Spenser Allaway

Spenser Allaway asked for an update on move-in rates in Q1 2026. He then inquired about National Storage Affiliates' strategy for balancing occupancy and rate growth, asking if one is prioritized over the other and if the company is satisfied with current occupancy levels.

Answer

David Cramer, President and CEO, reiterated that move-in rates are expected to be negative for the first 4-5 months of 2026 due to tougher 2025 comps, with a focus on maximizing customer flow and conversions for revenue goals, before turning neutral to positive around June. He described the occupancy and rate balance as a function of marketing spend, pricing, and discounts to drive conversions. Mr. Cramer stated that starting the year with positive year-over-year occupancy gives confidence in continuing to improve occupancy effectively, which will contribute positively to revenue, expecting to be more occupied at the end of 2026 than in 2025.

Spenser Allaway asked about the current trend of move-in rates in Q1 2026 and how National Storage Affiliates (NSA) is balancing the trade-off between occupancy and rate growth, given the reported 1% move-in rate growth and overall rental rate growth in Q4 2025.

Answer

President and CEO David Cramer reiterated that move-in rates are expected to be negative for the first four to five months of 2026 due to tougher comps from 2025, before returning to a neutral or positive position from June onwards. He emphasized that NSA is balancing marketing spend, pricing, and discounts to drive customer count and conversions, which will lead to increased occupancy. Mr. Cramer expects NSA to be more occupied at the end of 2026 than in 2025, contributing positively to revenue.

Spenser Allaway asked if SmartStop Self Storage REIT has a share repurchase program in place or if the board has considered one given the current stock trading. He also requested additional color on the year-to-date performance of the Canadian markets, specifically the Toronto market.

Answer

David Corak, Senior Vice President of Corporate Finance and Strategy, confirmed no share repurchase program or ATM is currently in place, but an ATM program will be implemented soon. Michael Schwartz, Founder, Chairman, and CEO, detailed their 2026 capital deployment strategy ($72M-$96M) across various initiatives, emphasizing prudent capital deployment and not planning stock buybacks at this time. David Corak reiterated that GTA occupancy has outperformed the U.S. year-to-date, running in the mid-90s (up 80 bps YOY), with in-place rates also outperforming, and a more pronounced sequential occupancy increase in Canada from December to January.

Spenser Allaway asked if SmartStop Self Storage REIT has a share repurchase program in place or if the board has considered authorizing one, given the current stock trading levels. He also requested additional color on the year-to-date operational performance of the Canadian markets.

Answer

David Corak, Senior Vice President of Corporate Finance and Strategy, confirmed that SmartStop does not currently have a share repurchase program or an at-the-market (ATM) program in place, though an S-3 shelf registration has been filed, and an ATM program is planned for the near future. Michael Schwartz, Founder, Chairman, and CEO, elaborated on their capital allocation strategy, stating they are near their upper leverage levels but comfortable going slightly above 6x with a clear path to deleveraging. He outlined a 2026 capital deployment range of $72 million-$96 million, including SmartCentres JV developments, solar initiatives, expansions/redevelopments, and acquisitions/loans, emphasizing the pursuit of an institutional joint venture for larger acquisitions, which is not yet factored into guidance. He concluded that they are not planning to buy back stock at this point. David Corak provided an update on Canadian markets, noting that Greater Toronto Area (GTA) occupancy has outperformed the U.S. year-to-date, running in the mid-90s (up 80 basis points year-over-year), with in-place rates also outperforming. He highlighted a more pronounced sequential increase in same-store occupancy from December to January in Canada (up 130 basis points), ending January at positive 70 basis points year-over-year.

Spenser Allaway asked Public Storage for an update on move-in rents in Q1 2026 and sought clarification on how the company's pricing strategy has evolved with the increasing integration of AI.

Answer

Tom Boyle, CFO and CIO, reported that January 2026 move-in rents were down 7%, showing sequential improvement, with occupancy up about 40 basis points year-over-year. He explained that the data science and revenue management teams continuously evolve pricing strategies, leveraging AI to attract the right customers, understand price elasticities and length of stay, and optimize pricing, promotions, and advertising to maximize NOI.

Spenser Allaway of Green Street Advisors, LLC asked about the drivers behind the improved non-same-store pool guidance and whether recent legislative activity in California alters the company's long-term strategy for the state.

Answer

SVP & CFO Thomas Boyle attributed the stronger non-same-store outlook to faster-than-expected lease-ups in development properties and the impact of new acquisitions. CEO Joseph Russell stated that while they monitor legislative risk closely, a recent effort was successfully steered from price controls to a disclosure-based compromise, which does not change their long-term view of the California market.

Spenser Allaway followed up on the transaction market, asking if deal flow is still mainly single assets or if larger portfolios are being marketed. She also inquired if existing customer rent increases (ECRIs) were higher in the quarter.

Answer

CEO Joseph Russell responded that the transaction market now includes a combination of traditional smaller deals and larger portfolios that are beginning to surface. Executive H. Boyle confirmed that the contribution from ECRIs was better in Q3 but emphasized this was driven by the growing pool of newer tenants becoming eligible for increases, not a change in the rate strategy itself.

Spenser Allaway asked if the four DFP projects commenced in the quarter were one-off initiatives or part of larger store expansion plans for the involved retailers, seeking insight into future opportunities with these tenants. Allaway also inquired about the ground lease market, specifically if recent transactions included purchase options and for general color on the opportunity set and pricing.

Answer

President and CEO Joey Agree confirmed that the DFP projects are not one-off and represent significant opportunities, driven by retailers' strong desire for expansion, which is greater than any time since before the GFC. He anticipates breaking ground on over 10 projects in Q1 and Q2. Regarding ground leases, Mr. Agree stated that purchase options are atypical and were not present in recent transactions. He described the ground lease market as unique and not a traditional 'market,' often involving sellers unaware of the structure. He noted that Q4's elevated ground lease acquisitions were driven by specific deals, such as a multi-ground lease transaction in Flanders, New Jersey.

Spenser Allaway asked if the four DFP projects commenced in the quarter were one-off opportunities or part of larger retailer expansion plans, seeking insight into future project opportunities. He also inquired about the ground lease market, specifically if recent transactions included purchase options and general color on the opportunity set and pricing.

Answer

President and CEO Joey Agree confirmed that the DFP projects are not one-off and represent significant opportunities, driven by retailers' strong desire for expansion. He anticipates breaking ground on over 10 projects in Q1 and Q2. For ground leases, Mr. Agree stated there are typically no purchase options and described the market as unique, often involving sellers unaware of the ground lease structure. He highlighted specific Q4 ground lease acquisitions, including Lowe's, Home Depot, Panda Express, Wells Fargo, and Wendy's.

Spenser Allaway from Green Street asked if the company has observed any cap rate movements or changes in pricing expectations from sellers while building its Q2 acquisition pipeline.

Answer

CEO Joey Agree explained that the Q2 pipeline is effectively built and that the company's hedged capital position allows them to be consistent with yield hurdles despite recent volatility in the 10-year Treasury. He noted that they haven't seen significant changes in seller pricing expectations, though some larger institutions are looking to sell assets. He emphasized that the seller pool remains highly fragmented, ranging from institutions to family offices, making it difficult to draw broad conclusions on pricing trends.

Spenser Allaway of Green Street asked if Agree Realty has observed any movement in cap rates or investment spreads within its Q2 acquisition pipeline and if there have been any changes in pricing expectations from sellers.

Answer

CEO Joey Agree explained that the Q2 pipeline is effectively built and priced, and the company's hedged capital position provides consistency, insulating them from recent market volatility. He noted that the seller pool remains highly fragmented and disparate—ranging from institutions to family offices—making it difficult to identify a single trend in seller expectations, though he did mention seeing more institutions looking to dispose of assets.

Spenser Allaway of Green Street inquired about retailer demand for new store development and whether labor shortages are a growing concern.

Answer

CEO Joey Agree described the current desire for retailer expansion as the strongest since before the GFC, driven by the store's role as an omnichannel hub. He noted that while labor shortages have not been a major topic in discussions, the primary challenges for development remain liquidity constraints and high construction costs.

Spenser Allaway of Green Street asked about retailer demand for new store development given the current macro environment and whether labor shortages are becoming a significant concern in development discussions.

Answer

CEO Joey Agree reported that retailer demand for new stores is the highest it's been since before the GFC, as the physical store is now viewed as the hub of omnichannel strategy. He noted that labor shortages have not been a major topic of discussion, with the primary development challenges being construction costs and financing constraints.

Spencer Allaway from Green Street asked for details on the 24 disposed assets, including geography and rent levels relative to the portfolio average, and if there were many more Life Storage assets fitting disposition criteria. He also inquired about the current on-site personnel and regional manager headcount, and the company's comfort with these levels.

Answer

CEO Joseph Margolis stated the disposed assets had a concentration in Florida and the Gulf Coast, with lower rent levels than the portfolio average, and while more Life Storage assets might be disposed of, this was the largest chunk. He noted the company has about 1.4 full-time employees per store, varying by location, and uses technology to improve efficiency. He emphasized maintaining store managers as long as customers choose to interact in-store, balancing expense efficiency with protecting the revenue stream.

Spencer Allaway from Green Street asked for details on the 24 disposition assets, including geography and rent levels relative to the portfolio average, and whether more Life Storage assets fit the disposition criteria. He also inquired about current on-site personnel and regional manager headcount, and the company's comfort with the headcount for the near term.

Answer

CEO Joseph Margolis stated that the disposed assets had lower rent levels and were concentrated in Florida and the Gulf Coast, confirming more Life Storage assets might be disposed of but not in such large portfolios. He detailed on-site staffing at about 1.4 full-time employees per store, emphasizing the strategic importance of maintaining staff to protect revenue and meet customer needs, despite ongoing technology-driven efficiency efforts.

Spenser Allaway of Green Street asked if the self-storage sector's perceived resilience during economic downturns has led to an increase in capital looking to enter the space in recent months.

Answer

CEO Joseph Margolis responded that while there has been a long-term increase in institutional capital interest, he hasn't seen a recent acceleration. He noted that activity with joint venture partners was busier in 2021-2022 than it is currently, but substantial capital remains interested in the sector.

Spenser Allaway requested the cap rates on acquisitions closed during the quarter and asked about the total costs incurred to date for rebranding the legacy Life Storage assets.

Answer

CEO Joseph Margolis provided yields on deals approved year-to-date, including low 5% first-year yields for wholly-owned assets and 10% for JV deals. He stated that rebranding costs to-date are modest, with a total expected cost of around $117 million. Executive P. Stubbs added that the original merger underwriting had assumed $90 million for these costs.

Spenser Allaway of Green Street Advisors, LLC questioned the drivers of underperformance in Texas markets and asked about any setbacks or surprises related to costs or labor for the two development projects in process.

Answer

CEO Christopher Marr noted that Texas markets like Austin are showing signs of recovery, while Dallas faces challenges from both supply and competitor pricing. He expressed overall optimism about stabilization. CFO Timothy Martin confirmed there have been no significant surprises or setbacks on the development projects, as they were timed fortunately to avoid recent volatility in raw material costs.

Spenser Allaway asked for an update on how move-in rents were trending in the first quarter of 2025 and for color on the broader transaction market, including deal mix and activity levels.

Answer

President and CEO Christopher Marr clarified that the year-over-year negative gap on move-in rents improved from an average of -10.3% in Q4 to around -7.4% recently. CFO Tim Martin addressed the transaction market, stating it's still in a 'price discovery' phase with mixed signals from brokers. He noted that activity is seasonally slow and many potential sellers are waiting for more clarity on the interest rate environment.

Spenser Allaway from Green Street asked for additional details on why the transaction market has become more constructive and requested quantification of the compression in the bid-ask spread.

Answer

CFO Timothy Martin explained that the acquisition environment is more constructive due to an increase in the quality of available assets and a narrowing of the bid-ask spread between buyers and sellers. He noted that while the environment feels much better compared to the lack of activity over the last 18 months, he declined to quantify the exact spread, emphasizing that the focus is on finding high-quality opportunities where the spread is zero.

Spenser Allaway of Green Street asked about existing tenants' appetite for growth amid economic volatility and whether any changes have been observed in tenant rent coverages due to tariffs or shifts in consumer spending.

Answer

CEO Stephen Horn reported that while tenants are re-evaluating growth plans, the Q2 deal pipeline remains solid, and he shared positive anecdotes from the car wash and auto service sectors. CFO Vincent Chao added that with 85% of ABR from service and non-discretionary tenants, the portfolio is relatively insulated from tariff impacts and that rent coverages have remained stable.

Spenser Allaway asked about the transaction market, specifically the mix of portfolio deals versus one-off transactions in recent activity. She also questioned if there were any changes to the credit loss assumptions being underwritten for 2025.

Answer

CEO Stephen Horn stated that large-scale portfolios have been scarce, with 80% of Q4 deal flow coming from relationship-based transactions. CFO Kevin Habicht added that the 2025 credit loss assumption is 60 basis points, lower than the historical 100 basis points, as the major issues with Badcock and Frisch's are already accounted for separately and no other tenants pose an immediate, significant risk.

Spenser Allaway inquired about the current state of the transaction market, asking how Q4 deal flow compares to historical norms and about the level of competition for assets outside of NNN's relationship network. She also requested details on the nine properties sold during the quarter, specifically their industry and the cap rate on the occupied assets.

Answer

Executive Stephen Horn noted that sellers are returning to the market, increasing the average transaction size. He described the market as highly competitive, with some private money entering, but affirmed that it doesn't significantly impact NNN's focus on smaller deals. Regarding dispositions, he explained the sales, which included five vacant properties, were primarily to clean up the portfolio, involving some urgent care and auto auction assets, with the occupied properties selling at a 4.4% cap rate.

Spenser Allaway inquired about potential risks from input costs and labor for capital projects, and asked for commentary on the competitive landscape for net lease investments in the U.S. and Europe.

Answer

Head of Asset Management Brooks Gordon confirmed there is minimal risk on capital projects, as most are under guaranteed maximum price contracts, and they have seen no labor disruptions. CEO Jason Fox described the U.S. net lease market as consistently competitive, though WPC's all-cash buying capability is an advantage. He noted that Europe remains a less competitive environment.

Spenser Allaway inquired about the marketing status of the self-storage assets earmarked for sale and the perceived depth of the buyer pool given current sector headwinds.

Answer

CEO Jason Fox stated that the assets are in a 'pre-marketing' phase to determine the optimal sales strategy, whether as a single portfolio or multiple smaller ones. While acknowledging the storage sector is not as robust as in the past, he expressed confidence in achieving the company's target of a ~100 basis point positive spread between the asset sales and new investments.

Spenser Allaway inquired about the assets included in the updated disposition guidance and asked for more detail on the increased competition, including its geographic and property-type focus.

Answer

Head of Asset Management Brooks Gordon clarified that the disposition guidance change was minor, reflecting only a timing shift of one asset into 2024, and that potential Hellweg sales are being considered for 2025. CEO Jason Fox specified that increased competition is mainly in the U.S. industrial market from private equity funds, while competition in Europe remains thinner.

Spenser Allaway of Green Street Advisors inquired about the potential impact of tariffs on tenant health and whether the observed decrease in competition was consistent across all of Essential Properties' target industries.

Answer

CEO Peter Mavoides stated that tariffs are expected to have a minimal, tangential impact due to the portfolio's 93% service and experience-based tenancy. He also clarified that competition is more pronounced for larger transactions and well-known credits, while the company's focus on smaller, granular deals with mid-sized operators faces less competitive pressure.

Spenser Allaway asked which industries are showing the most activity for new unit expansion within the acquisition pipeline. She also inquired if opportunistic dispositions are from a pre-identified list of assets or handled on an ad hoc basis.

Answer

Executive Max Jenkins responded that pipeline activity, including new unit growth and M&A, is ratably spread across industries and consistent with historical trends. CEO Peter Mavoides clarified that dispositions are not ad hoc responses to inbound calls but are driven by a deliberate risk management process where they identify assets whose risk profile they no longer like. They then typically run a competitive process to sell those assets rather than responding to unsolicited offers.

Spenser Allaway asked about the new tenant relationships formed in the quarter and whether the company's current headcount is sufficient to manage its growing asset base and deal flow.

Answer

CEO Peter Mavoides explained that sourcing new relationships is a core part of the business model, aiming for an 80/20 mix of recurring to new business to fuel growth. He confirmed that the company is constantly hiring, training, and investing in its infrastructure to manage a larger portfolio, a dynamic process reflected in the G&A guidance.

Spenser Allaway asked for details on the composition of the disposition guidance and the buyer pool for those assets. She also inquired about BNL's stance on providing CapEx or tenant improvements for re-tenanting vacant spaces and asked for an update on portfolio-wide rent coverage trends.

Answer

CEO John Moragne said the disposition guidance includes remaining clinical healthcare assets, potential office pruning, and other opportunistic sales. The buyer pool varies from 1031 investors to large institutions depending on asset size. He confirmed BNL is open to providing CapEx for re-tenanting, evaluating each case on its economics. For rent coverage, he noted it has been consistent, with the restaurant portfolio stable at 3.3x, and the watch list has not materially changed.

Asked about the composition of planned dispositions, the approach to re-tenanting costs, and general tenant health metrics.

Answer

Dispositions will consist of remaining clinical assets, some office, and opportunistic sales, with a varied buyer pool. The company is open to providing CapEx/TIs for re-tenanting based on deal economics. Tenant health and rent coverage (3.3x for restaurants) have remained consistent.

Spenser Allaway asked for details on the assets included in the 2025 disposition guidance and the nature of the buyer pool. She also inquired about BNL's stance on providing CapEx for re-tenanting vacant spaces and requested an update on portfolio-wide rent coverage trends.

Answer

CEO John Moragne explained the disposition guidance includes remaining clinical assets, potential office pruning, and other opportunistic sales, with a buyer pool that varies from 1031 investors to institutions. He confirmed BNL is open to funding TIs and CapEx based on deal economics. For tenant health, he noted the restaurant rent coverage remains consistent at 3.3x and the overall watchlist has not materially changed.

Spenser Allaway of Green Street Advisors inquired about the operational impact of the new private fund, specifically on team time allocation and potential headcount changes. She also asked for an update on the competitive landscape in the U.S. and Europe.

Answer

CEO Sumit Roy stated that the fund will leverage the company's existing scale and platform, requiring very little incremental personnel. He noted the 465-person team, including investment, asset management, and legal, is fully staffed to handle the additional business, with new costs limited to a fund manager and a specialized IR function. Regarding competition, he described the U.S. market as crowded, while Europe is less intense but seeing more competition from private capital.

Spencer Allaway from Green Street inquired about the depth of the buyer pool for potential education portfolio sales and asked about the fungibility and underlying real estate value of the company's Topgolf assets.

Answer

CEO Gregory Silvers and CIO Gregory Zimmerman characterized the buyer pool for education assets as 'fairly deep,' with interest from a wide range of public and private players. Regarding Topgolf, Mr. Silvers highlighted that their assets are on large parcels in major metro areas and that the market for such properties is robust, citing historical sales of similar assets at strong valuations with cap rates in the low 7% range or below.