Jernigan Capital (JCAP) 5 May 182018 Q1 Earnings call transcript

Greetings and welcome to the Jernigan Capital First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. President Finance. Vice Senior Corak, of Corporate David Thank you.

may begin You

Senior And to morning, My Capital May Corporate X, Corak, all recorded, First this are is Good Today’s name President Jernigan conference Finance. David XXXX. Call. Quarter welcome Thursday Conference in the a everyone. being mode. of Earnings of is time, At Vice participants XXXX listen-only

in are latest questions the defined that Laws. the to Before on prepared materially remarks risks other GAAP contained is non-GAAP SEC in with your qualified please filings review. by due statements the to implied and to we or as measures release. press associated statements forward-looking financial remember by A the and management’s those our uncertainties Private from Reform cautionary may encourage begin, Actual company’s with Litigation forward-looking SEC, to company’s forward-looking the we included answers contain earnings XXXX differ provided which Securities business. of Act in statements you the the our and by stated call reconciliation results of statements could this Security Federal These

audio can on release, You press reports replay SEC call our the of conference our and www.jernigancapital.com. find at website webcast

now the the Jernigan, today, Good, I’ll Mr. Dean Kelly floor addition John to In over myself, on and turn Dean? Chairman and Jernigan. CFO. call Luttrell, CEO; we have President COO; to and

us Thanks David. joining Thanks, today. everyone. for morning, Good Okay.

first results. for tends set companies as I I my We’re of who few usual, From results talking sector. the minutes trend all about know you the I entire public first excited I want have pleased quarter. reported year. was talk to about to spend as the a you public are their to quarter our with quarter as the the to And experience, assume companies,

for QX, you’re to for my expand minute and have good on likely at have first a pleasant looking a are to surprises QX You to going really just the that, good be quarter, all. upside expectations a in year. And to

the QX, considering the are off other April – in a think pluses. they’re I Northeast seeing good their And again, results to results talked good think CEOs April. getting the of about rough some the all had, in, so winter start far I in

I up think I setting we deliveries, in company. new always ourselves and get about to our the an for sector. we’ll are want QX that cover outstanding to concerned entire just and then supply, back briefly, Everyone’s

ever is absorption Something spoken that’s about natural hardly our in sector.

growth our the there as driver, demand towards are as drivers multifamily, the note trend urban moving toward to toward the core. back positive into smaller you just demand the take housing, we’d single-family population trend other in If sector, the such trend

of All add to tends this demand.

customers, glass product Gen and I looks about how virtually attractive, the we’re our is say today, the this one I add are storage facilities, more building professional is really vertical quarter the of attractive V, across talking to going want this steel, anybody are built even so we’re extremely buildings But by these and that. all I I country, to myself. think developer that the Another to with beautiful attract have haven’t heard that if being

these the – with recount, we’ve I us to product driver to about just working before, when storage facilities. XXXX think we at And forward But just talked XXX deliveries, in think were average. I top or for Matrix, going markets, facilities, the numbers what delivered with that’s rentable I XXX talk on about XX,XXX new another versus Yardi of built demand new talk but and about were XX net right in we’ve heretofore. some

in delivered; XXXX, of of So indicate, property, number million that’s these population I we’re average people no footage average, for XXXX XXX use drivers not X thinking top slightly XXXX, XXX that we we In the look to about population twin XXX if a square again, you this numbers, square they’re going population need both markets. XXX, footage XX have that XXX. country. feet to growth the about per person you earlier. square with markets were delivered I to and that growth. think as if XXX, the XX I’m – in per alone, to I want And up you range, at the XX,XXX peak But – and facility. – use top about growth in of number And in years, just being than as be if some the those per national average, given X.X% net as used with mentioned XXX more new consideration just XXXX, rentable the of national properties consideration markets, in keep or would again, that properties year demand just using properties other

to a just up. XXX keep growth, population year Just properties

So metrics a just this XXXX. population if you met keep about short XXXX XXXX, up basis that’s upward and growth, were We XXXX, what XXXX, the in years, those know we talked on in we’ve of and look we we it. through woefully new creating with back rates caused had past to XXXX, incredible same-store the on pressures operating in supply

XX pressure typical when on don’t XXXX, that one simple theoretically, really only markets. in excess And Well, into got upward XX if that XXX we X build rates built, submarket. absorption, natural delivered market. on allocate people then property we only get well, that’s should we market, submarket been until Jernigan at one would per we take of needed city. in any for have properties per what XXX So was a top XXX,XXX In market, about the – And property have just Capital, if that you ease one impacted. be or submarkets in a million-person

the first we quarter. in I seeing the reported And think good we’re so of in that some results

is most our I doing forward That us. properties additional three should those same Yardi that for were would two And market been only – is submarkets were properties or think have great submarket. to the the of coming case, there job we XXX At have impacted. Matrix, submarkets who roll You impacted. XXXX, in a And be in said built that from delivered. will two delivered information three again, perhaps per

math So rest of built – properties do and you can them. on the only the excess four per XXXX, market.

we’ve called some of XXXX. we at I rhetoric fair – past. of I’ve in in shadows amount jumping So think think that a XXXX, I with And on have our calls the these done it

and data collectors Yardi job others, these substantiating are with only with but and a what good STR doing think not I Matrix, Dodge deliveries of are. and our REIS others,

XXXX we we supply embrace new don’t at no supply what be new ‘XX, our words, no that anybody’s So data ‘XX, – just would natural happens we’re one after theoretically delivered go that we need the in We portfolio, our XXXX it other But in should XXXX. supply; planning are years reason we would if no In because have than still property have absorbing to start on jumping homework guess more and – do new supply. that, Still and What yet. think demand, will you we have for forward. you’ll at this contract, as And yes, realize properties under years in have pipeline we we to we and population ‘XX, pipeline. our really that in any away. XXXX? in look growth. be But I in has process that that see two today be be yes, any our because delivered in here need quickly shadows

has our XX% across sample Our good decreased company represents at its pipeline country. by of peak. And a I about probably the very entire market the think

which I being before make and think that today, XXXX, about guess natural this we’ve XXX and to absorption. need made in I’ll will for it delivered we represents, again, properties guess, we our again what drop back in XXXX, So

So period, only across years a is here affecting or with the I’ll if and will, lasting limited three to that country four number only quotation markets. and overbuilding our only these "overbuilding" modest submarkets short of put marks, in overbuilding in you point,

And so excited other It’s not that price in reason another anybody of for they And too studies to shopping. I’m about the of But get power facility. not – of are price rental. get the power of are these these a to platforms XX% enormous. rates. manageable. we’re and all the no seeing There’s They slashing for is the of there yet. to is keep shopping be XX% straight customers renting. companies sure only for our go calm There’s really through And today, one are oversupply. to with my us front the platforms out one Again, demand that public of that to everyone of no and leave-behind companies, much today understands reason keep us these

once from you of get not your rent funnel, the and they’re customer comparison. to a another perhaps you even price So check in XX% going time,

of here calm, that turn John. first renting. – power I’ll it’s with the to results. power the I to use see power. of platform, that, keep So those time that brands, to we’re the think the it starting quarter Keep And With over

investments commitment of full this After as the Dean, committed year million us the year-to-date development the begin Thanks, earnings value guidance. program, recognized for completion. capital commitments XXXX of – our us. through include year We XXXX, the The are represents in launched we’d for investments during fair our with and already Diving XXXX inaugural financed, year an right with XX, is lease XX% of approximately quality potential XX% our under projects of started operations program approximately XXXX morning, the XXXX in yields to believe in exceptional a our of as $XXX new exciting recently XXXX, remained an which off for into consistent the XXXX since midpoint everyone. and XXXX, only investments on projects high, JCAP. refinancing bridge development which and built prospective and of March portfolio. of are and our provides development underwriting we’ve we’ve good that and or Commitments IPO. which record up significant growth upon year

wholly expectations occupancy. rate our five facilities this outperformed Our driven by and expected quarter, owned higher

of lease-up currently not our initial occupancy XX underwriting. continue point in exceed that two are facilities outperform, average continuing but all that facilities by development are are in Our to lease-up with wholly CubeSmart. to operated that out our We’d owned

our CubeSmart’s industry-leading level a with saw industry-leading management of of we they��re provide gives that exceptional that management providing quarter confidence results, portfolio, first of As their us portfolio. high they

Our experienced the XX fair construction to led development more is quarter our in part what progress value than to continue initially under expected. properties which gains well, during

the in in facilities and across continues partners of and storage investments. in high-quality development be As discuss a moment, key a are our factor experience the Kelly building further professionalism will success progress excellent country, making their our to

Looking forward, investment as about XX last Dean million months. alluded within the approximately stands compared pipeline $XXX at million our today to to, $XXX

trade be footage who’s and in already be certainly the developers, in us at areas, estate in of believe compelling in and/or consider the metro interests possible density, national include owned we and ownership self-storage growth To an in seeking focus excess and lease-up cycle. from by convert Pittsburgh. be wholly very have, in concentration pursuing multifamily While few risk less in as that on this And to a to interests be selectivity now and at is our unlocked Atlanta to do capital absence run mortgage we’re much profits that developers area. assets our our our as high housing; very have least, five also advantage We household deal XXX,XXX that In we loan outright home that’s what of during some We’ll quarters, has produce NOI in years. facilities. of $XX,XXX positions We has Jacksonville; by micro These on development feet in now population XXX% disciplined, in of with structure ownership levels market home developer and the innovative that’s Island other previously preferably estimate the Jacksonville, sites as that’s per substantial but development We for of to waned to into to own as The market Fleming approximately increase that down the a five are but not selectivity, opportunities per wholly owned should be in average; last each stage X interest and seen the year; investments acquisitions developers end, equity We incomes first investment of experienced square late words, that remove underwriting assets, our projects over to stabilized a execution new many capita; any the a people wholly our characterized of that site the net deem time, stabilization. same exceeding other generally program; part. next way. take of the area site XX.X% brought these past not with we first from developer outright that rate remain of quality the investments innings, disclosed. self-storage an in acquired Alpharetta deals Marietta; few rentable we’ll real assets intentional opportunistic will million both of us that the upon first high four than of runs. of XXX% confident over of us. continue developer, yields our construction our a with before to to a $X.X our generally micro our to over the we a and a of quarter, continuing reduction is cycle’s we and in reported deals and in meticulous several

– where REIT, ROFRs, interest believe we’ve will and an number equity a acquisition become equity properties and owned have XX.X% operate equity we’re an many lease-up, in the with of we the As effectively to like REIT. company more and we

Vice tasked Corak of Lastly, Corporate management Stifel world job I you discuss on we investor JCAP. the to he running to our capital are the business. an both at among Senior me the see David from FBR, I’ll That’s with accomplish Many exceptional business, depth now on of here touch parts David other David the to of where and to tremendous remarks. to as turn what be the with excited we results. can and for space March, financial personnel. of President as In and know he Finance. as markets of of self-storage our be addition outreach, side want his Kelly time side analyst And at equity team and and our it things sell the did We over prepared David can David covering from will think the company. added

before of strong plan. quarter’s to discuss the first earnings results per and hello, and call share on I’m detail to a going reported John, of exceeded touch Thanks, on everybody. the high guidance quarter, we’ve quarterly guidance. over to night, provide David of end per the with of capital $X.XX, $X.XX Last turning which earnings both our share and adjusted our

continue further quarter and discussion. from with noteworthy believe to total the net from year the value few as that A compared properties XXX% growth, strong owned operating results increasing of fair income revenue revenues experience elements in last warrant last as as well quarter We and we above-expected the investments. to XX% increases our to higher-than-expected same

assets than in income owned more wholly while in anticipated as quarter capital five guidance guidance were anticipated. occupancy our we quarter came were first expenses had first interest rate and higher we line. our on as deployed Also, NOI than First, above exceeded our

we quarter his our Second, charges and some other primarily retirement experienced departure. related the real estate in-house some expenses with to of contractual incurred this counsel

full we Accordingly, top the need new However, our our XXXX. exceeded G&A increases the million Last expense our year end value of offsets adjust certainly of SVP least, recurring to Corporate of related for did guidance our in compensation decrease the feel Finance. $X.X fair but additional of the not G&A guidance range. not our

properties bridge In were in from regard, control. from development the less repeatedly impact our to new In stated faster-than-expected our an increases that one’s final increase and interest success in and investment, short-term progression, portfolio in building at setting the ability immediate permits is in have anticipated. potential guidance of basis slowness art Last some the developers rates delivery within of dependent our of over primary an noted release, XX the have is weather. outside pace or we inspections that control the last and construction value accretion we harsh obtaining quarter, and we of manage dates point construction self-storage fair of developers our many to outside Likewise, had rising long-term As several the loan factors would are completely rides an winter on than when drivers not their in faster-than-expected for of rates the rates. quarters, noted predicting interest various in elements range, the construction earnings our value construction delays reasons that in we respects investments us. many every control, fair took and QX impact on starts reported or on of our corresponding the the that approach like regards

fair such our these increases estimated versus guidance contingencies reduced last of built preliminary in estimates, November. the we in into As guidance March we value as our issued full given range the early fair year value

and March an pace bump rates, yield over the and construction. curve short-term which to are very While above-projected we are very we that curve in benefited guidance, flattening in or many from the of we in fair on-balance-sheet of had contributed year. the our both construction ground April, just in of coming first in the The XXXX the our early value investments quarter out exceeded treasury still stages QX increase the of early the treasury expended

$XX million. we not raise value factors, is full prudent believe range these fair guidance and ‘XX reaffirm million $XX of it our Given year to to

policy Fed that, we go will our interest year the gain turn we’ll it commitments visibility our on better reevaluate summer. into the ‘XX to guidance With I’ll David. to and ‘XX more over into we However, affect get progresses continue and and progress how rates, later as as of picture the a long-term

Kelly. Thanks,

added quarter new all-in around package sense funding sheet. supplemental we funding it of balance position of a in to and of the This XXXX need obligations our capital capital our give sources – number, the On a commitments additional investors XXXX investment We year funding is an capital that XXXX, supplemental, total through In per investment of March notice cash Page as investments table pages uses is remaining you’ll chart guidance. few rest to the and going million page, supplement better well estimated for You’ll thought represents that the a we our midpoint our of this the total that we our the XX cash for forward as of estimated million. provided bottom what the $XXX uses. not with see the to our full Note just $XXX XXXX. including $XXX provided million prudent our of contractual guidance. of XXXX on

on funding of our a line, our in repayments expected investments. of and XXXX all of existing a and comprised our XXXX line Series equity preferred place have A on cash commitments, for our of commitments portion existing of capacity hand, combination We

capital few Beyond $XXX of years. that, the we have remaining next million needs approximately over

in capital any growth-oriented business, grow. that’s development the require REIT like to Just we

including, be capital We capital not in and of we asset be venture our to we activities, to, sales, that so. and common secure preferred debt opportunistic equity have To and joint refinancing continue to loan prudent proven but will ATM managing sources sales, limited have proceeds. noted potential end, sales, B Series

finance of appropriate. capital, and very when in our and/or good and plan has very help capital-recycling Over few I the plan structure. prudently have ATM here weeks designed deem team of to plan our first capital through team layer opportunistic since offerings I’m in long-term feel company’s here, capital of use next a IPO. spent and issuances to take hours The the at is and common JCAP We new stock to management in One through debt many confident my many is for capital years. believe working we follow-on time the my limit of senior the long-term capital optimize of advantage stewards proven role the wearing opportunities our be the hats six our

are commitment XXXX, early management $X a we are have philosophy fund $X to will sted be matching our since Importantly, of when of certain held investment capital to with available fastly required generally that that a we we commitment. of

shareholder be the We capital have JCAP. note, we part will a of those always commitments fund to is management is that I’m extremely commitments readily team and ensure capital excited at to of long-term accretive long personal value. On – and this term here mix a that to available

of team. forward. chance that the going to portfolio ever I’ve under am look the this the confident you Now quality had forward the the I more "look officially to on than all hood", in of call with working I platform, the and

all I’ll we remarks. in of have that’s now turn Q&A. So over to prepared terms it

Instructions] be Hoglund Thank a you. Our question-and-answer session. At conducting go question is from [Operator first George Jefferies. this ahead. time, Please we’ll from

George. Hey,

question morning, seen developers. somewhat to guess in similar good lending of of entrants lending Hey, some terms the Dean. I we’ve into programs new environment I one for you kind business, mean, just the doing guys.

lenders Just on wondering, what the seeing new competitive from from is the new And for are side? lending you trending landscape overall a in development? entrants how you appetite think do

Good George. Dean. It’s morning,

anticipated I get carefully. will Of backside very program development cycle. me they it today a late few a little that to banks. they’ve rate. have don’t game, numbers reduced on reduced out the go with new who’s monitor turned down survey article the deals pencil a anymore. to stream the have this working there one late in three and – has Journal that will capital A for some ago, competition, been thing understand, very new less and spigot’s coming that may that is favor developers or new the that seems course, do the from in all is other what out of And And months And share the was people Wall the about on out dramatically. we commercial beginning of The the very, that lion’s they’re coming cycle. definitely anyone supply written this competition, capital bank this along, country. of for Street in end us, where in was we’re for but in that of markets And of as they the the cases, done, just rates it’s been that a providing bigger That’s the these new are concern across

pencil don’t broad numbers they the just so like a And on in past. really have the basis

the any So about even the entrants this commercial or to banks late we’re not at at space all concerned point.

thanks. one all do and And update Okay, then last just thing, any danger markets? watchlist that your at on you Has changed from have quarter?

Austin, itself three that have levels changed, list markets high Nashville, upwards and The state capitals, to – high show per to real the impact supply, continue existing really state the to negative new The new greatest George. XX% all most markets the those on hasn’t supply Raleigh, footage kind and entry pretty of of of barriers the supply capita. potentially are that’s not Southern square results of

big from those spike supply. ones construction, potential not projects away seen are most become projects that, but Portland are in a real kind generally. has staying lot that Portland’s a of a concerned. markets And Other we’re problem only markets, standpoint, watchlist the So than new the those under about have a we’re From planning. new to showing also in which of market.

are But continue to highlights the monitor a list from list. our standpoint, of We those. those

Okay, Appreciate thanks. color. the

from question next James. ahead. Jonathan is Raymond Hughes go Our from Please

a not just a morning. real Hopefully, drill, fire fire. good that’s Hey,

not our It’s end. on

on end morning. All right. Not neither. Good our

as opportunities Can looking to fast for solutions? are product. sell in obviously loan that compare REITs you exit plays anticipated. just you this up seeing developers coming last Maybe equity there? earlier the leasing budgeted one looking seeing bridge to Meaning, mentioned and are So talk And they’re than about as some more year. you the to not

hasn’t day sure. arrived coming, knew Jonathan. and was morning, We yet. Good it this quite really Yes,

by, from pressure it’s quite wanted; sources but as for see the off. end goes the leasing loans have as to the also the they showing big quickly as – pay one, rates maybe they they not the they that’s up got construction loan that the One think two of time comes are they’re developers. construction And loan. and wanted when construction yes, these is, I at to

that next I in loan that really bridge we into five first were year. so of This development in started did, that kick end kind Miami. that properties would we in early on did, year this all along probably our And started said thought the I in toward of and first XXXX, were had XXXX program group

early Texas of in the and that’s we Boroughs York example development cycle. this early New in that. know So started started Miami an that started And early,

with So a that’s But we’re good the starting in reason And happen. beautiful lot we the of that said new cycle in product, got yes, sale – the a are I’ve there. one silver them on, companies Gen that be this development than bullet to along lining for early of all would silver that’s going guessed properties, to sale. and I’ve XX% those V always going to built capital early are for be there. be is

sitting also that equity the and REITs includes public some the money includes on private sidelines. that so And

due primarily that they their the ahead into can I up pay a start and full construction it’s year. kick And they to cycle will a next high so to acquisition a convince point And will dollar. by little gear lease think bit this motivated do certain go coming in year. getting them buyer developers think It and loans

extending Okay. Appreciate that bridge the then kind What’s And the loan. projects? your of non-stabilized pipeline color. maybe fit just And that. the would in assets that terms of of maybe development composition

$XXX Currently, continues of development. be to new million, the most it of

really up because Dean because – didn’t until a the the the hit degree XXXX. financing lot As real deliveries hasn’t spike said, yet a to large of for probably bridge impetus

see opportunities And So our now, right we those development later. pipeline is predominantly investment.

I’ve from the next supp, need various the you that And me. just past, asked more come one the the show in this sources I And over years. few Okay. million then know in but capital for $XXX will

you you debt Just can moment. elaborate cost of the How about and of current think source capital. your attractiveness curious at if equity, on each the

David. It’s

So as prepared for have XXXX the commitments a portion XXXX I we remarks, place the mentioned in funding in of commitment. of and our all

you midpoint as million beyond to there see need couple we’ve we’ll XX, don’t just think of years. need the for over can have of on an we that guidance, course immediate is the capital we ‘XX our But that up. next got what $XXX the of So on Page lined fund

what quarter this in is those to options a in shareholder potentially And of on going manner focuses we a prioritize options the so that supplemental And back did that list we most we’re included value. driving funding there. for the the of

so would of this And highlight opportunity mortgage to our first them one potentially loans. I is refinance

into And had are we pretty products ROFR sense. capital to and so our profit older our drives the interest retain a ROFRs look And of some our two-for-one us of for that the giving which while far IRRs Two value makes you of but the a lot that loan deal, profit lot for have invested that two think at we this amount, opportunity and us along XX.X% newer even interest a right? opportunity is the mortgage higher the to We’d lease giving creates and recycle if a we first about shareholders. an single the up. refinance think effectively projects, investment in

fit, day. along, or at property we a of or – the buy of optionality our the they developers As a a have want. market these the opportunity that some There will to perspective, of either of sell might as we all end are our to have the investments that assets matures, we not so style earliest either kind really portfolio assets handful from have if sell

then of our continue good the to common continue think in pretty have think properties some proven and stock long account – we’ve shareholders makes we issue we to we make decisions option an capital, can We so that do as can opportunistic. we to price, be ATM. to we’ll So of And sense. been as that mature. as if Or otherwise, towards do off we’ve accretive on

So the situation we comfortable as pretty feel today. with capital it stands

Okay, that’s it me. on the everyone. Congrats, new for Thanks Dave, role.

you. Thank

question next go comes Tim from from Please Our FBR. Hayes ahed.

my Thanks for Hey, everyone. taking question.

on with different runs pricing now? or scope narrower anything to taking, first you regard with The the order to pipeline, home just kind you’re you’re been since the the one, offset or of loans of kind of doing dynamic structure have focusing in

as pricing, our really know, – No, a you pricing. is we Tim, haven’t. unitranche It’s

And teens here, We the have in a very driving that. several of components on an basis. have high profitable IRRs you unleveraged investment

of you moved We don’t You financing, of components you high rates a really and changing the components justify of enough coupon mezzanine more debt And it and us to think all real senior have have going have components equity. return. have rate. drives

bumps, alluded right X.X%, seen to, up time, as anywhere leaving that. a – But there. yield the of evaluate spike more close than long-term expansion lot seen we’re that think expansion that we it X.X% flattening don’t you’ve curve to rates X.X% be now, to you’ve to if So market is. and Kelly such that, short-term we’ll and expansion that of as rates. The we’re became rapid massive certainly or the were ought at Yes,

our really right we pricing just good circumstances we’ll about So as now. feel And monitor change. it

if and Okay. Thanks so, of do color rates, guys able interest that? to hikes your speaking, certain would into of your And the you a have underwriting? for there. share built guidance be guess, you amount Fed And I

And assumed in what the year year, in $XX hikes we exact our – our point full actually interest added basis our believe, rate we our – on of of, guidance. XX to We million, in assumptions, assumption $XX our is. full the four I million supplement, XX Page do. we And in

Four.

rate what that Sorry, four period over of of earlier. I hikes missed time? It’s XX basis

year. the whole Over

it. year, got the Over

me. Okay. more And then one from

the to identified potential just a drivers specifically? of then are asset also, could kind if be was wanting what one You a properties. And loan that the a sale divest small source of that asset you of that wondering And liquidity. or behind of

investment, where developer’s out anything. period this from think doing very beyond the first our our Well, locked the investment, is I it is earliest

is the focused so sell desire V, urban core a the on The asset. latest-generation It’s not developer the asset. drive-up asset to single-story And has Gen we’re – asset. multistory And we V assets. a Gen the

it’s – – feel a of price It’s a we that fit that not be so the one price. to longer-term like that’s is And deal, going our as we really doesn’t real not ownership that big massive strategy.

my taking you questions. okay. again Thank Right, for

Our go Markets. ahead. Thomas Capital Todd next KeyBanc from question from comes Please

Hi, morning. thanks. Good

First question.

selectivity So XX% down $XXX as about growing? around you mentioned additional at that at the you you’ve commitments for pipeline way commitment range there And year? the appetite discussed, XX% is I today, outlined that know you the in does million, the Or within is increase to the of you which that does through guidance. look you’re keep for

expect on Yes, upon outstanding, future. our issued within based to are we’ve now, that And near guidance we of all the Todd, sheets we’ve always that which that in term that we expect were based term close, sheets range. guidance sheets or right the to the term issue

again, just a interest But initially terms down you’re Okay. inbound been the in whether or about And think of pipeline from even general, then what I again. level, realize higher or less, is not more the mean, in describe maybe sort of from that the you consistent? I interest level is developers? or Or XX%? that general just is not phones’s down construction also screening of can ringing,

spent kind you you of respect as time know, lot a you telling with Well, strategy of and our to we’ve with developers.

our projects professional still a And on of seeing we’re terms and of finite the what the have beauties developers these And we hard. thing very becoming of more there know that the difficult. focused the But with is of relationship beauty developers. seeing they’re working doing. We’re are in number program guys those these of same and one guys

sites, our like we they’re they’re working they’re just being on still they’re So front. still looking of mean, the selectivity for line I defense hard, are. but selective first

they calls our we a us selected inbound they’re calls they’ve our are so inbound you and while far. done that where seeing, to developers. partners from where that’s what the to come and journey, this our to whole existing projects, can’t number want a come that’s through So I working assign we’ve still and of walk think great with from, They’re pipeline job

then for to And chime here. in maybe Okay. question Dean

construction from And in on of And development have costs, costs and management we’ve steel going to are think new on this. there just on you some response rising read terms develop, forward. your other mixed innovative teams what ways new I’m wondering the labor Just some of will the had and from impact some self-storage I know more prefab in rising just development and forth, how and that all rise how could new whether can of all I’m dropped thinking than plays have, into offset that that. be like landscape seems or and might the wondering used being cost. about construction are costs that it containers into construction the builds units the you’re impact that so that

it ground. little Sure, – price is factor But the that’s the of Todd. We a net standpoint. up it’s think a the from I big one. doesn’t labor steel the prices offsetting – Yes, And the bit. are up, move needle

fewer there multifamily far have today for developers less two two out, because demand our multifamily sites. we’re over are we it years are were slugging there last year that products we years years looking, the ago three We had – having pricing just fewer ground there on developers people out or than or were, to ago ago, with

And so that has competition diminished greatly.

think little fairly, they’re by And are but – so the got of being is mentioned ground. minimis. fairly yes, that price price two factors on it I increase is labor things, And And of labor. you other it’s bit we’ve steel, those and things de offset the

then could storage storage. generation you you having is you necessity-based, or I there? that about create happening facilities actually bit And without Okay, here, rents are little need And for you that a fun built, Gen being more describe stimulate V nobody that’s also, really helpful. for Can demand. storage understand think is this just think a commented what

early some brand storage back in years I to ago, go days new business very I’ll in mean, was XX markets. but I Sure. guess, in my storage the

so for that same useful product evolutionary they real people is before. existed didn’t a this direction. an really And them Well, that step from estate know discovered

thinking, clean to potential see, Whereas Being out shiny for for You anything, buildings there is storage our year. a baby. room these it. forward, to visible another I it, pretty, maybe thinking, they think past, dining didn’t have the garage-looking Well, would our for go think past really need facilities, And new plus. didn’t I customers that past, storage to thing. and go That’s I big in rent the will one-story who, for going see nice, a playroom driven like a about don’t really in so

it to tended the destinations. on Pages. Our And they’re second-, a in few the or they’re a off buildings a say not a third-generation thoroughfare, ago, are. of drive really they’re everyone nice. first-generation, they’re they these how pretty, the today, main five to have But like thoroughfare. Yellow on really see X.X our nice with there main Atlanta blocks astounds stories We on here one-story, tall tended back we off, these And bit, are I and to look of and be properties, if main them thoroughfare kind they were think couple of to I properties again, myself, and tour little be days would took

number So customer I do we’re but yet, attractiveness think can’t do a that out a it – I our put Todd, buildings. the new of create going on to think I of

it. Got

take online? share appeal moving but mean, is appealing V from stable it just Gen the is demand properties the that or So across view generally, curb it have look if industry. older is some activity inferior less properties demand, your I steady, that stimulates facilities,

That’s it. day every question about No happening there. out

higher-occupied, buyer pay to be a And what we’re when two rents. get is to forward, going only years on for V a to see sold, be it’s and property, now, ready will rate lower is year the gets higher And not Gen from now to so it going cap the it. from going

Okay, thank you.

go next from Instructions] Baird. Milligan W. our from [Operator R.J. And question Robert comes Please ahead.

good guys. Hey, morning

question my developers’ and rest from year should the of XXXX? the volume about interests other Just for me, the we answered. of questions of and one been into most cadence have How think of buyouts

that in and engage And has developer about ripeness be it’s quiet. in going for have buyout. the to I of a to discussions it’s be for to based The upon keep point the rest Yes, facilities buyouts. be a think lease-up to mind really the pretty certain R.J., of motivated year, at

So I it’s very quiet. think that year, for the this rest of

but see one, You maybe could maybe not. also

even So I one. on count wouldn’t

personal of XXXX, of about think exits. you into of XXXX, As starting half their gets portion portfolio second first are of to our where latter move own a start part the significant XXXX, to of the that’s lease-up developers really stage when half

be where, lot time think, we’ll of and specific this you period relevant, to I the discussion give more more that’s prepared so more And be a will information.

the brought blended a you on have sheet, projected then sort the for cap properties And rate those helpful. that’s of you that acquisitions? developers’ Okay, have the average for for interests on calculated stabilized guys balance

the and And... have, in supplement. We that’s

XX. Page

we’ve the the Page estimated that And supplements. on two what XX ways. presented We’ve our cost. presented done NOI yield in is cash of we’ve stabilized

build number to that, So funded what the we’re on we about on than paid in developer that’s the at cash invested. what And and buy cash of of the X.X% return average, stabilized construction in an of interest. developer’s during the financing see we basically facility, terms you’ll XX.X%

took you time fair until the value fair that time we fair marks facilities marks quit I we is, value think, purchase, taking from yield that value X.X%. the purchase, marks, of to at which the blended we that time those started If add the taking on of

So you Page XX, everything Page that if should give you go to need. XX, you

Thanks, Great. guys.

to management I’d session. turn comments. any back question-and-answer you. the Thank like to concludes This closing over the floor for

comments. very Thank No you Hope soon. you much. closing to see all

teleconference. This concludes today’s

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