Dave Cramer: Yes, Eric. Thanks for joining. Good question. You know we certainly have seen the new starts slow considerably and for a variety of reasons, headwinds and interest rate, uncertainty in outlook on what the future is as far as revenue growth and fill rates look like, availability of capital. There is still headwinds around getting contractors and everybody lined up and getting approvals going and so as a whole nationwide, we’ve seen you know new construction starts certainly slow and we’ve seen proposed projects maybe stall or take longer or maybe not even pellet all. You know I think the markets that we still feel the most pressure is one – some of the ones we called out, Phoenix, Las Vegas around parts of Atlanta, where these starts were – had been started and are finishing up now or there are still a few new starts in those markets.
And so I would generalize it in probably more of our major markets is where we’ve seen the most competitive pressure and our secondary markets, not as much.
Eric Luebchow: Yes, that’s helpful. Thank you. And just to follow up on the asset disposition topic, I guess how do you think about the various use of those potential proceeds between you know repaying debt, additional M&A or repurchasing additional stock and as you look at the attractiveness of those, you – should we think about you know FFO per share accretion or how it impacts your longer-term same-store growth. Just maybe some color on how you assess the attractiveness of those various dispositions? Thank you.
Brandon Togashi: I think, Eric all the things you mentioned are potentials for how we would use the proceeds. I mean, certainly we’ve got amounts drawn on the revolver. So most immediately, we would use the funds to reduce that and which is carrying a pretty healthy interest rate cost. Today, I spoke to you know share repurchases earlier. We’d have to refresh or stand up a new program. But that that remains a possibility. And then we do want to position ourselves to grow externally again. And you know that’s not going to happen in mass and so there is a rebalance in terms of cost of capital and cap rates. But when that happens, we certainly want to be ready to go. And so all those things are what we’re trying to position ourselves for.
I think the assets that we’ve identified that Dave spoke to earlier, they are generally of the type that are probably going to you know slightly improve our occupancy profile, slightly improve our NOI margin profile once they are no longer part of the portfolio. Not tremendous amount but it will still improve the quality of the existing portfolio and that’s certainly you know a clear intent of these strategies.
Eric Luebchow: Thank you.
Dave Cramer: Thank you.
Operator: Our next question is from Ki Bin Kim with Truist Securities. Please proceed.
Ki Bin Kim: Thanks, good morning. Good morning. So I was curious, eventually, we’re going to hit you know occupancy being flat and street rates being flat at some point. Is there a scenario as we get to that point that same-store revenue could still be negative? Just because even though your ECRI program is doing what it’s doing, you know, you still have that – the cost to release those customers that left at higher rents.
Dave Cramer: So it’s a good question, Ki Bin and thanks, you know, thanks for joining. Maybe there could be a scenario like that. Certainly what we’re seeing also is a compression of the rent roll down. And so I also think we’ve hit the peak of our rent roll downs. And so as occupancy, the spread in occupancy becomes tighter as our street rates level out and you know what we’re turning over time is longer term tenants that have that that longer you know rent roll down implication. We’re starting to see that roll down tighten because we’re turning over people who’ve been with us six months or people who have been with us nine months, who have been on a little bit less of a street rate entry level. And so that first ECRI is making up for that, you know that compression around that rent roll-down. So I would not expect it to be long if it did that just be my personal take on that. But there could be a situation.
Ki Bin Kim: And what is the rent roll-down in 3Q?
Dave Cramer: So the rent roll down in 3Q was at about 18% on average almost 19%. It peaked in September ’23, Ki Bin, so you can always, its – it started in the third quarter much closer to around 14% and finished up about 23% and then in October, it’s fallen off. So, like we said with street rate gap, and occupancy gap, we think you know September was probably the peak.
Ki Bin Kim: And last question from me, your store payroll costs have been pretty flattish sequentially. Just curious as you look forward, you know what kind of growth in expenses should we expect from that line?
Dave Cramer: Probably a little tougher line of sight there. You know we’ve done a lot around store initiatives and use of technology and store operating hours and headcount and so the teams have done a wonderful job really working towards the new staffing model and it’s still evolving. We’ve had some good success. And what we’ve really been doing is not refilling. We’ve been doing it through attrition and we’ve been doing it as opportunistically as we can. There’s you know, we’ve had two, so actually three really good years of payroll set, control and payroll expense. You know, looking forward, we think there’s a little bit more around head count that we work on it. And I think that the true test for us is going to store operating hours, just when do we have to be there, when this consumer not needed to be there.
How can we use technology to supplement that? So again, I think maybe on our next call, when we’re talking about 2024, we might have a little more color around that for you.
