Greetings and welcome to Public Storage Second Quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. To access the queue, please press Star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press Star 0 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 Second Quarter 2025 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, July 31, 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 on this call is included in our earnings release. You can find our news release, supplement report, SEC reports, and an audio replay of this conference call on our website at publicstorage.com. We do ask that you initially limit yourself to two questions. After that, of course, feel free to 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. We are raising our outlook for 2025 based on stabilizing operations and accelerated acquisitions, which reached $785 million closed or under contract year to date. Public Storage's industry leadership is proven by, among other things, the highest revenue generation per square foot among peers, the most efficient operating platform, including customer and employee-centric technologies that are enhancing satisfaction while bolstering our revenue and margin advantages. The strongest ability to drive portfolio expansion through our best-in-class acquisition and development teams is backed by our growth-oriented balance sheet. As the operating environment stabilizes, new competitive supply deliveries decline further, and the transaction market becomes more active, we are holistically enhancing our advantages and positioning for growth. From a performance perspective, the West Coast in particular, along with other markets including Washington, D.C., and Chicago, are standouts, with same-store revenue growth in the 2% to 4% range. Our expectation for the impact of fire-related pricing restrictions in Los Angeles is unchanged. Similar to most of California, Los Angeles will return to being a higher-growth market when the restrictions end. Speaking more broadly, the trusted Public Storage brand and our geographically diversified portfolio are highly recognizable to consumers and businesses and a source of pride for our team. We have developed an optimized mix of digital and in-person service options that have modernized the customer experience while driving returns and revenues. With our broader operating model transformation, we have created a win-win-win for customers, team members, and our profitability through higher engagement, satisfaction, and efficiency. Our ancillary businesses, including tenant insurance, third-party management, and lending, are expanding. Our acquisition and development teams are executing on accretive portfolio growth with a 538-property non-same-store pool expected to generate approximately $470 million of high-growth NOI in 2025, with an additional $110 million coming through stabilization in 2026 and beyond. Public Storage is uniquely positioned to grow internationally, as demonstrated by our success with Shurgard in Europe and the potential new partnership in Australia and New Zealand. As announced, we are currently in due diligence and therefore in a quiet period. We are excited about the potential to partner with Abacus Storage King and Kye Corporation, their major shareholder, to enhance the company's customer experience, operating performance, and portfolio growth. Now I'll turn the call over to Tom. Thanks, Joe. We are leaning into our powerful compounding returns platform comprised of three components. Joe spoke to our industry-leading operations. I'll now speak to capital allocation and capital access. On capital allocation, we have accelerated portfolio growth with more than $1.1 billion in acquisitions and development already announced for this year. The acquisition opportunities are relatively broad-based across size, geography, and seller type, which we are built to execute based on our relationships, data-driven underwriting, and capital structure. We will continue expanding the high-growth non-same-store pool through additional acquisitions and our $648 million development pipeline to be delivered over the next two years. We are utilizing our advantageous access and cost of capital to fund that growth. During the quarter, with ongoing support from bond investors, we issued new unsecured bonds for refinancing and to fund that growth at the tightest spread of REITs for the year. With leverage at 4.1 times net debt and preferred to EBITDA and approximately $600 million in retained cash flow this year, our capital position is very strong and poised to fund growth into the future. Now shifting to financial performance for the quarter and our increased outlook. In the same-store pool, revenue growth came in as expected, increasing for a second consecutive quarter following three quarters of declines last year. Rental rates were up 0.6%, which more than offsets slightly lower occupancy. That occupancy gap versus last year continues to improve, down 40 basis points versus down 80 basis points to start the year. Expense control was strong, leading to a better NOI outcome than we anticipated. Strong non-same-store and ancillary NOI growth drove core FFO higher by 1.2% in the quarter. FFO growth accelerated 240 basis points from the level achieved during the second quarter of last year. In light of that performance, we lifted the low end of our 2025 core FFO guidance range from $16.35 to $16.45 per share, driven by an improved outlook for self-storage and ancillary NOI. All in, Public Storage is very well positioned to drive performance from our compounding returns platform comprised of leading operations, strong capital allocation, and advantageous capital access. With that, Rob, let's open it up for questions. Thank you. 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. 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. As a reminder, we ask that you please limit to two questions and re-queue if necessary. 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 Michael Griffin with Evercore. Please proceed with your question. Great. Thanks. Maybe just first starting off on fundamentals, wondering if you can give us an update on July operating trends, maybe both from a rate and occupancy perspective. As it relates to the guide, it seems like you're trending above the revised midpoint, at least year to date. Should we kind of interpret the back half of the year as a deceleration in fundamentals? Has that changed your stance at all about potential recovery for storage fundamentals? Sure. Thanks, Michael. Starting with the first part of your question, just in terms of how operating fundamentals have been through the peak season here into July, I'd say, generally speaking, seasonal trajectory very similar to last year, right in line with expectation. The stabilization that we've been speaking to continues to play forth. Joe spoke to some of the strength in many of our markets, the West Coast markets, San Francisco, Seattle, San Diego, Portland, all putting up good kind of 2% to 4% same-store revenue growth. We continue to have certain markets like Atlanta and Dallas, some of the Florida markets still working through the normalization process. We've been encouraged by some of the trends that we've been seeing through the leasing season in those markets. For the quarter, move-in rents were down about 5%, and as I noted, occupancy did close the gap to down 40 basis points from starting the year, down 80. July trends have been relatively consistent. In terms of customer behavior, rents are trending similar in July, down, call it mid-single digits. We ran a successful 4th of July sale, which will optically lower that statistically, but seeing good customer traffic and behavior there. Occupancy gap continues to tighten, today down about 30 basis points as we sit here today. The second part of your question related to guidance and kind of performance year to date. As you highlighted, we're seeing performance pretty similar to what we've been expecting year to date. Trends are a little bit above the midpoint on year-to-date performance and revenue, which is encouraging. I think that's specifically what you're getting at. I think the second-half deceleration that's implied by that guidance, I would point you to the discussion we've been having and Joe highlighted around Los Angeles. The Los Angeles impact from the fire-related emergencies will be more felt in the second half, as we've consistently highlighted, and is the contributor to that deceleration in the second half. That said, LA continues to be a fantastic storage market and one that we have a lot of confidence in over the medium to longer term and will rebound nicely when those fire emergencies expire. Tom, that's certainly some helpful color. Maybe switching next to kind of the acquisition pipelines and color on deals closed year to date, it looks like you did about $160 million in the second quarter with a healthy pipeline, call it around $40 million under contract. Outside of that, can you give us a sense of how the transaction market has been, what kind of buyers and sellers are out there? Could we see incremental acquisitions on top of that $480 million set to close? It looks like you've targeted a number of Sunbelt markets with your acquisitions so far this year. Obviously, those have kind of felt more the brunt of the supply headwinds. Curious if kind of the acquisition strategy is more getting ahead of a recovery in those markets or it's more sub-market specific. Thank you. Okay. Yeah, Michael, this is Joe. I'll take that. Tom's welcome to join in as well. First of all, just talking about the overall transaction market through year-to-date. Tracking that, we have seen nationally, it's up year over year anywhere from, say, 10% to 15%. We'll see how that plays out full year. Typically, second half of year transactions are more robust than first half of year, to be determined. We have seen, again, the amount of product coming into the market and the willingness of owners to transact into levels of value that we have seen appropriate actually increase. That's been encouraging. It's certainly been part and parcel to the amount of volume that we've done year to date that we've spoken to. We'll see how the rest of the year plays out. There are still very few larger portfolios coming into the market. Those that have have had some level of friction relative to the amount of bidding activity and the value realization that many of those owners have attempted to achieve both privately through many conversations we've had with them over the last even 12 to 18 months and then what we've even seen year to date. It's a little tough to predict how things are going to go between now and into the year, but what we've been able to do is unlock many of the things that we do very uniquely, as Tom spoke about in his opening comments, which we have deep-seated relationships. We are in active dialogue with a whole set of different types of owners, very different market opportunities. To that point, and the other part of your question, both intentionally and then what we've seen from the market concentration of activity, it has been dominated by a number of markets, more mid to East Coast. What we do, though, is not aim and look for Sunbelt markets that may have different dynamics tied to supply and/or growth, but going right down to a sub-market basis where we can use data to guide us to where we see unusual value opportunities. We're very confident in the way that we've actually captured assets year to date based on all the tools that we have and the unique opportunities that we have to execute those tools. A number of those transactions have been off-market. Outside of two, I would say, moderately sized portfolios, they've been primarily dominated by one-off transactions. We'll see how that continues to play through the rest of 2025. We have been encouraged by the realization that many owners have taken relative to cap rate expectations and value expectations and have, frankly, captured some good assets going into 2025 thus far. For our cap rate, we'll explore those. That was very, yeah. Thank you so much. I'll hop back in. You bet. Thank you. Our next question comes from Nicholas Yulico with Scotiab ank. Please proceed with your question. Thanks. I guess I just want to touch on the move-in volume, net of move-outs. You talked about that being slightly better than last year. Can you just give us a feel for how much that you think that might need to pick up in order to help pricing on the move-in side where you said it's been a little bit more competitive on move-in rates? Yeah. I mean, we've seen consistent performance, closing that occupancy gap with move-ins doing better than move-outs really for the past year and a half. I would expect that to continue. In terms of the dynamic with move-in rents, I think there's a couple of pieces there. One is our own strategies related to what it is we're doing to drive revenue. We do things like run sales and things like that periodically and otherwise that are going to skew some of the numbers one way or the other. The ultimate driver of some of this is overall industry demand. We've been encouraged by industry demand that really bottomed last year and is starting to recover. I think it's going to take a little bit more time with that recovery before the industry overall starts to be in a position where we're driving move-in rents higher, given the success we've had in using move-in rents at lower promotional levels over the past couple of years. I do think that will come here as we move through the year and into next year, continued narrowing of that move-in rent gap. We'll be really supported by that demand picture, which we think is modestly improving off the bottoms from last year. Okay. Thanks. Second question is just going back to Los Angeles. As a region, it does feel like that market is struggling a little bit more than some others in the U.S. Can you just talk about any other sort of trends you're seeing on the ground? I know you have the fire ordinance that's an impact, but is there anything else you're seeing that's kind of pointing to near-term weakness in that region? Thanks. Yeah. No, we were actually seeing pretty good strength across the whole West Coast and even Los Angeles. I mean, you highlighted the rent restrictions, but if you look at Los Angeles in aggregate, if you look at Orange County, for instance, Orange County revenues were up 3% in the second quarter, which just speaks to the strength that we're seeing really across the broad-based West Coast. We are impacted by those rent-related restrictions that are in place, but ultimately they will expire. We've got a lot of confidence both in our portfolio in Los Angeles as well as the demand dynamics here in Los Angeles that will return Los Angeles to a strong performing market here in the future. Our next question comes from Ronald Camden with Morgan Stanley. Please proceed with your question. Hey, thanks for taking my question. It's Jenny on for Ron. First, can you please comment on any markets that you think you become incrementally more or less constructive? Any notable change in your underwriting approaches in those areas? Thank you. The good news is, again, quarter by quarter, we're seeing continued progression market by market where we've seen improvement in either revenue growth itself or the change in revenue growth. We're continued to be encouraged by the amount of demand factors that are lifting each of these markets one by one. There's a whole host of markets that then also lead to our confidence relative to capital allocation. That, as I mentioned in a prior question, really goes right down to a sub-market by sub-market basis where we're looking for ideal opportunities to invest into assets that are going to have the opportunity for us to put our own brand or operational techniques and platform to improve performance as well. We've been very encouraged by a whole host of markets that give us that set of opportunities. The landscape for continued investment is quite good relative to the things that we have uniquely to drive and understand, not only current conditions, but changing and improving conditions market by market. That's super helpful. Second is regarding operations. Maybe talk a little bit more about if there's more room to automate or centralize operations. What could be the expected margin expansions from those initiatives? Thanks. Yeah. Another very vibrant and robust part of the business that we uniquely are investing in and capturing all types of different levels of either A, optimization, B, cost savings, and then C, from an employee standpoint, opportunities for different levels of specialization as we allocate, for instance, labor into properties where we can use analytics to determine the best place and location for our own employees to match customer demand. Many of the things that we've been doing from a cost efficiency standpoint around our investment into solar, for instance, to again optimize costs tied to utilities. From a scale and concentration standpoint, the leverage that we continue to extract relative to, again, the optimization and the way that we're running our properties day to day is significant. Very encouraged by the amount of progression. It's not over yet. We're seeing the ability to lift optimization that also ties to both revenue and expense control while also preserving, if not enhancing, both customer and employee satisfaction. The entire opportunity that we see there continues to grow, and we're very confident we've got more to do. Perfect. Thanks so much. Thank you. Our next question comes from Jeff Spector with Bank of America. Please proceed with your question. Great. Thank you. First question. On the same-store revenue growth guidance, it's still fairly wide, minus 1.3% to 0.8%. Can you talk about the various scenarios or key drivers, bottom end versus top end? Thank you. Yeah, sure, Jeff. I'd point you to the same guideposts, frankly, that I did earlier in the year. The year has played out largely in line with our expectations, and so would point you to guideposts of higher occupancy from here to the end of the year in the high-end case, with move-in rents probably narrowing to, say, down 3% on average. Some improvement there on move-in rents. The low-end case being modest drops in occupancy from here, as well as move-in rents declining through the second half. While the probability of those high and low-end cases may have come down a little bit, we felt like they were still the right guideposts for investors to be able to gauge performance. Okay. Thank you. My second question is on street rates. Just curious into July, how are operators using street rates to manage occupancy versus demand? I guess if you could talk about just the current environment, discounting, promotional activity. Thank you. Yeah, pretty consistent. I wouldn't point you to anything meaningfully changed here in July. Okay. Great. Thank you. Thanks. Our next question comes from Eric Luebchow with Wells Fargo. Please proceed with your question. Great. Appreciate it. I guess as you look at the back half of the year, what type of seasonality are you really expecting into the slower months? The last couple of years, it's been pretty competitive on move-in rate across the industry into the slower months. Are you optimistic that we won't see the same level of price competition to try to maintain occupancy? Any thoughts that would be helpful? I think our expectation coming into this year is we'd see pretty similar seasonal trends this year as we did last year. I would stick to that into the back half as well. It continues to be competitive for new customers. I think that's a dynamic within our industry that's been tried and true for a long time. Different operators are going to use different pricing and promotion tactics, but we're certainly well equipped to utilize ours and drive traffic to our Public Storage sites around the country. Great. As you think about kind of leveraging move-in rent versus promotional discounts versus marketing spend, promotional discounts have been down year to date versus last year, and your marketing spend was up a bit in the quarter. It's just year over year. How should we think about the interplay of those and your ability to hit your occupancy targets this year? I'd say big picture, we don't have occupancy targets. We're looking to maximize revenue. You highlighted the three different levers that we utilize day in and day out, being marketing, promotions, and move-in rental rates. We'll continue to do that. That's an analysis that's done very granularly at a product site level at the property. We'll continue to utilize those tools to maximize revenue over time. Okay, thank you. Thanks. Our next question comes from Eric Wolfe with Citi. Please proceed with your question. Thanks. Just wanted to follow up on Los Angeles. It seems like you're expecting around negative 6% same-store revenue growth in the second half versus flat in the second quarter and the first half. Is there anything that could cause that prediction to be materially off one way or the other? Is it somewhat just math and certainty that it'll end up close to that level? I'm just trying to understand the volatility of outcomes that could happen in Los Angeles in the back half of the year. Yeah, sure, Eric. I think that there's a couple of components to that. One is overall, the impact of the state of emergency pricing restrictions on our ability to send rental rate increases to existing customers. I'd say that component of the impact is pretty well defined because we understand our customers that are in place and they're likely to vacate as well as rental rate increase cadences. I'd say that component is relatively more known as we move into the second half, and that's the biggest contributor to the decline in performance as we move through the year as that impact of rental rate caps accumulates through the year. The other component, though, is just the strength of overall demand and customer behavior in Los Angeles, and that is more variable. I'd say we've generally been pretty encouraged by customer demand in Los Angeles as well as just broadly across the West Coast, as I highlighted earlier. It's not an LA County thing, but I mentioned earlier that Orange County is performing particularly well, obviously not impacted at all by these emergency restrictions. That is a little bit more variable, and we'll ultimately report on Los Angeles as we move through from here. I think you characterized it well in terms of our expectations for the back half. That's helpful. I guess maybe a difficult question, but to the extent that the restrictions are lifted next January, how quickly do you think you could sort of capture that lost revenue back? Yeah, that's a great question. That is something that we obviously have some experience in doing. We've had emergencies expire in the recent past and had a lot of success in re-accelerating revenue in Los Angeles. We'd anticipate utilizing a similar playbook, which is immediately following those restrictions, we will likely see an opportunity to send those rental rate increases to those we haven't been able to. You'll see revenue accelerate in the months following the emergency expiration. You'll see that probably play out, in this instance, maybe over the course of a year. In the last instance, it probably took more like a year and a half, two years, but that's because that emergency was in place for longer. We'll ultimately need to judge that when we get to that point early next year. Thank you. Our next question comes from Spenser Allaway with Green Street Advisors. Please proceed with your question. Thank you. Can you talk about what's driving the increasing guidance for the non-same-store pool? Have those been leasing up faster than expected, or is it just more on the rate side? Yeah, great question. I'd break it into two components. One is a strong performance from the non-same-store pools that are in lease-up. In particular, the development and expansion properties had a very good start to the year, leasing up ahead of our expectation, which I think just further reinforces the environment for new customers is stabilizing and modestly improving from here. That's an encouraging statistic that those lease-up properties are ahead of expectations. The second component is the new acquisitions that we've closed on or intend to close on through the back half of this year as disclosed also increase that from here. That's great. Maybe the last piece, Spencer, just to highlight is we did also increase the outlook for the amount of NOI to be achieved in 2026 and beyond from that pool. Joe highlighted that in his prepared remarks from $80 million to $110 million. We are refilling this high-growth non-same-store pool that not only will have an impact on this year, but importantly, will have an impact on future year growth as well. Yeah, maybe just to add one more component, Spenser, to the configuration of the non-same-store. About 100 of the 540 or so assets that are in the non-same-store are developed assets or expansions that we've intentionally put into markets. To your question, we're seeing very good lease-up, but those assets can take some additional amount of time to get to stabilization, which is all very powerful. About 20% of the non-same-store is actually tied to our very intentional development activities as well that give us over time the highest returns on capital. Continue to be very encouraged, even with assets that we put into the market over the last year or two. Okay. That's very helpful. Thank you. Specific to California, we've seen more attention being brought to potential rent control as well as pricing transparency. While I realize no rent control bill has actually been successful in passing, does the recent push from California legislators change how you view your exposure to the state mid to long term? Sure. The thing that we do nationally, just to step back, is we do keep a very close watch on any legislative efforts that are potentially gaining either attention or traction that could impact the business. California can be prone to that kind of activity. To your question, we keep a very close eye on the variety of things that may be contemplated legislatively or otherwise within the state. We take a very proactive posture when and where we see those kinds of activities. In the case of California, which we do more typically when any of those kinds of events take place, we're not independently engaging with and/or formulating any type of reaction or response. We're going to be doing that with industry partners, including the National Storage Association, etc. Most recently, the efforts that were taking place here in California ended up being basically successful around taking a set of initiatives that initially had price controls tied to them and then coming up with a solution that was alternatively geared toward disclosure. We felt that that was a fair compromise and aligned with the interests of the industry. In our particular case as well, we felt that that was a good compromise. This is just something that we continue to monitor. Part of this is the continued education and advocacy, even through different political bodies of the way our business works, the way promotions and then rate increases typically take place, how that does have a good match relative to customer attraction, meaning it can be very advantageous to the way customers look at acquiring spaces and holding those spaces long term. We continue to look at all those ways to continue to educate legislative efforts. Frankly, more often than not, those become very sensible to them. They've given us a good foundation to continue to move forward when and if these events take place. We're going to continue to stay focused on that, again, with our partners nationally. We'll go from there. Excellent. Thank you. Thank you. Our next question comes from Todd Thomas with KeyBanc Capital Markets. Please proceed with your question. Hi. Thanks. I wanted to ask about the development and lease-up pool a little bit more. I was wondering if you can discuss how the newer vintage projects are trending versus underwriting and comment on stabilization timeframes and NOI yields as you reforecast those projects. Are you underwriting new projects today in either the in-process pipeline or planning any differently for new developments going forward? Yeah. Thanks, Todd. A number of components there. First, just starting with reiteration of what I mentioned earlier, that the lease-up and trajectory of the recently delivered acquisitions and expansions continues to be robust. You can see that in our non-same-store disclosure in the SUP. In terms of seeing good traction there for lease-up, they are tracking a little bit ahead of our performance to date, which is encouraging. The overall targets for yields that we're looking for for those sorts of developments and expansions are typically in the 8% plus or minus yield on cost. If you look in the SUP, you can see we've consistently hit or exceeded that over time and have a lot of confidence in these recent vintages. In terms of how we're looking at the program overall going forward, while the overall industry continues to face headwinds, and we're not immune to that related to longer timelines in certain jurisdictions, higher cost associated with component parts, and financing costs, we do have some pretty unique capabilities vis-à-vis others building self-storage facilities in the fact that we can purchase nationally, given the breadth of our program, our in-house team, and the relationships that we can build around the country, and obviously our balance sheet and ability to fund this program largely with retained cash flow today. While the rest of the industry volumes for new development, we anticipate to decline this year, we're going to have a relatively strong year for deliveries, about $370 million delivering this year. While we haven't provided any guidance for next year, we would anticipate north of $300 million for deliveries next year as well, kind of maintaining our kind of $300 to $400 million pace of development deliveries from here. Okay, that's helpful. I wanted to go back to some of the discussions around markets and that performance gap between various markets on the West Coast and Chicago and a few others that you mentioned relative to Sunbelt markets that are still normalizing, like Atlanta, Dallas, and some of the Florida markets. Are you seeing any indication of stabilization in those more challenged markets? Any sense how far you might be from sort of a bottom and what the timeline for those markets to recover more meaningfully might look like? Yeah, Todd. I mean, again, on a case-by-case or market-by-market basis, you're going to see different trajectories. You mentioned Atlanta, for instance. Atlanta is in probably one of the toughest spots at the moment, a fair amount of supply, and again, not the amount of demand coming through as quickly to either shore up or stabilize that supply. We have been alternatively encouraged by the turning set of events, for instance, in Florida. Florida was a high flyer through the pandemic, if in fact the highest flyer. It had the commensurate impact from those trends reversing. Again, on a market-by-market basis, through Florida, we're actually seeing a good set of performance factors, good stabilization, and now in a number of markets within Florida, we're seeing not only revenue growth, but the change in revenue growth trend favorably. The trajectory from a national standpoint is positive. There are three, four, or five markets that we're keeping a very close eye on. I mentioned Atlanta, Dallas, Phoenix, Charlotte, for instance. Those are ones that we're keeping a particularly close eye on as we speak. We have been pleased by the turnaround that we've been seeing now quarter to quarter, frankly, for the last 18 months or so, and we don't see that changing. Okay. All right. Thank you. Thank you. Our next question comes from Michael Goldsmith with UBS. Please proceed with your question. Good morning. Thanks for taking my questions. First question is on the new customer. What are you seeing in terms of top-of-funnel demand? It sounds like the first half was a little bit ahead of last year. Just trying to get a sense of what the funnel looks like. Along those lines, you're continuing to run promotions, and marketing spend was up year over year. Is the customer reacting to these different factors the same way they have in the past? Yeah. There's a lot there to unpack, Michael. I guess I'd say overall, as you highlighted, we are seeing modestly better demand this year versus last year, which is another sign of stabilization that we're seeing in the business. In terms of customer behavior itself, pretty consistent trends. Our conversion has been healthy. Reactions to promotion and pricing tactics have been consistent with what we'd expect. Our revenue management and marketing tools are working. We are utilizing those to seek to optimize revenue from new as well as existing customers. I know you didn't ask about existing customers, but I might as well highlight that because. That's where I was going next, Tom. Good. All right. We're doing it together. Existing customers are actually performing quite well year to date. In the second quarter, we saw really strong performance from longer-term tenants, for instance. That's something we were watching very closely coming out of liberation day to see if there would be any shift in behavior. Encouragingly, we saw vacate activities diminish. We've seen delinquency levels be consistent, frankly, a touch better year over year, as well as accepting of rental rate increases. As we think about the customer base overall, it continues to be a bright spot for us as we sit here today. Got it. Since you covered that, as my follow-up, there's been a series of residential real estate earnings this week and today. Turnover on the apartment side and on the multifamily side has remained relatively subdued. Do you see that as a good thing for self-storage, or is that bad? Is there just less movement? On the one hand, it could be good in that the apartment customer is staying in place and so continues to use storage as an extension of their apartment, but also it could be seen as bad because there isn't a turnover moving to a home, which drives a different type of demand. How would you interpret lower apartment turnover and the impact on self-storage? Yeah, Michael. It actually speaks to the resilience and the unique attributes of self-storage. We actually can benefit by any of those events and currently are. On one end of the spectrum, apartment users that may be stickier, maybe may not be moving as often, that could be tied to affordability or having less options to expand or take an additional size living space plays very well to the inherent demand factors of our business. To your other point, if there's some amount of dislocation because of movement itself, that's always a driver to our business. The affordability factor too plays here, which, again, self-storage is commonly looked at as a sensible way of buffering higher cost of living or higher cost of shelter. That too is an inherent driver. As we've spoken to for some time, we have a high percentage of renters in our portfolio, and they're great customers. All those factors lead to very similar lengths of stay. I wouldn't say in any way we have an overarching concern about the type of customer because, in fact, they may be a renter. In fact, most renters end up being very good customers, particularly after they stay for some period of time. All those factors are good inherent drivers to our business. Thanks for that. Good luck in the back app. Thank you. Thanks, Michael. Our next question comes from Ravi Vaidya with Mizuho. Please proceed with your question. Hi there. Thanks for taking my question. I wanted to follow up on the ECRI program. Maybe can you quantify the average rate increase and maybe how it has changed from last quarter and last year in terms of frequency and amount? Thanks, Ravi. We don't typically quantify frequencies or specific magnitudes, but we do disclose information that allows folks to get to the contribution from existing customer rent increases. As I highlighted on our February call when we came out with our outlook, I'm anticipating contribution from existing customer rent increases across the country to largely be pretty similar to last year. Given the rent restrictions in Los Angeles, which will drive less contribution year over year, overall there will be a modestly lower contribution from the full national pool. We continue to see customer price sensitivity that's very much in line with our expectations and predictable behavior and reaction to our tactics on the ground, and a stable number of customers that are requesting some sort of concession after they receive an increase. I'd say overall, very consistent trends and right on plan. Got it. That's helpful. Just one more here. Can you maybe discuss the impacts of the big beautiful bill? Does this further encourage your development pipeline given the bonus depreciation provision? Do you forecast home sales to increase and subsequently self-storage demand given the SALT property tax adjustments? Maybe just walk us through how you're thinking about the recent legislation there. Yeah, sure. There's a couple of components there that I'd highlight. You hit on some of them. I think the full impact of the bill will be felt across the macro, I think, over time. I think specifically to Public Storage, there's two things I'd highlight. One of them relates to our solar program. We've been very active in investing in solar for rooftop generation to offset our own utility usage. That's something that we've had a robust pipeline on, and our pipeline is set to complete here over the next several years. We're fortunate that we started that program and really accelerated it over the last several years to take advantage of the incentives that were in place and that will no longer be in place going forward. We feel good about that, and that will be a tailwind to our expense profile as we reduce our utility expense and our carbon footprint over the next several years. That's a negative impact over the longer term, but won't impact us in the near term in our current pipeline. The second component relates to bonus depreciation, as you're highlighting. Bonus depreciation is something that we've taken advantage of consistently over the past decade or so. That bonus depreciation was starting to sunset, but with the new bill, will come back. That's an opportunity for us to continue to retain incremental cash flow over time and reinvest it into our development business as well as acquisitions. That reinvestment into the business helps drive our compounding return platform. Regarding the SALT provisions and home sales, are you seeing anything from that with demand? No, we haven't seen anything from that yet. Obviously, we'll see the broader macro impacts as we go from here. Got it. Congrats on the quarter. Thanks, Ravi. Our next question comes from Juan Sanabria with BMO Capital Markets. Please proceed with your question. Hi, good morning. Just first on acquisitions, just curious on temperature yields going in for what's been done to date and kind of what's planned for the remainder of the year, as well as kind of a longer-term, more stabilized expectation for those investments. Yeah, thanks, Juan. I'd point you to pretty similar cap rates to what we've been seeing over the last 12 months or so. Generally, transactions are trading hands with kind of going in yields in the fives, ultimately getting into the sixes. The portfolio activity and small individual assets that we've done year to date are right in line with that. We did do some lease-up asset acquisitions as part of this component. Even with that, I'd characterize of the 785, the going in yield is probably five and a quarter sort of zip code, ultimately stabilizing in the sixes. Thanks. On the ancillary part, which has done better than expected, you call that tenant insurance. Just curious, what's changed there? Is there maybe more pricing power? Just curious on what's driven that outperformance on the ancillary, particularly tenant insurance? Yeah, we continue to see really strong adoption from the tenant insurance program itself. Overall coverage levels are trending higher and have been over the past couple of years. In addition to that, premiums have also moved higher, kind of on both sides of the stabilized store base. Obviously, adding new properties into the non-same-store portfolio will further increase the opportunity for the tenant insurance business, along with our third-party management platform. That business is really hitting on all cylinders in 2025. Thanks. Our next question comes from Caitlin Burrows with Goldman Sachs. Please proceed with your question. Hi, good morning. Back from the prepared remarks, you guys brought up how you're positioned to grow internationally. I guess we'll see what happens in Australia. I was wondering if you could go through what benefits you think the Shurgard exposure gives Public Storage overall. Do you expect to pursue additional international opportunities? Yeah, Caitlin. The thing that I highlighted in opening comments around our relationship with Shurgard has been very powerful, where we've had an opportunity to, A, learn how many of the tools they've selected from our own platform have been opportunistic for them in a whole host of Western European countries, country by country, with many different types of dynamics. It's been a great opportunity for us to see, understand, and work with a platform like that that could take those kinds of tools that we're developing here in the U.S. and implement them one by one at their election into their own platform. For many years, we've seen the opportunity, how we've been able to optimize and see that integration in markets not here in the United States. With that, it's given us more confidence that for the right set of circumstances, other international markets may also be equally, if not better, prepared to achieve the same kind of optimization using the tools that we've been able to develop here in the United States. We think that that's very similar, for instance, in Australia and New Zealand. As you know, we've had an inherent interest in that market for some time over the last five-plus years. This opportunity, again, is very attractive for many of those exact same reasons. The partner who controls the entity is very attracted to the things that have played forth relative to our relationship with Shurgard. We'll see how this plays out as that opportunity progresses step by step that we'll give you some color on as we're able to. To your question, it does give us not only the skill, but the confidence and knowledge of how, A, complicated, but how, B, efficient some of these tools can become in different markets. It's not a static set of playbook opportunities, but it's one that, if it's tailorable to a particular market, can be very powerful. We'll see how that continues to play, not only in markets like New Zealand and Australia, but over time, potentially other markets as well. Got it. Thanks. I guess the bigger picture back to the U.S., you've talked about same-store stabilizing, that you think demand bottomed in 2024 and should continue to improve. You also talked about that the storage industry should be able to outperform in a variety of economic environments. I guess I was wondering if you could just give your current thoughts on what you think it takes to get a stronger improvement and get on the same-store side, like positive growth, whether that's positive or inflationary plus on the revenue or NOI. Is it the housing market? Is it less supply? Or do we not really know at this point? Thanks. No, good question, Caitlin. I do think we've seen that stabilization. I think as demand continues to grow off that 2024 base, you're going to see more momentum. We've already seen that across a number of our markets, right? If you look at the West Coast markets, for instance, that Joe and I have been speaking to on this call, starting to see that sort of growth already, which is encouraging. We've got a lot of confidence in the Sunbelt markets that have taken a little bit longer to normalize. If you think about an environment where demand is coming off a base, you've got new supply that is likely to continue to taper off given the challenges in the development business I spoke to earlier, and you've got a situation set up for a return to stronger growth for the sector. Is that going to happen overnight? No. As we've seen, the stabilization process will take some time to get back up to those levels of growth. We've already seen it in many of our markets, and we have confidence that around the country that's to come. Thanks. Our next question comes from Ki Bin Kim with Truist Securities. Please proceed with your question. Thank you. Good morning. Just going back to the impact of the LA wildfires. In the beginning of the year, you estimated about 100 basis points drag to your same-store NOI. Given the strength in the West Coast, and I think we see the same data, LA looks pretty strong. Do you think that drag is actually potentially bigger than 100 basis points? Keeban, we'd still point you to the 100 basis points impact and would point you to Los Angeles being plus or minus down 3% same-store revenue for the year. Around that 100 basis points number today. On the call, you mentioned that 2Q pretty much ended up where you thought it would. When we look at the pace of improvement from 1Q to 2Q, it does seem like it just lost a little bit of steam. It's just one quarter, I get it, but it wasn't the same pace. I was just curious, was there a macro factor or a change in some behavior that occurred during the quarter where that pace of improvement just looked a little bit softer than the prior quarter? Thank you. Thanks, Ki Bin. I wouldn't characterize it as seeing any sort of losing steam or any shift during the quarter. It was pretty consistent throughout the quarter and generally in line with our expectations. I wouldn't point you to that as something that occurred during the quarter, frankly. Okay, thank you, guys. Thanks. Our next question comes from Mike Mueller with JP Morgan. Please proceed with your question. Hi. Most of the 2Q stuff's been asked. Out of curiosity, when you have digital rentals versus in-person or from call centers, do you generally get the same amount of customer data that you would get that helps you formulate pricing and marketing strategies? Go ahead, Jim. To your question, Mike, all of those channels give us a whole variety of robust data. We are continuing to use different tools to leverage that data relative to customer knowledge and behaviors and efficiencies. It's a vibrant amount of the business that time and again, channel by channel, as we digitize, we see very good residual impact and knowledge opportunities. The more digital interactions we have, the more data we can get. Yes. It's as simple as that. Got it. Okay. Thank you. You bet. Our next question comes from Teo Akasana with Deutsche Bank. Please proceed with your question. Hi. Yes. Good afternoon. Just a quick one in regards to your markets that are outperforming, as you mentioned, West Coast, Midwest, D.C. Just curious thematically, if you can kind of talk about what's happening in those markets. Does it all just kind of boil down to less supply through the cycle, or is there kind of something thematically happening from a perspective of improved demand across these markets? Yeah, Teo. There's not ever just one impact, but supply certainly is a primary factor. Some of those markets have not been the high flyers in and out of the cycles that we've seen over the last 5 to 10 years. That's certainly a residual benefit. It could also play to, again, just inherent economic activity. Cost of housing, again, the dynamics that are going on just from a movement and trending standpoint, market to market. It can be difficult to put a broad brush on just a market as a whole, so you've really got to take it down to a submarket-by-submarket basis as well. Those are factors that, again, are very important that you've got to keep a very close eye on relative to either trends or different ways that the market's evolving. As we continue to speak to, even on this call, we are very encouraged by the market-by-market trends that we're seeing nationally. With that, the supply factor continues to diminish, where today, fortunately, we don't have more than three or four larger markets that are really dealing with an oversupply issue that's dragging down overall market performance. That's helpful. One other quick one. Just curious, from your call center data that you have, from data you have from prospective customers interacting with your website, just curious if you're kind of seeing any change in behavior, anything that kind of supports this idea of we're kind of getting closer to demand stabilization, as I believe you guys have kind of mentioned that quite a few times throughout the call. The only thing I'd point you to there, something I noted earlier, is conversion has been very healthy year to date. We've seen conversion improving across the channels, which I think speaks to more customer interest and willingness to transact with us. Thank you. Thank you. Our last question comes from Brendan Lynch with Barclays Bank. Please proceed with your question. Great. Thanks for taking my questions. Tom, you mentioned quite a bit about markets inflecting, turning positive. It seems to be improving signs of strength throughout the industry. However, street rates seem to be stubbornly negative, implied by your guidance as well. Can you just talk about the dynamics which are contributing to that? Yeah. I think the primary contributor to that is that we and others have found good success in lowering move-in rents and getting good customers and move-in volumes. As that's worked, we and others have utilized it. I do think that street rates and move-in rents will improve over time. We've seen that in some of the stronger markets already. It will take a little bit of time as demand comes off the bottom. Okay. Thanks. That's helpful. You talked about the seasonal pattern being pretty similar to last year in terms of occupancy gains and pricing. If I recall correctly, last year the seasonal peak was very early. Was there any change in that? I'd imagine all else equal, a later peak is better in terms of third-quarter earnings. Thanks. Sure. It depends on which metric in particular you're looking for in terms of peak. I mean, we typically get our occupancy peak here in July. I think that'll be the case here again this year. You typically see move-in demand peak at the end of May, early June, for instance. I think generally, I'd say we're not seeing anything unusual or shifting from a seasonality standpoint this year. That's frankly encouraging. Okay, very good. Thank you. 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. Thanks to all of you for joining us. Have a good day. This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.