Financial Data and Key Metrics Changes - The company reported Core FFO per share of $0.57 for Q4 2025 and $2.23 for the full year, at the high end of guidance [10][11] - Same-store revenue growth declined by 70 basis points in Q4, an improvement from a 260 basis point decline in Q3 [6][11] - Year-over-year occupancy improved, finishing the year down 70 basis points compared to a 140 basis point decline at the end of Q3 [6][7] Business Line Data and Key Metrics Changes - The company consolidated another brand, reducing the number of remaining brands to six, and formed a preferred equity investments platform [7] - Same-store revenues for the full year declined by 2.3%, with nine out of 21 markets delivering positive revenue growth [11] - Expenses declined by 80 basis points in Q4, while growing 3.1% for the year, benefiting from expense control efforts [12] Market Data and Key Metrics Changes - The company experienced sequential improvement in same-store revenue growth each month of Q4 [5] - January occupancy was up 20 basis points year-over-year, indicating positive momentum into 2026 [7][10] - The company noted that new supply in the self-storage market is stable and projected to decline over the next few years [8] Company Strategy and Development Direction - The company is focused on driving internal growth through increased marketing spend and competitive pricing strategies [9] - The portfolio optimization program will remain active in 2026, prioritizing scaling in markets while generating proceeds for deleveraging [13] - The company aims to maintain a leverage target of 5.5x-6.5x net debt to EBITDA [15][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of housing turnover and its positive impact on self-storage demand [8] - The company anticipates a steady improvement in same-store revenue growth throughout 2026, with a focus on disciplined expense controls [16][21] - Management acknowledged the potential for external factors, such as housing affordability initiatives, to positively impact the market [100][102] Other Important Information - The company completed the sale of three assets for $24 million during the quarter and has additional properties under contract [13] - The company has ample liquidity with a current revolver balance of approximately $400 million [14] - The guidance for 2026 includes same-store revenue growth of 90 basis points and Core FFO per share of $2.19 [16] Q&A Session Summary Question: Guidance for revenue growth improvement - Management indicated that the transitioning is complete, and the platform is working effectively, leading to confidence in revenue growth [20][21] Question: Expense growth components for 2026 - Management highlighted property taxes and marketing expenses as significant components, with expectations for personnel costs to remain flat [25] Question: Drivers of January occupancy increase - Management attributed the increase to higher marketing spend, effective pricing strategies, and improved conversion rates [32][34] Question: Trends in move-in rates and ECRI - Management noted that move-in rates may be negative for the first few months of the year but expected to improve later [42][44] Question: Dividend payout ratio and coverage - Management acknowledged that the guidance implies not covering the dividend this year but expects to cover it by the end of 2026 [84][85] Question: Performance in high supply vs. low supply markets - Management indicated that markets with heavy competition are slower to improve, while those with stable demand are performing well [88][89]

Financial Data and Key Metrics Changes - The company reported Core FFO per share of $0.57 for Q4 2025 and $2.23 for the full year, at the high end of guidance, indicating operational improvements [9][10] - Same-store revenue growth declined by 70 basis points in Q4, a significant improvement from a 260 basis point decline in Q3, with year-over-year occupancy improving by 70 basis points [4][10] - Expenses declined by 80 basis points in Q4, while growing 3.1% for the year, benefiting from expense control efforts, particularly in payroll costs [11] Business Line Data and Key Metrics Changes - The company consolidated another brand, reducing the number of remaining brands to six, and exited five states while selling 15 properties totaling $97 million [5] - The company acquired 10 properties totaling $75 million across joint ventures and on balance sheet, indicating active portfolio management [5] Market Data and Key Metrics Changes - Nine out of 21 reported markets delivered positive revenue growth, with same-store revenues declining 2.3% for the full year [10] - The company noted that new supply in the self-storage market is stable and projected to decline over the next few years, which could positively impact demand [6] Company Strategy and Development Direction - The company is focused on driving internal growth through increased marketing spend, competitive pricing, and solid execution from the sales process [8] - The strategy includes capital recycling and reinvesting in properties while also expanding through acquisitions, with a focus on markets that show potential for operational efficiencies [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of housing turnover and the potential for increased self-storage demand due to government initiatives addressing home affordability [6][100] - The company anticipates steady improvement in same-store revenue growth throughout 2026, with a focus on disciplined expense controls [14][19] Other Important Information - The company has ample liquidity with a current revolver balance of approximately $400 million, providing $550 million of availability [13] - The guidance for 2026 includes same-store revenue growth of 90 basis points and Core FFO per share of $2.19, with expectations for continued improvement in occupancy and revenue [14] Q&A Session Summary Question: Guidance for revenue growth improvement - Management indicated that the transition is complete, and the platform is working effectively, leading to confidence in revenue growth for 2026 [18][19] Question: Expense growth components - The main components of expense growth include property taxes and marketing expenses, with expectations for personnel costs to remain flat [24][25] Question: January occupancy improvement drivers - The improvement in occupancy is attributed to higher marketing spend, effective pricing strategies, and improved conversion rates [30][32] Question: Move-in rate trends - Management expects move-in rates to be negative for the first few months of the year due to tougher comps but anticipates a return to neutral or positive rates later in the year [42][57] Question: Dividend payout ratio - The company expects to be light on covering the dividend in 2026 but anticipates returning to full coverage by the end of the year [85][86] Question: Market performance based on supply - Markets with heavy competition are slower to improve, while those with stable supply are showing positive growth in rates and occupancy [88][89]