Ladies and gentlemen, thank you for standing by, and welcome to the Public Storage First Quarter 2021 Earnings Call. [Operator Instructions]. It is now my pleasure to turn the floor over to Ryan Burke, Vice President of Investor Relations. Ryan, you may begin.

Thank you, Angela. Hello, everyone. Thank you for joining us for our first quarter 2021 earnings call. I'm here with Joe Russell and Tom Boyle. Before we begin, we want to remind you that certain matters discussed during this call may constitute forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to certain economic risks and uncertainties. All forward-looking statements speak only as of today, April 29, 2021, and we assume no obligation to update, revise or supplement these statements they become untrue because of subsequent events. A reconciliation to GAAP of the non-GAAP financial measures we've applied on this call is included in our earnings release. You can find our earnings release, supplement report, SEC reports and an audio replay of this conference call on our website at publicstorage.com. We do ask that you initially limit yourself to 2 questions. Of course, if you have more beyond that, please feel free to jump back in the queue. With that, I'll turn the call over to Joe.

Thanks, Ryan. Good morning, and thank you for joining us. Before we begin, we continue to wish everyone good health as we all face the many impacts from the pandemic. This morning, Tom and I will begin the call by covering a few areas tied to Q1 performance, along with our inaugural guidance for 2021. As you know, on May 3, we are hosting an Investor Day virtually and hope you can join us. We will share our key strategies and introduce you to the executive leadership team that will drive our growth in the coming years. Looking at Q1, a number of historic metrics play through. Customer demand for self-storage has remained elevated. We continue to see consistent customer behavior across all markets with increased move-in rates, extended customer length of stay and more latitude to resume traditional rate increases to existing customers. Demand has been tied to both historic drivers coupled with the longer-lasting impacts from more consumers needing storage. This includes work-from-home, study-from-home, elevated home sales and remodeling and the migration in and out of metropolitan markets. With the economy improving and additional government stimulus, consumer balance sheets are healthy and our customers' payment patterns remain strong. Both same-store and non-same-store assets are performing well. With lease ups, particularly in non-same-store assets outpacing our projections as NOI grew by 46%. To investments, 2021 is shaping up to be a robust year of acquisition activity. With the addition of the recently announced ezStorage portfolio, our year-to-date 2020 acquisition activity either closed or under contract is $2.5 billion. Of note, since 2019, we have acquired, developed and redeveloped approximately 22 million square feet and have expanded our portfolio by 13%, having invested $4.3 billion. In regard to the ezStorage acquisition, I would like to mention a few highlights of…

Thanks, Joe. I'll start with financial performance. Our financial performance has improved steadily through the second half of 2020 into the first quarter of 2021. In the same-store, our revenue increased 3.4% compared to the first quarter of 2020, which represents a sequential improvement in growth of 2.6% from the fourth quarter. There were two primary factors contributing to that improvement. First and foremost, move-in rates were up double digits, while move-out rates were roughly flat year-over-year, leading to improving in-place rents. Secondly, occupancy also increased through the quarter with move-in volume down but move-out volume also lower. Now on to expenses. The team did a great job driving same-store cost of operations down in the first quarter. Lower expenses were driven by property payroll, utilities, marketing and a timing benefit on property taxes. On property tax specifically, we will expense our estimate ratably through the year, leading to a benefit in the first 3 quarters and reversing to a headwind in the fourth quarter. This will lead to more stable quarter-over-quarter property tax in the future. The benefit this quarter was worth $0.05 of FFO. Some of the technology and operating model evolution we'll discuss on Monday at our Investor Day, showed up in our first quarter numbers, with property payroll down 13% in the quarter, given efficiency improvements. We look forward to sharing more on Monday. For the first time, we included 2021 core FFO guidance in our earnings release and supplement. In conjunction with the line-by-line commentary in our supplemental, it's a guide to our outlook and the key drivers of our business. And as we started 2021, we've seen continued strength, as Joe mentioned, in customer demand, with occupancies up 260 basis points and in-place contract rent per occupied square foot turning into positive year-over-year territory…

[Operator Instructions]. Your first question is from the line of Jeff Spector with Bank of America Merrill Lynch.

First question is just really the main incoming investor question we get, and it's around the customers, demand drivers, and Joe, you discussed this, I guess, in your opening remarks a bit. But -- and then again, you talked about a decrease in occupancy in the fourth quarter. Can you just, I guess, dig in a little bit more on why you feel the customer -- some of the drivers we saw last year may fade? And can you confirm the 100 bps drops in the fourth quarter, is that just normal seasonality? How does that compare to normally what you see in the fourth quarter?

Yes, Jeff. One of the things that is hard to predict, even going out another couple of quarters is what could revert to some degree to what you would call normal seasonality. So to Tom's point, we're looking at that as a potential event, but still to be determined. As we've seen now for the last several quarters, the sustainability of consumer and business demand for that matter has been quite elevated. As I noted, there are consistent market trends, literally in every area that we operate in the business right now. And consumers continue to look for and need storage for a whole host of both traditional and, I would say, new and different reasons. We're encouraged by the fact that there's even generationally entirely new pool of customers coming to storage for the first time. We think that can be additive as well. And as we've seen with home sales, as I mentioned, the additional pickup of the economy, overall demand has been quite healthy, and we feel it's sustainable, but could be impacted for more seasonality reasons, closer to the end of the year, but to be determined.

And then my second question just on acquisitions and new facilities. How should we think about, I guess, specific target markets for you and how that fits in with your current portfolio plus the ezStorage portfolio?

Well, one of the benefits that we clearly have had over time and this isn't new to the way that we're uniquely positioned nationally is we have deep presence literally in every major metropolitan market across the United States. We're on the ground. We're dealing with a lot of very vibrant data relative to knowledge of other owners, the traction that we're seeing in markets, the way that we balance, the focus that we've got on going deeper in any particular market. And looking at the ezStorage acquisition, as I noted, we already had a top ownership position in that market by quite a large margin. The ezStorage portfolio was highly regarded and was known nationally as a very top-tier national operator, by virtue of pulling those 48 assets on top of what we already had, which was a very strong presence in that market. We were able to magnify our presence there quite dramatically. And that could play through in many other markets nationally, whether it's on something as sizable as ezStorage or something more limited from a specific asset base, whether it's a single or a smaller portfolio or one that could be more widespread. Give you another example in the fourth quarter of 2020, we bought the Beyond Storage portfolio, unlike the ezStorage portfolio, the Beyond Storage portfolio was in multiple markets, but again, very easy for us to integrate, very easy for us to underwrite. And we had very good ability to move quickly which leads to the fact that we are, without question, a preferred buyer. And with that, the team continues to see a very strong collection of different opportunities nationally. We're seeing good quality of assets come into the markets. I would say about half of them come to us privately off-market and the other half, more through traditional means, but we've got very good relationships, deep seated, by virtue of the fact that we've been and operate in these markets and have a very strong reputation as a preferred buyer.

Your next question is from the line of Juan Sanabria with BMO Capital Markets.

Just wanted to ask a little bit more about the same-store revenue growth. And maybe if you could just give us any more context with regards to the cadence as you built in through the year, your assumptions for the full year. Maybe if you can provide some color on the low versus high end and what's assumed at those 2 extremes? And what the benefit is from easier comps on the fee business, which has been a drag for the last few quarters?

Yes, sure, Juan. There's a lot there to unpack. So let me pace through that. Starting with the last one first, which is fees. So that has been a drag in each of the quarters since the onset of the pandemic. And so you started to see that really take hold in the second quarter of last year. And so we will have lapped that comp. We do anticipate, as Joe mentioned, continued strong payment activity. So we don't think that those fee collections will -- those fees will be charged or collected for the remainder of the year, but we won't be comping against the previous year where we had been collecting them. So that should go away from a comp standpoint in the next 3 quarters. In terms of cadence through the year, I mentioned the occupancy point in the fourth quarter in our base case. And I think that, that is really driven, as Joe mentioned, by typical seasonality as we get into the second part of the year. We'd anticipate that as the economy starts to open up, we see more governors talking about getting back to normal through the summer period and employers encouraging folks to get back into the office as we move through the summer and into the fall. We would anticipate a more seasonal pattern to reemerge and occupancies to fall like they do in any typical year as we move into the third and fourth quarter. In terms of any other items I'd highlight as we talked about last year, one of the drivers of the drop in in-place rents last second quarter, in particular, was the fact that we had paused on our existing tenant rate increase program. And as Joe mentioned in his prepared remarks, we are executing on that plan throughout the year this year. So we will have easy comps from an existing tenant rate increase program standpoint in the second quarter. But then we did resume those last year in the third and fourth.

Great. And then I was just hoping if you could provide any color on what you're seeing on street rates for new customers in terms of net effective and how that's trended through April, just to give us a sense of how seasonality is trending to date?

Yes. Well, we continue to see very strong demand trends, as Joe mentioned earlier. The move-in rates in the first quarter were up nearly 16% year-over-year, and those were comping pre pandemic 2020. As we moved into April, we obviously are now comping the onset of the pandemic last year where we did see reduced customer demand and lower move-in rates. So move-in rates year-over-year through April are up 40% plus. And I think the most encouraging thing is we start to look at a typical seasonal pattern. We're looking at 2019 as a benchmark, and our April move-in rents are up double digits versus April 2019 as well, indicating that continued positive trajectory of rents and good performance there. So we continue to be encouraged by customer demand. And frankly, we have limited inventory within the same-store pool. So rates are going higher.

40% sounds pretty good to me.

Your next question is from the line of Todd Thomas with KeyBanc.

First question, just circling back to investments. I'm just trying to tease through some of the comments that you've made, Joe, and the $200 million of incremental acquisitions that are embedded in the guidance. It seems a little bit light relative to the pace you're on, even excluding the ezStorage deal. Are you expecting a slowdown in the near-term because you have to hit the pause button to digest a little bit? Or is there just a lack of visibility at this time based on what's in the market with maybe last coming to market after a flurry of activity here. Can you comment on that?

Yes, Todd, there -- it's a little more related to the latter. No, we're well primed and continue to add assets to the platform very easily. And the acquisition team seeing good opportunities, as I talked about a few minutes ago. So it's just, again, a hard metric to look at from a continued elevated level of activity, but we're seeing good quality assets. We've got a lot of activity going on. It's competitive. We're still focusing on quality assets, quality markets and properties that we know that can be accretive and additive to the overall platform, but we're confident that we're going to continue to see good activity there. It's just the predictability, and from a competitive standpoint, what we're going to face as we go deeper into the year. As Tom has noted, what the balance sheet is more than well primed to continue to support our acquisition and development activity. And with that, we'll continue to seek out and find and pursue many different types of opportunities, whether they're portfolio related or on a one-off basis. If you look at the $500-or-so million that we've got in our acquisition pipeline. As we speak, it's more oriented toward either one-off or smaller concentrations of assets. That's the consistent playbook that is always in our mix. And then what can be more unpredictable is just what can come through in the larger portfolios. So we still think we're in very good shape to continue to pursue opportunities, but we'll see how that plays through as the year goes on. But very pleased by the amount of volume, certainly, that we've been able to capture not only in Q1, but going through 2020 as a whole and then, as I mentioned, off to a very good start this year.

Okay. And then just thinking geographically, obviously, the ezStorage deal was a little bit more concentrated. Is there a focus looking out on adding exposure in certain markets or regions, whether because of maybe certain demographic changes or accelerated -- accelerating trends in certain markets? Or is it more based on quality of asset and what's generally available for transaction purposes?

Yes. Obviously, you can't manufacture sales opportunities in and of itself. But we are very intentional on where we're putting priorities, where we're looking to either expand each area of the business based on the trends that we see, where we continue to see very strong advantage by enhanced scale. Looking at the ezStorage portfolio, as I mentioned, we already had a commanding size portfolio there. This made it even more attractive from a scale and presence standpoint. But we're also out looking to increase our presence in other markets as well. We recently went into Boise, Idaho. We've never been in Boise before. We were able to capture a very nice 6-asset portfolio in that market. So we're looking deep in the markets that we've been in traditionally, and we're looking at markets that we see good growth opportunities as well.

Okay. And just a quick last question. You haven't sold in saying really previously or really at all over the course of the last decade or 2 or 3. And I normally -- it's around dispositions, but some strategic changes around certain parts of the business and capital allocation strategy in recent years. And I'm just curious if -- just given the demand for assets, if you're contemplating any asset sales or dispositions in order to either sort of call or prune the portfolio at all?

That's an ongoing evaluation that we do, Todd. I wouldn't point you to any specific area and/or type of asset or portfolio that we own, I would say, is a candidate to look for disposition at the -- at this point, but it's something that we continue to evaluate. And if circumstances and our own perspective has changed, we think that's beneficial. We'll certainly execute on that for it, too. But nothing to speak to on that.

Your next question is from the line of Smedes Rose with Citi.

I wanted to ask you just a little bit on AutoPay, which I think you've said is 1 reason why you've seen this decline in late fees, and it sounds like that's kind of structurally lower going forward. But do people who go on AutoPay tend to stay longer? And is that kind of an opportunity across your portfolio? I don't know what percentage is already on AutoPay.

Sure. Thanks, Smedes. The ONE thing I'd highlight is we think it was above and beyond AutoPay change as we moved into April. Our AutoPay was pretty consistent through the months of February, March, April, May last year, but we saw a significant acceleration in payment patterns at the onset of the pandemic. So I wouldn't point to AutoPay specifically. That said, AutoPay has been trending higher over the last several years, and we expect it to continue to, given our e-rental platform, which now comprises about half of our move-in volumes today and that auto enrolls folks into AutoPay if they elect that move-in method. And so we do anticipate that AutoPay will increase. But it's not really the main driver of what we've seen on customer payment patterns. I think that's more consumer balance sheets being excellent and some of the operational processes we put around and at the time of the pandemic.

And have you seen any differences though between folks who are on AutoPay, who aren't in terms of how long they stay? Or is it not meaningful?

AutoPay is certainly one of the things we look at from a customer composition standpoint. People that select AutoPay have a certain characteristic associated with them, both demographics and psychographics and the like. And so it's not necessarily selecting AutoPay that makes them be a customer of a certain type. It's the folks that generally select AutoPay tend to have certain characteristics, but that's something we watch very closely as we look to understand our customer.

Okay. And then I just want to ask you, you mentioned price restrictions that's still in place in some regions. Does that meaningfully restrict in your ability to really pass along price increases? Or are the upper limits kind of above where you would normally be anyway? I'm just trying to think about -- around your guidance like if some of those got listed, is there upside there? Or is it not all that impactful right now?

Yes. Thanks, Smedes. That's a great question. We've been talking about pricing restrictions through the pandemic, but many of those restrictions have started to fade away which is encouraging. So as we think about it on a year-over-year basis, 2021 is a better pricing regulatory environment than 2020 was. The one big notable state of emergency pricing restriction that's in place, and it has been for the last several years now is in Los Angeles County and several other counties here in California related to fires that have taken place over the last several years. So Los Angeles is our largest market. And we've been restricted on pricing because of Section 396 in California since the fall of 2018. So that remains in place. It's not scheduled to expire until December 31. So it doesn't factor into our guidance per se, but it remains a headwind in Los Angeles. And you can see Los Angeles is doing quite well, but it's certainly not seeing the same level of revenue growth that we are in some of our other markets, given some of the pricing restrictions there.

Your next question is from the line of with Samir Khanal with ISI.

Joe, just one more on the acquisition front. I know we talked about sort of the U.S. and domestically. But I guess, internationally, just curious what does that opportunity set look like for you guys as well?

Well, we have certainly the bandwidth and the knowledge of thinking outside borders. We've talked about this historically relative to our very strong and, I would say, deep knowledge base that came from the platform in Europe. Obviously, that's Shurgard and the things that we've taken away and learned from portfolio like that and how it's grown over time and how it's been able to do quite well throughout the Western European markets. So the skill set is resident here in the company. We continue to track a number of different markets outside U.S. borders and when certain opportunities present themselves and/or we think it's an appropriate opportunity for us to expand outside, we're well suited to do so.

And I guess my second question is just shifting over to the supply picture over the next 12 to 18 months. When considering how strong fundamentals are, I mean, developers are not slowing down. How do you think about supply picture, let's say, 12, 18 months down the road?

That's something that we're watching closely. Development nationally peaked in 2019 were plus or minus about $5 billion of new assets were developed and delivered. It tapered down in 2020 by about 15% or so. In 2021, we're predicting another leg down in that 10% to 15% range again. Going into 2022, it's always a little bit more cloudy to figure out what could play through. We do think that this, however, has been a very good cycle for us to continue to find and source land sites with less competitive activity out there. Our development team is very busy sourcing those kinds of opportunities. So it's been a good window for us actually to jump in and look for land sites, either that have or have not been through different levels of entitlements. And we're going to continue to look for and extract very good value from our development activities, where we typically are able to drive the highest return on invested capital through the investment that we put into development and/or redevelopment. So we're uniquely positioned to do so. As I mentioned, we have the only development platform in the public arena, and by far, we have the biggest development team in the self-storage industry. It's national. We're deep, great relationships, just like we're able to tap into on the acquisition front. And we'll continue to monitor and see what kind of continued activity play through from the development activity that's going on right down to individual submarkets and then nationally as well.

Your next question is from the line of Rich Hill with Morgan Stanley.

I'm on for Ron Kamdem today. I think you're painting a pretty good picture about growth over the medium term, maybe even long term. So I wanted to maybe take a step back and unpack internal versus external growth. As you think about internal growth, can you maybe talk through about the demand drivers that's coming from a millennial and Z generation that's just now entering to the household formation years and sort of how that plays into how you think about your ability to continue to push rent growth off record levels? And then more importantly, I shouldn't say more importantly, but similarly, could you maybe talk about the external growth? And if there's other opportunities to acquire big portfolios like you've done over the past several years?

So yes, Tom and I can kind of toggle and answer your questions. But I would say internally, we definitely do see the opportunity around maturing generational demand. There's been a consistent and confidently, we're optimistic about the type of demand factors that are now playing through in, again, the newer generation users, many of whom are actually coming to use storage for the exact same reasons, their predecessors did. So life events in general, needing more space, cost of housing, working from home in this particular environment, all the things that play through relative to changes in family dynamics, et cetera, are very powerful to the use case and continued adoption and absorption of self-storage nationally. The Self Storage Association tracks this on an annual basis, and it has continued to grow over time, and we're confident it will do just that. And then on the external side, there's a good population of quality assets, many of which have been delivered, say, over the last 4 or 5 years, in particular, by individual developers that we've been able to tap. We haven't been shy about buying assets that are less than stabilized. Our average occupancy of the assets that we have under contract, for instance, right now is about 50%. So there's a good pool of assets out there that are far from stabilization that have been good opportunities for us to go out and acquire. We're still buying stabilized assets as well. But there's a healthy amount of inventory from a group of developers that have come into the self-storage sector for the first time weren't intending necessarily to be here for the long haul. And that has elevated our opportunity set to go out and acquire and be confident about our external growth, knowing that, that inventory level is quite strong, and the quality is quite good, too, in many cases. Tom, I don't know if you want to add anything to that?

No, no. I think you covered it well. And I'd highlight we'll be spending more time on these topics on Monday for our Investor Day in some more detail.

Yes. That's helpful, guys. And ultimately -- what I'm ultimately getting at is we see a really favorable backdrop for the housing market. Certainly don't see any signs of a bubble despite some of the media narrative. So if HPA is going to remain, call it, in the mid-high single digits, what does that mean for your rent growth? And certainly, there's probably going to be some normalization from the record levels that you've seen. But it would seem to indicate that there's no reason you can't continue to capitalize at an above-inflation rate over the medium term. Is that a right characterization?

If your predictions for home price appreciation and rent growth play out, storage is definitely linked to that as a space substitute for consumers. So all nice contributors to potential rent growth over time.

Your next question is from the line of Ki Bin Kim with Truist.

So when you look across the portfolio, there's probably a good mix of markets that never really shut down, some of that shutdown, but opened quickly and some are just kind of opening now. So would have kind of called that reopening cohorts. When you look at those mix of cities, is there any lessons to be learned that might confirm or give you confidence that occupancy could decline? Or maybe is that just being conservative?

It's definitely something we're watching, Ki Bin. It's something, however, that hasn't, in any way, elevated to a noted change or a reversion to what may have been more normal in prior periods. If you look at Florida or Texas, for instance, I would say, two markets that have been on the early side of "opening back up," we're actually seeing some of our healthiest demand drivers in those 2 states as we speak. So even as either consumers or businesses are coming back into some level of normality, demand is still very good. In fact, if anything, it's percolating higher than it was on the early side of the pandemic. So it's a validation that there are other additive drivers that are going on, whether it's with the economy at large, home sales, in migration, all the other factors that can drive overall demand for storage. And we've really seen no evidence yet that there's any change that would point to the fact that there's something reversing or that we're going to see any near-term anyway, something that would shift strongly that has, on the opposite side, been very additive to overall business metrics. So we're watching closely right down to a submarket basis. But if you even take a look at Texas as a whole, whether it's Houston, Austin, Dallas, San Antonio, very good activity in all 4 cities. And we've got big presence in each and every 1 of them, going to South Florida, for instance, whether it's Miami or Tampa, again, very, very strong drivers there, too. So we're tracking and keeping an eye on it, but it's a validation that the business is not only quite resilient, but it's -- from a product standpoint, consumers and businesses are looking for storage very actively right now.

Okay. That's pretty encouraging to hear. The second question, you guys provided CapEx guidance, a bit higher than what we've been used to on a recurring CapEx. I'm not sure if I'm looking at this apples-to-apples, but wondering if you can provide any commentary around that?

Sure. Happy to, Ki Bin. And we'll go into some of our CapEx plans on Monday as well. But I think if taking a step back the $250 million to $300 million that we disclosed for the year, it's higher than it has been in previous years, and it's really been driven by incremental activity tied to our Property of Tomorrow program and the acceleration of that program after we had slowed it down through the pandemic. So if you think about the $250 million to $300 million, the building blocks there, about $75 million or so of regular maintenance CapEx, an additional, call it, $50 million to $60 million in solar and LED investments and then, call it, $120 million plus in Property of Tomorrow as we seek to accelerate that program and run it through our portfolio.

Your next question is from the line of David Balaguer with Green Street.

Sticking to development, just wanted to focus on construction costs a little bit as looking across property sectors, that's been a topic that seems to have hit most property sectors quite a bit. With your development platform, how much have you seen construction costs increase? And to what extent could that have an impact on supply moving forward?

The one component that we're watching closely is steel cost, for instance. So there's been some volatility there and some price increases that we're keeping track of. Market to market, there could be some impacts from a labor standpoint. So it's fluid. It can be erratic in some cases and unpredictable as well. So it's definitely something that we're keeping a close eye on. I wouldn't say it's become some kind of an overarching headwind for somebody to either stop a potential development project or actually delay 1 indefinitely, but we'll see how those costs trend over time. But the 1 area that we're looking at more specifically right now is just steel costs.

Got it. And just a second follow-up question. For the acquisition subsequent to quarter end besides the EV storage acquisition, can you give us an idea on occupancy there and general lease-up time line compared to recent acquisition activity over the last couple of quarters?

Yes. Again, the amount of occupancy roughly in the $500 million or so that's in our unclosed pipeline of acquisitions hovers around 50% or so. So it's a combination of assets, some of which are just coming to the market. So a few assets that we're going to take very low levels of occupancy to others that are much higher and I would call them more stabilized. But it's a range. As I noted, we have not been shy about bringing those kinds of assets into the portfolio. Frankly, we need more space to lease-up. So it's been a good opportunity for us to pull those assets into the portfolio, put them into our operating platform, and we're seeing very good and, I would say, better-than-expected performance based on the environment that we're dealing with. So we're looking for and finding good quality there and aren't hesitant to buy assets that have the lease-up that maybe others are not as comfortable with. So we're seeing good opportunity set there, and we'll continue to hunt for those kinds of assets.

Your next question is from the line of Todd Stender with Wells Fargo.

Probably for Tom, with the $2 billion in bonds, you used to fund the $1.8 billion for ezStorage, just seeing where you sit right now as far as sources and uses and what you're budgeting for the remainder of the year as far as external capital?

Yes, sure. So we weren't able to get into the bond market pretty quickly post the ezStorage transaction for the $2 billion. And as Joe mentioned, we continue to see good opportunities for acquisition volumes. And as you're highlighting with sources and uses, if those volumes continue to percolate, we'd anticipate we'll likely access the bond market in the second half of the year, and that's embedded into the interest expense guidance that we released yesterday afternoon.

Got it. And then when we look at these coupons for the debt across those 3 tranches, does that start to make the cost of preferreds not competitive right now? Is that fair to say?

Well, the duration of those and the features of them are quite different. And so as we look at preferred costs around 4%, certainly, the 3-year bond that we did about 0.75%, very different in cost, but also very different in profile. And so we'll talk more about balance sheet strategy on Monday, but we continue to like preferred stock as a cornerstone of the capital structure, but we've been adding lower cost and shorter-dated duration to spread the maturity profile out over time and diversify our sources of financing.

And your final question comes from the line of Mike Mueller with JPMorgan.

Just two quick ones here. One, Tom, appreciate the CapEx breakdown. Can you talk about like which are the extra components about the non -- the normal core stuff, the solar, the Property of Tomorrow. Like how many years do you see that stuff recurring?

Sure. So Property of Tomorrow, and we'll go into some detail on this on Monday. We see continuing over the next several years as we roll that through the rest of the portfolio. And then we have a good runway, particularly on solar. LED, we're moving through the portfolio pretty quickly through last year and this year on an interior basis. In the prior 3 years, we were doing exterior LED. So we've got some more LED activity maybe for the next year or 2, but then that will really subside. But solar we see the opportunity to put that on half or more of our portfolio over time, and we're just scratching the surface there.

Got it. Okay. And then just in terms of looking at land sites, I mean, how are you thinking about infill urban as opposed to more of the first ring suburbs, just given the dynamics that have evolved over COVID?

Yes, Mike, we're vetting both. We're not seeing really any material degradation in urban versus suburban demand factors. So the team is out hunting for sites that have the right dynamics from a competitive standpoint, meaning finding land sites that were much more benefited by having less competition. The amount of demographic analysis that we do, overall ability to predict and see good demand factors over time based on any particular new development. So it hasn't really turned anything, I would call, from a segmentation standpoint that we would be hesitant to go into urban versus suburban or prioritize 1 over the other. Frankly, we have a good and healthy mix of both as it stands. And based on -- even in this environment, the kind of trends and the overall demand factors, we're confident that both types of environments are very good for our business, so long as we understand the ultimate dynamics that go right down to that specific trade area. We've got great data. We've got the ability to vet those sites very quickly. And as I mentioned, we're seeing some pretty interesting opportunities around land sites with less competition.

And I'm showing no further questions at this time. I would now like to hand the call back to Ryan Burke for additional or closing remarks.

Thank you, Angela, and thanks to all of you for joining us today. We very much look forward to seeing you virtually again on Monday at the Investor Day. Have a good weekend.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Have a great day.