Good day, ladies and gentlemen, and welcome to the Q3 2018 Extra Space Storage Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, this I would now like to turn the conference over to Mr. Jeff Norman.
Sir, you may begin.
Thank you, Lisa. Welcome to Extra Space Storage's Q3 2018 earnings call. In addition to our press release, we have furnished unaudited supplemental financial information on our website. Please remember that management's prepared remarks and to your questions may contain forward looking statements as defined in the Private Securities Litigation Reform Act. Actual results could differ materially from those stated or implied by our forward looking statements due to risks and uncertainties associated with the company's business.
These forward looking statements are qualified by the cautionary statements contained in the company's latest filings with the SEC, which we encourage our listeners to review. Forward looking statements represent management's estimates as of today, Wednesday, October 31, 2018. The company assumes no obligation to revise or update any forward looking statements because of changing market conditions or other circumstances after the date of this conference call. I would now like to turn the call over to Joe Margolis, Chief Executive Officer.
Thank you, Jeff. Good morning, everyone. Thank you for joining us for our Q3 call and for your interest in Extra Space Storage. 2018 is playing out as we expected as we move into the last couple of months of the year. Revenue, NOI and FFO growth are all solid and remain within guidance and expectations.
Occupancy continues to be strong ending the quarter at 93.9%, twenty basis points above 20 seventeen's mark. This is especially encouraging because last year's quarter end occupancy benefited from the hurricanes. We continue to have solid rate growth, which was partially offset by increased but expected discounts, resulting in same store revenue growth of 3.2%. The year over year impact from discounts should taper off in the 4th quarter and we project higher same store revenue growth. External growth was also strong in the quarter.
We continue to be selective and disciplined in our acquisition efforts, but have been able to find acquisitions with acceptable risk adjusted returns primarily through existing relationships. By year end, we expect to have acquired over $1,000,000,000 in properties with extra space investing approximately $600,000,000 Between acquisitions and third party management contracts, we have added 140 stores through the quarter. We have more than 500 third party properties and a total of 7 34 stores including joint ventures. Our report related to new supply remains generally unchanged. We are seeing an impact from new supply in certain submarkets and its impact varies by location.
New starts appear to be down in many MSAs already saturated with new development and activity is migrating to markets where there may be a better yield. We continue to see delays in deliveries and see many proposed projects being abandoned. Our highly diversified portfolio, while certainly not immune to the effects of new supply, reduces volatility and our sophisticated platform is better prepared to respond to competition than ever before. At this time last year, we were reporting the impact hurricanes had on our customers, our employees and our properties. Unfortunately, the Southeast experienced severe weather again, but I am happy to report that our portfolio was relatively unscathed.
We did not have any material disruption with customers or employees and damage to our properties was minimal. I would now like to turn the time over to Scott.
Thanks, Joe, and happy Halloween, everyone. Last night, we reported core FFO for the quarter of $1.20 per share. Rental rates to new customers continue to be solid. Throughout the quarter, our achieved rental rate was up approximately 3% to 4% year over year. As expected and as discussed on our last call, discounts as a percentage of revenue were also up, partially offsetting revenue growth.
As Joe mentioned, we anticipate the impact from discounts to decrease in the 4th quarter resulting in an increase in same store revenue growth. We saw expense growth normalize in the Q3 and we were successful in minimizing increases in our controllable expenses. Property taxes, while elevated, were in line with our expectations. The increase in insurance premiums was not a surprise due to the elevated level of property claims caused by last year's hurricanes. We also chose to invest more in marketing in the quarter, allowing us to grow rates and keep our stores full heading into the fall and winter.
We continue to execute our leverage neutral balance sheet strategy. During the quarter, we increased the percentage of unsecured debt and the size of our unencumbered pool and further laddered our maturities. We are also in the process of increasing and extending our credit facility. In the quarter, we sold 34,000,000 on our ATM at an average price of $99.75 per share. We also disposed of 1 property in California for $40,700,000 The property was sold at a below market cap rate for an alternative use and we anticipate the reinvested proceeds will produce a significantly higher yield.
This store as well as 3 other stores with large expansions or redevelopment projects were removed from our same store pool consistent with our same store definition changing our total same store number to 783 properties. We have updated our guidance and annual assumptions for 2018. Our same store revenue guidance remains unchanged. We have increased the bottom end of our same store expense growth by 25 basis points. We have tightened our same store NOI guidance by 25 basis points at both the top and bottom end of the range with the midpoint unchanged.
We increased our core FFO guidance by 0 point 0 $5 at the midpoint. FFO guidance includes $0.06 of dilution from value add acquisitions and an additional $0.14 of dilution from C of O stores for total dilution of $0.20 The lease up of these properties continues to exceed underwriting expectations as a portfolio and will generate long term growth for our shareholders. With that, let's turn the call back over to Jeff to start our Q and A. Thank you, Scott. In order to ensure that we have adequate time to address everyone's questions, I would ask that everyone keep your initial questions brief.
If time allows, we will address follow on questions once everyone has had an opportunity to ask their initial questions. With that, Lisa will start our Q and A.
Thank I have the first question is coming from Jeremy Metz of BMO Capital. Your line is open.
Hey, good morning guys. Joe, on the supply front, in your opening remarks, you mentioned delays in deliveries and some projects being abandoned, but you also noted no change to your expectations. So just trying to reconcile those, because it sounds like some of the items you're pointing to would leave you arguably feeling better about the supply outlook for next year if there are deals starting to fall out.
Thanks for the question, Jeremy. So I think generally our view is unchanged that we're in a supply cycle, a development cycle and that it's having an impact on our operations in stores. There's some new supply being added and there's some falling out. But I would say last quarter I was asked about 2019 and I said that we subject to what is scheduled for 2018 getting pushed into 2019. I said we thought 2019 would be flat to moderately down in new deliveries.
Based on the data we have now and what we're seeing, I would say 2019 is going to be down. So we are seeing a slowing in the development cycle and but it's not a material change. I mean, we're still going to have impact on our operations from new supply in 2019. You have the cumulative effect of what's being delivered. But I do see the delivery slowing.
And can you tie that into maybe just some of your bigger metros in terms of where you maybe see supply pressures getting worse even just from deliveries or ones where you maybe see it abating more than others and feeling a little better?
So the Florida markets I think are going to get worse before they get better. We've seen the acceleration in Dallas. Portland, I think is going to get worse. Washington, D. C.
May get worse. Chicago is a market that's on the other end of the spectrum where we're seeing some improvement.
Great. Last one for me. Scott, you mentioned the achieved rates holding in that mid single digit range. I think you said 3% to 4% this quarter. Discounting has been a drag, which you noted.
So if you factor all that in, where are your net effective rates and how has that been trending?
So our achieved rates for the quarter were 3% to 4%. If you look at the impact of discounts in the quarter, discounts decreased our revenue by about 80 basis points in the quarter. So without discounts, our revenue would have been had discounts been flat year over year, our revenue would have been 80 basis points higher.
Great. Thanks guys.
Thanks Jeremy.
Next question is coming from Todd Thomas of KeyBanc Capital Markets. Your line is open.
Hi, thanks. Scott, Joe, your comments about the discounts being lower year over year in the 4th quarter and revenue growth being higher. It seems like the comps overall beginning in late 3Q after the hurricanes last year and over the next couple of quarters would be a little bit more difficult. I understand the discounting dynamic, but I was just hoping you could provide some additional context around that comment and maybe provide some insight around some of those factors heading into 2019?
Yes. So the discounting strategy is just part of our overall revenue discount as heavily in the Q3. So during the summer months of last year, our discounts were low. This year, they were high as we kept to keep as we chose to keep rate and use discounts. So it was more of a comparable from last year than kind of a change in what we're doing overall.
So we expect this year's discounts to be comparable to last year. So a portion of that 80 basis points that we're we saw discounts impact our revenue by about 80 basis points this last quarter. We expect a big portion of that to not be there in the Q4. So while overall revenue, we year over year or sequentially continues to get tougher. Revenue the rate of growth slows.
The impact of discounts will lessen in the Q4.
And then how should we think about that? So you're anticipating your model shows revenue growth being higher in the 4th quarter versus the Q3 here. Any insight into how we should think about 2019 just in terms of maybe setting expectations?
So obviously, we're not ready to give 2019 guidance. We'll give that on the Q1. But I think with the supply cycle, we expect things to continue to moderate, but I don't think that we expect things to go negative by any means. So we'll give our guidance in Q1 of this next year.
Okay. And just last question for me. The decrease in net tenant insurance income, I don't know if I missed this in your prepared remarks, but was that attributable to the hurricane expenses? Or is that something else? And how much expense that's nonrecurring was in that number?
It actually was not attributable to the hurricanes. We had some claims from the hurricanes, but not significantly higher. It was primarily due to some water claims from the tough weather during the winter months of this past year.
Okay. And how much was that in the quarter?
In the quarter, we were $1,000,000 to $2,000,000 high and some of that was some of those claims were made late and processed late. So while they happen in the winter months, they didn't get processed or adjusted until Q3.
Next question comes from Samir Khanal of Evercore. Your line is open.
Hi, good morning. Scott or Joe, I guess, where do you stand on your views on property taxes for 2019 based on where you sit today? I mean, you had if I look at your numbers, you had higher taxes, especially kind of in the first half of this year, primarily in 2Q. So if that doesn't repeat, comps could be easier, maybe a better NOI growth and especially kind of in the first half of twenty nineteen. It feels like with some of the other companies in our coverage universe, you have these one time items of higher taxes.
They say it's sort of one time, but then they continue to repeat. So I want to kind of get your view as we kind of think about 2019 growth here.
So certain states are pretty fixed in property tax growth. I mean California is relatively fixed. Other states like Texas and Florida reassess quite frequently and are quite aggressive. As those values approach what things are trading for, they typically slow in their reassessments. So I think property taxes are potentially your biggest risk on expenses and potentially the biggest benefit in expenses as year over year comps become easier or as some of these states slow down in their reassessment.
Okay. And I guess my second question is, just looking at your debt maturity, I know you've got roughly $300,000,000 of debt that's sort of maturing between now 2019. How should we think about that piece? How will you address that?
Yes, I think you'll look we'll continue to do more unsecured debt as we move things forward. 2019, if you look at it with extensions, is actually pretty low in terms of the amount of maturities we have. So we'll extend a portion of that and then we'll continue to fund things with primarily unsecured debt as we move more towards an unsecured balance sheet. Okay.
Thanks guys.
Thanks, Sameer.
Next question comes from Smedes Rose of Citi. Your line is open.
Hi, thanks. I wanted to ask you just for the Q4 a year ago, do you have a sense of was there any impact lingering impacts of higher occupancies due to the hurricanes and maybe what do you think sort of what we should be adjusting for this year? And then my second question, I just wanted to ask you on the acquisitions front, if you're seeing any changes in pricing in the private market just given the upper bias in interest rates? And if you're not yet, do you have a sense
of how long that kind
of takes to follow through?
Yes, Smedes. I'll address the Florida Houston question and then Joe will take the acquisitions one. Florida really provided no benefit for us last year in terms of upside from the hurricanes. What we saw is a lot of people moved in. Most of those people moved in with 1st month free and then moved out 30 days later.
Houston was a little bit different. Houston, we saw a fairly significant benefit. Our occupancy jumped quite quickly. But Houston is less than 2% of our portfolio, so I wouldn't tell you it's going to impact it significantly. And if you look at our occupancy overall as a portfolio, at the end of the Q3, we are 20 basis points ahead of where we were last year.
Even though a market like Houston is 400 basis points behind in occupancy, Florida is actually slightly behind as of the end of September. Florida will come back in October in terms of occupancy, but we expect Houston to be a tough comp for the year, but a small percentage of our income.
Thank you.
Smedes, on the acquisition question, we really have not seen any material change in pricing. We have not seen cap rates increasing, although you would expect them to as interest rates go up. I guess as interest rates started to go up lenders tightened spreads a little bit and that made up the difference, but that can't go on forever. So if there are several rate increases next year, at some point you would expect cap rates to react, but we just haven't seen it yet.
Okay. So I mean, do you guys remain primarily focused, I guess on your 3rd party managed as a potential pipeline of acquisitions? Or I guess sort of where do you stand on external growth at this point?
Yes. Great question. Thank you. So a little over 80% of the $1,000,000,000 of acquisitions gross that we'll do this year came from relationships either joint venture partners or 3rd party management or relationships. We've had less than a 5th that were brokered deals where we're competing in the market.
And I think that's going to continue. We just we find very few situations where we can be the high bidder in a brokered situation and we're very lucky and fortunate to have these great relationships and somewhat proprietary pipeline that allows us to continue our external growth.
All right. Thank you. Thanks, James.
Next question is from Jonathan Hughes of Raymond James. Your line is open.
Good morning. Happy Halloween. Thanks for taking my questions. Joe, just wanted to clarify what you said earlier when you mentioned seeing new supply activity migrating to markets with better yields, are those secondary, tertiary markets you're talking about or suburbs of primary markets?
I would say secondary, tertiary markets. A lot of suburbs of primary markets I think of as secondary markets too. So I would include all of those. But moving out of kind of the main downtown or primary suburbs or herbs of the main markets and moving to these other secondary type markets.
Okay. And then kind of going back to Smedes' question about external growth, percentage of assets or acquisitions bought out of the 3rd party platform, you said 80% are already managed. That was maybe, I don't know, 30% a few years ago. And again, underwriting is perfect on those assets, so lower risk. But the strength of your platform is pretty impressive.
And so why not try to go out and buy more non managed stores with more operational upside, I mean, of course, assuming you can buy them. I'm just looking at the integration of these 3rd party assets, 3rd party managed properties into your same pool going forward and the growth is going to be lower in the future, because there's not much upside. Is that a fair assessment?
For the most part, yes. So not all of that 80% were managed. Some of it is truly from relationships we have with people and we don't actually manage the properties at the time. Secondly, we bought we've been buying this year more than ever before many of these stores in joint ventures, which even though they are kind of maximized from a management standpoint because we do manage them, we do get outsized returns because we're not investing 100% of the capital, but we get a management fee, we get the insurance proceeds and we have the opportunity to earn or promote. In a perfect world, I would love to buy more from the mom and pops and from under managed properties and get them more juice out of the deals.
But I don't want to pay for it. So we'll do that when the pricing is right. And when the pricing isn't right, we need to remain disciplined and patient.
Okay. Fair enough. And then just one more and I'll jump off. But could you just maybe give details on the yields on the operating store acquisitions this quarter and scheduled to close by year end? I know you said transaction market hasn't seen any change, but curious what you paid for those couple of stores?
Sure.
So the stores were in different stages of stabilization with the Fort Lauderdale store was fully stabilized and the other stores we underwrote between 10 22 months to get the stabilization. So they're not so the initial yield was not always the stabilized yield. But if you average them all together, we 1st year was in the low 5s and stabilized was in the mid 6s.
Okay. Maybe what was the stabilized yield on the Lauderdale acquisition if that one was fully occupied?
6.5.
6.5. Okay, great. That's it for me. Thanks for taking my questions.
Thanks, Jonathan.
The next question is coming from Eric Frankel of Green Street Advisors. Your line is open.
Thank you. Joe, could you comment a little bit on the cause of
some of the supply decreases or the drops in attempted starts?
Sure, absolutely. So one thing is that there is better information out there in the market today now than there was a couple of years ago. There's some 3rd party providers that are doing a pretty good job of putting together information. So when a developer or an equity source or a bank is looking at a the smartest thing to build the next store in North Dallas. 2nd, that may not be the smartest thing to build the next store in North Dallas.
Secondly, costs are up, right? Interest rates are up. We talked about that. Land pricing is up. Labor is certainly up.
Materials up. So you have an increased cost. And on the other side, you have moderating operating projections, right? If someone honestly underwrites a deal, they're not going to underwrite 8% rent growth. And so if you have increased costs and moderating projections that squeezes your development yield.
And then you have lenders that are somewhat more cautious where you have a little bit more difficulty getting loans. So I think all those factors make it harder these days to stick the next shovel in the ground.
Is it fair to say that
a lot of developers were underwriting a lease up time of say 2 years, 3 years at most, which is maybe common a couple of years ago, but that turned out to be what it's historically been in that 3 to 5 year range?
I don't know if it was lease up time or rate, but in general developers are optimists. And they will create a pro form a that has an aggressive lease up rate, an aggressive lease up time period and an aggressive unit mix too, which is what we frequently see where the unit mix is meant to maximize revenue, but may not actually work in the market. And it's the equity providers and the lenders and the operators, the managers job to try to make sure the developer has a realistic pro form a. And if that can get financed, then the deal typically goes forward. And if not, sometimes it gets put on the shelf.
Interesting. Just another development financing related question. I think one of your public peers has taken on the strategy of underwriting a construction mezzanine loan business, whereas I think what you and some of your peers do more of the certificate of occupancy type acquisitions, those are available. Would you consider being in the lending business as well that led to more investment opportunities?
So we do not want to be in the lending business for development. And the primary reason for that is because if you make a loan you have to be willing to own that project. And we don't want to own a broken development deal where we have to continue development take the project to completion. There's obviously already problems. That's not a risk we're willing to take.
We are willing to make loans on completed buildings that we 1, manage and 2, would be willing to own.
Okay, thanks. That's it for me.
Thanks, Eric.
Next question comes from Tayo Okusanya from Jefferies. Your line is open.
Yes. Good morning, gentlemen. My first question has to do with the comment made earlier about discounts declining in 4Q. I'm just again wondering how the confidence level you have in that just kind of given some of the supply issues that are still out there, why you wouldn't keep discounting to try to maximize revenue?
So I don't think we're necessarily cutting back on discounts. It's more a comp issue. So we will discount in October, November, December. But the difference is, is we also discounted last year in October, November, December. So just seasonally, you typically have more discounts in the fall winter than you do in the summer, whereas this year, we increased our discounts in the summer months.
So our strategy year over year is much more similar this year.
Okay. That's helpful. Thank you for that clarification. Then the second question, given your meaningful exposure to LA and as well as San Francisco and some of the talk happening around Prop 13 potentially hitting the ballots in 2020. Just wondering kind of what you're hearing about that, what you're thinking about that And if you've done any homework about what kind of impact that could have on EXR?
Yes. So obviously, we recognize it as a risk. Some of our properties are legacy properties that we've owned for quite a while that have just had the 3% raises every year. We have done some math. It's pretty simple math where you're basically comparing what you're paying in taxes today compared to if they were assessed at full value.
We understand what that is. Clearly, it's an impact. It will depend a little bit on, 1, if it gets passed and then 2, how they phase that in. So very difficult to really comment on the impact at this point, but it's a risk we're monitoring. I think the Self Storage Association is aware of that.
I think that you'll probably see some lobbying efforts around that.
Did Curtis share anything you've done in regards to the worst case analysis like if it all kind of shows up straight away?
We have, but it's probably not something we would want to disclose on the call today.
Got you.
All right.
Thank you. Thanks, Tyler. Thank you.
The next question comes from Wes Golladay of RBC Capital Markets. Your line is open.
Hey, good morning, everyone. I just want to go back to the $0.20 dilution this year from acquisitions and CFO deals. Will those be still dilutive next year? I know you might have some more roll in, but just for this comp set here, will you get to, I guess, a no dilution point next year? And has there been any change in stabilization of CFO deals as far as timing goes?
Yes. So we'll continue to add CFO deals. You can see that in our supplements. So as the value add in COO deals that are causing that $0.20 lease up, we'll have others added into the pool.
And it depends a little bit on what stage they're at in terms of their lease up. So a property that opened Q4 of this year, quarterly will be dilutive next year. An acquisition that we bought that was 70% full and we bought it in January of this year, it likely is not dilutive next year. So overall, I would tell you part of that $0.20 continues into next year, but it's a different pool, a different group.
Okay. And then what is still the typical underwriting? And from what I recall before, it was up to 3 years, but they were stabilizing maybe 1 to 1.5 years. Has that changed at all?
So we're underwriting CO deals between 36 42 months to achieve economic stabilization depending on the size of the property in the market that it's in. And we're currently doing maybe slightly better than 36 months, maybe 30 to 36 months to get the economic stabilization and we're getting to occupancy stabilization earlier than that.
Okay. Thanks a lot guys. Thanks, Wes.
Next question comes from Todd Cinder of Wells Fargo. Your line is open.
Thanks. And probably for Joe, just to round out your last thoughts there on the CFO and lease up duration. I wanted to just get a sense of how you're incorporating maybe potentially higher risk in your underwriting assumptions. It just depends on if it's being acquired within a joint venture wholly owned. Are your yield expectations upfront coming up?
Is leverage assumed for these portfolio deals coming up? I just want to get some color, maybe you're going to expect a little more yield upfront because the NOI stream going forward might slow down. Just giving you a sense of the risk there.
So we everything needs to make sense on an unleveraged basis. We underwrite on an unleveraged basis. And if it doesn't make sense, we don't try to do the deal by adding leverage to it. So that's an easy answer. We've been underwriting pretty consistently at 90% occupancy, thirty 6 to 42 month lease up and 3% rental rate growth.
And some of those given where you see our current occupancy and revenue rate growth, some of those may be conservative numbers, but that's we feel that's the right way to underwrite these deals. We our target stabilized yield on COs deals is and has been for some time 8% plus and minus. If someone brings us 1 in a great location in a barrier to entry market, will we take a little less? Yes, probably and a little more in other markets, but that's kind of our target yield that we think compensates us for taking the dilution during the lease up period. And we bring in joint venture partners, so we can stay within our dilution target.
We don't have too much dilution. So we can derisk these deals. So we're doing more of them and spreading our equity out further and so we can enhance our returns.
All right. That's helpful. Thank you. And then lastly, the Menlo Park property is sold. You got a huge gain, but it's also high barrier, very affluent market.
Is that just an offer you couldn't refuse?
Yes. So we sold that to an adjacent corporate large corporation that wanted the property for an alternative use and it sold around a 3 cap. So we can take those dollars even though it's probably impossible to build storage in Menlo Park. We can take those dollars and kind of double the yield from them by reinvesting them, which we have done through a reverse 1031 exchange. So every property is for sale if someone offers us enough money.
Got it. Thank you.
Thanks, Doug.
Next question is from Juan Sanabrera of Bank of America. Your line is open.
Hi, good morning. I just wanted to touch back on supply. Do you have a sense of what percentage of your portfolio is going to be exposed to that 3 year rolling supply in 2019 versus what that number is 2018 and if that delta is going to be a greater percentage and to what extent?
Sure. So let's start by looking at 2018. About a third of our portfolio will of our own portfolio of 8 41 stores will be facing new supply in 2018. But of those stores, almost half of them have not yet been delivered. So some of those are under construction, so they will be delivered, but they'll be pushed into 2019.
And others are under the proposed list. So they may or may not be delivered. Under in 2019 that number is less than half of that of what we've identified. So that's where we see the drop off into 2019. Did that answer your question?
Yes. When you say less than half, so 15% if 'eighteen was a third?
14%.
Is that right? Okay. But do you have a sense of what that is on a 3 year rolling window, not necessarily new deliveries? From a 3 year rolling window of deliveries, Is that more or less?
So it actually goes up. The 3 year rolling I'm sorry, Juan. The 3 year rolling goes up by 9% because you're dropping off 2016 which was a relatively small number and adding 2019, which is while a smaller number than 2018, a bigger number than 2016.
Okay. And that's up 9% to what or from what base? Just so we have a sense in the total portfolio exposed on a 3 year basis?
So with a 3 year ending in 20 18 is probably close to 50% and then you're closer to 60% in the 3 year
ending in 20
19. Was that the right question?
Yes, sir. Thank you very much. That was perfect. And then just on from a same store perspective, how should we think about the benefit of the new stores being added next year to the pool and relative to the benefit you've had this year, which has come down as the year has gone?
So we haven't completed the 2019 budgets, but I think the majority of the benefit will come from C of O stores that are moving into that pool and less from acquisitions. I think that I would tell you it's going to be somewhat minimal. It's a big enough same store pool and you're not bringing that many properties in that the number is not going to be that significant.
Okay. And one last question for me. So you said that the concessions were about an 80 basis point drag to the 3rd quarter same store revenues. And you've kind of described the 4th quarter given an easier comp as not being an issue. Does that mean that that 80 point delta goes away to 0 in terms of a drag on a year over year basis?
Not sure it goes to 0, but a significant portion of it goes away.
Okay. Thank you very much. Thanks, Juan. Thank you.
There are no remaining questions. I would like to turn the call back over for further remarks.
Thank you. Thank you for joining us today. We are pleased with our platform and our team's ability to continue to drive rental rates and occupancy. We have always invested in our platform, our portfolio and our people and it is paying dividends in the current competitive environment. 2018 is following our expectations and our diversified portfolio is performing well.
We're excited about our outsized external growth as we enhance our size, scale and brand. We thank you for your interest in and support of Extra Space Storage. We look forward to seeing you and speaking with everyone at NAREIT. Have a great rest of the day. Thank you.
Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.