Annabelle Ayer

Annabelle Ayer asked about National Storage Affiliates' (NSA) strategy for payroll management, specifically the trade-off between lowering costs and potentially losing sales. She also inquired about the anticipated future benefits from the company's investments in its website and platform, including improved search rankings and higher conversion rates.

Answer

President and CEO David Cramer explained that NSA has been modeling payroll for years, using data and tools to meet customer needs, with staffing levels varying by market. He highlighted efforts in optimizing hours of operation, leveraging the customer care center with AI automation, and digital transformation, which have led to payroll savings with more expected, without compromising customer experience. Mr. Cramer noted significant success from website and platform investments, evident in improved visibility, outranking scores, and 20-30% higher rental volumes, with ongoing efforts in AI modeling and search optimization expected to yield further benefits.

Annabelle Ayer asked about National Storage Affiliates' payroll strategy, specifically the trade-off between lowering costs and potentially losing sales. She also inquired about the anticipated future benefits from the company's significant investments in its website and platform, including improved search rankings and higher conversion rates.

Answer

David Cramer, President and CEO, explained that the company uses advanced data and tools to model payroll, aiming to meet customer needs while optimizing staffing levels, which vary by market and store. He highlighted efforts in adjusting hours of operation, leveraging the customer care center, implementing AI automation, and digital transformation (app, barcodes) to achieve payroll savings without compromising customer experience. Regarding the website and platform, Mr. Cramer noted significant success in driving rental volumes (up 20-30%) due to improved visibility and outranking scores. He emphasized ongoing efforts in AI modeling, Google search, and paid search to further enhance effectiveness, with more benefits expected.

Annabelle Ayer asked about the expected retention rate for Vornado's remaining 2026 expirations, particularly the 600,000 sq ft in the fourth quarter, and the trends for TIs versus free rent.

Answer

Glen Weiss (EVP) expressed confidence in the 2026 expirations, expecting two large block expirations to renew. Steven Roth (Chairman and CEO) and Glen Weiss discussed that TIs are likely to remain sticky or even increase due to construction costs, while free rent is expected to decrease, and overall rents are projected to rise.

Annabelle Ayer inquired about the expected retention rate for Vornado's remaining 2026 expirations, particularly the 600,000 sq ft in the fourth quarter, and asked if there were any larger blocks of space to call out.

Answer

Glen Weiss, EVP, Vornado Realty Trust, expressed confidence in the 2026 expirations, noting that two larger block expirations are expected to renew. Steven Roth, Chairman and CEO, Vornado Realty Trust, added that the Manhattan office market is tightening with rising rents, and while free rent may decrease, TIs are expected to remain sticky due to construction costs.