Q2 2024 CubeSmart Earnings Call
Christina: Thank you for standing by. My name is Christina, and I will be your conference operator today. At this time, I would like to welcome everyone to the CubeSmart second quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.
Thank you for standing by my name is Christina and I'll be your conference operator today at this time I would like to welcome everyone to the cube Smart second quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
If he would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question you can press star one again.
Christina: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, you can press star 1 again. Thank you. At this time, I'd like to turn the call over to Joshua Schutzer, VP of Finance.
Thank you at this time I'd like to turn the call over to Josh it's their VP of finance.
Joshua Schutzer: Thank you, Christina. Good morning, everyone.
Josh: Thank you Christina good morning, everyone. Welcome to <unk> second quarter 2024 earnings call participants on today's call include Chris Marr, President and Chief Executive Officer, Jim Martin Chief Financial Officer, our prepared remarks will be followed by a Q&A session.
Joshua Schutzer: Welcome to CubeSmart's second quarter twenty twenty four earnings call. Participants on today's call include Chris Marr, President and Chief Executive Officer, and Tim Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q&A session.
Joshua Schutzer: In addition to our earnings release, which was issued yesterday evening, supplemental operating and financial data is available under the investor relations section of the company's website at www.cubesmart.com. The company's remarks will include certain forward-looking statements regarding earnings and strategy that involve risks, uncertainties, and other factors that may cause the actual results to differ materially from these forward-looking statements. The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to or files with the Securities and Exchange Commission, specifically the Form 8K we filed this morning, together with our earnings release filed with the Form 8K, and the risk factors section of the company's annual report on Form 8K.
Speaker Change: In addition to our earnings release, which was issued yesterday evening supplemental operating and financial data is available under the Investor Relations section of the company's website at Www Dot keeps Martin.
Speaker Change: The company's remarks will include certain forward looking statements regarding earnings and strategy that involve risks uncertainties and other factors that may cause the actual results to differ materially from these forward looking statements.
Josh: The risks and factors that could cause our actual results to differ materially from forward looking statements are provided in documents the company furnishes to or filed with the Securities and Exchange Commission specifically the form 8-K, we filed this morning together with our earnings release filed with the form 8-K, and the risk factors section of the company's annual report on Form 10-K.
Joshua Schutzer: In addition, the company's remarks include reference to non-GAAP measures. A reconciliation between GAAP and non-GAAP measures can be found in the second quarter financial supplement posted on the company's website at www.cubesmart.com. I will now turn the call over to Chris.
Josh: In addition, the company's remarks include reference to non-GAAP measures a reconciliation.
Josh: The liaison between GAAP and non-GAAP measures can be found in the in this can be found in our second quarter financial supplement posted on the company's website at Www Dot cube smart Dot com.
Josh: I will now turn the call over to Chris.
Chris Marr: Thanks, Josh. Good morning.
Chris: Thanks, Josh Good morning, Thank you all for joining our second quarter earnings call.
Chris Marr: Thank you all for joining us on the second quarter earnings call. Overall operating trends for CubeSmart during the quarter were largely in line with our expectations. Our same store portfolio experienced a 1.8% increase in rental compared to the second quarter of 2023; vacant units in the same store portfolio were flat to the second quarter of last year. Asking rates in that same store pool began the quarter down roughly 13% compared to the prior year and ended June negative 9.8% compared to the end of June last year.
Chris: Overall operating trends for Jim Smart during the quarter were largely in line with our expectations.
Chris: Our same store portfolio experienced a one 8% increase in rentals compared to the second quarter of 2023.
Josh: <unk> in the same store portfolio were flat to the second quarter of last year.
Chris: Asking rates in that same store pool began the quarter down.
Speaker Change: Roughly 13% to the prior year and ended June negative nine 8% compared to the end of June last year.
Chris Marr: Same store occupancy ended June 91-9, gaining 150 basis points during the quarter. We historically reach our seasonal peak in early August. However, over the last few years, those peaks had been shifting earlier in July, and this year, it now appears that peak occurred in late June.
Speaker Change: Same store occupancy ended June 91, nine gaining 150 basis points during the quarter.
Speaker Change: We historically reach our seasonal peak in early August over the last few years those peaks had been shifting earlier in July and.
Josh: And this year. It now appears that peak occurred in late June.
Chris Marr: This aligns with macro trends in the economy, housing, and consumer. Additionally, performance trends by market were consistent with the first quarter. The urban markets of New York, the DMV, the District of Columbia, Maryland, Virginia, Northern Virginia, and Chicago were all stronger performers across key metrics, while we continue to see softness along the west coast of Florida, in Atlanta, and Tucson, Arizona. Within New York City, the boroughs continue to outperform the overall MSA. As we are still feeling a bit of the residual impact of supply on Long Island, Westchester, and North Jersey.
Speaker Change: This aligns with the macro trends in the economy housing and the consumer.
Speaker Change: Performance trends by market were consistent with the first quarter the urban markets of New York.
Speaker Change: The DMV district of Columbia, Maryland, Virginia, Northern Virginia.
Josh: In Chicago were all stronger performers across key metrics.
Josh: While we continue to see softness.
Josh: Along the West coast of Florida.
Josh: In Atlanta, and Tucson, Arizona.
Josh: Within New York City in the boroughs continue to outperform the overall MSA as.
Josh: As we are still feeling a bit of the residual impact of supply.
Josh: On our long island, Westchester in North Jersey stores.
Chris Marr: Our third party management program continues to grow, and our balance sheet remains in excellent condition. I'd like to now turn the call over to our Chief Financial Officer, Tim Martin. Tim. Thanks, Chris.
Josh: Our third party management program continues to grow on our balance sheet remains in excellent condition.
Josh: Now I'll turn the call over to our Chief Financial Officer, Tim Martin.
Tim Martin: Thanks, Chris. Good morning, everyone. Thanks for taking a few minutes out of your day to join us.
Tim Martin: Thanks, Chris Good morning, everyone. Thanks for taking a few minutes out of your day to join US No big surprises in the second quarter as our results were right in the middle of our expectations same store revenues grew 3% compared to last year with average occupancy for our same store portfolio down about 110 basis points to 91, 5%.
Tim Martin: No big surprises in the second quarter, as our results were right in the middle of our expectations. Same store revenues grew 0.3% compared to last year, with average occupancy for our same store portfolio down about 110 basis points to 91.5%. Same store operating expenses grew 4.2% over last year, driven by continued pressure on property insurance, as well as a bit of a timing issue related to repair and maintenance costs relative to the timing of those costs last year.
Tim Martin: Same store operating expenses grew four 2% over last year, driven by continued pressure on property insurance as well as a bit of a timing issue related to repair and maintenance costs relative to the timing of those costs last year.
Tim Martin: So 0.3% revenue growth combined with 4.2% expense growth yielded negative 1.2% same-store NOI growth. And we reported FFO per share adjusted of 64 cents for the quarter, which was the midpoint of our guidance range. From an external growth perspective, we opened two development projects in New York for a total cost of $61.8 million.
Tim Martin: So 3% revenue growth combined with four 2% expense growth yielded negative one 2% same store NOI growth and we reported <unk> per share as adjusted of 64 cents for the quarter, which was the midpoint of our guidance range.
Tim Martin: From an external growth perspective, we opened two development projects in New York for a total cost of $61 8 million. We continued our disciplined approach to finding external growth opportunities on balance sheet.
Tim Martin: We continued our disciplined approach to finding external growth opportunities on the balance sheet. On the third-party management front, we had another productive quarter, adding 39 stores to our platform, bringing us to 879 stores under management at quarter end. Our balance sheet position remains strong, 4.3 times debt to EBITDA and effectively no floating rate exposure. We're really well positioned to support external growth opportunities with our available line of credit, access to liquidity, and our leverage capacity. I am looking forward to the second half of the year.
Tim Martin: On the third party management front, we had another productive quarter, adding 39 stores to our platform, bringing us to 879 stores under management at quarter end.
Tim Martin: Our balance sheet position remained strong for three times debt to EBITDA and effectively no floating rate exposure, we're really well positioned to support external growth opportunities with our available line of credit access to liquidity and our leverage capacity.
Tim Martin: Details of our 2024 earnings guidance and related assumptions were included in our release last night. We narrowed the guidance ranges for same store revenue, expenses, and NOI. The high end of our initial revenue guide implied an improvement in the housing market, which hasn't materialized. Taking that along with our performance through the rental season resulted in us narrowing our revenue guide to our current outlook of negative 0.75% to positive 0.25% growth for the year.
Tim Martin: Looking forward to the second half of the year details of our 2024 earnings guidance and related assumptions were included in our release last night.
Tim Martin: We narrowed the guidance ranges for same store revenue expenses and NOI.
Speaker Change: The high end of our initial revenue guide implies an improvement in the housing market, which hasn't materialized, taking that along with our performance through the rental season resulted in us narrowing our revenue guide to our current outlook of negative <unk>, 75% to positive two 5% growth for the year.
Tim Martin: We improved our expectation for same store expense growth based on year-to-date results as well as some slightly improved expectations for real estate taxes this year. When you bring those components down to same store NOI, the result is a narrowing of that range from negative 4% to 0% growth down to the middle of that range with our revised guidance at negative 3% to negative 1% growth, and then a very similar narrowing of our range on FFO per share as a result.
Tim Martin: We improved our expectation for same store expense growth based on year to date results as well as some slightly improved expectations.
Tim Martin: For real estate taxes this year.
Tim Martin: When you bring those components down to same store NOI. The result is a narrowing of that range from negative 4% to zero percent growth down to the middle of that range with our revised guidance at negative 3% to negative 1% growth.
Speaker Change: And then a very similar narrowing of our range on <unk> per share as a result.
Christina: That concludes our prepared remarks. Thanks again for joining us on the call this morning. At this time, Christina, I'll open the call.
Tim Martin: That concludes our prepared remarks, thanks again for joining us on the call. This morning at this time, Christina let's open coffers.
Tim Martin: Yeah.
Christina: At this time, I would like to remind everyone that in order to ask a question, please press star followed by the number one on your telephone keypad. Again, if you do have a question at this time, you can press star one. And please hold while we compile the Q&A roster. Thank you.
Christina: Thank you at this time I would like to remind everyone in order to ask a question. Please press star followed by the number one on your telephone keypad again, if you do have a question at this time you can press star one.
Speaker Change: Please hold while we compile the Q&A roster.
Christina: Your first question comes from the line of Josh Dennerlein from Bank of America. Your line is open. Joshua, are you there? Josh, just to make sure your line's not muted on your end. Again, your line is open. Okay, we're going to move on to the next question. Josh, if you would like to ask a question again, you can press star 1. And your next question comes from the line of Spenser Allaway from Green Street Advisors. Your line is open. Thank you, and thanks for all the color.
Speaker Change: Thank you. Your first question comes from the line of Josh Stirling from Bank of America. Your line is open.
Speaker Change: Josh.
Speaker Change: Josh just to make sure. Your line is not muted on your end again your line is open.
Speaker Change: Okay, we're going to move on to the next question Josh If you would like to ask a question again, you can press star one.
Chris Marr: Sure. Thanks, Spencer.
Christina: And your next question comes from the line of Spencer Alloway from Green Street Advisors. Your line is open.
Spencer Alloway: Thank you Alan and thanks for all the color in regards to move in rates during the quarter can you provide an update on where and then rents have trended thus far in <unk> and <unk>.
Speaker Change: You have any.
Speaker Change: Additional color you could share on how ECR eyes have been trending and customer sensitivity that'd be great.
Chris Marr: So the rate gap in July compared to last year's July moved out about 100 basis points from where we ended June, so a high negative 10% range in terms of the existing customer base. The existing customer base continues to be pretty healthy. We see lengths of stay, customers who have been with us for longer than two years, continue to be higher than pre-pandemic levels. The auction activity that we see, receivables, and write-offs, while all slightly increasing from what we saw at this point last year, all remain at or in line with pre-COVID levels. So at this point in the year, I continue to feel positive about the health of our existing. Okay, great. Thanks. That's awesome. Your next question comes from:
Spencer Alloway: Sure. Thanks Spencer so.
Speaker Change: The rate gap in July.
Speaker Change: To last year's July moved out about 100 basis points from where we ended June so high.
Speaker Change: Negative 10% range.
Speaker Change: In terms of the.
Speaker Change: Our existing customer base.
Speaker Change: The existing customer continues to be.
Speaker Change: Pretty healthy.
Speaker Change: We see lengths of stay.
Speaker Change: Customers, who have been with us for longer than two years.
Speaker Change: We continue to be higher than pre pandemic levels.
Speaker Change: The auction activity that we see receivables and write offs.
Speaker Change: While all slightly increasing.
Speaker Change: Increasing from what we saw at this point last year, all remain at or in line with pre COVID-19 levels. So.
Speaker Change: At this point.
Speaker Change: In the year continue to feel positive about the health of our existing customer base.
Speaker Change: Okay, great. Thanks, that's all for.
Speaker Change: For me.
Speaker Change: Thanks.
Christina: Your next question comes from the line of Steve Sakwa from Evercore ISI. Your line is open. Hi there, good morning.
Steve <unk>: Your next question comes from the line of Steve <unk> from Evercore ISI. Your line is open.
Speaker Change: Hi, there good morning, Thanks for taking my question I'm on for Steve You had a question around expense growth you guys lowered the guidance for expense growth can you elaborate more on different components, we are seeing less pressure.
Speaker Change: On the expense side.
Tim Martin: Yep, thanks for the question. So on our revised and improved expense guidance, part of it is that our year-to-date performance is reflected in there. And then the forward-looking item that has changed a bit is what I mentioned in prepared remarks, which is on the real estate tax line item. We have a bit of additional information in three of our large states that gives us a revised outlook for real estate tax growth to not be quite as high as we would have included in our original guidance range.
Speaker Change: Yes. Thanks for the question so on on our revised and improved expense guidance part of it is our year to date performance is reflected in there and then the forward looking item that has changed.
Speaker Change: A bit is what I mentioned in prepared remarks, which is on the real estate tax line item, we have a bit of a different additional information in three of our large states that gives us.
Speaker Change: Our revised outlook for real estate tax growth to not be quite as high as we would have included in our original guidance range.
Speaker Change: Sounds good. Thank you that's it for me.
Tim Martin: Sounds good. Thank you. That's it for me. Thanks so much.
Speaker Change: Thanks, so much.
Christina: Your next question comes from the line of Eric Wolfe from Citigroup. Your line is open.
Speaker Change: Your next question comes from the line of Eric Wolfe from Citigroup. Your line is open.
Tim Martin: Thanks, it's Nick Jessup here with Eric. Just following up on the ECR question, has there been any change in customers' willingness to accept the higher ECRIs? We're hearing about softening on the consumer, so just curious if you're feeling that at all on the ECRIs.
Speaker Change: Thanks, Nick Joseph here with Eric.
Nick Joseph: Just following up on the ECR question is there has there been any change in customers' willingness to accept the higher cri as we're hearing about softening.
Speaker Change: Tumors. So just curious if you're feeling that at all on HRS.
Chris Marr: Yeah, Eric, thanks for the question. So we watched that very carefully in terms of, you know, the metrics that I responded to Spencer's question, but as well as looking at the behavioral patterns of the existing customer post-receiving that rent increase, and we have not seen any discernible change in behavior as those existing customers have received a rate increase. But to your point on where we are with the consumer, certainly it's something that we pay very, very close attention to. But at this point, there is no discernible difference.
Speaker Change: Yes, Eric Thanks for the question So we watch that.
Eric Wolfe: Very carefully in terms of.
Speaker Change: The metrics that I responded to spenser's question, but as well as looking at the.
Speaker Change: Behavioral patterns of the existing customer post receiving that rent increase.
Speaker Change: And.
Speaker Change: We have not seen any discernible change in.
Speaker Change: Behavior.
Speaker Change: As a as those existing customers have received.
Speaker Change: A rate increase.
Speaker Change: But to your point on on where we are with the consumer.
Speaker Change: Certainly, it's something that we pay very very close attention to but at this point.
Speaker Change: No discernible change.
Chris Marr: Thanks, that's helpful. And then maybe just on New York City, which obviously continues to outperform. So just hoping you could talk about the trends you're seeing there and whether you think this outperformance is sustainable.
Speaker Change: Thanks, That's helpful. And then maybe just on New York City MSA continues to outperform so just hoping you could talk about the trends youre seeing there.
Speaker Change: Let me take this outperformance is sustainable.
Speaker Change: So again, we would expect to see.
Chris Marr: So, again, we would expect to see some deceleration in the New York market as we move through the balance of this year, just given where the fundamentals are, as we've discussed across the country. A very resilient customer, one who tends to stay longer, obviously rents a smaller amount of space and tends to use that cube on a more regular basis. Also, a nice combination of, you know, small businesses in the blocks around our store who are long-term customers. We certainly see softness in New York as it relates to the locker size, the smallest size cubes. That is where, obviously, the consumer can remove their possessions and literally carry them down the street if they wish to switch up.
Speaker Change: Some deceleration.
Speaker Change: In the New York market as we move through the balance of this year, just given where.
Speaker Change: Fundamentals are as we've discussed across the country.
Speaker Change: Very resilient customer customer, who tends to stay longer obviously rents a smaller amount of space and tends to use that cube.
Speaker Change: On a more regular basis also a nice combination of.
Speaker Change: Small business in the <unk>.
Speaker Change: Blocks around our store, who are long term customers, we certainly see.
Speaker Change: Softness in New York as it relates to the locker sized the smallest size.
Speaker Change: <unk>.
Speaker Change: That is where.
Ken: Obviously, the consumer Ken.
Speaker Change: Remove their possessions and literally carry them down the street, if they wish to switch up and we've seen.
Speaker Change: Incredibly aggressive pricing from some of our competitors, particularly in Manhattan on those really small sized cubes, but outside of that business continues to be very positive.
Chris Marr: And we've seen incredibly aggressive pricing from some of our competitors, particularly in Manhattan, on those really small-sized cubes. But outside of that, business continues to be very positive. In terms of by borough, in the Bronx, where we have not seen any additional supply since, boy, probably going on now a year and a half, you see good, solid kind of mid-six, same store, revenue growth in the second quarter Brooklyn, which, you know, in fact, does have some residual impact of supply, but has seen some pretty good trends around consumer behavior and demand actually posted the highest same store revenue growth of the boroughs in the quarter.
Ken: In terms of by borough.
Speaker Change: In the Bronx, where we have not seen any additional.
Speaker Change: The supply since Ah boy, probably going on now year and a half.
Speaker Change: You see good solid kind of mid six same store.
Speaker Change: Revenue growth in the second quarter of Brooklyn, which in fact does have some residual impact of supply, but has seen some pretty good trends around.
Speaker Change: Consumer behavior and demand actually posted the highest same store revenue growth of the boroughs in the quarter.
Chris Marr: And then in Queens, again, a little bit of a different market, you have a little more single-family homes, they are a little bit more space, and continue to be a good, you know, a good performer, kind of right behind the Bronx, Staten Island, we only have a small presence there, it's seen some supply. And then, you know, Manhattan is competitive, certainly has seen supply. We have our own one store there on 55th Street.
Speaker Change: And then in Queens.
Speaker Change: Again, a little bit of a different market you have a little more single family homes. They are a little bit more space continues to be a good.
Speaker Change: Good performer.
Speaker Change: Right behind the Bronx, Staten Island, we only have a.
Speaker Change: Small presence there had seen some supply and then Manhattan as competitive certainly has seen supply we have our one store there on 55th Street's doing well, but certainly I think Manhattan is a little bit of a different animal at this moment given the supply you move out into the New Jersey, Westchester Long Island.
Chris Marr: It's doing well, but certainly, I think Manhattan's a little bit of a different animal at this moment, given the supply. You move out into New Jersey, Westchester, Long Island, feeling good that New Jersey is stabilizing after the supply impact, still have a little ways to go on Long Island, and Westchester is doing fine. So that's, that's kind of the New York MSA in the boroughs in a nutshell.
Chris Marr: Thank you; that's very helpful.
Speaker Change: Feeling good that new Jersey is stabilizing after the supply impact still have a little ways to go in long Island and Westchester is doing fine. So that's that's kind of the New York MSA in the boroughs.
Speaker Change: Thank you that's very helpful.
Christina: And your next question comes from the line of Michael Goldsmith from UBS. Your line is open.
Speaker Change: And your next question comes from the line of Michael Goldsmith from UBS. Your line is open.
Chris Marr: Good morning. Thanks a lot for taking my question. As the new customer is seemingly more price sensitive, are you seeing any major changes to conversion rates or balking at the final page of online checkout? And with that, how has top of funnel demand changed?
Michael Goldsmith: Good morning, Thanks for taking my question as the new customer is seemingly more price sensitive are you seeing any major changes to conversion rates are balking at the final page of online checkout and with that how has top of funnel demand trended.
Chris Marr: Yeah, thanks, Mike. [inaudible] No change in conversion rate as the customer goes through the funnel, whether that be online or through a call to our sales center. So I have seen that be fairly constant over the last three or four quarters. From a top-of-funnel demand perspective, again, I think it's indicative of how we thought about guidance back in February and kind of where we are today. We're not seeing the, you know, demand levels, or the improvement in the single-family home for sale market that would have driven us towards the more bullish end of our expectations as we described them back in February. Conversely, we're not seeing the combination of factors that would have taken us towards the more bearish end.
Speaker Change: Yes, Thanks, Michael.
Speaker Change: No change in conversion rate as the customer goes through.
Speaker Change: It goes through the funnel, whether that be online or in a call to our sales center. So have seen that be fairly constant over the last.
Speaker Change: Three or four quarters.
Speaker Change: From a.
Speaker Change: From a top of funnel demand perspective.
Speaker Change: Again, I think it's indicative of how.
Speaker Change: How we thought about guidance back in February and kind of where we are today.
Speaker Change: Not seeing the.
Speaker Change: The demand levels the improvement in the.
Speaker Change: And the single family homes for sale market that would have driven us towards the more bullish end of our expectations as we describe them back in.
Speaker Change: February Conversely, we're not.
Speaker Change: Not seeing that combination of factors that would have taken us towards the towards the more bearish and so it just sort of navigates as you would expect given the macro background.
Chris Marr: So it just sort of navigates as you would expect, given the macro background, just a little bit less movement, which is creating a little bit less top of the funnel demand, particularly in the markets I called out as soft. You know, the combination of new supply, along with a little bit less demand and movement inquiries in that Tampa to Naples corridor has made that west coast of Florida particularly challenging here over the last couple of years.
Speaker Change: Just a little bit less movement, which is creating a little bit less top of funnel demand, particularly in the markets I called out is soft the combination of new supply.
Speaker Change: Along with.
Speaker Change: A little bit less demand and movement inquiries in that Tampa enables corridor has made that west coast of Florida, particularly challenging here over the last couple of months.
Speaker Change: Got it and as a follow up.
Tim Martin: Got it. And as a follow-up, Tim, you know, it seemed like other income grew pretty maturely during the quarter. Can you walk through what's in that line and what influenced the strong growth this quarter? Thanks.
Speaker Change: It seemed like other income grew pretty materially during the quarter can you walk through what's in that line and.
Speaker Change: And what influenced the strong growth this quarter. Thanks.
Tim Martin: Thanks, Michael. So, a couple drivers of the growth in other property-related income. We've been able to generate some additional fee income across a variety of categories as we continuously refine our fee structure and our approach. Those fees include administrative, late, and payment convenience fees. We also capture our solar credits on that line item, and so some of that growth reflects the benefits of our expanded solar program. So it's a combination of those things that is leading to some nice growth in that line item.
Speaker Change: Thanks, Michael So a couple of drivers of the growth in other property related income we've been we've been able to generate some additional fee income across a variety of categories as we as we continuously refine our fee structure and our approach.
Speaker Change: Fees include administrative late and payment convenient fees.
Speaker Change: We also capture our solar credits on that line item and so some of that growth reflects the benefits of our expanded solar program. So it's a combination.
Speaker Change: Those things that are leading to some nice growth in that line item.
Tim Martin: Did that have an influence on the New York market because that kind of accelerated pretty materially in the quarter? Yeah, I mean, it did.
Speaker Change: Did that have an influence on the New York market.
Speaker Change: The kind of accelerated pretty.
Speaker Change: Pretty materially in the quarter. Thank you.
Tim Martin: Yeah, I mean, I guess on a relative basis, it had a little bit more proportionate impact there. But it's similar, similar trends across the portfolio, and the changes that we have made are universal across all markets.
Speaker Change: Yes.
Speaker Change: I guess on a relative basis that had a little bit more proportionate impact there, but it's similar similar trends across the portfolio. The changes that we have made.
Speaker Change: Our universal across all markets.
Speaker Change: Thank you very much.
Speaker Change: I appreciate it.
Christina: Your next question comes from the line of Hong Zeng from JP Morgan. Your line is open.
Speaker Change: Your next question comes from the line of Hong Zhang from J P. Morgan Your line is open.
Chris Marr: Hey guys, you've kept advertising expenses relatively stable for the past year or so. I'm just kind of wondering what your thoughts are on that category and why not spend more to potentially get more inbound leads and more customers.
Hong Zhang: Yes, Hey, guys.
Speaker Change: So you.
Hong Zhang: You've kept advertising expense relatively stable for the past year or salaries kind of wondering what your thoughts are on that category why not why not spend more in Q4.
Speaker Change: Essentially get more.
Speaker Change: More customers.
Chris Marr: Yeah, thanks for the question. I think I think it depends upon the lens that you view that spend through. If you think about our spend, and how we do it seasonally, but also as a percentage of revenues, we are fairly aggressive as it relates to our overall marketing spend. In terms of just the seasonal move, obviously, if you look at last year from Q1 to Q2, there was a pretty significant uptick in spend.
Speaker Change: Yes. Thanks for the question. So I think I think it depends upon the lens that you view.
Speaker Change: That spend through if you think about our spend.
Speaker Change: And how we do it seasonally but also as a percentage of revenues.
Speaker Change: We are we are fairly.
Speaker Change: Aggressive as it relates to our overall marketing spend.
Speaker Change: In terms of just the seasonal move obviously, if you look at last year from Q1 to Q2 pretty significant uptick in spend similarly pretty significant up tick in spend this year.
Chris Marr: Similarly, pretty significant uptick in spend this year. As I've said all along, I would expect that when we get to the end of the year, marketing spend will be up a little bit higher than just pure inflationary levels. I continue to believe that that will be the case, but ultimately, it's an ROI-based decision. We need to see an opportunity to generate those incremental rentals at a cost below the lifetime value of that customer for us to increase spend. In pockets, we've seen that, and at times, we've seen that when it is, we'll be aggressive, and when that opportunity is not there, we've tended to pull back a little bit.
Speaker Change: I've said, all along I would expect that when we get to the end of the year the marketing spend will be up a little bit higher than just pure inflationary levels continue to believe that that will be the case, but ultimately it's an ROI based decision we need to see an opportunity to generate those incremental rentals at a cost.
Speaker Change: Although our lifetime value of that customer for us too.
Speaker Change: The increased spend.
Speaker Change: Pockets, we've seen that at times, we have seen that when it is we'll be aggressive.
Speaker Change: That opportunity is not there we've tended to pull back a little bit.
Chris Marr: Got it, and for my follow-up, if there's been a lot of higher expectations of the Fed cutting rates going into the end of the year, do you think that's enough for street rates to potentially break even next year, or do you think something more needs to happen for that to occur?
Speaker Change: Got it and for my follow up I guess, there's been a lot a lot higher expectations of the fed cutting rates going into the year.
Speaker Change: Do you think that.
Speaker Change: For street rates potentially breakeven next year, where diesel something more needs to happen for that.
Speaker Change: Okay.
Speaker Change: Yeah. That's a great question. Thanks for asking so so you could be in the optimistic camp to say, if we really experience.
Chris Marr: Yeah, that's a great question. Thanks for asking.
Chris Marr: So, you could be, you know, in the optimistic camp to say if we really experienced, I guess now they're counting on three and maybe one that's 50 basis points between now and the end of the year. There is an optimistic case to say. Ultimately, does that translate into what drives mortgage rates, and if we see a decline in mortgage rates as a result? There is pent-up demand, I firmly believe, for single-family home transactions.
Speaker Change: I guess now they're counting on three and May be one that's 50 basis points between now and the end of the year. There is a optimistic case to say.
Speaker Change: Ultimately does that translate into what drives.
Speaker Change: Mortgage rates and if we see a decline in mortgage rates as a result.
Speaker Change: There is a pent up demand I firmly believe for single family home transactions.
Chris Marr: And this could be, you know, could be the catalyst for folks to feel a lot better about buying and selling a home. And if that is, in fact, true, we may get some assistance late this year in terms of some transactions that maybe, in normal history, would have taken place in May and June but will take place late in the year. Certainly, it could be a very good setup for 2025. So I'm not counting on that, obviously, in our expectations that Tim outlined, but certainly today has been an interesting day. Yeah, thanks.
Speaker Change: And this could be a.
Speaker Change: It could be the catalyst for <unk>.
Speaker Change: Folks to feel a lot better about buying and selling of <unk>.
Speaker Change: And if that is in fact true.
Speaker Change: We may get some assistance late this year in terms of some transactions that maybe in the normal history would have taken place in May and June but take place late in the year certainly could be a very good setup for.
Speaker Change: For 2025.
Speaker Change: Not counting on that obviously in our expectations that Tim outlined but.
Speaker Change: But certainly today has been an interesting they are at.
Chris Marr: Yeah, thanks. Have a great weekend.
Speaker Change: Yes, thanks have a great weekend.
Speaker Change: Thanks.
Eric <unk>: Your next question comes from the line of Eric <unk> from Wells Fargo. Your line is open.
Christina: Your next question comes from the line of Eric Luebchow from Wells Fargo. Your line is open.
Eric Luebchow: Great. Thanks for taking the time to answer the question. Maybe you could provide a little more color on what the transaction environment looks like. I know you've talked in the past few calls about a pretty wide bid-ask spread, maybe narrowing a little bit, but it seems like most in the industry have said that activity is still relatively quiet. What does your pipeline look like today? Where are you seeing cap rates for stabilized assets that fit your underwriting criteria? And in the absence of material M&A in the pipeline, how do you think about other forms of capital return, between dividends and buybacks?
Eric Wolfe: Alright, great. Thanks for taking the question, maybe you could provide a little more color on what the transaction environment looks like I know you've talked in the past few calls about a pretty wide bid ask spread maybe narrowing a little bit but it seems like most in the industry have said that activity is still relatively quiet so.
Speaker Change: What does your pipeline look like today, where are you seeing cap rates for stabilized assets that fit your underwriting criteria and in the absence of <unk>.
Speaker Change: Material M&A in the pipeline how do you think about other forms of capital return between between dividends and buybacks. Thank you.
Chris Marr: Thank you. Yeah, good morning, Eric. Thanks for the question.
Chris Marr: Yeah, good morning, Eric. Thanks for the question.
Speaker Change: Yes, good morning, Eric Thanks for the question I wish I had something.
Speaker Change: New and exciting to share with you, but we find ourselves in a very similar situation as we've been discussing here for <unk>. It seems like several straight quarters. At this point is that we had seen and have seen a narrowing of the bid ask spread we have we've been pursuing some transactions, where we're much closer to <unk>.
Speaker Change: Transacting than we had been but obviously in our in our results you saw that nothing nothing got across the finish line seasonally acquisitions in our sector tend to be weighted to the back half of the year as sellers tend to like to put their books together and sell off of higher occupancy levels and peak rates for the year. So.
Speaker Change: Back half of the year is still a bit of an unknown.
Speaker Change: We are we are actively looking at a lot of different opportunities and there remains a bid ask spread, albeit narrowed from from where it had been several quarters ago. So.
Chris Marr: I wish I had something, something new and exciting, to share with you. But we find ourselves in a very similar situation, as we've been discussing here for what seems like many, several straight quarters at this point, that is, we have seen and have seen a narrowing of the bid-ask spread. We have, we've been pursuing some transactions where we are much closer to transacting than we had been. But obviously, in our results, you saw that nothing, nothing got across. So, as I talked last time we were together on this call, it feels like we're getting closer, but we're not quite there yet.
Speaker Change: As I talked last time, we were together here on this call. It feels like we're getting closer, but we're not quite there yet so really nothing new.
Speaker Change: As it relates to alternative.
Speaker Change: Forms of capital and our dividend policy has been pretty consistent we look we think our payout ratio.
Speaker Change: Is pretty appropriate.
Speaker Change: And we would think about dividend growth over time being plus or minus about about the same growth we would see in cash flow.
Speaker Change: Our most attractive opportunities arent redevelopment opportunities I wish we had more of them but.
Speaker Change: But we do pursue those we have a handful of things that we're still working on that are coming out of our storage West acquisition. A couple of years ago that are some nice opportunities that we continue to pursue theyre not necessarily needle moving.
Chris Marr: So really nothing new as it relates to alternative forms of capital. I mean, our dividend policy has been pretty consistent. We look, and we think our payout ratio is pretty appropriate. There are some nice opportunities that we continue to pursue. They're not necessarily needle-moving, but it's an area of focus for us. So we continue to underwrite and look for great opportunities that are consistent with our investment strategy at returns that make sense for us. And we've been patient; we'll remain patient and are optimistic that some things are going to break loose here, and hopefully sooner than later.
Speaker Change: It's an area of focus for us. So we continue to underwrite look for great opportunities that are consistent with our investment strategy at returns that make sense for us.
Speaker Change: Ben patient will remain patient and are optimistic that some things are going to break loose here in <unk>.
Speaker Change: Sooner than later.
Tim Martin: Great. Thanks, Tim.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Juan Sanabria from BMO capital markets. Your line is open.
Christina: Your next question comes from the line of Juan Sanabria from BMO Capital Markets. Your line is open.
Christina: Hey, this is Robin sitting here with Juan. On the SFO guidance, what drives the implied back half acceleration?
Robin: Hi, This is robin sitting here with one.
Speaker Change: <unk> guidance.
Speaker Change: What's the implied back half acceleration.
Tim Martin: The back half, meaning first half FFO per share versus second half FFO per share? Yeah, I mean, it's typically our seasonality of our business, and the strength of the rental season results in, second half of the year is almost every year higher FFO per share in the back half than in the front half. So that's a pretty seasonal norm for us, and this year is no exception to that.
Speaker Change: The back half <unk> first half <unk> per share versus second half <unk> per share.
Speaker Change: Yes.
Speaker Change: Yes, it's typically are.
Speaker Change: Seasonality of our business and the strength of the rental season results in.
Speaker Change: Second half of the year is almost every year.
Speaker Change: Higher <unk> per share in the back half than in the front half. So that's that's a pretty seasonal norm for us in this year is no exception to that norm.
Speaker Change: Okay and on a same store revenues.
Christina: Okay, and on SEMSER revenues, what's the revised assumption now on street rates, and when do you expect to hit parity?
Speaker Change: A revised assumption now on street rates and when do you expect to hit parity year over year.
Tim Martin: I'm sorry, so street right question the gap on street rates year over year and when we expect to hit parity. Yeah, I'll jump in. Thanks.
Speaker Change: I'm sorry, so so street rate question, the gap on street rates year over year and.
Speaker Change: And when we expect to hit parity.
Speaker Change: Yes.
Speaker Change: Band It close the gap.
Chris Marr: Thanks. So again, I think when you look at the volatility that we're seeing certainly in the market this morning, it just goes to the difficulty in pinpointing that question with any specificity. I think that in our Guidance, as implied, we continue to track towards kind of where we thought we would be at the beginning of the year. The high end implied that we would see that parity sometime late in summer. That's obviously off the table.
Speaker Change: Yep. Thanks, So again I think when you look at.
Speaker Change: The volatility that we're seeing in certainly in the market. This morning. It just goes to the difficulty in <unk>.
Speaker Change: Pinpointing that question with with any specificity I think that in our.
Speaker Change: Guidance as as as implied we continue to track towards kind of where we thought we would be at the beginning of the year. The high end implied that we would see that parity sometime late summer Thats, obviously off the table.
Chris Marr: And I think at this point, given where everything is, it's just going to be incredibly difficult to predict with any precision. Our expectation at this point is that we will not see that parity in 2024. When we will see it in 2025, it's incredibly difficult to predict. As I said, if today's movements are indicative of any sort of relief on the mortgage side, that could set up a nice backdrop for 2025, but it's too soon to tell.
Speaker Change: And I think at this point, given where everything is it's just going to be incredibly difficult to predict with any precision.
Speaker Change: Our expectation at this point is that we do not see that parity in 2024, when when we will see it in 2025, it's incredibly difficult to.
Speaker Change: To predict as I said, if today's movements are indicative of any sort of relief on the mortgage side that could set up a nice backdrop for 2025, but too soon to tell.
Speaker Change: Got it thank you.
Speaker Change: Thanks.
Christina: And once again, if you do have a question at this time, you can press star 1 on your telephone keypad. Again, if you do have a question, please press star 1 on your telephone keypad. Your next question comes from the line of Todd Thomas from KeyBank. Your line is open.
Speaker Change: And once again, if you do have a question at this time you can press star one on your telephone keypad again, if you do have a question. Please press star one on your telephone keypad.
Speaker Change: Your next question comes from the line of Todd Thomas from Keybanc. Your line is open.
Todd Thomas: Hi, thanks. I just have a couple quick questions for you.
Todd Thomas: Hi, Thanks, just a couple of quick questions for me first I think Chris you said that the peak rental season.
Chris Marr: First, I think, Chris, you said that the peak rental season peaked towards the end of June a little bit earlier than in prior years. You know, any sense of sort of what really drove that specifically? And then, sorry if I missed it, but did you speak about occupancy in July and how that compares year over year?
Speaker Change: Pete.
Pete: In towards the end of June a little bit earlier than than in prior years.
Todd Thomas: Any sense on sort of what what really drove that specifically and then sorry, if I missed it but did you speak about occupancy in July and how that compares year over year.
Chris Marr: Thanks, Todd. So I think one of the reasons certainly has to tie back to the housing market and a dearth of transactions there. I think, again, you typically see that That home move drag into July, historically, towards the end of July, and I think what we've seen over the last couple of years as the housing market has been slower than historical norms, it's just kept pushing that seasonality a little bit earlier into the process. Occupancy, as of July 31st, was 91.4%.
Pete: Thanks, Todd So I think one of the one of the reasons.
Speaker Change: Certainly has to tie back to the to the housing market and a dearth of transactions. There I think again, you typically see that.
Speaker Change: That home move drag into July historically towards the end of July and I think what we've seen over the last couple of years as the housing market has been.
Pete: Slower than historical norms, it's just keep pushing that.
Speaker Change: Analogy.
Speaker Change: A little bit earlier into the into the process.
Speaker Change: Occupancy as of July 31st was 91, 4%.
Chris Marr: Okay, and what does that look like year-over-year?
Speaker Change: Okay.
Speaker Change: That looked like year over year.
Chris Marr: Compared to July 31st of last year, it was down 1.3%.
Speaker Change: GAAP to July 31 of last year.
Speaker Change: It was down one 3%.
Tim Martin: Okay, that's helpful. And then I just wanted to go back to the other property income. Tim, you talked about some of the components there, you know, some of the fees, the solar credits, I think your tenant protection, you know, fees run through that too. Is that all in the same store, your comments about some of that, or was that just regarding the consolidated other property income line?
Speaker Change: Okay.
Tim Martin: My comments were focused on the same store component, the tenant insurance that you refer to as not in our same store, um, fees. The variety of fees that I mentioned, the solar credits are in the same store, and they were what I was alluding to tenant insurance not semester.
Speaker Change: Paul and then I just wanted to go back to the other property income.
Speaker Change: Tim you talked about some of the components there some of the fees the solar credits.
Paul: Thank your tenant protection.
Speaker Change: If these run through that too.
Speaker Change: Is that all in in the same store your comments about some of that or was that just regarding the consolidated other property income line.
Speaker Change: My comments will focus on the same store component.
Speaker Change: The tenant insurance that you referred to is not in our same store.
Speaker Change: Fees the variety of fees that I that I mentioned in the solar credits are in same store and they were what I was alluding to tenant insurance not so much.
Tim Martin: Okay, I got it. And then I'm just curious about the growth in that line for the same store. In the first quarter, there was not really a big contribution to same store revenue growth. However, this quarter, it did have a big impact, and it increased $2 million sequentially. So it had a decent impact on the growth rate year over year, but also just the run rate in general. Did something happen specific to the quarter, and is it expected to be maintained at this level moving forward, or should we reflect that in the run rate going forward and think about an adjustment heading into the third quarter? Yeah, I think so.
Speaker Change: Okay got it and then.
I'm just curious about the growth in that line for the same store in.
Speaker Change: In the first quarter, there was not really a big contribution to same store revenue growth. This quarter. It did have a big impact and it increased $2 million sequentially.
Speaker Change: So had a had a decent impact on the growth rate year over year, but also just the run rate general did something happen specific to the quarter and is expected to be maintained at this level moving forward or are should we reflect that in our run rate going forward and think about an adjustment heading into the third.
Quarter.
Tim Martin: Yeah, I think many of the changes that we made were not one-time changes that are going to be, you know, a second quarter blip up and then return back to prior levels. Our expectation is that that line item should – there's going to be seasonality trends to it, but that line item, year over year, we should see some continued outsized growth in that line item over the next couple of quarters.
Speaker Change: Yes, I think I think many of the changes that we made.
Speaker Change: We are not one time changes that are going to be.
Speaker Change: Second quarter blip up and then return back to prior levels. Our expectation is is that that line item should.
Speaker Change: There's going to be seasonality trends to it.
Speaker Change: But that line item year over year, we should we should see some continued outsized growth in that line item over the next couple of quarters.
Todd Thomas: Okay. All right. That's helpful. Thank you.
Speaker Change: Okay, Alright thats helpful. Thank you.
Speaker Change: Sure.
Christina: Your next question comes from the line of Brendan Lynch from Barclays. Your line is open.
Speaker Change: Your next question comes from the line of Brendan Lynch from Barclays. Your line is open.
Brendan Lynch: Great, thanks for taking my question. You mentioned in the prepared remarks about the peak season or demand peaking in June versus the traditional August. If you were to expect this to occur next year, how would it inform your street rate and ECRI approach?
Brendan Lynch: Great. Thanks for taking my question you mentioned in the prepared remarks about the peak season or the demand, peaking in June versus the traditional August. If you were to expect this to occur next year, how would you confirm your street rate and Cri approach.
Speaker Change: Yes, thanks for the question I think.
Chris Marr: Yeah, thanks for the question. I think the concept then is when do you have that sort of customer peak that then translates primarily into occupancy and rent rates for new customers. And then when does that begin its seasonal decline? As we think about the drivers of that for next year, you know, absolutely, it will have to inform where we believe that will occur. That then translates into how we see seasonal trends in the back half of the year, in terms of both that occupancy and that rate?
Brendan Lynch: Thanks.
Speaker Change: <unk>.
Speaker Change: The concept then is when do you have that sort of customer peak.
Speaker Change: That then translates primarily into occupancy.
Speaker Change: And rent rate for new customers and then when does that begin its seasonal.
Speaker Change: Decline.
Speaker Change: As we think about the drivers of that for next year, absolutely. It will have to inform where we believe that will occur that then translates into how do we see the seasonal.
Speaker Change: Trends in the back half of the year in terms of both that occupancy in that range. So it's a factor.
Chris Marr: So it's a factor in terms of how we would think about, you know, budgeting for our stores in 2025. But I think, again, we're going to be fortunate to have more information here, in August, September, October, before we have to kind of dig into those budgets.
Speaker Change: In terms of how we would think about Bud.
Speaker Change: Budgeting for our stores in 2025, but I think again, it's it's.
Speaker Change: Yes.
Speaker Change: We're going to be fortunate to have more information here August September October before we have to kind of dig into those budgets.
Speaker Change: Okay. That's helpful. Thank you and then on the fees that you're pushing on clients how much more aggressive do you think you can be before facing customer resistance I would imagine this is something that is.
Chris Marr: Okay, that's helpful, thank you. And then on the fees that you're pushing on clients, how much more aggressive do you think you can be before facing customer resistance? I would imagine this is something that is being AB tested to kind of fill in where customers are. And maybe just ask a question, at what point do customers become aware that they're going to be facing these fees relative to when they're signing up for a unit?
Speaker Change: <unk> be tested to kind of fill out.
Speaker Change: Where customers are.
Speaker Change: Maybe just a related question.
Speaker Change: At what point do customers become aware that theyre going to be facing these fees relative to win there.
Speaker Change: Signing up for.
Speaker Change: Our unit.
Chris Marr: Yeah, thank you.
Chris Marr: Yeah, I think the fees are disclosed and increasingly disclosed as it relates to fees that are, again, a variety of things, ranging from the administrative fee that a customer pays when they initially rent, and that really ties in with when you think about an administrative fee; it is really part and parcel to the initial rental. So, it gets mixed in with the rental rate and how you think about that, how you think about any type of promotion or discount, administrative fee, all that stuff goes together.
Speaker Change: Yes, I think the fees are disclosed an increasingly disclosed as as it relates to fees that are.
Speaker Change: Again variety of things ranging from the administrative fee that the customer pays in there first when they initially of rent.
Speaker Change: And that really ties in with when you think about an administrative fee.
Chris Marr: For us, it happens to be recorded on a different line item, but it's all part of that initial cost, which is disclosed and very available for a customer to understand. The other fees that are late fees or payment convenience fees are all disclosed at the time and are highly visible to the customer. From a customer's point of view, how much can the customer take? I mean, that's consistent with anything else as it relates to how much can we push on rates for new customers, what are the opportunities to increase rates to existing customers, fees just fall into that same category.
Speaker Change: But it's all part of that initial cost, which is which is disclosed in and very available for our customer to understand the other fees that are late fees or or.
Speaker Change: Sure.
Speaker Change: Payment convenience fees are all disclosed at the time and our highly visible to the customer from how much can the customer.
Speaker Change: I mean, that's consistent with anything else as it relates to how much can wait how much can we push on rate for new customers. What are the opportunities to increase rates to existing customers be it just fall into that same category youre constantly looking for continued refinement and optimization across all of those different revenue streams.
Chris Marr: You're constantly looking for continued refinement and optimization across all of those different revenue streams, and we found some opportunities to be a little bit more efficient, a little bit more profitable on some of those line items, which is what you're seeing flow through into the results.
Speaker Change: And.
Speaker Change: We found some opportunities too.
Speaker Change: To be a little bit more efficient more profitable and some of those line items, which is what which is why youre seeing flow through onto the results.
Tim Martin: Great. Thanks, Tim.
Speaker Change: I appreciate it.
Christina: Your next question comes from the line of Josh Dennerlein from Bank of America. Your line is open.
Speaker Change: Your next question comes from the line of Josh <unk> from Bank of America. Your line is open.
Josh Dennerlein: Yeah, guys, thanks for the time. I guess I'm just trying to think through like the evolution of the in-place rent per occupied square foot from here. I guess moving rates, it seems like they're under pressure, but the existing customer seems fine. So just kind of, any kind of gives or takes we should think about as this metric goes up and down from here?
Josh Stirling: Yeah, Hey, guys. Thanks for the time I guess I'm, just trying to think through like the evolution of the in place rent per occupied square foot square foot from here I guess move in rates. It seems like they are under pressure, but the existing customer seems fine so just kind of.
Speaker Change: Kind of like gives or takes we should think about how this metric was up and down from here.
Chris Marr: Yeah, Josh, ultimately, for the industry, we need to see the rate for the new customer moving in go up. And again, absent seeing that, you're going to see overall results that continue to be in line with what we've experienced thus far this year. So, you know, again, what's gonna drive that is, you know, a combination of things. Certainly, market forces and competition are one; supply is another; consumer health and behavior are a third; and demand drivers are a fourth.
Speaker Change: Yes, Josh ultimately for the industry.
Speaker Change: We need to see.
Josh Stirling: The rate for the new customer moving in.
Speaker Change: <unk> built up.
Speaker Change: And again absent <unk>.
Speaker Change: Absent, saying that youre.
Speaker Change: Youre going to see overall results that continue to.
Speaker Change: Be in line with what we've experienced thus far this year so.
Speaker Change: Again, what's going to drive that is a combination of things certainly.
Speaker Change: Market forces and competition are one supply is another and consumer health and behaviour third and demand drivers fourth so some combination of those four.
Chris Marr: So some combination of those four factors will ultimately lead to, you know, again, this closing of the gap between the rates for new customers moving in and where they were last year. And again, we have the question as to when that will happen. I don't quite have that crystal ball refined, but it will. And at that point, then you will go back to having that nice blend of new customers coming in at a higher rate year over year, and the growth that you get from that, that also tends to have a bit of a positive effect on the asking increases for the existing customer base.
Speaker Change: Four factors will ultimately lead to.
Speaker Change: This closing of the gap between.
Speaker Change: Rates for new customers, moving in and where they had been last year.
Speaker Change: And again, we've had the question as to when that will happen don't quite have that crystal ball refined but it will and at that point. Then you will go back to having that nice blend of.
Speaker Change: New customers coming in at a higher rate of year over year and the growth that you get from that that also then tends to have a bit of a positive effect on the.
Speaker Change: Asking increases for the existing customer base.
Speaker Change: And then you kind of get back into that 20 year trend of.
Chris Marr: And then you kind of get back into that 20-year trend of self-storage revenue growth, but ultimately, we need to see the combination of those four things work in some way together to get that new customer rate up.
Speaker Change: Self storage revenue growth, but ultimately we need to see the combination of those four things work in some way together to get that new customer right.
Sure.
Josh Dennerlein: Okay, no, I appreciate that. That's good for me. Thank you. Thank you.
Speaker Change: Okay, No I appreciate that Doug.
Speaker Change: Good for me thank you.
Speaker Change: Thank you.
Christina: Once again, if you do have a question, please press star 1 on your telephone keypad. Thank you. If you have no further questions, I'll turn the call back over to Chris Marr.
Speaker Change: Thank you with no further questions I will turn the call back over to Chris Maher.
Chris Marr: Thank you. Thank you, everyone, for participating in this second quarter call. We look forward to seeing many of you in the early fall, and we'll speak to everyone again when we report for the third quarter. Thank you, and enjoy the rest of the summer.
Chris Maher: Thank you thanks, everyone for participating in this second quarter call, we look forward to.
Seeing many of you in the early fall and we'll speak to everyone again, when we report for the third quarter.
Speaker Change: Enjoy the rest of the summer.
Christina: Thank you. This does conclude today's conference call. You may now disconnect. Have a great day.
Speaker Change: Thank you. This does conclude today's conference call. You may now disconnect have a great day.
Speaker Change: [music].