So, no real impact to FFO, but certainly drove incremental. And then if you think about that interest and other income line, right, you are just doing some simple math, $2.2 billion in cash and sitting on it earning a little over 5%. I think we get the numbers for 50 days of about a $15 million benefit during the quarter. So, you could think about that as not recurring. We won’t be sitting on that $2.2 billion of cash in the fourth quarter.
Keegan Carl: Got it. Thanks for the time guys and Happy Halloween.
Tom Boyle: Thanks Keegan.
Joe Russell: Thank you.
Tom Boyle: Happy Halloween.
Operator: Our next question comes from Ron Kamdem with Morgan Stanley. Please proceed with your question.
Ron Kamdem: Hey. Just two quick ones. I think you guys were one of the first this year to talk about the potential of same-store revenue to go negative. And obviously, the guidance in 4Q implies that it does that and I think we could sort of use your wisdom as we are thinking about sort of next year. If I go back to that move-in, move-out spread down 26% in 3Q, which got a little bit worse, it sort of suggests that, that things are still sort of decelerating. So, the question really is, like as we are thinking about next year, is it occupancy response, is it length of stay, like what sort of factors should we be watching to get a sense of the direction of the same-store trend into next year?
Tom Boyle: Well, Ron, I think there is a few things there that I will pick out and comment on. One is, certainly, we started 2023 at a point of particular strength and rents were significantly higher. I have commented on some of the positives and negatives that have played through this year. But no question, growth rates have moderated through the year. Commented on move-in rates, in particular, have been softer than expected. And I think that’s certainly the case as we move through the third quarter and the fourth quarter here. Going into 2024, I am not going to speak to specifics, but one of the things that we spent a good bit of time on earlier in the year talking about this year was that comps eased in the second half because the environment started to change last year.
And I would suggest that, that’s not just a second half of 2023 thing. It’s also into 2024 as we work through a demand environment that softened through 2023 as well as move-in rents that declined through 2023. And so for the same reasons that we discussed moderation and deceleration are easy comps in the second half of 2023, maybe we haven’t seen that as much as we initially envisioned, but we have also seen the levels of performance of the existing tenants make up some of that rental rate comp dynamic. But we are still, to your point, looking at negative same-store revenue growth at the midpoint in the fourth quarter, to your point, we were highlighting that in February. Our outlook for the fourth quarter has gotten better as we move through the year.
I think the midpoint now is down 50 basis points in same-store revenue. So, almost there at flat, which is frankly an improvement from where we were sitting starting the year. And to your point on 2024, I think I probably said as much as I should. And we will be providing a good bit more detail in February on the assumptions and fresh guidance for the year.
Ron Kamdem: Great. And then my second question was just going back to the supply question, but instead of just like the macro forecast, do you guys have a sense of how much of the portfolio is actually competing directly with new supply high level? Is it a quarter? Is it half? Just trying to get a sense of the range of the actual assets that are competing with new supply. Thanks.
Joe Russell: Yes. That’s going to vary, Ron, market-to-market. There is a whole spectrum. As I mentioned, our largest market, being here in Southern California, almost no new supply to speak to other parts of the country that are well known to be the tougher markets to develop into have same and similar dynamics. I mentioned on the other end of the spectrum, we are keeping a close eye on the amount of deliveries that are playing through in Phoenix and Las Vegas. But frankly, it goes right down to a very submarket impact. And I would say it’s less than and continuing to shrink below the lower number you pointed to, i.e., whether it’s 20% or lower, it’s definitely a factor below that. And I think we will continue to shrink, which as I mentioned earlier, is a very good thing for the industry as a whole.
Ron Kamdem: Thanks so much.
Joe Russell: Thank you.
Operator: Our next question is from Caitlin Burrows with Goldman Sachs. Please proceed with your question.
Caitlin Burrows: Hi. Just a couple of quick follow-ups. I think I was wondering, I know the Simply Storage deal is still pretty fresh. But wondering if you could go through whether you have started to realize any synergies and/or just go through the near-term strategies you are implementing?
Joe Russell: Yes, Caitlin. I mentioned in my opening comments that our goal with that portfolio, which is to-date, our largest private transaction with 127 assets coming to us. The benefit that we saw in that portfolio is it crosses 18 different states. It didn’t put any undue burden on our ops team, market-to-market. And frankly, over the last 3 years or 4 years, we have become very good at integration on a whole level of different scale market-to-market, where we have seen certain portfolios with dozens of assets, whether it was easy storage in the Washington DC market or the portfolio that we bought in Dallas-Fort Worth that again, was – again, very efficiently brought into the portfolio on a much more concentrated basis.
But this portfolio from an advantage and integration standpoint was different. It was definitely sizable and we were able to deploy many of the techniques that we have used over the last few years to integrate those assets. Now, from a data integration standpoint, again, our toolkit has become incredibly strong relative to the efficiency. As I mentioned, we pulled 90,000 customers on to our portfolio overnight. That synergy continues to play quite well now that we are in the seventh week or so of owning those assets. We were able to integrate and train 250-plus new employees that came to us from that portfolio, great additions to the platform as well. So, that opportunity from a training synergy and adaptability standpoint has gone very effectively.
And we are also leveraging many of the things we do day-in and day-out to drive margins. Again, with the scale that we have got market-to-market, the ability for us to see optimization, so we really haven’t seen any shortfalls at all. And if anything, we have been pleasantly surprised with the continued strength of that portfolio. Occupancy is holding quite well. The transition from both customers to our platform, the transition from the branding is going very effectively. We will have that finished no later at the end of the year. We see definite inherent value to transitioning what were once blue properties to orange properties. And we are very excited about what we have got ahead of us because we think that, that portfolio as a whole is very additive to the scale that we have got across the 18 states that I spoke to.
