Q1 2020 Earnings Call
Ladies and gentlemen, today's conference is scheduled to begin shortly please continue standby. Thank you for your patience.
[music].
Ladies and gentlemen, thank you for standing by and welcome to the extra space storage incorporated first quarter 2020 earnings conference call.
Time, all participants' lines ARNA listen only mode.
After the speakers presentation, there will be a question and answer session.
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I would now like to hand, the conference over to your Speaker today Mr., Jeff Norman Vice President Investor Relations. Thank you. Please go ahead Sir.
Thank you Daniel welcome to extra space storage is first quarter 2020 earnings call.
In addition to our press release, we had furnished unaudited supplemental financial information on our website.
Please remember that management's prepared remarks and answers your questions may contain forward looking statement is defined in the private Securities litigation reform.
Actual results could differ materially from that stated or implied by our forward looking statement 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 latest filings with the FTC.
Which we encourage our listeners to review.
Forward looking statements represent managements estimates as of today May 720 20.
The company assumes no obligation to revise or update any forward looking statement, you haven't changing market conditions or other circumstances. After the date.
I'd now like during the quarter to Joe Margolis, Chief Executive Officer.
Thank you Jeff.
Good morning, Good afternoon, everyone and thank you for your interest in extra space.
Before I discuss the first quarter and the balance of 2020 who'd like to make a couple of introductory remarks.
First I understand that every one of US has had our daily routines interrupted stress put on our lives may have dealt with illness family and friends I.
I sympathize with the difficulties everyone has endured.
Greatly appreciate the professionalism positive attitudes and support shown by everyone on this call.
In times of crisis reveal our true nature than our industry can be very proud of itself.
I hope you and your loved ones are well healthy and managing through this.
Secondly, I'm pretty frequently asked what makes extra space different of course special.
In response, I describe our portfolio, our operating and technology platforms and most importantly, our people.
Well all of these it performed well during this crisis. It is our people, particularly our store managers, who have really stepped up and delivered and an extraordinary manner.
All of our employees, regardless of rule or region of the country have adapted quickly to changing operating procedures and requirements and have gone to great efforts to keep our stores open and our customers say.
And all this was done well they were under the same personal stress and worry that we all are feeling.
I could not be prouder of the people, who make up extra space and feel extremely lucky to be part of such a great team.
I know that whatever challenges lie ahead.
Timo strive to optimize performance well upholding extra space is values.
With respect to performance Q1 was a strong quarter.
Even with the impact of Cobot 19 in the latter part of March property revenue for the quarter was inline with expectations and same store revenue growth was 1.9%.
Core AFFO per share growth was 6.9%.
Four cents higher than the top end of our guidance.
We continue to see strong external growth through third party management with 48 stores added to the platform.
And in bridge loan activity.
External growth through acquisitions is currently muted as we patiently wait for opportunities that present attractive risk reward metrics.
Our balance sheet is in great shape.
We have been in contact with all of our lenders and partners and we're very comfortable do we have sufficient capital options to satisfy upcoming maturities as well as having additional capacity to be opportunistic if attractive investments become available in this unusual environment.
We are proud of our strong start to the year and while we are fortunate do we have been able to keep our stores open execute new leases and continue to provide our customers access to their belongings. We certainly have not been immune to the impacts of Colgate 19.
The financial impact of the changes to our operations caused by the pandemic such as the decision to pause auctions temporarily suspend existing customer rent increases and a reduction in rental activity due to stay at home orders create a wide range of possible EFO outcomes.
Some of which fall outside of our initial guidance.
Well, we considered simply revising our annual guidance range.
We recognized that in order to provide accurate guidance one key driver impacting all primary revenue assumptions is the timing of lifting stay at home orders across the country and subsequent customer behavior.
We are encouraged by the activity, we see in markets like Detroit, Salt Lake City, and most impactful to our portfolio multiple California markets, where rental activity is improving.
But the uncertainty of when other major major markets like New York City will reopen and how customers will respond in such dense urban markets reduces our performance visibility for the balance of the year.
Therefore, since these key factors remain unclear and move very from market to market. We do not believe it would be prudent to provide guidance that would reasonably capture the full span of possibilities.
It would also encourage us to produce guidance they may be overly cautious in order to include even remote possibilities.
However, we believe it is important to be transparent with the information that we have to help our investors understand our company and the sector. So they can make informed decisions.
As we provide point in time metrics, we urge you not to lose sight of the big picture.
It is still a very good time to be invested in storage.
Demand for our need based product Walter bullet temporarily slowed will continue.
The life transitions that have made demand so durable in the past will continue.
The advantages over smaller operators with our diversified portfolio sophisticated platform and top notch team are still in place.
Our balance sheet quality is better than ever and external growth opportunities will likely increase going forward.
I would now like to turn the time over to Scott to walk through some of those metrics in more detail.
Thank you, Joe and Hello, everyone.
To understand our current operating trends. It is helpful to have some context as to what has taken place over the last few months.
From January of this year until early March we further expanded our positive year over year occupancy Delta to 90 basis points, while also increasing achieved great.
My early March or achieved great for flat to slightly positive on a year over year basis.
Beginning in mid March stay at home orders caused a gradual reduction in rental activity. This was partially offset by increased college student rentals.
However, as more orders were issued across the country the reduction in rentals and Vacates increased significantly.
Rentals were down 35% to 40% for the 30 days from mid March to mid April partially offset by Vacates, which were down approximately 25% during the same period.
Over the last 15 days of April rental velocity improved with 25 of our cop 30 markets experiencing an increase in rental velocity compared to the previous 30 days.
Well rental volume has been down it is primarily due to lower walk in traffic, which is expected.
Web traffic remained steady, indicating that people are still looking for storage.
Occupancy as of April Thirtyth was 91.1%, which is 60 basis points lower than this time last year, but still very healthy.
To give you some context occupancy at the end of the first quarter in 2008 was 84.1%.
Our ability to acquire customers is significantly better today than leading up to the financial crisis, and we believe we'll be able to continue to drive traffic to our properties and to maximize revenue.
In April achieved rates for new rentals were down or more down approximately 10% year over year.
In March we postponed sending existing customer rate increases, which is having an adverse impact on our revenue growth.
As municipalities lift stay at home orders, we're resuming rate increases market by market.
We collected 93% of rent in April and this is down approximately 5% on a year over year basis for the same store pool due to increased accounts receivable and pausing auctions.
It is important to note that these levels were obtained without making collection calls are aggressive we following up with past due accounts from mid March until the end of April.
We have resumed these practices in may and we expect accounts receivable balances to decline.
As Joe mentioned, while we haven't been immune to the impact of Cobot 19, our company is well positioned to navigate the current landscape.
Our team has a track record of consistent high level execution, and we will continue to find ways to provide value to our shareholders regardless of the economic climate.
With that let's turn it over to Daniel to start or QNX.
As a reminder to ask a question you'll need to press star one on your telephone to withdraw your question press the pound key please standby and while we compile the Q on a roster.
Our first question comes from Jeff Spector with Bank of America. Your line is now open.
Hi, everyone. This is actually Alaskan extra just today. Thank you for taking the questions I'm. So just wondering if you guys can give any expectations or color on the third party management platform in the near term.
Spectrum to see that to continue to grow or have you seen some declines.
Few weeks anything on that would be great.
Sure. Thank you for the question. So we had a great first quarter for our third party management platform. We added 48 stores, we saw 18 stores leap the platform. So a net increase of 30.
We added 12 in April we had scheduled had 19, but we're seeing some delays.
And one trend that.
We are seeing is that we're seeing less interest from new development as new development waned, but more interest from owners of existing leased stores. So we expect to continue to grow that platform and have a very positive year.
Okay, great. Thank and then just one quick question just your commentary on the share repurchase program are you guys planning to continue.
Do you think that's going any pause for a lot.
We are proud that we are good allocators of capital and I think you can see that historically, if you look at the timing of when we were heavy in the acquisition market. When we participated heavily in new development, two Ceos and when we pulled back.
When we issued equity.
Buying back shares is another allocation of capital decision and we will continually consider it in comparison to our other investment options.
Okay, great. Thank you.
Thank you.
Thank you. Our next question comes from Parker to Crane with Citi. Your line is now open.
It's Michael Bilerman here.
I wanted to ask you saw the occupancy side. The 91, one at the end of April.
Does that include the tenants that are in there, but on delinquent status or I guess is an economic occupancy or not.
Yes, the occupancy as of the end of April does include all tenants that are in our properties and it includes about 20 basis points of occupancy for the month and a half a pause dock auctions.
And then from a Collectability standpoint can you share anything.
I guess in the so far in May I don't know how much you have on auto pay versus.
This is actual physical check.
Yes, so our auto pay is about 65% of our tenants. So almost two thirds of our tenants are on auto pay so those continue to pay automatically it that other.
About 90% of our customers pay with the credit card and the other 25% are the ones that typically call in each month with a credit card or we reach out to them. So yeah. The month of May as well as question for the month April will start reaching out to those tenants. If they have not paid so we're expecting to collect a large portion of those they ours that are current.
Yeah, 30 days or look at.
Okay. Thank you.
Thanks, Michael.
Thank you. Our next question comes from Ki bin Kim with Suntrust. Your line is now open.
Thanks pull out there.
You talked about reinstating day existing customer rate increase program sounded like market by market can you just give us a broader scope of how much is coming back online.
And how much you expect to have come back online by entity or.
So we will resume and our resuming our existing customer rate increase program market by market as they open up subject to.
Governmental restrictions on that so.
We whether we can habit fully resumed by the end of year is totally a function of.
When markets open up and government activity and frankly, it's one reason, we don't have enough transparency to give guidance.
Okay.
And.
Do you think as you open up certain markets do you think the demand from people who couldn't use that that will come back out and start using cell stores will be greater than perhaps what people who are waiting to pull out there they're belongings snow scores units.
Which one do you think will cover.
Went out when markers tied to open up.
So.
We don't have a ton of data and I don't want to give you kind of what I think so what I can tell you is based on the last two weeks of April.
In 25 of our 30 markets we saw.
Improvement in rental activity will vacate stayed flat.
Now that's two weeks, we're encouraged by that.
But we're we're being patient to see how the situation plays out overtime.
Okay. Thank you.
You bet.
Thank you. Our next question comes from Jeremy Metz with BMO capital markets. Your line is now open.
Hey, guys, Hey, Joe just for clarity that move out activity you were saying.
Flat on a year over year basis here, so no additional churn from that.
And up activity.
Just to clarify.
No vacates.
There was no change in vacate activity from say mid March to early April as compared to last two weeks of April where if you look at mid March to early April on the rental side to the last two weeks of April there was significant improvement.
So it's not.
I.
It's how things are changing as we get deeper into this situation.
Got it okay, but are there may still be some pent up move outs that are in there alright shot I'm. Just wondering if you could talk about Peter spend side, a little bit any opportunity to mitigate some costs, how we should be thinking about and I guess.
The other side it gets written in probably much you can do on taxes at this point.
And it sounds.
Or what's the latest on marketing I'm guessing that's still the mentor you're going to be using.
To help drive demand here, so should we expect that to stay at an elevated level or even perhaps increase here and maybe a in the second quarter.
Yes, if you look at the first quarter and look at which expense line items were elevated the ones the pop out to your payroll.
Marketing and property taxes, I think property taxes are pretty close to what we were expected expecting and we expect them to be somewhat elevated but as you know if revenues fall then you potentially get some are pretty but that typically lags by you know as much as a year too in terms of pay.
Hey roll part of the reason that is elevated in Q1. This year is it the tough comp Q1 last year, we actually had negative 4% payroll growth and so very difficult comp we would expect payroll to continue to be elevated more an inflationary costs, 3% to 4%, but not necessarily at that 7% range. We did.
Not see a benefit from lower staffing or anything of the sort in the first quarter as we continued to pair employees as our stores were opened.
The last one is really marketing and our marketing expense in the first quarter is elevated partly due to a tough comp from last year. So we started increasing our marketing spend in the second quarter of last year and it was elevated throughout the year and we continued spending at that elevated level into the Q1 of this year. So Q1 of this year how to.
A tough comp from last year, and we expect to continue to use marketing this year, but I don't think you'll see the elevated spend.
Quarter over quarter for the remainder of the year that you saw in Q1 of this year.
Oh, Okay and my last one.
Joe you guys have always equity acquisitive than on Monster deals in your opening remarks, you mentioned being positioned to be opportunistic.
Opportunities arise I guess, when we look at supply that's in the markets already been waiting.
On on fundamental before they should look at the potential drag here from the pandemic into the busy season I guess, how big is your actual appetite to take on additional week lease up here in the form a potential distressed opportunities.
So.
We are lucky in that we are not constrained by capital so between internal capital sources and partners capital.
We can take advantage of any opportunity did make sense. So the limiting factor in my mind is going to be.
Are there good deals that we can appropriately understand the risks and get rewarded for it if we can identify those deals we have various sources of capital to execute on them.
And not limited by some target number.
Alright, thanks for the term.
Thank you Jeremy.
Thank you.
Our next question comes from Todd Thomas with Keybanc. Your line is now open.
Thank you first question just following up on the comments made around rentals in the 25 markets, where you're seeing improvements I think your comment was that.
Move ins and the the final two weeks of April were higher compared to the prior 30 days. So that the mid March to mid April period can you comment on rentals.
During the last two weeks or 15 days in April and what that was on a year over year basis.
Good I'm, so I'm not sure I followed the question.
I think your comments around rentals improving.
In in 25 of 30 markets you commented that you're seeing you're seeing improvements I think that was relative to the prior 30 day period I'm just curious if you can.
You know help us understand how move ins rentals trended on a year over year basis, just against the the down 35% move in activity that you saw.
Thank you spoke about this so we can understand sort of the trajectory and kind of the trend and magnitude of rental activity.
Oh, Okay. So I apologize for me can you repeat that so.
I'll give you a couple of examples and maybe that will help you.
And if I'm not answering your question, let me know so take San Diego for example for mid March to early April San Diego, We were down 31% in rentals in the last two weeks of April we were down 1%.
So thats significant improvement we saw similar improvement in Los Angeles Sacramento Dallas.
And that's encouraging to us the flip side of that is if you look at Washington, DC in that kind of Washington, Baltimore Corridor, we saw no improvement we had the same experience.
Early in the crisis as we did in the last two weeks of April.
Okay. That's helpful. So so in some of the markets. The those 25 markets are so where you're seeing improvements are in San Diego.
On a year over year basis rentals or are almost flat.
San Diego, Yes.
Okay.
Got it and then.
You know look I understand the environment, some predictable today, but you.
You know normally you'd be gaining occupancy you know at this point the peak leasing season, and it's it's falling backwards understandably in March and then at the end of April or do you think it's possible that you might not see.
Sequential occupancy improvements at all from from from April levels in May June or July during this peak leasing season or would you expect to.
See some some occupancy improvements over the course the next couple couple of months.
So I think it's important to remember that occupancy is not our goal.
Our goal is revenue and occupancy is one tool along with rate and advertising spend and discount.
And if we can maximize revenue by driving occupancy is up then mis system can do that if we can maximize revenue by losing a little occupancy or staying where we aren't than the system can do that.
Okay, and just one last one for for Scott I'm following up on the existing customer rate increased program. If we think back to the original guidance.
How much of the the 75.75% to 1.75% same store revenue growth that you forecasted was attributable to to rate increases and and I guess some of that growth is really earned in for the year right. So customers that received increases in 19 and also early this year that do not leave.
So how much you know this years revenue growth.
You know was was from that you see our I program and how much of that do you think could be impacted in 2020.
Yes, so I think that's really the difficult question and one of the reasons. We pulled guidance. You know is one is the occupancy in the summer as well as how long are we on pause in terms or existing customer rate increases in terms of historically how is it added is actually is added between 10 and 30 basis points to our annual growth rate us not.
Driver because we do it on year over year basis, now where it could hurt you. This year for instance is if we have to pause. These for months on end no. If this pause happens for a month or two.
It is obviously impacts is but it's much less than if we paused them for five or six month. So that obviously one of the big reasons, why we elected not to update our guidance for guidance.
Okay alright, thank you.
Okay.
Thank you. Our next question comes from Steve Sakwa with Evercore ISI. Your line is now open.
Thanks.
What is it just to ask a couple of quick question Scott I wanted to clarify. Thank you said that the in April rates on new rentals were down 10% is that correct.
That is correct.
And can you just maybe give us some comparison, maybe what what was it in the a in the first quarter and you know any sense as to how you think that may trend kind of moving forward and street rates dropped further to create perhaps a bigger gap moving forward or have street rates kind of held firm.
Yes started the year, we were slightly negative on our achieved rates by the first of March we were slightly positive. So they are trending in the right day right way before they stay home orders and before the outbreak of the cobot 19th.
In April we were negative 10% I think that we will continue to adjust rates and marketing spend as we look to maximize revenue. So rate is obvious obviously always a factor we will continue to test to try to figure out the best rate, but you know if rental stay down.
If occupancy stays down and our model shows that rate is the best thing to adjust we will adjust rate.
Okay, and then maybe a question sort of your Joe just on your kind of lending program I'm just curious the activity level in opportunity set you see and I guess any distress kind of rolling on kind of lease ups and when like those manifest themselves in opportunities.
With respect to the lending program, we've see increase in inquiries and opportunities as.
I guess other for one thing other lenders have gone to the sideline and more owners are seeking the a bridge to better times. So last year, we did nine loans for 104 million gross.
This year, we closed three and approved 10 433 $34 million and we have a very strong pipeline. So we see the loan program is a good good growth opportunity for us.
And then just anything on the distressed side in terms of kinda Seo deals or lease ups kinda not performing well and.
When you think that some of those might manifest themselves acquisition opportunities. This year do you think it kind of holds often 21.
I think we will see those opportunities this year, it's a little early to say that theres been a flood of those but.
I think there is there is stress in the market and we are going to see.
Good number those opportunities and.
Look at each of them individually and see if we think it makes sense for us.
Great. Thanks, that's it for me.
Thank you.
Thank you. Our next question comes from Ryan lump.
Mean Street Advisors. Your line is now open.
Hi, Thanks.
Are you able to share what the paid search trends.
I've been like so far in the second quarter.
All of this sort of assuming that online traffic has fallen in Reais recently.
So I would not assume online traffic has fallen in recent in recent weeks.
It's actually been pretty steady throughout this and cost have been fairly flat.
Sure. So is that to assume that conversion rates have fallen a bit.
Correct.
Interesting, Okay, and then last question and is there any change has been made to compensation for store level employees in light of recent events.
So we have a great team up there and we pay our managers above minimum wage and give them incentives to sign leases.
And when when the crisis hit we first took all necessary steps to keep them say, we originally closed our stores and we're doing no contact leases were in the process of.
I'm going to kind of phase two of that with plexiglas protection and being able to open our offices.
But uh huh.
And we provided.
You know paid time for people, who stores were closed by government mandate. We provided some relief pay for employees, who were ill or had to take care of Illinois loved ones. So we feel we.
Did the right things by our employees, we did not need to pay them more the issue hazard pay or something like that to keep them engaged in working and we recently done a survey and continue to have over 80%.
Positive engagements stores from our workforce, so I think they've done a great job to this and.
No it's.
Been beneficial to us to develop.
Such a great workforce and have such great relationships with them and Thats benefited us through this crisis.
Okay, great. Thanks.
Thank you.
Thank you. Our next question comes from Todd Stender with Wells Fargo. Your line is now open.
Hi, Thanks, guys.
Well.
Can you talk about your collection strategy right now just under normal conditions I think the threat of having the tenants property auctioned off.
Pretty quickly keeps tenants in check.
Without that or if you I guess you soften that stands right now.
How do you balance that collecting versus showing some degree of flexibility.
And so we.
Obviously, you're going to try to focus on our customer first and so our decision to do this was very customer focused and recognizing that they're feeling some strain as they're staying at home as youve.
Had people sick around them a lot of fear and so our decision was to move away from auctions to pause those and then also to move away from collection calls we did do some reminder, calls letting people know, but starting the first part of May as things open up we are moving back to auction so as state to open up.
Following the state mandates, we will open up auctions with it if it's allowed.
We will try to work first to pay to vacated units. So you'll try to work with a customer to take get whatever we can to have them vacate versus moving to auction.
At her experience and we will now begin more of a collection call versus a question reminder, or payment reminder, where you are calling now instead of saying your rent is do we're saying your rent is due and do you have a credit card. So just a little bit more proactive in that manner.
That's helpful and you're still acquiring a CMO deals some wholly owned some JV.
So you probably we're using your underwriting a methodology as of a couple months ago. So has anything changed it would you be expecting a longer duration.
To get to a stabilized occupancy at this point any changes around maybe the underwriting.
[noise], so we have eight.
Ceos and our pipeline for to close in 2020 in 2021 five of those will do in joint ventures, which.
Reduces our exposure and increases our return through management fee and tenant insurance.
Our underwriting.
Evolved.
As the development cycle got deeper and who is more new competition in these markets and certainly if we saw a new deal now we haven't approved one cents koeppen 19, but certainly if we saw one now.
It would be very hard for us to approve.
Underwriting approved but underwriting would change as well.
Thank you.
Thank you you stop.
Thank you.
Our next question comes from Mike Mauler with JP Morgan Your line is now.
Yes, hi.
We backed up April rents being down 10% year over year, just want to clarify that you did say before that at the beginning of the year.
They were modestly positive is that the right comparison. So before this there must be positive and now stuff down 10% in April was that correct.
Correct. They were slightly negative at the start of the year by the first the March they were slightly positive and then down about 10, 10% in April.
Okay, and how did the actual move in rate to dollar amount compared to the dollar amount moving out.
So if you look at our current in place rents versus the rents that are moving in there is a negative that always depends on the time of year.
And you know in the summer months that negative amount is different than in January or February.
Now the other thing I would caution you on when you compare those is that assumes that.
Everyone moves out on average, whereas we see more churn much more churn in our short term customers are medium length of stays about six months versus though average length of stay everyone. That's moved into moved out of about 16 months and so if you look at someone who moved in five months ago and they're the ones that move out it is.
And then someone that moved into moved out two years ago over three years ago.
Got it okay.
And I guess on the bridge loans can you just talked about the pricing.
What sort of rates are you achieving on on that.
So our whole loans are currently price the.
Lie bore plus 400 to LIBOR plus 500 with the LIBOR floor. I think this smallest floor was 50 250 basis points and then the return to extra space.
Is.
Based on his we sell or place the ATP soon the first piece returns to US our you know a LIBOR plus 900 plus.
In addition to that we manage the properties and get tenant insurance.
Got it.
Okay. Thank you.
Thank you thanks Bye.
Thank you Sir our next question comes from Ronald Camden with Morgan Stanley. Your line is no.
Hey, just two quick questions me one was on sort of the opening comments about sort of the college students.
In one Q, just just curious what percent of the portfolios expose sort of those college student then is there a way to sort of quantify what that it could be one Q or even there are there just market that are there clearly maybe more exposed to.
And now there's any color there would be appreciated.
Yes, so our portfolio has low teens in terms of exposure to college students. So it's.
12% to 15%.
In terms of the benefit from those students you effective we got an extra month or two from them.
And you're talking 112th or 110th of 12%. So it's really not impactful not a big benefit.
That's helpful. And then the second question was just.
Sort of a similar but moving onto started to small business in the business customer.
Just how are they ferrying what are you hearing from them.
Hi, this environment sort of is impacting them. Thanks, so much.
Sure. Thank you.
We really don't have a lot of data to show any difference in behavior in our in our business tenant.
So we think it's just a little too early to tell but so far they seem to be behaving just like our retail tenants.
Great that's it for me.
Thank you.
Our next question as a follow up from Parker Crane with Citi. Your line is now open.
Thank you Michael Bilerman again, I guess just pick out in the last comment I'm surprised that there isn't a bigger difference between the business and the just the straight customer individual because I would've thought a lot of businesses event.
People, maybe storing things there's no events going on so.
And maybe they definitely helps but their space, but I would've thought there would have been a higher level of delinquency.
And your maybe decide versus your individual side.
Yeah, Michael I can't tell you, what we're going to see but we're pretty early in the right you're one or two months in and kinda business pay 150 Bucks for a month to see if they can hang on here do whatever so.
So far we haven't seen it I don't know if we will see it in the future I don't know if government checks are helping but.
We just don't see that yet they often will be on auto pay also Michael and so it could be later that you see something like that so we just have not seen at at this level yet a lot of them are sole proprietors too.
Right and I guess the May collections. The the May has there been any difference in what you're seeing in the first five days of the month versus April.
Yeah ours is a little different Michael in that were anniversary date. So we really only seen five days or you know.
A small portion of the month, whereas many operators are first a month. So they get a better idea of collections are they on so ours is a very small sample size.
Right now is there anything in that 500 basis points of people, who didnt pay are able to break that down by region on a Ah that's the type of unit.
Bye.
Oh, yes.
Whether there was how much of it was the lack of being able to do an option just getting more granular on the people who didnt pay rent.
Yeah, we break it down by zero at a 30 30 to 60 and 16 greater and the ones that we typically crack and our you know are more aggressive on or 30, plus day, one zero to 30 most of those pay.
You know we also have more so.
No no more software.
Needs.
Let's say more to where they are right. So of that delinquency was there any regional impact was there any type of unit impact larger units for smaller units I'm just trying to get more granular on your national portfolio were certain regions.
You know like it was you back what's going on in California, where you know the moratoriums on Nov actions have told people you can't consumer tend to start with the pay.
The biggest trend I would tell you would be more cash payments versus credit card payments, meaning you know store that is 95% credit card, obviously is going to have west delinquency than somewhere that is.
60% cash payments and those typically are.
[music].
We have obviously fewer of those stores, but that's probably the biggest trend I'd point to.
And then just thinking about the cadence of same store NOI in terms of its components of revenue and expenses and I totally understand.
Of why you'd want to pull guidance given you're in a short lease duration sector and there's a lot of uncertainty and you don't want to be too aggressive nor do you want to be too conservative, but the industry. Just from an occupancy perspective is that a very different level because the industry has moved their occupancy levels up.
Higher than they've ever been before writing even you go back to the GFC. You know you guys are running in the mid eighties low to mid eighties PS. They obviously pursuing an Iraqi strategy was in the low Ninetys all industries now in that low nineties.
And I know part of that's just an operating side of things and all that was a greater adoption too.
But there's an element from the things sort of why perspective, just trying to frame how negative it couldn't be right and so we've been through two recession is the last 20 years, you're sort of high single digit declines in the early 2000. It was call. It mid single digit declines year over year on a quarterly basis.
Coming out of the GFC.
It is there any goalpost you can share with us, especially given the fact that when you came into this.
You really thinking things trying to why was gonna be 1%. This year rush right at 25 basis points. This year and I recognize you did better in the first quarter, but are there sort of things you can.
At least give us some goalpost on how we should be thinking about that.
Yeah, we can point to the last downturn, where we saw near 2.9% decrease in same store revenue growth our occupancy went down about 270 basis points.
There were similarities in that downturn, you know going in you had that we were coming on US office supply Ron last time. We're on you know we've had a lot of supply recently there was also differences I mean, this one going in as much more severe we stop you know I think everybody stop rate increases very quickly, whereas during the last downturn, we continued to do rate increases.
Yeah.
So theres similarities and differences and the very difficult frame and that's why we pull cadence.
Okay. Thank you.
Thanks, Michael.
Thank you as a reminder, ladies and gentleman that Star then one to ask the question.
Our next question as a follow up from Ki bin Kim with Suntrust. Your line is now open.
Thanks, just one isn't that question, but I know Joe you guys have prided yourselves on your culture and your employee engagement. So it's actually a good to see that actually translate into something quantifiable, which is typically never quantifiable.
On my follow up question.
You guys have tickled typically talked about.
Tenant turnover being about six to seven per cent per month.
At La times, it's the same space turning over so you can't just take that number times the street rate.
But when you take a step back or any account for the same space turning all the time.
What is the effect of turnover rate in a quarter.
And what does the effect of turnover rate in a year that we could apply the changes in street rates too.
I don't know that we've ever done the effective that math on an entire portfolio when it's going to be very different for us stable property versus a new property I mean, a new property doesn't have any long term tenants versus a property. This 20 years old could have some tenants that have been in there since day, one so an older property.
Has much lower turnover than new property.
Okay.
I see and.
Can you just talked about the New York City market, how much different wasn't New York City.
Her to your portfolio average that you saw in April.
In terms like operating metrics.
So New York City, not New York MSS in New York City had done negative 1% revenue.
Thanks.
Compared to the portfolio of 1.9%.
So.
Has been for several quarters and continues to lag behind the portfolio.
The other thing I would add Ki bin is they were more severely impacted by the rentals the decline in rentals as their stay at home orders were more strict than some of the more suburban markets that we've seen.
Okay. Thank you.
Thank you. Thank you for your comment Ki bin I appreciate it.
Thank you.
I'm not showing any further questions at this time I'd now like turn the call back over to Joe Margolis for any closing remarks.
Thank you all for your interest in extra space storage I wish everyone in their families.
Well and health through this difficult time and I'm sure. We'll talk soon thank you again.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating you may now disconnect.
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