Life Storage Inc - Registered Shares (LSI) 31 Oct 192019 Q3 Earnings call transcript

Company Profile

Participants

David Dodman	VP of IR & Strategic Planning
Joseph Saffire	CEO & Director
Andrew Gregoire	CFO & Secretary
Shirley Wu	Bank of America Merrill Lynch
Robert Metz	BMO Capital Markets
Jonathan Hughes	Raymond James & Associates
Smedes Rose	Citigroup
Todd Thomas	KeyBanc Capital Markets
Stephen Sakwa	Evercore ISI
Ki Bin Kim	SunTrust Robinson Humphrey
Ryan Lumb	Green Street Advisors
Jonathan Petersen	Jefferies
Michael Bilerman	Citigroup

Call transcript

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Operator

Good morning, and welcome to the Life Storage Inc.

Third Quarter 2019 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the conference over to David Dodman. . ahead go Please

David Dodman

Financial welcome today's third Saffire, discussion Life Gregoire, Officer and conference Chief XXXX call. of Chief Andy and Leading will Storage; to morning, quarter our earnings Executive Officer. Good be Joe

As questions forward-looking your answers contain the a statements. following reminder, and to discussion

Our actual projected from differ due uncertainties and risks results company's the may with business. those to

Relations and Additional page on copy of A company's SEC information regarding filings. found these lifestorage.com. be factors press at can quarterly release be the may Investor found in the supplement our

Instructions]. this time, I'll [Operator Joe. the turn to At call over

Joseph Saffire

and an Good high share, the call. of which solid to adjusted had X-pack on morning, because million discussed second which reported acquired yesterday at store million a of again stores update and leasing stores transactions for on for million. wholly-owned end We million, quarter. $XX welcome store, earnings lease-up previously includes July; with of stores the our Seattle as strategic of for with Vegas a stabilized third quarter an active $XX quarter per and in in XX-pack X-pack was which We for our entrance stabilized Austin quarter stores $XXX portfolio $XX FFO million; Baltimore an we for as markets for in Las of a $XXX well XX our were roughly $XX guidance we $X.XX were closed in of of portfolio which That for earnings I'm another range. our to going all extremely million, begin our X into great call.

a time X and the to markets given pleased be and rates. are in we've liked Baltimore, for long We demographics Seattle

that both new for contract $X.X in our quarter fact, to expect as in interest minority We property, presence We XX% open And under CofO XXXX. a a a quarter made joint a of to the million in expect partner this investment deal which in venture. Seattle we fourth a building those. continue stake have of in we in

additional in York contract actually X very for $XX.X is plan to put there. we Greater portfolio million. stores us, quarter, market greater has our New the largest week. last performed third which wholly-owned growing York for well under New closed continue During our our City and market One we for the portfolio

X our to relates that guidance for it for we were acquired the interest As pleased activity, stores year previously Childress We Properties. brand. in XX% establish on minority with and the achieve A are Max a strategic to a pace Class JV managed to relationship under are Klein million $XX.X investment Space

and a manage We a XX% are in that stores for also ownership under currently contract in X $X.X Tampa million Sarasota investment for and minority interest. we

stores of mature And quarter to call. it the transactions, Real portfolio $XXX relates Group discussed finally, as in sale million we XX for completed our July, earnings second also Inland Estate to on

will We XX stores to all management long-term a subject agreement. terms of continue to manage

we the into is aggregate of to generate years. per share FFO to but details, get than been decided protocol a we provide result going XXXX have of of exciting we executing have to higher ongoing growth our we impact So earlier initiatives year, of substantially all the adjusted on initiatives change than is we as guidance to these recent Andy and experienced past. expect in this that in many have

expect pool a in non-same-store recent result this year, we larger by a have have portfolio our to year-end quarters. had than we as Specifically, of transactions

opportunity are of stores, occupancy will which lease-up for XX.X% We strong of with expect XX have that XX roughly markets in average in significant good rates currently pool and growth. providing

seeing repair remain management ensure faster in excited that Rent already supply of And street pressure NOI we utilities, under which we margin on we is extremely focused by focused than are revenue savings on already way, improvement We the contributing manage are are actively and and cost we to putting the to our activities. of Additionally, ability are to Now, given benefits. rates. growing and is seeing by driving is we in on are payroll reevaluating some those maintenance benefit of initiatives those actions. how Many and these manage trends

Our to have by we third-party total as have another of managed strong we a and the of stores management strong platform continue year-over-year, year is having XX% grown pipeline number opportunities.

enhancements focused investments. XXX the similar expansion almost And at complete finish growing a expect year this $XX amount to portfolio year we next X paced of million finish million with expect We each to anticipate $XX compared of with another $XX remain investments opportunity in well. And year. million to $XX active we very in this $XX of next previous are million JV's our roughly on stores. to been expect to We We year year and have our almost we as million as years.

to been are as growth. But we we prepare relates our took markets So as reposition by excited building enter year dilution momentum FFO transition the the XXXX to we a it I'm to in has certain given portfolio, XXXX.

over it Andy. to hand now I'll

Andrew Gregoire

Joe. Thanks,

adjusted As $X.XX from operations of Joe reported quarterly per night. funds mentioned, share we last

growth was controlled Our same-store growth performance by achieved of a NOI expenses. by combination revenue X.X% and highlighted of

same average X.X% by over Rate rates growth in XXXX. increased third last Specifically, per over decline driven partially thanks basis rose the occupancy. realized XXX X.X% period of year quarter to point that square our was foot revenue by the offset

and office XXX the Internet increase expenses continued the marketing decreasing quarter maintenance, payroll over in spend. be Third in to quarter controlled, of other taxes outside well of and offset benefits, XXXX. and expenses Decreases same-store extremely third basis operating points property and repairs

and focus in our in improvement are margin. are evident basis on XX and point technology in the producing year-over-year investments NOI great efficiencies same-store Our our results

we X.X% the As anticipated, increased property in quarter. taxes

continued insurance this program benefit quarter. captive income tenant net third over our of our We XX.X% last year's are very program operating to associated with transition pleased for the as a with increased

that certificate of our portfolio, of early in growth at or same-store performance lease-up the we we continued strong the at consistent see the to addition stage. purchased to occupancy In properties trend

occupancy As XX occupancy of stores of acquisition end the XX XX.X% pool past with quarter today compared of of quarterly at activity our the consists XX a over of of with quarterly months, third to result XX% stores lease-up XXXX. the our

to Our significant portfolio lease-up has grow. room current

also of quarter traction reflected XX.X% third due gained revenue third-party overall in significant Our in have increase increase we portfolio the a management growing fees that to stores.

to significant they balance Our to our when we very flexibility solid, opportunities sheet on investment remains attractive continue requirements. and return meet have capitalize

of At quarter hand and million we of our on cash $XXX end, on available $XX.X line credit. had million

a to EBITDA X.Xx. and debt X.Xx, net coverage our was recurring ratio Our was debt service healthy

until maturities debt no have XXXX. We

and maturity years, our total was debt September debt the was percentage X.X at rate of is that average XX. fixed Our XX%

expect fourth we Regarding and to be between XXXX. the $X.XX adjusted full per raised in be end between guidance $X.XX and FFO year of XXXX Therefore, $X.XX guidance, now share per $X.XX. and we expect quarter to the adjusted share low FFO of

in our guidance late Keep offering introduced in a share that FFO mind contemplated per XXXX. in February debt

expense will resulted on planned which not to You included comments notes that was XX-year, in opportunistically million That guidance. second conditions from was issuance in in than early long-term earnings of capitalize fixed $XXX order we rate for interest favorable that secure issued in market June, earlier fixed-rate of our quarter additional recall $X.XX initial debt. senior unsecured

this cost trends. We by offset additional since favorable it have operating was not adjusted account to our for guidance down

grow X.XX% year. to X.XX% XXXX the revenues relates XXXX, same-store it we As between and for to expect fiscal

more again Rent property our to the X.XX% in pressure result range market we Now of should this savings X.XX% accumulative a to to than at at continued between X% expect growth the of lease-up than related occupied our effect in X% online of our other The past operating the and with we and marketing the stores stages expect platform. the increases. are in not Excluding expected discipline assumption grow do same-store taxes, from expenses Internet Property cost offset acquired result that taxes impact are in XXXX. as rental We our were to same-store practices, to X% any in decrease reductions on XXXX. beginning of rates these costs early in group less XX% of NOI. Consistent X% including to

between million, be acquisitions $XX investment In to and $XX joint $XX and share share. aggregate, be to to per be adjusted million. between we be we to in XXXX $X.XX million expect and in million G&A million and $XXX enhancements investment to anticipate Similar between and ventures cost $X.XX $XX between XXXX, and FFO million approximately expansion $XX million, per $XX in

that, With now call open questions. the can we for operator,

Operator

Instructions]. [Operator

with Bank Wu Shirley America. of from comes question first Our

Shirley Wu

question has to your my first do guidance. 'XX expense So with

impact as you're and you of some to efficiencies? to those And what other that X%. Now, negative your significantly about the earlier better the little 'XX down expecting in outside Could you've that's costs X% initiatives about of come of utilization So talk talk creating to than a well. financial lot taxes, bit And the peers. Rent mentioned expecting you're that's that in 'XX also a and the continue

Joseph Saffire

the Joe. And our how store head level time, obviously we've laser-focused us at it's part improve talking margins, wanting that having question. the and help has how been really our the the on been Thanks the the bigger Shirley, stores in for a and while rotation. will to been to there. for But We've asset premise for at the better company markets improve of office. same now was margins at

sooner launched has Rent And to we've now been in over is payroll when recognizing it. it, year expected. say expected that we Now been Part we initially the we them get we're of that it about Now. And did since level. Rent we efficiencies some we'd pleased than X

are call our They're they're XX% about to movements of to not forth. and so center If going not now you by the it, think directly our counter, handled customers. going

it. a So chunk that big is of

Rent on we are just obviously, not But focused Now.

have. the pleased store the a to all store many really other store. level, of say level, to store that improve store those them up that today and week, efficiency at how real runs of all are Online that we're fewer manager at and to efficient efficiencies recognizing XXXX. the options, looking seeing the down double the processes We how of are FTE the like doing coverage, things things procedures we're embracing at has like those premise things how been online now. can can we We're we paperless, reduce we have auctions. efficiencies add We're number we've currently at need hours these what more the a technologies And going how the with We're improve benefits currently and And are drive do to we we really can we teams that for make bank per the this. them, pleased forecasting in results. to really the

is XXXX pleased savings everything in And achieving what are it. really already what we're that see today. with from These we we are seeing real today. So guided have we we're that for

There that new new initiatives with. year, up will be next ideas we come

to experience. those so marketing. haven't with great a we That's more has can't team The level, that control into a head taxes, at that's our can looking that know we control we're level We factored the efficiencies And overhead at XXXX. drive we really we spend of guidance. everything we work do at store can but more We continue bit really that the ideas, hard. and to the office great but premise on little our cost, upside, property

Shirley Wu

my 'XX. for on revenue it. second And for question, Got it's

guidance stabilizes that X.X, current would your So XQ. similar XQ to at that imply

you forward, if sense moving wanted the hit revenue like revenues get those feel So of revenues lows. your to just cadence I if have growth -- their of

Andrew Gregoire

X%. Shirley. effective things we we the X.X. are Street done that they the all I net in been year. lowest rates down like specials saw I were our a industry, down what only that we QX. with That's there's in But Sure, and saw as they've some down in changes think, think few them Yes, down, we've

saw occupancy trends we the we like And quarter. seeing narrowed quarter effective basis occupancy. you're pretty the The so quarter as the and with see in occupancy we saw. We gap that gap. net Today through the rates went the So quarter, gap basis points. that the ended point then trends at XXX like fourth in XX we consistent right, third is we what we're

Operator

Our Metz Jeremy next with question comes Capital BMO Markets. from

Robert Metz

slower on your you look I this guidance have I the Joe, early point in just the guess to that if limited and less in visibility the pullback out I season and mean and revenue XXXX go back we wanted given seasonally to stick front never peers more the back, here, last come giving guidance. or sector. the with

the predict in sense. the side, the is the current to the helping You team non-same-store earnings. on. I combine picture. guess confidence hardest that expense like at really stake The the you But and wondering gave from with the here. I side I'm supply to makes get ground And That's plan coming to seems that benefit point. just what this revenue

on So that? color any

Joseph Saffire

Yes. Thanks, Jeremy. Thanks for the call. Yes.

this a protocol amount saw somewhat We've this talked already year. real and And be We of to of dilution. and as disconnect will really what considerable sold We had been year were feel expected bought a changed We bunch produce. us. have which moving for we're with bunch a there's of a confident as which what efficiencies. lot year a we next efficiencies parts, I We going what was a you about We technology. the of we some real. stores. stores. new of But took launched know,

level on projection income seeing this good and projection like store only our that see the is and about things so captive year And some we I feel from other we're we're on to the revenue rates same-store believe that now, our going not But but with fee forth. making Jeremy. that what side, still

a not been don't coming York, in If then terms much. on. if those our new you boroughs lot X are look latest XX comfort you New And markets of as Yardi's with top us the sure, supply. look construction the markets, see and That market, already hit are that We in report, We've markets Houston for particular. some Houston X in new particular, the supply. we're top the that and on particular New at York those in with lowest gives the MSAs Chicago, in greater Chicago at at of

seeing We our region, Most affecting new stores, feel about ton Island City. Long there. not a Island, pretty supply have projections northern X Long of store us. in of good our Jersey, We mid-Hudson New we're

we high And asking particular, that the XX%. saw digits down at less we've the pretty double in quarter, seen negative over first get in Houston it XX%, rates year.

now. think I mid-single-digits we're

Andrew Gregoire

X%. yes. Correct,

Joseph Saffire

that a we've and next a kind stabilize. we'll feel us occupancy and We is improve seen in second worst really the maybe and behind maybe year of of good that positive. X% little half Houston bit see the in

So very on realistic revenue we what projected side. the it's think we

Robert Metz

the that forecast side helping point? you're results gives seeing drivers and you still it's a push the and you're confidence as piece is that of existing And of on revenue here, the one that the some making still customers, the you're seeing this confidence that with at

Joseph Saffire

Yes. We ideas feel have the about this. We're still We some confident. of Exactly, X now Jeremy. testing very years with different in-place strategy.

comfort promotions We little we aggressive more there we in-place a That improve And little competitors. larger little gives think we We out have some there. a with different with us a occupancy. that. maybe to work than strategy, our add there. have to think lower can room We're of bit we more the some

been our what see Is We've weeks. some excited in or that. tweaking the new much We're about how the we'll But things we're that seeing year. upside management it with we're strategy And the so of for revenue I the goes, X guidance? that revenue. our next We've year increase excited X next last in got most is think goes. how We'll that's kind of that model. but about we're see doing of I bulk on on the yes, there. same-store think that in-place

Operator

Hughes Our with Jonathan James. next from question Raymond comes

Jonathan Hughes

on that conversion traffic maybe the details before looks us more and give customer platform? of you versus and Rent rates, rollout maybe Could Now what some trends today like like

Andrew Gregoire

Yes.

of supply is, the the them the getting the those this at are similar and we move-ins is challenge. the still, maximized where to rate here. right in So think I what most cycle, saw part struggle revenue in are bringing right? the trends Move-ins

down, rates see occupancy But October, special September So that move-in we're is and the what we seeing what like saw you in quarter-to-quarter. that trend gap and we narrowing. in producing

with comfortable we're So that.

the our is. On gap effective like we well. rate as net where side, shrinking That is

So you're move-ins. it's right, the

we've up been. in-place on surprise to during ticked move-outs how us, our our year. increased move-outs, from the of they last have increases, year and XX% the continue the aggressive On customers We not

on the move-out up aggressive that picking has we've been based as not is been. surprise big the So how

Joseph Saffire

And are for sure And not kind focused XXX% We're conversion pay is rate. in on Jonathan, booking that's they rate, somebody Now tool. of days before average fact, we capture capture a typically losing in. Rent If that the on we great on Rent is a rate. them. see customers those Now, three move

activity, to the So organic, they're improving We general, either that at our this website, the weeks, definitely hits maps, in X in year through we're X helps really us. high. seeing been the activity an all-time move-ins that see even the pay. and last But have though lower is on

the We getting traction. are

Our and the spend that a do great organic we I paid have really, would is search side. presence high. on We on efficiently say, maps

I idea There's real new there. some are is aware out little out leased bit of the supply. a The there. There's more consumers think are being stores options specials up. There that is

that our somebody So and well on in We've best We've do us new improving we we're got into that rate. been doing some now. XXXX. retraining experimenting I And team. for think If some with. capture calls, call that tactics center sales our focused bodes heading our we've been

into we to we're capture year, be peak to season really well to think As continue prepared next rate. I improve going get our the

Jonathan Hughes

just Okay. me. one more Great. That's helpful. maybe And then for

operators? The third-party Or platform flag from third-party Were deliveries? in those some mostly new XX the added. transitions quarter, were there that's growth stores other

Joseph Saffire

leased equity sold they contract no-brainer were we platforms, that more so, no to stores. XX manager. our remainder and the purchased. probably stabilized a Inland and and a long-term half XX And -- are they've a it I up Well, in since half that we as stores us have But couple brought for was of loved say that or them we We've keep Yes. kept would with are to the that. them in on stores a

Operator

question comes Our Rose Citi. from Smedes next with

Smedes Rose

mentioned got XX% the you've push customers rates course that in increase rent through? increases over the to last this average year. to of or wanted I able First, the just is of What been ask, that you --

Andrew Gregoire

The average been increase, had it's X%. is Smedes, a this Year-to-date than XX.X%, quarter X-ish, quarter. higher it the previous was which little

Smedes Rose

And there things go just more of with the structural undermine sort that's mentioned, the can I'm maybe seemed -- just but back to Okay. XXXX. level in of savings. ago acquired you catch-up I of to And was mean a costs And your now, wanted Storage wondering sort is more in terms down all just maybe fact the change while to don't cost to you I kind holistically of that's that of system? the bring then maybe just to more drastic at efficiencies of none been to the that property that them able -- something that sort platform of that or you've something bringing Life a any

Joseph Saffire

The have manage about number more savings of the the if if the we significant have number I store, don't significant. I that it in in our over last FTE number brought big Smedes. and center lower. Rent you store, provides on the part we XXX. think We efficiently. XXX on can mean of stores that's the Now. think stores part It is people we call of is we're per Now so, a it's of That up. field, hours initiatives it. adds a despite of year, FTE Rent Honestly, per That doing. bringing is was and

different ideas. have We

this have some focused like doing on where is maintenance we've been We're and managers. that. multi-store a things something number Repair year. We of

We see manage program disciplined. of projects better that's think And I better we're And approval. on it the part benefit to I it. starting think more just of of to a those a year. part software control, all big different of last brought is

and So it efficiency the we're of realizing We'll quarter, very see the we're things. quarter. And what into there's to XXXX third for going partly And trying in already that And store it there's it at the in a projected a have we up. on the is, of confident carry level. dollars lot again, in because fourth XXXX. savings add number improve to those we're

Smedes Rose

just then on in do the have -- projection? does the change the in you XXXX, And Okay. NOI pool of finally, some impact fact, fixed same-store or

Andrew Gregoire

stores would needle minor not it's obviously, whole a a our move rest. change. stores stores normally, the so XX to big grow higher XXX lot, We're XX won't. It's But change. than those they But the adding a to

Operator

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

Todd Thomas

first Just question.

the it So for that's $X.XX XXXX expected same-store XXXX for from account to like guidance, looks so the the about is of midpoint, growth $X.XX.

some from decompose a non-same-store XXXX? the growth bridge mentioned you and help $X.XX further of lease-up, initiatives. that bit sort the Can You other other

Andrew Gregoire

of NOI. adding There's right? a bit right? there, things about But Sure. those the middle So That of cost through we sold bought The us pop, recycling quite in stores on few stores flowing $X.XX a is are $X.XX. we year. the a of the

that there's have from the positive another recycling. bit Management $X.XX another more nicely CofOs are some from -- The has that adding NOI $X.XX So the little are is a CofOs, an in those. $X.XX up The there's fees I $X.XX. initiatives so. same-store pop rest with legacy a and -- or leasing about that, FFO than the

the program, full there's So that. Warehouse other those Anywhere. we and April few year And have insurance next results from things a we like year we're which we X, the seeing a on implemented and of

Todd Thomas

Are That's share expecting the close is front? can in year for little your you the you XXXX? caught higher And then but occupancy to what Okay. you're the on still helpful. back in forecast that lower occupancy and same-store, You of trend gap year-over-year. bit of a here, throughout terms occupancy

Andrew Gregoire

Yes.

think we through close we the modeling is through gap the year. next what that predicted I would

in late go to year. we the flat basis to year, So now we as expect would points XX the be that positive through

Todd Thomas

question. Okay. And last

amongst I of there. some in initiatives the You know Anywhere been that's for Warehouse motion just mentioned some time.

to that some that help your initiative? a of there, effort. Can on that bit provide you you're the generate an hire income more a update to made little recently You from just talk there and about starting with efforts detail overall,

Joseph Saffire

for last it customers, We've idea about right? some generates We've Warehouse think the on at business It into well income for the business mile. Anywhere. plays It we with a customers. come tool We of excited focused always income. We're been technology look decent as rental generates some fee out some obviously our us. that Todd. Yes, whole

still our really very XXXX guidance a haven't could big The We great. some young. from has there too be It's upside mean forecasted I pop in Anywhere. new Warehouse been hire there.

or to I brought want a got X new takes we've of work names. in last see But us larger test kind those on in. -- of time really we come think to We've the contracts got what for They on X it pilot. things month household mean. They to want out. a to to

And of forecasted which search noise, visibility product, a now, spike. works say great. we But speed. gained finding really Companies it just is I would sometimes through it are big doesn't. has the But sometimes us the this haven't and

compared year, not think experienced this ton. $X.XX this improvement I to into may XXXX a but from year be what we

love It's see but it, We'll still its goes, differentiator how but for it. our about But customers in it excited a we're again, infancy. it's us.

think clients. talking showed to some office. it. excited Now. third-party and I Anywhere us helping Warehouse Rent They win come business. our our And And about we them They it's to get our we're

Warehouse that don't specific So equate Anywhere there's that some to dollars business. intangibles to to

contracts winning are excited from we're We it, it. and about

Operator

with Sakwa comes question next from Our Evercore. Steve

Stephen Sakwa

focus has of a know lot on XXXX. been I

occupancy focusing dipped Just marketing a maintaining bit different your more than occupancy, on is maybe some very your more. are larger and side, trend your who has Internet on the clearly, peers of

you're through doing to kind what of us sort gap. think of close help Just that

on Internet If marketing, what doing? you're are not exactly you spending

Joseph Saffire

are on We spending definitely marketing.

one last marketing brand had spending Our those years funds in been Steve. building we Life traditional new been for halfway that decide a into has We right year And started over marketing. has to the to brand. we our move benefit couple marketing this been really where really Internet bucket that had about up, of the the had we funds marketing, of

hand. an So the overall there marketing, to right from is in that moving hand increase but line kind is left offset by of the marketing Internet

paid the obviously that watching got still it sales getting, we up in important. general, we're making clicks. But hits And I sure so found. that move-ins. comes management, of the the then on really maps. becoming being It's on of at show show tactics, search in obviously promotions said watch organic. terms revenue high forth. still earlier, were got we we're to record kind And more is are And up We down as and to It's to clicks,

to So spread feel with We it. every in our be can Internet smart and need we just we don't spending #X market. out be

We are smart with it.

was Bob's to And in-house have brand what today paying team the excellent. we Uncle Life think from We an They when a learned they ton learned. I did change Storage. marketing that's who dividends from

look for want you auctions. ads And you It's spent you around pop-up we the be on of think We do go in hard are when And when smart it's being that in do our all country. lot bidding dollars sure if in of store really even see you work appropriately. time. the make to We with see ad when some time ad. even dollars I So paying day we're make not a spending. that that's should sure we're an at the to do Nashville we're might not Nashville. a market. not search, a not that We We

So I to go expect with think very we're those efficient. we do very We're But next year. dollars. up smart them

and XX% we'll growth it goes. I and budgeted think see watch a it we how

Stephen Sakwa

Just the year way of there or back so. guidance taken are. us change maybe built Okay. into those of sort effectively the the what what changes quantify over maybe to to organization of those the much but FTE the been of sort how are in for and Joe. place of And past of understand your kind is point, sort And kind help I appreciate ability is to already size the realize to to FTE of next have us the those change has I a come just for year? sensitive discussions,

Joseph Saffire

the It is of to assistant manager typically been turnover of the it Most attrition. for not of it, is in field Steve, has -- Part us a is sensitive. positions. not They're full-time all through roles. going high-level

So that's Less organization. helps. usually an in workforce that highest on dependency turnover rate the

any of should part hours coverage has Rent stores but bit. store that. year, to it. number that that And number our guidance, but progress and to of comfortable it where of a a going to definitely Now. we making a So part bring FTE continue It have that into building we're tested about trying hiring being of improve reduced per positions A it's because I'd FTE we to some with of We've not trying haven't in and is we're our it and kind smarter that of forth. down really We're store we taken per next built so already. rather about test persons guidance. is double and X ratio And feel general. into it, talk certain with and of that not

the a because of well. but of in up, help channel haven't Rent in as amount that kept movements And through XX% tried Now Now, be of there. by know, be going payroll hoping Rent We've year. we for we next of to us will obviously our or would That example, to being the our but will we been go XX%. be growth Rent expect pretty don't aggressive if built way, channel we move-ins We considerable Now savings. that haven't haven't would I at growth up. on conservative any or We've XX% move-ins it next XX%. whatever. projected, year it We're it had XX% Obviously, goes that our any

have built that not We our guidance. into

Stephen Sakwa

I because somebody clarify to about just average think next occupancy And asked Okay. year.

weighted XXX at average looking about this I'm right, points. if your X basis occupancy So months down is

What that the what occupancy year factored that then number around you're into Just the guidance? out close is gain year. next assuming to -- it's maybe

Andrew Gregoire

is match occupancy, The next we year. up that Steve,

goes today's gap. XX% -- we X% So to a

So it's to expect growing not We be like gap occupancy. we're just narrow. it -- to the

Joseph Saffire

hasn't Yes. is us revenue drivers going be occupancy. close a we management, that earlier, But we about bit XXX think to That points. that past. in-place going about basis That things focused that's XX, said gap. ideas unique XX. we the in a We've seeing are within industry. been we're it help little And And a strategy. closed got on some Steve, already now really different to we some of believe our are the month to XX one as on got I more

feel comfortable we that. So with pretty

of that we Denver, hard And again, some not top some not markets like with and in and us. of faced we're those is the of forth behind construction a some so the -- Nashville, markets yes, in Portland hot hit Atlanta. markets, new But and other of are supply We're getting just Miami lot some now. our have

Houston, behind of Chicago, markets, York Some of Vegas. kind are Buffalo, us, region, our larger the New

be we a achievable XXX, I feel more it. that's we with about good it pretty And start So -- feel than like would achieving we'll to pretty but that.

Operator

Ki comes Bin with question next from Kim SunTrust. Our

Ki Bin Kim

on there a about thought some had why that out we market talked guys maybe Was early? declining is especially in just that reasons You put put why given you guys you a are hazy other the forward. and for to or like the are flag reasons environment you opinion bit reason to any guidance a things are growth out like this. I investors it versus But you a XXXX you other like probably about your wanted just little felt there's would putting seeing. different looking rate feels guidance want what out mean

Joseph Saffire

books more Well, we hitting a talk then out get And right? I conferences. transparent we've a They're had lot We parts, because it properties, are really And real next We're our our what We to to lot We significant. do NDRs. be of in new a is several on sale these of to real And the seeing with this about we of seeing. We're of going timing the savings. properties, will us year. the think rationale we those. weeks. of at talk moving with benefit efficiencies going Kim. want investors the NAREIT wanted about yes, and are had couple purchase year to do the some and real of

it. out -- makes we just next don't have about lot us really reason do confidence to feel it it that might gave We us, that's sense. very a for there, good the of a that's go know. I and But year time? Will reason. So for things we this not

Ki Bin Kim

for were effective expecting this quarter. net said guidance, net what that Implicit you down X.X% rates? are you in And Okay. rates XXXX effective

Andrew Gregoire

them down So they we to down. were and X.X% be during quarter, the expect

trend on mentioned, as We're We Joe Houston's the see come negative just revenue that Chicago and expect from, rate on -- rate side. of occupancy rate traction will side. not Outside of where some are starting the end the the of to of cycle. in don't think the traction the is our markets, lessen. Houston occupancy the we're some growth lot of from seeing I whole a

our So we be but markets, still trends we what think overall. it's in like going to I negative in top see

Ki Bin Kim

Okay.

negative, Steve occupancy it's customer Does imply but I'm a So -- question, rate together. the revenue it's driving the I that you program so and be to think about be are rates is you'll just And just same-store think said your to basically is Sakwa's a increase If really growth? X get will going these X.XX%. benefit. to benefit that existing comp trying forecast earlier

Andrew Gregoire

the growth. It will of drive most Correct.

Joseph Saffire

Yes. this for That's what planning next and saw year. we what we're year, that's

it's I do. it's thing -- right pretty So to believe the

Ki Bin Kim

just that it next last year. matter biggest markets And Okay. perform guidance, how Underlying question. your doesn't

like good So your of you some that in for biggest or guidance how much Chicago markets news Houston? embedding are

Joseph Saffire

showing Well, year. as we're negative Houston next

negative we Chicago, will to range, of X%. the the but to market, predicting, last negative. of has It that's good way, So there, been what story. it's and we're half it down would not than a be whole expect but in We'll better looks half. that be quarters X be put X news a in Miami year still, it the steady. and to expect that that's lot what steady we we second another That is mid-Xs first expect.

down, markets, of some we're Miami, we next there's markets that's steady, are to markets Florida year. are showing markets. that of steady there to the our So expecting and some backwards, Charlotte. of lot A go markets holding some be are what There lot are but we expect and Orlando

Operator

from comes Ryan question next Our Lumb with Green Street Advisors.

Ryan Lumb

circle I of increases. it that comparison? point of tenants just of what back past a kind in-place on What XX%-ish on was basis? to for years is in want year-over-year Or got the number

Andrew Gregoire

lower. same-store. was have on was Last much it much year was it I year, it don't The calculated here, it XX% that, before but the lower.

Joseph Saffire

XX. About

Andrew Gregoire

double Yes. It in over was 'XX about did 'XX. XX because we

there's hit XX aggressive the -- So our hitting more over XX% year, after almost move-in. 'XX, for 'XX. cycle again in we we a last In a year, in of customers -- or are earlier we hit them little

year. ended us with more than it that hit those than So more a up we -- got customers

Ryan Lumb

is Sure. guys kind Or you do Do XX%-ish watermark? like the you from higher of high think you can go think there?

Andrew Gregoire

Well, always in things I that. tweak you there's think can

a a I there, not think -- some -- change to change there's there. But XX. whole we bit not from think there's little XX left a

effective We have with those. be more to

Ryan Lumb

the -- that So of or guys piece lot have it of some Sure. is of that puzzle, Now adoption XXXX pace a sort if past, this that sort then and there's would on does as like? into a of point the are pace in optimism as it of just like of you define adoption. commented sounded Now baked seeing there's the sort And accelerating Rent adoption program. of guys seems wondering Rent this at adoption accelerating you Can you you of the the rate -- because

Joseph Saffire

Ryan, kind since to Well, of it went fully, out rolled X. we it from X

X XX. seeing to a generally been a It's half year. we're Now

not of a We're kind season. seeing at XX%. it slower because of seeing we're time it just this So a kind year, it's of

in customers how to quickly We as know it it more far go our known it expect things, it right and we're now, don't go We We becomes we up. sort how haven't XX%. will baked at repeat But up. in guidance. these think any really of and or increase seeing

I go when and think I over don't know up. time, it will how quickly.

Ryan Lumb

has innovative the mean sort Warehouse with a sounds it and hopper. last in past question. programs Life a the the so, number Sure. Storage handful call others them, Rent And of, Now. in or of And out year there's like come I then Anywhere of

something wondering, lines? in Just out news. is Any in the storage I developing mean there interest those valet along

Joseph Saffire

space. that larger We of watch out know We parties there. the some

Our business-to-business Warehouse is a valet. Anywhere

have couriers. We

out aware it, There's of want we'll And provide on are our being going and right to think We customers for and stuff that have who lot They spent customers. businesses money have But their pick, we it goes. an their I finding valet believe it's there where We of We're kind it. picked challenges pack watch of ship. a space. interesting should one. there personally I now. be see up.

where We even want well. know we something there's a they're at sure amount our it. it. with look on threatened right? where in eyes are, they they want we're the end we're goes. of But things know But go we'll don't our in out not came them. will small not bin to franchise. It's bins going it recently. cup our tea. get that's But want whole feel There's their It's service. that of at the XxXs want to keeping They really inventory. them very some -- bigger our go than if I'm investment But to that see And space. selling. UPS when of -- And day, that people by not

not and keep ears open. silly open our be we'd to So eyes

Operator

Petersen question with next comes Our Jefferies. Jon from

Jonathan Petersen

of recycling. Another curious assumes And to it XXXX What you color we I'm guys guidance I of are know JV around guidance. contributions. think properties? acquisition I question of some what or in if some think guys maybe continuing I dispositions in terms capital you -- thinking how you can. dispose you gave terms about gave should

Joseph Saffire

a done market. of we've this some mean some year a heck acquisitions. off with kind job I XX% real are them of acquisitions, nice of

we'll of $XXX partners great We on feel next year. a good new million this We've get lot some got brought confident have pretty pipeline. a some And JVs. have and We visibility in-house some We year. we to strategic can team.

focus more think to and we're It's I way that. great to a to on scale, way get it's a use great to continue going capital.

do done in but pay dispositions. to put year some some more more we'd with to be not guess and next Dispositions? than who someone that's our of willing -- X for if clear questions another out and want There and take recaps. No. maybe recap, there's XXXX. there dilution wants a might to our We in us that reason with up multi-family some be coming property plans guidance thoughts We're the because were for That's other that, that no. kind X I or

Jonathan Petersen

about grow stated you you'd in kind to increase that to numbers management include business, platform mentioned think guess to share that? of year. like and third-party think per And have just of of I by management what then with I is partners you an I the XXX third-party And continue Okay. guidance do FFO the that expect assumption year. end the an generally next you But the

Joseph Saffire

Yes.

I we're I conservative some run rate, new stores, which some great out. we our players there. view, in about XX There's competitors. space. XXXX. have we I we Public But obviously signed conservative my the is but built for There's deliveries that, in entering given be built in think XX, is, think a in going contracts some and mean not problem. that's to already

stores we are going So already to going many we're open the just because have idea how an next of get year. to

it. about good feel we So

been never has pipeline The stronger.

have lot everybody. didn't getting Everybody attention Vegas of Our platforms time ago. technology are were our to meet the in months and the at couple We of technology, enough products, to delivering a it's And and savings our see, real efficiencies our show they're selling a We a point. as you about and to that. real hear see and wants business, can our great owners industry.

So that we nicely. is grow to to going continue think business

Andrew Gregoire

brought this there year on year And year. we Jon, a whole next the obviously, for be stores will

about into a in line increase built XX% So the it's that guidance.

Operator

Our Capital from Jeremy next Metz Markets. question is BMO a follow-up with

Robert Metz

follow-up. quick one Just

back point? break terms the realistic goal of expect get Going I you discussion ultimately initiatives? is looking margins what is from that it And margin versus then Now out, you the and other see much what to Rent Can how earlier. as you in by guess where of further to down

Andrew Gregoire

where of drives we your grow at market, some we also see year we year. figure, the and XX R&M to improve and that's our The we next another XX Now other that markets basis Rent where ESG can of some it. to, the compared margins. next city. the with margin personnel that. XX in online it. is others part savings to low-margin giving Obviously, the after there, largest we potential year Chicago and our big there we're improvement a the there's add is market a Jeremy, after And year out same-store When Okay. there's mix point But the think margin efficiencies think auctions, improvement

Operator

Our next follow-up question another Smedes from with Citi. is Rose

Michael Bilerman

here with Bilerman Smedes. Michael

the street So sort sort and conservatism the demonstrate to just about understand level of -- are what and ahead built guidance all to into I I of XXXX want detail from of just of really of of you in going on. wanting the that sort perspective, sense overall, the the appreciate to all guide that the this in get changes

it to by saying trying have I that I you're think to good say do So that. it's

you assume, throughout Joe, to a year. I to raise would want in the beat be where position and you're going

how you a comprising that, handle you being taxes understand I have with that and and you because on all have translates specifically it expense of so sort year, initiatives handle a that probably revenue like it have to property on. on and good sounds big of piece knowing And a side the the obviously the pretty components into good chunk next that want

stores into new platform. rolled on the handle a the good that have have You

a the have on financing the of side You handle good business.

of really that to comes sort front. it So down built -- side. what want on And of revenue to you've in I the understand sort really from conservatism

Joseph Saffire

sure. Well,

and it. than earlier about little that captive you improvements they into think the we've that it's Obviously, in there's income insurance And do we other fees. I are some some things it. fee But talked conservative. have we built there normally

are we've put much don't upside in. to conservative, think those and there's what think I I

a same-store The revenue side is revenue.

we're Houston for second our didn't if at gut looking of example, positive but think is half that. the the I we the for in will forecast year, turn it

So there could upside some be there.

We're thing be seeing, next improve. our we there. as rate. be turn markets. again, of new to some We a conservative going the there's larger cautiously around some -- in But would not in cautious our the think for took supply the in more I And in of optimistic deliveries we see of again, are and general, markets, occupancy expect view example, past. Houston many I some on our would our about is we're But markets.

efficiencies if has and there. -- we'll And Andy program, it. rotation really we we the so But maybe call, But as don't And I on with put better very spell little the that. obviously the needed I And effects conservative, we to next not. what of have whole overall, idea it the anything on we view get we out a better. to add whole into the Michael. maybe were out these think feel adjust earnings that of or we'll know confident

Andrew Gregoire

No.

Dallas in the don't I definitely do another be where we But positive we where will we next think there's surprised markets some we think see through by holds went market been pressure negative. markets year-to-date. year. We've

and we're some run rate the markets. with. there continued we're a are conservative through comfortable continued But So markets, when new very many supply that we pressure, models, in comfortable few top of look our

Michael Bilerman

outlook? And then is that there an embedded view on street rate XXXX in for embedded revenue

Andrew Gregoire

expect rates raise customer those, street handling in Yes. year-over-year. we the with less think We our down we and we of still quickly think effective -- street rents, a And the be rates impactful. specials new we're street Net less to cycle how rates impactful. life the how less

we And the in door. little get past. differently those in in than we had customers that then have We once the the they're to treat door, a

Michael Bilerman

now you're going if What existing the versus declining embedded basis, what's or is is Is increase just So took in increasing it for have terms assuming? number that that growth. of on percentage customer then the rate this. What you're existing and they apologize embedded settings? of and an percentage to same? same I XXXX? I base revenue XXXX the So customers remaining -- in in the apples-to-apples it And missed X% of that

Andrew Gregoire

I'd slight customers. cycle. that little I in of a increase believe a it's We life slightly, of in the because increasing where year-to-date XX% earlier our say, it just It's see doing

Michael Bilerman

than with on risk with probably being rather X leave, push a rate you potentially of some decide them down that back X increases, being level have to poses if So some the funnel customers up. of customer rate new the their and or to

Andrew Gregoire

Yes.

a in in see in position of we're whole We will quarter. customers portfolio. good think lot spot are is them that. We're than of in this that But we street rent roll-up quarter, so had point are at. which better not the rent above and fourth a issue We seeing think our do view pushing the it's our an in I others. rate, I from relatively of rate industry get where we're new a current in at less a roll-down,

Michael Bilerman

occupancy, then correct? you are an assuming And the flat year from year-over-year for to be occupancy-wise,

Andrew Gregoire

To get to it flat, negative. will start

We expect it get to to flat.

Michael Bilerman

average an average in on it what you're year, in it's was occupancy for But in full Yes. line the XXXX. with assuming XXXX

in from a potential... no So pickup deterioration

Andrew Gregoire

whole room the we're slightly most down to expect we slightly it is we dealing be year, For in although that it think that be an with to it the XXXX, have that we there higher. will move -- issue

Operator

turn back the for is That Joe we remarks. like the any questions all Saffire to would closing have. conference I over to

Joseph Saffire

Yes. Well, thank you, everyone.

And you then fans. L.A. of National everyone those few wish all dialing in. in the to Halloween. safe we seeing And Well want to obviously done. congratulate for a many First, I look in again weeks forward and I Thanks happy

Operator

today's The for conference presentation. has concluded. attending Thank you now

may You disconnect. now

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