Financial Data and Key Metrics Changes - Q2 AFFO per share was $0.36, with the first half performance largely on track despite ongoing market pressures [7][24][26] - Same store economic occupancy declined slightly in Q2 compared to Q1, with expectations for a decrease of approximately 250 to 450 basis points for the year [3][24] - Same store rent and storage revenue for economic occupied pallets increased by approximately 1% year over year, while same store services revenue for throughput pallets increased by 4% [5][9] Business Line Data and Key Metrics Changes - The retail and QSR business segments are positioned near the top of the portfolio in terms of cash flow generation, with a rent and storage revenue from fixed commitments at 60% for the quarter [4][10] - Warehouse services margins improved by 90 basis points year over year to 13.3% for the quarter, reflecting enhanced productivity from a dedicated workforce [4][5] Market Data and Key Metrics Changes - The market remains highly competitive, with pricing pressure expected to continue into the second half of the year due to various economic headwinds [32][34] - The company has successfully converted over 80% of previously announced $200 million in probability-weighted sales, although occupancy ramp for new customers is taking longer than expected [12][24] Company Strategy and Development Direction - The company is focused on controlling costs, improving efficiencies, and capturing new business, particularly in the retail and QSR sectors [8][24] - Development projects completed in Q2 include expansions in Allentown, Kansas City, and Dubai, showcasing the company's ability to leverage strategic partnerships and expertise [15][17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook for the second half of the year, citing ongoing demand headwinds and a conservative view of the market [7][24][26] - The company is actively pursuing alternative growth opportunities in underserved geographies and focusing on investments that align with customer needs [8][22] Other Important Information - The company completed three planned exits of idled facilities for total cash proceeds of $20 million, with plans to exit six more facilities [28] - Total net debt outstanding at the end of the quarter was $3.9 billion, with total liquidity of approximately $937 million [27] Q&A Session Summary Question: How competitive is the current pricing environment? - The storage market remains very competitive, with pricing pressure expected to continue until occupancy growth returns. The company has developed tools to balance price and occupancy effectively [32][34] Question: Can you provide details on fixed commitments? - Fixed commitments are structured as multiyear agreements with fixed monthly fees, allowing customers to secure space during peak seasons without annual volume resets [38][40] Question: What factors are suppressing revenue growth in the second half of the year? - Several headwinds, including pricing pressure and unique demand challenges, are impacting revenue growth. The combination of these factors makes it difficult to forecast occupancy and price [44][48] Question: How is the company managing capital deployment and return hurdles? - The company aims for a return of 10% to 12% on new capital deployments, focusing on low-risk projects that align with customer demand [50][52] Question: What is the outlook for occupancy in Q3 and Q4? - The company does not expect any seasonal uplift in the second half, with occupancy levels anticipated to remain similar to the first half of the year [55][56] Question: Are there any catalysts for increasing inventory levels among customers? - Improvement in macroeconomic factors is necessary for demand to increase, as customers are currently facing multiple headwinds [58][61]