Financial Data and Key Metrics Changes - The company raised its outlook for 2025 based on stabilizing operations and accelerated acquisitions, which reached $785 million closed or under contract year to date [5] - Same store revenue growth increased for the second consecutive quarter, with rental rates up 0.6% and occupancy gap improving to down 40 basis points from down 80 basis points at the start of the year [11] - Core FFO grew by 1.2% in the quarter, with FFO growth accelerating by 240 basis points from the second quarter of last year [12] Business Line Data and Key Metrics Changes - The West Coast, Washington D.C., and Chicago markets showed same store revenue growth in the 2% to 4% range [6] - Ancillary businesses, including tenant insurance and third-party management, are expanding, contributing to overall revenue growth [7] - The non-same store pool is expected to generate approximately $470 million of high growth NOI in 2025, with an additional $110 million coming through stabilization in 2026 and beyond [7] Market Data and Key Metrics Changes - The transaction market is up year over year by 10% to 15%, with a healthy pipeline of acquisitions and development opportunities [21] - Los Angeles is expected to return to a higher growth market once fire-related pricing restrictions end, despite current challenges [6][19] - Orange County revenues were up 3% in the second quarter, indicating strength in the broader West Coast market [32] Company Strategy and Development Direction - The company is focused on enhancing its competitive advantages through customer and employee-centric technologies, optimizing service options, and expanding its portfolio through acquisitions and development [5][7] - International growth is being pursued, with potential partnerships in Australia and New Zealand, alongside successful operations in Europe [8][123] - The company is leveraging its strong capital position to fund growth, with a $648 million development pipeline to be delivered over the next two years [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the self-storage market, particularly in Los Angeles, once current restrictions are lifted [19][63] - The company anticipates continued improvement in demand and revenue growth across various markets, with a focus on submarket-specific opportunities [37][128] - Management highlighted the importance of monitoring legislative efforts in California that could impact the business, maintaining a proactive approach [75] Other Important Information - The company is investing in automation and operational efficiencies to drive margin expansion and improve customer satisfaction [40] - The impact of the recent legislation, including bonus depreciation, is expected to provide opportunities for reinvestment into the development business [108] Q&A Session Summary Question: Update on July operating trends and guidance implications - Management indicated that July trends are consistent with expectations, with occupancy gaps closing and rental rates stabilizing [16][19] Question: Insights on acquisition pipelines and market dynamics - The transaction market is showing increased activity, with a focus on submarket-specific opportunities for acquisitions [21][24] Question: Impact of lower apartment turnover on self-storage demand - Management noted that lower turnover can be beneficial for self-storage, as renters may seek additional space due to affordability issues [99] Question: Discussion on the ECRI program and rate increases - Management highlighted consistent trends in customer price sensitivity and rent increases, with expectations for modest contributions from existing customer rent increases [104] Question: Cap rates and yields for acquisitions - Management reported that cap rates for transactions remain stable, with yields generally in the 5% to 6% range [115] Question: International growth opportunities and benefits from SureGuard - The company is leveraging its relationship with SureGuard to optimize operations in international markets, with confidence in future growth opportunities [123]

Investment Rating - The report maintains a Neutral rating for Big Yellow (BYG.L) with a 12-month price target of 1,110p, implying a 12.5% upside from the current price of 987p [1][33]. Core Insights - Revenue growth is expected to decelerate due to a subdued demand environment, with occupancy forecasted to remain stable at around 80.3% to 81% for FY26E and FY27E [2][3]. - The company's balance sheet is strong, with a net debt to EBITDA ratio of 3.1x and a loan-to-value ratio of 12.8%, the lowest in the sector [3][4]. - Valuation appears fair, trading at a 6.3% earnings yield, above its long-term average of 4.6%, and at a 31% discount to net tangible assets (NTA) [4][28]. Revenue and Occupancy - Revenue growth is projected to slow, with occupancy rates expected to stabilize at 80.3% in FY26E and 81% in FY27E, compared to 79.1% in FY24/25 [2][36]. - The average rent achieved has declined to 3.2% year-on-year since its peak of 8.6% in FY23 [20][36]. Financial Performance - Adjusted EPS forecasts for FY26E to FY28E have been updated with a change of -2% for FY26E and a 0% change for FY27E [1][32]. - The forecasted total revenue for FY26E is £183.2 million, with a projected EBITDA of £133.9 million [14][36]. Development Pipeline - Big Yellow has a development pipeline of 14 sites, with 9 currently under construction, expected to generate a net operating income (NOI) of £36.6 million, yielding 8.7% [3][36]. Valuation Metrics - The report indicates that Big Yellow's valuation reflects both upside and downside risks, with a current earnings yield of 6.3% and a significant discount to NTA [4][28]. - The forecasted dividend yield is expected to increase from 4.2% in FY25 to 5.2% by FY28 [11][36].

Investment Rating - The report maintains a Neutral rating for Big Yellow (BYG.L) with a 12-month price target of 1,110p, implying a 12.5% upside from the current price of 987p [1]. Core Insights - Revenue growth is expected to decelerate, with occupancy forecasted to remain stable at around 80.3% to 81% for FY26E and FY27E, compared to 79.1% in FY24/25. Rate growth has moderated to 3.2% year-on-year, down from a peak of 8.6% [2][3]. - The balance sheet is solid, with a net debt to EBITDA ratio of 3.1x, an interest coverage ratio of 6.1x, and a loan-to-value ratio of 12.8%, the lowest in the sector. The development pipeline includes 14 sites, with 9 under construction, expected to generate a net operating income (NOI) of £36.6 million [3]. - Valuation appears fair, trading at a 6.3% earnings yield, above its long-term average of 4.6%, and at a 31% discount to net tangible assets (NTA), below its long-term average of 0% [4]. Revenue and Earnings Forecast - Revenue is projected to grow from £177.8 million in FY25 to £216.5 million in FY28, with adjusted EPS estimates for FY26E to FY28E showing minimal changes of 0% to -2% [1][14]. - The forecasted EPS for FY26E is 59.55p, with a dividend yield expected to increase from 4.2% in FY25 to 5.2% in FY28 [11][14]. Financial Metrics - The report highlights that the average net achieved rent per square foot has declined to 3.2% year-on-year, down from a peak of 8.6% [20]. - The company’s leverage is noted to be the lowest among its peers, with a net debt to property value ratio of 13% [22]. Market Context - The demand environment remains subdued, with forward demand indicators showing a 3% year-on-year decline in prospect numbers for FY24/25 and a decrease in Google searches for self-storage options [2][18]. - The broader UK economic context is characterized by low growth and global macroeconomic uncertainty, which may continue to impact occupancy and revenue growth [2][25].

Financial Data and Key Metrics Changes - Core FFO per share for Q1 2025 was reported at $0.54, a 10% decline from the prior year due to decreased same store NOI and increased interest expense [11] - Same store revenues declined by 3%, driven by a 190 basis point decrease in average occupancy and a 1% decrease in average revenue per square foot [11][12] - Expense growth was 3.7%, primarily due to increases in marketing, repairs and maintenance, and utilities, partially offset by a decrease in personnel costs [11][12] Business Line Data and Key Metrics Changes - The existing customer base remains healthy, with a successful ECRI program and a length of stay above historical averages [6] - Contract rates increased approximately 5% in April compared to Q1 levels, while occupancy increased by 20 basis points to 83.8% [7][11] - Same store NOI growth was negative 5.7%, but showed sequential improvement from the previous quarter [12] Market Data and Key Metrics Changes - Portland and Houston markets showed positive revenue growth, with Portland being a top performer due to successful pricing and ECRI program implementation [8][10] - The company closed on three assets totaling approximately $40 million and sold two properties for $10 million during the quarter [9] Company Strategy and Development Direction - The company is focused on operational improvements and realizing benefits from consolidated operating platforms and upgraded marketing tools [6][10] - There is a disciplined approach to acquisitions amidst economic uncertainty, with expectations for more transactions in the coming months [9] - The self-storage sector is viewed as resilient, with significant investor interest demonstrated by recent IPOs in the sector [10] Management's Comments on Operating Environment and Future Outlook - Management believes they have found a trough in fundamentals and are encouraged by the trajectory of contract rents and improving supply outlook [9][10] - The company expects a moderately better spring leasing season than last year, with improving pricing power and occupancy through summer months [16] - Management remains cautious about the impact of economic conditions and tariffs but has not seen direct effects on business so far [9][10] 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 [13] - New disclosures in the supplemental package include contract rent per square foot for in-place customers and move-ins/move-outs to assist with modeling [15] Q&A Session Summary Question: Can you provide perspective on the increase in contract rates and occupancy? - Management noted sequential improvement in contract rates and occupancy, with positive trends in move-in rates and overall revenue maximization efforts [18][19] 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 year-over-year, they anticipate positive growth in the back half of the year [26][27] Question: How are promotions and discounts trending for new tenants? - Management confirmed that concessions remain within expected ranges, with a slight increase in promotional discount usage to attract new tenants [56] Question: What is the current state of the transaction market? - Management reported steady deal flow and a disciplined approach to acquisitions, with expectations for material movement on dispositions [41][44] Question: How is the company addressing occupancy challenges? - Management stated that vacate activity remains muted compared to last year, and they are focused on balancing revenue and occupancy strategies [70][71] Question: What are the current demand drivers for self-storage? - Management highlighted various demand drivers, including transitions, small business needs, and residential storage requirements, while noting challenges due to low home sales [96][98]

Financial Data and Key Metrics Changes - The company reported FFO per share of $0.64, which was a penny above the high end of guidance [6][10] - Same store revenue growth decreased by 0.4% year over year, an improvement from a decline of 1.6% in the previous quarter [8][10] - Average occupancy for the same store portfolio was down 50 basis points to 89.5%, narrowing from a decline of 120 basis points in the fourth quarter [9][10] - Same store operating expenses grew by only 0.6% year over year, better than expectations [10][12] Business Line Data and Key Metrics Changes - The company closed on the acquisition of the remaining 80% interest in a joint venture, acquiring a portfolio of 28 early-stage lease-up stores [11] - The third-party management platform added 33 stores, ending the quarter with 869 third-party stores under management [12] Market Data and Key Metrics Changes - Strong markets such as New York City boroughs, Chicago, and Washington D.C. continue to show strength, while supply-impacted markets like Northern New Jersey, Phoenix, and Atlanta are stabilizing [7][12] - In Texas markets, Dallas is facing challenges due to supply and pricing decisions, while Austin shows signs of recovery [34][35] Company Strategy and Development Direction - The company remains focused on optimizing its platform while maintaining high customer service standards [6][10] - The management expressed confidence in the long-term health of the self-storage industry due to the quality and geographic diversity of its portfolio [7][12] - The company is cautious about the economic environment, maintaining a conservative outlook for gradual improvement in operational metrics in 2025 [13] Management's Comments on Operating Environment and Future Outlook - Management noted uncertainty in the economy affecting consumer decisions, which could impact storage demand [13] - The company does not foresee improvement in the housing market and expects a gradual recovery without sharp reacceleration [13] - Management highlighted the resilience of the self-storage business, noting that demand drivers include everyday life events and business needs [18][19] Other Important Information - The balance sheet remains strong with a net debt to EBITDA ratio of 4.8 times [12] - The company is monitoring the impact of macroeconomic factors on its operations and is prepared to adjust strategies accordingly [13][54] Q&A Session Summary Question: What are the drivers of demand in the current environment? - Management indicated that demand is driven by everyday life events and business needs, despite a slow housing market [18] Question: What was occupancy in April? - Occupancy ended at 89.9% in April, showing a slight improvement [21] Question: How does the company view the leasing season? - Management expects a muted leasing season compared to pre-pandemic levels, with no significant growth anticipated [30] Question: What is the outlook for Texas markets? - Management noted that while Austin is recovering, Dallas faces challenges due to supply and competitive pricing [34][35] Question: How is the company managing expenses? - The company has been proactive in managing staffing and operational expenses, leading to better-than-expected results [50] Question: What is the strategy for acquisitions? - The company is open to acquisitions but faces challenges due to market volatility and seller expectations [53][54] Question: How does the company view potential recession impacts? - Management believes the self-storage business is resilient during economic downturns, with demand potentially increasing due to life changes [88][90]