Greetings, and Welcome to the National Storage Affiliates first quarter 2021 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, George Hoglund, Vice President of Investor Relations for National Storage Affiliates. Thank you, Mr. Hoglund. You may begin. We'd like to thank you for joining us today for the first quarter 2021 earnings conference call of National Storage Affiliates Trust. On the line with me here today are NSA's CEO, Tamara Fischer; COO, David Cramer; and CFO, Brandon Togashi. Following prepared remarks, management will accept questions from registered financial analysts. In addition to the press release distributed yesterday, we filed an 8-K with the SEC containing our supplemental package with additional detail on our results, which may be found in the investor relations section on our website at nationalstorageaffiliates.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements that are subject to risks and uncertainties, including uncertainty related to the scope, severity, and duration of the COVID-19 pandemic and the actions taken to contain or mitigate the direct and indirect economic impact. The company cautions that actual results may differ materially from those projected in any forward-looking statement. For additional detail concerning the forward-looking statements, please refer to our public filings with the SEC. We also encourage listeners to review the definitions and reconciliations of non-GAAP financial measures such as FFO, Core FFO, and net operating income contained in the supplemental information package available in the investor relations section on our website and in our SEC filings. I will now turn the call over to Tammy. Thanks, George, and thanks, everyone, for joining our call today. Before we talk about our outstanding results for the quarter and our positive outlook for the remainder of 2021, I'd like to recognize the hard work and dedication of all of our team members, beginning with our field team, our corporate team members, and our PROs and their teams. The joint efforts by all of the extended NSA family are what drives our stellar results. I couldn't be prouder or more appreciative of our entire team. Now, moving on to results. We're off to an exceptional start to the year, delivering double digits same-store NOI growth in the first quarter, and with acquisition volume that is on pace to reach the top half of our original guidance range. While the back half of the year still presents some challenging year-over-year comps, our current occupancy and rate trajectory make those comps appear somewhat less challenging. All signals are pointing in the right direction, and I don't see that changing in the near term. We continue to benefit from the resilience of the self-storage sector, the diversification of our portfolio, and the strength of our differentiated PRO structure. On the acquisition front, we've been very busy this year, and the pace of deals coming to market is not slowing. During the first quarter, we invested $166 million in 23 properties. So far this quarter, we've closed or have under contract to close 20 properties valued at about $250 million. We continue to see meaningful competition for transactions. The amount of capital seeking to establish or expand a position in self-storage is driving cap rate compression, especially on larger portfolios. Fortunately for us, though, about 2/3 of our closed deals this year were either off-market or from our captive pipeline, where we tend to buy at slightly above-market cap rates. The average stabilized cap rate on our first quarter acquisitions was in the high fives, and the deals so far in the second quarter are in the mid-sixes. Our Core FFO per share increased 23% in the first quarter compared to the first quarter last year. This growth was driven by a combination of strong same-store growth, healthy acquisition volume, and the internalization of SecurCare Self Storage in April of 2020. While the self-storage sector as a whole is clearly having a banner year, we once again are able to deliver results above the peer average, which really attests to the benefits of our PRO structure and our secondary market exposure. In summary, it's a great time to be in self-storage, as our results surpassed even our own expectations. Fundamentals continue to strengthen from already remarkable levels. We'll remain very active and engaged in the current consolidation phase of our sector. Our stellar first quarter results and the continued momentum into the second quarter give us the confidence to raise our same-store NOI and Core FFO per share guidance meaningfully. I'll now turn the call over to Dave to provide color on what we're seeing on the ground. Dave? Thanks, Tammy. As you know, we kicked off the first quarter with already strong year-over-year occupancy gains and positive momentum in street rates, both of which have seen continued improvement each month this year. We ended the first quarter with record occupancy of 93.8%, which has increased to 95% at the end of April. Despite having entered the peak spring leasing season at such a high occupancy, we are still experiencing normal seasonal leasing trends. As we move into the second quarter, the overall rental activity will appear to be elevated. That is due to the comparison of the muted levels during the pandemic-related shutdown of 2020. As we have discussed on our past couple of calls, consumer demand for storage is driven by a broad number of factors, which we believe will continue. The wind is clearly at our backs, and currently we're not seeing any decline in customer demand. We do believe we'll see a return to normal seasonal occupancy trends by the end of the year. With the strong demand factors continuing, we believe that our occupancy will remain above historical levels throughout 2021. We do want to reiterate that we managed to optimize our total revenues and not occupancy. Free rates have increased almost 8% year-over-year in the first quarter, and accelerated to the mid-teens in April. As we continue to monitor all restrictions across all of our communities, we did see California lift most of its pricing restrictions during the first quarter, which provided an additional opportunity to optimize our revenue management strategies. The few remaining restrictions in California are in areas where we don't have significant exposure in those markets. Turning to new supply, outlook remains similar to what we've communicated on our previous couple of calls. Completions are trending down year-over-year, while an increase in abandoned projects is reducing the forward pipeline. We have yet to see a meaningful shift of development activity in any of our markets. At this point, we don't think that the healthy storage fundamentals that we're experiencing today will result in a spike in new construction in the near term. We will continue to face headwinds from new supply in Portland, Phoenix, certain sub-markets in Dallas, Atlanta, and West Florida. Currently, the robust demand is mitigating the negative impact from supply in these markets. I'll now turn the call over to Brandon to discuss financial results and balance sheet activity. Thank you, Dave. Yesterday afternoon, we reported core FFO per share of $0.49 for the first quarter of 2021, which represents an increase of 23% over the prior year period. First quarter same-store NOI increased by 11.5% over prior year, driven by 8.1% revenue growth with only a 60 basis point increase in property operating expenses. Same-store occupancy averaged 92.5% during the quarter, an increase of 560 basis points compared to 2020. Same-store OPEX growth was muted due to an ongoing focus on cost control, as we've discussed in recent quarters. Specifically, strong customer demand allowed us to reduce marketing spend, which declined 4.1% in the first quarter compared to prior year. Personnel costs declined 1.1% year-over-year, in part due to reduced store hours as well as an easier comparable from 2020. These favorable expense controls were partially offset by property taxes that grew 2.6% from the prior year period, R&M which grew 4%, largely due to elevated snow removal costs from the winter storms. Moving on to guidance. The first quarter was better than we expected, as is the continued momentum in April and these first few days of May. The elimination of nearly all restrictions that previously affected us is also a benefit since we introduced guidance in February. Of course, comps become more challenging in the second half. Taking all of this into consideration, we're increasing full year 2021 guidance as follows. Core FFO per share increases to a range of $1.89-$1.93, or 12% growth over prior year at the midpoint. For same store, revenue growth of 5.5%-6.5%, OPEX growth of 3.5%-4.5%, and NOI growth of 6%-8%. We also increased the low end of assumed acquisitions by $100 million to a new range of $500 million-$650 million. Now a lthough we don't give guidance for the next quarter, I want to remind everyone of the unusual comp we have in Q2. In 2020, we only had negative same-store revenue growth in one quarter, and that was Q2. Typically, same-store revenue grows sequentially in the second quarter due to seasonality. Last year that didn't happen because of the slowdown in customer traffic and the various limitations on our normal course business practices. With that as the comparable, and given we ended Q1 nearly 700 basis points stronger in occupancy over prior year, it's very realistic we could deliver double-digit same-store revenue growth in the second quarter. Additionally, I realize that our full-year same-store NOI guidance range assumes a deceleration from Q1 levels. Keep in mind that Q1 benefited from low expense growth and we have more challenging expense comps the rest of the year. I'll also point out that the bottom end of our full-year same-store NOI guidance range assumes a confluence of negative factors, the likelihood of which is very low. Turning to the balance sheet. At the end of March, we settled the remaining portion of our forward equity offering that we transacted last year, issuing $3 million shares for net proceeds of $97 million. We also utilized our ATM program to issue nearly $2 million shares for net proceeds of $78 million in March and April. Earlier this week, we entered into an agreement to issue $180 million of private placement notes with a weighted average maturity of 9.6 years and a weighted average cost of 2.87%. Our balance sheet is well positioned with only $3 million of debt maturing through 2022, plenty of capacity on the revolver, and a net debt to EBITDA ratio of 5.8 x at the end of the first quarter. Our conservative balance sheet management was recognized by Kroll Bond Rating Agency in their recent affirmation of our issuer credit rating at BBB flat, while they revised the outlook to positive from stable. We're committed to maintaining a strong balance sheet with low leverage and access to multiple sources of capital, which allows us to opportunistically take advantage of the deal flow that we're seeing. Thanks again for joining the call today. Let's now turn it back to the operator to take your questions. Operator? Thank you. We will now be entering our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may also press star two if you would like to remove your question from the queue. One moment please while we now poll for questions. Our first question comes from Juan Sanabria with BMO Capital Markets. Please proceed with your question. Hi. Thanks for the time and good morning. Just on the cap rate comments you started out, I think you commented, a kind of mid-fives or high-fives cap rate stabilized. Just curious, on the mix of stabilized versus lease-up, and if you could tell us what the going yields were, but more broadly, where you expect cap rates to be for future acquisitions based on how competitive the market is today. I would say that, as you know, Juan, thanks, it's a good question, thanks for the question. As you know, our core strategy is the acquisition of stabilized properties. Less than 20% of the assets that we acquire are considered assets in fill-up. To the extent the assets are in fill-up, you might say the going-in cap rate is 50- 75 basis points lower. Stabilized cap rates are mid to high fives, and to the extent the assets are coming out of our captive pipeline or our off-market, we're seeing cap rates in the low to mid-sixes. I guess let me follow up on that. Your second question was where do we see cap rates going? I'll tell you that we are seeing significant cap rate compression. There is no shortage of capital chasing transactions. We are very focused on acquiring assets that we want to hold over the long term, and yet we will remain disciplined. I think there's no question that cap rates will continue to compress. Thanks for that color. Then just on the expense side, curious on how we should think about personnel and marketing costs going forward. Some of your competitors have talked about, as have others, about the impact of technology in reducing hours. But how much runway do you have on personnel, and how long do you think marketing costs stay kind of below the trend that we were seeing for a couple of years there with some of the pressures from your Google costs, et cetera? Yeah. Hey, Juan, it's Brandon. Let me start, and then I think Dave can provide some color. In terms of the personnel costs, some of what we saw in the first quarter was certainly what we've talked about the last few quarters about finding efficiencies. Last year caused us to look at the business in a different way. Certainly optimizing store hours, for example. It's also a comparable thing. If you look at Schedule 8 in our supplemental, you see the trailing five quarters, and Q2 through Q4 is a tougher comparable for personnel. I definitely expect that to be elevated year-over-year for the balance of the year. Marketing was certainly a benefit in Q1, and that had to do with the positive fundamentals we saw across the board. We didn't need to spend the money, so we didn't spend the money. I do think there's some legs to that as we just continue to see everything that we have so far in April and May. I'll just pause there and let Dave chime in. Yeah, I would agree, Brandon. I think we're also making some really nice advancements on our customer acquisition tools as we look at some of the AI learning tools we have implemented and how the teams are responding with the customer acquisition process and their competitor sets and how they're really deploying marketing spend. One, we have great demand, which allows us to keep marketing costs down right now, but I do think futuristically, we are getting better at how we deploy our customer acquisition dollars. One more thing I wanted to add is just the 50 basis point drop on the high end of our OPEX guidance. That's really driven due to the marketing coming in lower in Q1 and what we're seeing right now. It's also property taxes. Even though property taxes were higher in Q1 year-over-year at 2.6%, that was due to some one-time benefit that we had in the first quarter related to last year. We still expect that run rate to be closer to 4.5%-5.5% for the full year 2021. Thank you very much. Thank you. Thank you. Our next question comes from Neil Malkin with Capital One Securities. Please proceed with your question. Hey, everyone. Good morning. I guess the market wasn't happy with double-digit same-store revenue growth for the first half of this year. Right. Absolutely. Yeah. First one, maybe just kind of bigger picture. I think the outmigration from the coast is by now well documented. Maybe it's a little harder for you guys to assess that or see that, but are you seeing a notable uptick in at least new leasing volume from out-of-state, in particular, your coastal states or larger cities into your kind of secondary/suburban assets? That's a good question. We've certainly seen outward migration into really as you look at the Sun Belt areas, the Arizonas, the Floridas, even Nevada, Texas, Alabama. We've certainly seen housing markets be very strong, rental markets be very strong, that transition certainly creating demand for storage. All of our markets have responded well, though, and that's one of the things I think we're pleased with is we've had success across all of our portfolio, but those markets are performing a little bit stronger in those areas. You still have some COVID effect overhang going on with the communities that haven't cycled back yet, the communities haven't solved their return to office, return to the gym garage, those type of things. That's still out there. Our tertiary markets, even though they had a great 2020, if you want to look at it compared to some of the other markets, are still standing up very strong. I think there's a lot of factors that we're talking about, and that transition you mentioned is one of them. Okay, great. Maybe on revenue management. Occupancy is 95%. That's crazy for your portfolio. I mean, congrats. Yeah. Just kind of given the state of where things are, clearly you're seeing street rates tick higher. Is that part of the revenue management? Maybe if you can give some insight, maybe Dave, really anyone. What are your plans for the next couple of months where you're seeing unprecedented demand, very high occupancy? How are you going to look at existing customer rent increases, street rates, especially with some of those restrictions being lifted? Can you just kind of walk through how you're thinking about that, and if that means there's potentially upside to your revenue guidance from that? Yeah, it's a really good point, and it's a good question. We're spending a lot of time on that because this is a very high occupancy level for all of the sector, including ourselves. We're looking at all the ways we can assert ourselves in all of our markets and all of our locations. We've seen very strong street rate growth through the first quarter. We had around 6% in January. Street rate growth was somewhere in the almost 16% by the end of April. We're seeing some really strong improvements there. That leads us to, obviously, with high occupancy, good street rate growth allows us to assert on in-place rent changes. Those changes are in the high single digits to low double digits at this point, and we're assessing it by unit size, by customer type, by location. The team's done just a great job using the new tools that we have in place to implement all of these strategies. We're going to assert and push as hard as we can push and be smart, but still be very assertive. Okay. Just, I guess maybe a follow-up to that, specifically. Typically, it's seasonal with the move-out, move-in spread. Do you think this summer, this 2Q32 or 2Q vs 3Q will be different in that you might have move-outs that came in during COVID, didn't get a bump because of the market, and then they're moving out now on top of very strong street rates, which will sort of maybe widen that move-in, move-out spread to essentially historic levels. Is that a possibility? I certainly think it is, yes. One of the things we're entering with the rent rolldown, as you kind of mentioned this piece of it, the first quarter was really more like a historical peak leasing season for us. If you looked at the first quarter average, about a 2.5% rent rolldown rate, which would normally be in our strongest leasing season. In April, we flipped that to a positive at 3%. As we work our way through the summer, what we're happy with is velocities are still remaining very good. Rental velocities are strong. Even the move-out velocities right now are still muted, even if you look beyond what 2020 was, because we know that second quarter is going to be really hard to compare against our 2019 volumes as we're studying the same set of stores. We're still seeing muted move-outs. I think this leasing season will be very strong for a lot of factors, occupancy level, rates, rolldown, all those things you're mentioning. Okay. Thank you all very much. Great quarter. Thank you. Thank you. Thank you. Our next question comes from Smedes Rose with Citigroup. Please proceed with your question. Hi, thanks. I just wanted to go back to some of your opening remarks where you talked about not necessarily seeing a meaningful uptick in development, even though the industry is doing so well. I just wondering, what do you think are the key sort of gating factors? Is it just the ability for developers to access capital from banks, or is there something else that you think will kind of suppress new construction going forward? Hi Smedes, and nice to talk with you. Thanks for the question. I think that what we're seeing right now is what's in the pipeline and what we're hearing about, we rely probably on some of the same data that you guys do. We have maybe a slight advantage because we have our PROs on the ground, and it's what they're seeing and what they're hearing in their own markets. I guess our view is that self-storage is performing so well. Clearly, there will be continued interest in developing assets. Right now, what we're seeing in the pipeline are projects that were delayed in 2020, coming to market in 2021. Length of time to get through a process, the cost of building a project, whether or not the project will pencil the same way it did, we're not seeing it yet. It doesn't mean that we won't. Right now, we believe that deliveries will be up a little bit from 2020, primarily due to the delays in I might have said 2020, but in 2021, we think deliveries will be up a little bit as compared to last year. 2022, we think they'll be the same or down a little bit and continue to decline based on what we're seeing. It's not because the asset class isn't attractive. I'm not positive that it's that easy to get through it right now. Okay. I was just wondering, outside of your captive pipeline, will you look at other opportunities? Are you seeing any change in the willingness of folks to try to come to market and sell based on the potential changes in tax rates? As I'm sure you've seen, the elimination of the step-up, the 1031 exchange, capital gains rates increasing. Is that sort of trickling through at all or is it not really an issue so far with what you've seen for motivating sellers, I guess? They're hearing about it, and there's a lot of discussion around it. I wouldn't say that what we're seeing in the current deal flow is driven by what's happening in Washington, D.C. today. Having said that, I think that the pipeline, the top of the funnel, is getting bigger and faster, and my take on that is that it does in fact have something to do with potential changes in tax law. Okay. All right. Thank you very much. Mm-hmm. Thanks, Smedes. Thank you. Our next question comes from Samir Khanal with Evercore ISI. Please proceed with your question. Good afternoon, everyone. I guess, Brandon Togashi, when I look at your guidance today, where do you think you've left some room to the upside, meaning that if I were to look at guidance again sort of six months forward at that point, if you have raised, where would the upside come from? Is it acquisitions? Is it better control expenses? Just trying to get a better clarity on that. It's a good question, Samir. I think the top line is one area where we're at record high occupancies, as Dave said. It's somewhat new territory for us with this portfolio. How high can we go projecting out the pace of move-outs? I'll tell you, last year as we progressed, we saw the delayed start to the normal occupancy trends, and progressed in the back half of the year with a lot of trepidation about when would we start to see that slope down on the occupancy curve, and it never really came, right? We just kind of held occupancy through Q4, and into Q1, and now we're certainly seeing the typical occupancy trends and leasing activity that you'd expect. We feel more comfortable with that. We do not expect a dramatic return to move-outs with normal seasonal patterns. On the downside, to get to the downside, it would have to be a surprise. It would have to be a very dramatic return to move-outs en masse. We're seeing very low bad debt right now. Historically, we've talked for our portfolio about 2% - 2.5% of revenue bad debt, and we're closer to 1.5%. There is, in our minds, an expectation that we will see some return to those levels. There's a lot of money that's been pumped into the system, broader economic factors. That's all played into the ranges that we've revised to. Back to your question, on the upside, I think it's a continued hold on the occupancy, and maybe we're seeing, as David Cramer mentioned, we grew occupancy further in April so far. Continue to see that, and that's probably the biggest windfall. OpEx, I think we're at a good number. I don't expect that to contribute meaningfully on the upside. Yeah. No, thanks for that. I guess my second question is just taking a step back. Where is this sort of demand or new demand coming from, right? As you talk to customers, I'm sure there's surveys you do. What's kind of been the biggest reason as to use storage right now? I think largely, what we've seen a lot of the surveys recently is more around this transition, moving houses, rental apartments type markets. There's just a lot of transition around the country. In and out of markets, in and out of cities, in and out of states. That is really fueling a lot of what's going on. The economy, from a small business perspective, is standing up very strong right now. Our consumer ratio of residential versus commercial is in normal levels, and those commercial tenants are paying well and doing good. This seems like all factors, and then you layer on a little bit of the COVID-19 overhang, it just adds to that overall demand picture. Thanks. You bet. Thank you. Thanks, Samir. Thank you. Our next question comes from Todd Thomas with KeyBank. Please proceed with your question. Hi. Thanks. First question, circling back to acquisitions. You provided the initial yields on the first quarter and second quarter investments, which was helpful. I'm just wondering with the demand that you're experiencing today in the portfolio, whether or not you're considering lease-up opportunities more than you have in the past. Yeah. Good question, Todd. We are. We're definitely more open to assets that are in lease-up. As I think I mentioned earlier, a little less than 20% of the assets we've acquired in the last six months would be considered lease-up assets. I think there are more opportunities coming to market, and we like what we're seeing in many cases. It's an opportunity for us, from our perspective, to drive the external growth. Okay. Can you share updated thoughts, in the current environment about bringing a new PRO onto the platform? Are you seeing activity pick up at all on that front? I wouldn't say that activity is picking up. We continue to have conversations with a handful of private operators who we've been talking to them. As you know, it doesn't happen quickly, and it's a big decision to join NSA, and it's a big decision for us to bring an operator into our family. I definitely wouldn't rule it out. It's a part of our strategy. We're focused on it, and it will remain so. I'd like to see something happen this year, we clearly can't say that it will. It takes time. Okay. What about the outlook for an additional PRO internalization in the near term? We don't have any line of sight on another PRO internalization right now. Having said that, I do think that we would be having preliminary discussions early on. We wouldn't know formally until closer to the end of the year. I think that the success of the internalization of SecurCare shows leadership and shows how it can work and how successful it can be. I have confidence that was a good move and, as I say, kind of leads the way for the rest of the group. We don't have any indication that anyone is considering it right now. Okay, that's helpful. Just last question. Dave, the comments I think you made about seeing occupancy higher throughout 2021, was that for the full year, or were those comments to suggest that you would expect occupancy to remain higher on a year-over-year basis, even late in the year, in the fourth quarter through December of this year? Yeah, it was really more as you look out towards the rest of this year and throughout the rest of 2021, based upon historical levels. We may peak in the summer and see, we're currently sitting at what, 95% today. I don't know where the summer ends up. By the end of the year, we think that will trail off for a number of reasons. One, we're working really hard on revenue management. When you do that also could push occupancy down some. Just normal seasonal trends. We do believe from a historic level, if you look at where we finish towards the back half of the year, it'll probably be higher than where we've historically closed previous years. Right. Okay. Makes sense. All right, great. Thank you. Sure. Thank you. As a reminder to our audience, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Ronald Kamdem with Morgan Stanley. Please proceed with your question. Hey, congrats on a great quarter. Just a couple quick ones from me. Just going back to sort of seasonality and maybe asking that question a different way. Clearly, 2020 was a unique year, and there was really no seasonality. As you're coming into 2021, is it possible that the peak leasing season and the acceleration where we typically get, could it be back to normal this year? Is that possible or some form of it? How are you guys thinking about that? I would say early on, April certainly suggested that we were going to have some pretty more normal seasonality trends. First few days of May have looked pretty good as well. I think that as you look at it, we're pretty full right now, too. You start looking at how many more available units do you have and what do you have left in your inventory to rent. We are studying the velocities. We're happy with the velocities. It feels more like a spring to us, like a normal spring to us. Yeah, I would say right now we're thinking it's more of a normal seasonal time of year for us. Got it. Makes sense. My second question was just a little more color, switching to sort of eRental and operations post-COVID-19. Can you just remind us what% of customers are coming in through sort of an eRental platform and any sort of color and how those customers are behaving relative to sort of the rest of the portfolio in terms of age demographic, average stay, any color would be helpful? Yeah, great question. Our complete online rental, if you look at it, the way people who went through the process fully online is in the high 20s, is where it's settled in at. We're working on the journey. We're working on the tools. We'd like to see that increase more. We think that's an opportunity for us as we continue to build out our technology platforms. The behaviors and the demographics and the people using the platform, we're not seeing nothing's really standing out for us as being different or a unique user or any different length of stays at this point in time. Obviously early in this process, most of that stuff's only been out about, really about a year. Yeah, at this point in time, nothing really standing out as far as a difference in type of consumer we're drawing. I think just yet another tool for us to use to help however you want to rent from us and have that journey be just another tool for us to maximize on. Right. My final question was just going to be on part of the acquisition front and circling back to, I think you touched on the captive pipeline and so forth. The question really is, when you're thinking about sort of upside to the acquisition volumes and so forth, what's really the main impediment again? Is it capital, or is it usually the availability of deals out there because it's so competitive when you're thinking about acquisitions? I got to imagine with the equity currency at these levels, it may not be capital, but curious how you guys are thinking about it. The truth is, this cap rate climate is crazy. Every time we see the cap rates go down another 10, 15, 20 basis points, we're like, "Oh, this has got to be it. It can't go any lower than this." The next deal comes out and prices at some 10, 20, 25 basis points lower. For us, it's a matter of keeping our eye on the long term and making sure that we're acquiring assets that are in markets where we want to be for the long haul and that we think have upside value to us. Not capital as much as this current competitive environment, frankly. Got it. Helpful. Congrats on a great quarter. Thank you. Thank you. Thank you. Our next question comes from Ki Bin Kim with Truist. Please proceed with your question. Hi. I just wanted to follow up on Samir's question earlier. When you look at the incremental demand drivers for self-storage in a market like Portland versus Atlanta or Vegas, is it very different or pretty similar? There's a lot of similarities. Where our customers are coming from, length of drive time, mile radius, types of customers, demographics of customers, pretty similar across most of those markets. When you mentioned that some of the incremental demand is coming from transition-related, housing-related demand. Traditionally, our users that stem from that kind of demand segment, do they have a longer length of stay or shorter, or is it pretty similar? I think if you're looking at housing transitions, they have their own set of I guess as you look at length of stay, it depends on how long they're waiting for their house to complete, how hot the housing market is. If you look at some of these really hot housing markets right now, how long does it take them to actually find something to move into? Are they going to be in that apartment nine months? Are they going to be in the apartment six months as they wait for the house to either be finished, being built, or being bought? I don't know that I can really answer to you that between housing and apartment rentals, that there's a significant difference even. I think within the subset of what we're seeing, we haven't seen that change is how I'd probably answer that. Personally, I own a house right now in Phoenix. Length of stay is pretty much similar to what we would see in a normal housing market. It's just it's a hot housing market now, so we're seeing more people need storage because of it. Got it. If I remember correctly, there's a 6% preferred return that goes to the SP units on deals. I believe that's only on contributed equity value. Does that in some way limit the type of assets that you might want to pursue because you have this initial preferred return that you have to give back, so you can't necessarily but it discourages you from necessarily pursuing lease-up deals that might not have that 6% cash flow to pay out. I'll tell you that it's interesting. Our PROs are very focused on and very disciplined in their sourcing and underwriting of transactions. We are absolutely, I would say, not restricted in our acquisition strategy. I guess it's also worth pointing out here is we're probably 45% now corporate-owned managed stores. Well, they're all 100% owned by NSA, of course, but our corporate team is a much bigger part of the pie these days. In the event that we're looking at, let's just say, a portfolio that crosses over markets where we operate and our PROs operate for us. If a PRO takes a pass on a deal for one reason or another, let's say they start to get priced out because of cap rates, we have the opportunity to go forward with the transaction on balance sheet with our corporate team. That's sort of how we look at it. We don't feel like we're getting boxed out of deals, really, ever. We feel pretty good about that part. Okay. Just last question. The conversion ratio for SP to common increased to 1.28 from 1.23. Just curious of what caused that. That's directly related to performance. It's 100% related to Q1 performance. More NOI. Okay. Got it. Thank you. Thank you, Ki Bin Kim. Thank you. There are no further questions at this time. I'd like to turn the call back to Tamara Fischer for closing comments. I'd like to thank you again for your interest in NSA. We're very pleased with our first quarter results and the fact that our sector and our unique PRO structure allow us to continue to deliver these outstanding results. We remain optimistic about 2021, we look forward to meeting with many of you, either virtually near term or hopefully in person again later this year. Thanks. Bye-bye. Ladies and gentlemen, this concludes today's web conference. You may now disconnect your lines at this time. Thank you for your participation, and have a great day.