Greetings. Welcome to the National Storage Affiliates first quarter 2024 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 now begin. We'd like to thank you for joining us today for the first quarter 2024 earnings conference call of National Storage Affiliates Trust. On the line with me here today are NSA's President and CEO, Dave 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, and 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, May 2, 2024. 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. 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 Dave. Thanks, George, and thanks everyone for joining our call today. During the quarter, we completed many of our strategic initiatives that we've been discussing in previous calls. These initiatives enable us to deleverage our balance sheet, gain access to growth capital, increase earnings per share, and ultimately position our company for future growth. To continue our focus on enhancing our operating platforms to ensure a better customer experience, these initiatives are still ongoing, but we're starting to see improvements in rental activity and conversions from our advanced web presence and upgraded call center operations. On the rental front, we experienced three months of positive net rentals through the end of April, contributing to a seasonal uptick in occupancy, which ended April at 86%, up 50 basis points from the end of February. During the quarter, we experienced a meaningful year-over-year increase in leases being fully executed online, large part due to improvements made to the lease signing experience. Additionally, our call center answered over 30% more calls during the quarter compared to last year. To continue to enhance and simplify our customer journey by leveraging intelligence in our customer acquisition strategies, we expect to see continued improvements in the customer experience we offer and overall performance. We're also being more aggressive on our pricing strategy. While this is helping to drive rental volume, it is putting pressure on our move-in rates, which averaged down about 14% year- over- year for the quarter. Consumer base remains healthy, with 65% of our tenants having stayed with us over a year, while 49% have been with us over two years. Our ECRI program remains largely consistent with the past couple of quarters in terms of frequency and magnitude. Ultimately, the quarter played out as we expected. It's still early in the spring leasing season, with the peak months ahead of us. That said, looking across our different Sunbelt markets, continue to face many challenges due to several factors, including absorption of new supply, a muted housing market, and a very competitive pricing environment. Results are mixed in these markets, with revenue in Phoenix, Sarasota, and Las Vegas all coming in below portfolio average, while markets like Oklahoma City, Savannah, and Corpus Christi were better than average for the quarter. Continue to work hard in these markets to deliver a superior customer experience, recognize some of our markets are going to be slower to recover. It is important to point out that we have markets that are currently healthy and delivering solid results. We remain very confident in the growth prospects of our Sun Belt markets due to attractive population and migration trends. I'm very pleased with our strategic positioning heading into this next phase of growth. We're starting to see opportunities on the acquisitions front. We're finding a variety of deals in many of our strongest performing markets, where we have good insights into rental demand and street rates, allowing us to be more precise in our underwriting. These are deals that make sense for us to pursue as they improve our overall portfolio quality, add depth to our existing markets, and increase our operational efficiency. Currently have over $25 million under contract and approximately $200 million of properties in various stages of negotiation. Expect to fund these acquisitions through a combination of 1031 proceeds, joint venture capital, and debt. We won't comment on pricing until the deals are closed. These transactions make economic sense for us and our JV partners. They will represent the start of us putting the dry powder to work that was generated from our portfolio optimization strategies. I'll now turn the call over to Brandon to discuss our financial results. Thank you, Dave. Yesterday afternoon, we reported Core FFO per share of $0.60 for the first quarter of 2024, representing a decrease of approximately 9% over the prior year period, driven primarily by the decline in same-store NOI, an increase in G&A, and a decline in contribution from our JVs. ...Overall, our results for the quarter were in line with our expectations, except for a few casualty events resulting in an aggregate $1 million loss, or almost $0.01 per share. For the quarter, revenue growth declined 1.5% on a same-store basis, driven by growth in rent revenue per square foot of 2.4%, offset by a 380 basis point year-over-year decline in average occupancy during the quarter. Occupancy ended the quarter at 85.9%, down 350 basis points year-over-year. Expense growth was 4.5% in the first quarter. Similar to the past couple quarters, the main drivers of growth were property tax, marketing, and insurance, partially offset by payroll efficiencies that resulted in lower spend versus the prior year period. Marketing expenses remain elevated due to increased competition for customers and a tough comp, while insurance expense growth will moderate going forward to the low single digits, given our policy renewal that occurred on April first. As Dave mentioned earlier, we had a busy start to 2024 on the asset sales and joint venture front, all of which was discussed on our last call. Although we did not complete any acquisitions during the quarter, we remain active underwriting and evaluating potential transactions. The majority of our revolver available to us today and $1 billion of buying power within our 2023 joint venture, we are encouraged by the opportunities for external growth that lie ahead of us. Turning to the balance sheet, during the quarter, we completed just over $200 million of common share buybacks, and subsequent to quarter end, exhausted the remaining $72 million of our program. We believe this strategic initiative is beneficial to our shareholders and will ultimately provide more FFO per share to them over the long run. Our current revolver balance is roughly $200 million, giving us approximately $750 million of remaining availability. Lastly, our leverage was 6.2x net debt to EBITDA at quarter end. Now, moving on to 2024 outlook. As we said earlier, the quarter played out largely as expected, and it's still early in the spring leasing season. We are reaffirming our previously provided guidance, which is detailed in the earnings release. One item I want to mention on the balance sheet. We have $250 million of interest rate swaps that fix daily simple SOFR at 1.59%, which mature in Q3. $145 million of this relates to the term loan that matures in July. So effectively, $250 million of fixed-rate debt will adjust to market rate starting August 1. This impact was factored into the guidance we provided in February, but I wanted to point it out since the swap expirations aren't exactly aligned with the underlying debt maturities. Thanks again for joining our call today. Let's now turn it back to the operator to take your questions. Operator? Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask, ask a question today, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Thank you. Our first question today is from the line of Samir Khanal with Evercore ISI. Please proceed with your question. Hey, Dave, can I ask you to give more color around April? I know, I know—I believe you said move-in rates were down 14% in the first quarter. Maybe give us an idea of kind of, kind of what you're seeing in, in April so far. Yeah, Samir, thanks for joining our call today. Certainly, you know, April, we saw another positive net move-in activity in the month of April, which we were pleased with. We were able to generate the activity at the top of the funnel. We certainly are, you know, in a very competitive... Most of our market's in a pretty competitive market around, you know, street rate or asking rent to get started. And so, I would tell you, April got, you know, slightly worse than where the quarter finished. It wasn't, you know, a large number, but it got slightly worse, as far as, you know, street rate to street rate and move-in activity, and move-in rate to move-in rate. So we saw a decline in both. Samir, this is Brandon. On the year-over-year move-in rate worsening that Dave's referring to, that's in part because last year, you know, we moved rates up some in April, and so that's also affecting that comp. Okay, got it. And I guess on the transaction side, you know, it sounds like you have some opportunities on the acquisition front, but you know, last quarter, you were active on the sales front of the non-core asset. Is there more, like, is there more in that bucket of non-core at this point, or is that pretty much done, you think? Yeah, I think we'll continue to look at our portfolio and scrub through the portfolio. You know, we did the large portion of the asset sales last year in that tranche we worked through, and we were pleased with that activity. I know we're still scrubbing through particular markets and particular assets, and, you know, I think that'll be a part of our program as we go forward in our future, as we look at, you know, optimizing our efficiencies and optimizing our portfolio. So I think you could see sales, you know, in the future. I don't think you're gonna see the large chunks that we've done recently. You know, I think we're shifting our focus to looking for opportunities, and when opportunities present themselves, we'll go out and look to start acquiring properties. Okay. Thank you. Thank you. Our next question is from the line of Jeff Spector with Bank of America. Please proceed with your questions. Hello, this is Dan Byun for Jeff. Thanks for having me. When it comes to allocating capital, how are you thinking about leverage versus buybacks? Yeah, Dan, I'll take that. This is Brandon. So, look, we, we completed the $275 million share repurchase program that we, you know, mentioned in the earlier remarks, and also detailed in our release. And, and I also, as, as mentioned, you know, pretty light on the acquisition volume. Everything we've done over the past few quarters, you know, we're very pleased with accomplishing what we set out to do. Leverage, you know, in line with our targeted range of 5.5x-6.5x. So what it does right now is it really positions us with, you know, the majority of our revolver available to us to take advantage of some of those opportunities that, that Dave referred to earlier. No different than what we talked about in our February call. I think if there's a slight bias, it'll be to deploy capital through the joint venture platform, and that allows us to obviously do that in a capital-light way, manage leverage, and you know, put to work some of that money that we worked hard to get ready with our JV partners. Thank you. And then just to follow up on leverage, could you provide your rationale behind including the hypothetical liquidation at book value for your 2024 JV to adjust the EBITDA? Yeah, good, good question, and good observation. That was a new thing this quarter. So, that joint venture, that's the one that we put the 56 assets into. I would tell you, the arrangement there is quite similar to the existing two joint ventures we have in that we're 25% money partner managing the assets. However, the one nuance is there is an arrangement where, based on certain performance metrics, you know, the split of cash may be something different than 75%, 25%. In some cases, we may get outside share; in other cases, our partner may. That drives us into this, the term you used, like a GAAP-specific methodology for allocating earnings. And we're basically removing the effect of that and just showing a more straightforward 75%, 25% split. Awesome. Thank you for your time. Sure thing. Thanks. Our next question is from the line of Michael Goldsmith with UBS. Please proceed with your questions. Good afternoon. Thanks a lot for taking my questions. We've heard from some of your peers that a number of markets are starting to bottom out and reaccelerate. Are you seeing that across your portfolio? Maybe what percentage of your markets are accelerating or any specific markets to call out? Thanks. Yeah, Michael, thanks for, thanks for the question. Thanks for being here. You know, I think as we think about it, we believe that the first half of our year was going to be the toughest part of our year, as we think, particularly from a year-over-year comp. If we look sequentially, we're happy that we had the move-in volume and the net rental activity that we had over the last three months. And it was tougher sledding, I would tell you, in the Southeast, Florida, some of the Sun Belt markets. Phoenix, we mentioned. We mentioned Sarasota, Las Vegas. Those markets have been slower to respond, and those markets are also facing supply, like markets like Atlanta as well. And so I think as you look at it and look at... As we look at some of those markets, the markets that have the most supply are slower to recover, but we've had good success through the Midwest. We've had good success through the Texas markets, as we called out, I think we call out Corpus Christi in our opening remarks. And so, you know, those, I think, did not also have some of the, you know, the pandemic highs, and they've been a little bit more stable, I think, as we went through this last cycle, and those are performing well for us. But, again, I think, you know, more of that, some of that Sun Belt exposures with the housing and muted transition and some of the other factors that are going on are going to be a little bit slower for us to recover. Thanks for that, Dave. And then my follow-up is, you know, you did a number of transactions at the start of the year with the sale and then the sale to the JV. It provided an influx of capital, but with the transaction market seemingly paused for the time being, how are you thinking about redeploying these proceeds, and when do you think you can put them to work? Thanks. Yeah, good question. You know, I touched on it a little bit in the opening remarks. We do have... you know, we have $25 million under contract right now, in existing markets, where we're adding properties to our portfolio that will certainly help us in our efficiencies and the way we operate and, you know, scale and density and, and really things that we're looking to drive in those markets. We have about $200 million that we're in negotiations with right now, and so I would tell you, we're starting to find opportunities that we like. And, we thought for sure, as we looked at this year, that the back half of the year, we'd continue to see more opportunities. I think the fact that we've found some opportunities earlier in the year is a positive sign for us. And again, these are in markets that we operate and have great scale in and have great efficiency in, and we are a good logical buyer for these properties. Thank you. Mm-hmm. Our next question is from the line of Juan Sanabria with BMO Capital Markets. Please proceed with your questions. Hi, just wanted to continue with the same line of questioning with regards to acquisitions. I guess, where are you-- are your targeted yields or cap rates, and, and do you think that would be indicative of kind of the current market for your types of assets? And this is a subset of that: Should we assume or not that you reup buyback, now that it's been fully depleted? I'll jump in and then maybe Brandon finishes on this. I think as we look at assets that we're looking to purchase, you know, we're targeting mid-six is probably a range that we're looking at today. Obviously, each property, when you start talking cap rate, it's you know, where is the property and it's, how old is it? How seasoned is it? What's the opportunity? Is there a value add? Is there, you know, a component of management from who you're buying it for, where you think you may have a better opportunity versus you would, you know, on a different type of property or a different owner? And so I think it's hard to really pin down cap rates, but we certainly internally have been modeling around that mid-six range. As you remember, the assets we sold were towards the 6 cap itself, and so we are certainly thinking redeploying this capital when we sold it to 6 and redeploying it to 6.5 makes a lot of sense to us, and we get some growth opportunity on these assets that we're buying. As far as the share, we're able to obviously fulfill the current authorization on our share repurchase program. I think that, you know, share repurchase is part of our investment activity. I think that we look at several ways to deploy capital from this company, and buying our shares back makes sense. And so, we don't have anything authorized at this time, but, again, I think we would use that as a tool in our investment opportunities if we thought it was appropriate. And one, this is Brandon, I'll just jump in. So the, the other thing I would comment on the share repurchase is just to my earlier remarks about leverage. I mean, we'll, we'll obviously do everything that we're talking about here, capital deployment, acquisitions, repurchases, you know, and maintain the, the range of comfort, 5.5x-6.5x on Net Debt to EBITDA, that, that, you know, we've had for a long time now and, and are in currently. And then the only other thing I would add to Dave's remarks is just on the year one yield and acquisitions, you know, also to my earlier point about some bias towards using those JVs, you know, that gives us some management fees and allows us to stretch on deals that might be on the lower end of the yield target. Great. Thanks. And then, just on the slope of seasonality, both on occupancy and rate, could you just comment on how that's trending? I mean, it seems like rate maybe is disappointing. You called out a tough comp from the increase you saw last April. So just curious on, on your commentary there and how that stacks up relative to your initial thoughts. Yeah, I think what we're trying to balance, and we always talk about we're solving to revenue, and so occupancy is a piece of that, you know, asking rate is a piece of that, discount is a piece of that, what type of customer we're attracting, what type of unit we're renting, you know, it's hard to have a global comment to that because there's so many things that we're looking at as we work hard and navigate, you know, what we're trying to do. But what I would tell you is the reason we're being a little more sharp on rate. It's a competitive environment, but what we're finding, and the team has done a good job finding, is conversion rate. And that's what we're really looking at as far as what's coming through our opportunities and how we're converting those opportunities into rentals. And so, you know, from the seasonal drop in February to where we finished in April, we were very pleased with the rental activity, and what we're able to achieve. And some of that came at a little bit sharper, you know, price point than maybe we would have wanted. I can tell you, we're backing that up with the ECRI program, which is stronger than ever, and our ability to really, you know, work through our existing tenant base. And so we're looking at the offset of what we have to give maybe on an upfront rate or an upfront discount and how we make it up quicker in the ECRI cycle. Thanks, Dave. Yeah, thank you. Our next question is from the line of Eric Wolfe with Citi. Please proceed with your question. Yeah. I just wanted to follow up on your last answer there. I mean, last quarter, you talked about the occupancy-based models, and you were just talking about it a second ago. I was just wondering how that testing has gone thus far, and is it providing any type of outperformance versus comparable areas of your portfolio? Yeah. Thanks, thanks for joining. Good question. We are seeing success in areas, and it's not... Again, that's the advantage of testing. And, and, again, as we talk about our business unit size, it goes down to the unit size. And so, yes, we've seen some success. We have, you know, expanded the program in areas that we thought we would have success in. I can tell you we've had some areas where it was not successful, and we pulled right back and said that that tested did not work for us. But I would tell you, as a whole, we, as around the commentary and being a little sharper on pricing, we've, we have found activity we like, and so we're expanding the program, and that's put a little bit of pressure on street rate for us. Got it. And your occupancy came a bit this quarter, sounds like a trough in February. I was just wondering, in a typical year, sort of what you would expect in terms of occupancy increases in the second quarter into the third quarter, and then sort of what's baked into your guidance for this year? Eric, yeah, it's Brandon. I mean, it wouldn't be uncommon for us to gain, 250 basis point to, you know, some years, 350 basis points, from, you know, the valley to the peak. What was baked into guidance for this year at our midpoint was really more like flattish occupancy as we went. I mean, maybe a little bit of seasonal uptick in the spring and summer, but by and large, sequentially flat for most of the year. What that means on a year-over-year basis is that, you know, as you saw in our first quarter numbers, you're starting off, you know, 350-380 basis points negative over prior year, but the comp gets easier in the back half, so that, that gap, you know, narrows as you go throughout the year. I think I would add to that, to Brandon's point, we're also not very assertive on rent growth either. And so, you know, as we're testing these models, you know, anything we're trying to trade off on rent, we're certainly trying to pick back up on occupancy. And so what moves that initial guidance, you know, to the occupancy level you're talking about around, you know, if we move the occupancy number up and we have to give a little bit on street rate, that's the balance we're trying to find. Right. And the thesis on the occupancy, Eric, was really just expecting likely experience last year, more muted muted demand related to housing. And so far, you know, that's played out. I mean, nothing wildly better or worse than how we thought about things back in February. That's helpful. Thank you. Yeah, thank you. Our next questions are from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your questions. Hi, thanks. First, just a quick follow-up. So 86% at the end of April, you know, talking about, you know, the comps getting a little easier. What did... Sorry if I missed it, but what's that look like on a year-over-year basis? Has the gap continued to narrow? ... It stayed fairly flat in April, Todd. You know, the hard part about it, when you look at it a month, you know, that monthly snapshot, you know, we were talking earlier this week, you know, there was five Saturdays in April last year, there was four Saturdays this year, five Mondays, and moving this stuff around. And so you start talking about it, it's really we have to look at through the second quarter before we'll really know the amount of occupancy gain and amount of momentum we're picking up. We did, you know, we did see rental activity. We're happy with April, but again, there's, you know, there is some noise around the moving pieces of rental days in there. And we ended 86 flat, Todd. You know, intra-month, we were, you know, we were higher than that, and then not uncommon to lose, you know, 10-30 basis points near the end of the month. So we were pleased with... I was pleased with some of the gross rental volume. It also meant there was a little bit of higher move-out volume versus last year. So, you know, it's, it's early to start making too many conclusions, but I think there's April, there was just more mobility generally than what we saw last April, and maybe, you know, maybe that portends for the next few months of a little bit more activity, but we'll, we'll have to wait and see. Okay. Yeah, got it. And then, Brandon, with, you know, you, you... I appreciate the comments on the swap expiration, but, you know, can you just remind us, or give us an update on the plan related to, both the 2024 and the 2025 term loans, the Tranche B in July and Tranche C, next year? It's $470 million in total, what the plan to refinance that it looks like. Yeah, sure. So we've got, near term, we've got the Tranche B, that's $145 million. So we can, you know, we got capacity in our line. We can obviously seek to place some refinance debt out there as well. We do have a six-month extension option on Tranche B, so that would stack it on top of the January 2025 Tranche C that you're referring to. All that debt is with our banks, so, you know, we're in this environment, you got to stay close and constant dialogue with your bank group. So we're certainly doing that, and we'll continue to do that throughout the year. And then, you know, base case is to put some replacement debt out there, be it with our bank group or, you know, we've been very successful accessing the debt private placement market, so that remains an option for us. Our secured debt as a percent of our total debt stack, you know, has—there's opportunity to return that to levels that it's historically been at, that call it the 10%-12% range. We're 6%, currently. So, you know, a lot of opportunity there, and, I expect we'll probably address the majority of that in the second half of 2023, 2024, excuse me. Okay. And then just back to the acquisition discussion here. So, you know, in, in terms of, acquisitions, it sounds like the majority of what you intend to acquire is expected to be, you know, through the, the joint venture that you announced last quarter. Will, will there be any acquisitions, on balance sheet that we should anticipate? And, and, and then what happens to, the assets that were in the captive growth pipeline that the PROs had, you know, sort of in the pipeline that NSA had been executing on since, you know, since, since the IPO in 2013? Well, yeah, good, good, good three-parter there. I'll try to make sure I cover them all. I think, you know, probably the majority of our acquisitions will be weighted towards the JV because that is a good passive capital for us, and it's a good way for us to purchase properties at today's environment. I would not rule out that you'll see stuff on balance sheet. We do have some 1031 activity we wanna take care of as some of the properties we sold last year, we're gonna wanna redeploy in a 1031 mechanism this year, so you'll see those come through. And, you know, we'll try to balance, you know, the opportunity, the type of property, what we think the right place for that property to sit, and we'll put it in the right bucket. As far as the PRO captive pipeline, it's still out there. We're still evaluating, obviously, with today's cost of capital and finding, you know, the bid ask between seller and buyer, we've had a tougher time bringing stuff in from the captive pipeline. It doesn't mean we're still not working it, it doesn't mean there's still not opportunities. It's just been a little slower for us to work off that captive pipeline in today's environment. And then there was the third part that... I'm sorry, Todd, if I missed. No, that was it, really, about the captive pipeline. But I guess, you know, what's the latest there, you know, in terms of the size? And if I recall, these assets, a lot of them, you know, had debt. You know, there was leverage or, you know, maturities that, you know, I think were sort of the catalyst for, you know, NSA being able to acquire them at maturity. You know, what's the latest there? What are the PROs, you know, I guess, sort of, executing, you know, around that in the meantime, while NSA has been, you know, sort of, you know, less active, bringing those, the captive pipeline properties onto the balance sheet? Understood. You know, I think if we look at the top of the stack, there's probably 110-115 properties in the captive pipeline, depending on how you want to value it, you know, north of $1 billion-$1.2 billion. You know, I think if you think about most of the folks that are in that Captive Pipeline, they're looking for some kind of tax-deferred transaction, and so the preferred method they'd want to have is some type of OP Unit, right? And so I would tell you, the Captive Pipeline is not shrinking. They're not out selling it to third parties. There hasn't been a lot of transactions around that. Amount of debt coming due, we haven't felt a lot of that pressure in that group. They've been fine, and so I think the opportunities still exist. I think we've had a lot of discussions around it, but at this point in time, it's just been hard for us to find a place where it works for both parties. Okay. All right. Thank you. Sure. Our next question is from the line of Ron Kamdem with Morgan Stanley. Please proceed with your questions. Hey, just two quick ones. In terms of the performance of the portfolio, is there a way to provide a little bit more color on maybe some of the more sort of COVID winners versus the rest of the portfolio? Or is there any sort of other way to slice and dice performance in thematic buckets that would be helpful? Well, yeah, Ron, I mean, I'll give it a shot. I mean, I think certainly what you have is some of the markets that were red hot during the pandemic, Atlanta, Riverside, for us, you know, those have definitely cooled off, and to some degree, we're still dealing with the comparison against that cooling off that was happening, you know, in the back half of 2022 and all throughout 2023. And so that certainly plays into the year-over-year performance that you see for any given quarter. There's other markets that, you know, maybe didn't perform, but still performed really strong, but not as strong as those. And so those have been more like steady Eddies all throughout, and those are gonna be your OKCs and Tulsas and some of the other markets that Dave cited in the opening remarks. Any other comments, Dave? Well, I'd also probably say, you know, if you think about the lack of movement around single-family housing, we do have some of this portfolio that sits around markets that benefited from people who bought houses in the lower interest rate markets. So maybe they pulled ahead their home purchase, they went ahead and moved into Florida, they moved into some of these markets. And until I think we see a meaningful change around that single-family housing environment, some of these stores, you know, may be slower to recover versus the rest of our portfolio, until you see a little bit more activity around that transition. You know, I would tell you, I think, you know, we're happy with where we're positioned. We like our Sun Belt exposure. You know, the Sun Belt exposure, as we call it. But I also think the positioning of our portfolio and the diversity of our portfolio, to Brandon's point, we've got some markets that are chugging away just fine, and we're able to do exactly what we wanna do. And these other markets had a red, red hot, unbelievable run for about 18-24 months there, and now they're back to, you know, it's gonna take a little bit for things to come back to, what we would call, I don't know, new normal or new reality. Great. That's helpful. And then the... My second question was just on sort of the guidance, basically, versus where you are sort of in 1Q. I guess it would assume a little bit of a deceleration on the same-store NOI, same-store revenue line. Is that mostly just because you're trying to wait to see what sort of the peak leasing season brings, or is there sort of something else there? And if you could just quickly comment on just how you're thinking about demand from sort of home turnover, given the higher rates. Thanks. Yeah, Ron, on the first part, you're correct. I mean, certainly the midpoint of the full year guide that we gave for both same-store revenue and same-store NOI is lower than the Q1 year-over-year growth numbers, so that there's implied deceleration. You know, that's no different than when we were introducing the guidance in February. We expected to trough in terms of that growth in middle of the year, and then maybe that accelerates, you know, still maybe negative growth year-over-year, but improving in fourth quarter. And that's just really the dynamic of how we budgeted this year and the quarter-by-quarter comp that you have all throughout last year. On your second part, regarding housing, I mean, look, we... How we feel today is probably different than how we felt six weeks ago, but I'm sure four weeks from now will feel different, right? It's a, you know, mortgage rates felt like they got a little bit of a relief, early in the year, late last year, and then, and things have, ticked back up. But like I, like I said in my response to Todd's question, you know, some of the general mobility, stuff we saw in the data in April was encouraging. So that would be despite, you know, the, the new highs for 2024 that you're seeing in mortgage rates. Obviously, you've got apartment renters and, and other things. So, the benefit we have also is just a longer length of stay. If people aren't, you know, moving in as much, there's also a lot of people who aren't moving out as much, and that gives us power with ECRI, and it's what, as you know, it's what has allowed us and others in the space to, you know, to maintain and protect the in-place portfolio rates. Great. That's it for me. Thanks, Ron. Our next questions are from the line of Keegan Carl with Wolfe Research. Please proceed with your questions. Yeah, thanks for the time, guys. Maybe just first on supply, how should we think about new deliveries in your markets in 2024 and 2025? I think our general tone is we do think new deliveries are slowing nationally, and then... And if you look down into a lot of our markets, we think new deliveries are slowing off the pace they were two years ago, and so that's a positive, excuse me, a positive sign. I think the way we look at it is we really track around amount of fill-up properties, fill-up properties that would be in our three-mile radius. And I can tell you that number, percentage of stores that are facing pressure of, you know, some store and some form of fill up, isn't moving around much. I mean, so the amount of new entries coming in and the amount of new entries falling off is keeping that percentage pretty similar, and that is down, you know, from where it was in 2022. And so we've seen a decline in amount of our stores feeling pressure from stores and fill up. And so all of that, if I had to wrap it up, I think we're feeling better about new supply pressure in the coming years. But, you know, certainly that's market specific, right? You've heard us talk today on the call about Phoenix and Atlanta, and there's been some product delivered that's gonna, you know, put pressure around those markets. We believe in them. We believe they'll grow out of it, but there are gonna be markets that feel more pressure than others. ... And then changing gears, if I think back roughly a year ago, one of the things that came up in our NAREIT meeting was the potential for you guys to start your own third-party management platform. I guess, just where are you guys at on that today? That's a really good question. You've heard us talking, you know, over the last, you know, eight, 10 months, really about really looking at our platform, improving our platform, looking at, you know, people, process, and platforms, our team, our talent. We have done some major lifts in the last eight to 10 months around our data systems, our operating platforms, our website, our call center, all of these things to position us to really evaluate how we continue to grow this company and, and look for things that would be additive to the company. Certainly today, our PROs do third-party management, and so that's something we've had access around. We obviously have JVs, so we do a lot of what we would call, even though we have an ownership, we manage for others, and we have all the systems and the reporting, all that stuff built out. I would tell you, it's on. It's in our discussion points. It's something we look at and ask ourselves: Is there a right time to dip your toe in the third-party platform? I would tell you, we talk about it. I don't have an exact date for you, but I'd say it's something that might be on our horizon. In addition to the platforms initiatives, Keegan, that Dave said, I would tie in all the portfolio optimization strategies that we've been speaking with, right? So I mean, the 71 stores that we sold in Q4 and Q1, if you remember our comments from the last call, I mean, that was spread out across 33 different MSAs. And so we're certainly trimming in areas where we don't have market dominance or, you know, strong market presence, and we're densifying in areas where we do. And I think that's going to, you know, in addition to the systems and platforms efforts, it's gonna provide, you know, the path going forward for us to seriously consider, you know, the 3PMs, to your point. Great. Thanks for the time, guys. Yeah, thank you. The next question is from the line of Wes Golladay with Baird. Please proceed with your questions. Hey, guys. Quick one on the pros. Do you get the sense when talking to them, they're more excited about the current environment, the opportunities they see? Or do you think, you know, you may see someone retire or, you know, call it within the next year or so? Good question, and thanks for being with us today. You know, I certainly think from the pros' perspective, they would like to be... You know, they'd like to see the environment be a little more conducive to external growth. And I think, you know, as you think about Heritage and how long we've all been in the business and part of this business was acquiring and, you know, improving performance on properties and finding the value in those acquisitions. And so certainly this has been a time where patience has been at the top of the list, and I think the PROs have been very, very good at being patient. I would also tell you, they've also been very good about acquiring properties outside the REIT. You know, they've been out, they have found some opportunities, they've found money outside the REIT, and then that just puts stuff into our Captive Pipeline that we can evaluate and look to move on at a later date. So, you know, they've been great. We appreciate them very much, and they've been patient, but they've also been active. So, I think, you know, short answer to your question, sure, they'd love to see it be a little easier to acquire properties within the NSA. Okay. And then you had the comment earlier in the call about the cash flow, and the JV may not exactly be 25%. Can you put some sensitivity on that? Are we looking at 24% or 26%? And, you know, what would cause that deviation? Yeah, sure. Wes, it's really around, like, providing a minimum, you know, base, return to our partner, which, you know, the, the going-in yield, the value at which we contributed the assets, it was all kind of pre-designed to, to, not guarantee, but, you know, strongly assure that we're gonna be at those levels. And then if we hit certain metrics and operating performance, we have the ability to earn some incremental fees. That's not currently... That scenario of us being in the money on those is not a meaningful driver of our 2024 guidance. It's a possibility, but it's just not a big needle mover. And then, yeah, I'll save comments for the out years. They're achievable goals, but I'll save comments without handicapping the likelihood beyond 2024. And then, like our existing two JVs, we have, upon a liquidity event, promote structure, where, you know, once a certain return has been provided to our partner, then we get kind of a disproportionate share of that upside. Okay, then how should we think about, you know, call it, the floating rate exposure? I think you mentioned some swaps are coming offline. You did some buybacks. You may have some dispositions. You may be buying some more assets. So a lot of moving parts over the course in the balance of the year. What do you think the floating rate exposure into the year? Well, I guess, let me say it this way: We're, as I mentioned in the opening remarks, about $200 million drawn on our revolver, which is our only current variable rate exposure. We have the $250 million of swaps that expire middle of the year. That could go to floating or, you know, between now and then, we could enter into new swaps and fix that. So that, that'll be... Or, you know, take out, replace the debt. So those are options to us. If you factor in the $250 million of swaps that burn off, let's just assume that goes to floating, it puts our total debt, that's subject to variable, Wes, as a percent of our total, it rounds 13%-14%. You know, we've been comfortable in the past up to 20%, sometimes 25%. So I think if I had to tell you, I'd say, you know, between 10% and 20% of our total debt stack of a little over $3 billion could be floating rate by the end of the year. Okay, thanks for that. Sure. Thank you. As a reminder, to ask a question today, you may press star one from your telephone keypad. Our next question is from the line of Tayo Okusanya with Deutsche Bank. Please receive your question. Hi, yes, good afternoon. Quick question. The captive pipeline from the PROs, is there any way that can potentially be acquired by the JVs, or you can't do that legally, or because of tax implications, something like that would not work? Well, certainly, I think you touched on the point, is the captive pipeline people would probably... They could sell to anybody. They could sell it to, you know, a JV, they could sell it to our JV, they could sell it-- You know, if we, if we turn the property down and decide we don't want it, they could, they could sell it wherever they want. I think they're really looking for the tax treatment, and the OP unit is one of the primary drivers behind that captive pipeline and that group of sellers. And so that makes it hard. We can't spin it into the JV in that aspect, is the answer to that, I guess. Right. Short answer. And Tayo, the only other thing I would say is, Todd, you know, in his question, referenced the debt maturities as a driver, which is true. But, you know, there's also assets in that Captive Pipeline that are PROs managed, but they don't outright control. You know, they may just completely manage them only, or maybe they have a minority ownership interest and also manage them. So, you know, to the extent that those other owners, if their fact pattern changes, and if they wanted to be a cash seller, you know, the JV could be an option. We haven't seen that yet, and I think it's less likely, as Dave said, but I just wanted to provide some additional color on some of the different arrangements. Okay. That's helpful. And then could you also kind of give a general sense on overall tenant credit, maybe what you're kind of seeing in regards to, you know, increasing auctions, increasing delinquencies, or decreasing auctions and decreasing delinquencies? Yeah, I mean, no real changes in the first quarter from the previous several quarters in terms of delinquencies. You know, we track bad debt as a percent of revenue, and that's historically been, you know, in and around the 2.5% range. So we're very much in line with those levels for Q1. It's something we're certainly watching closely, but haven't seen any significant changes in payment patterns or payment timing from the customer. So all indicators are very, very healthy customer base intact. Great. A solid work on the capital allocation front this quarter. Thank you. Thank you. Our next question is coming from the line of Brendan Lynch with Barclays. Please see your questions. Great, thanks for taking the question. I want to go back to the focus on internal operations and the people, process, and platforms that are being upgraded and evaluated. I'd imagine this is a perpetual focus to a certain extent, but to the extent you can define, are we reaching the end of that process for certain components of it? And maybe just more broadly, where you are in the transition overall. Yeah, really good question. And I would categorize it as, yes, we are ending. We're ending the - you know, reaching the end of the current, you know, development cycle of what we've worked on. And so - but it will be done here shortly. We've upgraded the operating platform, we've upgraded our data center, and our, our capabilities around data and AI and technology. We've upgraded the call center platform, and we've updated the web, web experience. And so we've touched all four of those, which were a very big list for this company. The teams have worked extremely hard, and they've been extremely diligent in their efforts, couldn't be more proud of all that we've accomplished. So, you know, to me, we've got the platform, the foundation, really, really solidly built, and this launches us into the next, you know, next chapter of this company's life as we look forward on utilizing that, that what we've developed, utilizing the technology we've developed, and really having the, the tools for the talent to really excel. Great. That, that's helpful. And then it looks like here you had about a 32% increase in marketing spending. Can you talk about the components that went into that? I'd imagine paying for clicks is part of it, maybe some call center considerations as well. Yeah, you touched on them. I mean, our call center is included in our marketing expense. And I think, you know, we think about it today, you're at a very competitive environment. You know, the marketing spend has come back to a level that we're very comfortable with as a percentage of revenue. And, you know, as we continue to implement technology, and we continue to look at how we staff our stores and the payroll around our stores, obviously, you know, the call center, the customer touchpoints change. You know, digitally, we're moving more people to a more of a digital experience. Our customers are transacting much more with us digitally than they have in the past. The call center volume I was talking about is also a function of that, where we are meeting the customer on how they want to transact. And so, the comp is tougher because last year we were not spending at the level from a digital spend, paid search. Some SEO work around that piece of it was not as big as it is this year. We'll start to annualize that paid search and some of those marketing costs, you know, the hard costs that go around Googling those things. Really, as we head into the, you know, second quarter, third quarter, we really start to annualize that year-over-year spend, and that comp will not look as, as, you know, pronounced as it is today. Okay, very good. Thank you. Thank you. Our next question is from the line of Eric Luebchow with Wells Fargo. Please proceed with your questions. Great, thanks for taking the question. So, you know, it sounds like with some of your new revenue management systems you put in place, you're being a little more dynamic in terms of, you know, new rates and offering lower rates to customers to generate some additional occupancy, which is reflected in some of your web scrapes as well. So any early learnings on how that strategy is progressing compared to other types of promotions that you might give, like, like one month free rent? Yeah, really good question. It's, it's, I would tell you, to start on the top of that is, is what we're, you know, discovering, and I don't think it's new to all of us, is the, the customer price sensitivity is mattering more now in the rental process than it did a year ago, and even six months ago. And so I think the consumer, from their entry level, are looking for a little bit sharper promotion, discount, price reduction, however you want to look at that. We have been primarily focused on lowering entry rate and then trying to make that up, you know, through a little bit more of the ECRI program. But we are finding success now, looking a little bit more of back to what we used to do as an industry around promotion, where it's, you know, maybe 30% off or a third off for the first three months or half off for two months. And a little easier to implement that with the consumer, a little more visibility around that piece of it as far as, you know, here's your discount, you know, your rent is this, and you get 50% off for the next two months, and then it's going to that. And, you know, as far as a consumer standpoint, that's a pretty easy point of sale, pretty easy to understand, and takes a little bit of pressure off those large increases, you know, after a 60- or 90-day period of being with us. So we are testing, and we're finding a path around probably a little bit more promotions use and maybe not as steep, you know, of rate decreases as where we're heading with this. So I would tell you, having the technology, having the testing, having the testing environment, you know, I've been around a long time. I'm really excited about what we can see and the data points we have and how we can test and react and how nimble we can be. We are, you know, much farther down a path of where we ever used to be, and, you know, it's a good thing to be excited about. It's also a good way to learn and hopefully, again, find the best efficiencies we can find when we're trying to attract new customers. I do want to shift back, too, also. Our existing customer base has been very, very, you know, sticky. We had long length of stays. And so on the flip side of that technology, attracting—we talk a lot about attracting customers, but our existing customer base is really healthy, really stable, and has been very accepting of the, you know, ECRI program that we have in place. Great, Dave. That's very helpful. And I guess just one follow-up, just to confirm, the midpoint of your same-store revenue guidance assumes we don't have a typical seasonal uplift in move-in rents from the troughs of winter to spring and summer. I just wanted to confirm that. And do you think that's, you know, seems like the right assumption, just based on what you've seen in kind of early spring through you know late March, early in April? Yeah, that's correct, Eric. I mean, maybe, you know, we modeled a variety of scenarios, so in some of those, it would incorporate a little bit of uptick in rate due to seasonality, but nothing like the typical norms that we've had in historical years. I would agree with what you said, yeah, nothing that we've seen so far makes us feel like we should or need to change those assumptions. Okay, great. Thanks for the questions. Yep, thank you. Thank you. At this time, we've reached the end of our question-and-answer session, and I'll turn the call back to George Hoglund for closing comments. Thank you all for joining the call today. We appreciate your continued interest in NSA and look forward to seeing many of you at the REITWeek conference next month. Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.