Q4 2019 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the fourth quarter 2019 extra space storage incorporated earnings conference call.
At this time, all participants are any listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Please be advised that todays conference is being recorded.
If you require any further assistance. Please press star zero I would now like to hand, the conference over to yesterday, Vice President of Investor Relations, Jeff Norman Sir. Please go ahead.
Thank you achieve welcome to extra space storage is fourth quarter and year end 2019 earnings call. In addition to our press release, we have furnished unaudited supplemental financial information on our website.
Please remember that management's prepared remarks and answers your questions may contain forward looking statements as defined in the private Securities Litigation Reform Act.
Actual results could differ materially from those stated or implied by our forward looking statements due to risks and uncertainties associated with the company's business.
These forward looking statements are qualified by the cautionary statements contained in the company's latest filings with the FTC, which we encourage our listeners to review.
Forward looking statements represent management's estimates as of today February 19 2020.
The company assumes no obligation to revise or update any forward looking statement, because a changing market conditions or other circumstances. After the date of this conference call.
I'd now like to turn the call over to join our Board Chief Executive Officer.
Hello, everyone.
Thank you for joining us for 2019 fourth quarter and year end cool. Thank you for your interest in extra space storage.
We delivered solid results in 2019, despite significant competition from new supply and for external growth.
Our same store occupancy ended the year, it's 92.4%.
Hi, Steve you're right Mark since 2015.
Our same store revenue increased 3.5%.
And why increased 2.9% and core AFFO growth per share increased 4.5%.
Demonstrating the durability of our diversified portfolio and the progress of our platform and team.
We had impressive external growth acquiring 47 stores with an additional 177 stores added to our third party management platform.
The majority of these stores were new to the platform, we brought a new property into the system every 1.3 business days on average.
We also about other innovative ways to enhance our external growth.
Including redevelopment and net lease transaction with W.P. Carey.
Bird equity investment with Smartstyle and the launch of a new bridge loan program.
Well that these efforts help extra space invest approximately $650 million at attractive risk adjusted returns.
The fourth quarter, not only barks, yet another solid year by did incredibly dedicated performance over that time, we grew our store count by more than 2000 stores an increase of 137%.
We developed proprietary technology to help optimize performance.
Just to be outperform our peers.
We do you ever to our balance sheet and achieved a triple b stable rating from S&P.
Most importantly extra space storage right at the highest 10 year returned to shareholders of any publicly traded greed and the 11, hi is above all companies in the S&P 500, regardless of sector.
We are proud of the growth we experienced over the past 10 years. The value is created for our shareholders. We appreciate the support of our investors lenders partners contributed 200 growth and success over the past decade.
We also acknowledge the vital contributions hard work dedication of over 4000 employees made such performance possible.
The culture values of this deep let us to be named the top 100 best place to work by glass door out of over 1 billion companies.
Well, we are proud of our accomplishments nor we believe it's important to celebrate our past successes, we are even more focused on the future.
Most of the headwinds faced in 2019 will continue to be present in 2020.
The supply cycle, we find ourselves and well continue to dampen performance, but it is moderating and will reverse.
But even while in the deficit. This cycle, we are in incredible business.
Mark by high occupancy.
Increasing customer demand.
Longer average length of stay.
Used by all age demographics.
No real disruptor on the horizon.
And it increasing advantage of the large operators over the mom and Pops.
The stable and increasing cash flows we oh enjoyed continued to be a homeworkers self storage.
We are committed to leveraging our experience our technological sophistication in our diversified portfolio continued to provide solid returns in 2020 ended the decade ahead of us.
I would now like to turn the time over to Scott.
Thanks, Joe and Hello, everyone.
Our core EPS up over the year was $4 in 88 cents per share ahead of the high end of our guidance. The beat was primarily attributable to lower interest expense and income taxes.
During the fourth quarter rental and tenant insurance revenue were inline with expectations.
Revenue growth was primarily driven by achieved rate growth and higher occupancy with lower discount usage also providing a benefit.
Same store expenses were elevated due to increases in property tax marketing expense and payroll.
We continue to be pleased with the quality of our balance sheet and our access to all types of capital after obtaining or triple B credit rating from S&P. We now qualify for improved pricing on our credit facility that will lower interest expense going forward.
Last night, we provided guidance an annual assumptions for 2020, our new same store pool will increase by 42 stores for a total of 863 stores. We expect the change in the same store pool to benefit our revenue growth by only 10 basis points or less over the year.
We experienced gradual gradual moderation in our same store revenue growth through the end of 2019 due to new supply and expect that moderation to continue into 2020.
Same store revenue growth is expected to increase 0.75% to 1.75%.
2020 same store expense growth is expected to increase for the 5%.
We do not expect as much pressure from property taxes are marketing expenses in 2020, but we do expect them to continue to be outsized.
The projected increases in property taxes are heavily weighted to Florida, Illinois, New York and Texas.
In addition, we anticipate higher payroll expense due to a two that due to a difficult 2019 comp.
Our revenue and expense guidance results in same store NOI growth expectations of negative 0.5% on the low end of the range to a positive 1% on the high end.
For 2020, we expect to invest 230 million in acquisitions, approximately 55 million of which is closed or under contract. We also expect to invest an additional 60 million in bridge loans, our guidance assumes external growth, we financed with net operating income and debt.
As always we're committed to being disciplined, but we'll be opportunistic and innovative in seeking additional ways to grow externally, we have plenty of liquidity in capacity and will proactively pursue accretive growth opportunities as they become available.
Our full year core FFO is estimated to be $4, a 99 cents to $5 an eight cents per share.
2020, we anticipate seven cents, a dilution from value add acquisitions and an additional 13 cents dilution from CMO stores for total dilution of 20 cents down three cents from 2019 levels.
With that let's now turn it over to would tiv to start a question and answer session.
As a reminder to ask a question you will need to press star one on your telephone.
Draw your question press the pound she again that star one on your telephone to ask a question.
Standby, we've compiled acuity roster.
Our first question comes from a line of Jeff Spector of Bank of America.
Line is open.
Great. Thank you.
If we could talk a little bit more pleased about.
Your same store revenue guidance for 20 over 19, I think Joe talked about moderation, but can you talk to and again continued pressures from supply, but can you tie the comments and.
You know discuss that a little bit more.
Sure. Thanks, Jeff So we've been discussing revenue growth moderation in a soft landing for several years now and we experienced a decline this moderation in revenue growth in 2019, but it was somewhat delayed from our initial guidance. So it was something.
Later in the here.
And that was a likely due to delays in the delivery of new supply.
2020 guidance indicates rabid continued revenue growth declines, but at a moderate pace over the year by the ended the year, we believe will be flat.
Okay, and then I guess again I'm just trying to think.
Think about the guidance first you know previous comments about supply in peak supply in your markets. I think you where you were actually meeting for that to be 18, and I know you weren't willing to say you know peak pressure in 19. So obviously that pressure continues into 20, but I guess can you then provide more color on your supply.
Forecasts for you know in your markets.
Sure. So we do.
We do still believe we experienced peak deliveries in 2018 and that deliveries moderated somewhat in 2019, we see a more significant decline in deliveries in our markets in 2020 by about a third now that.
Assume some assumption does.
The same push rate or delay rated 2020 2019, but we do see a greater decline in deliveries in our market significantly greater in 2020, the 19, but that being said is you hinted that.
The impact is accumulation of the supply from the past.
Three plus years and that's why we're still still fighting through this.
Development cycle, although you know we are we ever seen we are seeing though my guess is Uh huh.
Okay like it is one follow up then I guess again, tying those comments too you mentioned you expect less pressure from on the marketing spend or you know marketing spend to stabilize which was much higher 19 than we initially thought.
'cause it does the lower revenue forecasts, if anything to do with a company decision to spend less on marketing.
No no nothing personal.
Thank you for that question I think it's important that we be clear about what marketing spend is.
Marketing spend is akin to an investment well when we choose to spend marketing dollars were doing so because we can track positive ROI.
<unk> dollars and marketing spend is less than 3% revenue for us. So yeah. We're doesn't have a giant impact when you have high margin business and you can generate rentals by that span.
That being said, our 2020 budgets do have a moderate increase in marketing.
Spend we will see you feel agreed or impact does that impact of that increased excuse me in the first quarter due to a bad <unk> first quarter 2019.
But we do have a moderate impact over the life for the year and frankly, we end up spending more than our budgets say, we do it's because we chose to spend that money and we believe it's going to happen. We know it's going to have a good returns.
Okay. Thank you.
Thanks, Jeff Thanks, Jeff.
Thank you. Our next question comes from the line of Ki bin Kim of Suntrust. Your line is open.
Oh thanks.
Can you talk about the street rates and promotion trends, we saw inter quarter and up to January February.
Yeah Ki bin its Scott. So we continue to use promotions you know to attract.
Renter to attract customers, but it's pretty similar to what we've done throughout the entire year the quarter looked a little different because it's when we lapped our current discount policy with how we didnt things last year so discounting.
Had less of a benefit in the fourth quarter than it had for the first three quarters of the year or discounting trend in 2020 is assumed to be very similar to what we did in 2019.
If you look at rates in 2019, you probably need to start first of the year at the first of the year, we had low to mid single digit rate growth and our occupancy fell so by mid year, we were about 50 basis points below year over year, and our occupancy and we made a decision to be a little bit more aggressive not.
Only marketing spend but also in our on their rate. So starting with July 4th we ran a special where we drop rates seven or 8% you know during the month of July and primarily related with that special is when we started doing that and we'd tell your work the additional marketing spend in the lower rates in July caused occupancy.
Jump, we then push rates up throughout the remainder of the year and finished the year close to flat. So we were slightly negative on are cheap grades, but our occupancy grew by about 140 basis points from the ended June through the end the year. So that combination of increased marketing spend and lower rates caused occupancy to grow.
And towards the end of the year as we push freight rates back up to a closer to flat, we continue to maintain that occupancy and actually expanded it a little bit.
Okay and implicitly in your guidance I know, it's not just one lever because everything is kind of related but what does implicitly in your guidance for.
In 2020, Onest free race and promotional usage, but I'm guessing that promotion, you think will become a tougher comp and 2020.
Yes promotional usage, we're not assuming that there's any benefit or you know any detriment in 2020 and all of the growth in the when seven five to 1.75 comes from a combination of rate and occupancy.
Okay. Thank you.
Thanks Steven.
Thank you. Your next question comes from Smedes Rose of Citi. Please go ahead.
Hi, Thanks, I wanted to ask you just a little bit about your acquisitions outlook I'm at least relative to our forecasts. It's it's Scott I'm quite a bit lower relative and to where it was last year.
And yeah, I guess, if she's just talk about you know what you're seeing and maybe.
Why you would I could come down time, and then just on the JV side that looks flat year over year, and I think before and your comments you sort of talking about how about what's maybe more attractive risk reward situations. So just wondering maybe if you could talk a little bit more about your expectations on the JV side as well.
Sure happy to speeds. So I think it's important to recall that we went into 2019 with over $300 million of deals in the pipeline and we're entering into this year with no 54 $55 million written deals in the pipeline.
So we have less kind a you know.
The last in the back that we know is going to come about a lot of that is due to.
Significantly slowed down our commitments the C O deals developments several years ago. So there's much fewer of those delivering now and that turned out to be a good decision happy we don't have a more.
New product being delivered into today's market.
On the acquisition side.
We see very you know lease stable good properties good Mark good markets on the market just very few of those most of what we see in the market our stores that are in so stage of Lisa and.
We price those bid on but our view of the lease up in the future returns are those is less than tomorrow, and frankly, we're not very competitive and we don't rely on being active purchaser broker deals in 2020, just like we were.
During 2019 in prior years.
So that means we're gonna have to get Craig and we're gonna have to try to talk to a lot of people in the market and see what their needs are finding capital voids and see how we can use our advantages and trying to create deal that produce accretive long term value for shareholders and I.
I can't tell you what that is just like I couldn't tell you in the beginning of 2019, if we were going to do a preferred equity investment within our bridge loan program was gonna be so successful or that I guess, we were talking to W.P. Carey at this time, but we didn't know moving ultimately get to a deal.
So I can't give you specifics of how we're going to.
I was going to grow externally, but I do tell you we got a bunch of smart people, who are working every day on the market join to create good deals for us.
Okay, and so it sounds like just on the acquisitions friend booking it stabilized assets, maybe not much change and already pretty aggressive pricing.
And the end just less sort of quality product on the market instead of fair kind of characterization of what you're seeing.
That is there and I apologize speech I didn't answer your joint venture question. So.
We will go out and try to find deals that make sense worse.
And what you find those deals we will then fine well then determine the best way to capitalize whether it's with dad or with joint venture money or some other form and capitalization and you are correct in today's environment because of the a reduction of risk when we're a joint venture partner and the enhancement.
Returns management, these 10 insurance and hopefully promotes and be something.
That's a joint ventures or more attractive business stage of the market cycle than in others stages.
Okay, great. Thanks for the color.
Thank you.
Thank you. Your next question comes from Michael Mueller of J.P. Morgan Your question. Please.
Thanks, I'm just wanted to clarify something when you were talking about a moderate revenue growth throughout 2020 and being flat by yearend.
Without a comment that are the moderation would subside by year end or you expect to be fourth quarter zero percent your peer group.
Oh, I'm, sorry, if I wasn't clear on that no. We do not expect fourth quarter to be zero percent. We expect the decline in revenue growth to have stopped.
Got it.
Got it and then another question you mentioned a longer length of stay can you talk about that today versus say three years ago in five years ago, how different it is.
Yes, it's low single digits, but it's a very consistent slow increase in length of stay.
Your average today is just over 15 months. Your average of everyone that has moved in and everyone. That's moved out in terms of like the stat.
Got it.
Okay that was helpful. Thank you.
Thanks, Michael.
Thank you. Our next question comes from Jeremy Metz of BMO capital markets. Your line is open.
Hey, guys. They are just wondering if you gotta look at your call. It top 15, or so markets, which ones of those do you think in slack hearing 2020 for revenues versus 29 chain, and Conversely, which ones do stank still have some slowing to go and I guess I'm just trying.
Think of how that gives you kind of confident Joe and some of the comments around a light at the end of the tunnel and finishing the year here about flat.
Jeremy maybe starting on somewhere that could potentially hurt as to the downside you're starting with the New York, New Jersey, New York market. It's one of our top three markets and we saw our revenue growth slowed throughout this year and we are assuming that it will continue to slow next year. So that's a very big Mark.
For us another assumption is Los Angeles.
Orange County continue to slow and another big market for us on the upside potentially you saw Dallas tick up this quarter not necessarily one quarter doesn't make a trend, but you know were maybe optimistic that Dallas has seen bottom you know Atlanta is or not and Atlanta in Miami or other markets that are seen a lot of supply and.
We're hoping are bottoming out have potential upside that are both big markets for us.
Switching gears just on the loan book I'm, just wondering what sort of yields you're getting I know is and how the reception has been so far and if anything it did seem like late last year made the pipeline was a little larger maybe that was wrong read but just how that's going and they received in them.
Okay.
Yeah, I know our a pipeline is pretty robust we have Uh huh.
I think about 20 $425 million and signed term sheets, we have another $130 million it term sheets outstanding and our you know back and forth on another $150 million report. So I don't know how many those last but we're very active there's a lot.
A lot of activity.
The yield on the loans depend on whether we keep the whole loan or involve our our debt partner to take to say piece if you will.
So.
You know our.
Or if we keep the whole loan our yield not including management be intended insurance is 5% to 6% and if we.
Placed the a piece with Argonne partner, our yields are 10% to 11%.
Got it and last one for me is just on third party and just adding stores or platform you mentioned, the frequency with which you're adding them. So how are you thinking about further growing to third party platform from here I know you know the patchy used to take almost any contract.
Ah to growing scale the business, but now that you've you've got scale in many markets are you turning more down today and being more discerning at this point.
Well, we do hope our guys did take any contract, but does [laughter] I think you're absolutely I think you're absolutely right. We are being more discerning today and we're turning turning away a lot more properties I do because a saturation in the market where that property is.
Because it's too big it's too small in some cases, a we don't believe in the problem project into development. We recently told people. We don't think they should build if we're not going to manage it if they do.
Is but we still.
We still growing that platform at a good pace, we expect to have similar growth. This year is last year and we're doing it without compromising our pricing structure I know when some of our peers entered the business. There was a lot of concern that our pricing structure would have to change the content.
You'd be.
Track the number of new properties are we in China and it turned out that that's not the case, we're able to maintain our pricing structure and grow at the rate we've been growing up.
And our the bulk of those still kind of under development lease up front. That's right. It's about it's probably like 70 370 developing 30 exist.
Great Great showed nice pickup.
Sure.
Thank you next question comes from Jonathan Hughes of Raymond James. Please go ahead.
Hey, Good afternoon, Joe earlier, you mentioned continued revenue growth deceleration. This year's similar to last year, but last year's initial guidance implied only a 100 basis points revenue growth deceleration your guidance.
For this year imply degree than a 200 basis points you sell so I'm just.
I'm just trying to understand the level of conservatism, that's embedded in guidance and I realize it's better set the bar low and then maybe raised throughout the year, but.
Yeah. The outlook given last night, just seems I'd say either concerning way lower incredibly conservative.
So I guess it depends on where in the range you you end up with and we also ended December lower than the full fourth quarter. So the are our budgets actually reject flatter.
The acceleration in 2029 2019.
Okay, because december was lower than the average for the entire fourth quarter.
Okay. Yeah, you started the quarter closer to 3% and then if you average for the quarter two and a half you can get the you ended at closer to 2%, which is our starting point for 2020.
Got it okay. That's helpful.
And then when you when you do your budgets.
She they come in and get rolled up into the overall portfolio do you didn't take that and apply it say 50 basis point haircut and that's what is issued as initial guidance or are the ranges given guidance strictly from the property level budgets with no adjustment from the team in Salt Lake City.
So our budget process involves both as you point out budgets coming up from the field and also a top down approach from our financial planning and analysis Department. So it's.
Oh, both have input into the budgets, we don't have a.
Said kind a deduction for you know whatever reason, we don't do that we tried to produce guidance that we believe it and we believe we can achieve.
So if there's a big divergence between the top down a bottoms out I mean.
Do you see go through and reconcile that or do you pick one or the over the other.
No they their job is to reconcile.
Okay.
Alright, and then last one for me.
Have you looked at increasing the magnitude or frequency of renewal rate increases since existing tenants are seemingly stickier than ever as a way to offset some weaker move in rates.
So I would tell you one thing about extra space is that we're always trying to be innovative and test new and different things across all aspects of the business including rate increases.
Can you give any details on that or is that a proprietary [laughter].
I don't pick up you can give any details on that.
[laughter] fair enough. Thanks for the time.
Thank you.
Thank you. Our next question comes from Todd Thomas of Keybanc Capital markets. Your line is open.
Hi, Thanks, I'm just first question Joe back to your comments I'm that revenue growth flattens out late in 2020.
That suggests growth I'm, you know my might begin to recover and 21.
Relative to 20, what gives you confidence at this point a year ahead of the peak leasing season that growth will in fact flatten out or the deceleration well will flatten out late in the air.
So we've been producing estimates of performance annual performance at this time of year for many many years, we have a great deal of experience and how our stores perform during different times of the season, we have when I think is a really good track record.
Of at least achieving our guidance and therefore have a great deal of confidence in the numbers.
And does that thought process does that include or.
A recovery in and move in and move in rates and and also in asking rates are sort of you know across the system nationwide.
So rates are of course one.
One input into revenue.
And.
In many cases raids rates will be the the driver of or the performance we project, but we have other tools as well do we can we can use.
Okay and then.
Scott I'm, just curious, whereas the the Smartstop a preferred dividend income in the guidance that you know or where does that flow through the piano I guess how's that being treated are counted for is that in interest income or is that somewhere else. It right now it's in management fees and other income it really isn't.
Management fees, but we I mean, other income, but we roll it up into that that bucket.
Okay. So that's included in the 69 to 70 million dollar.
Assumption for for that line got it yes it yes.
Okay alright, thank you.
They started Scott.
Thank you. Your next question comes from.
Captain Morgan Stanley Your line is open.
Hey, Yeah, two quick ones for me just on going back to the expense side on the property taxes.
I'm thinking about sort of that.
The total expense guidance and what property taxes are gonna do can you give us a sense of how much room is there to outperform based on you know I'm going back to that to the various counties in fighting taxes and so forth.
Yeah. So we continue to appeal our major increases you know your hard part is with cap rates being as low as they are sometimes we don't have a lot of.
A lot of.
A lot of a defense there in terms of values, but we have seen the appeals process being much longer today than it used to be some of those actually have to go to.
Yeah, good accord and things like that so we have appealed things our current guidance does not have a significant amount of upside in terms of appeals and winning those.
Helpful.
Now going back to the out of the marketing sad if he got previous scores you talked about.
Some of the public as well as private operators, making that that environment a lot more competitive terms of online advertising can you just provide anymore color on what you're seeing on the on the marketing spend side is there any if pricing any room for pricing to alleviate or you're getting more compatible.
It is it sort of the same as loss here just trying to get a sense there. Thanks.
Yeah, we had seemed to use the word again, a flattening in a increases in Oh auction market. If you will.
And we hope that continues but you know the real time will come during leasing season.
Got it. Thanks, that's all for me. Thank you.
Thank you Ron.
Thank you. Your next question comes from Spencer All the way of Green Street Advisor your question. Please.
Thank you I, even talked a lot about your guidance for 20 and most of the key levers, but could you just provide a little bit more color around your underlying assumptions regarding new supply and then when you think will ultimately see the negative impacts from me supply peak.
So our assumption for 2020 is that supply is down you know we were seeing less than we saw in 2019, we still think that supply peaked in 2018 with peak impact probably coming you know in 19 and 20, we saw our rate of deceleration be steeper last.
Two years than it is in 2020. So it is all kind of in your definition of when that peak impact is.
Okay. Thank you.
Thank you.
Your next question comes from Steve Sakwa of Evercore Your line.
Oh, Thanks, Joe I guess I wanted to go back to earlier comment you made about you know not seeing much in the this way of Disruptors in the industry and I can appreciate companies like make space and clutter right now or are reasonably small and have a you know a relatively small footprint.
But I'm thinking also U.P.S. says, it's kind of thrown attached in the ring and I'm just curious how you're sort of thinking about these different competitors and somebody or different markets.
Yeah, you know, we're certainly keeping our eye on them and we're monitoring impact on our stores in a market that they're active.
And keep our eyes wide open we're not dismissing them, but you know right now I just don't see it and I don't see huge barriers to entry into those businesses. If it turns out to be something that our customers want.
No I also look at those companies and I see quarter buying hard assets in New York City and that indicates to me a change in business strategy.
And that's usually not not a positive indicator.
Okay and then this is really small technical question for Scott I just on the guidance page you know that Youre one month LIBOR assumption is slightly lower than where current one month. LIBOR said. So are you just looking at a kind of a forward curve that suggests you know rates are going down or do you have kind of.
A different view about the curve or just curious how sort of that assumption was a kinda determine.
It's an average for the year and we look forward LIBOR curve, which does imply that rates are going down.
Got it thanks.
Thanks.
[noise] again to ask questions. Please press star one at this time that start wondering and telephone to ask questions.
I've a follow up from Ki bin Kim.
Suntrust. Your line is open.
Thanks, I'm just a follow up on Steve's question.
Did you guys talk about your refinancing plans for a billion dollars that you have to <unk> of that that's rolling into here.
Yeah I keep in so we have a billion dollars coming due this year. Some of that has extensions about 700 million, that's what really needs to get taken care of this year without extensions. The majority of that is a $575 million convert it comes due the first part of October we will likely take that out with a combination of some.
Most likely bond offerings, and you know and our line of credit terming that out overtime. So yeah, well look to be opportunistic on when we approach the market for those.
And just from for simplicity fake what does the average interest rate that is maturing versus what you would look to refinance that.
Yes, so the the pieces coming to the 575 is three and three and an eight.
And our assumption in our model today is.
Mm 300 closer to three in a quarter.
But there is you know if rates stay lower there today, there's some potential benefit and we're also looking at more term, we're looking at going 10 years versus five years.
Okay, and just last question I realize when I asked earlier about on January or February rates I don't think of we heard an answer I'm any insight you can share.
So rates are similar to where we ended the year, they're slightly negative to flat you know our occupancy is also we continued to have that delta in occupancy year over year. So continued to keep things.
Keep things fall and rates are as good as they were at the end of the or slightly better.
Alright, Thanks again.
Given.
Thank you at this time I like to turn the call back over to Chief Executive Officer, Joe Margolis for closing remarks [laughter] Sir.
Thank you. Thank you everyone for your participation today and interest in extra space storage, we certainly understand everyone's concern over declining revenue growth and the impact of new supply in the market.
However, I think it's important to step back and look at some big picture items.
Even in the top as part of the development cycle, we project to deliver over 4% corridor.
Which given where we are I would say is not about result.
We can do so because we have many tools, including innovative ways to grow to support this AFFO growth and we'll continue to explore and execute smart innovative strategies with good risk adjusted returns.
Even with all this new supply delivered we already an extremely high occupancy and this is a direct result of our ability to acquire customers are machine works.
We have positive same store revenue growth, even though two thirds of our property that new supply deliveries in your markets.
We have improved rated flexible balance sheet and access to multiple sources of debt and equity capital to allow us to take advantage of opportunities presented in the mark.
And we've been disappointed in the acquisition market. We're not just got you can get deals we're not buying things just grow we're being very disciplined.
We continue to grow our management plus business without compromising our pricing structure.
So I know we're in difficult times, but I'm very excited about our opportunity to outperform in 2020 and beyond.
Thank you very much.
[laughter].
Ladies and gentlemen. This concludes today's conference call. Thank you for participate you may now disconnect.
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