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Greetings. Welcome to National Storage Affiliates Fourth Quarter 2025 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, George Hoglund, Vice President of Investor Relations for National Storage Affiliates. Thank you, Mr. Hoglund, you may begin.

We'd like to thank you for joining us today for the Fourth 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, February 26, 2026. The company assumes no obligation to revise or update any forward-looking statement 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'll now turn the call over to Dave.

Thanks, George, and thanks, everyone, for joining our call today. The fourth quarter provided further confirmation that our portfolio performance has inflected in a positive direction. We are benefiting from the significant operational efforts executed by our team over the past few years to position NSA for outsized growth. We produced solid results for the quarter and delivered wins in several areas, including all but 1 of our 21 reported MSAs saw improvement in same-store revenue growth versus what we reported in Q3. Same-store revenue growth was down 70 basis points in the fourth quarter compared to down 260 basis points in the third quarter, a substantial improvement. We experienced sequential improvement each month of the quarter. Year-over-year occupancy also continued to improve, finishing the year down 70 basis points. Remember, we were down 140 basis points at the end of the third quarter. Our core FFO per share results came in at the top end of our guidance range, beating consensus. Looking at the full year, we delivered a handful of notable accomplishments, including we consolidated another brand, reducing the number of remaining brands to 6 and an additional growth driver with the formation of our preferred equity investments platform, we continue to execute on our portfolio optimization program by exiting 5 states and selling 15 properties totaling $97 million. We also acquired 10 properties totaling $75 million across our joint ventures and on balance sheet. And most importantly, we exited the year on solid footing with positive momentum that has carried into 2026 as January end-of-month occupancy was up 20 basis points year-over-year. We've clearly turned the corner. The tremendous efforts undertaken by our team to internalize the PRO structure, dispose of noncore assets, upgrade and centralize our marketing, revenue management and operations platforms, along with the consolidation of brands and the move to one web domain are paying off. Looking at 2026 and beyond, the backdrop for self-storage is improving. First, new supply is currently stable and is projected to decline over the next few years to levels well below long-term historical averages, with the impact becoming more meaningful in 2027. Second, there is momentum in the current administration to address home affordability, which could provide a boost to the housing transaction market and self-storage demand. Lastly, increased stability in self-storage pricing practices could lead to rising street rates, providing a near-term lift to revenue growth. Now let me comment on our relative position within the sector. Our portfolio fundamentals have inflected positively, and we have the most to gain from a recovery in the level of housing turnover. Our enthusiasm is supported by the fact that we're starting the year with strong rental volume, an inflection from negative to positive year-over-year occupancy and an encouraging trajectory of same-store revenue growth, while we remain focused on disciplined expense controls. As we enter the spring leasing season, we will continue to focus on driving internal growth with increased marketing spend, competitive position in terms of rate and promotion, solid execution from the sales process and remaining assertive with our ECRI strategies. Meanwhile, we continue to improve our portfolio through capital recycling and reinvesting in our properties while also growing our portfolio through expansions and acquisitions. 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 $0.57 for the fourth quarter and $2.23 for the full year, at the high end of our guidance range as our focus on operational improvements is starting to be reflected in our results, with same-store revenue and NOI coming in for the high end of the full year guidance ranges. For the quarter, same-store revenues declined 70 basis points, driven by lower average occupancy of 120 basis points, partially offset by year-over-year growth in average revenue per square foot of 100 basis points. This is meaningful improvement from the 2.6% revenue decline in the third quarter, with 9 of our reported 21 markets delivering positive revenue growth. For the full year, same-store revenues declined 2.3%. Expenses declined 80 basis points in the fourth quarter while growing 3.1% for the year, slightly below the low end of our full year guidance range, benefiting from our meaningful expense control efforts. Most notable savings came from payroll costs that were down 4.1% in the quarter and 2.8% for the year as we continue to find efficiencies with hours of operations and staffing. Meanwhile, marketing was up 37% for the quarter and 31% for the year as we continue to invest in customer acquisition spend in markets where we clearly see the benefits. Outside of same-store operations, the lighter tropical storm season led to favorable results within our insurance captive, where we retain a portion of the property casualty coverage for our stores. This resulted in lower expense in the other line item within operating expenses compared to the run rate from the first 3 quarters. Moving to the transaction environment. We completed the sale of 3 assets during the quarter for $24 million. And subsequent to quarter end, we sold 3 additional properties for $21 million and acquired 1 wholly owned property for $10 million. Our portfolio optimization program will remain active in 2026 as we prioritize scaling in markets while generating proceeds for deleveraging and funding attractive investments through our JV and preferred equity programs. Our on-balance sheet investments will largely be to fulfill 1031 requirements. Now speaking to the balance sheet. We have ample liquidity and maintain healthy access to various sources of capital. We have $375 million of maturities this year, consisting of a $275 million term loan that is due in July and $100 million of unsecured notes due in May and October. We have optionality and we'll most likely address these maturities with a new term loan. Our current revolver balance is approximately $400 million, giving us $550 million of availability. Our leverage continues to come down with net debt to EBITDA of 6.6x at quarter end, just slightly above our 5.5 to 6.5x target range. Now moving to 2026 guidance, which we introduced yesterday and the full details of which are in our earnings release. The midpoints of key items of our guidance are as follows: Same-store revenue growth of 90 basis points, same-store operating expense growth of 3%, flat same-store NOI growth and core FFO per share of $2.19. We have also guided to acquisition and disposition ranges of $50 million to $150 million. In both cases, these amounts represent NSA's share. With regard to same-store revenue, we foresee the year-over-year growth steadily improving as we progress through these next couple of quarters. As Dave mentioned, our occupancy is slightly positive year-over-year at the end of January, and that spread has continued into February. At the midpoint of our guidance range, the $0.04 decline in core FFO per share is due to growth in G&A of approximately $0.02. This growth primarily comes from assuming target level cash incentive comp as the same expense in 2025 for our corporate team was below target levels given company performance. The remaining $0.02 is attributable to a combination of headwinds from debt refinancings and the tough comp for our insurance captive based on my earlier comments regarding the favorable results in the fourth quarter of 2025. Thanks again for joining our call today. Let's now turn it back to the operator to take your questions. Operator?

[Operator Instructions] Our first question is from Samir Khanal with Bank of America.

I guess, Dave, when I look at your guidance, you're calling for a healthy improvement here in revenue growth. down about 70 basis points in 4Q, getting to about 1% at the midpoint. I think this sort of puts you even above the peers here. So maybe help us kind of walk through kind of how you get there. Talk about the breakdown, let's call it, occupancy through the year, rate growth, move-in rate growth and even ECRIs, how are you thinking about all that?

Yes, Samir, thanks for joining. Thanks for the question. I'll start off and then I'll have Brandon walk us a little bit of the cadence. I think where I would start is what's different today versus where we were a year ago when we were giving guidance is, our transitioning is done. Our platform is working very, very well. Our synergies and our strategies are working very, very well. All the work we put into our people, process and platforms is complete. And so there's no distraction or no moving pieces right now. So as we sit here in '26 versus where we were a year ago, we just came off of PRO internalization and had a lot of moving pieces. Right now, we're no longer chasing occupancy. Here to say that occupancy in January was 20 basis points up year-over-year. That's something we haven't seen for a couple of years. And so that gives us a high level of confidence that we'll continue to work on that occupancy gains throughout the year. The rate environment is stable. We have seen good contract rate growth through the back half of 2025. We expect to have solid contract rate growth through the year of 2026. And that comes from also the strength in the ECRI program. We're now more assertive than we have been historically. And that's because we have a high confidence level in our marketing program and our customer acquisition platforms. We're seeing very, very high levels of rental volume. We finished on a square footage basis about 11% up year-over-year in the fourth quarter. Keep in mind, that was muted because we were down about 10% in October because of a hurricane comp. And thus far in January and February, those numbers are even stronger. So we're just very, very pleased with the rental output we're getting at the top -- through the top of the funnel all the way to the rentals themselves. And so I think for us, looking at all the things we're thinking about, RevPath is positive, occupancy is positive, contract rate is going in the right direction, and our platforms are really working. I think for us, where we're coming from, where we've been, we feel very, very confident on how 2026 will play out. And I'll let Brandon kind of walk you through the cadence of the year.

Yes. I think the main thing I would add, Samir, and you touched on it in your question, the negative 70 basis points that we delivered in the fourth quarter, Dave remarked in the opening about how that improved. So it was more negative to start the fourth quarter, and it got less negative trending towards flattish as we got to the end of the fourth quarter. And then based on the data points that we've given for end of month January occupancy, in my remarks about how that's continued into February, we just feel comfortable that we're starting the year within the negative 30 to positive 210 revenue range, whereas a year ago, we were delivering a quarter and starting the year that was, frankly, well below the low end. So it required much more of an improvement than what's required now.

And I guess just as a follow-up, maybe as we're talking about the guidance, maybe you can hit on expense growth here, right? I mean you have about 3% for this year. Maybe talk kind of the components to kind of get there as we think about '26.

Yes. Samir, I'll go -- most significant line item is property taxes, so we'll start there. We're assuming a range of 3% to 5%. That's consistent with kind of multiyear averages for our portfolio. Personnel, you saw the good success that we had in that line item, both in the fourth quarter as well as for the full year '25. We're expecting similar successes. I expect that line item to be flattish in 2026 over '25. And then outside of those 2 line items, I would say the largest percentage increase is going to continue to be marketing expense, not to the tune of the 30-plus percent that we saw this year, but still probably in the teens on a year-over-year growth rate. And after that, a lot of the other line items fall generally in that low to mid-single-digit range that we have for the total OpEx guide, the one exception being insurance. we do believe we're in a better market. Our renewal was in April 1. And so we are forecasting that line item to be a year-over-year decrease in the cost.

Our next question is from Michael Goldsmith with UBS.

First question is on the January occupancy being up 20 basis points. Can you talk a little bit about what's driving that? I think you talked a little bit about strong rental volumes. It seems like marketing spend is up, but can you walk through some of the moving pieces? Are you cutting rate to drive that occupancy higher during the slower season? Just trying to understand the moving pieces and context around the occupancy improvement.

Yes. Sure, Michael. Thanks for the question. Thanks for being here. I think it's a combination of all those things. Clearly, we committed to a higher marketing spend really through the back half of 2025, and that was based upon our conviction that we were seeing the activity at the top of the funnel and our ability to convert those into rentals. And so we've done a really good job looking at the sales process all the way through the funnel and our conversion rates. And so that would include how you use discounting, where you're priced in the markets, the amount of marketing spend and when you're spending that money. This is where AI and some of the AI technologies and the modeling we have are really starting to pay off and the fact that the teams are doing a really, really good job as we model our marketing spend and model our dynamic pricing and use of discounts to really work on that closure within that funnel. And so we've seen a significant improvement in our ability to really work the conversion rates through that funnel. So I would tell you, from a pricing standpoint, we're keeping the same competitive position we've kept through the back half of the year. We did a good job holding occupancy and not having the seasonal trough that you normally would have, and that's a function of marketing spend pricing, discounting and then use of call center and staffing hours and those things. So I think all those things in place. We're not undercutting markets. We're not trying to go out and try to move markets one way or the other. We're just staying within the appropriate competitor set to get the results we want.

Dave, and as a follow-up, like where do you see yourself to the point of actually having pricing power, right? Occupancy is improving, you're improving operationally, you're talking about strong rental and volume. So is there a certain level of occupancy where you think you would have pricing power?

It's a really good question, and it really varies by market and by store. So we do have markets that are having some good success, like a couple of the ones that jumped off the page, Wichita, Colorado Springs, even Portland, if you look at Portland, where supply and demand are in check and those markets are responding well to not only street rate or market pricing, but the ECRI programs and what you're able to drive through the ECRI programs are working very effectively. And that's really, I think, as you look at our portfolio, we do have a lot of stable markets where they are benefiting very much from all of the changes we've made within the company and all of the adaption that we've done within the company is helping those markets. The other markets, Michael, like Phoenix and Atlanta and Gulf Coast of Florida and stuff, it's really a supply issue where until you really get that balance and get a better demand profile to get these stores filled up, it's going to be harder to get pricing power. The one thing I would add into that, too, is it's also -- we've noticed you got to get granular down to the unit size. It's one thing to scrape overall properties and look at overall occupancies and overall pricing power, but there are subsets of unit types that are seeing pricing power within some of our markets because supply and demand is in check on that particular demand for that unit.

Our next question is from Juan Sanabria with BMO Capital Markets.

Congrats on the successes on the post PRO internalization. Just hoping for a little bit more color on kind of the move-in rate trends throughout the fourth quarter and into January as well as kind of how the quantum and or cadence of ECRIs has changed maybe year-over-year or however you could help us contextualize that?

Sure. I'll start, and then Brandon wants to jump in here. I think what you have seen and you will see from us is our move-in rates as they went through the fourth quarter narrowed on a year-over-year spread. And that's because if you think about 2 years ago in '24 when we were internalizing the PROs, we reset street rates pretty hard in the back -- really the fourth quarter of 2024 and left them elevated outside of the competition range probably until April or May of 2025. And so our comps on a year-over-year basis are tougher the first 5, 6 months of this year, just on the move-in rents. Now for us, we're getting the rental volume we want. We're effectively priced where we want to be priced in the markets. But I think you guys will see us go negative on move-in rates probably the first 4 or 5 months of the year and then get back to more of a neutral to positive position from June, July on. But we are seeing significant rental volume. Again, I'll reiterate, we're not undercutting the market. We just adjusted our competitive position to really work on customer count and do it as smart as we can to get to a better revenue output. The back half of that question was -- I'm sorry, I'm done a blank now.

ECRIs and how that's changed the quantum or cadence.

Yes. Thanks, Juan. Sorry about that. The cadence hasn't changed. So we're still hitting the ECRIs around the same timing that we have been hitting them. I do know our magnitude of rate increases has increased on a year-over-year basis. All of the testing and the things that we're doing and our confidence in the ability to attract new customers and drive additional rental volumes is allowing us to be more assertive on the rate increases through all of the steps, whether it be first, second, third, fourth across the board. And so that's also helpful as we look at our revenue projections this year.

Great. And then I was just hoping you could comment on when you're leasing units if the size or the number of square feet that is being taken up has changed. I know at one point, I think it was last year that has gone down for a bit. But curious on kind of the latest thoughts around how many square feet people are actually leasing today and how that's trending.

Yes. Good question and good memory. We certainly -- this time last year, we were facing probably about a 5 to 6 square foot per rental square footage roll down. We've since closed that back up. We're back up to where most of our rentals are either at the same level or a little bit bigger in square footage. And so that's also very much helping in stabilizing occupancy and making sure we're attracting the customers for the units that we're vacating. So feeling good about that progress we made. That really flipped for us really in the -- probably starting September of last year, and we've been able to hold it all the way through February thus far.

Our next question is from Todd Thomas with KeyBanc Capital Markets.

I appreciate the detail on January and some February data with regards to occupancy and move-in rents. It seems you've recovered a lot of ground. You described '25 as sort of a tale of 2 halves, first half being a little weaker, followed by an improvement in trends in the second half. Is 2026 from sort of a revenue growth standpoint also expected to be sort of a tale of 2 halves? Or do you think you can continue to recover in the back half of the year when some of your comps begin to normalize?

Yes, Todd, this is Brandon. I do think that we'll have the benefit of some easier comps in the first half of the year and partway through the third quarter as well. The fourth quarter will be the tougher comp. We see the year-over-year same-store revenue growth steadily increasing as we go throughout the year until maybe we plateau a little bit because of what you touched on, it does get a little bit tougher of a comp starting in the back half of the third quarter and then really for the entirety of the fourth quarter.

Okay. And then Brandon, Dave, too, I think you both touched on reducing leverage as a priority. And I just wanted to ask whether the guidance includes any sort of deleveraging initiatives really primarily, I guess, outside of organic EBITDA growth? And do you have a leverage target for year-end '26?

Yes. So our 5.5 to 6.5x range remains kind of the long-term target for us just outside the top end of that at the end of 2025. Based on the midpoint of the same-store NOI guide, Todd, as you know, flat on that metric and FFO being relatively flat, it's really calling for leverage to stay fairly neutral, a little bit of seasonality depending on which quarter you go through, because the metric is calculated on an annualization of the given quarter, as you know. But outside of that, I would say by the end of '26, it's going to be fairly similar to the end of '25. Capital deployment will affect that. You saw the guide on acquisitions and dispositions at the midpoint of each, we're saying that, that would be neutral. Obviously, changes month by month based on the deals that we're seeing, the success we're having on some of the disposition initiatives, any of the particular deals in front of us that we're underwriting for acquisition largely through the joint ventures, as we said earlier. So the timing and the success on those fronts could drive it and move it a little bit. But generally, at the midpoint, you're seeing it stay pretty constant.

Our next question is from Salil Mehta with Green Street Advisors.

Just a quick one here to start off. Sorry if I missed this before. I know you guys mentioned January and February occupancy, but did you guys provide any color on where move-in rates are thus far in 1Q?

Yes. Thanks for joining, it's Dave. What we talked about is our move-in rates will inflect negative for the first probably 4 or 5 months of the year, and it's due to a little tougher comp from 2025 and where we're positioned in our markets to make sure that we're maximizing flow through the funnel and conversions and customer count, working towards our revenue goal because that's what we're trying to work towards. But I think you will see some negative move-in rates for the next -- probably until about June, and then we think they'll inflect back to a more neutral positive for the back half of the year.

Thanks for that insight. And given the roughly, I guess, 1% move-in rate growth and overall rental rate growth in the quarter, how are you guys balancing the trade-off between occupancy and rate growth going forward? Is one going to be a bigger priority than the other? You guys kind of mentioned that you guys aren't chasing occupancy. Does that mean that you guys are happy with where occupancy levels are at currently?

Yes. I think you're touching on it. It's a balancing point of marketing spend and the use of price and discount to get better conversion and really occupancy can lead to revenue. And so for us, we think we are at a point where we can use those levers effectively and drive some more customer count, which will increase our occupancy. And so the fact that we're starting the year coming out of January on a positive note on a year-over-year basis, as we look at our year, we think we'll be able to continue to work on the occupancy side of the house effectively with that -- and that's a nice revenue output for us. So that is, as you think about our year, we think we'll be more occupied at the end of 2026 than we were in 2025.

Our next question is from Michael Griffin with Evercore ISI.

Dave, I'm curious if you can touch a little bit on sort of organic customer demand. Obviously, I think it's a positive seeing the same-store revenue growth inflect into next year, but it feels like that's more an enhancement of marketing initiatives and capturing more of the top-of-funnel demand as opposed to the pie maybe expanding a bit. So can you talk a little bit about organic customer trends? How are new customers versus renewals? And really is the inflection driven by, I guess, capturing more of the pie of customers out there rather than expectations for more customers to come back to the market?

Yes. Good question. Thanks for being here. I would agree with your premise. And I think we're approaching 2026 with a mind frame that the competitive environment will be very similar to what we face in 2025. Nationally, we know that new deliveries are coming down. But that number takes a while to be absorbed. And so I think as you think about our stores that are facing competitors in a 3- and 5-mile ring, we don't see a material change in the number of stores facing that competitor set in 2026. So we're going to be very focused on just executing and trying to take more of the pie. And certainly, every month, you go deeper into absorbing new supply, it helps, but we did not, in our guidance at our midpoint, really model in any catalysts or anything that's really materially different in the way we're thinking about how the competition is going to look for 2026.

That's certainly some helpful context. And then maybe just on the external growth opportunities. It seems that particularly the acquisitions component of that might be more in kind of the JV structures that you've laid out. But can you give us a sense of what kind of product type you're targeting with those whether it's going in cap rates, your yield requirements? Just maybe give us a sense of kind of external growth priorities and the investment pipeline for the year ahead.

Yes, a really great question. First of all, we're targeting markets where we can densify our portfolio, get better synergies, get better operational efficiencies. And that's been part of our portfolio optimization program now for a couple of years. And so the markets we are targeting are really around where we think we can have good efficiencies and good success in buying properties. We're probably a little less attracted to the markets that are really struggling right now because we'll want those markets to improve before we want to step into them. But we have a number of markets where we have had good success. We've seen the inflection points. We're seeing things go in a positive direction, and we're very actively working in those markets to come up with acquisitions. The best cost of capital right now for us is our JVs and the new structure, the preferred equity structure, we'll lean into that this year as well. And then we will buy on balance sheet, if needed, primarily used probably to fulfill 1031s as we come across those through the dispositions. But we're willing and able to want to buy, but we're just being very diligent with our money right now because it's -- certainly, there's -- you got to be very smart and you got to be very diligent on how you put your money out and deploy it.

Our next question is from Ravi Vaidya with Mizuho Securities.

I wanted to ask about the rent per occupied square foot. You've seen strong improvement there on both a year-over-year basis and a quarter-on-quarter basis. Do you -- how do you see this metric trending in 1Q '26 and throughout the balance of '26 as well? Do you think it's going to be stable, accelerating or decelerating?

Good question. Thanks for joining. We approach 2026 with continued improvement in the achieved rate. It becomes more challenging when you have bigger roll-downs like we're facing today. So our rent roll-downs are in the low to mid-30s at this point. And so the strength of our ECRI program and the improvements we've made around how we implement the ECRI program will help offset that rent roll down. But we did throughout the year, show modest improvement in the achieved rate as we went through the year.

And I wanted to ask another question about the guide. I know that you mentioned that we don't have any housing-related catalysts or any other demand catalyst for achieving the same-store revenue guide. But what are some of the potential levers of maybe upside or elements of conservatism that might be baked in given that the broader operating environment remains a bit choppy.

Yes. Good question. I'll start and then Brandon, if you want to jump in. Certainly, things that can move the guide around. And one of the primary things is asking rents. If we see good improvement in asking rents, and we see a good spring leasing season. And that's the hard part about sitting here today, it's February. And if we were sitting here in May, I think we'd have a lot more light on how active the spring leasing season was. If we have good rate, we're able to drive the street rate asking rents up as historically this industry does. And so that's the one thing that we don't know, and that could push the guide up or it may push you to the low end if street rates don't cooperate and you get more volatile competitive environment as far as the revenue side of the house goes. And that would affect occupancy and it would affect, obviously, what you're driving home for the achieved rate if you're any movement on that street rate. Anything else?

Ravi, I mean, one thing I might add is just that's outside of our control, obviously, is just the regulatory environment and any state of emergency declarations due to severe weather or other events, our portfolio is not currently subject to significant restrictions there. But obviously, that could play a factor. There's always some elements of that in the portfolio as you go throughout the year. In the state of Oklahoma, we had some restrictions in 2025 that impacted our OKC and fulsome markets. So that's just one variable. But we try to, as much as you can, incorporate some element of that as we think about kind of the normal course revenue management program.

Our next question is from Ron Kamdem with Morgan Stanley.

Just 2 quick ones. Just can you just contextualize your dividend payout ratio for this year? And sort of -- I think you talked about sort of an inflection. Is it sort of a '27 or ' 28, like when do you sort of anticipate getting that back to sort of even as this inflection sort of plays out?

Ron, thanks. It's Dave. Thanks for the question. Yes, certainly, we -- the guidance would imply we're not covering the dividend this year. We will be light on covering the total payout. Certainly, as we think about it, we are at an inflection point. We are seeing fundamentals turn positive. We're seeing our organic growth turn positive. And there are moving pieces, investment activity and things like that, that can move FFO around. We did come off of covering the dividend in third quarter and fourth quarter of last year. And so I think we have very good discussions with our Board. Our Board is very in tune to what the outlook of the company is. And right now, I think to your point, as we finish the end of the year, we probably will be back to where we're covering 100% of the dividend towards the back half, really the fourth quarter of the year and then into 2027, if the fundamentals keep improving, we'll certainly be in a much better position. But we're certainly aware of where the payout ratio is, and we're working very hard to accomplish that to be lower.

Great. That's helpful. And then my second question, I think the release sort of noted that all but one market saw sort of sequential improvement, which I thought was interesting. I mean, could you just double-click on whether the heavy supply markets versus maybe the lower supply, how those are sort of performing and what your expectations are in terms of that -- the strength of the inflection?

Yes. Good question. I'll start and if Brandon wants to come in here. But you're touching on it. The markets where we are still facing a tremendous amount of competition that needs to be absorbed are the ones that are really not inflecting positive are going to take time. And really, it's just time. And in some markets like Phoenix, they need to stop building because they're still building in Phoenix. And so you make 2 steps forward and then you have to take 3 steps back as somebody adds some more product to the market. The markets that don't have that, and I mentioned a couple of them earlier, Colorado Springs, Wichita, Portland, we're seeing nice solid sequential growth in rate and occupancies have been steady, and we're seeing some pricing power in those markets, and we're having good success. And so fortunately, we do have a diversified portfolio. We have a lot of our markets that are going in the right direction. And so that makes us feel very good as we think we've hit that positive inflection point. And even a market like Atlanta, which is improving, it's still very much negative, but we are seeing some consistency and some stability in some of these markets, which is encouraging to us.

Our next question is from Eric Wolfe with Citigroup.

You mentioned the positive trends on occupancy year-to-date. I was just wondering if it was possible for you to update us on where RevPath has been trending. Just to understand how average realized rents have been moving through the early part of the year, especially given your comment around seeing more success on ECRIs.

Thanks for joining and good question. RevPath is following the similar trends. We are seeing improvement in RevPath that would be consistent with nice solid ECRI gains and obviously, the improvement in -- or stabilization in occupancy and slight improvement in occupancy. But the RevPath is growing, yes.

And it looks like your other property-related income or revenue was a 40 bps drag on your same-store revenue growth this quarter. Can you just talk about what's embedded in your guidance for that line item and where you see it trending throughout 2026?

Yes, Eric, it's Brandon. That line item will continue to be a little bit of a drag. That includes our -- the tenant insurance dollars that are retained at the store. We've always had some amount of tenant insurance dollars reported within the store level NOI dating back to the PRO structure. So that's just remained. And as we talk about all the things that Dave has hit on here, the jocking between street rates, marketing spend, our discounting and promotion initiatives, the -- at the time of rental upsell and tenant insurance, we have altered that over the past couple of quarters in order to prioritize getting that rental. And so that's created a little bit of a drag in that line item. And so we expect that to continue in '26, although it does -- that comp gets easier as we get to the middle part of the year.

Our next question is from Omotayo Okusanya with Deutsche Bank.

First question I had was, again, while guidance does not really contemplate any real change in the housing market. Just curious how you guys are thinking about, again, some of these affordability initiatives that President Trump is trying to make happen. I mean just kind of take a look at all of that. I mean, do you kind of feel like the housing market could get better, so this could potentially be a positive catalyst? Or do you kind of look at it and kind of say it's more you'll see a whole bunch of refinancing activity because mortgage rates are now down at 6%, but it's still not low enough to really stimulate housing demand?

Yes. This is Dave. Thanks for joining the question. That's a hard one. I mean, we are encouraged with the fact that at least everybody is talking about it, and they're trying to find a solution or some solutions to get progress there. Our -- we did not look at 2026 of any type of cracker catalyst in that piece of it. We just approached '26, and that would probably remain the same. Any improvement of that would be much welcome. We would be positioned for outsized impact should they crack any of that and open up the resale market or things like that. But I think we see the same data that you do. There's a lot of listings, there's a lot of stuff going on out there, but we've just not seen any significant improvement yet.

And then second question, the preferred equity platform. Could you just talk a little bit -- it sounds like everything is not kind of in place. Can you just talk a little bit about kind of how deployment is going to work there and how quickly you think you can kind of put out capital?

Yes, sure. It's a 2-year program that we'd set up that we wanted to get the capital out in 2 years. Certainly, we are working very, very hard. We do have 3 properties under contract today, totaling a little over $50 million. So we're pleased that we've got that stood up and we've got properties under contract. We'd like to get that out as quick as possible if we can find the right deals. So it's hard to handicap those. Those transactions are lumpy and timing is -- cannot be particularly seen, but we are happy that we're off and running, and we're certainly looking at a lot of properties and there are a lot of opportunities.

Our next question is from Wes Golladay with Baird.

I just have a quick question on the portfolio optimization. When you get through this year's dispositions, will you be largely done with the program?

Wes, it's Dave. Yes, I think so. We've done the majority of the heavy lifting and the larger work. This year, we'll wrap up a lot of that. And then after that, it will just be as things materialize and stuff. But yes, most of the heavy lifting is done.

Our next question is from Annabelle Ayer with Barclays.

Can you remind us of your strategy for payroll and how you think about the trade-off between like lowering payroll costs versus potentially losing sales?

Yes. Annabelle, thanks for joining. We've been working for a number of years on how to model payroll. And I can tell you with the data we have today and much better tools that we have today, we certainly want to meet the customer when they want to meet us and how they want to shop with us. And so there's no singular answer to perfect staffing levels. We have markets where we have to have more staffing with more hours and markets where it's less. But what I do know is we have a much better line of sight. What we've been working on is hours of operation. And that would be, can we be open later? Can we be closed earlier? Do we need to be open 8 hours, 10 hours, 12 hours a day? Do we need to be open 6 hours a day? We've certainly put a lot of emphasis around our customer care center and our call center teams are doing amazing things, plus we've implemented AI there. So we have a lot of automation built in there where we do not have to be around. We've put obviously the bar codes on the window. We have an app stood up. But for us, it's pretty fluid in markets and pretty fluid in stores, but we have seen payroll savings. And we do think there are more additional payroll savings for us as we go forward. But we will not try to do that at the expense of the customer. But I do believe, clearly, the customer expectation and when they want us around and how they want us has changed. There's definitely that digital transformation is real, and it allows us to just be a little more flexible when we're at the store.

And then one more. You guys have invested a lot in your website and platform over the last year or two. How much more of a benefit do you see coming from improved search rankings and higher conversion rates?

Another good question. We've certainly put a lot of effort there, and we've seen a lot of success. If you look at our visibility scores and our outranking scores, and it's a true testament to the rental volumes. When we talk about rental volumes being up 20% and 30%, that's all of these things coming together and working very, very well. So we're extremely happy. Obviously, you're never done. You're always working and trying to find another penny here and another rental there. And so the teams are working very hard with their modeling and how we're evolving our AI modeling. And there's a lot of progress around what we're doing with Google and around our -- how we're looking at our search and how we're looking at our paid search and our effectiveness around all of the channels that are available to us. And so I'm very pleased with the progress, but still more to come there.

Our final question is from Michael Goldsmith with UBS.

Back for a couple of follow-ups. First, I think you mentioned some restrictions in Oklahoma, like including Tulsa. Can you kind of clarify what you're referring to there?

Yes. I'll jump in a little bit, Michael. What we had last year is they had high wind and fire, major restrictions around counties because it was so dry. And so what we faced for a number of months was a restriction on how much we could increase rates at a certain particular time. And so we set a little calmer on Oklahoma through probably 5 or 6 months of that year. And then we had a pretty good lift in January around working back through the portfolio in Oklahoma and catching folks back up to where we wanted them to be. Like Brandon said, a lot of these state of emergencies, they're generally pretty short in nature, and they're not as widespread. I mean it will be by county or by city sometimes. And that one just happened to be a wildfire one that hung on because they had such dry conditions for such a long period of time.

And then, Brandon, a follow-up just on the refinancing. Can you walk through what's untapped for this year and just how you're thinking about it?

Yes. The -- No, the $375 million that we have coming due this year concentrated $275 million on that term loan and then $100 million on the private placement notes. As you can see on Schedule 4 in the supplemental, the blended rate on that $375 million is about 4.25%, and so if we, as I said earlier, executed a refinancing of all of that through the term loan market, again, depending on whether we take some of that floating or fix it all for the tenor, you're probably in the mid- to high 4s. And so that's -- let's just say that's 0.5% of rate reset on that notional. And so that kind of -- it's a partial year impact in 2026, Michael. So that kind of gets to some of that interest expense headwind that I mentioned earlier. That's just kind of the plan A. There's obviously the private placement market or the secured market. So we feel comfortable with being able to address the maturities. That will be the main focus for our finance team. And then I was also referring to in my comments earlier, and you see it footnoted in our guidance table, one of our joint ventures has about $360 million of debt that comes due in October. And so currently, the plan there would be to refinance that. And so that's a 3.5% in-place interest rate. So there would be a rate reset at the JV level, and then we would pick up our 25% share of that. So that's all incorporated into the guide.

There are no further questions at this time. I would like to turn the call back over to Mr. Hoglund for closing comments.

Thank you all for joining us today, and we appreciate your continued interest in NSA. And we look forward to seeing many of you investors next week at the conference of Florida. Thank you.