Ladies and gentlemen, thank you for standing by. My name is Colby and I'll be your conference operator today. At this time, I would like to welcome you to the SmartStop Self Storage REIT Third Quarter Earnings Call. [Operator Instructions] I would now like to turn the call over to David Corak. Please go ahead.

Thank you, operator. Before we begin, I would like to remind everyone that certain statements made during today's call, including statements about our future plans, prospects and expectations may be considered forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act. These forward-looking statements are subject to numerous risks and uncertainties as described in our filings with the Securities and Exchange Commission, and these risks could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in our earnings release that we issued last night, along with the comments on this call, are made only as of today. The company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, we will also refer to certain non-GAAP financial measures. Information regarding our use of these measures and a reconciliation of these measures to GAAP measures can be found in our earnings release and supplemental disclosure that were issued last night and are available for download on our website at investors.smartstopselfstorage.com. In addition to myself, today, we have H. Michael Schwartz, Founder, Chairman and CEO; as well as James Barry, our CFO. Now I'll turn it over to Michael.

Thank you, David, and thank you for joining us today for our third quarter earnings call to discuss our first full quarter as a New York Stock Exchange listed company. I'll start with some introductory remarks on SmartStop, the Argus transaction and the industry before I hand it over to James to discuss the quarter. After that, we'll open it up to Q&A with James, David and myself. Before we dive into the high-level remarks, a few highlights of our third quarter results. We posted a strong third quarter with sector-leading same-store revenue growth of 2.5% and average occupancy of 92.6%, both largely in line with our expectations. We reported FFO as adjusted per share of $0.47, which was about $0.02 below our expectations for the quarter. This was entirely driven by 2 events that we noted in last night's earnings release, an unexpected vacate of our only notable industrial tenant and the recognition of a onetime equity-based compensation expense related to performance units issued in 2023. James will elaborate on these items later in the call. With these pieces in mind and our 3Q strong operating results, we maintained the midpoint of our full year 2025 FFO as adjusted per share guidance. We had another robust quarter, both in terms of performance and activity. First, we opportunistically returned to the Canadian Maple bond market, raising CAD 200 million at a 3.89% coupon this time with a 5-year maturity. During the quarter, we acquired approximately $86 million of Class A storage properties on balance sheet in both the U.S. and Canada. We also acquired one property subsequent to the quarter end for $15.3 million. These on-balance sheet acquisitions are primarily Class A properties located in top markets consistent with our communicated acquisition strategy. We also increased our loans and preferred…

Thank you, Michael. Starting with our operating performance, we are pleased to report that our same-store pool posted year-over-year revenue growth of 2.5%, the with operating expense growth of 4.5%, leading to an NOI increase of 1.5%. These were all in line with our expectations. The FX impact from our 13 Canadian same-store assets was a headwind of approximately 10 basis points to our overall same-store pool as we posted constant currency revenue growth of 2.6%, expense growth of 4.6% and NOI growth of 1.6%. Revenue growth was in line for the third quarter, and we accomplished best-in-class same-store revenue growth utilizing less concessions and limited marketing dollars while maintaining strong occupancy of over 92%. On the operating expense front, property taxes were up 4.8% and marketing expense was up only 1.8%. We saw muted or negative expense growth in payroll, utilities, professional and administrative expenses. Notably, our property insurance was down 4.5% this quarter as we finally started to see pressure alleviate in that market. The result was that same-store operating expenses were up 4.5% year-over-year. Our same-store pool ended the quarter at 92.4% occupancy, up 10 basis points year-over-year, while average occupancy was 92.6%, up 40 basis points year-over-year. Our web rates were down about 3.9% year-over-year for the third quarter, while our achieved move-in rates were down 8.5% on average as the stabilization of the rate environment slowly but surely continues. As we moved into October, we put a strong emphasis on maintaining occupancy headed into slow season. In doing so, we actually grew our average and ending occupancy over September by about 10 basis points. October ended occupancy at 92.5%, up 20 basis points year-over-year. In-place rates were up 50 basis points year-over-year and flat versus September, and we are positive on a year-over-year basis for…

[Operator Instructions] Your first question comes from Todd Thomas with KeyBanc Capital Markets.

James, I wanted to ask about acquisitions. You touched on investments that you've completed. I think it was over the last 12 months, targeting $375 million this calendar year. How are you thinking about acquisitions from here with a view into '26? Do you pause given sort of some of the volatility in capital costs and with leverage in the high 5s? Or do you stay -- do you maintain this pace moving ahead?

Todd, it's Corak. I'll start and then hand it over to the rest of the team here. So what we've said from the get-go is that we've got this target leverage range in the 5 to 6x range, and we intend to stay in there. Obviously, there's going to be periods where we are below it as we were right after the IPO, and there's going to be periods that we opportunistically look to take that up a little bit. But we do want to maintain that as our target range on a go-forward basis. When you think about the pace of acquisitions, right, this year, [ 3.75 ] is the midpoint of the range, which entails just over 10% growth of the asset base overall. We'd love to be able to grow the portfolio by 10% or more in a given year. But realistically, when you just do the math, if we wanted to do that next year, that would require some common equity to help keep us in that target leverage range. And so what we've said from the beginning is we're not going to go out and issue common equity at a 6.5% cap to go buy 5.5 cap assets on a go-forward basis. So the math just doesn't make sense to us. So I think what I would say is when we look out, we're going to be really prudent with how we deploy capital and be opportunistic on a go-forward basis.

And Todd, this is Michael Schwartz. I would add also is that as many of you are aware, we've had some significant structural changes to our balance sheet, which we're starting to see kind of that kind of flow-through with respect to kind of our FFO for the third quarter, moving in potentially the fourth quarter and then 2026. And so as we look at our levers to growth, clearly, external growth is one that we'd like to capitalize on. But we obviously need to be careful of where we're trading. But we do have other levers of growth. We do have our same-store pool. We do have our non-same-store pool. We have our joint venture pool. And we have our third-party management platform with Argus, which obviously we're spending a lot of attention. And last but not least, we do have our managed REIT platform, which we think will be -- add some additional contribution as we move forward. And then finally, at this point, we do not have a joint venture partner. At some point in the future, we will have a joint venture partner, and we think that, that will create additional lever for growth.

Just to frame one more thing. Michael mentioned the acquisition of Argus, which obviously closed subsequent to quarter end. And some of the consideration there was in the form of equity for tax planning purposes. So actually, that transaction should bring down our leverage on a net basis when you roll from 9/30 to 10/1 just from that transaction alone.

Okay. That's helpful. And then 1 or 2 on Argus actually. First, can you talk about the integration of that platform, the time line for SmartStop to fully integrate leasing, revenue management, financial reporting, whatever else. And Michael, you talked about the scale benefits that you might expect to achieve in some of the overlapping markets. Any early update or insights on that and sort of the time line to begin to see some of those benefits?

Todd, thank you. Well, the good news here is that with the acquisition of Argus there's not this integration within SmartStop, okay? And so let me step back. When we decided to acquire Argus, we spent a lot of time understanding what Argus had built. And they had built this entrepreneurial third-party management platform that was developed for entrepreneurial self-storage owners that were fiercely independent. And so some want full service, but some actually want to stay in the overall aggregate operations. And so we've recognized that we have to respect the entrepreneurial owners within that. And so what our strategy has been, and we've been making this clear is that we want to provide the services that these owners want. And so what we stepped back and said, how do we do that? Well, one, we didn't think it was prudent to go in there and say to these owners that you now all have to be pushed on to the SmartStop platform. That's not very entrepreneurial whatsoever. And being an entrepreneur, I'm very sensitive to that. So we put together a menu, a menu of options that gives us a differentiated experience versus some of the third-party platforms out there. One, if you want to be on the SmartStop platform, hey, great. We will brand you, sign a couple of year agreement, and we will kick in some dollars to change signs out and brand and onward you march. Or if you like your brand, well, we love your brand, too. You can keep your brand and you can move to the SmartStop platform. We'll create a page within the SmartStop environment and you're utilizing all the benefits. However, if you really want to maintain your independence through a private label solution, we're going to allow that. Now…

Yes. And Todd, just to add on in terms of kind of time lines and lead flows that we've seen thus far, I would say we've seen interest across owners across the spectrum of menus, right? So we've had people that want to engage with a SmartStop branded location, some that want SmartStop legacy and some want to continue on and then learn more about the platform. So overall, the reception from the owners has been positive and definitely curious about the upgrades that are going to...

And I will add that, obviously, they're running on a separate operating system. We've received a separate data card, and we're about 3 to 4 weeks into being able to provide some similar aspects that we have at SmartStop. So that takes a little bit of time. So it's probably a 60 to 90 days just from a technology perspective.

And lastly, one of the strategies we had in this transaction is we could actually bring our balance sheet to bear to help out owners. And as we mentioned in our opening remarks, we've already closed on one of those transactions in a highly accretive manner, double-digit coupon in the preferred investment. So -- and again, that's servicing our customers from an owner perspective.

Your next question comes from the line of Jonathan Hughes with Raymond James.

I appreciate you adding the earnings bridge, I find it very helpful. I think some who see that might be inclined to annualize that implied fourth quarter figure to get a sense of next year's earnings. But what are some considerations we should be aware of as we look at that implied fourth quarter FFO and think ahead to next year? I mean I know there's overall seasonality in the business. Is there also maybe some G&A seasonality? Just some more color there would be great.

Thanks, Jonathan. It's Corak. I will try not to be long-winded here, but I will probably fail because it's a [ last one pack ]. So yes, we gave the quarterly bridge just given the step-up in FFO from 3Q to 4Q. So it's $0.56 for the 4Q on the midpoint. I'll note, just to be clear that, that $0.56 is on the 4Q share count of about 59.2 million shares, not the full year weighted average share count of 51 million shares. So that $0.56, is that a good run rate in the 2026, to your question. And I'll try to answer that as best I can without going into actual guidance, which we will give in February. So 4Q is the first quarter that reflects all of the various financing activities that we've done this year from the IPO to the Maple bonds to the JV refi to the private placement coupon step down. It's not quite a full year of the JV, but that's the least impactful piece there. So from a financing standpoint, it's a pretty darn good run rate, right? From a G&A standpoint, the implied guide for 4Q is about $7 million of clean G&A. That 3Q number was $9 million. So in addition to the $825,000 of performance units, which all hit in the third quarter, there's some seasonality in G&A, whereby 4Q is naturally less than 3Q. My point being that, that, that $7 million is probably not the right number, but also $9 million is probably not the right number, so somewhere in the middle. Those are the 2 sort of pieces I would call out on that front. Everything else is sort of an assumption into next year. And so I don't want to get in the same-store necessarily just…

Very helpful. I appreciate it. Just one more for me on just the acquisitions front and guidance for the year there was tightened, but can you talk about how you source investment opportunities, maybe what percent are brokered versus sourced via relationships. And maybe how much do you look at on a monthly basis versus what is acquired, so effectively like a conversion rate?

Yes, that's a good question. Obviously, we believe we see, I think, most acquisitions out there in the U.S. and also Canada. So we've got a team of about 6 people that are just carrying through acquisitions on both sides of the overall aggregate border. Many acquisitions are not institutional quality. I think they're discarded from -- at minimum. I think overall, the acquisition flow and quality has been pretty consistent from our perspective. that I think sellers are willing to trade, not all of them, but they are willing to trade. And I think it's been evidenced by our $0.5 billion. We found that -- I think we found the right acquisitions at the right pricing, I think, at the right time. And so we feel pretty comfortable with respect to the flow. From where we get these, I mean, we -- look, we've -- this is my 21st year. So Wayne has been with me 17 years. So between the 2 of us, we're getting from the traditional brokers, we're getting traditional from owners, developers, third parties. I mean we get a lot of calls from a variety of different people that have self-storage properties. And so they can be on or off market. And so I think that has been very consistent. And obviously, Bliss in Canada has a tremendous amount of relationships within Canada. So she's hearing and seeing all those deals and starting to pitch those to us. I think with respect to kind of a hit rate, I can't say -- I give you a number from a hit rate. But what I can say, the ones we want, there's enough out there that we can transact.

Your next question comes from the line of Nicholas Yulico with Scotiabank.

Hello. This is Viktor Fediv on with Nick. Now as we are getting closer to the end of this year, just trying to understand your framework of thinking about 2026, kind of what is your base macro expectation for 2026? And how are you thinking about move-in rents and occupancy dynamics kind of in the next 12 months versus the last 12 months?

Thanks for the question. So I will once again be careful here on sort of the 2026 outlook. But I think from a macro standpoint, there's a lot at play, both -- a lot of moving pieces, both in the United States and Canada, right? And so I don't want to get too bogged down in the macro because honestly, I don't know. With that said, from a storage perspective, there is one thing I do know, and it's that the supply picture in self-storage in the United States is improving, right? And the impact from that new supply will be less in 2026 than it will be in 2025. So from the demand side, I think there's a lot of moving pieces, and it's too early to really tell. But from the supply side, which is a good half of the total equation, we feel better about 2026 than 2025.

Yes. And I think if you step back also, I think that you are seeing additional listings out there. Listings are up year-over-year. You're not seeing things trade. I think you're still probably seeing the prices maybe come down to 5%, 10% to 15%. But I think that sets us up for 2026 and that in concert with the reduction in interest rates, I think could create some mobility. I don't want to overplay that. But the listing for housing, I think, is a good indicator of future transactions. And you're seeing a lot of markets where listings are increasing and people are talking about that. So I think we're cautiously optimistic with respect to that. But in addition, I will add that what I'm seeing, even with all the choppiness we've talked about, you're seeing natural absorption in the storage market. And I think that's incredibly important. And I know that I'm a broken record on supply, and we've talked about supply, but I think that natural absorption is going to carry over into 2026.

Understood. And then a second small one for me. Now that you've added this third-party managed platform and have access to much more data across several markets, where should we expect to see the first synergies in terms of improved pricing strategies and expense control?

Yes. This is James. I'll jump in on specifically the margin expansion story. We've always said it's -- whenever we get to sort of 10 properties or so in an MSA, that's sort of our benchmark for getting to economies of scale. Within the next 12 months, we start to see that real -- that margin improvement in those economies of scale start to come in. Clearly, we just closed on this Argus transaction on October 1. I will note, there are 4 more markets that the Argus property overlap tips us into that 10-property mark, right? So we were previously at 6, and we've added 4 more as a result of that transaction. But again, it's going to take, call it, a 12-month period before we start to see the economies of scale really chip in there. And then from a revenue management perspective, I mean, clearly, that's our mousetrap and our algorithms are continuing to incorporate that data and then further enhance their overall pricing synergies to maximize revenue, right? And so that's going to be -- that's an ongoing process, whether it's our data or the newly integrated Argus data as well.

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

This is Robin Haneland sitting in for Juan. I was curious on Toronto, what your preliminary thoughts are on the market's performance heading into '26. And if you can provide some data points on expected new supply this year and 2026, specifically for Toronto?

It's Michael Schwartz. Why don't I talk about supply, and then I'll kick it over to David to talk about some of the KPIs. From a supply perspective, there's been a lot of chatter out there, and we've heard it with respect to additional supply in Canada and in Toronto. And the answer is yes. And we've been very clear in communicating that on previous calls, there is a good amount of supply in Toronto right now. Now a lot of the supply that is from us. We have delivered 7 properties in the GTA in the past 36 months. We have a pipeline of about a dozen identified properties that we'll look to deliver over the next 5 years and an additional pipeline -- an additional pipeline behind that. Today, about half of our properties are being impacted by new supply. Now the square foot under construction is approximately 10% from our estimation of existing stock. Now those stats are pretty consistent with what we've seen for the past 5 years or so. But when we look out and we expect to see that drop to 5% to 6% next year. And so that said, there are isolated trade areas as there always will be, particularly where multiple projects are being delivered at once, and we will see temporary softness. But we -- this is not a structural or Toronto-wide issue. So for example, lease side, which is one of the most competitive, I think, markets within the GTA, we have 8 properties in a 0.5 mile range of competition. And we're still experiencing very high overall occupancy and $35-plus rents per square foot. I think the answer is we can compete, specifically from a technology perspective. So at scale, the GTA in Canada in general remain dramatically undersupplied relative to the population. Urban densification continues. Living spaces are shrinking and new supply, they face significant barriers. In some areas, the development charges, just for the privilege to develop self-storage is approximately $45 a square foot. So in a lot of cases, the math simply doesn't support a national, regional oversupply narrative. And so we don't think that will be for the foreseeable future. David?

Yes. So just to talk about some of the metrics in Toronto right now. On a constant currency basis, same-store revenue growth was 1.4% in the third quarter. the comp in 3Q '24 was 2.6%. So a much tougher comp than the U.S., which was actually net. If you look at our joint venture properties that would meet the definition of our same-store pool, they actually did even better at around 5.3% year-over-year revenue growth on a constant currency basis. As we sit here today or at the end of October, excuse me, the occupancy is 92.5%. That's up 80 bps year-over-year. So that gap has widened and is actually wider than the states. And then we've added another 20 basis points in the first 6 days of November. Move-in rates were down about 9% in October, which was actually better than the States. I think our overall demand remains solid, right, in our trade areas. I think the platform continues to capture an outsized amount of that demand. And really, we haven't seen any of the weakness from changes to immigration policy or macro environment. And it appears that the recently proposed budget could be a potential economic catalyst. So given our operational advantages and everything I just said, our thesis on Canada and the GTA remains unchanged.

Just curious if it's impacting your thoughts on deploying capital for SmartCentres JV, if you'd like to take that elsewhere? Or just curious on your thoughts there?

Can you repeat that. You were a little choppy there.

I was just curious on the -- if that changes your view on deploying capital through the SmartCentres JV, if you're thinking about taking some of that capital deployment in other markets?

No. No. I mean, actually, we're leaning into the SmartCentres joint venture. Part of the strength of that relationship is their access to their retail platform and a lot of underutilized land within some of their retail that we can leverage up and put a SmartStop self-storage next to a Walmart, next to a Home Depot. So the answer is no. I think we are interested in expanding, but not at the expense of that joint venture. I think we've talked about that we believe there's a tremendous opportunity in Canada, and that's why we moved into developing on the island of Victoria, Vancouver, Calgary, Edmonton and Montreal. And so I think sitting and building out, I think, one of the nicest aggregate portfolio in the GTA is now going to benefit us with respect to our overall growth path throughout the top 5 metropolitan cities within Canada.

And now that we're past the IPO lockup, can you maybe talk about what the potential recapture rate back into your managed REIT funds has been?

Well, one of the things when it comes to the kind of the managed REIT platform, we were going to talk about this is that because we switched over to our -- a new managing broker-dealer, we were effectively about 6 months behind with respect to be able to kind of launch new products. So I think at this point, the recapture rate, we're going to have to look at 2026 from that perspective. So right now, we don't have the proper product out in the marketplace right now.

Understood. And then I was just also curious if you can maybe disclose the industrial tenant that went bankrupt.

Yes. It's -- actually, we're a little bit limited in what we can say in terms of this particular matter because obviously, someone -- we had a tenant that broke their lease prematurely. And so we're evaluating all of our options as it relates to that contract. So at this time, we're not at liberty. Just to talk about that particular property. Just to note, this is a component of this non-same-store asset where the majority of the square footage is self-storage. So if you think about it, there is a redevelopment opportunity. It could also just be a re-leasing opportunity. So we're looking at all those options.

Your next question comes from Michael Mueller with JPMorgan.

I guess for the 2 questions. First, I guess, how much higher are the margins in the markets that you were talking about where you have at least 10 properties compared to the others? And then the second question, just going down the path of adding a JV, I guess, what hole do you see that needs to be filled by adding a JV or that you can fill by adding a JV, especially because it could, I guess, increase optically the complexity to the story overall. So I guess, how do you think about that trade-off?

Yes. I'll start with the margin question. So when we look at our markets, where we've consistently had 10-plus properties, we're generally about 300 basis points higher than our overall portfolio average. And if you look at a market like Toronto, where we have 35 properties in that MSA, we're actually closer to 500 basis points higher in terms of our -- relative to our portfolio average. So that just gives you a sense of the scalability of the platform in all of these particular markets.

Yes. So from a joint venture to your second question there, Mike, I'll be clear, we already have a joint venture, right, with SmartCentres that is a pure development joint venture. I believe what you're referring to is if we added an institutional acquisitions joint venture. So I'll speak to that specifically. What we look for and -- what we'd look for there and what the gap, I guess, we would be trying to fill is given the size of our company, right, if we wanted to go out and acquire a $1 billion portfolio, right, and I'm making numbers up here, it would be tough for us to do that with the capital that we have right now. But if we were able to partner with an institutional joint venture where we were a smaller part of the overall deal, ELP and put 5%, 10%, 15%, 20% into a particular joint venture, that deal is all of a sudden a lot more achievable for SmartStop to take down. I think beyond that, portfolios that are maybe not pure stabilized, maybe there's a place in there. But I think the main goal would be to be able to compete for larger deals and make those deals accretive for SmartCentres.

Your next question comes from Wes Golladay with Baird.

A question on the revenue management. Sometimes it's early to detect signs of weakness in the economy. I'm just curious if your revenue management is pivoting more to an occupancy mentality right now?

I mean our strategy is currently an occupancy strategy. So we think that best positions us for success. More importantly, it best positions us in the slow seasons in the fourth quarter and the first quarter to maintain as high as occupancy as we can so that as we move into the busy season that we're only focusing on really economic overall aggregate occupancy. And so that to us has always been incredibly important. We focus on high occupancy, then we're focusing on rates and discounts and then we're focusing on existing customer rent increases. That is kind of -- has been our process.

Yes. If you think about the occupancy that we posted in the quarter and then where we are in October, we're sitting here at the end of October at 92.5% occupancy. That's up 20 basis points year-over-year. And importantly, it's up 10 basis points over September, which is a really nice sequential move for us and really illustrates our strategy that Michael laid out to maintain occupancy into the fall. So we're really happy with that.

Okay. And maybe a quick follow-up on the fourth quarter. It looks like the guidance implies like a small uptick in the fourth quarter on same-store revenue. Is that maybe going to be due to the occupancy build? Or will that be potentially easy comps, rate? What's driving that?

I -- just doing the math, I think it actually -- it's a slight downtick versus the 2.5% and absolute on same-store revenue. It implies a further reduction of the OpEx. So the OpEx is where the absolute NOI gain would be there. But we're assuming same-store revenue goes down in the fourth quarter versus the third quarter in terms of absolute dollars.

Your last question comes from Eric Luebchow with Wells Fargo.

I apologize if I missed this earlier, but it seems like your Q3 same-store came in largely in line with expectations. Q4, obviously, maybe the expectations are a touch lower. So could you maybe just touch on some of the moving parts and what you're seeing in October. I know there are some difficult comps in a handful of hurricane or storm impacted markets that you're going to lap. But maybe just give us kind of an update on how you're feeling in terms of exit rate going into '26 versus last quarter?

So I just went over the October occupancy number, so I'm not going to say that again. But we feel really good about where occupancy is sitting in the 92.5% range. When you think about move-in rates during the quarter, the third quarter, James touched on this in his remarks, but they were down about 8.9%. In October, those were down about 18% year-over-year as the building occupancy strategy played out. You pointed this out, but I'll note that October was -- October 2024 was the most difficult move-in comp of the whole second half of 2024. So not too surprising to see that down year-over-year. As we moved into November, the trends have improved. We're still sitting at 92.5% occupancy, which is really -- really happy with that. and the move-in rates have actually improved sequentially by about 6% or 7% over the October numbers and in-place rates have actually improved sequentially over the October numbers as well. And we're now up 40 basis points in occupancy year-over-year. So those stats have improved as we've gone into November. And then lastly, just to touch on ECRIs as they are a piece of the whole puzzle, we continue to pull that lever without changes to attrition there. Attrition is actually down year-over-year, as James and Michael mentioned. And without getting into specific numbers because some of that's a bit proprietary, we gave ECRIs to more tenants in October than the new rentals, right? And that average ECRI was above the 18% in a really healthy place. So we feel really good about all those pieces as we stand here right now.

Just to touch because you brought up the hurricane-impacted markets, just to kind of recap those. Obviously, Asheville was a hurricane-impacted market and as was kind of the Gulf Coast of Florida. We're effectively lapping the occupancy comp on Asheville. But remember, we didn't do any sort of existing customer rate increases until the first quarter of 2025. So both the Asheville market as well as the, for example, the Tampa market, while we are starting to lap the occupancy comp where we had elevated occupancy, we are coming in with a pretty healthy head of steam on the rate side.

Got it. Super helpful. Appreciate that. And maybe just one final question. I think -- how are you guys thinking about -- obviously, move-in rates, there's a little bit of tough pressure in the back half of the year. Part of it is comp based. We've heard of some of your larger peers kind of leaning in on discounts or promotions, kind of more short-term ways to bring people in the door. How are you seeing that competitive backdrop play out between discounted move-in rates versus promotions or upfront discounts? And what do you think is kind of more effective in keeping that occupancy number up?

Yes. So if you look at what we've done this year versus last year, year-to-date, our concession numbers have been down pretty materially, like in the 20% to 30% range. So we were able to drive rentals without using concessions nearly as much, and that's paid off for us I think -- and you see it in the revenue growth numbers and the results overall. As we stand here today, that's less so the case, right? We're utilizing concessions a little bit more than we were in the third quarter, especially as compared to last year, but not drastically differently. So I'd say we're utilizing all of our tools to drive rentals right now. The one thing I would point out is that from a marketing spend perspective, we've been not utilizing that nearly as much as we were last year. I mean, in the second quarter, I think we were negative 4% or 5%. And in this quarter, the third quarter, we were only up like 1.5%, 1.8%, something like that. So not having to spend a lot to drive rentals. And those rentals for what it's worth were up 3% in the third quarter and are up 8% -- 8% or 9% into October. So the strategy is working.

And with no further questions in queue, I'd like to turn the conference back over to Michael Schwartz for closing remarks.

Thank you, operator. It's been an amazing first 7 months as a publicly traded company. We've accomplished a lot in just a short amount of time. We thank our investors, both retail and institution for their support, and we look forward to the next quarter in 2026. Thank you for your time and interest in SmartStop Self Storage, The Smarter Way To Store. Have a great day.

This concludes today's conference call. You may now disconnect.