operator

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

Ki Bin Kim

PRO back internalization. going revenue to commentary synergy the the Just on

occupancy different mentioned versus Or curious, able profile. certain that I a basis might that points was just portfolio markets is you just Meaning, one weighted? to comparing be that obviously portfolio? the NSA market You gap is in XXX close. somehow have occupancy

David Cramer

portfolio, pure a lot Ki spread really in you, is would good a is I studying, these there portfolio It's of but to question, tell markets we're the that overlap. Bin.

and we'll I a a level able solve the mean, of we of to we're adjust still markets occupancy just be to similar better portfolio these confidence revenue that new better that through we but level what to trying revenue, practices smartly. have So -- high lot the able new within has instituted and tools. close practices, that marketing management be tools the done the had success we've corporate since to around gap we'll

Ki Bin Kim

in as structure. any internalized cause guess, July at Did operating transitioned, you I to blip kind performance? in that all of And usual

David Cramer

release, I a marketing the nice, a -- you we've to the team around be Certainly, honest intent of certainly structure a acknowledged smooth it's know well extending transition we've But we agreement nice got lift. you team all can work I it. transition. as in it's management The time my got on mean, planned, the and get you I transition every distraction. here, a you, through is would it platforms and member with platforms transition, be comments

working the first We But very on of that the hard about work here the very, are of distraction. and certainly year, very we're minimalizing we thinking focused were very, year. the half back it the half

positioned. And well think we're so I

I think team I'm honest, we fine. we're work doing the to what it's it of and how again, they're they're but know being extra proud work. executing, through and very going

Ki Bin Kim

you of something same-store change year-to-date. the portfolio why NOI press if just noticeable same-store I could NOI asked. a the -- growth suggested in pretty in or there's some is rates? Yes. the curious versus that, which Maybe I provide been mean between And release NSA's just like difference language PROs performance

David Cramer

this it get lot obviously, into store of to went around there's Ki going that a time different not strategies it. probably specifics, and Bin markets to and into I'm pieces

NOI won't talk lot a about So I between the differences the portfolios. probably

Operator

next of with Our from comes line question Michael Goldsmith UBS. the

Michael Goldsmith

could the or customer about what seeing demand any macro a quarters, customer housing last increased sensitivity else get lot economic talked, the you the question of demand, are over to better? first customer change but has that that just get and new is to of the to have on We market, things sort to anything My on slowing? influencing be several kind

David Cramer

question. good a It's

healthy. Like a from We slowing. existing has the haven't lot I said, been base impact customer economic of seen

so of with And and all activity pleased those we're payment it. pieces

that's So good.

of customer are there There's new obviously little that other to the attracting demand. around due new a going Transition less think housing customers, on. country to we I due in -- our several environment, a of the has of place. I think, particularly jobs kept economy, that still in new I markets, lot have strength people supply Sunbelt. things in cycling the we're believe

And so that will through. take burn time to

we markets before, So look growth. in the the Phoenix markets good of There's some Atlanta West time of out Florida job what's still good still growth we've going you long still if storage formation. markets. And and term, and household some is go it. called population at like through these we these I Coast industry just and to they'll fix There's the masked that. good work There's we COVID had time back this burn the like way which you, It success takes the supply their of supply, was of and to COVID, because them. around tell the would to in think through

as are even mean, downsize their I economy, things tighten goes, to other has historically or from those for to the move people storage country or maybe the in jobs maybe life. contraction forced they're Storage as -- forced as benefited think I transitions in around

that's housing XX only change the to happened XX hasn't the so transition. interest the environment, muted rate really and last that the And been months, really in really has something it's

will back. come was markets the hottest really strong we're portfolio that. time, had we some happy happy the a just this country We at run The think in Sunbelt diversity in point is We're with of the we and shouldn't markets way positioned. cycle forget down our our That the of through it. I one to have of with portfolio. through and those So COVID, through

Michael Goldsmith

little same-store saw is of guidance down bit the Brandon, take follow-up And have expense of peers a lot then for the We kind my moved the guidance. higher. expense a question same-store

or seeing like environment? So expenses side on can side? the and ability expense you expense seeing you're you're maybe the What your at demand to the walk slower what through flex

Brandon Togashi

the Yes, a the Michael, bit first just of little -- lowered on yes, what in the right, increased year. low saw you're expenses, of end the half based the range we sorry, we the guidance on

based a that that spend. we where had Some of to taxes muted have is we earlier, where things on just the more big described ton that to capture of a budgeted given some in our demand is the We we customer customers than and we could the -- one marketing like trying competitive still obviously you little the of yet, just chose line a our that all spend deliberately and just on final just those markets some and get Property clarity are environment. item don't right, assessments.

first which half earlier in budgets as appeals, of the some to third But year and are year successful beginning a the the guide a oftentimes markets, projected to had we end the benefits into incorporates the of but has the mentioned contesting our lot of those. we that year. fourth is So at the my of year of I beginning back sometimes the we little remarks, because we what quarter, still the more successful for half year, and of get I in think were the a the conservative baked the little

we'll other through go the of couple those, of on have we get and Southeast, next quarters final these parts more and as there. bills So Texas clarity

Operator

of comes line Eric Wolfe with . next Our Citibank. the question from

Eric Wolfe

in You changes it actually curious change a what trying would when changing, mentioned past, was that do in a seen it? Was recession yet, signs you existing haven't economic was cause seen what the Just but you behavior reasons? in understand think you that ECRI to have or behavior? the caused piece customer I

David Cramer

the altering we -- places really maybe made we health rates more maybe really unemployment really is think, I percentages. the income around rate you'd have -- and tight. I set had that that never stopped time probably last total ECRI go really I and a increase. was back around what versus magnitude around dollar back and the got increase can in think looking levels of the around amount changed We've on book of consumer would with mean And do, to think like were to environment it, at go I GFC of of to guardrails piece program, we program. they the challenged but pocket the We really going or the the

though. today, smarter think I we're

We have tools. better data

it's We Personally, I that confidence. different If and GFC, have we've we'd more have give would these gut the a now, about probably confidence. us had higher today. of had far, a less we tools you we rate thus It's do than more back changes in deployed at the tell attitude as time levels about feeling. data

Eric Wolfe

I said correct before the months any I have if and That's there was have wrong to changes me that think I companies six But storage And knew past, wondering XX% just that. been went if out on didn't customers in helpful. a I'm about know of average are customers staying come little of turning down more more customers short-term and know it's up being over or during by if quickly that? that but driven length long-term that's less COVID stay a bit, time.

that average I staying? cohorts seems stay staying changing just different of know they're to consistent, are long be how within length curious terms but of of sort in

David Cramer

referring people good XX haven't average study as months, seen that. tell you're of than can XX to, us I around out, lot places like XX days, move buckets a still question. the buckets. of months, a length to over It's your movement less stay been less we within six the really with do point, than just those And on is you, And months. We of

still about more us than our same approximate with tenants of north in-place length store, a for XX months. than all the of Our tenants total been more -- XX% have of is with two of us -- stay have been our within XX% and years. the year The

history, some and very to the back solid. still numbers those look above you of historical if So staying are

Operator

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

Eric Luebchow

Great. appreciate I it.

touched activity Sunbelt, a is in seeing But now, are Dave, already this of little current may direction, working But through but matter some to of an hold overhang terms a sense it? in trying persist to time demand on markets you when continued supply supply and supply. trends popping think a up longer? supply could think in new online that on as opposite it's we those development bit, You the for the you that forward? of lot just overhang that Or makes about you reverse going of just you a see that start assuming get mentioned, for

David Cramer

think supply Certainly, and been delivered that of down new believe new and the there Certainly, markets 'XX, was you, there probably on of is you're the We are looking would supply. might the longer than so new downhill as major downhill far lot seeing of as tell supply I if than are fill-up through development. this say delivered the from times majority of impact amount a on We the that deliveries. develop. we're ever 'XX, environment going future. market. development. ever maximum a has is slope new change competitive a the hitting It's to now of more impact about develop. your slide challenging more challenging at developer, I'd to It's that developing we're more in But of the And you're expensive attitude in product the

Eric Luebchow

to -- more rates improve to Appreciate that. aggressive on occupancy. touched a Great. little And get you've been and move-in

think the ECRI. successful from you've talked one on in and other I Has pushing compare free larger first customers, like a the So techniques signs that been of so magnitude the faster been used ECRIs? And with promotional rent? the early that past, how does far? things rate increases any about to you've

David Cramer

still customers. our price us on Currently, would data I is tell attracting think that is important new

come to the still is up bit, a the get driver discounting but has so price main little rental. And

seeing a we've that, And entry timing, at program for of After the so testing better -- the and of we and around doing -- ECRI customer success increasing we're frame magnitude. And levels more doing acceptance we magnitude pricing pushing in stats ECRI, all haven't focusing sharp around getting we're on even that's are the the all little and had timing them. customers. in on might that we point anything though new the time just the quicker the they're not short we're testing, we're within different when the be

just we accepting haven't lot So we're and of we a the the customer talked programs movement. far, again, healthy. about seen remains implementing, They're that

Operator

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

Jeffrey Spector

you you like should currency will a 'XX feel point? least to not that expect peak last do consumer of season leasing to based really remarks, the last just commented environment that's current appreciate your it the it? on environment at the until possibly seasonality I Is this at that say and and David, comment Or current through into really the opening we think fair conditions year-end. fair

David Cramer

good question. It's really a

of around I [ that would and to people year, back to does similar and I going know I becomes way would around more the the see -- interest should -- the just from do buy just to houses pent-up half. the then little wanting along. probably year then me little demand that. transition. If rates. there that spring the in now quarter at come off excuse We demand muted XXXX the back than country, much around factor think I There's a of we don't lot and free in but answer activity Fed question company XXXX in leasing movement, we'll up right play a the to enter how this be there's the activity will of as first a back stronger bit tell the is year the a lot sell camp, return. transition have had create we half then light -- is -- this season I is and entered ]. of things yet. we're think the And the to more mean Fed half will what leasing cut I wish a little a season some better We'll a hopefully the of XXXX unknowns the comes the I'm housing say

hopeful. we're think I

will some commonized I us changes, then markets us when maintain. But in excel. on platforms today's internalization things certainly, other ease that do then it in our compete we to I and our and internally, sets we supply think will markets some the And of environment. can pressures while getting with well think up

Jeffrey Spector

the appreciate then, rate. that existing the on you're I in the strength And and again, existing customer pushing customer all comments

there's current issue. to that reviewing It's in historically an respond customer their alluded state. right that when and expenses, that did when You is we're I think you

a you think as the -- next that, think So about concern? strategy that? is seasonal over months, Or shifting that a you'll thing? it much again, you're yes, few you just I are that you contemplating Is pushing? how discussed on that we balance? how Do should do

David Cramer

that -- ECRI tenants and of I that is with we're it of I question. tenant, thing that tenant increases longevity to not at that, change rate we're replacement Good that maybe have path sixth going increase looking look the don't add probably way. seeing ourselves today -- pursue, our much where how do With a rate or that asking Yes. of we're if program. number to is that anything had want a we fact actively our would at course on one fifth at you

component believe because And is large rest expense convenient, a that magnitude and line. so levels storage than any or storage us harder not ever. But I is of the telling always this in still product a our at doing. need-based been the personal a is look testing need. And as I area we're our is that's us use one not we're studying that you, different I timing dollar business. and has It's what think the telling the very easy and behaviors habits programs, people of different that of we change having will large, tell consumer item

that the they their to tough having make storage before so a really us And in believe our decide strength also helps consumer I around to unit. of leave confidence choice

Operator

Deutsche comes next with of from the question Our Bank. Okusanya line Omotayo

Omotayo Okusanya

I Yes. quarter year-over-year. you rate. it for was down believe Questions mentioned the X% street around

Just half curious street perform think 'XX? may into revised how guidance built the rates what's in back of the regarding you

David Cramer

our non-Sunbelt for I joining. difference think I And was the was -- between our Sunbelt about thanks markets. Brandon think just what Tayo, talking markets and

in his he our about I talking difference our was in street comments, non-Sunbelt think in X% rates decline in versus the was markets. markets so Sunbelt And

we street think were the quarter. XX%, right street quarter. On rate, ended we what were think around rates the XX.X%, I I down down is for

gets the back year. I I comp know easier a think little the in our of half

July we July. finished as far [ so better said you in where we or And so, as was it It's XX.X% it it if ] at a I XX. was got look as July, in think little

the difference in And year, in of comps little year-over-year will back though. remain closer. the I get will easier, variance rate year-over-year a you, competitive, get tell half going street it's come rates, the the bit the to in the

to smart think driving around be I going to we're number. a revenue

gets the we're for. shooting driving in around be which an to marketing we'll rate overall we that street think goal occupancy number revenue discount I is spend smart want, a environment a

some and right environment what supply. others, feeling it's would competitive markets where still say. so more more They're And certainly, is now, I dynamic have we guess, than And that exist. pretty are competitive new I

Omotayo Okusanya

curious year-over-year So a Or negative if it can in the how specific improve us nail give now, year? a sure bit is dynamic of a everything it you little back of you but kind are kind given single half to double we about digits negative that could it. of guidance thinking Does I'm much digits? from more down not better around just level comps because the right

David Cramer

say, February, year. in the the pressures the looked year digits the would really at be do. thought single gap know competitive the what as we in Tough would half in I to of back we that it closing

single as be we low but not digits, probably not think anymore. the optimistic we're teams in we'll believe think that will get I I

the the we're think of I maybe to end going high year. get by single digits

Operator

from next comes Our of question line Lynch Brendan Barclays. the with

Brendan Lynch

place? you with marketing algorithm evaluate are the maybe some pricing further and of on what just you I wanted commentary lack how whether the are and upside on potential from adjustments? maximizing better your to ask of to term a some And perfected you that they performance truly for in versus have extent profitability occupancy algorithms, having

David Cramer

Really, think really I several are And optimized. think thought we're reasons good there. that. I for don't there

I time. think improve time, all you situation, the number data a points of

rate entry in competitive environment. think particularly from I environment. And seen a this been a I come the don't in about I movements We've where the very, ever. this if seen consolidation it, We've materially a long dynamic type If -- new I've of on. time price, think way rates time, COVID really they high industry. we're and you operated in some seen a at higher come we high now in we've machines very that be supply going into really long dynamic mean, and we've haven't environment. this before. for seen

learning of day. so every And learning. are They're our tools capable

all of strategies I you, within better. the markets, time are I will We and time, unit would different tell make within think us sizes, testing properties. But within

I better, think and we better. how us learn us make will what we situations will improve and make tweak how we

improve. room to from personally, So we have think position, my I

Brendan Lynch

Great.

And related somewhat follow-up.

are, the out a Marketing your so taking marketing few months and on far? hired going into initiative Maybe marketing what how ago. Officer and branching Chief tactics expectations might You new new you they're a that be anything

David Cramer

an promoted actually position. internal that We into candidate Sure.

been Melissa five I been has think, what with she's now. years, So us

search of a time our algorithms out integral been marketing and so And acquisition last years, which of adding part spent around and call built. tremendous very two she's of the we the we've around strategies strategies. The website technology and of the platform, our building our paid amount a Google energy around introduction our have marketing talent customer platform, center platforms,

And a the so us positioning we've setting for future. and to done things lot our footing, up improve of our

she's in which spearhead of. launched new the around we've our look, been customer experiences you If website,

I learning lot touches. Data things introduces -- that and center of think, technology. machine just amount touch amount the the and putting we of environment for a that. got, we've the so Again, finishing center we're center, is warehouse technology very the new of that data is That warehouse up AI call And running exciting to us. points and we service call amount have, the members team the important of have, functional,

a been she's lot for And I really job. She's program develop And she's doing around to yes, strong us. a had support, this. our with a vision certainly mean, so of able wonderful

Operator

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

Juan Sanabria

Thanks for time. the follow-up

think quantum levers and about the you could managed you time the stores the corporate that in-place the of previously and difference close PRO between curious, the do and comment and to how about if rates to gap Just frame that stores so? managed

David Cramer

Thanks Thanks for of geography. for the It's hard the because question. follow-up.

maybe own so -- market I non way a the mix. they at a versus different each store varies different ratio They different has it, have a think and climate, look it unit have has of control its each throughout you markets. climate

rate us for around hard it's think like in-place a rate give number PRO. contract or to achieve I so And

we in base. What are on way we is differences you the existing can the we would customer work there know tell really

that data one is performance really it, piece tools, customers customer use to tenant. attract base stronger we to use use in-place but acceptance data, of and of of use a the of how drive of appetite, tools, of existing So the out that

in-place bigger see And where to that will rents we contract opportunity, an obviously revenue. so that's and to lead ability drive

Juan Sanabria

setting you judge not And determining internalization you? final do me. determines just of in targeting success for think how the the hurdle rates success how or I one one or able to for you're optimizing to PRO what whatever like guess, be levels I guys mean that for what delta are and should -- benchmarks we,

David Cramer

of transition, and the we've Well, around out spend way laid couple the of top around, rental. a acquisitions technologies will to end conversion the and acceptance our and rate around and platform paid change ratio use success of is on spend them marketing funnel funnel of work customer through rate think the the platforms I

work on continue the we occupancy to I then and refine and to. think we'll pointed we talk obviously, one those can is then are that gap first about. And numbers the

to revenue. that think drive effectively additional opportunity we As we use an through work there's this carefully transition, lever to occupancy

with transition quarters get then of come the through team next we'll stats. done, get platform get And back the transition, few so I think us a more let couple and the done, of

I will looking we're at success. you that think help how understand

Operator

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

Keegan Carl

you just curious just on words, have rate July think this your In but how assuming at I your where then and in I'd compared then to also June. of particular, might range? other XQ in And said versus versus on midpoint the I'm both July, and were of know expectations? occupancy both performance prior you particular, this, guidance just some love where July apologize, I performed

Brandon Togashi

prior end the that remark negative that's at July, XXX at delta Keegan, of year. basis XX.X% month, the was the we a did point So, occupancy

comments as we being to things it little and Dave Also would the So and have June everything earlier put through widened seen, night. report informed we gave obviously, and a just have than just a July, about, liked the little year-over-year. the June last bit I in that in weaker progressed we

June year. sequentially move go back those down to the street sequentially downward also as they half rates seasonally, typically start go occupancy typically would they So through as to of to metrics, both you the would of right, July, start lower

June does a projections. our would the it through. QX, certainly we much growth that's rate It's tell much we lack a year-over-year, the you that of just when would is but of demand. of we of as today weigh what So just you, those of going and and from what trajectory the built that How in talked how say off with like night. how materially talking May, informs put about in have things exited July on were as competitive and progress I matter last we lot the pressures dynamic were report wasn't I into too

Keegan Carl

to embedded to similarly is mid- any your inflection rate. helpful. Got kind is curious, guide. expect occupancy of on sort just on any year? for mentioned how guess we it. range? the about of demand of just does I'm the within on know And you I then include basis inflection or high shifting it in of the you either portion street But year-over-year rest it But should And guidance occupancy think of for gears how delta the the there rest the of I you touched a I the now. that XXXX? That's end trend the know

Brandon Togashi

Yes.

and occupancy year-over-year, still we dynamic normally that continue inflect the would be back has gap narrowing the has do our year, the XXX. And to negative. negative is midpoint in So, is of probably But go more likely our rate, going end that's year seasonally. the for would that point negative, lower saw that basis of the the been maybe by of Keegan, basis and like at that that XXX delta to guide, the at such you negative to but expect narrowing. end it range, then July, assume half average contract that but of our we negative have a just And numbers, as point on as the the other been positive in is XXX

which negative that So on basis regarding in a on rate, on coupled a negative implied guidance. growth you do point The saw assumptions inflection XXX contract with revenue it's gets demand. a that not include occupancy, material to you our year-over-year

described the the maybe Fed job mentioned do. swiftly get Dave moved That that the end. earlier those September Dave material here high some As that and things what and some anything help from from at low and generally that could But events. benefits the -- things we types pickup in those could we're in earlier, Also, that because if business not like countercyclical loss that there's and from. of there's are of us midpoint, transition the if assuming demand of increase our

Operator

Ronald the Morgan next Stanley. Our line question from of with comes Kamdem

Ronald Kamdem

quick me. Just for ones two

get I sure guidance, right. it Just making trying of the to understand same-store sort revenue

the starting is sort I And we thinking Is XXXX sort have for down year rate it X you of about? am of year of exit into for sort the a X sort be down would that of sort should be for the year down the correct? implies XXXX. Or that So which exiting that of something? number, of if missing year, going half sort X the year-to-date, so of at right you're back that point the and the

Brandon Togashi

versus I Your it, Ronald, with I X.X number, X, X. number your commentary. high overall, a -- have call agree But got

back the more beginning Now mean year And I'm QX there what XXXX where will about that QX? get of your terms across year, give aggregate. color talking right? the crux how obviously here, we you're to of what than and not about get the we there, of given projections. the that half you what but in talk that's we've How we're prepared and be when exiting And XXXX do in that's question, XXXX, February actually we does any to impactful

Ronald Kamdem

bit. stuff. little then know like of a just touched -- you you've but just -- a taxes, and sounds my -- of And it, got was sense. on sort labor appeals some going one expenses second it on I if favorable Makes don't to ton

time? high-level you trend? do provide could should rate? better that maybe opportunities where expect over right the is Just some on of this X% just sort to those there to commentary Or number run Is than we

Brandon Togashi

when recently, those comes marketing the X% we're term, the success had second comments X% pressures, wage half favorable obviously, the growth property which X, great obviously, especially to and as averages demand little assessed to less, was. mean, And to some bit not Long didn't bills. for on dial mean, Yes. we've been a lot X-year results was levy a implied, tax growth. back the forward, half like half can be mover the be about I there's to the tax earlier have going what I back the I spend is than rates needle have OpEx or property to More will get tremendously the spend, pressures, first markets when where that year-over-year certainly from final certainly, expect yet and -- Southeast we've is whether it values of or whole pressures, trees. But year, of we falling

Operator

comes the Citibank. Eric question Wolfe with from line of last Our

Eric Wolfe

follow going you with an compete store. your Thanks up, call think is XX% to for around said LSI long the that stores taking But of I here. I the know XX%

end curious would aggregate of assumed helpful hold more of that your to long being moving some more be you perhaps did would rents that just up enough So just that they pricing May, quoted I raised pricing other impact that helpful they saw guess, stores? the across competing was you I was was the would around or what didn't stores? sort of your competing for have numbers curious competition sort in But places. it I of when than late I suggest.

David Cramer

Sure. June, up. able Really May, really particularly into move, were street good and question. rates to We April

some that I so competitive and driving, street the mid-June really set seeing of just a that rate a on, into in pressure from improvement environment and June -- happened the markets having and little all think, July. react we us certainly some To competitive street reversal I point of of rates Brandon's rate that yes, helped. saw pressure and of to back to less a movement was by certainly think the street Brandon And positive in changing around July, half put

it about June of half is in as quarter, second second we're changed the May, I think quarter, -- the little you back optimistic you were more there July. that's that's So look at talking certainly a when probably -- and out we to

Operator

There the to are like no back at for closing some further questions this remarks. I'd time. call to turn over George

George Hoglund

rest at all hope conferences for seeing we look We you to in Thank your the upcoming forward interest you in summer, the the NSA. of continued many you and September. enjoy of

Operator

This concludes today's teleconference.

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

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