Ladies and gentlemen, thank you for standing by, and welcome to the Public Storage First Quarter 2023 Earnings Call. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. [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, Britney. Hello, everyone. Thank you for joining us for our first quarter 2023 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, May 4, 2023, and we assume no obligation to update, revise or supplement statements that become untrue because of subsequent events. A reconciliation to GAAP of the non-GAAP financial measures we provide on this call is included in our earnings release. You can find our press release, supplemental report, SEC reports and an audio replay of this conference call on our website at publicstorage.com. We do ask that you initially keep your questions limited to two. Of course, if you have additional questions, feel free to jump back in queue. With that, I’ll turn the call over to Joe.

Thank you, Ryan, and thank you for joining us today. Public Storage had a very good start to 2023. We remain focused on leading the self-storage industry’s digital evolution, transforming our own operating model, and enhancing and growing the portfolio. In the quarter, we achieved new milestones on several of our key initiatives, which included exceeding 60% of customers choosing to move in through our eRental online lease, eclipsing two million downloads of the Public Storage mobile app, reaching 400 properties on our customer demand-driven digital operating platform, installing solar at more than 200 properties putting us on track to complete at least 1,000 property installations within the next three years, completion of over 70% of the property of Tomorrow Enhancement Program, growing NOI by 29% across the 529 acquisition and development properties in our non-same-store pool, and driving the industry’s largest development pipeline to an excess of $1 billion to be delivered over the next 24 months. We had a strong operating performance in the first quarter, particularly with existing customers performing well and same-store move-in volume up nearly 13%. Length of stays are strong and same-store revenues were up nearly 10% year-over-year. Our exceptionally large non-same store acquisition and development pool now nearly 25% of the overall portfolio continues to outperform as well. Fundamentally, self-storage is a needs-based business with demand drivers that are multidimensional and fluid throughout economic cycles. We also continue to benefit from people spending more time at home, which has increasing permanence with remote and hybrid work here to stay. Additionally, with the return to more seasonal patterns of demand, we are currently also seeing an uptick in movement activity that has continued into the second quarter. We also continue to find good opportunity in development and redevelopment as well, with a vibrant pipeline poised to generate growth for years to come. Our unique ability to weather economic cycles serves us well, particularly while other developers have slowed their activity due to higher interest rates, cost pressures, difficult municipal processes and concern over the near macro term landscape. Now I’ll turn the call over to Tom to discuss acquisition market and financial performance.

Thanks, Joe. The transaction market has been relatively quiet to start the year as potential sellers feel out the macro environment, higher interest rates and the spread between buyer and seller expectations. That said, we have closed or are under contract to acquire nearly $200 million right on track for our $750 million outlook for the year. The vast majority of our acquisitions this year have been done off-market quietly. More recently, we’ve been encouraged by an increase in inbounds, which are primarily small to medium-sized portfolios. We’re in a great position to acquire today given our cost and access to capital advantages paired with our industry-leading NOI margins. Now on to financial performance. As Joe mentioned, we started the year strong reporting core FFO of $4.08 for the quarter, representing 16.2% growth over the first quarter of 2022, excluding the contribution from PSB. Looking at the components. In the same-store, our revenue increased 9.8% compared to the first quarter of 2022. We drove strong move-in volumes up 13% during the quarter heading into our peak leasing season and the existing tenant base remained strong with length of stays sitting at records. Same-store cost of operations were up 5.6%, leading to total net operating income for the same-store pool of stabilized properties growing 11.2% for the quarter. In addition to the same-store, the lease-up in performance of the recently acquired and developed facilities remained a standout in the quarter growing 29% compared to last year. Shifting to the outlook. We lifted our outlook for the year, driven by increasing our same-store revenue assumptions. While the macro environment remains uncertain, performance to date has been encouraging. We’re set up well heading into the second quarter. Last but not least, our capital and liquidity position remains rock solid. Our net leverage of 3.3x, combined with $700 million of cash on hand at quarter-end, puts us in a very strong position for capital allocation as we move through the year. Now I’ll turn it back to Joe.

Thanks, Tom. Our people, technologies, platforms, balance sheet and brand have and will be continually enhanced to create and strengthen the competitive advantages we have across the entire Public Storage enterprise. We see opportunity in the current environment and are poised to execute with focus on delivering growth and value for our shareholders. Let’s go ahead and open the call up for questions.

[Operator Instructions] And we will take our first question from Juan Sanabria with BMO Capital Markets.

Hi. Good morning. Joe or Tom, I was just hoping you could speak to April trends and what you’re seeing in terms of demand and/or price sensitivity from customers out there? Any – some of your peers have talked to some softness in March or April depending on their market exposure. So just curious what you guys are seeing across your platform.

Yes, thanks for the question, Juan. As we move through the quarter and you could hear it in the prepared remarks, we saw continued strength in move-in volumes and interest into our system. And so as we move through March and into April, that trend continued. I wouldn’t characterize March as weak, but I would characterize April as strong. And so we’ve seen accelerating move-in volume growth as we move through what was a strong margin into a stronger April. One of the things you highlighted there was existing customer sensitivity to price. And I’d also note that we haven’t seen anything concerning there. Price sensitivity has been very in line with our expectations. And so against that backdrop, seeing good move-in volumes, which is encouraging in particular as we head into the next several months.

Thanks. And then just for my second question, just on the Property of Tomorrow spend, you guys have made excellent progress on deploying that capital. Just curious on the types of returns you’re generating as you look at the CapEx that you’ve spent and how that’s augmenting growth either in the same-store or non-same store pool?

So, the step back, Juan, the program has been quite well received by both customers, our employees and now that we’re at a point where we’re actually getting to full market completion in several of our key markets as we finish up and round out the program over the next couple of years. We’re actually seeing a very good response and overall lift just to the – again, the image and the power of the brand, particularly where we’ve got meaningful scale in many, many markets. So we continue to track and see the benefits from that. It’s continuing to enhance our presence market-to-market. And with that, we continue to be very excited about getting the program completed. The team has done a very nice job figuring out any and all ways to optimize the amount of volume we’re actually going to pull it in plus or minus a year earlier than we intended to. And with that, we’ll be in a very good position nationally to have elevated the crisp and enhanced brand attributes that play well in many parts of our business.

Appreciate the time. Thank you.

Thank you.

Thanks, Juan.

We will take our next question from Michael Goldsmith with UBS.

Good afternoon. Thanks a lot for taking my question. My first question is on the guidance. You brought up the low end. Is that a reflection of the trends that you’ve already experienced in the first quarter? Or that guided – the low end of your range was based on a full recession scenario? Is the increasing guidance more reflective of that outcome is less likely to occur? And then within this, you’ve included this quote in your supplemental that suggests that the potential of revenue growth rates is wide and including the potential for year-over-year declines in revenue in the second half of the year. Is there anything that you saw in the first quarter that changes your view on that? Thanks.

Sure. Thanks for that question, Michael. I would characterize the first quarter as a strong quarter and that is really what’s leading to the lift in the low end of that revenue assumption component. And so we’ve talked to the strength in the first quarter you’re highlighting how we characterize the wide range of potential outcomes embedded within our outlook for the year. There’s still certainly macro uncertainty in the back half of the year that hasn’t changed, but performance to date has been quite encouraging, which is leading to the increase in the outlook for the year.

Got it. And my follow-up question is about the strength and the sustainability of the LA market. Same-store NOI growth was up 20% in the quarter to added 300 basis points to the overall number. Presumably, this is reflecting the rate restrictions that were lifted in February of 2022, which you lap during the quarter. But is there kind of like a second – is there a second year of growth coming from the LA market? Or have we kind of – have you kind of used up all the gain there and the gain should be more modest going forward? Thanks.

Yes, Michael. First of all, LA being our largest market, we’ve been very pleased by the performance we’ve been able to achieve over the last year or so, to your point, where the owner’s restrictions have been lifted, but it is also a market where we have a commanding presence. We’ve got very good inherent demand. We’ve got very good occupancies and very little new competitive product coming literally to any of the submarkets that we’re competing in. So the inherent demand in the market is quite good. We think we’ve got against some good traction ahead of us, certainly going into the rest of 2023 and we’ll continue to see where we go from there. But we’ve been very pleased by the performance of that portfolio. It is one of the markets that we – to go back to my comment about property tomorrow, we put about $75 million into that portfolio to lift it from a brand awareness standpoint, finished that a little over a year-and-a-half ago and again good timing and tie to that – being that much more prominent in the market. And one of the ways we measure the receptivity of that too is Net Promoter Scores, again getting very good reaction from customers and the brand itself is playing through quite well. So with that good demand and that good continued performance.

Thank you very much.

Thank you.

We’ll take our next question from Smedes Rose with Citi. Your line is open.

Hi, thank you. You mentioned the almost 13% move-in volume across the first quarter, but move-out volume was lower, but kind of almost kept pace with the move-in volume. I was just wondering if you saw a similar trends in April as well.

That’s a great question, Smedes. So one of the things that took place during the quarter was we did gain occupancy as you anticipate. And so occupancy from the end of the year through March was up 50 basis points. And in April, we gained another 20 basis points. So starting to see that seasonal uplift in occupancy that will really continue here into May. And I’d characterize the trajectories of year-over-year move-in and move-out growth as being favorable, i.e., as we move through the quarter, the move-out volume growth has modestly lowered and the move-in volume growth has modestly increased into April, i.e. So April was actually our best month in terms of gaining occupancy and closing the year-over-year occupancy gap on an incremental basis. So again encouraging trends here as we head into the peak leasing season.

Thanks. And then I just I noticed that the late charges, the pace of growth picked up at a faster pace on – rental income. I’m just wondering if there’s anything kind of to read into that? And have you seen an uptick in kind of non-payments or anything that would suggest some customers are under economic duress?

Sure. Yes, there’s two components to that line item. The one is what you’re highlighting, which is that there are more customers that are making late payments this year than last year. But if you frame it over a multiyear time period, we’re coming off of really, really low delinquency time periods over the last several years and remain well below 2019 levels delinquency, but you’re seeing an uptick there in late payments. And then I think more interestingly, the fact that we had significant move-in volume growth also contributed there with our administrative fee that’s charged to new customers when they move-in, leading to a year-over-year increase in that line item as well.

Great. Thank you.

Thanks, Smedes.

We’ll take our next question from Todd Thomas with KeyBanc Capital Markets.

Hi, thanks. Good morning out there. First question just related to investments. Tom, the balance sheet is in great shape. I think you commented that you’re seeing an increase in inbound call volume from owners. Are you seeing the pipeline build? And can you speak a little bit to pricing, whether pricing seems to be moving in your favor such that we should expect to see deal flow pick up in the quarters ahead?

Sure. So we have started to see or started to receive more inbounds more recently. And I do think that that’s healthy. And as you know, Todd, it’s traditional to have a busier second half for storage transaction volumes in the first half and we’re encouraged to start to see that inbound activity. And we suspect it is going to lead to a pickup in volume as we move into the second half of this year. And in terms of the valuation as you think about the assets and where things have traded, transaction volumes have been relatively light to start the year. So I wouldn’t point to a significant amount of data for us to sit here and say, that cap rates are an X or Y with significant precision. We’re continuing to find good value in many of the assets and or closing that buyer and seller gap in many instances, but it remains wide in others. And so we’re still working through that and anticipate to work through that through the rest of the year given what’s played out with interest rates and the macro environment. To put some numbers on it, I think on the last call, we said the cap rates had moved up about 100 to 125 basis points from the lows. And I would say we haven’t seen anything over the last three months that would have us direct you any differently from that.

Okay.

Yes, Mike. And then Todd, just a little bit more relative to the complexion of the activity so far. So Tom mentioned that we’ve been doing a number of deals off-market. So as always, we are looking for those kinds of opportunities as well. There are still owners out there that are looking for an efficient clean transaction. The average occupancy of the $186 million that we’ve done so far has been about 50%. So thematically very similar objective on our part where and if we can acquire properties that have upside once we put them in our platform that’s going to make sense relative to the ultimate yields that we’re likely to achieve from those assets. So we’re confident we’re going to continue to see those kind of opportunities going into the rest of the year.

Okay. And then how would you sort of compare and contrast the U.S. versus non-U.S. opportunity set today? And then also would you – just given the amount of development activity that’s taken place over the last several years and some of the tighter lending environment that we’re seeing today, would you consider building out a structured finance program at all to be a financing solution for borrowers, but also as a way to maybe expand the platform through third-party management and build a future investment pipeline?

Okay. So, yes, a couple of questions or more on that statement. So first of all, from an international standpoint, I would say, consistent with what we’ve spoken to for some time, which is we’re well equipped to consider and evaluate outside border opportunities, we continue to do that, nothing to speak to as we are here today. But again, that’s part of the overall mining that we’re doing both inside and outside borders. But we’ll see how that plays out over time. Clearly, there’s been far more in border opportunities over the last three or four years. And maybe to a tight – another part of your question is the fact that part of the reason for that is the amount of development that’s come into the cycle has been done by owners that have no intention of being long-term holders of those assets. So that continues to be a good breeding ground for us to find deals. I’ll let Tom talk about thoughts around going into any kind of lending platform et cetera.

But yes, I’d maybe take a step back and comment on your question around the lending environment because if you think stepping back the lending environment, it certainly gotten more challenged for many developers at this point. It could lead to lower new supply heading forward. So we’ll have to see how that plays out. In terms of our participation in other parts of the capital stack, we continue to find very good value in the equity portion of the capital stack and have been deploying capital there consistently over the last several years and have found that to be a good risk adjusted return. And I note in addition to that, we have made some lending investments with some of our partners on a smaller scale. So something that we’re considering as part of our wheelhouse as we move forward.

All right. Thank you.

Thank you.

Thanks.

We’ll take our next question from Keegan Carl with Wolfe Research. Your line is open.

Hey, guys. Thanks for the time. Maybe first here, just any more color in your development pipeline, particularly those assets are completed from 2018 to 2020. It seems as if occupancy levels are below your portfolio average by decent margin, but yet they should have stabilized at this point based on your press release commentary. So just any sort of color on what’s driving and if it’s maybe market specific would be helpful.

Yes, I’d characterize as the performance of those assets to be pretty strong, right? I mean anything we delivered over that time period has benefited from really strong demand drivers. And frankly, they’ve been exceeding our expectations. Your comments around occupancies, I think, some of those vintages are a touch under 90%, but they’ll certainly stabilize above 90%. One of the things that I’d remind you is that occupancy is only one part of the equation of stabilization and rental rates is certainly the other. And we’re seeking to maximize revenue from those pools of assets the same way we do our same-store pool. So occupancy will ultimately get over 90%, but I think more importantly the rate growth there has been exceptionally strong and likely has several more years of strong rate growth compared to the same-store pool from that group of assets. And you can see the yields that we’re achieving there. It continues to reinforce the strong risk-adjusted return of that program and it leads to our increase in desire to continue to build moving forward. So the development pipeline now is sitting over $1 billion as we seek to grow that program.

That’s helpful. And then one thing I noticed in the supplement, just your commentary on credit card fees stood out. Just kind of curious, is there a way for you guys to charge a higher rate on those using credit cards to offset that? Or do you just now want to take the risk of them bulking given those people on auto pay tend to be better customers?

Yes, I’d say for the most part the increase in credit card fees relates to the increase in revenues and that’s by far and away the contribution. So as revenues increase, you’re going to see those payment processing fees go higher. From an operational standpoint, we do spend time thinking about ways to incentivize our customers to use attractive payment patterns for them, but also one that may be cheaper for us to process. And so that’s an ongoing kind of year in and year out attempt through different operational methods. But to your point, we love to move people in and achieve that auto pay and ultimately it’s much more important to achieve that move-in than it is to focus on the payments process.

Got it. Super helpful. Thanks for the time, guys.

[Operator Instructions] We'll take our next question from Steve Sakwa with Evercore ISI. Your line is now open.

Great. Thanks. Good morning. I'm sure you guys are disappointed in the outcome with Life Storage, but does that sort of change kind of your view at all about kind of large-scale M&A? Or do you feel like this kind of puts pressure for you to find other transactions of size to kind of keep your lead in the industry?

Yes, Steve. Clearly, we are well positioned to continue to grow in all different shapes and sizes. And we feel every bit, if not more, confident that opportunities will continue to arise going forward. So we're very focused on that. We are looking at many different alternatives going into future opportunity scenarios. But we feel that, again, the reset to whatever degree happens in the sector by virtue of the LSI and ESR combination. At the end of the day, it doesn't change the landscape from a competitive standpoint. One of the things that we've learned over time scales one part of efficiency and optimization, but many other things play through as well, that we continue to invest in that lead to our industry-leading margins, the things that we've done to enhance our own brand, the effectiveness of the presence we have market-to-market, and we feel very confident we're in good shape going forward, and we'll continue to make those investments.

Great. And then, I guess, secondly, on development, we continue to hear that development should be coming down given all the challenges in the lending environment. You guys have remained, I think, active I'm just curious, are you sort of changing kind of how you guys underwrite development today? Have you changed your hurdles? Are you changing anything in the, I guess, the framework and the way you evaluate new development projects?

Yes. The – first of all, development is a long game, right? So we're typically looking at scenarios that – well without question, go in and out of all kinds of different ranges of economic cycles, et cetera, when you're thinking about total time periods to actually put a property to a point of not only opening, but stabilization, I mean you can easily be at a five-year plus mark asset to asset. So that I think, is a good headwind, particularly in this environment where, again, many owners are seeing different headwinds around cost of capital, availability of capital, component costs. I mentioned the amount of timing it takes to get approval, city-to-city, and we've been talking about for some time is far more difficult today than it's ever been on that front. And literally almost everywhere. I can't even name a market where it's easier to develop today than it was one, two or three years ago. So you've got to be, again, ready to work through those kinds of demands or those kinds of factors, those kinds of risk components. We feel very well suited to do that. In this environment, where we're actually seeing the opportunity to pull more interesting properties into our own pipeline that potentially have far less competition from a land standpoint or even a repurposing standpoint. So the team is working hard, and we're finding some good opportunities. I'll let Tom talk a little bit about how our underwriting process play through as well. But that's something that always is reflective not only the current environment, but the long-term environment.

Yes. And just to piggyback on that, I think we're consistently looking to try to improve our underwriting processes year in and year out. And if you recall at Investor Day, our data science leader talked about some of the tools that, that team has helped develop with – for use with our development and acquisition team. Those processes continue to be underway. We try to use our wealth of data internally to give us advantages on picking those sites and adding in new development. So underwriting process is consistently evolving in a positive way. In terms of hurdles and the like, obviously, we do with acquisitions as well as development and think about what our cost of capital is and evaluate that in the context of the returns that we expect on new capital allocation. But I'd point you to a relatively consistent trend, which we said that we're seeking to build new sites that will generate a yield on cost of circa 8% plus at delivery, and that's not significantly changed over the last several years.

Great. Thanks.

Thanks, Steve.

Thanks, Steve.

We will take our next question from Ki Bin Kim with Truist. Your line is open.

Thanks. Good morning. Did you guys provide an update on April moving rates? Sorry if I missed it.

No, we didn't. The way I'd characterize move-in rents, and I think this is the first question on move-in rents on the call, which maybe a record in terms of depth before we get that question, but move-in rates across the sector have been lower. And I think that's been pretty well documented. Move-in rents in the first half of the year, we anticipate to be down more significantly than maybe the back half of the year given the comp scenario that we've been discussing with the first half, really tough comps versus last year in the second half, easier comps. And so as we move into the second quarter, we anticipate moving rents, and we're seeing that in April to be down in that kind of upper single digits to low double-digit type ZIP code.

Okay. Great. And how many stores do you have right now that are managed fully remotely without people? And are those – any kind of shared characteristics are those usually just smaller stores in tertiary markets or in different places as well?

Yes, Ki Bin. I would tell you there's a broader context of the way we're approaching the whole concept of "remote." One of the things I mentioned in my opening comments, is we've now got 400 properties on what we call customer-driven technological platforms, which includes a piece of what you might consider a property to be remotely managed. A misnomer on remote is remote also requires and every property still requires some level of on-site personnel. What we have done in a broader context is continue to test and now deploy pretty effective technological, predictive and data sources that we have to put people in the right places based on property activity, the amount of demand that's likely to come through the patterns both on a weekly, daily and monthly and even quarterly basis. So with that, we can really take even that baseline concept of remote to a far different level, which can work in suburban or remote areas. It can work in more dense areas. It can help us optimize the amount of necessary on-site labor. And this is all built around something that's first and foremost, which is actually maintaining or improving customer service. So there's a whole range of different components to that platform, some of which include kiosks for instance, some of which include the way that we interact with customers through our customer care center. And then another leg of that whole puzzle is a very effective time and presence from a face-to-face Public Storage employee. So all of those things are being optimized piece-by-piece, and we've done some very interesting things, and we have a lot more to come. Very excited about that part of the business.

And so you said 400 properties, you have about 2,900. I guess, can you apply to all? And if you do, like does the FTE go from 2 to 1? Or I am just trying to understand the impact overall?

Yes, yes. It's the roadmap we're on. I wouldn't say it's pure enough to say each and every one of the 2,900 properties have the same impact from the platform, but the great part about our overall strategy as there are components to this. So you can optimize FTE based on, again, what size of property you're dealing with, what historic level of either staffing or presence you'd have from an employee standpoint. And then Tom, you can talk a little bit about some of the economic benefits that we're likely to continue to see. But the great thing about this, like I said, far deeper than just remote because it can apply to many different types of assets, and we're excited about deploying in that many more parts of the business.

Yes. The only thing I'd add to that Ki Bin is in our Investor Day presentation, we did highlight our objective to reduce labor hours and get more efficient with labor hours through the specialization and centralization that Joe is speaking to in reacting to customer demand. And the target we set is for a reduction in labor hours of 25%. We'll achieve that this year. In fact, we think that there is more upside from here. So just another component of how we're seeking to get more efficient and drive our industry-leading margins higher.

Thank you.

Great. Thank you.

We'll take our next question from Mike Mueller with J.P. Morgan. Your line is open.

Yes, hi. I was wondering, are you seeing any signs of like the degradation of length of stay for your lower-term customers that have been there over a year or two?

Yes. I mean, we characterize the length of stay is sitting at records in our prepared remarks earlier. And so generally speaking, while we have seen move-outs increase in trend back towards 2019 levels, the length of stay of the overall platform continues to be really strong. The portfolio now – the average length of stay of the tenant base today is over 36 months and has been sitting around that sort of ZIP Code for the last several quarters. In terms of the longer length of stay customers themselves and how they're behaving, they continue to behave quite well. And on a year-over-year basis, the percentage of customers greater than two years is actually higher than where it was last year. So continuing to demonstrate the strength of that component of tenant base.

Got it. Okay. Thank you.

We will take our next question from Spenser Allaway with Green Street. Your line is open.

Thank you. Maybe just another one similar to the development topic. But can you just remind us what percent of the portfolio would you say has true expansion opportunity?

Yes, Spenser, I don't think we've ever characterized that as a specific number. What leads to those kinds of expansion opportunities are several factors. We have hundreds of properties that have been developed, say, 30, 40 or 50 years ago that in those periods of time, a traditional properties you might have a much larger amount of acreage and would typically have what we would call our Gen 1 product simple, single-story drive-up product. There are many opportunities within the portfolio to potentially acquire different and higher levels of FAR to magnify the size of those properties. And frankly, many of them are in great locations, some of which we get far better customer demand once we actually even make the property that much bigger. So there's a sizable set of those types of assets. Time and the effort that goes into that to be quite complex. Many cities won't allow us to do certain expansions of that magnitude. Some that may open the door to that, actually, they will put you through a multiyear process. That, again, you've got to work through very diligently. So we've got a number of those efforts in play as we speak. Another thing that we have at hand in many assets, for instance, is either some additional excess land or parking area that, too, can be developed or expanded into, again, a more modern facility as an extension of what's already on the property. So there's a whole range of things that we're continuing to evaluate on that front, but the good news is by virtue of our very consistent investment processes now for several decades. We've got amazing sites. And with that, in many areas, properties that have far different demand and better demand dynamics when they're originally built that could fit very well to, again, the opportunity going forward. Today, the $1 billion development pipeline, plus or minus about 50% of that is actually tied to the kinds of sites I'm speaking to. And the team is going to continue to work, to monetize and unlock those opportunities as we go forward. One of the great things about our development team is they can wear both hats. They can work on ground-up development as well as expansion development. We're doing that like-for-like, clearly in many of the markets that we're looking for expansion.

Okay. That was really helpful color. And I was also just wondering, just given the fact that there has been a lack of larger portfolios in the market, has there been any increase to the personnel dedicated to sourcing or underwriting acquisitions just as I would imagine, the deals are a little bit more granular, excuse me, than normal. But it sounds like from what you just said, your personnel are very dynamic and perhaps can wear multiple hats.

Yes. To that point, maybe just to give you a little context. 2021, to your point, it was an unusual year where we did a couple of very large unusual transactions. And again, the flip side of that, though, is that was only half of our volume of the $5.1 billion that we did. The other half was dedicated to what's very traditional, either single asset acquisitions or much smaller portfolios. We've got a deep-seated team, very knowledgeable, very well placed relative to knowledge of markets, knowledge of owners and the kind of dialogue that comes with that from a relationship standpoint, has been and will continue to be very important for our efforts to grow the portfolio. As Tom mentioned, about half – or more than half, excuse me, a lion share of the acquisition volume that we've done in 2023 has come from off-market transactions. So part of that is just, again, as I think you're alluding to, we've got the right team in place to go out and engage. We've got a great reputation as a preferred buyer, and we're going to continue to leverage that.

Thank you.

Great. Thank you.

It appears we have no further questions on the line at this time. I will turn the program back over to Ryan Burke for any additional or closing remarks.

Thanks, Britney, and thanks to all of you for joining us. Have a great day.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.