Joe Russell: And just again to bolt on the comment, Ron, that we made in other questions. Again, very, very little competitive new supply. It’s one of the most difficult markets to either, a, find land sites and work through entitlement processes, et cetera. Uniquely, though, it’s the market at the moment, we have the most development activity nationally in. So we uniquely are finding some interesting opportunities to expand our portfolio right here in Southern California. And to Tom’s point, we’re still seeing very consistent and good levels of activity.
Ronald Kamdem: And then my second one was just a follow-up on the marketing spend question. Is it fair to say it’s at the highest level in five years as a percentage of revenue, as number one? And then can you talk about the breakout of that marketing spend inflation between just cost per click going up versus just more marketing being done, if that makes sense?
Tom Boyle: So a couple of questions, components there. So the first quarter and fourth quarter, we tend to see higher percents of revenue as we think about supporting demand in quarters where we have seasonally more inventory to rent, and we get good returns in those quarters to do that. And then we typically see the second and third quarter marketing spend come down a little bit as a percentage of revenue. As you look at the quarter, yes, it was probably pretty consistent with some quarters we had back in 2018, 2019, maybe a touch under what some of them were, but a comfortable range as we think about the level of marketing support that we’re providing the stores. As I mentioned on a previous question, that’s dynamically managed around local demand trends and supporting the business.
But I would anticipate from an absolute percentage of revenue that’s likely to decline in the next couple of quarters like it did last year before coming up again in the fourth quarter to support higher inventory levels at the lower levels of occupancy we experienced in the fourth quarter.
Operator: Our next question is from Caitlin Burrows with Goldman Sachs.
Caitlin Burrows: Maybe just on acquisitions. It looks like subsequent to the quarter end, you had $34.6 million in acquisitions. So just wondering if you could talk about how these properties came about, were they for separate deals, what type of seller?
Joe Russell: Yes, individual sellers, Caitlin, small or deal-by-deal opportunities. As typically we see there’s a range of different seller types that were in dialogue very actively. So these were, again, individual owners. I would tell you, as I mentioned earlier, we continue to have a whole range of different conversations with different owner types, whether family owners, individual owners, institutional owners. But again, the deals that we’ve got either closed or under contract or just that very one-offs, smaller assets that fit well into certain markets that we’re certainly interested in growing scale, et cetera.
Caitlin Burrows: And then maybe just one on the move-in, move-out spread, it looks like it’s flattened a bit. So do you have a view on whether we’ve hit the trough of that spread given where the move-out rates and move-in rates are at this point, and I guess, expectation going forward?
Tom Boyle: We would anticipate, Catlin that, that spread does narrow in the second and third quarters seasonally before widening out again in the fourth quarter. So not dissimilar from a seasonal trend standpoint to what I was speaking to related to advertising.
Operator: Our next question comes from Ki Bin Kim with Truist Securities.
Ki Bin Kim: So I’m not sure if I missed it or not. But did you give an update on April move-in rate trends?
Tom Boyle: I did, Ki Bin.
Ki Bin Kim: I’ll just go back in the transcript. When you look at the year-to-date changes in sequential rents, how does that compare to what you would consider a normal seasonal pattern, has been better or worse?
Tom Boyle: I’d say on a year-over-year basis, it’s been pretty consistent, touch better than last year, which is what we’d anticipate. And obviously, we’re anticipating that likely to continue here through the peak leasing season. We’ll update you on that as we move through the next three months or so.
Ki Bin Kim: And on your CapEx, you have $150 million for the Property of Tomorrow program that’s supposed to wind down next year. But just trying to get a better sense of it. I mean does it go to zero, or is there a certain level that you might have to keep for a longer time?
Tom Boyle: No, it’s going to go to zero. Probably some of the cash payments on the cash flow statement will continue into the first quarter or so of next year just as we wrap up the program and make our final payments. But ultimately, that will go to zero.
Operator: Our next question comes from Tayo Okusanya with Deutsche Bank.
Tayo Okusanya: Just given some of your comments around improving trends in more markets. Could you talk a little bit kind of January, February, March, specifically around street rates kind of on a year-over-year basis, how that was improving throughout the quarter? Like do we kind of sort of like more negative 15 and now we’re like a negative 10 and heading towards zero that’s kind of embedded in some of your guidance going forward?
Tom Boyle: So there’s kind of two parts to that question, one is the accelerating markets. And those accelerated markets are driven by a whole host of things and not just individually move in rents, right? But as we think about that, we highlighted on the previous call two or three markets that were accelerating at the time we were sitting there in February, and we added a handful of markets to that. So we’re definitely seeing improving trends across that group of markets. I think your next question was just sequentially as we think about year-over-year declines in move-in rents. And on the February call, I had highlighted that January, February move-in rates were down in the 10% or 11% ZIP code, and we finished the quarter and had April right around that same sort of level.
Obviously, there’s periods of time where it’s a little bit better than that, periods of time where we’re lowering rates to drive move-in volume. So it’s been relatively consistent, which is what you’d anticipate really through the first part of the year, because you’re at the trough point of rents. And as I noted, we’re at the point of the year now where we are raising rents now and that’s when we’re likely to see some changing activity as it relates to those trends as we’ve discussed in our outlook.
Tayo Okusanya: And then for ECRI increases, are they also kind of consistent versus what we’ve been seeing in recent quarters?
Tom Boyle: Yes, pretty consistent in terms of trends with the exception of what I highlighted earlier around more newer tenants added to the program, given that strong move-in volumes last year.
Operator: Our next question is from Mike Mueller with JPMorgan.
