Joe Shoen: Well, it’s kind of a red state, blue state analysis about the long and short of it, probably, I think we’re probably the same as every other business that restaurants will tell you the same thing. So where we have – let’s just take Tennessee help, Tennessee is just a wonderful place to do business today. And that just what just what it is and I think everybody sees that and we’ll see how it goes. We kind of end up reflecting it. So you see someplace like Tennessee and you think, well, good, let’s push ahead. But we don’t always get opportunities, don’t always present themselves only in the better markets. I also am seeing a lot of – we’re going back through and sorting back at a very detailed level.
Where do we have the equipment, where do we have the outlet? And population is still shifting in this country, not like it did during the pandemic, but people are moving around. And as you know, there’s a tremendous amount of inborn migration. And these people are creating new – basically new pockets of manatee, or whatever you want to call it. And so we need to keep adjusting our basis to market to those people. We largely do that in the initial phases with our independent dealers because they’re in that market running a landscaping business or something else. And so they make a good combination with U-Haul. But then we’ll start to, as those communities become a little more established, we may go ahead and put a company operation in that area.
So other than just saying, which nobody wants to hear, red state, blue state, I would just say it’s communities growing that maybe we weren’t aware of last year. I get my best information from what we call our local traffic. We have 200 traffic offices across the country and the people there see trends first. They see them and they try to alert us and say, well, this looks like it’s going to go positive. Of course, Florida has done great. Texas has done great. I mean it’s about what you’d think. I would like to say that we had some marketing initiative that was catching fire and I don’t think we have a particular, if we do, I’m not aware of it. I guess what I’d say other than equipment distribution with us, it’s so important to have the equipment where and when the customer wants it.
So just because we own the equipment doesn’t mean it corresponds to where demand is. So we have a big operation trying to get that constantly trying to get it better. And it’s a constantly moving target because next week we’ll have tens of thousands of trucks in a different spot than they were this week. So you’re constantly trying to re-optimize that.
Keegan Carl: Maybe just shifting gears to storage here. I guess, big picture, are you seeing any change in your average length of stay? And I know rate increases that are being sent out are obviously topical in the storage industry. I’m just curious, are you seeing any change in how customers are reacting to the rate increases you’re sending out?
Joe Shoen: I’ll say – I’ll address the rate increases. We continue to send rate increases. That’s not what’s going on in the industry we have now is rate slicing 50% off and more. And that’s unsettled the customer because they want to know why store competitor X is half our price. Well, they’re half our price because they’re going to jack you so hard 90 days from now your head’s going to spin. We don’t do that to people. We consider it anti-consumer activity and we think it’s destructive of the industry. But everybody has their own view of that. So whipsawing rates, you’re making a rate change more than 5%. I – you’d have to explain to me why something was wrong with your original pricing. The – just that’s my feedback. And so you’ll see us typically we’re doing, I think we did 3%. Is that about what our asking rate is now?
Jason Berg: Over the whole portfolio.
Joe Shoen: Over the whole portfolio. So the storage market is tighter by far than it was two years ago, by far. And so you’re having to look to your knitting. Well, that’s kind of our game. I like to believe. I like to believe when that comes up. We start to dig in and it energizes us. And so that’s what we’re attempting to do, offer a better overall experience for the customer, but not necessarily by slashing pricing. Maybe we could increase value. We were – we push value real hard.
Jason Berg: And Keegan, hi, this is Jason. I haven’t seen any dramatic shifts in the average stay.
Keegan Carl: Really helpful. And then last one for me. I guess this is another big picture question. Obviously, you guys have a lot of excess liquidity in your balance sheet in the form of cash. I guess I’m just curious how we should think about the utilization of that. Especially if you take a look, the forward rate curve, it’s coming down, the interest income won’t be as favorable. So just kind of curious where your heads are at on cash utilization.
Jason Berg: Well, this is Jason. We’ve worked it down, give or take, close to $1 billion here from like say a year ago January till now. So we’re all about getting that reinvested back into self-storage. I would say that right now we have somewhere close to or north of $1.6 billion in assets that, that would include cost of acquisition and construction put into them so far that are either haven’t opened or not fully opened or have additional phases remaining. So I wouldn’t call them fully realized yet. So there’s quite a bit going on there. We’ve kind of been sitting out on the real estate financing side. So we do have the ability to raise quite a bit of cash at some point if we need to. But as you can see, we’re not doing that right now.
Keegan Carl: Great. That’s it for me. Thanks for the time, guys.
Operator: Our next question comes from the line of Jamie Wilen from Wilen Management. Please go ahead.
Jamie Wilen: Hey, fellas. Joe, you’ve always said that the fleet utilization for the trucks is one of the most important metrics you look at with transactions being, let’s say, relatively flat I mean, I realize you have to upgrade the fleet to better and better units all the time, but why are we increasing the size of our fleet while transactions are flat, if we’re trying to raise that fleet utilization percentage.
Joe Shoen: It’s really because our deletions haven’t quite [indiscernible] so in other words, this is all what goes in the top and what goes out the bottom. We have some stuff at the bottom that still needs to come out, some of just grounding. We believe it’s better to rent a different truck pending sale of course, that doesn’t put a big smile on Jason face because we’re – but until we can sell for them, that’s kind of what happens now. At the same time, we’ve down fleet our pickup fleet, maybe 2,300, 2,500. Jason, do you know where we are exactly?
Jason Berg: Yes. The tolerant end of our fleet, mostly pickups some vans is down close to 4,000 units.
Joe Shoen: Yes. If you do vans and pickups, we’re down almost 4,000 units. And I think that’s our – we can most readily respond to. It’s a more liquid resale market. Most of those trucks go to the auction and through dealers and such. And so that’s a much bigger market. The van trucks are typically we retail it ourselves. So it’s not going some auction where you can clear 50 trucks in a day. They kind of go out dribs and drabs. And since we stopped selling during the pandemic, we kind of turned off the faucet with buyers and buyers, other sellers or whatever buyers do. So in the last 12, 13 months, we’ve tried to get that upcoming on, but its coming on slower than we expected. So I don’t – I think when we calculate utilization, you correct me, Jason. I believe we calculate all trucks.
Jason Berg: If it’s actually in the – those aren’t included.
Joe Shoen: Right. But if its…
Jason Berg: But you haven’t actually classified them and waters it down.
Joe Shoen: Then waters down. So I think we’re – you’re right, we have too many trucks. But I think it’s because they’re not sold yet, not because we have bought too many and we’re still buying license plate. But a bunch of this equipment more or less pending got you sale and that’s where it shouldn’t be in the rental.
Jamie Wilen: Right. Your fleet maintenance expenditures have declined a bit. Are you seeing any difference in the quality of the vehicles that you own that, that would give you any inclination that fleet maintenance and repair will not be a rising figure moving forward?
