Financial Data and Key Metrics Changes - The company reported core FFO per share of $0.55 for Q2 2025, an 11% decline from the prior year, primarily due to decreased same store NOI and increased interest expense [13][17]. - Same store revenues declined by 3%, driven by a lower average occupancy of 240 basis points and a year-over-year decline in average revenue per square foot of 30 basis points [13][15]. - Same store NOI growth was negative 6.1% for the quarter, with expense growth at 4.6%, mainly due to property taxes, marketing, repair and maintenance, and utilities [13][15]. Business Line Data and Key Metrics Changes - The company sold 10 properties in non-core markets and acquired one property in Texas and an annex in California, focusing on improving balance sheet metrics [7][8]. - The occupancy rate increased by 140 basis points sequentially during Q2 to finish at 85%, with further improvement to 85.3% in July [10]. - RevPath improved for five consecutive months, with the year-over-year delta decreasing from 4.2% in February to 1.6% in July [11]. Market Data and Key Metrics Changes - The company noted continued pressure from new supply in several markets, which has impacted performance more than expected [6]. - The housing market remains challenging, with no meaningful improvement in macroeconomic conditions affecting occupancy and revenue [5][6]. - The company expects new supply to decline over the next few years, supporting an improving supply-demand backdrop [9]. Company Strategy and Development Direction - The company is focused on improving its portfolio and occupancy position through increased marketing spend and the use of concessions [9]. - Management remains confident in the outlook for NSA, expecting to realize full benefits from the pro internalization as the housing market recovers [8][9]. - The company is being disciplined in capital allocation, balancing share repurchases with potential acquisitions [26][27]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the elevated use of concessions during the quarter was a near-term drag on revenues [7]. - The company is optimistic about the potential for recovery in the housing market, particularly in Sunbelt and suburban markets [9]. - Management believes they have hit bottom in fundamentals and are starting to see positive trends operationally [10]. Other Important Information - The company has ample liquidity with no significant debt maturities until 2026, maintaining a revolver balance of $400 million [16]. - The adjusted guidance for 2025 includes same store revenue growth of negative 2% to 3% and core FFO per share of $2.17 to $2.23 [17]. Q&A Session Summary Question: Can you walk through the scenarios for the updated guidance? - Management explained that the revised guidance is primarily anchored to same store revenue growth, with expectations of seasonal occupancy trends and the impact of higher discounts and concessions [20][21]. Question: How are you thinking about share repurchases? - Management views the current stock price as attractive and plans to balance share repurchases with capital allocation for acquisitions [26][27]. Question: How is the ECRI strategy performing in light of market pressures? - Management reported no significant changes in the ECRI program and noted that they are adjusting their approach based on customer behavior and churn [31][32]. Question: What is the competitive landscape like in your markets? - Management indicated that new supply has likely peaked in many markets, leading to more stability in asking rents and occupancy levels [51][52]. Question: Can you elaborate on the green shoots in your new marketing strategy? - Management highlighted improvements in visibility scores and top-of-funnel demand due to increased marketing spend and rebranding efforts [55][56]. Question: What are the challenges with the pro internalization? - Management noted that challenges are more market-driven rather than specific to individual pro properties, with some markets being particularly competitive [90][91]. Question: How many properties are earmarked for sale? - Management confirmed they have identified properties for potential sale and are evaluating strategies for reinvestment in the portfolio [96][97].