Greetings, and welcome to the Life Storage First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Diane Piegza, Vice President, Investor Relations of Life Storage. Thank you. You may begin.

Thank you and welcome to our first quarter 2018 conference call. Leading today's discussion will be Dave Rogers, our Chief Executive Officer; along with Andy Gregoire, our Chief Financial Officer. As a reminder, the following discussion and answers to your questions contain forward-looking statements. Our actual results may differ from those projected due to risks and uncertainties with the company's business. Additional information regarding these factors can be found in the company's SEC filings. A copy of our press release and quarterly supplement can be found on the Investor Relations page at lifestorage.com. During today's question-and-answer session, we ask that you limit themselves to two questions to allow time for everyone who wishes to participate. You may re-queue with any follow-up questions. With that, I'll turn the call over to Dave.

Thanks Diane and welcome everyone to our call. Last night, we recorded adjusted FFO of $1.30 per share for the first quarter, showing pretty significant improvement in most of our markets. We see good demand across our portfolio, even during the slower season of our rental cycle, signs remain encouraging. We've also been able to augment our residential tenants with greater penetration into the business sector, especially at the 120 new stores we added in 2016. There's good opportunity for us there because prior management didn't exploit this market segment very effectively. We ended the quarter with 91.2% same-store occupancy, which is 110 bps higher than last year's Q1 end and a record for us at this time of the year. By every measure, our customer base is strong. They are absorbing rate increases well, account receivable balances remain in check, frequency of customers taken to auction is unchanged, and ancillary income sales are higher. The rebranding issues we experienced last summer and fall are behind us. Our web presence is where it should be, and we look forward to getting in front of our customers with some great advertising programs themed around the Life Storage brand this busy season. Concerning store performance, we had as expected really solid growth in the markets we entered via the Life Storage transaction; Las Vegas, Sacramento, and L.A. Most of Florida; Beaumont, Texas; Upstate New York; and New England are also performing well. Houston had a nice quarter, but we might see some slippage there later in the year, as the bump we got from Hurricane Harvey abates. Regarding our launch markets, those where we forecasted less than portfolio-wide growth; San Antonio, Dallas, and Austin are fighting their way through the supply issues we've talked about over the past three quarters; and Chicago…

Thanks Dave. As Dave mentioned, last night we reported quarterly adjustment funds from operation of $1.30 per share compared to adjusted FFO of $1.26 per share for the same period in 2017. These results were above the high end of our forecast, driven by better than expected same-store performance as well as CofO and lease-up store growth that exceeded our estimates. Same-store quarterly revenue grew 2.5% as a result of occupancy gains and a slight improvement in rental rates. Same-store occupancy at March 31st was a first quarter record high for our company at 91.2%, 110 basis point increase over 2017's March occupancy. First quarter same-store expenses outside of property taxes were well controlled, increasing less than 1%. As expected, the Life Storage brand has gained significant presence on the web and allowed us to reduce Internet marketing spend by about approximately 18% versus the first quarter of 2017. As we anticipated, property taxes increased 6% in the first quarter, but significant increase is expected in Houston, Austin, Chicago, St. Louis, and certain Florida markets. In addition to the improvement -- improved performance of our same-store portfolio, we continue to see consistent growth trends at the properties that we purchased at certificate of occupancy are very early in the lease-up stage. Even though Q1 is the traditionally slow season, occupancy for these lease-up stores increased 390 basis points from December 31st, 2017 to March 31st, 2018. With quarter end occupancy of 81.6%, these lease-up stores has -- have significant room to grow. Our overall first quarter revenue increase also reflected a 31.7% increase in management fee income to $2.4 million as the strength of the Life Storage brand is resonating with independent owners and developers. Our balance sheet remains very strong. At quarter end, we had cash on hand of $7.8 million and $370 million available on our line of credit. We have no debt maturities until December 2019. Our debt service charge ratio was a healthy 4.6 times, and our net debt to recurring EBITDA ratio was 5.7 times. With regard to guidance, we are encouraged by the better than expected results in Q1 and have raised our annual same-store revenue guidance ranges and our annual FFO guidance. We do expect headwinds in the second half of the year as a result of new supply and the normalization of the Houston market. Same-store revenue growth for Q2 is expected to be in the 2.25% to 3.25% range. And for the year, revenue growth is now expected at 1.75% to 2.75%. Our expense guidance remains unchanged. As a result of these changes to our same-store guidance, we are forecasting adjusted funds from operations for the full year 2018 to be between $5.36 and $5.43 per share and between $1.32 and $1.36 per share for the second quarter of 2018. And with that, operator, we can open the call for questions.

Thank you. The floor is open for questions. [Operator Instructions] Our first question is coming from Juan Sanabria of Bank of America Merrill Lynch. Please go ahead.

Hi, good morning. Thanks for the time. Just on the bumps to existing customers, can you give us an update on where you are? You previously talked about maybe becoming more aggressive. Did you take advantage of that? Or did you do that in the first quarter? And what's assumed in guidance for the balance of the year?

Hi Juan. Yes, we did take advantage of being more aggressive with those in-place customers. In Q1, it actually -- that went into effect to about 26,000 versus about 5,000 last year. Q2, we sent out letters to significantly more than we did a year ago. Move-out rate ticked up a little bit. So, the impact on revenue is still -- we're still monitoring that move-out rate because, obviously, it's very sensitive to the move-out rate. So, we'll monitor that move-out rate. And as we go through, we expect to be aggressive, but that move-out rate will tell us how much aggressive -- how much more aggressive we could be in Q2.

Could you just comment on what the impact of that change in strategy was to your same-store guidance for the year?

We didn't put it in guidance. And we figured in Q1, based on our calculation, it was about 10 to 15 basis points. Some of that will burn off because we saw additional move outs after the end of the quarter, but it's about 10 to 15 basis points during the quarter.

Okay. And then just on the net effective street rates, could you give us a sense of what that was in the first quarter throughout the quarter, January versus March maybe and what the trend is in April to-date?

Yes, I think we started the year slightly negative at about 0.5 percentage points negative. It turned positive in February. March was positive about 3%. It's very similar in April.

Thank you very much.

You're welcome.

Thank you. Our next question is coming from Jeremy Metz of BMO Capital Markets. Please go ahead.

Hey guys. Good morning.

Good morning.

I had a question on your same-store revenue here. Just kind of, if I step back and look at it simplistically, your same-store revenue, it's basically the change in your realized rent here plus the change in your occupancy. Maybe you get a small benefit from the tenant insurance or other, but it's basically those metrics. On that basis, it implies about 1.6% growth, 1.7% versus your reported 2.5%. The difference, I believe, is the expansions -- the addition of that square footage to the pool in 2018 versus 2017. So, I guess, I call it whether it's 70, 80 basis points, it appears you're getting outsize benefit relative to your peers to the math implied similar level of benefit last quarter. So, can you talk a little bit about this dynamic? Is this a benefit that we should expect to carry forward through the year? And then maybe stepping back, how do you determine when to add or remove this from the same-store pool? Not sure if there's maybe a square footage threshold here, but it seems to suggest a pretty material impact or increase to the square footage.

Yes, Jeremy, you are correct. The square footage went up by about 200,000 square feet year-over-year. But I think what it does when add that square feet, it underestimates our occupancy growth because that square foot goes into zero occupancy. So, our occupancy change, when you look at it, was really -- would have been larger had we not included some of those expansions. So, over time, it's been relatively -- we expect to be consistent in 2018 and 2019. 2017, we were about $35 million, we expect to do about $50 million this year. So, there is some impact from that. If we take the store out of service, there is two stores that we demoed and are rebuilding, those come out of the same store. But normally, we're taking down 10,000 square feet and adding climate control or converting to climate control a new building, sometimes going two stories up with 20,000 square feet. We do not take them out of the same-store pool.

So, Jeremy, essentially what we're doing is, we're pulling the stores -- we're taking spaces out of service, replacing them. As long as -- I think -- because these jobs are so small on balance, a building here at 6,000 feet, we sometimes go to 12,000 feet. Sometimes, we just add climate control to it. Because the jobs are so small, this effects 50, 60 stores between the two-year period during the construction and the reopening. And we take a hit as we're working on them and we take a benefit as the stores from the prior year come in. As long as the amount of expansion is pretty consistent year-to-year, it really is a neutral impact. And occupancy is a detriment on revenue. It's a bit of a plus, but it's deminimus. I think when we would really have to watch it as if we go to our peers in years like we expect to $50 million, $60 million a year of additions and then stop, then we would get only benefit in the year that we stop and no pain. So, I mean, we tried to launch it, but we can wind up with significantly smaller same-store pool that we took out every store that we touched for addition of 6,000 or 7,000 feet, here or there, or -- but you are right, the square footage comes in bigger at the end. And for a lot of the year, that square footage is out of service.

Okay. And I guess that goes to Andy's point about the occupancy being that the -- it actually held back occupancy. That sort of suggests that possibly they are still vacant in this period or are you saying to hold back?

Correct. There's a portion of those that are still vacant.

Okay. Thanks guys.

You're welcome.

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

Hi thanks. Good morning. So, question on guidance, you beat the high end of your first quarter guidance by $0.02 a share and only increased the midpoint of the full year range by about $0.03. And I think the Board in G&A charge is excluded from the revised range, which is on an adjusted basis. So, really just about $0.01-or-so in the budget despite the higher run rate here. What else changed or what are you expecting in the remaining quarters here to act as an offset?

Hi Todd. I don't expect much change. I think what you look at, we were pleased with what we saw in Q1. But I think we are not in the busy season yet. It's tough to look out and change the back half of the year right now. We still -- we have some headwinds from Houston. Obviously, we had the benefit from Houston last year and that will burn off. We've got a lot of new supply coming on. But I think we got to get through Q2 before we really make an adjustment for the rest of the year.

Okay. Are the headwinds that you discussed in the second half of 2018, that you are anticipating, are you expecting them to be a little worse now than you did when you initially issued guidance?

No. I just -- I don't think it made it any worse. I think the first quarter made us more comfortable that the low end could be moved up. But I don't think it changed our second half guidance or what we expect in the second half.

Okay. And then I'm just curious if you could give us an update on your thinking around investments here? You pulled back over the last several quarters on both investments and CofO deals. Your cost of capitals improved over the last few months. And I'm just wondering if you're seeing any opportunities out there or thinking differently about deploying capital and -- whether or not we should expect to see get a little more active year?

I think so. We certainly never stop looking, Todd. This is -- that's what we do, right? But as we said at the top of the call, the pricing of assets, even modest or lower quality assets, has not moved much. They are still pretty rich. Yes, our cost of capital has improved a bit and we're certainly not at this point comfortable with equity raise. We do have $70 million to $75 million of free cash flow that we're deploying into the ENEs. We're looking at, again, some joint venture deal. Those are targets where we go after. We have a lot of assets that we're in discussion with. We're considering putting into a -- either a disposition or contribute to joint ventures. These are all things that we're looking at and nothing definitive yet. But as we look at where our capital costs are, what our opportunities are, the opportunities to buy on the open market wholly-owned properties are pretty slim right now. And just to clarify, you mentioned the CofO properties, we sort to step aside from those, even when the cost of capital was considerably cheaper, just because we thought the risk/reward ratio on those prices were out of line. So, I would say, right now, we are looking. There's opportunities, not great ones, on the open market. But our internal growth is based on expansion and enhancements. Perhaps seeding or getting into some JVs, those are our main focus, at least, right now, as we sit with market prices being what they are and our share prices being what it is.

Great. Sure. And can you just -- maybe in light of that, can you just add a little color to the comments around the dispositions or the potential to seed a new joint venture? Is that a new joint venture? Or would that be additional properties to -- that you would contribute to an existing joint venture? And maybe just put some context around that comment?

Yes, I should reiterate. In the very early stages, we just had our second Board meeting on the topic. So, we're flushing it out. You'll hopefully see some of this activity during the summer. But it would be -- there are some markets that are smaller and maybe we warned themselves out as far as being in our portfolio. So, we would be looking to move some of those off. And then either contribute those stores to a joint venture or in combination with some new stores and our stores. It's all -- we talked to a number of people, we'll be talking to more people, and this would grow hopefully in the coming quarter, quarter and a half.

All right. Great. And nothing on that front is contemplated in guidance, those are correct?

Absolutely, it's correct.

All right. Thank you.

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

Hi, this is Ki Bin. Good morning.

Good morning Ki Bin.

Good morning. So, there's obviously, been a few changes. Could you just talk about -- I know it's early, but can you talk about maybe would there be a shift in focus in different areas of the company or capital deployment or just balance sheet, anything like that?

I'm not quite sure. You're following on to Todd's question and then my answer, you mean? Is that--

No. So, what I mean is, with the board changes, should we expect any type of incremental shifts and focus?

I don't think so. I think we rejuvenated the board certainly, but we just had our full Board meeting with the whole team this week -- our first meeting with the whole team this week and there's a lot of opportunity here. We have a lot of strength, but I would not extract any radical shifts in the way we act going forward, in terms of our business strategy, in terms of -- we're always looking to optimize shareholder value. And to that end, we look at different things. But right now, we have, we think, a pretty good year ahead of us and pretty good opportunities. So, there should not be nothing dramatic at all.

Okay. And just from street base you mentioned, plus 3%, is that net effective after promotions or is that just advertised street rates.

That is advertised street rates. Promotions were a little bit higher in Q1 at 2.6% of revenue versus about 2.1% last year. And I think, April, they are right on top of each other.

Okay. And does -- last question, back to the existing customer rate increase program. You mentioned that 26,000 letters went into effect, but I'm assuming that probably went into effect later in the quarter, right? So, there's probably a little more tailwinds going into second quarter? So, maybe you can just give a broad commentary on how many letters that you're planning to send out this year versus last year? And so far what has been the -- I know it's early, but what's been the acceptance rate?

Yes. I think we would see us sending probably about three times as many letters as we did a year ago. That being said, the move-out rate did tick up a little bit. They were heavily weighted towards the later part of Q1. But we saw tick -- uptick in the move-out rate, which -- that's what really drives the revenue growth from that process and that tick -- uptick definitely eats into the impact on revenue growth. So, we saw some move outs in Q1. We saw additional move outs in April. We got to give people time sometimes. They don't move out right away when they get the letter. So, we're keeping a close eye on it and we'll update as we go forward.

And we say three times more letters, you mean in the first quarter or you are talking about the full year expectation?

Full year expectation.

Okay. Thank you.

Thank you. Our next question is coming from Smedes Rose of Citigroup. Please go ahead.

Hi thanks. I just -- I wanted to ask you just a little bit more about the Houston and Chicago markets, since they are, obviously, a large part to your earnings. You mentioned you would expect continued sort of burn off of hurricane activity in Houston. Are you seeing thus far in the second quarter? And could you just maybe comment on the supply outlook in Houston?

I think on the -- we are seeing the burn off. I think Q4, if you looked at our occupancy, I think delta was over 400 basis points year-over-year. In Q1, it was 200 basis points approximately. I would expect that to burn off probably in the next quarter to two. So -- then we would have headwinds. I wouldn't expect occupancy that would actually be lower in Houston than it was a year ago.

The thing with Houston is we did expect this. What gave us a good benefit though was we did get pricing power starting mid-4Q right into now. So, that was a benefit we expected. We figured four to five quarters maybe of occupancy uptick. We got -- we're in the three now. But the real benefit to that was, for a little while and even now, we feel like we have some pricing power. We're not discounting as heavily. We have been able to raise rates. We felt comfortable boosting in-place customers in Houston, whereas for the prior year and a half we did not.

Okay. And then maybe if you could just talk about your thoughts from the Chicago market. Obviously, you're down a little bit in the quarter. What -- maybe just sort of updates on your strategy there? And then kind of what you're seeing on the supply outlook?

Yes. The -- as we talked about before, we're in the northern suburbs and the northern part of Chicago, which had some supply growth later, I think, than other parts of Chicago, but not as anything else nearly as bad as Houston did. There's certainly -- it's a little more stealth in Chicago. In that, the warehouses are -- have been converted and are tracking at least as maybe not as good as when you are getting up new zoning and new entitlement process you can follow and see what's coming. Sometimes with warehouse conversions, it comes in a little under the radar and all of a sudden, you only have a few weeks or months to know that it is coming ahead. But not as bad as Houston. I think a lot of it has been delivered, which contracts to Dallas or Miami or the boroughs, where the deliveries are just now ramping up or hitting their peak. Chicago, yes, we slipped back a little bit. Andy, you might have the numbers? Just how many?

Yes, in Chicago, we're tracking in last two years within five miles of our stores. 20 have opened, and there's five more under construction.

So, I think the delivery impact is pretty well done. We're fighting through, of course, to lease-up of these things. But yes, we're down a bit, and we'll stay down to about where we are. Perhaps the summer might dip a tad lower, but we're not overly concerned. We know how to play through. It's just going to impact rate increases and probably drives specials a little bit harder, but it's not Houston by any means.

Okay. And then are you just seeing, in general, any change in the ability for developers to access capital for new development or any changes on that front?

I think we're seeing a lot more of the family office type. I don't think we're seeing big capital players come in and put a big programmable deals that we had feared or thought were going to happen. But boy, there seems to be an awful lot of activity. We get a lot of pitches and people coming in with more or less family offices, smaller companies, but laying out between $50 million to $200 million over a two or three-year period in establishing [ph]. So, I would say, the big hitters, not so much, but there's a lot of these smaller family offices and smaller investment groups that are in. So, yes, I would say, unbalanced. Probably more real money coming in as opposed to less likely big hits. Financing, on the lending side, I don't think it's improved much for them, but the equity piece is there and it continues.

Okay. Thank you.

Thank you. Our next question is coming from George Hoglund with Jefferies. Please go ahead.

Hi, good morning. You guys had decent growth in third-party business and you're scheduled to have solid growth for the rest of the year. The properties that you are adding, kind of, can you give some color on what markets these are in? And then how often are you competing with Cube and EXR for contracts or these kinds of markets where those guys don't have a presence?

Well, we tend only to entertain contracts in markets where we have a presence. So, there's a bunch that may be going to Cube, maybe going to EXR that we don't even know about. So, we're pretty well focused. We're not going to be able to help new clients if we've only got one or two stores in the market. The whole part of this thing is scale. So, we do run across both Cube and EXR space often, and I'm sure they run across us more lately than they have. So, it's competitive, there's no question about it. And I think EXR space especially is not necessarily afraid to go into a market where they don't have a presence and they will start, whereas we are not at that point yet. We want to have scale in the market.

Okay. And then the property that you expect to add for the rest of the year, how many of these are from kind of programmatic developers, where you are getting a lot of repeat business versus kind of just one-offs?

Right now we have pockets of -- we don't have big programmable developments. They may turn into that and then may be that the guys that were quoting three and four deals on could grow at 10 or 12. But right now, we're only topping out at what's hard, what's there. And I think we're negotiating right now a little over 300 active leads. Of those, about 55 are in development leads and 50-some are in PMA, Property Management Agreement status, negotiating the agreement. Those are development leads. Out of the existing facilities those are up and running, we have 11 in negotiation and another 40 or so that we're following up on leads. So, it's about a 20% -- 18% or so mix of existing properties versus development lease-up. But as far as big hits and big clients coming in, we don't have any of that going on. It's more folks with two and three and four, presumably with more expected.

Thanks for the color.

[Operator Instructions] Our next question is coming from Robert Simone of Evercore. Please go ahead.

Hey guys good morning. Thanks for taking the question. This kind of ties into an earlier question about revenue growth. I just wanted you guys talk broadly about how your revenue management and pricing initiatives are kind of progressing and what impacts may have been seen in the quarter? And if there was kind of no impact, like, when should investors start to expect or look for a pick-up in rate growth, for example? I just wanted to get your broad thoughts on that.

Yes, I think part of the issue we had with our revenue growth last year was, as we've talked about, lack of high visibility on the web for our organic search. So, while we had descent call volume, for much of the busy season last year, we were pricing in slow season mode, if you will. So, what that did was it sort of had our system tell us, hey, you need to offer special. You need to capture the calls as they are coming in. Be more aggressive on using your incentives and not raising rate and especially not kicking existing customers up. So, some people point to our revenue management system as not being up to par and there's a lot of factors that go into that. There's also the fact that we -- our biggest markets, for our company specifically, are taxes, which are just as competitive as it gets. So, the revenue management system, in a lot of ways, acted exactly how it should. You got to capture the leads you get and make it work. Price it so that you're going to get those. Having the Texas, at least as far as Houston goes, supply issue abate at least for the coming couple of quarters, having our presence on the web really where it should be right now, I think the whole revenue management system is moved over. It's given us a lot of comfort. As Andy said, we feel very comfortable popping out 3x what we did last year with rate increases. Our incentive lever hasn't been pulled any harder than it was last year. So, there's -- it's a -- we're real comfortable with revenue management. We think we've got a good product there. We think it's -- it reacts the way it's supposed to. It predicts the way it's supposed to. It's pre-pricing now for where we should be in June and July. We're seeing where we expect to be. We want to have the data points that we're going to get in the busy season. A lot of this has been done since the fix from October to now, which is the slow time of the year. So, we're confident. We think we got it going pretty good and given the markets we're in and the competitive nature of where we are, we think we're in good spot.

That's great color. Thanks guys.

Thank you. Our next question is coming from Todd Stender of Wells Fargo. Please go ahead.

Hi, thanks for the comments on Houston, Chicago. Can we hear a few others, maybe New York, New Jersey maybe experiencing a little more pricing power that you noted in Houston after being down for a couple of quarters? That's part one. And part two is, any weakness that you are seeing in any markets in the spring selling season that may surprise you?

Well, I'll take the weakness and then Andy can answer a question on an upper note. But certainly, as we've talked about, Dallas is going to -- Dallas is experiencing its delivery peak we think right now. Certainly, it is -- there is more stores coming on in Dallas than we would like. There's more stores to come. So, the delivery impact is yet to be felt. And then of course, after that, we got to worry about absorption. Miami is, as we've talked about also, a pretty tough market. We're not as exposed there by any means, but that's going to be a little difficult. I think we're going to see -- we see a lot of development in Phoenix. Not all of it touches our stores, but Phoenix is a very busy place. As it pertains to us and there's other parts of the country that are experiencing in Portland, Santiago and couple of other that we are not there, so we don't worry about those. I think New York is sort of a conundrum, and then everybody is waiting for it to happen. We're not too exposed in the boroughs. We are all around. We're in Southern Connecticut. We're on the island. We're in Northern New Jersey, and pulling up okay. So, the worst -- certainly, the worst on our radar is Dallas. San Antonio, Austin, and later Houston are not out of the woods, but those are the lows.

Yes, Todd, I think, you can really see the winters there. You see the Vegas', the Sacramento's, rates are up double-digits, occupancy is strong, and obviously, the revenue growth is strong there. We're seeing the same in New England, Upstate New York. So, we've got a lot of markets where rates are up double-digits. And then yes, we're going to be dragged down by some of ones Dave mentioned, but we're comfortable what we're seeing in the stronger markets and what we can do with rates. And you'll see that start to show in the realized rent per square foot. Occupancy gap will start to decrease and you'll see it on the rent per square foot side.

Okay, that's helpful. And then how about just on your business customer mix. Any anecdotes you can share on pricing power, ability to push rate on existing customers and maybe any marketing efforts that you have been rolling out lately, just to lay in more business customers?

Yes. I think the initiative that we've had for quite some time is the one where we line with -- we call it Warehouse Anywhere. We used to call it Corporate Alliance. And that's a set up where essentially we arrange for big corporate customers, the pharmaceutical companies, some of the equipment suppliers -- medical equipment suppliers, and so forth, where we arrange for them to have storage throughout the country, whether it be in our facilities or arrangements we've made with what we call preferred providers to be our sub-links essentially. And we will work with those customers -- those corporate clients to satisfy their stores' needs throughout the country with one bill, one invoice, and we arrange all of the leases and so forth downstream with our own properties preferably and the preferred providers elsewhere. So, that is continuing to ramp up. We develop more corporate clients. We don't purposefully help our storage brethren by giving them leases. But it works out that we collect a fee from a customer and a bit of a leasing commission from the preferred provider. So, that continues to grow. We've always said that that's what we call our corporate customers. Our business customers at the store those that are vocal, subcontractors, small retailers, all that kind of thing, those are customers who bet on bread and butter. We cultivated those customers from day one when we started our business in the northeast, and residential customers weren't as percentage-wise as common as they're in the Sunbelt. So, we learned how to cultivate the corporate or the small business customer. We love -- they are there. It's part of their day. It's part of their business. Our storage facility is there for them. So, they are the ones that we have been unable to rent increases through even in the leaner times. They stick, and it's like -- it's a good thing for storage, we need it.

Great. Thank you.

Thank you. At this time, I would like to turn the floor back over to management for any additional or closing comments.

Thank you, Donna. And thanks, everyone, for your interest and confidence in us. We look forward to seeing many of you at NAREIT in a month or so. And in the meantime, enjoy spring.