So, as you think about our payroll model that we’ve been working on about staffing hours and reduction of staffing hours and having satellite properties and remote properties, the customer service centers really become an important piece, so that the consumer can deal with this digitally, they can deal with this over the phone. And so, the new operating platform we stood up in the fourth quarter allows all of this customer service center seamless integration to all of the platforms and it really helps us conduct business remotely. And so, yes, it’s I look at what the team went through in the back half of the year with the strategic initiatives, but it’s not to be underscored how much of a lift it was to get the technology pieces in place. And I’m proud of them and looking back on it a year or two from now, we’re going to be really, really happy with what we completed.
Eric Luebchow: And just one follow-up, I know you touched on a little bit on the ECRI program. I believe you’ve said in some previous periods that kind of the average increase was somewhere in the 13% to 15% range across your portfolio. Just wondering are you having success especially for some of the lower rent customers over the last year pushing a much higher magnitude rate increase earlier in the cycle and then perhaps slightly lower rate increases for your longer tenured customers or how do we kind of think about that dynamic embedded in your guide? Thanks.
Dave Cramer: I think you’re thinking about it the right way. We are learning particularly on the new entries that we can certainly push harder and as you work your way farther through the lifecycle, maybe it’s less of a frequency or less of an impact of a rate increase. But yes, the technology is certainly teaching us to be we can have a little different approach to newer customers given today’s environment too where they are coming in at a pretty discounted rate. If you think about environment, we certainly are being a little more impactful on that first-rate increase.
Operator: [Operator Instructions]. Our next question is from Michael Goldsmith with UBS. Please proceed.
Michael Goldsmith: Dave, you mentioned earlier that in February move ins were up, move outs were down making it a net rental month. What does your data or your surveys show that’s driving improvement? What’s the thesis behind the improvement in February?
Dave Cramer: It’s a good question. Our surveying is actually showing a little bit more tenants moving a little bit. Now maybe they’re moving an apartment to apartment and maybe not to house to house, but we did see a little more uptick in people who are moving. And so that’s encouraging. And that’s just on exit surveys, Michael, as we pull customers coming and going new rentals and people who are moving out. And so that’s encouraging because I think that’s really the larger part of our business that’s missing right now and the demand factor is around that transition. The rest of the metrics, really not a whole lot of change about what we’re serving. I would say that’s probably the point that we saw a little more positive impact on.
Michael Goldsmith: And Brandon, just thinking about the asset sales, the facilities that you sold tend to have lower revenue growth, lower margin profiles in the core portfolio. Is there any framework to think about how the, what sort of benefit you’ll see without these facilities in your portfolio, for example, right, you sold 70 properties, that’s about 10% of the same-store portfolio and if they were growing 250 basis points slower, it should be about a 25-basis point benefit to same-store revenue growth? Is there any way to kind of frame that out on the impact on the whole portfolio? Thanks.
Brandon Togashi: Yes, Michael. So, I think the best way for me to give you a sense is just some of those assets we obviously completed the sale in the fourth quarter. So, I don’t have like a full year of numbers for those properties. Others were held for sale and I do. But I know when I looked at it through 9.30 for example, like the nine months here to date and our old same-store pool was 834 stores. And then as you saw, we revised that down to 724. That did help the improvement the performance of that remaining 724 stores, it wasn’t numbers that are going to knock you out of your seat. It was maybe 10 basis points on revenue, maybe 20 basis points on NOI where that growth profile of the remaining 724 was better than the 834 that still had the blended effect of assets that we have now sold.
So, I think it’s modestly better in that regard. Obviously, we talked earlier on the call about the NOI margin, that’s a more meaningful impact. And then I think it also just hits on some of the other things that Dave remarked on. I mean, there’s just a lot of operational efficiencies in terms of where those assets are located and just in markets where we didn’t have a tremendous amount of scale. And so, there is a lot of benefit that you maybe don’t quite see in the numbers I just cited, but from running the portfolio, running our regions and divisions, there’s a lot of efficiencies there.
Operator: Our next question is from Ronald Kamdem with Morgan Stanley. Please proceed.
Unidentified Analyst: It’s Jenny on for Ron. I just have a few quick questions. First is, would you mind sharing the exact occupancy and the street rates year-over-year change as of today? I know you have a few hours to finish February, but curious about that.
Brandon Togashi: So, Jenny, on occupancy, yes, we don’t want to really speak too much about February just because there is some movement towards the last few days of the month. But in my opening remarks, I mentioned that the spot occupancy at the end of January was 390 basis points down over prior year that has tightened a little bit in February. I think we’re going to probably closer to 380 basis points just on based on the last few days have looked year-over-year. So that goes hand in hand with what Dave said earlier about February having some optimistic read-throughs. And then street rate, I don’t have in front of me on February, but Dave if you do.
Dave Cramer: Yes, I mean the street rate itself, as we talked about, we came out of street rates down about 10.5% in the fourth quarter. Street rates in February were similar to same, street rates have gotten maybe a 0.5 a little bit worse compared to where they were a year ago, so maybe closer to 12%, 12.5% down year-over-year. And I think largely that’s because we are testing some markets around, can we by improving our rate, can we drive some better occupancy and trying to figure out a better revenue model. So, a little deterioration in year-over-year street rate.
Unidentified Analyst: And how should I think about the pricing power this upcoming peak leasing season where this last year in those specific market?
Dave Cramer: I think we all approached last year thinking we could raise street rates and have an occupancy lift and I think in our markets, we’ve lifted street rates and we saw no change in occupancy. I think we’re going to be probably a little more cautious around the street rate lift and see what we can drive in occupancy as we go through the first couple of months of the spring leasing season. It also really market by market, store by store, it compares on what the competitive set looks like. There’s certainly things we can’t control and if it remains very competitive, then we will not be able to drive any type of street rate lift. If we think the competitive sets are moving up, we’ll move up with them.
Unidentified Analyst: I’ll kind of just squeeze another one. Just on asset sale front, like do you plan to sell like additional batch of assets in ’24, like after this one to recycle some capital or that’s not something in your mind?
Dave Cramer: I certainly think we’re not done looking at the portfolio optimization. I don’t think the large lift is over and so now I think it’s going to be a little more selective. It may not come in chunks. It may just be singles, ones and twos or maybe some doubles here, but probably not large chunks at this point.
Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to George Hoglund for closing remarks.
George Hoglund: Thank you all for your continued interest in NSA. We’re excited about the opportunities that lie ahead and our current position to be able to take advantage of those opportunities. We look forward to seeing many of you next week in Florida.
Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.
