Greetings and welcome to Public Storage Fourth Quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If you'd like to enter the queue, please press star one on your telephone keypad. 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. I would now like to turn the conference over to your host, Mr. Ryan Burke. Thank you. You may begin. Thank you, Rob. Hello, everyone. Thank you for joining us for our Fourth Quarter 2024 earnings call. I'm here with Joe Russell and Tom Boyle. Before we begin, we want to remind you that certain matters discussed during this call may constitute forward-looking statements within the meaning of the Federal Securities Laws. These forward-looking statements are subject to certain economic risks and uncertainties. All forward-looking statements speak only as of today, February 25th, 2025, and we assume no obligation to update, revise, or supplement statements that become untrue because of subsequent events. A reconciliation to GAAP of the non-GAAP financial measures we provide in this call is included in our earnings release. You can find our press release, supplement report, SEC reports, and an audio replay of this conference call on our website, publicstorage.com. We do ask that you initially limit yourselves to two questions. After that, if you have more, of course, please jump back in queue. With that, I'll turn the call over to Joe. Thank you, Ryan, and thank you all for joining us today. Tom and I will walk you through our performance, industry views, and outlook. Then we'll open it up for Q&A. I will focus on three key things. First, we ended 2024 on a positive note with results that reflected the stabilization we are driving across our business. We began 2024 by pointing out that a handful of markets were improving sequentially and that we expected more would follow suit. They did, and we ended the year with nearly all markets having inflected, and we are seeing broad operational stabilization. As a result, our quarterly same-store revenue growth improved sequentially for the first time in more than two years. This, coupled with strong performance in our sizable non-same-store pool and ancillary businesses, helped drive Core FFO per share growth positive. Similar to same-store revenues, this is the first sequential improvement in more than two years. Simply put, industry and portfolio fundamentals are steadily heading in the right direction. Second, we are inspired by the strength and perseverance of the Los Angeles community following the tragic fires nearly two months ago. We have a long-standing and deep connection here, and we empathize with those that have been affected. I am very proud of the team for keeping our properties secure and open to serve our customers. We welcome our new customers and thank them for choosing us in their time of need. We are deeply experienced in navigating states of emergency and look forward to Los Angeles reemerging as a long-term outperformer among self-storage markets. In the meantime, we are driving operational stabilization across the rest of our portfolio, and we expect sequential improvement to continue outside of Los Angeles in 2025. Third, through portfolio enhancement, industry-leading innovation, and company-wide competitive advantages, we have positioned ourselves for opportunity as the industry environment improves. We recently completed the Property of Tomorrow program, a multi-year and more than $600 million investment into holistically rebranding our entire portfolio nationwide. This has further enhanced our brand positioning within local markets. As a result of completing the program, we expect our annual retained cash flow to increase from $400 million in 2024 to approximately $600 million in 2025, providing additional liquidity to grow our portfolio. Our digital transformation is advancing and further connecting all aspects of our business. Adoption by customers has been particularly swift, with self-selected digital options now comprising 85% of our customer interactions and transactions, a significant increase from around 30% in 2019. The platform digitalization has helped drive our implementation of a new and more efficient operating model. One of the many ways we are flexing the platform and using AI is to staff properties more appropriately. We are now meeting customers when and where they need us instead of always having someone on-site for nine hours every day. As a result, we've reduced on-property labor hours by nearly 30%, and there's more to go. Importantly, we are doing so while also driving satisfaction higher among our customers and the 6,000-member property operations team. We are also actively rolling out our solar program, reaching nearly 900 properties and with more growth ahead. Our strong progress so far has resulted in a 30% reduction in utility use, which benefits our financial profile and the environment. These are just a few of our many active initiatives, and we are excited about further operational enhancements to come this year and beyond. With that said, we are mindful of the challenges that the industry still faces, including competitive customer move-in dynamics. Our team and strategies are calibrated appropriately as we are driving improvement across our portfolio. Now I'll turn the call over to Tom. Thanks, Joe. On the capital allocation front, we have a $740 million development pipeline to be delivered over the next two years through our in-house team as we continue to invest while industry volumes decline. Acquisition activity has picked up with 26 properties acquired or under contract for $361 million in the fourth quarter through to today. We expect greater acquisition activity in 2025 than we had in 2024. With fundamentals improving and a multi-year period of declining competitive new supply, we are poised to increase activity. As always, our capital and liquidity positions are strong. Industry-leading leverage, balance sheet capacity, and cost of capital have us positioned to execute across our growth channels. Now shifting to our financial performance. We achieved core FFO of $4.21 per share in the fourth quarter, a 20 basis point increase year-over-year. This was strong sequential improvement from the 300 basis points decline experienced during the third quarter. Same-store revenues declined 60 basis points year-over-year in the fourth quarter, also improving sequentially from the 130 basis points decline experienced in the prior quarter. Move-in trends are improving. Existing customers are behaving well, and occupancy is at a level that puts us in a good position as fundamentals inflect. As Joe mentioned, we expect the sequential improvement to continue across the portfolio outside of Los Angeles. Same-store expenses increased 90 basis points year-over-year, with growth in property taxes offset by staffing optimization and additional expense controls. Now turning to the outlook for 2025. We introduced core FFO per share guidance of $16.35-$17, with a midpoint that is consistent with 2024. This includes an estimated $0.23 per share impact from pricing restrictions resulting from a state of emergency declared by the Governor of California in response to the fires. Excluding the impact, the midpoint would have called for a 140 basis point increase in core FFO per share year-over-year. Looking at the same store, the midpoint calls for revenues to be down slightly year-over-year. This includes an estimated 100 basis point impact from the restrictions in Los Angeles. At the midpoint, we are assuming that move-in rents are down 5% year-over-year on average. We are also assuming that occupancy is down 10 basis points on average, an improvement from where we finished 2024. As we've consistently seen, we believe existing customer behavior will remain steady. We expect 3.25% same-store expense growth at the midpoint, primarily driven by property taxes and offset by the initiatives that Joe spoke to. This leads us to same-store NOI declining 1.4% at the midpoint. As I noted earlier, we anticipate higher acquisition volumes in 2025. We've included the identified $140 million of closed and under contract volume, but we did not include any unidentified acquisition volumes in the range. Our outside non-same-store portfolio of over 500 properties is poised to be a strong contributor again in 2025, with $454 million of NOI assumed at the midpoint. They will continue to be an engine of growth with additional NOI upside of $80 million beyond 2025 through stabilization. As we enter 2025, Public Storage is on solid footing following two years of demand and growth normalization. Our completed Property of Tomorrow enhancement program, industry-leading transformation initiatives, sizable and high-growth non-same-store pool properties, and growth-oriented balance sheet will have us positioned for improving fundamentals and increased transaction market activity moving forward. Rob, let's open it up for Q&A. Rob, this is Ryan. Are you there with us? Yes, I'm here. Let's go ahead and open it up for Q&A, please. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. As a reminder, please limit to one question and one follow-up. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd 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 keys. One moment, please, while we poll for questions. Our first question comes from Jeff Spector with Bank of America. Please proceed with your question. Great. Thank you. Thanks for the additional information in your opening remarks. Tom, can you talk a little bit more about the assumptions on street rate? I think you said you're assuming on average during 2025 down 5% and occupancy down on average slightly, I think you said 10 basis points. So most specifically, the street rate assumption. How do you derive that? Thank you. Yeah, sure. Thanks, Jeff. So why don't I start with an update on year-to-date performance and speak to what we've seen to start the year, and we've seen continued levels of activity, demand stabilization that we talked through 2024 play out at the start of 2025 as well. Giving some snapshot stats, the move-in volumes are up a strong 5% to start the year. Move-in rates down about 8%. So on a net basis, continued improvement through move-in activity. Move-outs are flat, leaving occupancy to be down about 40 basis points year-over-year. As we sit here today, comparing to where we finished the year, down 80 basis points, but we did start the year with move-in rents down 8% or so. As we think about the full year, I highlighted a couple of the operational metrics to note. You seized on one of them, move-in rents down 5%. So that's obviously an improvement from where we're starting the year today. And we expect to continue competitive dynamics for new customer move-in rents through the year at the midpoint. We are anticipating that with demand stabilizing, that we do see occupancy at a down 10 basis points level on average. So improvement in occupancy through the year. We're already seeing some of that year-to-date. Obviously, the high and low end of the range capture better or worse trends on those metrics as well. But we thought that was an appropriate midpoint for our outlook for the year. Great. Thank you. And then my second question is on your comments around stabilization. Joe, you started saying that almost all markets inflected broader stabilization. What's driving that? Is it simply less supply? I mean, are you actually starting to see an improvement in demand top of the funnel? Can you talk about that more? Thank you. Sure. Yeah. The moderate but improving market-to-market demand factor is a positive trend. We spoke to that quarter by quarter through 2024. And as Tom noted, that's carrying us into 2025 as we start. So we have seen, as I noted in my opening comments, a number of markets that continue to inflect positive. That's a good trend. It's not a jump dramatically forward, but it's clearly not reversing. And we're seeing top-of-funnel demand by more Google search, for instance, industry-wide. We are seeing, again, moderate levels of improved activity, again, top-of-funnel. And then the thing that we continue to be very encouraged by are all the things we're doing from a conversion standpoint where customers are coming to us with a degree of higher interest in retaining or attaining self-storage space, but our conversion techniques are continuing to be highly optimized and very competitive. So with all those factors, Jeff, we're encouraged by this moderate but improving market-by-market growth. We're obviously pointing out some of the challenges, as I noted here in Los Angeles, but holistically, the portfolio at large, we're still seeing the level of improvement I spoke to, and we're going to continue to diligently capture as much as our fair share of market activities we can. Thank you. Our next question is from Todd Thomas with KeyBank Capital Markets. Please proceed with your question. Yeah. Hi, thanks. I wanted to ask about Los Angeles specifically, the impact that you're estimating there amounts to the 100 basis points negative impact on the same-store revenue. Can you just discuss the underlying assumptions there around occupancy and rate growth? And are you assuming that impact is fairly consistent throughout the year, or is the impact expected to be maybe a little bit greater earlier in the year than you would expect it to be as the year progresses? Yeah, Todd, that's a good question. So we did provide an estimate for the impact to same-store revenue that clearly flows directly down to core FFO of 100 basis points. As we think about the impact there, the primary driver of the impact is going to be rate. Occupancy remains healthy. Los Angeles continues to be a strong market for us, really in and out of cycles, given the demand and supply dynamics within Los Angeles. And so the 100 basis points that we're speaking to is really a rent restriction and pricing restriction impact. And that will have less of an impact in the first quarter, obviously, as we're starting here, than it will as we move through the year. And so that 100 basis point impact will accumulate as we move through 2025. But you can think about that 100 basis points as the right guidepost for modeling purposes. Okay. And then just stepping back and thinking about the portfolio more broadly, can you just discuss within the context of your remarks around continued stabilization and recovery in terms of fundamentals, can you discuss trends across the Sunbelt and compare and contrast that to some of the coastal and more urban markets? Clearly, the Sunbelt normalized more or experienced a greater deceleration from a higher peak growth rate. Looked like some of those markets stabilized a bit more this quarter and led the way. As you look to 2025, does the Sunbelt recover more quickly, or do you see some continued volatility there in the near term? Yeah, I can start, Todd, and Tom can add this additional commentary. One of the things that you pointed to is, yeah, we still are dealing with some of the high-flying markets through the extraordinary demand that we saw through the pandemic, etc. We are encouraged by that continuing to progress in the right direction off of, again, those pretty dramatic events and the demand that we saw. The other factor is supply itself. So in markets nationally, we continue to see declines more often than not in supply and deliveries of new product. There are still two or three markets we're keeping a particularly close eye on. That would include Phoenix, Las Vegas, parts of Florida that we're continuing to monitor. Atlanta is another one. But those are the markets that still are not adjusting as effectively as the nationwide portfolio as a whole. We've been talking about it now for the last couple of years, but we continue to see the holistic benefit of fewer and fewer deliveries taking place. The development business continues to be very challenging from an entitlement, timing, and cost standpoint, coupled with the fact that pro forma often are not matching investment hurdles by many market developers. So that too has been a positive trend that we continue to see that we're going to see through 2025 and, frankly, into 2026. And then, Tom, you can add any other things on top of that. Yeah. The only thing I'd add, Joe, is some specific market commentary. Last year, at this time, we were highlighting Seattle, San Francisco, and D.C. as markets that we're starting to see some improvement. That played out through the fourth quarter. Continue to see good trends there. But as you're highlighting, and Joe just noted related to the Sunbelt, some encouraging trends in some of the Florida markets, for instance, Miami, Atlanta, both inflecting into positive second derivative territory in the fourth quarter. So we are starting to see some improvements further into the Sunbelt, which is encouraging. All right. Thank you. Our next question comes from Michael Goldsmith with UBS. Please proceed with your question. Good morning. Thanks a lot for taking my questions. First, on the transaction market, it sounds like you have greater visibility into more activity in 2025 than last year. So what's driving a more liquid market, and where are acquisition cap rates settling in right now? Yeah, Michael, a couple of things there. 2024, as a stage setter, ended up being a multi-year low sector transaction year. Very few large portfolios traded hands. The bulk of the activity was one-off transactions, but all told, there was plus or minus about $4 billion of transaction activity in the sector at large. Going into the fourth quarter of 2024, we did see a bit of an uptick on the latter half of that activity level, meaning the one-off smaller transactions. We were able to capture a number of attractive opportunities in the fourth quarter that carried into, so far, the activity we've seen early into 2025. Tom mentioned we've either closed or have under contract approximately $140 million of activity. Again, highly leaning toward these one-off transactions, no different than Q4. Between Q4 and Q1 now, we've taken down about $400 million worth of acquisition activity. It's hard to tell if in 2025 we're going to see a different level of bigger portfolios coming to the market. Through last year, we talked to, from time to time, some of the inbound activity we were getting on some of these larger portfolios. Frankly, almost none of them ended up trading hands. Very few of them did, in fact. And we'll see how different 2025 plays out. There's still a level of activity that could come through on these larger portfolios, but very hard to predict at this point. Just to clarify, where are cap rates right now? Yeah, sure. On cap rates, I'd point you to a similar zip code that we've been indicating really for the last year and a half or so. And obviously, cost of capital, interest rates have moved around a little bit through the year, but I'd still be pointing to kind of fives cap rates getting into sixes as the right guideposts for cap rates. And obviously, lease-up assets are going to be a little bit different than that. I'm speaking more to stabilized properties. Thanks for that. And then as a follow-up here, it sounds like demand is stabilizing. Move-in volumes are up slightly, but it's not necessarily translating to pricing power for new customers. So is the missing ingredient just for demand to pick up for pricing power to return, or is there something else that can help generate the move-in rents to move higher? Thanks. Sure. Thanks, Michael. So I think stepping back, the level of demand that the industry is seeing has come off the highs of several years ago. But last year, we were specific in highlighting that we viewed it as the year of stabilization. And if you look at Google search activity for storage-related keywords or other metrics, we did experience that stabilization through last year, and we're starting the year in a similar place to where we started last year. So that's encouraging. The demand is not falling. So that's the first step in the ingredients that you're speaking to. In terms of the year this year, we are not anticipating that we see a significant uptick in demand through this year. So pretty similar trends as we think about our demand drivers in 2025 compared to 2024. So we're not expecting a big seasonal uptick, for instance, or a sharp return in housing transaction volumes. It feels like 2025 is going to feel pretty similar to 2024 across many of those demand dynamics. And so we're not anticipating that there are big shifts there. Obviously, to the extent that demand does pick up for any number of reasons which we can speak to, that should lead to better pricing power across the industry and better financial performance that would flow through thereafter. Thank you very much. Good luck in 2025. Thanks, Michael. Our next question comes from Juan Sanabria with BMO Capital Markets. Please proceed with your question. Hi, good morning. Thanks for the time. Just hoping you could talk a little bit about expenses and some of the assumptions behind some of the individual line items, and as part of that, if you wouldn't mind talking about your views on any potential risks to changes in immigration policy impacting labor costs or less environmentally friendly administration, maybe removing some of the benefits of solar initiatives you've put in place. All right. That's a lot, Juan. So let me pick through those. So in terms of expenses for 2025, ticking through some of them, the biggest driver of expenses will once again likely be property taxes. Another increase is likely to be indirect cost of operations. Some of the investments we're making on the team there will lead to increases. Those will be offset by payroll efficiencies that Joe spoke to earlier and continued improvements in our digital platform that will enable that. And so that will be a mitigant. And then solar, the properties that we added in 2024 will get full-year benefit of those that reduce utility usage in 2025. And then we're going to have another active year of additions this year. In terms of policies towards solar and whatnot, we'll obviously navigate those as we go. But the investment that we've made in solar to date have been very strong returns. Call it 10%-15% on levered IRRs on those investments. So we view those as attractive investments. And we're seeing that utility savings as we sit here today. And we think that that has a big opportunity for us over the longer term given the sizable nature of our roof presence across the country and the likelihood that utility rates continue to rise and solar panel prices come down. So more opportunity there kind of regardless of policies over the medium to longer term. Thanks, Tom. And then just hoping you could speak a little bit about the pricing dynamics for new customers and any sort of impacts from the comp period of last year with the achieved rates going up a bit to start the year. I think you said fourth quarter was 5% and year to date is down 8%. And then kind of weaving in what you're doing on the promotion side, which increased a bit in the fourth quarter. And just how we should think about the interplay there between promotions and achieved rates, etc. Yeah, sure. Happy to go into some of those dynamics. I always like to highlight that we really have three tools that we're pulling at really at local level markets opportunities with both promotions, advertising, and move-in rents. They each drive different performance amongst customers. Some are helping top of funnel, some conversion, etc. And so you did see some variability year-over-year in some of those metrics, but I would point you to the fact that those are relatively modest changes over time. If you look at our marketing spend as a percentage of revenue as a guidepost, for instance, 2.4% of revenue in the fourth quarter and roughly consistent with prior year, we continue to see very strong returns on our advertising spend given our strong brand presence and our digital platform investments that we've made over the last several years. On promotions, we utilize some of the more near-term, call it first-month promotions through the fourth quarter. But again, those promotions as a percentage of revenue at about 1.7% of revenue remain below historical averages and, frankly, is a tool that we'll consider using into 2025 as well. And then move-in rates, as you highlight, has been a notable area of competition among storage operators over the last several years. It continues to be a very competitive moving environment today, and we'll use that lever also. Thank you. Thanks, Juan. Our next question comes from Nick Joseph with Citi. Please proceed with your question. Thanks. I was just going to go back to LA and just understand the moving parts. I think if I look here, rent per foot is about $36 right now. So where's market rent in LA for the purpose of the emergency restrictions? And then how does that impact kind of new move-ins as well as ECRI? Yeah, sure. So the state of emergency triggers price restrictions within Los Angeles and Ventura counties. That results in a 10% pricing restriction. And overall, we've estimated and rolled that through our models, that results in about 100 basis points impact for same-store revenue in 2025. So I would point you to that 100 basis points of same-store revenue impact from Los Angeles. Right. And I guess the question is, how is market rent defined? Right? So if you're at $36 right now, what does that do to ECRIs and what does that do as kind of new people move in? Yeah, it has an impact to both. And so we'll take that into consideration. And we obviously did that in terms of forecasting the impact on same-store revenue to arrive at that, about 100 basis point impact to same-store revenue. All right. Thank you. And then just on capital allocation, I think last year you were repurchasing some shares. This year you more recently issued. So just curious on the framework you're using for kind of the decisions to buybacks versus equity issuance. Yeah, sure. So as we've consistently noted, the stock is one of the things that we evaluate as we think through capital allocation, as we evaluate development, acquisition activity as well. And as we moved through the second quarter of last year, acquisition volumes were quite low and seller dialogue was lower, as Joe mentioned, one of the lowest transaction volume years that we've seen over the last six or seven years. And at the same time, our stock was at a place that we viewed value, and we didn't think it was reflective of the improving fundamentals that we were seeing on the ground. And so we did repurchase $200 million in stock in the second quarter. At the same time, we are anticipating and expecting that 2025 will be a busier year for acquisition activity. And we're hopeful that more ultimately comes to market, and we're poised to participate in that. And we thought it was prudent to add an ATM program to our toolkit, which has consistently included retained cash flow, unsecured debt preferreds to fund acquisition activity. And so we did introduce our first ATM program in the fall. We took that for a test drive in the fourth quarter. Thank you very much. Thanks. Our next question comes from Spenser Allaway with Green Street. Please proceed with your question. Thank you. I just have one more on the LA rent restrictions. And I apologize as I realize it's a very sensitive topic. But how much transparency do you guys have on the state in terms of the duration of these restrictions? And do you have any sense of when you'd get an update on a potential extension of the rent cap? Yeah, Spenser. It can vary depending on, A, circumstances and then, B, the latitude that either the governor or, frankly, even going down to certain municipalities ultimately decide when and where to issue a state of emergency. Clearly, the impact from the LA fires was significant directly into LA, maybe in our view, less so in the Ventura County. But the governor took that opportunity to actually extend a state of emergency for a full year. That's somewhat unusual, meaning that out of the gate, he would use the statute to do something for that duration. But it is in place now technically through January of 2026. And from that point forward, we'll have to see what transpires. Okay. Thank you. And you provided some helpful comments earlier on your robust development pipeline. And I know you slightly touched on labor and immigration policy. But anything you can share as it relates to the development pipeline in terms of how input and/or labor prices have changed in recent months and how confident you feel about hitting development yields just in light of these fluctuating input prices? Yeah. It's too soon to tell, Spenser. If, in fact, market to market, we're going to see immediate or some transition to either labor pressure, whether it's availability and/or costs. We're keeping a very close eye on that. But with the multi-state development activity that we've got going on, nothing yet has surfaced that would indicate that immigration policy in and of itself may change that very directly in the near term. But again, we're keeping a very close eye on that across the board. Same thing for anything that may or may not be impacted by tariffs, etc. I think it overall just points to the fact that development continues to be a business that you need to know very well right down to a local area, the dynamics that play through the cost structure, the risks, etc. In a reverse way, that's actually something that I think is going to create additional discipline relative to the volume of development activity that will likely play through in the coming year or two. So we, as we have had in the past, can maneuver around some of these very differently than most other developers because of our national scale, the buying power that we have for component costs, the skills that we've got, and the ways that we're trying to effectively manage around those risk factors. So it's, again, a changing environment likely, but too soon to tell to what degree. Yes. Thank you so much. Thank you. Our next question comes from Samir Khanal with Evercore ISI. Please proceed with your question. Thank you. I guess my question is around ECRIs this year and how are you broadly thinking about that dynamic as you thought about guidance, especially with headwinds on the consumer. You've got potentially a slower job growth market. Do you expect ECRIs to hold at this point this year? So it's kind of more of a broad comment for various markets. I know we've talked about LA, but just broadly, how are you thinking about that? Yeah, sure. So as I noted earlier, we continue to see really good performance from our existing customer base. And really looking at any metric, be it delinquency or move-outs, we continue to see really strong performance there. And our testing and modeling indicates very consistent price sensitivity as well. And so big picture, the midpoint of the guidance range assumes for same-store revenue that we see pretty consistent performance as last year in contribution from existing customer rent increases away from Los Angeles. And obviously, in Los Angeles, for everything we highlighted, we'll have a lower contribution. So in aggregate across the country, a lower contribution year-over-year, but really pretty consistent performance in other markets. Thank you, Tom. And then just as a follow-up, I'm sorry if I missed this, but you talked about move-in rents to be down 5% at the midpoint of guidance. What are you assuming at the high end of guidance? Thanks. Yeah. At the high end of the range embedded in those assumptions is about a 3% decline in move-in rents on average. So steady improvement through the year there. Okay. Thank you. Thanks. Our next question comes from Ki Bin Kim with Truist Securities. Please proceed with your question. Thank you. Can you just remind us what were the ECRI increases in LA last year? Just trying to calibrate how much that 1% reserve accounts for a potential limit on ECRIs. Thank you. Yeah. No, I think in LA, like every market, there's a wide variety of different increases, both frequency and magnitude that we'll utilize. LA was no different than a typical market last year. And again, would point you to that 100 basis point same-store revenue impact from Los Angeles in 2025. Okay, and this might be a little bit early, but are you seeing any signs of increased housing turnover in the D.C. area, perhaps related to DOGE? Ki Bin, we're keeping a close eye on that too. Obviously, a lot of headlines coming out of DC with DOGE and the different ways that employment levels in that market could change. But far too soon to tell. Couldn't guide you to anything that we've seen on the front lines yet. Okay. Thank you. Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Caitlin Burrows with Goldman Sachs. Please proceed with your question. Hi, everyone. I guess maybe just going back to the capital allocation question, it sounds like you're constructive on the acquisition outlook, and equity is one of the tools that you could use. So just wondering if you could comment on kind of target leverage levels where you are today. Would you look to keep leverage where it is, or what would make you maybe want to go lower or higher? Yeah, sure. On acquisitions, as Joe highlighted, we are optimistic that there will be more activity this year. We are going to be reliant on interest rates and things like that that will skew the levels of seller dialogue and activity this year the way we have the last several years where we've seen certain quarters where dialogue picks up and then slows down. But we're overall quite optimistic as to how we're starting this year compared to last year. In terms of leverage, specifically, we finished the year with net leverage at 3.9x net debt and preferred to EBITDA. Our long-term target is 4x-5x. So we continue to have a leverage level that's a touch below our long-term average, and so certainly capacity to add leverage through unsecured debt and preferreds. At the same time, Joe highlighted that our retained cash flow is increasing from $400 million to $600 million this year. And we'll look to deploy that into the acquisition market as well. And then, as you noted, we did add an ATM program in place as well as an additional tool. But really feel like we have a lot of great tools to finance the business and activity into 2025 and are hopeful that there will be good opportunities to utilize those tools. Okay. And then I know you talked a little bit about development earlier. Wondering if you could give any more detail on how much the PSA portfolio was impacted by other supply headwinds in 2024 and how that factors into your, or I guess what you're expecting for 2025 supply headwinds and how that factors into guidance. Yeah, sure. Overall, industry-wide, our data that we're looking at would indicate that new supply as a percentage of existing stock around the country was right around 3% last year. We are anticipating that that will decline down to circa 2.5% plus or minus in 2025. So some modest improvements there as part of really what has been a multi-year decline in overall deliveries over the last several years. So anticipate a benefit there. Thanks. Thanks. Our next question comes from Ronald Kamdem with Morgan Stanley. Please proceed with your question. Hey, just two quick ones from me. I think you talked earlier about sort of the benefit of the mobile app and being able to reduce sort of labor hours. I guess I'm just curious, as AI sort of proliferates, are there any sort of obvious low-hanging fruits, whether it's leasing, accounting, that you guys are looking at where AI could have an impact? Yeah, sure. Ronald, there's a lot of areas, as I mentioned, that tie to AI relative to the whole digitalization that we've actually been working on now for multiple years. The combined benefit, whether it is through the app, which now we've got a million and a half customers using that tool, whether it's through the way we're interfacing with customers, there's new and different tools there, either through our care center, the things that we're doing on our website, etc. So the penetration and optimization from an AI skill and impact standpoint continues to grow. We continue to be very cautious relative to how far we take that step by step, but we're seeing very good balance of skill and impact versus the investment that we're making into those tools. Very uniquely, the overall investment we've made into our entire digital platform is highly additive, not only to optimizing efficiency from our standpoint, but it's customer satisfaction, customer processes. Again, we're seeing very strong conversion opportunities. A lot of that ties to, again, the way that we're putting different tools into each and every channel that we interface with customers. So a lot more to come there, but we're very encouraged by the investment and the impact that that continues to have on not only customer interaction, but also margins, efficiency, employee satisfaction, employee skill, etc. So a lot of good things to come there. Great. And then my second question is just going back to the CapEx commentary on the property enhancements being over. Is that something that happens every couple of years and so forth? And then the energy efficiency spending, is that something we should expect to also sort of go away at some point? There's some deep areas there that with a 250 million sq ft portfolio, we've got a lot of great things to do with efficiencies relative to the infrastructure of our properties, whether it's HVAC-related, whether it's solar-related, whether we can continue to invest in the right long-term tools that whether, again, we see cost savings and/or optimizations from an energy efficiency standpoint. The Property of Tomorrow program was, frankly, that was about a 20-year cycle where we stepped back five plus years ago and made the commitment to holistically change the entire branding of the portfolio, which we hadn't done in the last 15 or 20 years in one fell swoop. That's not anything that we do every couple of years. We hope to get a very good long-term usage out of that investment. On top of that, though, the day-to-day environment of either optimization, whether it's lighting, whether it's energy efficiency, new tools around solars we've continued to talk about, and other ways that we'll make investments in the properties that make them that much more optimized are things that we take on a case-by-case basis. And I think we continue to see good returns where and when we make those investment decisions. Great. Thanks so much. Thank you. Our next question comes from Michael Mueller with JP Morgan. Please proceed with your question. Yeah. Hi. Sorry. Two more LA questions. I guess first, are the headwinds in the forecast coming only from lower ECRI potential, or are you not able to have kind of a normal seasonal lift in move-in rates as you move into the spring? And then the second question was, can you give us a sense as to how different your year-over-year move-in rate assumption of down five would be if you strip LA out? Sure. There are two components there. One is the first one around what are the primary drivers of the 100 basis points. I would point you to existing customer rent increases as being the primary driver of that impact. That goes then to the second question around what do move-in rents look like. I would say move-in rents in LA are a little bit better than the company average was before the state of emergency and continues to be. That speaks to the strength of overall fundamentals in Los Angeles kind of in and out of cycles through last year and anticipated improvements over time there. On that, the rest of the country was probably a little bit worse than LA going into the state of emergency. The state of emergency pricing restrictions aren't likely to have a significant impact on move-in rents, and more of the impact being felt on existing customer rent increases. Got it. Okay. Thank you. Thanks. Our next question comes from Brendan Lynch with Barclays. Please proceed with your question. Great. Thanks for taking my question. I wanted to ask about acquisitions and any particular markets that you might be targeting or an urban versus suburban skew or any other property characteristics that you're aiming for. Yeah, Brendan. I wouldn't say one focus puts us in a different priority, whether it's urban, suburban, or geographic. It comes right down to the quality of the individual asset and how we see value creation relative to the position we may already have in a market and/or with larger portfolios, how benefited we might be from multiple assets going into multiple markets. So it's a combination of all of those things, but our underwriting process goes right down to an individual asset and the value that we see from that asset, the contribution it makes to the scale and the effectiveness we may have in the market. So we aren't limiting ourselves to either specific geographies and/or urban versus suburban characteristics. And we'll continue to see opportunities across the whole spectrum. Great. Thanks. That's helpful. You're also guiding to lower street rates year-over-year, but maybe not giving up so much on occupancy or don't anticipate doing so. Can you just walk us through your thought process on these components and where you're planning to be more stern versus more flexible? Sure. So we've already spoken a good bit about the move-in rent assumptions. As it relates to the occupancy assumptions, it relates to the expectation that we are experiencing stabilization in demand and we'll continue to navigate through that. And so we've seen over the last several years declines in occupancy, but less so each year, and anticipate that that's the case this year. Ultimately, we're looking to maximize revenues overall, not looking specifically to occupancy or rental rates. And that's how we think about day-to-day the pricing algorithms and optimization processes that take place day in and day out. In terms of the range there, right, occupancy is expected to be better on the higher end and a little softer on the lower end as you'd anticipate. But generally speaking, a relatively flat occupancy year against the demand backdrop that we're expecting to be relatively consistent. Great. Thank you. Thanks. Our next question comes from Tayo Okusanya with Deutsche Bank. Please proceed with your question. Yes. Good morning, out there. Just a quick question around consumer sentiment. Data came out today pretty weak. A lot of retailers this week are kind of talking about kind of a softer consumer. Curious again how you guys are kind of thinking about that in the context of demand and pricing, if not for all of 2025, at least on a near-term basis in the first half of 2025. Sure. I think over the last several years, retailers have consistently pointed to a softer consumer or softer activity. And one of the benefits of storage that we've experienced is some of those customers or really the customer cohorts that have moved in over the last several years have been some of our stronger cohorts over time in terms of delinquency, move-out trends, and the like. And so while the retailers are certainly seeing one thing, I think the storage customers continue to be resilient over the last several years. And we're experiencing that as we speak starting 2025 as well. No question that's something we watch very, very closely, but not something that we've seen the way maybe some of the other retailers have highlighted. In terms of overall demand, though, no question we've seen overall demand for storage come down from the highs of 2021. And we've spoken a good bit around some of the mix shift between housing transaction volumes and people that rent out space at home. But overall, we're viewing this year as a year pretty similar to last year across those metrics. And so I am encouraged by customer behavior through 2024 and to start 2025. Thank you. Thanks. Our next question comes from Caitlin Burrows with Goldman Sachs. Please proceed with your question. Oh, hi. I just had a follow-up on maybe development yields. You guys give some nice kind of disclosure on previous years of development and how those are, I guess, leasing up in the yields they're producing, but as you guys think about the more recent developments and then projects in process, could you give a little color on how you're expecting those to kind of lease up in the pace at which they reach stabilization and whether that's changed in recent years? Sure. Yeah. We continue to underwrite and target 8% plus or minus target yields. And as you noted, we continue to meet or exceed those in prior vintages. In terms of lease-up pace, we consistently are underwriting circa three to four years to reach that level of stabilization. No question we saw faster lease-up and stabilization in some of the vintages that delivered during the really strong demand periods in 2021, for instance, and 2020. But consistently, we're expecting that it will take three to four years as we obviously open the property and start from a zero-occupancy spot. Got it. And so it doesn't sound like there's been any change to that, like an 8% target over three to four years? No, that's right. We think that's a very strong risk-adjusted return and one that we'll continue to target. Thanks. We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Ryan Burke for closing comments. Thanks, Rob. And as always, thanks to all of you for joining us. Have a great day. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.