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Greetings, and welcome to the National Storage Affiliates First Quarter 2025 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. George Hoglund, Vice President of Investor Relations for National Storage Affiliates. Thank you. You may begin.

We'd like to thank you for joining us today for the First Quarter 2025 Earnings Conference Call of National Storage Affiliates Trust. On the line with me here today are NSA's President and CEO, Dave Cramer; and CFO, Brandon Togashi. Following prepared remarks, management will accept questions from registered financial analysts. Please limit your questions to one question and one follow-up and then return to the queue if you have more questions. In addition to the press release distributed yesterday afternoon, we furnished our supplemental package with additional detail on our results, which may be found in the Investor Relations section on our website at nsastorage.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements that are subject to risks and uncertainties and represent management's estimates as of today, May 6, 2025. The company assumes no obligation to revise or update any forward-looking statements because of changing market conditions or other circumstances after the date of this conference call. The company cautions that actual results may differ materially from those projected in any forward-looking statement. For additional details concerning our forward-looking statements, please refer to our public filings with the SEC. We also encourage listeners to review the definitions and reconciliations of non-GAAP financial measures such as FFO, core FFO and net operating income contained in the supplemental information package available in the Investor Relations section on our website and in our SEC filings. I will now turn the call over to Dave.

Thanks, George, and thanks, everyone, for joining our call today. Our first quarter results were in line with our expectations, and we are pleased with the 130 basis points of sequential improvement in same-store revenue growth on a year-over-year basis. Albeit three of our reported same-store markets saw a sequential improvement in the level of revenue growth; and two of our top three markets, Portland and Houston, inflected positive in the first quarter, giving us momentum into the spring leasing season. Fee rates and contract rates have experienced sequential growth every month this year, which is encouraging. And although occupancy is a bit softer than expected, the rate growth is exceeding expectations, and we met our overall revenue goals. Our existing customer base remains healthy. We continue to be pleased with the success of our ECRI program. The length of stay remains above historical averages and the bad debt expense remains within expected ranges. Now that we've completed the PRO transition, we are laser-focused on operations and realizing the benefits from the consolidated operating platforms and upgraded marketing and pricing tools. The benefits are manifesting themselves in better search rankings to drive customers into the top of the funnel, enhance pricing algorithms to optimize rate decisions and the use of AI to optimize call flows and staffing hours. These improvements are reflected in our sequential contract rate growth and declines in personnel expenses. We are in the early stages of showing improvement and are building momentum. In fact, moving contract rates in April increased approximately 5% from the first quarter levels. Meanwhile, occupancy increased 20 basis points in April to finish the month at 83.8% occupied. The markets where we're further along in implementing these strategies, you can see the benefit. Portland is a great example of a market where we have some runway behind us and a track record of implementing our strategies and the benefits are showing. We continue to operate our marketing and revenue management efforts, leading to better results. We've been very successful with our pricing and ECRI program. Combined with the benefits of easing supply, Portland is now one of our top performers, delivering positive revenue growth in the quarter. [indiscernible] are experiencing similar trends in January 2.2% revenue growth in the quarter. Moving the acquisition environment, while there remains a steady flow of opportunities coming across our desk, with the broader economic and capital markets uncertainty, we remain disciplined. During the first quarter, we successfully closed on three assets totaling approximately $40 million. We also sold two properties totaling $10 million. Proceeds from asset sales will be used to pay down the revolver and fund future acquisitions. Our activity is picking up, and we expect to announce more transactions over the next few months. In summary, we believe we found a trough in fundamentals. We're encouraged by the trajectory of contract rents and the new supply outlook is improving. While there is plenty of noise around tariffs and economic uncertainty, so far, there's been no direct impact on our business. And I'll remind all of you that the self-storage sector has proven to be resilient through various operating environments. Lastly, there is still significant investor interest in the self-storage sector. As demonstrated by the recent successful IPO of our newest public peer, SmartStop Self Storage. I'd like to formally welcome Michael Schwartz and his team to the club. I'll now turn the call over to Brandon to discuss our financial results.

Thank you, Dave. Yesterday afternoon, we reported core FFO per share of $0.54 for the first quarter, a 10% decline from the prior year period due primarily to a decrease in same-store NOI and an increase in interest expense. For the quarter, same-store revenues declined 3%, driven by lower average occupancy of 190 basis points and a year-over-year decrease in average revenue per square foot of 1%. Expense growth was 3.7% in the first quarter. Main drivers of growth were marketing, R&M and utilities, partially offset by a decrease in personnel costs. We expect marketing to remain elevated in the near-term, given the competitive environment, whereas R&M was higher largely due to severe winter storms during the quarter, which resulted in outsized snow removal costs. Without such impact, our OpEx growth would have been below 3%. These revenue and OpEx results led to same-store NOI growth of negative 5.7%, also a sequential improvement from last quarter, which we expect to continue as we progress throughout the year. Also impacting the quarter was interest expense, which was $1 million higher due to the maturity of a swap in the beginning of February, but fixed the rate on $225 million of our revolver balance at just under 3%. Upon swap maturity, the notional amount was then subject to the spot rate, which was approximately 275 basis points higher. This resulted in a $0.01 drag on the quarter's results. Now speaking to the balance sheet. We have no maturities in 2025 and our current revolver balance is $444 million, giving us approximately $500 million of availability. As Dave referenced earlier, we expect the immediate use of near-term asset sale proceeds will pay down the revolver, which, in combination with improving fundamentals, will help to bring leverage down. Net debt-to-EBITDA was 6.9 times at quarter end. And as I discussed on our call last quarter, the recent trough in year-over-year same-store growth along with the first quarter being seasonally the weakest put additional pressure on that metric. We expect to be in the 6% to 6.5% range in the back half of the year. Now I'll conclude our opening remarks with a few comments about our reporting package. And we added some new disclosure in our supplemental this quarter. At the bottom of Schedule 7, we've provided contract rent per square foot on in-place customers and on move-ins and move-outs to provide better clarity on fundamentals and assist with modeling. With regard to guidance, it is still early in the spring leasing season, and thus, our assumptions are unchanged and are detailed in the earnings release. I'll remind everyone that the midpoint assumes a moderately better spring leasing season than last year, characterized by improving pricing power and occupancy through the summer months. The high end of our guidance range assumes a better-than-average spring leasing season, fueled by a recovery in the housing market. A low end incorporates no material improvement in the housing market with muted seasonality and pricing power. Thanks again for joining our call today. Let's now turn it back to the operator to take your questions. Operator?

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Eric Wolfe with Citi. Please proceed with your question.

Hi. Thanks for taking my questions. I think you said that the contract rates increased 5% from March and occupancy was up 20 basis points. So I was hoping you could just put that increase into perspective? Is that a very good April, normal April? And then how much were contract rates up year-over-year?

Eric, thanks for the question. I appreciate you joining the call today. Sequentially, we have seen improvement in our rate scheme throughout really the entire year. We've seen street rate improvements sequentially from January through April and into May. We did see contract rate improvement from January through April and into May as well. And so from our seat, as we look to really maximize revenue and really work on all of the tools available from occupancy to rate growth to marketing spend, we were pleased with the progress we made around contract rates. And if you notice in our new schedule, we actually provided in-place customer rate growth and move-in rate growth. And you can see we improved move-in rates sequentially throughout the first quarter and into April, and our move-in rates actually inflected positive in March, stayed positive in April and improved in April and improved again in May. And so we've had really good success around the rate program for the first part of the year. And as we planned, that's what we were really looking to do to try to drive more storage revenue and maximize the in-place customers through the ECRI program and maximize the new move-ins that we were getting with improved street rates and really focused on that.

That's helpful. And you've talked about seeing better revenue and I guess, margin opportunities for the PRO properties that you brought on to your platform. I think you previously said there was like a 260 basis point occupancy gap that you could maybe close by the end of the summer. Maybe just giving a little bit more from right now, could you just talk about where you are in the process of sort of achieving those revenue synergies?

Yes, good question. Really, the transition took place really the third and fourth quarter of last year, the majority of it taking place really in the mid-part of that third and fourth quarter. And so as you think about rebranding stores, moving stores to a new domain name, nsastorage.com, having consolidated pricing and consolidated marketing efforts, we're really starting to see the transition take place and the team is really starting to see some traction around having everything sit in one place, having a Google bid model that's in one place, having pricing in one place, marketing tools in one place. There was about a 250 to 300 basis point gap when we started the PRO transition. We really didn't expect to close that gap until mid-summer months. So I would tell you, we're making good progress. We're happy with the rate growth in those portfolios, occupancy, we're still working through, and we really look for the mid-summer months to really get the traction around the marketing spend and the website to really implement the changes around that occupancy spread.

Thank you.

Thank you. Our next question comes from the line of Samir Khanal with Bank of America. Please proceed with your question.

Good afternoon everybody. Dave, maybe tagging along the prior question, just maybe talk about sort of the ramp-up. I don't know if you can quantify kind of into the second half. I mean you guys have done minus 3% in the first quarter for revenue growth. I would assume second quarter will also be down from a revenue growth perspective, but maybe quantify how much of a pickup we'll see kind of in the back half and especially into the fourth quarter. Thanks.

Hi Samir, this is Brandon. I'll jump in on it. So as Dave said, the revenue number for same-store was in line with expectations. We hit our goal for the first quarter there. You may recall in February, when we introduced guidance, I said we would start the year on same-store NOI growth in the mid-single digits negative. So, slightly worse maybe than expectations really due to the OpEx items that I mentioned. If we didn't have some of the winter storm impact on snow removal, as well as utilities, then I think we would have been closer to that negative 5 flat on the NOI number. But you're right, the trajectory and the pace of the growth and the continued sequential improvement is definitely implied in all the ranges of our full year guidance. You are also correct that we still expect to be negative for the second quarter on both revenue and NOI year-over-year. And then we didn't get real specific because there's a lot of different things that have yet to play out, but we said at some point in the back half that it would inflect positive on revenue and then eventually NOI follows by the end of the year. When exactly that happens, that's the million-dollar question, right? And I think that's what -- we're so early in the season. We're only starting to see the early remnants of kind of what the leasing season holds for us.

And then I guess just a follow-up is, I know you guys have talked about sort of this month-to-month improvement you're seeing. I guess, how much of that is really just sort of return to seasonality versus kind of improvements in demand, right, at this point? Thanks.

Yes, good question. I think I'd answered it on a couple of fronts. Certainly, the seasonality starts to come into play here. You certainly trough usually around that February month, and then you start to pick your way up into the spring leasing season. So, activity-wise, we're starting to see more customers at the top of the funnel, more search results and seasonally, it's starting to feel improved. But I would also tell you, we really had good success really starting in the back half, really the last couple of months of last year around street rate improvement, November and December have carried that street rate improvement all the way through the first quarter and April and May, that's not typical. Typical street rates don't increase like in January and February and March. And so we had good success around street rate improvement, which led to move-in rate improvement. And then our ECRI program has remained very productive, and we've had good results around the ECRI program. So I think we're ahead of schedule on what we thought we would be on rate. Occupancy, the supply and demand pictures haven't really changed much. There's a lot of uncertainty, I think, still around with economic conditions and interest rates and mobility around the country. We did see a pick up in April in occupancy. We've seen a pickup in May so far in occupancy. But both rental volume and move-out volume are muted compared to last year, they're below last year. I would also add to that. Last year, we did grow occupancy, but what we didn't grow was revenue. We did not grow storage revenue in the first four months of last year. This year, we've grown sequentially storage revenue really in the months of March, April, and now into May. And so while the occupancy may not as pick up as strong as it did last year, our revenue has picked up stronger than what it was last year.

Thank you. That’s it for me.

Thanks Samir.

Thank you. Our next question comes from the line of Michael Goldsmith with UBS. Please proceed with your question.

Good afternoon. Thanks a lot for taking my questions. My first question is around the dynamics of street rates. You can see, it seems like street rates have shown some improvement, but occupancy took a slight step back in the first quarter. So, can you walk through the dynamics of your ability to push rents and then also bringing people in and how you expect that to play out through the spring leasing season? Thanks.

Yes, Michael, thanks for joining. Good question. Certainly, we did -- I would agree with you. We certainly had good success around improving street rates, which led to improved move-in rates. And all of that with the ECRI program led to improved contract rates sequentially for the last four or five months. So we're very pleased with the progress there. The occupancy number, obviously, we're working hard on marketing spend. We're working on top of the funnel. The programs that we implemented with that transition, having everybody in a single platform, are starting to see some traction. So, we're seeing improved velocity at the top of the funnel. But I would also say that from an expectation of the spring, nothing's really changed a lot around some of the transitory factors that is going to help us drive additional occupancy at the top. So, the team has done a really good job balancing revenue, and that's what we're trying to solve for. And so while we'd like to see more occupancy, the more we get better rate improvement, the less pressure we have on the occupancy number. And so I think we're trying to balance all of those things as we go through the spring season.

Got it. Thanks for that David. And as a follow-up, you're expecting some acquisitions and some dispositions this year. Just -- can you give us a little bit of an update on the transaction market, where are you looking to buy lot, where are the properties, what cap rates are you looking to sell at? And just has there been any change in the transaction market over the last month?

Yes, good question. As we talked last quarter, transaction market, we're seeing deal flow come across our desk. We're being patient and trying to match deals with our cost of capital and where we think it's a good market where we can add and improve our operational efficiencies and our densities. And I think the team has done a good job, and we've underwritten a lot of properties, but we're, again, being very patient on where we pick our spots. We have good capital available through our JVs, and our JV partner has been very active with us looking at deals, and so we're pleased there. I think on the disposition front, it's -- we've been very active there. I think we're making good progress there. I think we'll have some material movement on our dispositions. You remember, we guided to about $200 million of dispositions this year and the team has worked hard, and we've got some good line of sight on product that we will be -- in the disposition pipeline, and we'll talk more about that, I think, after we get through the second quarter, but I'd say progress on that front. Back to the acquisition side, acquisitions are lumpy. I mean, we're seeing deals and we're underwriting deals. I think we're just being patient on where we pick our spots to buy properties.

Thank you very much. Good luck in the second quarter.

Thanks Michael.

Thank you. Our next question comes from the line of Juan Sanabria with BMO Capital Markets. Please proceed with your question.

Hi. This is Robin Haneland sitting in for Juan. With occupancy a little weaker in the first quarter here, what occupancy assumptions are you baking into guidance? And your guide expectations had a high-end assumption for a housing recovery. Just curious if you have seen any market with any signs of this yet in the early leasing season?

Yes, I'll take that one as well, Robin. So on the PRO internalization, there's a few different things to highlight and refresh you on. One is certainly on G&A, that was a clear-cut benefit that we started to realize some of that in the back half of last year. You can see it on the year-over-year face P&L numbers, close to $2.5 million of savings that we lap that comp in Q3 of this year. So we've already effectively realized half of that 12-month benefit in 2024, and we'll get the other half year in 2025. There were some tenant insurance economics that we started to realize from day one of the PRO internalization effective date last July 1. So that's kind of been a good run rate these last couple of quarters including the first quarter of this year. And then at the property level, the savings on personnel costs that I mentioned in my opening remarks on a year-over-year basis, some of that was due to just the way we staff the stores versus the way the PRO's previously managing those properties may have staffed them, the way we leverage the call center in lieu of some of those on-site staffing hours. The call center costs are in the marketing line items. So that's also part of the reason for the upward pressure on that marketing expense line item. I think we're fairly good run rate, so on a lot of that stuff that's really started to take place, as Dave said earlier, in the third and fourth quarters. And now we're kind of humming at a pretty good run rate.

Thank you.

Thank you. Our next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

Hi. Thanks. Good afternoon. I just wanted to go back to the discussion around occupancy and rate. And I'm just curious if you could talk a little bit more about what specifically gave you confidence to raise rates during the quarter despite the softer occupancy trends that you saw early in the year? And does that mean that you felt or your systems were indicating that lower rates would not have stimulated more demand than it did in the quarter. Is that the right read?

Yes. Todd thanks for joining. I think you're correct. As we modeled and forecast, we didn't think the benefit of a lower rate would drive enough customers through to get the net result we wanted. And so we repositioned ourselves in the market. I would also tell you, coming out of the third and fourth quarter last year, I think we were probably a little under on rate just because of the transition and some of the things we're doing around that PRO transition. So that also allowed us to reset rate in November, December, and kind of reposition ourselves in the market. We're still competitive on rate. We're just in a better position. But yes, I think that's part of the formula we're working on is what the lower rate drives and the amount of customer rentals and then how you can recover from that lower entry rate in the lifetime of the customer, the health of the customer and the type of customer you attract with some of these rates when you're out there doing different rate programs. And so again, I thought the team did a good job understanding the data, understanding the data points, looking at the conversion rates and positioned ourselves well to have a better entry rate led to a better revenue result.

Okay. And then the change in occupancy, how did vacate activity trend during the quarter? Can you speak to vacate specifically? And any change at all in vacate activity since the start of April?

No. Vacates remain muted compared to last year on a year-over-year basis. I'd say the ratio of vacates versus move-ins has been very consistent. So move-ins have been down and vacates have also been less than last year. And so no real change there. And I think that also leads to one of the things we've talked about is, until some of this outside pressures around the supply-demand ratios change, we still have markets that have a lot of supply that needs to be absorbed. And there's still some pieces in our sector, and particularly for our portfolio, where we're just not seeing as much customer activity. And so we're managing the environment we're in.

All right. Thank you.

Thank you.

Thank you. Our next question comes from the line of Salil Mehta with Green Street. Please proceed with your question.

Hi, guys. Good afternoon, and thanks for taking my question. I guess looking at the marketing spend numbers here, there seems to be a substantial increase year-over-year. I think it's about like 20%. Can you guys just kind of walk us through the decision to push this forward when we're seeing from the other REITs a significant pullback in this area and as new top of funnel demand continues to be sustained? And sorry, if I missed this part earlier, but is this a run rate that we can expect for the rest of the year?

Yes. Thanks for joining. I think we look at the marketing spend and the overall marketing cost as we would not deployed unless we thought we were getting results with it. And so for us, I think the year-over-year increases is where we started and the starting point from a year ago and previous years, and then also consolidation to a domain name where we can really deploy, particularly on the paid search side and some of the things we're doing around some of the other marketing efforts to really make sure that we get the brand authority and the search engine rankings that we want. And so comparing us to the peer group, I don't know that we were starting at the same point year-over-year basis. And so I think for us, it might look a little bit elevated where there might be a little more -- maybe year-over-year flat, but it's also where we started from and what we're working on. So to summarize, we're spending it. We think we're getting the right amount of lift and the right amount of top of the funnel activity and the right amount of customer conversions, and we will continue to use that tool as long as it's effective. Run rate, I think the run rate is probably similar for the rest of the year, provided we get the – again, it's a tool. We'll use it where it's appropriate. And if we can cut back on it and look at the results we want, we will, if we want to spend more and we get the results we want, we'll spend more. It should allude to revenue, though, is the key to that.

Yeah. And the growth rate year-over-year, the 20% that we saw in Q1, that was within expectations, and I think that growth rate is the right type of growth rate year-over-year to expect throughout the year.

Great. Thanks. That’s it for me.

Thank you.

Thank you. Our next question comes from the line of Ronald Kamdem with Morgan Stanley. Please proceed with your question.

Hey, just two quick ones. Just going back to the occupancy comment about some of decel. Obviously, you're solving for revenue, total revenue here. But just curious on the move-outs, is there any common themes or threads? And the question really is how do you guys get comfortable that the product is still at the right affordability in the markets? How do you get comfortable that, that risk is mitigated?

Yeah, Ron, thanks for joining. I think we study all the customers who move out. We look at length of stay, we look at where they were positioned in the rate compared to entry rate, replacement customer to where they're at with our ECRI program and how they were along in their life cycle. I would tell you, from a move-out perspective, we have not seen any change in behaviors. We've certainly -- bad debt is in check, payment activity is where we want it to be. And so from a consumer point, I don't think there's anything from an affordability the way we're attracting new customers or the way we're working through their life cycle that's really changed. And so I don't think there's anything really to report on the move-outs, it's any different than where we've been over the last six, eight, 12, 18 months.

Helpful. My second question is just -- I appreciate the additional disclosures on Schedule 7. I guess, when I look at the in-place customer, I guess they're paying 14.60, so call it, 146 on a 10x10. How are we supposed to interpret the year-over-year change? Is that just purely due to the spread of move-in and move-outs? Or have -- is there a change in ECRIs as well? Just how do we think about that year-over-year change? Thanks.

Yeah. I think you touched on a couple of points there. We're certainly with the -- as we continue to work on asking rents and new move-in rate, we're seeing improvements there. And then the strength of the ECRI program, I think we continue to find better success in our ECRI program than we probably historically have. And we see continued runway with that piece of it. I think as we think about it, that's the area we're really trying to work on with the amount of move-ins we're getting, and we've seen significant improvement. I mean, if you look at the April numbers versus where we finished Q1, I mean our move-ins were up $10.38 coming out of $9.89 for the quarter average. In-place customers are at 14.70 versus an average of 14.64. So we continue to see strength and improvement as we go into the spring season here.

It’s helpful. That’s it for me. Thanks.

Thank you.

Thank you. Our next question comes from the line of Ravi Vaidya with Mizuho Securities. Please proceed with your question.

Hi, there. I hope you guys are doing well. I wanted to follow up on transactions here with some pretty active capital recycling forecast that's here on the guide. Is this an opportunity to maybe trim some exposure in terms of exposure to a few markets and maybe increase to a few others? How are you guys thinking about that?

Yeah. Thanks for joining. And I think you're right on your observation. We certainly approach the printing of the portfolio, looking at how we can look at markets, our ability to grow in markets, the quality of asset. We had a market, we really try to tie it to operational efficiencies and make sure that we can really work on margins within markets. And so you're going to see us exit as we start to work through the second quarter. We're going to see some dispositions where we're leaving markets where we had a single asset. And I think we're going to have a couple of states that we also leave as well because we only had one asset in the state. So really looking at the portfolio, asking ourselves both sides. Where do we want to operate? And if we don't think we can find the economies we want long term, we'll look to exit those markets. And that could be from market health to ability to purchase properties to strength of what we already own there. And then as we continue to expand and recycle that capital, we are definitely looking to improve our position, improve our portfolio and improve our operational efficiencies.

Got it. That's helpful. One more here. What are some of the current demand drivers for self-storage right now? Being in your portfolio, having an outsized exposure to homeowners and being more sensitive to home sales. Where are you really seeing the growth from and demand from as we enter the peak leasing season here?

There's lots of drivers. I mean we talked about them from people who transition, and transition creates need, and we're a needs based business. And so that could be anything from small businesses to small commercial operators, working your way through people who run a landscaping company or a plumber or whatever they use as for their storage of their tools and their equipment plus they also use as a small distribution point for that product. So there's a robust amount of small consumers that use our product because we're well located and we're certainly affordable for them to use this as a small warehouse. You work in your way to the residential side, there's a lot of varieties there for just people who need additional space because they live in an apartment and they store seasonal items there, they store their bikes there, they store stuff that doesn't fit in their apartments, all the way through people who -- using their home for a home office now and they're storing the furniture they took out of that home office or if they put a home gym in and they've taken furniture out and they just use us because we're very affordable and very convenient. I think the pressures we continue to feel a little bit more in our portfolio, it's because of our exposure a little bit more to the suburban and Sunbelt markets is this lack of transition due to existing home sales and new home sales. And that's just missing in the sector because it's -- we're at all-time existing home sale lows, and that piece is missing. It's just a piece that's missing. But for us, it is a piece where we think we're missing some occupancy in our portfolio because of the lack of transition. We think that puts us in a position when the housing market does start to bounce off of its bottoms and start to reignite, we're well positioned to take advantage of that. And -- but at this point in time, we're just using all the other demand factors that want our product and making sure we're visible and we're affordable and able to take advantage of the consumers that need us.

Appreciate it. Thank you.

Thank you. Our next question comes from the line of Omotayo Okusanya with Deutsche Bank. Please proceed with your question.

Hi, good afternoon everyone. A couple of times in the commentary, that kind of suggested that fundamentals may be troughing, but yet, we still have this backdrop of a very tough housing market. So I guess, I'm trying to reconcile those 2 things. So Dave, can you just kind of help me a little bit with reconciling those 2 things and why you have such conviction that fundamental trough and you have like this kind of better earnings growth profile as the year progresses?

Thanks for joining. Good point, good observation. I think as we look at where we're positioned, the amount of supply we're absorbing, now the new supply that is coming and this pure levels around the demands for our needs-based business, we don't think the housing market is going to get worse. We don't think -- as you look at the markets we study, we had 2 of our largest markets inflect positive, Houston and Portland. We just see strength around the consumer, how long they're staying, the strength of the ECRI program and then what we're starting to see around Google searches around the top of the funnel activity. It just appears to us that we think we've come through the worst of it. And we started to see it really as we got the PRO transition completed, that puts us in a better position to be more operationally protective, which is helpful to us. And then also, I would probably leave in there the fundamental [indiscernible] at the comps. I mean we've had really -- as you look at the back half of the year and why we think that the back half of year is going to ramp up for us, we had a transition going on last year. We had a lot of things on our plate that we're moving around. We now have better technology. We have a team that's focused on execution and we have easier comps as you go through the rest of this year. So that's, I think, how I would frame it up for you and the fact that we think we have troughed, and we're heading in an upwards direction.

That's helpful. And then as it pertains to marketing, could you just kind of give us a general sense of what's happening in regards to like ad rates, search rates and kind of what the search engines are kind of doing on that front?

Yeah. We just had statistical data from Google from a couple of different sources. You already had some force and that we had our own Google data, we are seeing an increase in consumer shopping for self-storage services, so different types of keywords at Google is tracking. We saw an improvement in February and a pretty significant spike in March. And so if you look at folks out looking for self-storage, we did see a definite change in the amount of people searching for the product. We're working very hard with our tools. And as we've developed better tools and new tools that we have today, we're making sure that we're appropriately spending and giving ourselves the right visible position so that we're around the key routes at the time we want to be around the keywords and positioning ourselves with our stores, in the market so that we can have success. But right now, the activity at our top of the funnel has increased, which is encouraging, and we're also seeing the search engines tell us that there are more people shopping for self-storage.

Thank you.

Thank you.

Thank you. Our next question comes from the line of Nathan [indiscernible] with Baird. Please proceed with your question.

Hey good afternoon, guys. Can you talk about which markets are performing better or worse than expectations so far this year?

Yeah. I think we've hit on them, Nathan. I mean, certainly, the Portland and Houston markets we talked about. We've got a couple of others across the reported MSAs in Schedule Six that have been positive and continue to be positive. As Dave mentioned in his opening remarks, all but three of them sequentially improved in terms of the year-over-year performance. So broadly, as we said, portfolio performed in line, no major surprises one way or the other. But I think the ones that we've remarked on already have probably been the ones that have had a little bit of modest upside surprise.

Got it. And do you expect tariffs to have an impact on some of your tenants that may use storage for their small businesses?

They certainly could. We have not had any experience around that or had anybody actually call it out to us. I think we're early in the game yet and too soon to tell. But again, I think I'll leave it at that, probably too soon to tell. We just haven't heard anything yet.

Great. Thank you.

Thank you.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Hoglund, for any final comments.

Well, thank you all for joining our call today. We appreciate your continued interest in NSA. We look forward to seeing many of you at the REIT Week conference, in June. And in the meantime, we will look forward to the Warriors-Nuggets Western Conference Finals.