Extra Space Storage (EXR) 23 Feb 232022 Q4 Earnings call transcript

Good day, and thank you for all for standing by. Welcome to the Q4 2022 Extra Space Storage, Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. After speakers’ presentation, there will be a question-and-answer session [Operator Instructions].

today's being that advised be conference recorded. is Please

hand over to would now Norman. conference to like ahead. I Jeff the Please go

Chris. Space Extra call. Welcome quarter you, earnings Storage's XXXX Thank fourth to

Litigation implied by and latest or statements our forward-looking statements could we the materially business. In to we unaudited risks stated from information the the statements remember filings cautionary our answers remarks due to SEC, our in which management's release, by encourage uncertainties company's to company's differ those may the Securities contained in Web addition statements the have your as with our associated Please site. with defined review. Reform questions are press supplemental listeners results These forward-looking furnished financial prepared qualified to Act. and Actual that on contain Private forward-looking

today, market management's assumes of any represent changing as no estimates this date other conference call. to of statements forward-looking revise obligation company Forward-looking XX, update conditions after circumstances or of XXXX. the The because or statements February

Joe I to the like turn Executive Chief call to over now Officer. would Margolis,

an Thanks, year. everyone, thank joining off today's Jeff. We another strong to cap And had for quarter call. you, exceptional

across XX.X% is Space team history for XXXX store growth year, aspects proud the Extra highest was the am all of performance revenue of Our for above in another our growth same of company's the FFO the of business. and core consecutive second XX%. strong I year

quarter seasonally to continued store to levels store year Now at Vacates our growth during ending of speaking same the the was expectations XX.X%. comps and return of to fourth revenue strong and seasonality, steady, same difficult at the occupancy quarter, remained despite XX.X%. the leading demand normalize ahead

increased XX us expense same offering rates foot high same the to the growth in or We across rent our year-over-year. over stores portfolio. pressure joint of loans. management closing across items busy grow in resulting new the stores revenue to and platform with We store in NOI store growth XX Despite XX.X%. line were rates many million per expense bridge acquiring REIT to in customers, lower square gross net XX.X% adding party experienced maximize third on occupancy X.X%, front, and total customer allowed growth Our external of $XXX ventures,

our will We were marketing, on ahead already also by revenue slightly efficiencies. the which anticipate acquisitions, properties digital the management platform our our of We very the portfolio, provide underwriting. focused Storage additional strategic integrating Express the including XXXX integration end quarter, and which of operational of onto second full is

We have early also to started Express. operational to new stores and and growth we beginning opportunities some strategies Express at for Storage Space Extra external in are test existing markets new both Storage and see

in the efforts, external Board Directors growth in year X.X% and Our resulted core year. to of to plus XX.X% growth first strong increase our quarter NOI, dividend total five contributing our a by allowed for of quarter increase X%, our the of property XXX%. FFO This

we to the forward are XXXX, fundamentals encouraged the business. look of we by As

XXXX markets December. XXXX, store same high even from in growth peaks, Customer supply and new in above revenue from lower New moderate XX% remained our remained and we been supply has continues to has occupancy demand through expect steady, XXXX. competition

power occupancy through Our customers move we existing greater strong November. since occupancy sequentially we pricing new has month And us allowed leasing with season. customers will month to and give us new increase elevated rates to over the believe as

XXXX, than NOI same pressures resulting experienced We but at store to X.X%. in in expect guidance face levels X% to lower of continued expense

in will current and with in line to represents we the levels, While environment. from this level it norms believe classes other of XXXX growth well is moderation compare asset historical it

solid in made investment in is strategic focused the preferred of will term long term million shareholders. fourth $XXX for additional long quarter, NexPoint, our strategy have yields properties. term modified we and we our we for the investment returns trading Our result longer decisions managed In and believe duration

focuses acquisitions including acquisition Storage structures, We with asset non-stabilized strategy strategic also stores implications, or term on which long Express. light continued our

short While we our more some of believe over for these for and initiatives term additional provide shareholders come. value growth channels caused total dilution, they time to unlock years

also and for Leader Scott, time estate Before handing the in over companies. real NAREIT's third consecutive receiving the the ESG Space Extra congratulate Light to our sustainability would I honor like for team Award, to highest

that sustainable as are long to that results positioned REIT We results also and the to delivers company is continue proud recognized providing financial portfolio a a be for has created strong and haul.

to time now. over I'll turn the Scott

we Thanks, our FFO repairs from third had of store appeals. Total a the tax high, expect net into by beating continue to property driven growth, with hello, Payroll end still quarter and growth levels We operating strong success everyone. maintenance that improved a range quarter-over-quarter, improved due lower and to quarter, income. expense high XXXX. while same property Joe, and $X.XX, trend expense better by fourth expense

Turning to sheet. the balance

of During of debt, $XXX net of debt total under bridge our we total million a reducing the exposure our loan XX% rate swapped receivables. to floating variable of quarter, interest variable rate rate

forward pay we that to be future. approach, rates lower to continue our take rate our rate will completed reduce proceeds steps recognizing million Subsequent used term balances. a signal our down and we revolving methodical We to end, to interest loan the variable and $XXX curves the unsecured will quarter in debt in

released capture Last likely material the guidance. unusual NOI provided scenarios different revenue We comparable. bond and to ranges night, believe assuming we will maturities for the possible and needs year, are our we Like access market the that XXXX have same no XXXX store wider remains have growth capital grade we given investment last we in to XXXX it orderly.

for assumes full guidance revenue same Our the year. positive growth store

different However, pattern periods. than little the prior a maybe

comps, trough growth reaccelerate the of in half more first in the the quickly modestly moderate in Our year. year first summer exceptionally assumes the the and guidance to rate difficult the due will late half

from projected X% resulting X.X%. at expenses X%, in to levels to store store have XXXX same of NOI Same X% improved

NOI Our our which XXXX the $X.XX dilution, first of approximately core is is investment rates. of of higher by carry Much $X.XX properties, of growth our offset $X.XX the share. non-stabilized the in modification NexPoint and interest headwind FFO range to year preferred per

headwinds shareholders. each slows growth, a our of XXXX While over growth believe result we period these they will our term long stronger for rates in multiyear

current conditions. Our due guidance of includes market acquisitions million relatively modest $XXX investment in to

said, this if identify our Third we time to than to and dry believe year will be most party our and management powder, through That normal portfolio and have have FFO ways plenty be growth. opportunistic XXXX been expand at increase of channels. accretive of will of capital we we light investments we growth stronger maximize

ability our the asset maintain We the healthy highly in recessionary we inflationary is class believe great storage off year. positioned to among solid that through see another we levels. both portfolio fundamentals normalizing well storage growth a is are year as in are for confident XXXX diversified as and We most to and our an start to in and historical resilient environments

With let's that, operator, for questions. open it up

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

and through the revenue or bit trough expect Scott, the moderate, late then you summer modestly rate same year. growth 'XX talked you the that quickly reaccelerate in will little store in cadence about a

a implications back that in the high half guess, half state exit the like as rate steady we like single kind then year, that first question that the half? a think I does kind mid what digit in the kind to that growth guess in for single like And industry? Is of the digit think -- back -- way my implies normal it? of does about to kind rate the of the low about mean So growth of right is, I mid return is considered or then and is for rate you that

speak So industry. to I for think it's hard the

think us. obviously for I we're speaking

I are based given on in think that our remarks. assumptions your the we've comments correct prepared

assume I'd negative point maybe we go does is in point it one think make not any at zero the year. versus I that

of then just elevated street going around ECRI you and are elevated of years, that a ability is what this? does you the generate of last burning allow some Like that experienced through that's the the over also of of this lot your to couple that components And is pass the rates to you've kind the on imply then, guess, follow-up that off kind year? my first the there. that of kind street I get continued ECRI expectations along And of benefit and rate occupancy, to from question half

So obviously, we're always solving for revenue.

little of maybe So those. more the detail some -- on a

more negative slight we're that for range, operating assumes at have customer it occupancy you're high have the would rates. than we have end power. power. other throughout be that the maybe that end we you But imply If continue The to assumes pricing we would solving And assume It to year a ability existing also would delta. more that revenue. less low of pricing raise the that, we the on

Instructions] from Securities. [Operator next Jeffrey Our question Spector with comes BofA

First of, increase kind you really singles scale. some technology programs scale question, as Are let's throughout feel you've doubles say, you like on the to added hit with that point. new And your need initiatives or that Joe, some I portfolio your ask. today? you happy new front to acquisition I talked use continuing and to on can And at about,

right? structure more make term in is And to scale, have we and not to want this we every making sufficient operate any accretive sure investments. are important we so. frequently, we be we cost, scale in use in our in We that want happy do smart growth to almost and scale business, So market at but gain to we're and long

will our example, through expect some but Express gain for investment, markets, open some we'll we and a strategic channels in Our new in lot up acquisition us, that. Storage markets, scale new existing for

is Speakers] there And then else? [Multiple something

was you thank saying and I you saying your acknowledging to just No, I thank you again. was --

your that to the of ask second does landing it's so specifically so provided already can of the that's would a your I versus guidance, soft just operations, range say, the the describe if can lower apples-to-apples. peer guidance? end And of compare If not, a bottom, guidance, we reflect, how end the And reported, on range, landing? recession upper your you let's hard

is I consumer about economy. constitutes gives lower that guidance guidance say economic and more us hard now, of more stronger soft of landing. mean, the weakness talking a less upper it's stronger what power, and a constitutes is the recession, Scott to reflective as -- same store end reflects the of I'm pricing the and the end what guidance said, our Clearly,

follow-up? limit. I'm I one I if ask sorry, a there's can don't just know

Sure.

be think So that then we've first and the in again, half put just -- I the guess would leasing what street are for we terms than some focusing my stronger competitor how about looking is your in focusing is? year be stronger so what we I'm tough on? follow-up Like things the should trying to occupancy, we far, guess we -- peak Are ended, upside midpoint on comps. of knew -- more are given again, heard is, what the expected, the to of maybe all I where than rate?

tools day, funnel maximize reference and fit different various of can for best looking revenue. whatever So channels. occupancy, be to of or focus what see Scott's as to components revenue our the again, marketing we the going the to through the thing. discounts, revenue. use very the and we we'll can long be But demand, we're of on or which use spend, term is use at conversion I'll can charge all clearly indicative eventually different we at we revenue top end rate We're or maximize tools We'll that solving

question This Capital from of Markets. with Todd Thomas the KeyBanc line Instructions] comes [Operator

year-over-year. on you second that be occupancy But today, cadence year-over-year First terms maybe of growth, question, half to I what of about guess, in sort I to of in does what bit. up 'XX? said guess, do trends of that expecting occupancy the a where the guidance guidance like lower Scott, mentioned the first, flat just expect of the sort you be of revenue with you're year-over-year? higher consistent in or are is then, And following you what occupancy, you terms occupancy seeing little look

to early occupancy, a on year. last on So I'd one we thing comp really tough point have

slightly that we're with -- still we're gap Now the happy we being our today. we're where we started at year. said, XX.X%. are We've Today, closed since actually

happy we And so are. we're with where

I to it's look guidance at in opportunity think be our here, the that when and rate. going we

that since is Normally, February. have our year. starting actually we've of out you how month November, you're more rates at which January, bottom raised over and rates month If in this them November. lowering recently, each them time February, month has look odd you we've raised for done this November, in odd been December, the

the And assume growth What fee terms management of tenant the platform during then reinsurance what is party the in guidance that management income to third growth. net for and does income year?

a continuing that a weird to that some of are lost where last we add have The stabilized. stores thing one it's So we with bit is we properties. year comp were

we so you we're full impact assuming the more replace have stores. And them year, and with revenue lease-up last

lease-up management a store low are fee minimums. has some of at our actually insurance so And penetration, very tenant obviously them

So that should grow throughout year. the

several properties, XX I third properties that if management we on of year. bought we pool those our collect believe addition, out properties wholly fees no longer bought In we they party of out this management are and those. owned,

XX.

XX total, but wholly owned. XX were

into XX JVs.

to or unchanged guidance the the sort net to you of the assume where year? the party year does growth relative But during third platform management ended

management and modest in guidance tends transaction be to market because our in least from that's the in transactions. growth party business, is at the start year. of third modeled the of have And the we pretty muted the So lot a growth

first said, the third experienced of if for than modeled, of year, that party rest Now much management that year. being has for months two the demand the continues we'll in action see the much we've better and the and better

just then in more if I sneak one also. here could And

Just back investments. to Joe,

are often You outlook, that the perhaps future. all talked feeding aren't pipeline? you or or making for portfolios, initial just are do And value larger at single asset term that bit more back upfront, little stabilized that yields, Does dial about do strategy maybe current today, is at keep on them attractive that given uncertainty, investments larger investments long you change there's in of creation but different really that sort versus acquisitions view the strategy scale that and transactions, lower a good you're similarly? you dilutive

think we initial we we in dilution right? acquire joint what is of back which don't we to the it. that ventures Last I we everything our for REIT, was we investment in bit to might value believe dilution or bought have mute I would that $X.XX to if want dialed we lease-up long sense bought is term the more attractive a So we we from in a avoid see $X.XX, think the a past, than little almost and headwind. year add increased -- do

at and in year think we'll as realize of is pipeline, and going we of don't rest today, year know next our to Given bring, I but a direction stand what other the I that the bunch go the least likely $X.XX.

that you thought or And transactions, asset then deals any on single how response? would think about that scale between the same be larger

the we The large availability of capital, Timing, include forces you asset feel one variables when capital; about joint transaction how at of timing venture availability our in a single deal. direction. we sometimes look versus a

best to and unique in we'll opportunity the be So itself, would our at look feel that and opportunity every the lead characteristics will us of of execution we shareholders. what for

with of Research. Wolfe [Operator line Instructions] Carl from the question comes This Keegan

little first, on touched of kind but was bit this information. maybe know more I just a

much your floating this significantly is at know said things long I a to How forward expense obviously rate have your change you're year-over-year. of obviously term does regarding changed. but the interest debt? view curve, in So looking grow going you

So just here. kind curious of

they a speak our guidance, day. interest calls, depends on Fed moves a that. took we single almost It it what does, things with in So curve, on obviously, the like bit how point that little time rate conference every

today. applies It -- is curve also as what basically current So it doing, it's Keegan. our is best guess we're our today takes that it portfolio and

case, Like that? floating ideal is That's that's mentioned not for range the going you still rate your in know debt. you're is mean I still to XX% change. I -- But the XX% past, to

I but I variable to think today us that look like some we in than work higher see do that little down, rate debt believe -- to a and be. you'll think would we're we

going be And forward. to so more of through look you'll the to market move fixed swaps term out bond use that us to either or see that some

And second one here.

involved what's Just be of interested group, at possible you all the peer alluding guys at deal and earlier scale. given you're in the guys with Would out getting current going broader kind there? interested that you on potential in

comment So we're going in deals are market. the not that to on

comes Smedes Citi. Rose [Operator Instructions] question with This from next line of the

to around of maybe thinking little just about components. how in last marketing and -- Maybe costs, wanted benefits and get detail what seeing going color just maybe I expense just bit you see payroll of low are you the year, more those? around go that which I are how a know terms some. pretty little probably But but relatively up I they're to a maybe

this some year. give you around assumes what next our color I’d probably just guidance

we So our X% gave for year, the guidance X%. to

with a that below are number. Let's maybe big start that items of couple

payroll X% So assumes growth.

Our higher. -- It's we're more market. expecting X% XX% growth. are the and to is be in property taxes Marketing it a casualty about property then one other difficult the is range slightly in

And so we're more. expecting to see that grow

things are some over are seeing our and have that mean, with gas. also digits, done solar things We offset have XX% more high program. the stores to we like single but in grow our Those electricity solar. of I

it's a percentage, huge while it's high not number. a So

And was to could wondering, any maybe now? approach I reason the and around you modified provide if got that kind refusal? relationship. the there right of do then a particular just Was you I you detail right more NexPoint little -- that Just wondering the guess

$XXX this the say equivalent the for So would open way the pre-modification, open there but $XXX and the preferred prepayment, million was $XXX whatever million $XXX dead were million that's instruments, two to preferred in The year. a is preferred. million and probably it, equity

So would situation off no they instruments those have a where paid could we're investment. have in we and

which rate, everything the accretive year, contracts rate we dollars. in the us reduce we're is an getting terms, past those the them initially, preferred. management And extend to better on The payoff we long term the manage picked XX was costly future. years very will the but up for run it three felt that agreement stores this management a of we to So

So out, long you a offer, they're on a right not And very the first refusal term of as point management right of contracts. first assets.

from of Instructions] Spenser Green Allaway [Operator next question This comes Street.

Maybe just deployment. one another on capital

mentioned you return right You us channels. seeing where allocation across your look you asset investment asset can capital as walk of the growth? light avenues through you the priority specifically best now focus list, on maybe light more are But various those on

is properties risk existing So redevelopment on the relatively safe profile. of very reward

We the time. for of run we've have period market, asset, the the store some know we

on building taking relatively asset the multistory, RV land, into we the excess right? turning lot building a lots, So already X.X% story, that to XX%. on returns and infrastructure already is own single We it land, light, as have of

So years, the and -- continue that continue few over to that do than fact, to much demand ramp program bridge do. we'll than thought. that next we'll in loan is stronger we The up seeing we're that we'll

the quarter, happy for You really we're that. fourth saw numbers our with

of We benefits of then, the them, option any a expect to been the have them we to And then. The buy many we time selling at include the itself. of we pieces. of because eight that number ability year the a good of loan course, the have stores. capital And economics the opportunity time. economics that over retain light make bought can and very strong managing The of --

And Joint first prioritize some last Our light now, And back a we'll little and were we'll capital the types unique then this them partners with having year joint expect quarters know management of two. in discussions and always about issues first we we sometime and other hope in we of pick joint to year quarter that private option have as than those the expect that venture program. in quarter. a some those as the very, on is venture in be are we're up the funds do but of strong ventures, we're to the I fourth business, absolutely year well. the structures which folks and the equity quieter our innovative of very two year for we another with capital

there greater the move-out contrary And markets move-out then with or activity regions than seasonality, stand to any as others? return stickier that are out or have the with accelerated of activity has been

for Some that of really would softer has the to point most for slowed Sacramento us, Las three that markets one really and little below probably Phoenix the is been a I maybe Vegas, have are the the difficult us, is average.

the line from Ronald comes Stanley. question of with This Instructions] Kamdem Morgan [Operator

quick Just ones. two

the the to sort of growth. back on rent Going comments

of couple been I past think for unusual mentioned rents of months. the which time November, since to you've able and you sort is push for of year this the

Just intensity interested of ECRI more little that, a versus the COVID maybe what guidance the bit peak the is what today in and details maybe the assumes? particularly around and

had constrained than those of we peak the of by normal rent state this then kind had as off what And wider will, street customers we was COVID rate. during catch-up than governmental state, very kind paying increases greater ECRI you was if dropped regulations. So of what normal, because and regulations by were ECRI, where we have between gap

for As be ECRI important as us. same the reacting to way we XXXX, tool to are look the have an they in expect notices forward past. into Customers continue ECRI we to

move-out fact, yet, norm the there has and is historical but In heading from towards -- trended isn't more heading towards levels. down it's ECRI incremental

did the our the we'll up will rent rate customers kind restrictions extra gaps that think were don't some have when as of large, at we same outsized ECRI but we're -- to in. important, were I lifted giving be the get and ECRI So particularly the first now

discounted opportunity the have a them appropriate we'll rate rate and at So they're at in to get coming to market the time.

a And picture of about bigger demand. just sort then of funnel question the top maybe

the pandemic. just as slowing funnel you think about it. less demand, seeing ground lot the people good they what that as is presumably seen were like it of sort the a of But top sounds on slowed, hear housing economy down, moving you've you're are activity mentioned than I during has You the

think sense the is customers top do a get driving funnel? to trying you on hearing what of from what that, are So in you the and of your what minds

and over there competitive demand gives that to peers a a I advantage. out Certainly, capture smaller advantage operators. our and So public And to methods systems competitive strive competitive certainly us we advantage the hope we a well. that's as I have the over have think

So crucial our little, it to where particularly percentage and to peaks high of really, demand and it's historical of important to does capture back that's demand demand there then driving a and has is levels. softened success, more soften convert from just the ability out a really our the cover,

[Operator Instructions] Our Juan Markets. next BMO from comes of Sanabria question Capital

Just little you hoping, bit some upon what of with strategies Storage at going Joe, in could remarks here extend prepared existing comments your the opened and opportunities and what a maybe and the could in you testing made markets that your new What own Express in new existing regards about outset acquired to up forward? see we you and in means portfolio. both

of an you example give that. can I

have stores of two converting Extra Vegas. converted and to process model. in Seattle in run typical a we three year our the Space Storage them markets, stores of primary stores, So the method this are manager, five we're Express put Chicago, Express those operation Space Extra existing to And our in at and we'll Storage and of

how different allow I styles. operating optimize to this but our us the really of performance store store. we're these maximize learn the markets think will managed where in what not seeing situation portfolio our models we characteristic interested more using current in can manager model operating current market to with two So grow work type and markets works two only in and And the different remote different in

piece. across the separate both altogether? that Just those the is point of a that make same or brand kind to understood wanted sure I And is of

So brands. we running are two

We see it over we'll learn about and have Extra Express, us. that we'll and takes more something Space where Storage time, is and

the see changes that's transactions evolved you as cap that I stabilized the given over higher. And for last, you're just capital the XX the where today, kind curious of rates searching how and moved guess, have months rates cost of on then market, in

on So stabilized rates I just are, curious guess? what cap

sort So And sort paucity I is and unique mean, is of transactions. difficult higher. characteristics. to transaction the has say very it's I that given of -- own its each they're of think

a deal. I a but basis. in gun capital, individual work our And depends cap given for that head, stabilized it of owned the wholly rates on are the If you would put to my us low on Xs, say doesn't a lot cost

January one year you in street basis? just then on rates a wouldn't What's more, end, And are that of you the kind you if mind. what year-over-year the exited experiencing

it's are really time So today, you're we the of year bottom. at when really that --

you If this is churn of compared where of again, getting prior should our we're churn XX%, better was But years. look in our more worst slightly -- at about it year, a move-ins, March. to than move-out is rates which negative our in about time the the it start

This Sakwa from Instructions] the comes question Evercore [Operator ISI. of Steve line with

when revenue that didn’t to just throughout that misunderstand quarter of half, you've you -- to Joe store the properly. to sure Scott, and cadence the just make when to think like the same and the first about second come I kind be tough certainly half. first know I store But you'll maybe I back revenue comment wanted half, comps one the same got made above growth I in about same of very just growth year first store sure are I the make into be QX accelerating and 'XX? suggesting want will growth the revenue the

decelerating your double will those bit best. We is is year down quickly you the Maybe because difficult help of so ended it with obviously get more are more be that first But there. is the suggesting we're -- last And we point. just comps. from what the of a implication quarter comps, reference digit, first a quarter coming little the

of in the I mid slight part the slight back in of that from in then half. from trough reacceleration anything reacceleration then year part mid that a put other midpoint, year. the and You the than the trough, a it wouldn't

clarify the seen I've different some to And of numbers. I kind on because book, loan just then wanted the

the receivable said think look back almost like slated $XXX the at book million balances in If things end above would year, the guess, page, the I balance. the you receivable like notes supplemental, close, I notes $XXX the outstanding I year. guidance that I of kind of up trying sounds it I'm page are they're this at, of on square the just guess, seem to loan have to that about the million.

in Now that to sold. much maybe loan just those you're not repaid, But keeping net the I all money be broadly trying what's getting is was year? new and book of of how will this going investment out, thinking what's some the

difference was versus So what little in to year, we this the year doing This year. maybe guidance guided a how average we outstanding. were last balance

in what years. showing we little So were than that's prior a different

I think closings balances. the were year just in do We above getting like million sales we to million or ended it loan and terms things at of $XXX and $XXX was showing outstanding that. more difficult with

that implies eight So of We'll loans. half sell loans that first the of still throughout carry many of will but we're in some year, pieces. the that we continue the $XXX the those average to year, some sell continue we closing of million to

FFO make but that suggest how there's I lot could just that that go at wanted number that didn't about comment or you going forward to activity be a a know business Joe's as of see a a business as running guess, And percentage quick basis, that of think I out follow-up. scaling large you will Is the up? forward? that you on there, level

to manage notes mean. that have where going naturally somewhat loans a of what business it. The know to to happy capital lot has if with of right? But constrain get particularly many year, treadmill, starting growth, committed will mature. have grow to is continue to us. year. don't I we you our ability these start to point benefits next to a this it and but amount of of be a maturities are so the We it, And kind We sell the I'd A to

think a like you So is balance try forward? things and $XXX with to out and million reasonable keep in going coming

may I don't collateral or may or below grow because we opportunities it with we past want bring and to a to agree that, disagree buy have of the bunch that. that it

me you're give spot know I looking can't. a So but I number, to really for you

line comes from This question of of Instructions] Bin Truist. [Operator Kim the Ki

assumed fourth in What of question rates. how February? a rate or the and speaking, trended Just was going And year-over-year quarter into on year-over-year what's broadly to 'XX? guidance basis, back the for has at achieved midpoint that it move-in

churn our achieved go to so negative -- rate. The let's just

delta. rate just to better in through quarter November that fourth continue year-over-year was troughed achieved negative. XX% February, It Our get over and the in

So are negative the in about that in comps highest And we've to were Those ever also, experienced. February, XX%. these fact the point I'd we're rates difficult really XXXX.

that they think while are to relevant I So point out year. prior the negative, comp it's in just

-- what's could you did in guidance? to And comment you implicit want on

month-over-month. focus more we guidance, the So on growth

started rate achieved actually If you last June. in negative experiencing we growth year, look back to

as And our to in as the they season. have negative move into pricing were we and June, and is start power so rental positive rates assumption move that

is kind housing in impacted the moving, use people what's state with environment head upsizing does of be or of are one normal wildcards of XXXX, wildcard you're terms happening the downsizing as if I might how or and that of and you assuming And market we that how might storage. that of guess is the type thinking about that more challenging? a into

I today. that the is our none is us So economy really, good feel -- really we think like of assumption

I most downturn. for a not severe well assumption today, but well housing continues or is guided bad. better guidance is, implies we that's as market our storage, self storage or a we big like as But people it that. anything, healthy think have and does good would times you is recession it Clearly, self here a tell in the think as

of other negatively as impacts as So it economy. it not maybe the but parts

if you're can converted common your count, guidance, stock. third OP here. I the In your is just one that? quick Can you assuming to share touch on And squeeze in all a

assumed have converted. as-if counts share always the Our

got actual it… Okay, So not conversion? it's

change, No. converted method. It's correct. as-if no the It's

And Q&A you your any questions. for our That At to and Margolis closing Joe turn for remarks. I'll completes back segment. thank this team time, over it

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today's thank And you participation the conclude your for in conference. program. does That

now may disconnect. all You