Financial Data and Key Metrics Changes - Same store occupancy reached 94.6%, up 60 basis points year over year and 120 basis points sequentially from the first quarter [7] - Same store revenue growth was flat in the quarter, but there was positive year over year rate growth for new customers for the first time since March 2022 [8][11] - Core FFO guidance for the full year is maintained at $8.15 per share, with same store revenue growth anticipated between negative 0.5% and positive 1% for the full year [11][18] Business Line Data and Key Metrics Changes - The company completed one acquisition for $12 million and bought out two joint venture partners' interests in 27 properties for $326 million [9] - The bridge loan program generated $158 million in new originations, while the third-party management program added 93 stores, expanding the managed portfolio to 1,749 stores [9][10] Market Data and Key Metrics Changes - The self-storage sector continues to show resilience, with geographic diversification helping to offset softer conditions in certain regions [10] - New customer rates improved year over year by over 2% in July, indicating positive trends [22] Company Strategy and Development Direction - The company is focused on balancing pricing and occupancy to maximize revenue while pursuing strategic growth to enhance long-term shareholder value [11] - A multichannel approach combining opportunistic acquisitions and capital-light activities is being employed to create value regardless of market conditions [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while near-term revenue growth remains muted, operational discipline and investment strategy position the company well to navigate current conditions [11] - The company is optimistic about gradually improving fundamentals and expects potential acceleration in revenue growth in the second half of the year, particularly in the fourth quarter [18] Other Important Information - Same store expenses increased by 8.6%, primarily due to higher property taxes in certain states [16] - The company maintains 89% of its debt at fixed rates, with a weighted average interest rate of 4.4% and an average maturity of 4.3 years [17] Q&A Session Summary Question: Update on street rates and occupancy trends - Occupancy remained flat at 94.6% in July, with new customer rates up over 2% year over year [22] Question: Factors affecting gradual rate improvement - It takes time for positive new customer rates to flow through to revenue, with a gradual build-up expected [24] Question: Impact of LSI portfolio on same store performance - The LSI portfolio is performing as expected, with rates improving faster than Extra Space rates [37] Question: Expectations for same store revenue growth - Same store revenue growth is expected to be slightly positive in the back half of the year, with potential acceleration in the fourth quarter [44] Question: Insights on property tax expenses - Property tax increases are expected to normalize in the second half of the year [51] Question: Demand and market health - Demand is steady, and the company is capturing a disproportionate share of the market, with occupancy levels indicating a healthy market [56] Question: Future of bridge loan products - Demand for bridge loans remains strong, with no imminent paybacks expected from preferred holders [62] Question: Disposition strategy for LSI assets - The company is disposing of 22 former LSI properties to optimize the portfolio [65] Question: Market performance in NYC and Chicago - NYC saw modestly negative same store revenue, while Chicago experienced acceleration in revenue progress [71] Question: Housing market impact on storage demand - A strong housing market would be beneficial but is not necessary for recovery [75] Question: Seasonal expectations for leasing - The company expects the second half of the year to align with prior expectations, maintaining higher occupancy levels [81] Question: Customer behavior and ECRI acceptance - Existing customers are staying longer, with bad debt below 2%, indicating a healthy customer base [83] Question: Competitive dynamics in acquisition market - The company remains active in evaluating acquisition opportunities but will only pursue deals that are accretive [105]

Financial Data and Key Metrics Changes - The company reported core FFO per share of $0.54 for Q1 2025, a 10% decline from the prior year due to decreased same store NOI and increased interest expense [13] - Same store revenues declined by 3%, driven by a 190 basis point decrease in average occupancy and a 1% year-over-year decrease in average revenue per square foot [13] - Expense growth was 3.7% in Q1, with marketing, repairs and maintenance, and utilities being the main drivers, partially offset by a decrease in personnel costs [13][14] Business Line Data and Key Metrics Changes - The company experienced a sequential improvement in same store revenue growth by 130 basis points year-over-year, with all but three reported same store markets showing improvement [6] - Contract rates increased approximately 5% in April compared to Q1 levels, while occupancy increased by 20 basis points to finish April at 83.8% [8][10] - The ECRI program continues to perform well, with the length of stay above historical averages and bad debt expense within expected ranges [7] Market Data and Key Metrics Changes - Portland and Houston were highlighted as top-performing markets, with Portland delivering positive revenue growth and Houston generating 2.2% revenue growth in the quarter [10][12] - The company noted a steady flow of acquisition opportunities despite broader economic uncertainty, successfully closing on three assets totaling approximately $40 million during the quarter [11] Company Strategy and Development Direction - The company is focused on operational improvements following the Pro transition, leveraging consolidated operating platforms and upgraded marketing tools to enhance customer acquisition and pricing strategies [7][12] - The management expressed confidence in the self-storage sector's resilience and noted significant investor interest, as evidenced by the recent IPO of a peer company [12] Management's Comments on Operating Environment and Future Outlook - Management believes they have found a trough in fundamentals, with encouraging trends in contract rents and an improving supply outlook [11] - The company expects to see sequential improvement in same store NOI growth as the year progresses, despite anticipating negative growth in the second quarter [16][30] Other Important Information - The company has no debt maturities in 2025 and a current revolver balance of $444 million, providing approximately $500 million of availability [15] - The company is actively managing its portfolio, planning to exit markets where they have single assets and focusing on improving operational efficiencies [97] Q&A Session Summary Question: Can you provide perspective on the recent contract rate increase and occupancy trends? - Management noted that sequential improvements in contract rates and occupancy were observed, with a positive trend in move-in rates as well [20][21] Question: What are the expectations for revenue growth in the second half of the year? - Management indicated that while the second quarter is expected to be negative for revenue and NOI, they anticipate positive growth in the back half of the year [30][31] Question: How are promotions and discounts trending for new tenants? - Management confirmed that while there has been an increase in promotional discounts, they remain within historical ranges and are being used strategically to attract new tenants [60][61] Question: What are the current demand drivers for self-storage? - Management highlighted various demand drivers, including transitions, small businesses, and residential needs, while noting that the lack of home sales is currently impacting occupancy [100][101] Question: How does the company view the impact of tariffs on tenants? - Management stated that while tariffs could potentially impact tenants, they have not yet seen any direct effects or feedback from customers regarding this issue [117]