Greetings, welcome to the National Storage Affiliates’ Fourth Quarter 2022 Conference Call. At this time, all participants are in 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 Fourth Quarter 2022 Earnings Conference Call of National Storage Affiliates Trust. On the line with me here today are NSA CEO Tamara Fischer, President and COO David Cramer, and CFO Brandon Togashi. Following prepared remarks, management will accept questions from registered financial analysts. Please limit your questions to one question and one follow-up, then return to the queue if you have more questions. In addition to the press release distributed yesterday afternoon, we furnished 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 and represent management's estimates as of today, February 28, 2023. The company assumes no obligation to revise or update any forward-looking statement because of changing market conditions or other circumstances after the date of this conference call. The company cautions that actual results may differ materially from those projected in any forward-looking statement. For additional details concerning our 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. We're very pleased with our fourth quarter results that capped off another impressive year, delivering growth in core FFO per share for the year of over 24%, the second highest year of growth for us since our IPO in 2015. Our same-store growth for the year of almost 15% culminated a record three-year period where same-store NOI is now more than 40% and FFO per share is now more than 80% higher than the pre-pandemic levels of 2019. During the year, we acquired 53 stores valued at nearly $800 million, comprised of 45 wholly owned properties valued at $570 million and eight properties valued at $215 million that we acquired with our joint venture partners. I think it's worthwhile to note that this transaction volume was our third largest year since our IPO based on wholly owned acquisitions activity. To top it off, we also delivered 35% growth in dividends paid in 2022 compared to the prior year. Not only are we proud of being able to deliver record levels of financial growth for our shareholders, we're also proud that 2022 was our biggest year in supporting our communities since our IPO. Through our partnership with Feeding America, we were able to provide 1.5 million meals to assist in ending food insecurity in America. Our properties continue to support their local schools and children’s charities, and our corporate team thoroughly enjoyed our holiday toy drive for children’s hospital here in Denver. We were pleased to again step up our support of the Self Storage Association's College Scholarship Program. We also continue to enhance our diversity at NSA, where more than 40% of our senior management are women or minorities. Turning to the current acquisitions environment, we're seeing fewer deals come to market and there remains a pretty significant gap between buyer and seller price expectations. We continue to evaluate deals where it makes strategic sense and remain both disciplined and very selective in the face of today's increased cost of capital. Of course, just like we refuse to buy at prices that are not accretive for our shareholders, sellers often refuse to sell given the healthy cash flow they generate. It's not uncommon for sellers to just pull deals off the market if they don't like the pricing. Overall, the volume of transactions in the market is definitely slowing. In our case, though, we do have the unique benefit of our captive pipeline of assets, which are stores managed by our PROs, but that we don't yet own. Because we're on the same team as buyer and seller in these cases, we can cooperate to use structuring that is accretive for our shareholders while also beneficial to the sellers. To that end, we recently entered into an agreement to acquire 15 properties in Florida owned generationally by one of our PROs and family members. The transaction is valued at about $145 million, and we expect the first year yield will be in the low sixes. In this case, we've negotiated to fund the transaction with the issuance of a new series of preferred equity, beneficial to the PRO's family, but still accretive to NSA. We expect the transaction will close sometime in March. This deal demonstrates one of the many benefits of our PRO structure and our ability to continue to grow while being creative with capitalization. We began 2023 with another accretive event in the retirement of Move It Self Storage, one of our IPO PROs. Move It managed over 70 properties for NSA, concentrated in Texas and the Southeast. As most of you know, we've discussed and anticipated PRO retirements over time. We expected, at the time of our IPO, as many as half of our six PROs at the time would choose to retire within 10 years. Move It is the third of our PRO retirements following Northwest last year and SecurCare in 2020. We'll continue to operate the stores under the Move It flag. The internalization of Move It increases the number of stores managed within our corporate portfolio to almost 800 stores, or over 70% of our total 1,100 stores at the end of the year. We estimate this retirement will be $0.01-$0.02 per share accretive to core FFO. I'd like to thank the Move It team for their partnership over the years. They've been a key contributor to NSA's success. Finally, as today's call will wrap up my final year as NSA's CEO, I'd like to congratulate Dave on stepping up as CEO effective at the end of this quarter. I'd also like to congratulate Tiffany Kenyon on recently being elevated to Chief Legal Officer, and Derek Bergeon, our current Senior Vice President of Operations, on his upcoming move to Chief Operating Officer. I look forward to Dave leading NSA through its next phase of growth and continuing to deliver outstanding results for all of our stakeholders. I'll now turn the call over to Dave. Dave? Thanks, Tammy. I'd like to congratulate you on your upcoming transition to Executive Chair. We appreciate all that you've done for the NSA and all that you will continue to do in your new role. I would also like to thank our PROs and their teams, along with the NSA team, for achieving great results in 2022. Without their efforts, we would not be able to accomplish all that we have this year. As we reflect on the fourth quarter and how 2022 played out, we really experienced normal seasonal trends. Occupancy peaked in Q2 at 95.3% and finished in December at 90.5%. Contract rates grew every month in 2022, finishing 12.7% higher than 2021. Our rent rolldown averaged 12% in the quarter, which was in line with our expectations. Rental activity followed historical patterns, peaking in the summer months and declining in the back half of the year. As a reminder, our current tenant base has an average length to stay of over 40 months. Our team did a wonderful job in the quarter, driving revenue, which was up 7.4%, controlling expenses up only 1.6%, leading to an increase in NOI of 9.4%, thus improving our NOI margin by 140 basis points. As we look to 2023, we are encouraged as our portfolio is following typical seasonal trends. Occupancy and street rates have bottomed here in February, and we expect them both to pick up as we head into the spring leasing season. We believe we're on track to stabilize above pre-pandemic levels. January month-end same-store occupancy was over 250 basis points higher than January 2019, implying that we are settling in well above pre-pandemic levels. Our Sunbelt markets continued to outperform with states such as North Carolina, Florida, Georgia, and Texas all generating above portfolio average revenue growth. Several of our secondary markets, such as Brownsville, McAllen, Oklahoma City, Fayetteville, and Wilmington, are also outperforming the portfolio average. This reinforces our strategic market focus on Sunbelt secondary and suburban markets and continued emphasis on geographic diversity. Our focus on people, process, and platforms in 2023 will enable us to deliver strong results and continued success. I'll now turn the call over to Brandon to provide more detail on our financial results and balance sheet activity. Thank you, Dave. Yesterday afternoon, we reported core FFO per share of $0.71 for the fourth quarter of 2022, which represents an increase of 11% over the prior year period. For the full year, core FFO per share was $2.81, a 24.3% increase over 2021, driven by so-strong same-store performance, including 12.1% revenue growth and healthy acquisition volume in the back half of 2021 and throughout 2022. Dave spoke to the drivers impacting revenue. Let me give some color on fourth quarter operating expenses. Our fourth quarter growth of 1.6% benefited from lower than expected property taxes due to some successful challenges and efficiencies in personnel, partially offset by inflationary pressures on utilities and increased marketing expense. Turning to the balance sheet. During the quarter, we entered into swaps to fix interest rates on $410 million of floating rate term loans. The weighted average effective interest rate on these loans as September 30 was 4.6%, and pro forma with swaps was 5.2% as of December 31. In early January, we announced the recast of our credit facility, including expansion of our revolver capacity to $950 million, a $230 million increase to our existing term loans, and the retirement of $300 million of 2023 maturities. This execution during an evolving bank lending environment demonstrates the appeal of self-storage as a property type and the strong relationships we have with our bank group. The end result was an extension in our weighted average maturity to 5.7 years from 5.1, increased flexibility, and about a five basis point increase in weighted average effective interest rate. At quarter end, our leverage was 6x net debt to EBITDA, right in the middle of our targeted range of 5.5x-6.5 x. Pro forma for the financing activity I've mentioned, at year-end, approximately 17% of our debt is subject to variable rate exposure, down from 24% at September 30, with nearly all of that exposure from the outstanding balance on the revolver. We're committed to maintaining a conservative leverage profile and healthy access to multiple sources of capital. Now, moving on to 2023 guidance, which we introduced in yesterday's release. Same-store growth is reverting to long-term averages. We estimate same-store revenue growth at 4.5% at the midpoint of the range we've provided, which is in line with our average annual growth over the three years pre-pandemic. We estimate same-store expense growth at 5.25% and NOI growth of 4.25%, each at the midpoints we provided. Our same-store pool increases to 834 stabilized stores and 52 million sq ft, an increase of over 200 stores due to our record acquisition volume in 2021. Approximately 68% of our same-store portfolio is in the Sun Belt, we expect revenue growth from these stores to outpace our non-Sun Belt stores by about 100 basis points. We are very pleased with our core operating fundamentals. However, higher interest rates will be an earnings headwind in 2023. Based on our debt in place currently and using an assumption that SOFR averages 4.6%, we expect interest expense of over $150 million for the year. All of this results in our 2023 core FFO per share guidance of $2.78-$2.86, with a midpoint of $2.82. Lastly, before taking questions regarding Move It, I'll offer a reminder on the mechanics of a PRO retirement. The SP units associated with the Move It PRO were converted to OP units on January first at a conversion ratio of 2.75, and therefore distributions to SP units will be reduced accordingly, while the outstanding common shares and units outstanding increase by 2.5 million. NSA will no longer pay a management fee. There will be a reduction in supervisory and administrative expenses within G&A, which will be partially offset by an increase in other G&A as the properties will now be managed by NSA's corporate property management platform. All of these items are factored into our additional guidance assumptions that are detailed in the earnings release. Thanks again for joining our call today. Let's now turn it back to the operator to take your questions. Operator? Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Please limit yourself to one question and one follow-up so we may get to everyone's questions, and then re-queue if you have additional questions. Our first question comes from the line of Juan Sanabria with BMO Capital Markets. Please proceed with your question. Hello, good morning. Just hoping you could talk a little bit more about the acquisition environment you talked about. I think it was a low 6% yield on some of the PRO assets you acquired in Florida from the family. Just hoping to get an update on kind of where you see yields today and kind of how we should expect that to maybe evolve over the course of 2023, given what you're seeing in the markets today. Thanks, Juan. Nice to speak with you this morning. I would say as it relates to the PRO assets that we're acquiring here sometime in, we hope in the next month, you know, those assets come in on appraisal, and as we said, it's just over a six cap. In general, in the marketplace, I would say that cap rates have not increased a commensurate way, and they're probably in the mid-fives is where we're seeing things. I think more importantly, what we're seeing is fewer deals come to market. Generally a gap in expectations between seller and buyer, and not unusual for us to see sellers pulling a transaction when they're not getting the pricing that, you know, everyone was seeing in 2021, early part of 2022. I think people are generally just pulling back a little bit. Just as a follow-up on the Move It PRO retirement, curious on the decision to keep the flags and how you think about the opportunity from an efficiency standpoint, to have everything on one banner versus keeping the disparate brand names out there across the NSA platform. Yeah, Juan, this is Dave. Good question, and nice to talk to you this morning. You know, as we look at the Move It retirement, we will keep the brand in place in most of the markets. There are a few markets where we have overlap, as we look at maybe some of the other brands we run in those markets, where we may selectively look at a group of stores where it's more powerful for us to have, you know, maybe a brand that had more flags in one of those markets, and we may move them around within the brands we have. We still believe very strongly in these regional brands. We believe very strongly that our platforms do not limit us in having multiple brands across the country. We've proven it out through the years, and we're pretty committed to it. We've built tools that make it easy for us to be efficient and those tools can be, you know, deployed across multiple brands very easily. We looked at it and we will continue to look at it in the future on any PRO retirements or any branding across our markets. We think we can get a better scale by having a, you know, a single brand in maybe one of these markets where we had multiple, we would change. At this point in time, pretty comfortable where everything sits. Just one sneaky follow-up, if you don't mind. Could you just give the January occupancy and street rate spot numbers, please? Yeah, Juan, and this is Brandon. Street rate year-over-year, was down about seven, a little over 7%. You know, we're switching to a new same store pool, as we mentioned in the opening remarks. The, the new pool at the end of January is 89.7, and that's down like 20 basis points sequentially from December, which is kind of in line with typical seasonality. Thank you guys. Appreciate it. Thank you. Our next question comes from the line of Smedes Rose with Citi. Please proceed with your question. Hi, thanks. I just was wondering if you could talk a little bit more, I guess, why these 15 properties in Florida are available to you in a low six cap range, and kind of how do you think about their performance, I guess, over the next couple of years. That seems sort of a pretty, I guess sort of, without knowing more, good pricing to you, right? 15 properties in Florida. It's been generally a strong market. I'm just wondering if you could talk about it a little more and maybe what this sort of special issuance of preferred equity to this, to this family, kind of any more details around that. Sure. I'll start. We'll probably have Brandon and Dave weigh in a little bit on it. These assets are coming in from our participating regional operator in Orlando. These assets have been owned for many years by our PRO's family and now extended family. As part of their long-term planning and basically estate planning, they have agreed to contribute these assets to NSA. This has taken a long time. It's just complicated with the number of owners in these 15 properties. They finally were able to pull it together and get everybody on board. Our history and our agreement with our PROs is that assets coming out of the captive pipeline do come in at appraised value without a portfolio premium. This has been a long time coming. We're very excited about it. This is an excellent PRO. They joined us in 2017 and their performance is outstanding. We have no doubt that they will continue to operate, you know, at the top of the pack. I don't know, maybe you wanna jump in a little bit on that transaction. Yeah. I mean, on that deal. This is Brandon, Smedes. On that deal specifically, I think, you know, another positive, it's deepening our presence in the Orlando market. It's a top 25 MSA growing Sun Belt market. We've got five stores in the current portfolio right now, so this takes us to 20 assets with the incremental 15. That's a tremendous positive. The other thing I would tell you just broadly is the deals that we have done recently, we only did two, albeit at higher value properties, so $40 million in Q4, those were PRO-sourced. All of these are situations where the PROs are working with us, helping us solve for the cost of capital side of the equation. Those two properties that we closed on in Q4, they were done with a good chunk of the consideration in the form of OP units that we issued at an agreed upon premium, $60 a unit. In the case of the Personal Mini 15 property Florida deal, where we expect for the vast majority of the consideration to be issued in the form of preferreds, as Tammy mentioned. Just signed the agreement last week in terms of getting the deal done. There's some more documents and things to get through over the next few weeks. I don't have a hard number for you, but we expect the majority of that purchase value to be paid for in the form of preferreds, which, based on the price that we've agreed on, will carry a yield very similar to our outstanding preferreds today. It's gonna be a 6.1% yield. Okay, thanks. I was just wondering— Go ahead, sorry. No, that was it. Go ahead, Smedes. I just wanted to ask you on your expense outlook, if you could just talk a little bit more about kind of some of the components, maybe what you're seeing in wages and labor and maybe sort of marketing thoughts and property taxes and, you know, any other sort of major line items. The two biggest line items, property tax and personnel, we expect those two line items growth rates in 2023 will be in line with that total OpEx range we gave, a 4.5%-6%. Property tax is probably a little biased to the high end, personnel, a little biased to the low end, at kind of our base case levels. That comes off of, you know, just under 5% growth on property tax in 2022. For wages, you know, we had essentially flat growth in 2022, we're working against that comp. That's, you know, very pleased if we end up in that mid-single digit growth number. The other line items that will be above the total range that we gave in terms of growth would be marketing, utilities, insurance. Marketing and utilities for sure, the first half of the year, we still have a tough comp to work against, and then by mid-year we kinda get to the point in time last year where we were starting to increase net spend. The last thing I would guide you to is just for first quarter 2023, the growth rate is gonna be elevated. It'll probably be high single digits because we've got kind of a dynamic I just mentioned with marketing and utilities, but also a tough comp on property taxes. We had a good guy in Q1 2022, and so we're working off that comp. Great. Appreciate the detail. Yep. Thank you, Smedes. Our next question comes from the line of Lizzie Doykin with Bank of America. Please proceed with your question. Morning. Thanks for taking my question. I was wondering if you could provide some color on maybe the latest demand indicators as we're into February? Just as it relates to the consumer. You know, maybe if there's a read-through that could provide into the spring, you know, how are web traffic trends doing perhaps that might be a good indicator, and how does that compare, you know, to the typical kind of seasonal cadence that you would see? Thanks. Yeah, Lizzie, this is Dave. Good question. We're pleased right now with what we're seeing as far as customer activity. You know, I thought the team did a really good job the back half of 2022 really managing rate as we knew occupancy levels would come back to more historical levels. We did a really good job around discounting and around what we did with contract rent and what we did with our asking rents through the end of 2022. You know, towards the end of 2022, we ramped up marketing spend, and we really turned that on in November and December. You know, so we're seeing the positive effects of that as we come into January and February. You know, January's move-in numbers were 4%— about 4.2% higher than a year ago in January for this pool, we were pleased with the amount of move-in activity we had. Move-outs were fairly close to flat, about 1%-1.5%, you know, 1.5 points above what historical numbers were in January. Top of the funnel has been good. We've applied the right amount of paid spend. We've applied around the right amount of market pressures around where we want to be in pricing. We've adjusted street rate pricing to be a little more competitive in these markets. We're seeing the results of that. Top of the funnel is strong. Our conversion activity is good. I think the teams have done a wonderful job positioning us for what we think is gonna be a pretty typical spring leasing season. You know, in this time of year, you usually see the bottom of occupancy, you see the bottom of street, and we think we've found that, and we're starting to cycle more towards the spring leasing season and pretty positive about where we sit right now. Great. Thanks. That's helpful. As a follow-up, I was just wondering if you could talk about the focus with respect to the acquisitions you're hoping to enter into through your PRO partnerships, just given the latest Florida acquisition as a top 25 MSA. Is there more of a focus to like shifting towards these more primary markets versus what you've had historically as a secondary, tertiary, more of that exposure? Maybe if you could talk about where you're seeing the best demographics are, where —what still makes the most sense in terms of markets in 2023? Yeah, good question. you know, I think our focus on acquisitions and our strategy around acquisitions hasn't changed tremendously. I mean, we will fill in markets where we think it gives us good economies of scale, it gives us good distribution ability to drive revenue. We're certainly focused on the Sun Belt, and our focus around Sun Belt secondary and suburban markets isn't changing. The fact that we're able to have a PRO that had assets in a top 25 market is fantastic. We like it. We've been looking for these assets for a long time, and we're happy to have them coming into our portfolio. The rest of our captive pipeline is, you know, around where the PROs operate today, and we will look to get more of those captive assets in the future as timing comes. The timing around those assets are around estate planning, around loan maturities. There's a lot of things we can't control, but when they do become available, we'd capture them and bring into our portfolio. You know, we're balanced. We like our balance. We like the markets we operate in. We've had success in these markets, and we're really not changing what we're looking for in the future. Yeah, Lizzie, the only thing I would add, this is Brandon, is if you looked at our captive pipeline, where we have the biggest geographic footprint concentrations, it would be Orlando, which we're now bringing a good chunk of those assets in, Phoenix, and parts of Southern California. As we continue to harvest deals out of the pipeline, I think you will see some more in those areas, but no disagreement with what, you know, Dave remarked on broadly. Great. Thank you. Yeah. Thank you. Our next question comes from the line of Keegan Carl with Wolfe Research. Please proceed with your question. Hey, guys. Thanks for taking the questions. Maybe first, can you just give a little more color on what appears to be a slight strategy shift in the quarter? Prior communication made it sound like you guys were looking to more or less hold occupancy and give rate, but it seems like that wasn't the case given the steep drop in occupancy. Kind of curious, you know, on that. Yeah, good question. You know, really, I think, you know, when you look at the occupancy drops, we're coming off historic highs, and so our spreads look probably a little greater than what our peer group does, but we normally don't operate our portfolios at such high levels. You know, I may point you to maybe the Atlanta market, where if you look at Atlanta in the fourth quarter, we saw a 700 basis point drop in occupancy but still delivered 9.1% revenue growth. You know, Atlanta last year was at 97% occupied. That's an unsustainable number for our portfolio. We knew we were gonna settle back into what was more normal occupancy levels. I think the back half of the year, the team did a good job holding rates, knowing that occupancy would start to come back down to historic levels. Once we reach those historic levels, we go back to turning on other levers, like where do we wanna maintain market rents? What do we wanna do with discounting? What do we wanna do with our conversion rate and paid spend? I think we've settled in where we wanted to be at an occupancy level, and now we're back to driving revenue. Or really, that's our ultimate goal is we're focused on the revenue growth. Yeah, Keegan, this is Brandon. The one thing I would just add is when we were on our last call, I think we had given the spot occupancy at the end of October, and we talked about that being a 450 basis points delta negative year-over-year at that time. You can see that spread then widen. That, I think, speaks to what Dave hit on. I mean, that was part of our strategy is to hold the line there-trough here as we typically seasonally do in January, February, and then kind of see the normal bell curve in occupancy throughout the year that we're accustomed to in normal times. Got it. In the markets in the press release you called out as far as seeing weakness, what's driving it? Is it just new supply coming online, or is there something else you guys are seeing? I think you're right there. You know, we've talked about Portland a lot. Phoenix, as we called out as well. There's a lot of new supply being built prior to pandemic. The pandemic certainly helped mask some of that new supply pressure. Now that some of the pandemic, you know, fluff is going away, those markets are returning back to there is, you know, quite a bit of supply coming into those markets, and we're working our way through it. You know, a couple of those markets like Phoenix was also a very hot housing market, tremendously hot compared to the rest of the country, and that is now cooling off. New supply, a little bit of cooling economic factors, and that's what's, you know, driving some of that movement around. Just one more, if you don't mind. I just want to clarify on the interest expense commentary. You guys aren't contemplating an additional potential Fed rate hike, given kind of what you said SOFR is going to be at. Just want to clarify that that's correct? Well, it's a range, Keegan. I mean, we're modeling a multitude of scenarios. I gave you kind of a spot number that's. You know, we've used, I would say, kind of at primarily our base, but we're running sensitivity analyses up and down on that. That corresponds to also what we're, you know, assuming for the way we're able to move rate and drive revenue on top line as well. Okay, great. Thanks for the time, guys. Yeah, thank you. Our next question comes from the line of Todd Thomas with KeyBanc. Please proceed with your question. Hi. Thanks. Good morning. I just had a couple follow-ups, I guess, on first on acquisitions. Tammy, you know, what is the gap like today between buyers and sellers? Is it in that 75 basis point range? I guess you're comfortable buying at a low 6% cap rate, but sounds like sellers are in the mid 5% range. Is that the right way to think about the delta between where you're at and where sellers' expectations are? Yeah, Todd, I think that's right. Honestly, you know, 6%, if we weren't using this preferred stock as consideration for this transaction, we'd still be looking at it. We're gonna be very selective and very opportunistic in our decisions around investing capital in acquisitions this year based on, you know, our current cost of capital. Okay. Brandon, so the 6.1% rate on the preferred that you anticipate issuing to fund the Personal Mini investment, is that a traditional preferred or are they subordinated performance units or something else? Is that transaction expected to be funded 100% with preferred equity? Yeah. It's not subordinated or anything like that, Todd. It's more traditional preferred stock. There's some tax efficiency reasons to the transaction why we're actually gonna issue a new series of preferreds. You might be aware our current existing preferred series, the five-year non-call burned off late last year. It makes sense in this deal to kind of stand up a new series with new terms. It, I think, you know, it'll be more traditional in that sense. Doesn't have any, like, subordinated features like our SP equity with PROS. As I mentioned earlier, we expect the majority, and I said the vast majority, I don't have a hard number, but, you know, the vast majority of the purchase price we expect to issue the preferred equity on. Okay. How about how are you planning to fund incremental acquisitions during the year? Are there any, you know, sort of balance sheet initiatives embedded in guidance in order to permanently finance the outstanding balance on the revolving line of credit or anything else that's contemplated in guidance? Well, incremental acquisitions, I mean, expect us to do what we talked about doing in Q4 with the OP equity at a premium. What we're talking about doing in Q1 here with the preferreds. Certainly, our PROs can co-invest, you know, keep bringing cash to the table and we issue new SP equity, and that helps solve for the equity portion of any funding. Other than that, because we've done a good job clearing the slate in terms of near-term capital needs, we've got, you know, a very manageable $75 million of mortgage debt maturing in 2023 now that we did everything on the balance sheet last month. Our CapEx, recurring CapEx needs, I mean, we can pretty much fund all that with retained cash. You know, we're drawing $600 million roughly today on the revolver. Still have $350 million of capacity, but we don't have a lot of near-term pressing needs, so we're not gonna do anything hastily. We'll be, as Tammy said, opportunistic on both the acquisition side as well as the capital side. Okay. One last one for Dave. Apologies if I missed this. You know, you mentioned, you know, that January occupancy was higher by 250 basis points versus 2019. I understand the pool changes, and I think you talked about trends sort of loosely. You know, how does January compare to last year January on a year-over-year basis? Can you share an update for the end of February? Just curious if you know, have started to see occupancy start to stabilize at this point in the year and start, you know, creeping higher or if it's, you know, still sorta, you know, flattish relative to what you said, I think 89.7% at the end of January. Yeah, good question, Todd. I mean, as I commented, we have found—y ou know, which is traditional in seasonal patterns, February is where we think we found Our bottom and then our trough, and we're starting to see things improve. As we look at February, we're happy with where we're at as far as where rates are going and where our occupancy is going. I can't give any more color 'cause the month's not over, and I probably will not do that. You know, like I said, we think we've really cycled back into what we think is gonna be a nice spring leasing season, and February has certainly responded the way we want it to. On a, hey, Todd, on a comment about comparing to, you know, three or four years ago, that's based on a core group of properties, you know, 500 property pool that we can study for a five-year period. It's a true apples to apples. Okay, got it. What's the 89.7 at the end of January look like? Again, I realize it's a different pool, but what's that year-over-year spread look like on the new pool? At the end of January, it was down 370 from last year, 370 points. Okay. Thank you. Yep. Thank you, Todd. Our next question comes from the line of Michael Goldsmith with UBS. Please proceed with your question. Good afternoon. Thanks a lot for taking my question. [Brett], maybe start with Brandon. You know, your same-store NOI guidance calls for, you know, stuff in the growth in the low to mid-single digits, and yet your earnings growth range is slightly down to slightly up. Can you help provide some clarity in terms of where —what's kind of preventing the flow through on the nice same-store NOI growth? Is this just kind of a one-year type of a headwind from us, or is this something that we can expect in future years? Yeah, Michael, you know, it's largely interest expense, as I mentioned at the open. We've got about $700 million of variable rate debt that we carried in 2022, a little bit below that on average throughout the year. Projecting, you know, right around that level in 2023. It's a pretty comparable base. The rate on variable rate debt is probably gonna be 300 points higher throughout 2023 versus 2022. That right there, you could do $21 million. There's some sharing in there with our PROs, based on, you know, how our structure works, but that's still a pretty meaningful headwind. It's a 4%-5% FFO growth cannibalization. I think, you know, if the forward interest curves play out the way that it looks like they might, you know, there will be some relief on that in 2024 and beyond. Our we're comfortable with our variable rate strategy, carry 20%-25% of total debt. It's under that right now, 17% I mentioned earlier. You know, you're gonna feel it in a year like this, but long term, we feel like it gives us some optionality. It correlates to the fact that the fundamentals in our business have some characteristics that provide for inflationary hedge aspects, and we can move rates quickly and respond to the, you know, the current economic environment with our customers quickly. That's kind of the philosophy there. Thanks for that, Brandon. The next one's for Dave. Are you seeing, you know, with the macros kind of softening, are you seeing customers being more price sensitive than in the past? I guess just generally, like, how does the PRO structure, you know, what are the advantages and disadvantages of the PRO structure, you know, in a time when maybe rates are moving as higher, moving as high and your just the ability to kind of weather the macro with the PRO structure. Thanks. Yeah, good question. Thanks. You know, from a customer perspective, on asking rents, we've had to bring our asking rents down a little bit. That's really due to market conditions. There's been a lot of competitors moving their rates down. I think the consumer, as they're shopping today, is shopping more. They're being a little more price sensitive to getting the conversion rate. As we've looked at marketing spend and we've looked at our conversion rates, we have adjusted pricing to find the right blend of what we wanted on conversions of customers. For the in-place tenant, they've been pretty resilient. We've been able to stay on our cadence on our in-place rent changes. We haven't really had to alter much of what we're looking at as far as what we're modeling in that in-place rent change. They're not noisy. I mean, things are, like I said, they've been pretty resilient. We've been sticking on our cadence and haven't had a lot of pushback. From the PRO's perspective, very strong market knowledge. Very strong on-the-ground history in these markets. These PROs have 20, 25, 30 years of experience. They've seen good times, they've seen tough times. I think our PRO response and how they're modeling their businesses in their local markets has been superior. They have the tools on our platforms to make them better than they were historically. We've had really good, you know, experience around what they're doing to make sure their market's operating on a revenue perspective. If you look at our cost control and our expense control in the fourth quarter, we had really good expense control, and that's also because operators who have long history, long experience, know what they need to do to pull back when they need to pull back and be smart with the money as they go forward. I think our PRO structure gives us an advantage, gives us a— certainly a lot of history and a lot of market knowledge, and they're using the new platforms to be better than they were before. Thank you very much. Good luck in 2023. Thank you. Our next question comes from the line of Ronald Kamdem with Morgan Stanley. Please proceed with your question. Hey, just digging in on the same-store revenue guidance at the midpoint of the range. Maybe number one, how are you guys thinking about that in terms of the first half of the year versus the second half of the year, thinking about an exit rate at the second half of the year? Then I'd also be curious in what's baked in, into the top end versus the bottom end. Are you guys thinking about recession, not recession? Just how are you guys thinking about that? Ronald, it's Brandon. Thank you for the questions. We definitely start out higher on the growth rate year-over-year in 2023, and then decelerate or moderate on that growth as we progress. You know, in all scenarios, given where we've ended 2022 and are starting 2023, and all of the scenarios that inform the guidance range we've given, you know, we're still finishing the year with positive growth. At no point are we projecting, you know, flat or even negative growth by any means. In terms of what's baked in terms of like the. You know, I would say the range we've provided factors in what we're seeing today, what current economic predictions are for all of 2023, that does assume, you know, whether it's a technical recession or just recessionary forces in place, you know, say by mid-year we're feeling some of that. Historically, for the sector, there's a little bit of a lag between when, you know, a technical recession may be officially declared and when you really start to see it flow through in some of the operating numbers of the storage REITs. You know, we have that all baked in, but it kind of begins in second half of 2023 and then really kind of continues that impact into early 2024. Helpful. My follow-up would just be, look, as you're sitting here today and, you know, you're looking at sort of website visits, top of the funnel demand, the question is, are you seeing anything that would suggest that same-store revenue can go sort of negative, number one? Number two, what are some of the indicators you're gonna be looking at to figure out if the peak leasing season is coming in better or worse than you anticipated? Thanks. Yeah, Ron, good questions. I don't see anything yet as we look at the opportunities being presented to us on the website. I mean, the tactics we're using are working. We're getting the responses we want, the volume we want, and we're getting certainly the conversion levels we want. From that aspect right now, at this point, we're pleased with what we're seeing. You know, as you look at the spring leasing season right now, we think, you know, January and February reacted to what I would say pre-pandemic patterns, right? That's what we've been talking about in our shop about, you know, how do we figure out we get through this, the pandemic stuff and get back to, you know, more, maybe more seasonal trends, and I think we have found that. I think we'll know probably early April or mid-April to late April, by May, if we don't start to see the occupancy gains and the rate gains that we're expecting, that maybe we saw some consumer change or some kind of macroeconomic pressures put on our business. We're not expecting it at this point. We think the spring leasing season is shaping up nicely, but we would know by May, I think, that, you know, things didn't materialize like we thought. That's it for me. Thank you. Thank you. As a reminder, it is star one to ask a question. Our next question comes from the line of Wes Golladay with Robert W. Baird. Please proceed with your question. Hi, everyone. Just have a question on the move-in numbers you cited. I think you said they were up a few percent in January year-over-year. Is there a potential that there's a weather benefit there or is it pretty broad-based? It's been pretty broad-based. Yeah, there's, you know, there's been some really tough weather in some parts of our country. We were positive over 4% move-ins in January, so it was pretty broad-based across the country. Okay. Could I get one question on the guidance? Do you have a number for how much the new additions contributed to the same-store growth this year? Wes, this is Brandon. On revenue, it's about a 20–25 basis point lift that the new stores provide. Okay. Thanks a lot. Yep. Thank you. Our next question comes from the line of Spenser Allaway with Green Street Advisors. Please proceed with your question. Thank you. You made some share repurchases in the quarter, which seems prudent given where your stock is trading. Just wondering how you're thinking about future repurchases and how that stacks up on your capital allocation priority list. Yeah, Spenser, this is Brandon. It's certainly an option. It will continue to be an option as we go throughout 2023. It's the easiest single investment to underwrite, I can tell you that much, and it has the highest return. It's also, I would say, the least risky relative to an individual asset acquisition, and it's something that we can do pretty quickly. Those are all the positives about it. You know, on the flip side, for practical and regulatory reasons, you're also kind of constrained on how much you can actually do in any given quarter or period. There's a little bit of a lid on it from that perspective. I think Q4, frankly, is a really good representation of where our heads are at with things. We did $40 million of buyback. We also did $40 million of acquisitions in creative ways that included the OP equity at a premium that I mentioned earlier. That's kind of how we're thinking about things. Everything's on the table. We're just going to do what delivers the most long-term value. Okay, that's helpful. Just a quick follow-up on the ECRI discussion. Can you just comment on where the most recent ECRIs have been in terms of magnitude? Do you expect to be able to push typical ECRIs in terms of pre-leasing season? Yeah, good question, Spenser. You know, our cadence has remained the same, so the timing we're hitting our customers has remained the same. The amount of customers we're hitting each month is pretty similar to what we've seen over the past six to 12 months. You know, as we look at, you know, rate movement on the top end, market rate has certainly come down, we're being a little cautious around our top end, and we may put some guardrails around the top end. Overall, it hasn't significantly changed. As the spring leasing season approaches, obviously, we should see some better pricing as we look at street going into the spring leasing season, that helps take the top lid off a little bit. As we go into the spring, we expect at this point in time to stick to our cadence and be as assertive as we've been. Okay. Thank you. Thank you. If there are no further questions in the queue, I'd like to hand the call back to Ms. Fischer for closing remarks. Okay. Thank you. This wraps it up for the fourth quarter and for the year 2022. We're definitely feeling very optimistic about 2023. We certainly appreciate your participation in our call today and for your ongoing support of NSA. We look forward to seeing many of you in the coming weeks. Thanks again for your time today. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful day.