Public Storage says that move-in rates were down 4% for the quarter and this was the lever that the company used to drive move-in volume. “Our move-in volumes were flat year-over-year, which is one of the better quarters we’ve seen on move-in trends over the past couple years. In terms of other levers that we utilized in order to drive that move-in performance, advertising clearly being one of them,” said CEO Joe Russell on the firm’s Q2 earnings call.
He said the company will focus a little bit less in promotional discounts. “But flat on street rates and down 4% on move-in rate. Advertising has clearly been a lever that we’ve been pushing on through 2018 and into 2019 to drive volume. And those incremental move-ins from that channel support what is overall tougher move-in environment, and we like what we’re seeing there.”
According to Russell, Public Storage has real advantages online with its brand name and its scale in local markets with which the company can drive move-ins into the local inventory. “It’s the power of the Public Storage platform online.”
Advertising was up 49% in the quarter that follows up 28% quarter in the first quarter, he said on the call. “And as I’ve said in prior calls, we’re going to continue to push on that lever as we see good returns there. So I’d expect that we continue to utilize that lever in the second-half of ’19 as well.”
In terms of other levers, he said that “While promotional discounts were down in the quarter, that is a method that we continue to use, primarily our $1 special for the first month rent, and we’ll continue to use that through the second-half of ’19 as well.”
One thing the REIT was encouraged by was the fact that it saw another step up in its revenue growth. “We’ve got relative to leveraging the power of our brand, the initiatives we’ve got around customer search efforts, and the things that we do operationally that continue to give us tools to navigate what clearly continues to be market-to-market, in some cases, a heavy level of competition that is with us and could be with us for some period of time.”