Good day, ladies and gentlemen, and welcome to Extra Space Storage Q2 2017 Earnings Conference. At this time, all participants are in a listen only mode. Later, we'll have a question and answer session and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to introduce today's conference, Mr.
Jeff Norman, Vice President of Investor Relations. Sir, you may begin.
Thank you, Nova. Welcome to Extra Space Storage's Q2 2017 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 answers 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, August 2, 2017. 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. We had another solid quarter and we are pleased with our results for the first half of the year. In the quarter, we saw healthy demand and steady rental volume, which outpaced that of Q2 2016. We maintained our same store occupancy gap and ended the quarter at 94.4%, 70 basis points ahead of where we were in 2016.
We were also able to grow street rates, which together with our occupancy gains increased same store revenue 5.2%. We demonstrated great expense control with a 1.1% decrease in same store expenses. As a result, same store NOI grew 7.7%. We also saw growth outside of our same store pool, which contributed to an increase of 16% in FFO per share as adjusted. All of our markets showed positive revenue growth with the exception of Houston, which was effectively flat.
The markets in the Western States continue to perform particularly well, many with revenue growth in the high single digit. Our top MSAs have been affected differently by the current development cycle and we believe that we continue to benefit from our highly diversified portfolio. In the quarter, we added 27 new properties to our 3rd party management platform, bringing the total additions to 54 for the year. These managed stores provide us additional fee income, density in key markets, efficiencies that come from scale, customer data and potential future acquisition opportunities. We recently held our 2017 Partners Conference in Park City, Utah, where over 150 partners joined us for 2 days of meetings.
This is the best turnout in our history and our managed pipeline for the next 6 months is the largest it has ever been. However, we were recently informed that one of our partners, Strategic Storage Trust, formerly known as SmartStop, has decided to internalize management and its 94 stores will be leaving Extra Spaces system effective October 1. While the loss of these stores is unfortunate, we have over 100 properties scheduled to be added in the back half of twenty seventeen, the majority of which are in higher rent per square foot markets than the managed SmartStop properties. For example, we added an 11 store portfolio in New York City just last week. We remain enthusiastic about our 3rd party management platform and expect it to continue to be a valuable part of our growth strategy.
I would now like to turn the time over to Scott.
Thank you, Joe. Last night, we reported FFO as adjusted of $1.09 per share, exceeding the high end of our guidance by $0.03 The beat was the result of property performance, tenant reinsurance and management fees. Repairs and maintenance, payroll and insurance have been lower than expected and contributed to the expense beat. We also incurred a $1,600,000 loss related to the write down on 3 parcels of land, 2 of which are under contract for sale. Occupancy for the same store pool ended the quarter at 94.4%, a 70 basis point year over year increase.
While occupancy is just one driver of revenue, we are encouraged by the strong rental activity and peak occupancy levels we are seeing this summer. We were able to increase rates to new customers in the low single digits during the quarter and discounts, while up year over year, remain at levels below historical norms. We continue our existing customer rent increase program without changes. During the quarter, we did not access our ATM. Acquisitions and loan maturities were funded by draws on our credit facility.
We also completed a 10 year $300,000,000 private placement at 3.95%. The notes have a delayed draw feature, and they will be issued on August 24. The private placement proceeds will be used to finance acquisitions, loan maturities and to pay down revolving balances. These notes help us achieve our goals of increasing our average term our average debt term, our fixed rate debt ratio and the size of our unsecured pool. Based on the performance year to date, we raised the bottom end of our same store revenue guidance by 25 basis points to a range of 4.25% to 5%.
We lowered our annual expense guidance to 1.75% to 2.5%. As a result, our annual NOI guidance increased to 4.75% to 6%. We reaffirm our original acquisition guidance of total investment of 400,000,000 comprised of $325,000,000 in wholly owned stores and $200,000,000 in joint venture acquisitions and developments with approximately $75,000,000 dollars in capital to be contributed by Extra Space. Approximately $200,000,000 is currently closed or under agreement. We are in discussions on several other acquisition opportunities and our guidance assumes the remaining $200,000,000 will close late in the Q4.
We remain focused on only acquiring properties that create long term value for our shareholders. As a result of the Q2 beat, we are increasing our full year FFO as adjusted guidance to $4.25 to $4.32 per share. This includes the Q4 impact of losing the managed SmartStop stores. Our guidance also includes $0.07 of dilution from our C of O stores and an additional $0.08 from value add acquisitions for a total of $0.15 I'll now turn the time back over to Joe.
Thank you, Scott. Coming into 2017, we received many questions related to demand, new supply, external growth and our ability to increase revenue and FFO. We are more than halfway through 2017 and to a very large extent, our predictions related to these topics have been accurate. 1st, demand has been steady. Sable demand has led to positive growth in rates, rentals and occupancy resulting in solid revenue growth.
The rate of our revenue growth has moderated since the beginning of the year And as our guidance implies, we'll moderate further in the second half of the year. However, our systems have proved adept at adjusting rate occupancy discounts and marketing spend to maximize revenue in the current environment. Despite headwinds and difficult comps, we still expect storage to produce some of the best revenue growth among REITs and we expect to lead the pack in the sector. 2nd, new supply while present has been manageable so far. Several markets have felt the impact of new development, while others have remained relatively immune.
Most markets continue to see revenue growth and our performance continues to be solid due to our diversified portfolio. Construction pipelines have been pushed back as projects are taking longer to get done and the fallout rate of projects and planning remains significant. 3rd, we will have both challenges and opportunities related to external growth. Pricing for marketed acquisitions remains at elevated levels. Sales volume is down significantly and we have not seen sufficient long term value to increase our bids to meet seller expectations.
Most acquisitions have come from existing relationships rather than on the open market. However, our prediction that we could see an increase in demand for 3rd party management has come to fruition and we expect our pipeline to remain robust. Finally, we continue to produce outsized FFO growth. Our sector leading same store performance together with accretive acquisitions, tenant insurance, 3rd party management and an efficient balance sheet have resulted in another strong quarter of FFO as adjusted growth of 16%. We are focused on being responsible stewards of our shareholders' capital and providing the best long term return on that capital in the sector.
Let's now turn the time over to Jeff to start the question and answer session.
Thank you, Joe. In order to ensure 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. And with that, we'll turn it over to Nova to start our Q and A session.
Thank you. Our first question comes from the line of Juan Sanabria of Bank of America Merrill Lynch.
Hi, good morning. I was just hoping you guys could speak to what your thoughts are on the slowdown that's baked into the second half guidance for same store revenues and how we should think about that into 2018? And if you could also as part of that give us any sense of how July is trending particularly with one of your larger peers commenting about cutting rate significantly?
Okay. I hope I can remember all those questions. So not really prepared to talk about 2018. The slowdown for the second half of the year is partially due to a lessening positive impact of the prior year's acquisitions as we've discussed. So we get a greater benefit from our acquisition, our 2015 acquisitions earlier in the year than the later year.
And secondly, it is just a slowdown in revenue growth in the market. July is generally a continuation of what we've seen in the year. There's nothing significant to report in change in July. And Juan, what was the last am I missing one question there?
No, I think you got it. Have you changed your guidance for SmartStop or you were on that topic in terms of the contribution to same store revenues for the year?
No. We our guidance always implied or predicted that we would have the greatest impact in the Q1 and that, that impact would diminish as the year went on to when by the end of the year we expected that portfolio to be performing at or around portfolio averages.
Okay. And then just one follow-up on the same store expense, obviously, a big top versus the first half implied. If you could just give us some sense of what's driving that and the visibility into those expense increases implied by guidance?
We don't see a big expense increase in the 3rd or 4th quarter. It's more a comparison to last year. So last year during the Q3, our expenses grew at about 1.5%. We're expecting those grow at more normalized rates with property taxes growing, I call it, 5% to 6% and payroll growing more at inflationary. In addition, the Q4 last year, we saw expenses decrease by about 2%.
So year over year, that's why it's looking like expenses in the 3rd and fourth quarter elevator. Thank you. Thanks, Juan.
Thank you. Our next question comes from the line of Gaurav Mehta of Cantor Fitzgerald.
So I was wondering in terms of markets, are there any markets that are ahead of your initial 2017 guidance and any markets that are behind?
I would tell you that
I think California continues to probably exceed expectations. In terms of markets being behind, I don't think we're surprised by any of the markets. I would tell you it's somewhat the benefit of a diversified portfolio and as one market goes up, another typically goes down.
Maybe a market that's underperforming versus guidance for us would be New York City.
Okay. And I guess as
a follow-up in terms of renewals, are you seeing any pushback from your existing tenants in any of your markets?
No. There's really been no change in customer behavior with respect to their response to our rate increases.
Okay. Thank you.
Thanks, Gaurav.
Our next question comes from the line of Wes Golladay of RBC Capital Markets.
Hey, good morning guys. Can you talk about your customer acquisition cost? I mean, it seems like your market expense was really low considering you built occupancy. And then to bolt on to that, will you see any reallocation of the platform costs from the SmartStop JV or the JV management go to the consolidated when they leave the system later in the year?
So our marketing spend is just one tool we use to maximize revenue. The other tools being rate discount and occupancy. And when we believe it's beneficial to maximize revenue to increase marketing spend, we will do so. I would not be surprised to see us use this lever sometime in the second half of the year if we feel we need to. But we've been able to achieve the results we've achieved while staying on budget and marketing so far.
And could you Smart stop. So in terms of the Smart stop cost and the losing those stores, we have 100 stores coming on in the next 6 months. So we expect those stores to absorb some of that or be able to allocate the stores across the new stores. In addition, we have some termination fees associated with these properties that should help soften the blow in the Q4. Okay.
Thanks a lot.
Thanks, Wes.
Thank you. Our next question comes from the line of Gwen Clark of Evercore.
Hi, good afternoon. I was wondering, can you give us an update on the 30 property portfolio that you guys have on the market?
Sure. We're making good progress on the recapitalization of the 36 properties that we had on the market. We've selected a joint venture partner and we're onto the next stage of documenting the deal and we'll be happy to provide all the details once it closes. We expect it to close prior to the end of the year.
And can you just talk about then the use of the proceeds and whether you think the pricing on assets you purchase would essentially be equal or better than what you're selling?
Yes. We expect to use the proceeds to fund acquisitions and our goal is to purchase higher quality, better located, higher long term returning
Malhotra of Morgan Stanley.
So just wanted to follow-up on a question related to one of your peers indicating they would seamlessly cut rate in the rest of the summer months. So I'm trying to get a sense of how can you give us some maybe anecdote color or just from a strategic perspective, how would you theoretically respond to rates being simply cut by peers that are located close to your properties? And maybe just as some of the new supply is coming on, tactically, what are you doing to kind of pull customers to your facilities?
So our revenue management systems are designed to react to what's going on in the market and what is happening at an individual property. And it's possible that a competitor could cut rates significantly and have very minimal impact on us because of other factors. But if it does have an impact, our systems will respond and maximize the revenue at that store.
Okay. And then just going back on the expenses, what specifically changed around repairs and maintenance and labor costs that sort of from budget you saw the numbers negative for the 1st 2 quarters? I'm just trying to understand what changed.
Well, there are some controllable and some uncontrollable things. So we had a very mild snow winter
and that helped us on
our repair and maintenance numbers. And we also tightened our belts a little bit. We went and renegotiated all our landscape contracts and had a 9% reduction in our landscape costs without any change in service. We took a good hard look knowing this would be a tough year and we're able to find some savings.
On the payroll side, we have normalized hours for our stores as we've created efficiencies for our site managers, whether it's through the systems and the ability to attract customers in different areas, we have normalized those hours across all properties.
Okay. So we should expect that the benefit on those two line items should continue in the back half?
To a lesser degree, we started much of the payroll change in end of the summer, early fall last year.
Okay, got it. Okay, thank you.
Thanks, Vikram.
Our next question comes from the line of George Hoglund of Jefferies.
Hey, good morning guys. So just first on the strategic storage trust internalizing, was their decision driven just purely by they had reached critical mass to where it made sense to internalize? And then are there any other sort of large portfolios of assets under third party management where we could see that happen to someone else?
Yes. We've been told by Strategic that this was a decision to internal management based on their internal business goals, had nothing to do with performance or dissatisfaction with us in any way. We have 2 other owners where we manage large portfolios with. I don't believe we have the same risk with those portfolios because SmartStop had an operating platform before we purchased their portfolio. They kept many of those resources in place.
The other large portfolios we manage for, they don't have any operational management experience or history. So I'd be very surprised if they were in a position to do this.
Okay. And then just one thing on pricing. Just has there been any divergence during the course of the year in terms of Internet rate and walk in rate?
Year over year, you may see some variability, but in the current year, it has not changed significantly. But we're moving those all the time. And what I say by year over year is maybe last year, the difference was 5%. This year, it's 15%. So year over year, it looks more it looks different.
But remember, the difficult thing when it comes to our revenues at the stores and our pricing on the stores in the current year is we're coming off 2 of the best years we've ever seen in the market.
Okay. Thanks.
Thanks, George.
Our next question comes from the line of Nick Yulico of UBS. Your line is open.
Thanks. So supply has been one of the bigger topics for the sector lately. One of your peers talked about supply likely peaking this year as far as an impact and another thinks it's next year. Wondering which side of the coin you'd choose?
You
know, respectfully, I think it's not a very helpful question, right? The gross numbers of $600,000,000 to $800,000,000 this year or next year, it really doesn't matter if something gets delivered in December this year or January next year. So the gross amount of supply across the country is sort of interesting, but what this is very much a micro market business.
And
what we're very focused on trying to understand is what's happening in the markets where our stores are and how do we react to maximize revenue. That being said, I think the peak impact, if that's what you're looking for, I think the impact will be greater next year than this year, because you have the cumulative effect of things that were delivered in 2017 as well as in 2018.
Okay. And then on the second half of the year, can you just tell us what your expectation is for occupancy, just the year over year delta in the 3rd Q4?
It's lessening. So the Smart Stop stores, as they come up to the average, it will lessen. So by the end of the year, it is negligible. We expect the Smart Stop stores and the other 2015 acquisitions to be performing at our current portfolio level by the end of the year. And so there's a moderate benefit throughout the year, but by the end of the year, flat.
Lap.
Our next question comes from the line of Todd Thomas of KeyBanc Capital Markets.
Hi, good morning. First, not sure if I missed this, but can you comment on occupancy at the end of July and where that stood year over year?
We would tell you that occupancy continues to hold and July is not performing significantly different than the rest of the quarter or the rest of the year.
Okay. And then in terms of asking rents, you've maintained higher asking rents throughout the portfolio year over year, which you mentioned. And others are seeing asking rents decrease year over year at this point in the cycle. And I'm just curious if there's anything that you can speak to that might explain that difference?
Well,
it could be the different companies are using a different mix of rent and the other factors to get to revenue. It could be individual market exposure and it could be properties within that market that are more or less affected by new construction or better or worse located.
Okay. Do you expect to be able to maintain higher year over year asking rents in the back half of the year, just given the slowdown that you mentioned?
We would like to be able to do that if that is the way to maximize revenue. If we need to lower rate to increase occupancy or not spend as much on discounts or other things, whatever the right formula is for a particular market or property to maximize revenue, that's what we will pursue.
Okay. And just one quick last one, also a follow-up. Just about Public Storage's expected rent rent cuts in some markets, which they mentioned as of last Thursday, I believe. I'm not clear I'm not sure I heard whether or not you are seeing that decrease in rents in any markets and what the magnitude of those cuts may be, if you could comment on that?
It is a property by property analysis and we'll see public storage or someone else do something that will cause us to react because of the effect on our property or we'll see public storage or someone else do something that has absolutely no effect on our store and we're still able to operate it the way we want to. It really depends on the individual situation of the property.
Okay. Thank you.
Our next question comes from the line of Todd Binder of Wells Fargo.
Hi, thanks. Joe, I think in your opening remarks, you mentioned landing a third party management contract with the New York City operator. Can you give more details on that and who it is and where they're located?
It's the tuck it away stores and they're in the boroughs of New York.
And they'll be rebranded extra space just like the rest the properties?
They were rebranded last Wednesday. All the signs went up Wednesday Thursday and they'll be operated under the Extra Space platform just like all the other stores in our system.
Okay. Thanks. And just looking at acquisition volumes, your guidance is saying $300,000,000 I wanted to see what's in that number. If you just look at your straight acquisitions, if I have my numbers right here at about $115,000,000 on stuff that's either closed or going to close, which suggests a pretty good ramp for the rest of the year. Are CFO deals included in that?
What else is
in?
Yes. So it's $325,000,000 for wholly owned acquisitions. And we CFO deals are included in there if they're wholly owned. We have a number of things in process that we hope come to fruition. And if we're able to do that and meet our guidance that will be a good thing.
But if we can't, we're not going to buy things just to meet guidance. And if we don't meet our guidance, it's not going to have any effect on our performance or our ability to hit guidance this year. So we've left that number out partially based on what we're working on and in hopes we make it. But again, we're not we're going to buy things if it's in the best interest of our shareholders not to meet some guidance number we put out there.
One other point of clarification, Todd. The $325,000,000 wholly owned, we also have $75,000,000 of JV investment to total the $400,000,000 And of that JV investment, most of that is identified. So the $75,000,000 plus the $115,000,000 you referred to is kind of what's either identified or closed to date.
Our next question comes from the line of Ki Bin Kim of SunTrust.
I'm not sure if I missed this, but did you comment on the street rate growth you experienced in the quarter and maybe in July?
So street rates year to date have been up 3% to 5% just over 5%. The actual achieved rates are going to be lower than that. Our achieved rates year to date have been kind of 0% to 3%. And I'm giving you a range because it really depends on what specials we're running, what tests we're doing. But achieved rates have been below our street rates, but our street rates continue to be in that 3% to 5% year over year.
And how is that trended in July, same or towards a lower?
No significant changes in July today in terms of operations. Okay.
And if for argument's sake, if the achieved rate remains at 0% for the foreseeable future and there's no change to the existing customer rate increase program in terms of increased frequency or acceptance rate, How long does it take for same store revenues to follow suit and get close to that 0% number? And just trying to get a sense of like the wind down of the contribution from the program, if it how long it helps?
Yes. Just to make sure I understand the question, are you asking how long our current achieved rates take to flow through it to become our rent growth in the future?
Yes. And assuming there's no change in the ECRI program?
Yes. So first of all, I mean, things are changed. It's hard to really make that assumption. We have a lot of variables. Things are changing all the time.
I would tell you things will flow through in 4 to 8 quarters. At some point, your rates today become your rates in the future. But one point I would clarify is achieved rates have been better than 0.
I know that. I was just a theoretical question. And do you know what percent of your portfolio is impacted by new supply, the way you guys get it?
In terms of new supply, I would tell you that if you look at our revenues, about 2 thirds of our revenues come from markets that have somewhat elevated supply. But then I would tell you, you need to be very careful on assuming that 2 thirds of our properties have new supply or new competitors. For instance, in Dallas, Dallas is a market that has elevated supply, but our properties in South Dallas are almost unaffected. So it's very, very difficult to give you that number and have it be meaningful just because of the impact of the supply and the assumptions people then take from there.
Okay. All right. Thank you.
Thanks, Ki Bin.
And we have a follow-up from the line of Juan Sanabria of Bank of America.
Hi, thanks for the time. Just hoping you guys could comment a little bit more on where you see cap rates. I know deals are down, but kind of what the spread is bid ask and just commentary on cap rates where you see them for prime and kind of the secondary markets?
Yes, sure. As you point out, sales volumes are down significantly and we've seen a number of deals just get taken off the market because the bid ask best spread is too wide. So we have fewer data points. I'd also point out that most of what we see on the market is of lesser quality, either in terms of quality or market than we would like. So it's difficult to compare those cap rates to previous cap rates, which might have been better quality product.
That being said, we don't see a significant expansion of cap rates. There's still a lot of equity chasing this product type. Fundamentals are still very good. Things are highly occupied and rent growth is going in the right direction. So I think that all that capital is supporting prices and there might be some modest increase in cap rates, but it's really
hard to pin down.
Okay. And then you noted that supply was going to be or has been pushed back some delays and starts and some fallouts as well as potential future developments. Any numbers around that or any markets in particular that stand out in terms of first half versus second half split now versus your initial expectations of what would be delivered?
Yes. I could tell you a couple of data points. I don't know if we'll give you your full answer. But we currently have a little over 3.50 development properties in our management plus pipeline. And that number has grown a little bit, but it's always been a pretty significant number and the fallout rate we see on those properties is about half.
So that may be an over inflated number because the Public Storage's of the world don't ask us to manage their development, but that's a good data point. I'd also tell you that markets are in different stages of the development cycle. So when we look at Chicago and we're tracking 78 projects in Chicago. Many the majority of them have already been delivered. The pipeline is getting smaller.
And you compare that to Miami where many more are in the development process and have been delivered. And so we kind of look at markets that way and feel that in some markets like Miami, more of the impact is coming where a market like Chicago, hopefully, we're past the greatest point of impact. We're actually seeing that in our numbers as well.
Was that 50% fallout similar last year?
Yes.
Okay. And then just one last question for me. You guys talked about demand being steady to up. Any numbers around that in terms of web or call volumes or any way to get a sense of the robustness of that?
Without giving numbers, I would tell you we are citing that from our rental volume, our web searches and our call center volume. Okay. Thank you. Thanks, Juan.
And our next follow-up comes from the line of Lynn Clark of Evercore.
Hi, guys. I have two quick ones. First, what percentage of your first half FFO came from the SmartStop contracts? And then also in the guidance, when you contemplate a change in the same store pool, you referenced 50 basis points for inspiration from SmartStop. Is that in the updated guidance also?
To make sure I understand your question, you're asking what percentage of our or how many how many cents of FFO in the first half came from the SmartStop management contract?
Yes. The net income, I assume it's really small.
It's small and we've never broken it out to that level in terms of the exact profitability of our management business and we'd prefer not to.
Okay.
I'm sorry, the second question And
I guess I'd also say, the risk of repeating ourselves, we have sufficient stores that we will be putting online in the second half to replace all of the SmartStop stores. We're not going to take a step backwards. Obviously, we would rather not lose the SmartStop store and our growth would be greater, but we're not going
take a step backward.
Okay. And then for the guidance, the 50 basis points from SmartStop acquisitions, is that still in the updated range?
Yes. So SmartStop, it's not just SmartStop, but the 2015 acquisition continue to benefit. At the start of the year, it was 110 basis points in revenue. This quarter, it was 90 basis points, and we assume that will continue to go down until it's 0 for an average of 50 basis points to 75 basis points for the year.
Okay. Thanks.
Thanks, Ryan.
Our next question comes from the line of Smedes Rose of Citigroup.
Hi, thank you. I just wanted to ask you on the development side, are you seeing any change in the availability of capital or hearing anything in terms of the bank's willingness to lend in the space now?
I think availability of that capital is constrained on development now and obviously strong well capitalized developers can get loans and we see local banks filling some of the gap there, but absolutely sneezed. I think debt capital is a constraint.
Okay.
And then I just thank you. I wanted to ask too, on your management platform, just as a reminder, when someone does join, is there a minimum period that they have to that they sign a contract for? Or can they just kind of give you a month's notice? Or how does that exit process work?
So people can leave our management platform anytime because they want to internalize management like the current situation or they want to sell it. There is a termination fee that amortizes over time and compensates us for someone leaving before the term of the contract is over.
Okay. Thank you. And the termination fees would be included in your guidance through
the back half of the
year or for the Q4, I guess?
Yes. The termination fees we expect to receive from strategic is included in our guidance.
Okay. Thank you. Thanks, Smedes.
We have a follow-up from the line of Ki Bin Kim of SunTrust.
Just a couple of quick ones here. Is there anything inherently you're doing differently that you versus peers that is allowing you to keep a little bit more of an elevated same store revenue rate run rate? And because you are decelerating at a slower pace, so just curious if you can provide any commentary around that?
Yes. I hope so. And we certainly wouldn't discuss it on a conference call.
Yes. I don't want to give you a trace of your slate, but I just want to see if you had any bigger thoughts on it. But the second question, it seems like one of the kind of hidden costs in self storage is the days lost and inventory So when you actually find out a customer has left and that the days it takes to release it, has there been any noticeable change
in that statistic over past couple
of years? No. We're I mean, it's markedly different during times of year, maybe going from 30 days average in the winter months to close to 15 in the summer, but it's been very consistent.
Okay. Thank you.
Thanks, Steve.
And so I'm showing no further questions at this time. I'd like to turn the call back to Joe Margolis, CEO for closing remarks.
I want to thank everyone for their participation and interest in Extra Space and I hope everyone has a good day. Thank you very much.
Ladies and gentlemen, thank you participating in today's conference. This does conclude the call. You may now disconnect. Everyone have a wonderful day.