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spk05: Thank you. This is the operator. Today's conference is scheduled to begin momentarily. Until that time, your lines will again be placed on music hold. Thank you for your patience. Music THE END Thank you for standing by, and welcome to the Quarter 2020 Extra Space Third Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during that session, please press star 1 on your telephone. If you require any further assistance, please press star 0. I will now turn the call over to Mr. Jeff Norman. Please begin, sir.
spk02: Thank you, Jenny, and welcome to Extra Space Storage's third quarter 2020 earnings call. In addition to our press release, we have furnished unaudited supplemental financial information on our website. Please remember that management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in the company's latest filings with the SEC, which we encourage our listeners to review. Forward-looking statements represent management's estimates as of today, November 5th, 2020. The company assumes no obligation to revise or update any forward-looking statements because of changing market conditions or other circumstances after the date of this conference call. I'd now like to turn the call over to Joe Margolis, Chief Executive Officer.
spk10: Thanks, Jeff, and thank you everyone for joining us on today's call. I trust everyone and their families remain healthy and are managing through this difficult time. 2020 has been a challenging and eventful year. and the unprecedented conditions related to the pandemic have made it difficult to forecast performance. On our last call, we discussed the tailwinds we are experiencing in terms of rental activity, muted vacates, positive achieved rate trends, and the resumption of normal operations. We also discussed the potential headwinds that we believed we could face, including economic and political risk, as well as changing customer behavior and new supply. During the third quarter and to date, the tailwinds have proved stronger than we expected, while the headwinds have not been as significant or have not materialized. Rental volume remains healthy, while vacate volume remains muted, resulting in all-time high occupancy of approximately 96%. Through July, Occupancy was inflated with non-paying customers due to the inability to auction delinquent units. However, as the quarter continued and auctions resumed, we have been able to maintain our high occupancy and collections have returned to historically normal levels. Our elevated occupancy resulted in the return of pricing power during the third quarter. In short, our stores are performing significantly better than we expected earlier in the pandemic. On the last call, we stated that we expected to have negative same-store revenue growth in the third and fourth quarters. Due to the continuation of the tailwinds we are experiencing, we have achieved positive revenue growth in October and are confident we will produce positive revenue growth in the fourth quarter. We remain mindful of the potential macro and industry-specific uncertainties that we have referenced during the third quarter. However, at present, these risks do not appear to be negatively impacting the demand for storage or consumers' ability and willingness to pay for our product. The primary headwind impacting performance is new supply in certain markets. While the pandemic has delayed new deliveries and may reduce new projects and planning, properties are still being delivered and excess inventory is still leasing up, which will continue to suppress rate growth in high supply markets. Despite the improving trends, our same-store NOI remained negative in the third quarter. However, even with the disruption COVID-19 caused to our operations, we continue grow core FFO per share, which is our ultimate goal. In the third quarter, FFO per share increased 5.6%, and FFO growth for the first three quarters was 5%, both sizable beats over consensus. Our flexible organizational structure and focus on innovative capital light strategies have enhanced FFO through new external growth channels and non-same-store income streams. These contributions paired with improving same-store trends lead us to believe that our 2020 FFO will comfortably exceed the high end of our pre-COVID expectations. Turning to external growth, acquisition volume has picked up in the sector as markets have started to settle. but pricing for widely brokered deals, particularly for stabilized properties, remains very competitive. During the quarter, we have closed or put under contract an additional $140 million of acquisitions, bringing our total expected investment in 2020 to $287 million. In addition to acquisitions, we continue to find ways to creatively invest capital in the storage sector. Our bridge loan program continues to grow with approximately $315 million in bridge loans scheduled to close in 2020, with the expectation to sell 70 to 80 percent of the balances. We've also approved $167 million of loans to close in 2021. We also purchased $103 million senior mezzanine note at a small discount, and subsequent to quarter end, we invested an additional $50 million in SmartStop through our previously negotiated preferred equity investment. And through three quarters, we have added 72 stores net to our third party management platforms. In short, we continue to execute on our strategy to maximize shareholders' long-term value through optimizing property level operations and efficiently and creatively investing capital in the storage sector at acceptable risk levels. I'll now turn the time over to Scott.
spk02: Scott Walker Thank you, Joe, and hello, everyone. As Joe mentioned, we've seen a number of positive trends during the quarter that are continuing into the fourth quarter. During September and October, we typically see occupancy and achieved rates start to moderate due to seasonality. This year, this has not been the case. Rentals remained steady while vacates are still down, and October occupancy remained relatively similar to this summer's highs at just under 96%, a positive year-over-year delta of approximately 260 basis points, with less than 20 basis points of inflated occupancy related to non-paying tenants. New customer rates also remained strong. achieved rates to new customers for flat year-over-year in July, and improved to approximately 11% in August, September, and October. We have completed the rollout of our online leasing platform, Rapid Rental, and have seen approximately 20% of rentals come through this channel. We have also reinstated existing customer rent increases in most markets with a focus on bringing customers with below market rates closer to current levels. To date, such increases have not caused outsized vacate activity. Despite these strong trends, same-store revenue remained negative in the quarter, primarily driven by lower other income due to fewer assessed late fees and auction fees. We've tried to work with our customers and have been lenient where appropriate given challenges related to the pandemic. We have been proactively controlling expenses to offset lower revenue while ensuring we aren't hurting the long-term value of our properties or our business. Expense growth from property taxes was generally offset by savings in utilities and repairs and maintenance, and we managed to keep payroll generally flat without furloughs, layoffs, or pay cuts. We continue to view marketing spend as an investment in top-line revenue growth and will continue to use this lever to drive revenue when the return warrants it. We've been tracking the results of California's Proposition 15 vote carefully, and it appears that it will not pass and have an impact on property tax expense. We continue to strengthen our balance sheet and have access to many types of capital at attractive pricing. We received $425 million from our previously completed private placement transaction, and subsequent to quarter end, we used these funds, revolver capacity, and shares to settle our $500 million convertible notes. All in all, 2020 has been an eventful year, and we have certainly seen the landscape shift rapidly over the last two quarters. While we can't predict all of the future challenges we may face, We believe our flexible organizational structure, our focus on innovation, and ultimately our people position us to react quickly to change and to capitalize on various opportunities that follow. We operate in a fantastic sector, and our diversified portfolio, advanced platform, and talented team will continue to maximize shareholder value regardless of the economic climate. With that, let's turn it back over to Jenny to start our Q&A.
spk05: Again, if you have a question, press star 1 on your telephone keypad.
spk02: Operator, are we ready for the first question?
spk05: Yes. Your first question is from Jeff Spector, Bank of America.
spk08: Jeff, I hopped on a little bit late, but I think, Joe, you said 2020 will exceed pre-COVID expectations. Is that correct?
spk10: For FFO, yes, that's correct, Jeff.
spk08: Okay. That's a powerful statement. And so I just want to, you know, we thought the results were very strong. stock underperforming today a bit. I'm just trying to think about market concerns. Again, maybe your comfort visibility on the business. I know that's tough, but how are you thinking about 21 guidance? I guess you typically provide next quarter. What gives you comfort to provide that guidance at that time versus not? Is it vaccine? Is it you know, just watching cases and potential, you know, risk of shutdowns?
spk10: So, Jeff, I'm not sure I understood your question. What gives us comfort to provide 2021 guidance or not? Is that the question?
spk08: Just trying to think ahead to correct to the next quarter and given business was, you know, more resilient than expected, a lot of the issues that you know, you and your peers were concerned over starting back in March, you know, didn't transpire. Again, FFO, better than pre-COVID expectations. Like, you know, are you planning to provide 21 guidance? And if not, you know, what would help determine that?
spk10: So, Our current plan is to provide 2021 guidance. If the political or medical situation gets to the level of uncertainty that we don't feel we could provide a range comfortably, then we'll have to rethink that position.
spk08: Okay, that's fair. And then on a couple of the drivers, you know, that were discussed on the previous call and I know we've talked to you about, you know, the work-from-home benefits, you know, EXR and the sector has been seeing, or movement in the economy. I mean, from your standpoint, what's the most important thing to watch from here? Is it the housing market? You know, the work-from-home or work-from-anywhere seems to continue, at least for now. I know there's always different levers at different times, different cycles, but what's most important as we head into 2021?
spk10: So we'll watch our customers' behavior. We don't have perfect visibility as to how some of the things you're talking about, work from home, housing market, the direct correlation or translation to customer behavior. So we track literally every day customer behavior across a whole lot of metrics and optimize operations based on what we see.
spk08: Great. Thank you.
spk10: Sure. Thank you, Jeff.
spk05: Your next question is from Rose with Citi.
spk12: Hi there. I just wanted to ask you about move-out activities and if you've seen that relatively low relative to where you normally would have, which seems to be kind of like an industry issue. I'm just trying to think about it as that returns to maybe more normal levels in a post-pandemic world. How do you think about more normalized occupancies and how might you encourage customers to to stay? Would you try to entice them with rents or are you at occupancy levels where you could stand to maybe have that decline a little bit?
spk10: So vacate levels are still muted. They're still below historical norms. They're not as muted as they were earlier in the pandemic. But one of the factors, a strong factor in our very high occupancy is that vacates are muted. And I agree with you. A risk of the future is that customer behavior returns to normal, vacates return to normal, and that puts pressure on occupants. However, we don't think there's any way to encourage people to stay in storage. Storage is a need-based product, and at some point, people won't need the storage anymore, and at that point, they'll leave. They may not leave immediately because of inertia, but sooner or later, they're going to realize, I don't need this anymore, and even if we cut their rent to a dollar, they don't need it, and they're going to go and move on and do whatever they need. we can't encourage people to stay. What we can do is make sure that we can replace those tenants in the most efficient manner at the lowest cost and at the best rate that we can.
spk12: Okay, fair enough. And then maybe you could just touch on the debt maturities that you have coming up through the balance of this year, I think, and into next year and kind of how you're thinking about...
spk02: handling those? Yeah, it's me. This is Scott. The major maturities that we had coming due at the end of this year were really two items. One was a $70 million loan that came due in September that we actually extended for a year, so that'll come due in a year. The second piece is a $575 million convert, and that was actually paid off in two tranches, part of $71 million getting paid off the 1st of October and the other $504 million getting paid off the 2nd day of November. So we've either extended or paid those off, and we paid that off with the proceeds from our private placement which was a $425 million private placement, and then proceeds from our lines of credit. Great. Okay. Thank you. Thanks, Steve.
spk05: The next question is from Rick Skidmore with Goldman Sachs.
spk01: Good morning, Joe and Scott. Joe, could you just talk a little bit more about the bridge loan program and how you assess the credit risk and then how you think about the pacing of that capital and the rates on those loans. Thanks.
spk10: Sure. Happy to. So we started this program in 2019. We lend only on existing product. They're not development loans. The product has to be completed and operating. We manage each of these loans. So in addition to the economics of the loan, we get the economics of the management contract. We look somewhat at the borrower's financial capacity, particularly because they have obligations, personal obligations, to replenish operating and interest reserves. But our primary collateral is the real estate. We underwrite this real estate as if we're going to buy it. the same team that underwrites our acquisitions, and we make loans where we're comfortable. If we have to own the property at our loan balance, then we'll be happy that we did that. The second question with regard to pacing, you know, this program has grown, frankly, faster this year than we thought, and we get $100 million in our first year. We will fund or approve for funding probably close to over $500 million this year, and I think the acceleration is because more people are just looking for a way to get to a better tomorrow. We're in this weird position. They just want to get some financing that will let them get their store to a more stabilized number, and then they can put permanent financing or sell or do whatever. It's important to remember that we sell 70% to 80% of the balances of the loan. So they're structured as First and Mez or A and B. We'll sell the first position and retain the second position. That both leverages our return and allows us to control the amount of capital that's allocated to this program. Sorry for the long answer.
spk01: And as you look to 2021, expectations thinking about the bridge loan program continuing at the similar 2020 level, or do you think it increases or comes down a bit?
spk10: I would expect the program to grow. Our goal is to grow these programs as we develop more relationships, have more programmatic borrowers. It's kind of like a snowball rolling down a hill. It's my hope and expectation that we do more in 2021 than we did in 2020.
spk01: Great. Thanks, Joe.
spk10: Sure. Thank you.
spk05: Your next question is from Todd Thomas with KeyBank Capital.
spk04: Thanks. Just following up on the bridge loan program a little bit, I guess You said you have an expectation to sell 70% to 80% of the balance, but what's on the books today and what is the average yield on those loans and the weighted average maturity?
spk10: So, what's on the books today isn't representative of our final capital investment. When we first started this program, we would simultaneously close and sell the first tranche, so that never showed up on our books. We now think a better execution is to close them all on balance sheet, package it up in 30, 40, 50 million chunks, then take those to the market and sell it. So we currently have more on the balance sheet than we ultimately will because we're in the middle of selling a couple of those tranches. Yields on the whole loan are between 5 and 6 percent. There's a LIBOR floor that puts the yields in that place. Once we sell it, the yields on our piece are between nine and 11%. And those numbers don't include management fees or any insurance that we get from managing the property.
spk04: Got it. So yeah.
spk10: No, it's just going to make the comparison of, you know, where we see cap rates and opportunity to make money, you know, buying wholly owned properties versus the yields we can get from this. plus the management contract, plus we've already bought three assets out of the loan program. It's somewhat of an acquisition pipeline. And it allows us just to create more partnerships and more relationships, which is so important to us in everything we do.
spk04: Okay. So as you're sort of warehousing these loans and ultimately retaining 20% or 30% of the balance balance, How large or how much of an appetite do you have for this type of structured finance investment portfolio overall, and do you plan on adding some additional disclosure to describe some of the details around this as it continues to grow?
spk10: Yeah, so I think your second point is spot on. Now that this has gotten significant, we need to add some things to our SUPs, and we will do that in 2021. Seeing that we sell the vast majority of the loan balances, I don't see a meaningful cap on what we can do. I don't know if we can grow this big enough where we won't have the capital to do it.
spk04: Okay. And then, Joe, so your comments about supply still impacting fundamentals, I just wanted to circle back there. So your occupancy for the portfolio overall is 95.9% and rates are trending higher. So what impact is new supply having on the business today? It's hard to see those pressures right now. I guess, is demand just overwhelmingly that supply at this time, or is there something else? Can you just expand on those comments a bit?
spk10: Yeah, those are macro stats. If you broke it down to the store level and look at stores that had new supply challenges or new supply competitors, they may still be up quickly or have very high occupancy, but their rate growth, their rate power is very different than stores that don't have that new supply challenge. So we're able to fill all our stores up. The impact of new supply is on how much rate power we have.
spk02: And, Todd, you can see that some in the supplementals if you look at it by market. So, for instance, if you look at Dallas or South Florida or New York City, you'll see that those are performing from a revenue growth perspective below the average versus markets that are performing above the average. And we would tell you that supply markets are typically performing below the average.
spk04: Right. Okay. And I guess given the improvement, though, in fundamentals that the industry has seen You know, are you anticipating new supply growth to, you know, reaccelerate a bit? It sounded like, you know, it was expected to fall or moderate. You know, what's the outlook like today? Thanks.
spk10: So I do expect moderation. You know, equity, there's probably equity out there for the developers. I think that is harder to get. And there's some markets that it's just harder to underwrite to get the deal. So a new supply is not going to stop, but I would expect moderation.
spk04: All right. Thank you.
spk10: Thank you.
spk05: The next question is from Spencer Alloway with Green Street.
spk06: that the transaction markets continue to open up. I was just wondering if you could provide some color around what portion of the deals you're seeing are either assets that are in some stage of lease up versus those that are already stabilized.
spk10: So I actually don't know if I've ever provided deals we're seeing I don't know if I know the answer to what percentage of deals we're seeing are lease up versus stabilized. I'll tell you, the deals we've approved this year, we've approved 22 stores for acquisition and none of them were stabilized. They were all between, they averaged about 64% occupancy and had stabilized periods of six to 36 months with stabilized cash flow in the mid-sixes. So those are the type of deals that are attractive to us now. Stabilized stores at sub-five cap rates are not all that attractive to us.
spk06: Okay, that's helpful. And then you guys also mentioned that rental volumes have remained healthy. Can you just elaborate a little bit more on the move-in trends and whether or not this growth is widespread throughout the whole portfolio or if there are any markets that stood out in terms of elevated activity?
spk02: Yeah, I would tell you the rental volume and occupancies are consistent across the portfolio, so it's not just urban versus suburban. If you look at our property occupancy, we're full across the U.S. If you look at kind of rentals and vacates throughout the quarter, we actually had higher vacate volume this quarter due to auctions than we normally would because we kind of moved six months' worth of auctions into three months here. And so I would tell you our rental volume, while it might be slightly below last year, last year was a really good year with July being very high. We're very close to historical norms. So our rental volume has been strong, and we've also been able to offset any vacancy that was created by the increase in auctions in the third quarter. So, you know, we had those pent-up auctions as we paused during the stay-at-home time frame.
spk06: Okay, thank you.
spk02: Thanks, Spencer.
spk05: The next question is from Juan Sanabria with BMO Capital Markets.
spk11: Hi, thanks. I'm just hoping you could elaborate a little bit on the payroll line. For your same store, it was down slightly year over year. What's driving that? Is that more of the rental without having to talk to anybody, just the automated process, or is it just more cost controls by you guys in trying to manage that line item and any expectations going forward?
spk02: So in the first and second quarters, I would tell you it was up slightly for a couple reasons. One is we had a very tough comp from last year. We had very low payroll last year as we had You know, turnover that was maybe a little higher, and our time to fill was a little higher last year than it is this year. So this year we've had very little turnover. We also tried to be fair with our employees as, you know, people got sick and they had family members who got sick. So our staffing was maybe a little higher in the second quarter. As we moved into the third quarter, we've seen that normalized somewhat. And in the second quarter, the other thing we saw is nobody was taking vacations. So you were accruing the vacations. Nobody was taking time off. And so we would expect it to be up slightly, you know, but not to the degree it was in the first and second quarter.
spk11: Great, thanks. And then I'm just hoping you could talk to the fees, the auctions, et cetera, the late fees. At what point does that stop being a drag? Does it have to do with how high occupied you are today? In other words, is the higher occupancy working against you on the fees in some respect, or is it just because the move outs are down also obviously tied to your occupancy? If you could just help us think when that will pass, that pressure on the same store revenue line.
spk02: So I would tell you late fees are down for a couple of reasons. One is you have state of emergency orders that don't allow us to charge late fees in certain markets. In the Los Angeles area, we're not charging late fees or we're being lenient with late fees. The second one is early in the pandemic and as we moved in and as people went to auction, we have been more lenient on late fees as we've tried to be fair with our customers. As that auction volume has slowed, meaning we've gotten through some of the pent-up auctions, we would expect that to normalize in areas where we have had auctions and do not have state of emergencies.
spk11: Thank you.
spk02: Thanks, Juan.
spk05: Your next question is from Kibben Kim with Truist.
spk00: So when you look at the customer mix that we see lately, I mean, I guess it's kind of logical to assume it has to do with housing and people moving from different states. But is there something about that demand that you're getting that you think is more transitory in nature? Maybe they don't stay as long versus what's more typical of your tendency?
spk10: No, we don't know, right? We don't know how this is going to play out and how long some of this demand generated by the virus is going to last. We do know that it's a good thing that more people are getting exposed to the product and using the product and now know that it's an option. But, you know, one of the uncertainties is, you know, is all the colleges go back to normal? And if people move back into the city and out of their parents' home, do we lose some of this demand? It's a risk.
spk00: Okay. And we've seen a lot of acquisition activity in the self-storage sector in a relatively short time. Usually you guys win more than your fair share. So I'm just curious, what's this thing about just expensive pricing or the quality of some of the deals out in the market? Or is it that you just see more value in the bridge loan program and that's attracting your capital?
spk10: Yeah. So we don't judge, you know, success in the acquisition market by who bought the most. I mean, we could buy the most. We have the money. We can go out and bid more than anyone else. But at the end of the day, it's about the returns you produce for your investors and So we're going to be active in the acquisition market when we can produce the good returns. We're going to be active in the bridge loan market. We're going to find creative ways, whether it's preferred deals or otherwise, to do that. And we're also going to increase our management and capital life businesses. So, you know, at the end of the day, we're not seeking to buy the most. We're seeking to make the most money.
spk05: Your next question is from Hong Zhang with JP Morgan.
spk07: I was wondering, so you talked about expecting positive same-store revenue growth in the fourth quarter. Is there any, I guess, baked-in assumptions about move-outs or rent growth that goes into that?
spk02: So, I would tell you, obviously, we've made some assumptions. You know, I think that... We do have some vacancy assumptions in there, vacate assumptions. And, you know, if those, I think that if anything, if it keeps going like it is, we are very confident that that will be positive. You know, I think that right now, we had positive rent growth in October. Our occupancy is you know, still 2 1⁄2 plus percent ahead of last year, and rate increases have kicked in.
spk07: Got it. And I guess, would you be able to quantify how much of a drag the rent sets you signed in the pandemic and the rent positives had on just your overall rent number?
spk02: So in terms of quantifying them, We are, you know, we're not looking to quantify them here today, but I would tell you that many of those are getting rate increases today that are going to be outsized as we move people more to market levels. So, you know, our typical rent cycle is such that many of them have received rent increases or will be over the next month or two. So we should be moving them to market, and it should be much less of a drag into the fourth quarter.
spk07: Got it. And it sounds like you're accelerating that. Is that right?
spk02: So our rent increases are overall pretty similar to what they typically are in terms of our existing customer rate increases. Remember, we still do have some state of emergency areas that are limiting the amount of rent increases that we can pass through. Got it.
spk07: Thank you.
spk05: Again, if you have a question, press star 1 on your telephone keypad. That's star 1 for a question. The next question is from Ronald Camden with Morgan Stanley.
spk09: Quick one for me. Just going back to the demand question and the customer behavior, just ask me in a different way. Just thematically, when you're doing the analysis and you're looking at the customer behavior, Is there anything that stands out to sort of explain sort of the demand drivers, whether it be college students or small businesses, work-from-home demand or people living in the city? Just thematically, is there anything to call out there? And, you know, the corollary to that would be, as we think about a normalization scenario, you know, what is one time versus what's going to recur as well as, What are we thinking about when things normalize that could actually be a demand positive? Thanks.
spk10: So, thematically, I would think about demand broadly in two ways. One is there's, you know, demand for storage is driven by life events, at least on the non-business side. And those life events occurred during a pandemic. Some of those life events occurred during a pandemic and not during a pandemic. People are getting divorced, people are dying, moving their folks to old folks' homes. All the stuff that gives rise to storage demand before the pandemic is still happening. In addition, you have unique things like college students not going back to college, restaurants having to store half their tables and chairs, people leaving the city to work from home, people leaving the city to go move back with their parents because they don't want to be in the city. And that stuff, some of that stuff may eventually go back to normal. Some of it may be more permanent nature and we don't know the mix of that. But we do know that we live in a dynamic country where there's economic movement, where there's movement of people and that will continue and people will continue to use storage based on that, and our customer acquisition platform will continue to reach out and acquire those customers.
spk09: Great. That's helpful. And then, not to beat the dead horse on external growth, but just thinking about it sort of a different way. In terms of just the run rate, I think you said earlier about obviously you could buy more gills if you wanted to, but clearly the focus is about making money. But, you know, six months ago, you know, when COVID hit, I think we were all trying to get their arms around it. Clearly the sector has done that really well. Should we just expect the level run rate activity acquisitions to increase simply because maybe there's a little bit more confidence, a little bit more visibility? Could we get back to 200, 300 million, maybe even more in acquisitions, assuming those opportunities are out there and, again, they sort of meet your return requirements? How should we think about that?
spk10: Well, we have – $287 million already this year that we've closed or under contract to close on the acquisition side. So, you know, I guess we have gotten back to the levels you have spoken about. And then we have our other growth activities. So, you know, if we go into a year, I don't think this will ever happen and buy nothing because the pricing doesn't make sense and it would destroy value and not create value, then we'll do that. If we have an opportunity to place a billion dollars because it's accretive to our shareholders, then we'll do that. And, you know, it's incumbent on us to be aware of all the transactions, to manufacture transactions, to structure things that create value for our shareholders. And I think if you look historically at what we've done and the volume we've done and how successful it's been, I hope that gives you some confidence that we'll continue to do so in the future.
spk09: Great. Thanks so much.
spk02: Thanks, Ron.
spk05: At this time, there are no further questions. I will now turn the call back over to Joe Margolis, Chief Executive Officer, for closing remarks.
spk10: Thanks, Jenny. we're very happy to achieve 5.6% FFO growth this quarter. That's very meaningful accomplishment for us, particularly in a quarter where we have negative same-store NOI growth. And we do this through, you know, improving store performance both inside and outside the same-store pool and, you know, creative external growth and capital light activities. But none of this is possible without the teams at the stores and here in our corporate office and at the call center who work really hard all the time, who exhibit our values, who work as teams while managing through the pandemic. And I wouldn't want to end this call without acknowledging the hard work of all of our teammates. Thank you much, and I hope everyone has a great day.
spk05: That does conclude today's call.
spk03: You may now disconnect. Thank you. you Thank you. Thank you. Thank you. Thank you. Thank you.
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