National Storage Affiliates Trust

Greetings and welcome to the National Storage Affiliates first quarter 2020 conference call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, George Hoglund, Vice President of Investor Relations for National Storage Affiliates. Thank you, Mr. Hoglund. You may now begin.

Good morning. I expect that most people on this call are working from home and spending more time at home in general, and you may have found the need to clear out some space for your home office, or if you're like me, your spouse has made you clean out the garage. I just want to remind you that self-storage is available to help you optimize your space needs. With that, we'd like to thank you for joining us today for the first quarter 2020 Earnings Conference Call of National Storage Affiliates Trust. In addition to the press release distributed yesterday, we filed an 8K with SEC containing our supplemental package with additional detail on our results and our 10Q, which may be found in the investor relations section on our website at NationalStorageAffiliates.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements that are subject to risks and uncertainties, including Uncertainty related to the scope, severity, and duration of the COVID-19 pandemic and the actions taken to contain or mitigate the direct and indirect economic impact. The company cautions that actual results may differ materially from those projected in any forward-looking statement. For additional detail concerning our forward-looking statements, please refer to our public filings with the SEC. We also encourage listeners to review the definitions and reconciliations of non-GAAP financial measures such as FFO, Core FFO, and Net Operating Income contained in the Supplemental Information Package available in the Investor Relations section on our website and in our SEC filings. On the line with me here today are NSA's Executive Chairman Arlen Nordhagen, CEO Tamara Fischer, COO Dave Cramer, and CFO Brandon Togashi. All in prepared remarks, management will accept questions from registered financial analysts. I will now turn the call over to Tammy.

Thanks, George, and thank you everyone for joining our call today. First, I'd like to acknowledge and thank our pros and our many team members who've demonstrated their commitment and resilience in response to the demands of the novel COVID-19 induced crisis, which brings with it both health and economic related dimensions. I'd also like to formally welcome Dave Cramer, our new COO, to participation in his first earnings call. So welcome, Dave. You really picked a great time to start. By the way, as many of you know, while Dave is technically new to our NSA corporate team, he has decades of experience in self-storage, most recently as CEO of SecureCare. Dave and Arlen will both be available to answer questions during the Q&A session. Now, let me comment on the current environment and our response to the coronavirus pandemic. The health and safety of our employees and customers is our top priority. We've been actively addressing the rapidly changing environment and impact on our business, driven by the pandemic. All of our stores are open and operating in a modified manner for safety, including using face masks, protective barriers, and social distancing protocols. All properties have contactless rental options and we have halted rent increases and suspended auctions for the time being. Although 40% of our customers are on auto pay, we remain focused on cash collections and have had good success with those initiatives. We were very pleased that the year was off to a strong start, but the environment clearly began to change mid-March as the pandemic gained momentum and stay-at-home orders started to spread across the country. The dramatic economic slowdown that ensued has led to unprecedented job losses and although self-storage has historically proven recession resistant, it is not recession proof. The stay-at-home orders and rapid job losses have weighed heavily on our move-in volumes. Walk-in traffic during the height of the stay-at-home orders was all but eliminated. Of course, move-out volumes have declined significantly as well. Nonetheless, since this has happened during the typical beginning of our busy season, move-ins year-over-year from mid-March through April are down by 22%. Overall, this situation is still very dynamic, and given that we have limited visibility into the ultimate depth and breadth of these negative forces, we made the decision to withdraw our 2020 guidance at this time We will revisit this decision each quarter as the year progresses. In spite of the significant challenges currently facing the economy, we remain bullish on the self-storage industry generally and NSA specifically. In particular, we believe the industry is better positioned operationally today than we were at the time of the great financial crisis. Given the advances in internet marketing and sophisticated revenue management platforms, that provide large operators advantages in capturing and holding market share. We also think that NSA is well positioned relative to our peers given the downside protection inherent in our unique pro structure, our greater secondary and tertiary market exposure, and essentially no lease-up exposure. And finally, with just under $40 million of debt coming due through 2022 and $300 million of availability on our line of credit, we are well positioned to ride out this economic storm. On the external growth front, we acquired 36 wholly owned properties during the first quarter for a total investment of $223 million and two properties in our joint ventures valued at $12 million. The acquisition environment has slowed significantly with fewer deals in the market and, frankly, many buyers hitting the pause button for now. Our intention is to remain disciplined and strategic in our acquisition efforts with the objective investing when and where it makes sense for us for the long term. Finally, before I turn the call over to Brandon, I wanted to highlight the fifth anniversary of our April 2015 IPO. We talked then, as we have many times since, about the strengths and the benefits of our differentiated pro structure, which aligns the interests of some of the most successful private operators in self-storage with the interests of all of our stakeholders. Since our IPO, we have welcomed four new pros, invested approximately $2.5 billion in over 350 wholly owned properties, formed two joint ventures with initial portfolio values of nearly $2 billion and delivered sector-leading quarterly same-store NOI growth averaging about 7.5%. Combination of our internal and external growth has allowed us to increase our dividend by 74% since our IPO and to deliver sector-leading total shareholder returns from our IPO through the end of April of over 170%. We believe we've demonstrated the benefits of our differentiated structure, and as we enter this recession, the downside protection inherent in our structure will facilitate continued outperformance. I'll now turn the call over to Brandon to discuss operating results and balance sheet activity.

Thank you, Tammy. Yesterday afternoon, we reported a solid first quarter with core FFO per share of 40 cents, which represents an increase of 8.1% over the prior year period. This growth was fueled by a combination of healthy same-store NOI performance and strong acquisition volume. For the first quarter, same-store NOI increased by 3.5% over prior year, driven by 3% growth in same-store revenues, with 2.1% growth in property operating expenses. Same-store average occupancy was strong during the first two months, but ended the first quarter down by an average of 30 basis points to 87.2% compared to the same period in 2019. BainStore OpEx growth for the quarter benefited from a handful of favorable property tax assessments and appeals, which drove a 1.2% decline in property tax expense compared to last year. Utilities expense declined 6.8% over prior year, driven by milder winter and energy conservation efforts in many of our markets. These favorable expense items were partially offset by personnel expenses that were up 4.4% and marketing expenses that grew 4.8% over the prior year period. We began to feel the impact from the pandemic-related slowdown in mid-March, which has had a noticeable impact on our portfolio performance. Our key April metrics are as follows. Same-store occupancy at the end of April was 87.1%, which is down 140 basis points from the end of April 2019, and flat sequentially from the end of March. Street rates, which were relatively flat year-over-year in the first quarter, were down about 3% in April, I'll remind you that we focus on optimizing revenue, so there is always going to be a give and take between occupancy and rental rate. Cash collections in April were approximately 1% to 2% below normal levels as a number of customers are struggling with job losses and business declines. In-store move-in volume in April was 28% lower than during the same period in 2019. Move-outs also declined 28%. As for specific markets, let me give some examples of what we're seeing. Our largest market, Riverside San Bernardino, has performed above portfolio average for several periods now, and this has continued in April, with storage rent revenue growing about as strongly as it did in Q1. However, total revenue growth in April slowed from the Q1 rate. The primary drag on total revenue in April was lower fee income, due to both fewer move-ins as well as auction suspensions, and other ancillary revenues such as retail sales and truck rentals tied to the move-in process. Similar situation exists for the Phoenix and Oklahoma City markets. In Portland, our second largest market, the April operations were impacted more than portfolio average when compared to first quarter results, which is attributable to the elevated new supply in Portland, as well as regulatory restrictions on both auctions and late fee assessments. Las Vegas is a similar case. We had very strong growth there in Q1, but in April we observed a larger decline in performance relative to the portfolio average, which we attribute to negative economic impacts on the tourism and service industries as well as auction and late fee restrictions. These are just a few examples of what we're experiencing across markets. As Tammy stated earlier, we've withdrawn our full year 2020 guidance until we have better clarity on the economic impact of the pandemic including consumer behaviors as stay-at-home orders are lifted and until we have better visibility on resuming auctions and rent increases to in-place customers. Now turning to the balance sheet. During the first quarter, we issued 125,000 shares of common stock through our ATM program at an average price of over $36 per share for gross proceeds of $4.5 million and issued approximately 230,000 OP and SP units at an average price of nearly $31 per unit in connection with our acquisition activity. Also, as we've previously disclosed, we issued 8.1 million common shares and retired approximately 1 million OP units and 2 million SP units in connection with the internalization of SecureCare. Our balance sheet is well positioned with $300 million of availability on our revolver, just under $40 million of debt maturing over the next three years and healthy access to multiple sources of capital. This favorable position combined with our commitment to maintaining a conservative balance sheet is reflected in the recent affirmation of our BBB flat credit rating with a stable outlook by Kroll. Our weighted average cost of debt at quarter end was 3.4%, with all borrowings except our revolver fixed rate or swap to fixed. Our weighted average maturity is 5.5 years, and our net debt to EBITDA ratio was 6.5 times at the end of the first quarter, at the high end of our target range of 5.5 to 6.5 times. We have no immediate need for capital, and will be opportunistic about accessing the capital markets this year. Strength and flexibility of our balance sheet also positions us well to take advantage of investment opportunities as they arise. And we believe our well-connected network of pros and our ability to offer tax-deferred transactions with our OP unit currency will continue to fuel our external growth strategy. Thanks again for joining our call today. Let's now turn it back to the operator to take your questions. Operator?

Thank you. The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star 1 to register questions at this time. Our first question is coming from Sneeze Rose of Citi. Please go ahead.

Hi, thank you. I wanted to just ask big picture, maybe Arlen or Tammy, you know, you obviously, your company wasn't public in the last downturn, but maybe you could just shed some light on how the kind of assets you own performed in the last downturn, and what do you see as kind of the relative advantages or disadvantages, I guess, to the other public portfolios as we work through, you know, what looks likely to be a recession going forward?

Hi, Smedes. This is Arlen. I'll tell you that our portfolio, as you know, is a little more geared towards the secondary and tertiary markets. We do have about a third of our portfolio in the primary markets, but being more geared towards the smaller markets. We found in the last downturn, actually, that the predecessor company, SecureCare, predecessor to NSA, actually outperformed all of our peers throughout that downturn. Our worst quarter of revenue declines during the great financial crisis was a negative 2% year over year on same store revenues. And we only had four quarters during that entire time where we had negative revenue growth. The average of those was about negative 1% for that four quarter period. compared to our peers that were averaging about negative three to four percent. So it's a little more stable market typically by being a little more geared towards the secondary and tertiary markets. The other thing I would say about that is that in particular in this COVID situation, we are seeing those markets having less impact with restrictions on movement. Self-storage is generally a Thank you. And you mentioned that rent increases have been halted. Is that for the months of kind of April, May, June, or what's kind of the timeframe that you're thinking about?

Good question. This is Dave. You know, we're evaluating that as we look at every community and every market that we're in. We don't have a definitive timeline. We've certainly got models run. We're looking at when we think the communities will be ready for rate increases as we go forward. Optimistically, we'd hope to see some towards the end of the second quarter, beginning of the third quarter. But we really just got to understand it's too soon to draw that conclusion on how this economy and how the markets are going to respond.

And just to point out, too, means that that's on our existing in-place tenants raising their rates. We can always move our street rates up and down as necessary based on occupancy and demand trends. Great. Go ahead. Thank you. Thank you.

Thank you. Our next question is coming from Neil Malkin of Capital One Securities. Please go ahead.

Hey, everyone. Thanks for taking the question. I was wondering if you could give a breakdown of how much of your portfolio or demand is commercial, and then also what collections have looked like between the two segments, and how are you planning on collecting on the delinquent residential side?

Hi, Neil. This is Tammy. Between 15% and 20%, we usually talk about 18% of our customers are small business owners. And I think what I would say to you is that we're not seeing a real difference in the customer behavior between our residential customers and our small business owners. Brandon, do you have anything to add as it relates to cash collections in the month of April? Well, they've hit on this. Certainly, Tammy.

And, you know, from a collection standpoint, we've been fairly happy with what we've had of collections brought home. You know, looking at historical levels, we're getting about 98% to 99% of our expected rent in the door as we've gone through April. And the first part of May is looking very similar. Okay, so this is Brandon. Okay.

Sorry, Neil, this is Brandon. One clarification I just wanted to mention, Neil, just because I saw it in some of the notes that came through. What we did is we analyzed our total April cash collections compared to last year, and after you adjust for change in revenue, that's where the 1% to 2% lower levels from last year come in. That was a total cash collected, which includes Thank you. Thank you.

Okay, so I guess the other thing along those same lines would be, how do you, I guess, how long, you know, does delinquency go before you actually write it off as bad debt? In other words, you know, when will it be reflected in your results?

Yeah, so, you know, we historically run about 2% to 2.5% of revenue as bad debt, and thus far, post-quarter end, we haven't really seen A material change in that, but it's early, and so we're not drawing too many conclusions right now. As part of our process, as a customer effectively ages out before they've hit that lien process, we'll start to basically record against or reverse out their rent charges so it's not flowing through revenue. So it's an estimated process until they hit that lien or auction process.

And that starts when they hit 30 days.

Okay, great. The other one for me is, around external growth acquisitions, a big part of your story, obviously. Just wondering how you're approaching acquisitions in 2020, you know, given, you know, I guess leverage, stock price, and then, you know, I guess more uncertainty with NOI, et cetera. You know, are you focused on one channel more than others and I'm wondering if you'd be willing to potentially take out some distressed owners with leased up properties right now.

So I'll start. Neil, I think 2020 was off to a very good start for us with the volume of transactions we closed in the first quarter. I will say that beginning in March, frankly, the number of transactions on the market has reduced significantly. We're just not seeing as much. I would also say that buyers who we have historically competed with, many of them have hit the pause button. We think that our balance sheet is in great shape. We're very comfortable with where we are. However, I would say that we're going to be very strategic and very opportunistic with respect to our investment choices. I think one advantage that we have, and Brandon mentioned this briefly in his prepared remarks, is we've been very successful with attracting sellers with the use of our OP equity and allowing sellers to complete a tax-free or a tax-deferred transaction. and so our view of acquisitions is we're going to keep our eyes open and we will be very selective. But we intend to continue to evaluate transactions as they become available and with our pro structure, we think we have some opportunities with our pro relationships in their markets and across the self-storage industry that will give us a slight advantage. So does that more or less answer your question?

Oh, yeah. The other thing I had, the back part of the question was just if you look at supply over the last couple of years, obviously very elevated. And the lease-up timeline has done nothing but extend. So just given that and leverage out there on some of the less well-capitalized operators, I know that you guys aren't big fans of lease-up risk. Just wondering what your appetite would be because of the extremely or more than typical distressed environment in that aspect or part of the self-storage asset.

As you know, it really has not been part of our core strategy. The risk-reward hasn't really been there. However, I will tell you that we are keeping our eyes open to opportunities. It's a little too early for us to have seen much of anything at this point in time. But we, I think, are in agreement with you that opportunities will present themselves. And I think that at the right pricing, we would be more inclined to move forward that type of transaction. I would also say that historically, some of the best deals that Arlen has talked about, Dave has talked about over time, come about in distressed times such as these. However, there aren't that many deals to take advantage of. But we'll see. We'll see where we go with it. We are definitely open to taking advantage of the opportunities as they present themselves.

Appreciate it, guys. Thank you.

Thank you. Our next question is coming from Thomas of KeyBank Capital Markets. Please go ahead.

Hi, everyone. This is Ravi Devya on the line for Todd Thomas. I was just curious, in terms of occupancy, can you talk about what you're seeing so far in May? Given we're at the peak leasing season, do you have any visibility around occupancy gains you'll achieve throughout the balance of the year?

This is Dave. Good question. Obviously, the occupancy levels and the Trends that we're seeing as far as move-ins and move-outs are below historical levels. This is typically a very busy time of the year for our industry. It's very seasonal. The months of April and May are very peak leasing opportunities for us. Thus far in May, we've been able to hold occupancy coming out of April into May. The move-in activity has ticked up slightly, as well as the move-out activity. So, you know, too early to really tell. I think at this time, We're going to finish at the end of the year, let alone the end of the quarter, but we are at this point really stable would be the word I'd use coming out of April into May.

Okay, thanks. Just one more question. How are street rates trending in May so far compared to the minus 3% in April?

So far, May is flat. No significant change on our street rates, nor in discount store promotions. Everything seems to be very flat and stable at this point into May. Okay, thanks so much.

Thank you. Our next question is coming from Keevan Kim of SunTrust Robinson Humphrey. Please go ahead.

Hey guys, this is Ian on with Keevan. Dave, you had just talked about occupancy for May and move-in and move-outs. Could you maybe talk about what rent collection has been so far in May compared to this time in April?

Sure. Again, real similar to what the April patterns look like. We haven't seen a significant change in any of the buckets that we study at this point in time through the first 10 days of May. It's real similar to what we saw in April.

Okay. Thank you. And, Tammy, in your prepared remarks, you mentioned the downside protection from the SP structure. Can you give us just some color on How much protection is baked in right now? I know security care is just internalized, so maybe there's a little bit less or more protection because of that.

So about 60, that's also a very good question. And I would say about 60% of our stores, of our portfolio, are managed by our pros who are co-invested in the stores and are therefore protected by the SP equity.

Okay. This is Arlen. I wanted to clarify one thing that sometimes is confusing for folks about that is because on the SP equity, which represents on that portfolio about 60% of our wholly owned assets, that's about 25 to 30% of the equity on that portfolio, but it absorbs 50% of the downside in any downside. So even though I know Keaton had mentioned that we don't get to the point where they absorb all the downside until you decline quite a bit. If there's any downside at all, they are automatically absorbing a disproportionate, about two times the normal level of downside goes to the SP equity.

Okay, so just to clarify, so even if NOI went down this year, and a pro has been in for, call it, five, ten years. They would still absorb some of that right away, correct? About two-thirds?

Yeah, they still absorb half of that. So, for example, if NOI on a pro's portfolio went down by a million dollars, half a million of that comes right out of their pocket. The other half a million goes to NSA shareholders. So it's way disproportionate to the pros.

Okay, that's all for me. Thanks for the call, guys. Thanks.

Excuse me. Thank you. Our next question is coming from Ronald Camden of Morgan Stanley. Please go ahead.

Hey, just a quick one for me. One is just on if you talk about sort of college student, college student activity, what exposure is that in your portfolio, and did you see maybe outside activity in OneCube?

This is Dave. Good question. We have about 15% to 20% of our portfolio has some college influence, some of them bigger than others, small colleges to major universities. It's been a real interesting season for us. We did see a slight uptick in a few colleges' markets in March as it really related around spring break and when colleges did or didn't let people come back, did they allow them to stay in the dorms or not. We do have 20-25% of colleges haven't done anything yet, and we're not sure they will move students out. So I'm not really sure how to tell you in the second quarter if we're going to see any more movement at all or not. I would probably tell you that we've seen all the college movement we're going to see for the year.

Great. That's helpful.

The other question I had was I noted that I think Los Angeles was added to markets that are lagging. I don't know if you guys touched on that in the opening comments, but just curious any color of anything that you're seeing there.

Yeah, Ronald, it was pretty much flat on the revenue growth over prior year. And I think we were 2% plus positive for all of last year. It was the same 14 properties in last year's pool as was there this year. But we ended 2019 with that kind of flat growth year over year. And that really has to do with... Two to three properties in particular that are dealing with some direct new supply competition. And so, you know, it's unfortunate because it brings down the rest, but because it's only 14 properties, two or three can really weight it down. So that's kind of the main driver of what you're seeing there.

Got it. Helpful. Thank you. Yep.

Once again, ladies and gentlemen, if you would like to register a question, you may do so by pressing star 1 on your telephone keypad. Our next question is coming from Stephen Meade of Anchor Capital Advisors. Please go ahead.

Yeah, hi. Can we go back to the street rent sort of impact, you know, as we go forward and as your move-ins sort of pick up? I was kind of wondering what that does, you know, forward-looking in terms of, you know, The average annualized rent per property, especially in the markets would have more supply, Oregon or parts of California.

Yes, Steve, this is Arlen. I think the big thing to remember about street rates is that each typical month, they only affect about 5% of our customers. because only about 5% of our customers are moving in in any average month. Ironically, that's now down to about 4% because our move-in volume is lower and so is our move-out volume. So the streak rates themselves have a pretty slow and limited impact on our overall revenue growth. What is way more important is the other 95% of our customers and can we raise the rates on them? And that's what's been hit by this COVID deal more impacted because we are not raising rates on any existing customers right now and we won't do it until at least June. As Dave mentioned, we might start some in June but more likely some in July and part of that's just because of the impact on people and part of it was state regulated that we couldn't do that. So that's far more important when we can restart that which we're hopeful we'll be able to restart in earnest in a normal level in July. The other thing that's ironic is so that's the street rate impact versus the in-place impact. The other part relates to the people moving out and those rates that are usually higher than the rates of the people moving in because they've already had some rate increases. Ironically, the fact that we have less move-outs than we usually have has made the roll-down impact lower than normal because instead of having 5% of the customers moving out, we only have 4% moving out. So it's all a blend of all of those different factors.

And then during this period... Do you get any kind of sense of what's going to happen or what's happening to the amount of new permits in terms of the supply situation?

So from our perspective, what we're seeing is, to the extent there is a silver lining to the current environment, permitting is slowing down, lenders are slowing down. Generally speaking, we believe that we are seeing a sudden halt to this new development, new supply cycle.

Steve, that's really the best news of this situation, if we can put any good news on it, is We were already seeing a really strong January and February because we finally started to slow down in the new construction. And this is going to put just a stop to it because nobody in their right mind is going to build a new property now with going into this major recession.

And then with the kind of the pluses and the minuses of what are going on in here, as you look at the results in April and May, What's the prospect for overall occupancy now, or what should we expect in terms of occupancy? This is Dave. Good question.

I think we'll see a slight uptick just because of the seasonality of our markets we're in right now compared to where we're at today. At this point, it doesn't look like, unless move-out activity continues, Severely accelerates. Move-in activity has been positive. We have positive net moves for April and so far in May. So I think we'll see a slight pickup as we go forward in the near term. The issue is when you deal with historical levels, it's not going to seem like the same historical levels that we're used to because of these peak seasonal seasons. We are improving slightly.

Yeah, I think our biggest concern, frankly, is that we may in fact completely missed our annual peak leasing season.

Where we do the normal big bump, we won't get the big bump. We'll get a small bump, not a big bump. That's right.

Okay.

And is there a lot difference in terms of geographic in the places that have had less cases and, you know, in terms of activity, traffic, and stuff? What are some of the most affected places? markets for you in terms of what COVID has done.

Certainly, the secondary and tertiary markets have performed better than our larger markets. We've seen that across the board.

Portland and Nevada, though, I would say. Would you jump in on that?

We talk about Las Vegas. Las Vegas has certainly been one that's been hard to see with unemployment. Las Vegas went from a very, very hot market to a very cold market, and it's largely because of the unemployment and what's happened in there. But they locked down Thank you. Thank you. Our next question is coming from Todd Smith.

Thank you, Todd.

The fact that you're keeping the SecureCare brand, maybe just elaborate on where new acquisitions go if they are wholly owned.

Well, that's a good question. Our plan right now and for the foreseeable future is really no change, to be honest with you. If we're acquiring a store that is in a SecureCare, call it, territory where we have or we're flying the SecureCare flag, we'll brand that store SecureCare. because it just makes all the sense in the world. And then same for the iStorage stores. To the extent that we're acquiring stores that are geographically located in those markets, we'll fly the iStorage flag. And, you know, Dave, would you want to elaborate a little bit about some of the things that you've already been looking at and thinking about from a transition standpoint just to kind of get ahead of a question that we might have?

Certainly, certainly. That's a good point. You know, we've Obviously been busy with COVID-19 and this transition has gone a little bit differently than we would expect given the last six, eight weeks. But we actually forced us into really looking at efficiencies and looking at how we look at markets and brands and how we look at how we manage those markets and brands. You know, we will have a family of brands as we go forward with our pros and with secure care and eye storage. But we, you know, specifically looking at, you know, how we operate our call centers. You know, with the call centers remotely operating from home now, You know, what's that lend to us in the future and what's that lend to us to have more efficiencies as we look at, you know, combining call centers, combining locations, getting all of the brands under one roof. You know, it's one of the things I would probably call out. Plus, we're just looking at overall structure. The teams are doing a great job. We're cross-pollinization of the teams is working really well. We're working on some of the efficiencies within that. So, you know, as busy as we have been, we are making good progress in some of the integration things that were important to us.

You know, Todd, one of the things we've talked about historically about the local market, the sub-market, is the value of the brand. And I think we stand by that thought process. The local brand has a lot of value. And for now, at least, and for the foreseeable future, I think we stick with that.

Very helpful. Thank you. Just a follow-up from earlier, just to make sure I understand it correctly. So with state-level restrictions on price increases and auctions, As states reopen, does that mean the state restrictions are lifted, or really it's a state of emergency has to be lifted? When can you guys go back, and not suggesting you're turning auctions back on, but just when can you go back to your normal course of business without restrictions? What needs to be put in place at the state level?

That's a great point. It's a combination of both of what you said, declarations of emergency. It's also just other restrictions that cities may have imposed. Besides governments, you know, governors imposing these things. So we have a list, a master list that we're keeping. We will obviously pay very close attention to that and only implement, you know, normal policies as we feel the regulations have been lifted. And we also feel that it's the right thing to do. You know, regulation is one thing. Also, just making sure we're doing the best things we can for our communities as we go forward will also be top of our minds. But, you know, it is a combination of two. There's Multiple layers of this that we've been tracking that allow us to raise prices, conduct lien auctions, process late fees. There's been a multitude of variances amongst states and cities on this.

Thank you.

Thank you.

Thank you. At this time, I'd like to turn the floor back over to Ms. Tamara Fischer for closing comments.

Thank you, everyone, for your interest in NSA. We'll look forward to connecting with you. probably virtually in the not too distant future. Be safe and stay healthy. Thank you. Bye-bye.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines at this time and have a wonderful day.