Yahoo Finance

Peter Stubbs

As Joe mentioned, our first quarter financial results were ahead of our internal expectations. Our core FFO of $2 per share represents a 2% increase from the prior year. This outperformance was driven by better-than expected same store revenue, higher tenant insurance and greater interest income. On the expense front, we saw a notable divergence between controllable and uncontrollable costs.
Our operations team successfully reduced controllable expenses by 1.9% year-over-year through operational efficiencies and strategic cost management. However, uncontrollable expenses increased by 8% primarily due to continued property tax pressure and weather-related expenses. This dynamic of controllable versus uncontrollable expenses resulted in a same store NOI decrease of 1.2% compared to the first quarter of 2024.
We continue to strengthen our balance sheet as we executed two bond offerings in the quarter, one five-year issuance of $350 million at an effective rate of 5.17%, And a second 10-year issuance of $500 million at 5.4%. These offerings demonstrate our continued access to public debt markets and our ability to secure favorable terms despite the volatile interest rate environment.
We continue to maintain a conservative leverage profile with almost 90% of our debt at fixed rates net of our bridge loans receivable. This helps insulate us from near-term interest rate fluctuations. Our weighted average interest rate stands at 4.4%, reflecting our ability to secure competitive financing across market cycles. Based on our first quarter performance and current market conditions, we are maintaining our full year 2025 FFO guidance.
Same-store revenue, expense and NOI guidance also remains unchanged. This guidance assumes no significant recovery of the housing market and reflects our strong occupancy levels and stable new customer rates balanced against broader economic uncertainties. On the expense front, we anticipate continued pressure from property taxes and other uncontrollable costs.
We have updated a few items in our guidance, including a $17 million reduction at the midpoint in equity and earnings. This reduction reflects the repayment of the SmartStop $200 million preferred investment and the expected buyout of certain JV partners. The income from the properties we have and will purchase from our JV partners is now reflected in non-same-store NOI.
We've also increased interest expense to account for these partners buyouts and to reflect the change in the forward interest curve. Our annual acquisition guidance has also been increased to account for the JV buyouts that are currently under agreement. We are encouraged by our core business fundamentals and are confident that our diversified portfolio and systems will maximize performance in all economic scenarios.
And with that, John, let's open it up for questions

Question and Answer Session

Operator

(Operator Instructions) Michael Goldsmith, UBS.

Michael Goldsmith

Good afternoon. Thanks a lot for taking my question. Looks like street rates close the gap pretty materially in the first quarter. I was wondering what's driving that? It doesn't feel like demand is incrementally picking up, but I'd love to hear your comments there. And then also if you can provide an update on just how the conditions played out so far in April?

Peter Stubbs

Yes, Michael. So far, quarter-to-date, things have played out very similar to what we were expecting. So no major surprises, maybe slightly ahead of what we originally expected. In terms of street rates, our street rates have gone from negative 9% in Q3 last year to year-end street rates of negative 6%. In the first quarter, we averaged, -- our average was slightly negative.
And then by the end of the quarter and into April, we were flat. So street rates have improved. We're encouraged by that improvement. A 6% movement in the quarter is encouraging, but it's still pretty early to say where those are going to go into our rental season.

Michael Goldsmith

Got it. And as a follow-up, during the first quarter, you had same-store revenue growth of 30 basis points. The midpoint of the guidance range implies that that same-store revenue remains in that range through the year. I guess like is that a reasonable outcome for same-store revenue just to kind of remain where it is through the year? Or are you just trying to maintain some flexibility given some of the uncertainty out there?

Peter Stubbs

Yes. So I think it depends on where you are in the range. I mean you're assuming the mi-point in your comments here, we gave a fairly wide range for the year, and that had to do with not really knowing some of the economic conditions that we were going to see. So I think we're now moving into the leasing season. If we do see that rate power, I think that you'll see us above the midpoint of the range.
And if we don't see much rate power, I think you could see it play out midpoint to below.

Michael Goldsmith

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

Peter Stubbs

Thanks, Michael.

Operator

Samir Khanal, BofA Securities.

Samir Khanal

Actually, it's Samir Khanal. Sorry about that. So, Joe, it looks like you had the ability to raise guidance, but you didn't. And it doesn't look like you've seen any changes in customer behavior. But I guess what instructions are you giving your troops on the ground as it relates to leasing, right? The spring leasing season? Has there been a shift in strategy at all given the uncertainty you kind of mentioned in your opening remarks?

Joseph Margolis

No. There's been no change of instruction or strategy. Our goal is to maximize revenue. We have systems and processes in place to do that. I don't need to give instructions on a day-to-day basis. The algorithms are pricing every unit in every building on a nightly basis, taking into account both our massive data set that we have and what's going on the ground today.
And I'm very, very confident that our -- both our systems and our people are set up to take advantage of whatever opportunities present themselves and react to the environment as it unfolds.

Samir Khanal

And then I guess my second question is, I mean, in your opening remarks, you talked about the sort of the positive impact from LSI that you're seeing. Maybe expand on that. And you talked about improved leasing in that portfolio. Maybe just give a little bit more color.

Joseph Margolis

Sure. Absolutely. Good question. So overall, the former LSI stores rebranded as Extra Space are progressing as expected. We're seeing improvement in both organic and local search results, although there's still further room to improve there. The occupancy gap between the former Life Storage same-store pool and the former Extra Space same-store pool is close to 30 basis points, which is as tight as it's ever been.
If you look at the three-month period prior to the conversion to a single brand and compare it to the three-month first quarter 2025 period, rentals at the former Life Storage stores were up 10.4%. Rate growth at the Life Storage stores is faster than the rate growth at the Extra Space stores. And on the expense side, -- in the first quarter, we saved $1.3 million in paid search at the Life Storage stores.
Physically, we've had 500 stores that have their signage replaced, 350 offices complete. We'll have the painting done by year end. So while we're well on our way there, we're not done, and we hope to get further improvement as the physical part of the rebranding is completed as well. So overall, happy where we are, happy with the pace of progress and looking forward to it continuing.

Samir Khanal

Thank you for that. And finally, Scott, just one last one on the exchange of the 25% ownership interest for the properties to the existing joint venture. Was there an impact in 1Q from that at all?

Peter Stubbs

There actually is no impact. It basically has moved from equity, -- an equity pickup to it will be wholly owned. And that transaction actually happened on March 31. So going forward, it's reflected in non-same-store NOI.

Samir Khanal

Perfect. Thank you.

Joseph Margolis

Thanks Samir.

Operator

Nicolas Yulico, Scotiabank.

Nicolas Yulico

Thanks. I was hoping to just get a feel for the acquisition yields for what was done in the quarter and what's under contract right now?

Joseph Margolis

Sure. So we bought a wide variety of types of assets in the first quarter. The underwritten months to stabilization range from one month to 19 months. So that tells you they're at different stage of lease-up. Initial yields range from 2.3% to 6.5%, and they stabilized in the upper 6% to 7%.So obviously, higher stabilized yields if you're further out on the stabilization projection.

Nicolas Yulico

Okay. Great. And then just second question is, and I know Scott kind of framed out some of the change in move-in rate growth in the fall versus the fourth quarter. And even if we looked at it like sequentially in terms of what the move-in rents were in the first quarter versus the fourth quarter, there was a higher sequential jump in that movement rate than there was a year ago during those similar periods.
And at the same time, you had occupancy up. So I guess, is the message here that you guys are feeling a little bit better about pushing rate and removing some of the discounting on the front end? How should we think about that?

Peter Stubbs

I think we're feeling good about things. I think it's still too early to say moving into the leasing season. We have, -- rates have moved up sequentially month-over-month, which is good. But on a year-over-year basis, they've -- and from the previous quarter, they moved up 6% and they continue to move. But we'll see how those move as we move into the leasing season. So we would almost tell you it's really too early to tell.

Nicolas Yulico

Okay. Thank you.

Operator

Anthony Peak, Key Banc.

Anthony Peak

This is A.J. on for Todd. Quick question, just real quick around the April data. Could you quantify the occupancy for April thus far and what that looks like year-over-year?

Peter Stubbs

Yes. Occupancy at the end of April is 93.7%. So it's a slight increase from where we were at the end of Q1. So good movement in April.

Anthony Peak

Okay. And then real quick around kind of the 3PM growth kind of throughout the balance of the year. And I guess just broadly in this environment, how have the discussions changed around either the 3PM, structured financing or even acquisitions with sellers?

Joseph Margolis

So 3PM growth was really strong, 100 net. That includes the assets in the partnership that were moved from managed to wholly owned, sorry. So very strong quarter. 100 net is phenomenal growth. We continue to see strong demand from operators who are having trouble in the environment. We're seeing an increase in that demand and a significant decrease in demand from new developments as the development pipeline continues to slow down.
Similarly, on the bridge loan program, we see demand kind of converse to the acquisition market. So as the acquisition market continues to be muted, continued bid-ask spread, we see a number of borrowers seeking to kind of get a bridge solution instead of selling and they'll try again in three years. So very good activity on both of those fronts.

Operator

Ronald Kamden, Morgan Stanley.

Ronald Kamden

Great. Just two quick ones from my end. Just love some comments on the expense side, how you're sort of thinking about it? Obviously, taxes were higher as you expected, but just any relief as you go through the year?

Peter Stubbs

Yes. So property taxes and property and casualty insurance are the 2 areas that we kind of see pressure this year. So property taxes in the first quarter were higher. Some of that is a function of the bills that we received in the fourth quarter, and we were effectively, -- we had to catch up that accrual in the fourth quarter. So you had a harder comp from the first quarter of last year.
So on an annual basis, we wouldn't expect them to increase at this rate. But on a quarterly basis, it was a tougher comp. So the expense pressure is coming more from what we, -- we're doing what we can to control these expenses, whether it's appealing things on the property and casualty side, we've been very active in meeting with a lot of carriers, trying to make sure that we have as many people in the bid process as possible.
But those are somewhat -- you're somewhat subject to market conditions on the property and casualty side.

Ronald Kamden

Great. My second question is just obviously the April sounds like it's going well. But just from a macro perspective, after April 2, as you're sort of thinking about your business, your markets, bad debt, kind of feedback, any sort of signs that tariffs are having an impact anywhere on your business, business customer, anything that's coming up that you could share?

Joseph Margolis

So from a customer standpoint, we're seeing no impact as of today in any metric. So demand, which was mentioned earlier, is measured by Google search -- generic Google search terms is actually better now than it was last year at this time and better than 2019. So there is demand out there. We're not seeing any change in customer behavior in terms of acceptance of ECRI, defaults, bad debt.
The business is still good with no change. Looking forward, we don't know, and we don't know what the effect of tariffs are going to be on customer and customer behavior. I do know that our systems and our ability to collect and react to data will optimize whatever comes to fruition. So I feel good about that. I also think that tariffs -- and we don't even know what tariffs are going to mean in the long run, are going to have an effect on pricing immigration policy may have -- on commodity pricing, steel pricing.
Immigration policy is going to have an effect on labor pricing. And I think those things will reduce -- further reduce new development in the future, which is a good thing for our business.

Ronald Kamden

Great. Thanks so much. That's it for me.

Operator

Spenser Glimcher, Green Street

Spenser Glimcher

Yes, thank you. Joe, you commented on the sector's resiliency during economic downtimes. With that in mind, have you guys started to see more capital looking to get into the space in recent months?

Joseph Margolis

I don't know if we've seen more capital, Spenser. I think over the long term, there's been an increase in institutional capital looking to get into the space. When withdrawal cues in the open-end fund started and there was other reallocations of capital, it slowed down somewhat. We were certainly more busy with our joint venture partners in 2021 and '22 than we were in 2024 and currently this year. But there still is a lot of capital that is interested in self-storage.

Spenser Glimcher

Okay. That's helpful. Thanks so much.

Joseph Margolis

Sure.

Operator

Eric Wolfe, Citi.

Eric Wolfe

Hey, thanks. You mentioned that demand, as measured by Google search, is stronger than last year, and I think 2019 as well. But if you listen to the homebuilders, it seems like demand is pretty soft right now and affordability concerns. Apartments are seeing record low turnover.
So I'm just curious if there are other demand sources besides moving that are becoming a bit more important drivers of demand essentially just wondering why the Google searches look good right now at a time that the sort of moving environment seems to be a bit weaker than normal?

Joseph Margolis

Yes. So moving demand certainly has declined. The peak for us was the third quarter of 2021 when 63% of our customers told us they were in the process of moving. And that's not only moving to a for-sale house. That might be moving apartment to apartment or house to apartment or back home or to a dorm, but the peak was 63% of our customers and now it's about 54% in the first quarter.
So there clearly is a decline, but people are still moving. There's still a substantial demand from that. The increase in demand has been in the lack of space customer, and that's about 35% of our customers now are telling us that they are renting because they don't have enough space in their current situation. And the positive there is the length of stay of the lack of space customers twice that of the moving customer.
And one reason we see low vacates, I think, is because of this shift, and it's helped increase our -- both our occupancy and our average length of stay.

Eric Wolfe

That's helpful. And that lack of space customers, is that more pronounced in certain markets? Like I guess I would think in New York -- big, major urban markets where people tend to rent more than buy. But just curious if it breaks down by market at all?

Joseph Margolis

Yes. I think your rationale is logical, right? New York has always been a market with less transition and more kind of lack of space, small living space tenants. And you see that in market performance, right? New York -- both New York MSA and the New York boroughs outperformed our portfolio average by a significant amount, but that's a healthy market right now.

Operator

Juan Sanabria, BMO Capital Markets.

Juan Sanabria

Hi, good morning. A question on the rates as it relates to guidance street rates from your customers, you're flat now, and you said that was kind of one of the main variables whether you're at the high or low end. If rates are flat year-over-year on average for the balance of the year, what would that mean in terms of where you'd be in within the guidance range, all else equal?

Peter Stubbs

Juan, we actually haven't guided using rates. When we do our modeling, when we do all of that, we are guiding using revenue dollars. And so when I'm speaking to rates and strength of that, it's more in generalities. So I would tell you, obviously, higher rates are going to produce more revenue and lower rates are going to produce less, but we are guiding more on revenue versus rate.

Joseph Margolis

Okay.

Juan Sanabria

Okay. Fair enough. And then just a question on ECRIs. You've heard from some that there's been maybe some moderation in ECRIs, maybe the quantum that's asked for on average. Have you guys done any of that or seen that more broadly in the industry as you've kind of gotten more upfront or less paying upfront and those rates have stabilized year-over-year. But is there any kind of offset in ECRIs as part of that give and take between the two, street rates and ECRIs?

Joseph Margolis

Well, I think broadly, no. I think what changes ECRI, for us, I'm not speaking about the industry, is street rate, right? If we bring someone in at a discounted rate, an introductory rate, we'll try to get them through ECRI to street rate to or close to street rate in a reasonable period of time. And if street rate is not growing, that gives us less of an opportunity to do that. And if street rate is growing, then you get a little larger ECRIs. But I would think that's the variable is where street rate is going.

Juan Sanabria

Thank you.

Joseph Margolis

Sure.

Operator

Brad Heffern, RBC.

Brad Heffern

Hey, everyone. You mentioned the Google Search data having gotten a little better and the demand is finally sort of stabilized and also gotten a little better. What do you think is driving that? Have we finally just gotten to low enough pricing that's stabilizing things? Obviously, nothing happened on the housing front. Supply is pretty slow moving. So just wondering what you think is driving it?

Joseph Margolis

I don't think pricing has anything to do with it, right? People are searching for storage near me before they have any idea what the price is. I think it's life events and just all the typical things in good economies and bad economies and in all economies that happen that drive people to need storage. And it's one of the great, great things about our business is these things happen during all economic periods, right?
People are going to get divorced regardless of what the economy is going on, et cetera, et cetera. So I think it's just normal demand that is created by life events.

Brad Heffern

Okay. Got it. And then on the tariffs, are you expecting any direct impact on tenants like away from losing your job or like the macroeconomic impacts? I know it's hard to quantify, but I'm just wondering if you have small businesses, where there's an Amazon business, and they have a unit full imports from China, where it might be a headwind?

Joseph Margolis

So if that's true, it's a really small part of our business to start with. And I also think to the extent there are negative impacts, so the tenant that has Amazon imports from China now is out of business, there will be offsetting positive impacts of the business that ran out of a small flex space and their business is hurting and they have to downsize and operate out of a 10 by 20. So overall, I don't think it's going to be a big -- I'm pretty sure it's not going to be a big mover to our business.

Brad Heffern

Okay. Thank you.

Joseph Margolis

Sure.

Operator

Eric Luebchow, Wells Fargo.

Eric Luebchow

Alright. Great. Thank you. I know you don't guide to occupancy or move in rates, but I think last call, you had talked about maybe some of your occupancy burning off throughout the course of the year, and that could give you a little bit more leverage in pricing. So just wondering if those dynamics kind of still hold, and what you see in the market and how we should think about the next few quarters?

Peter Stubbs

The -- what we've said in the past about occupancy is we expect less occupancy benefit in the middle and back half of the year than what we saw in the front half, and we still assume that to be true.

Eric Luebchow

Okay. I appreciate that. And then on the acquisition guide, the $600 million in your updated guide. I guess, how should we think about the potential mix there between wholly owned acquisitions or JV investments? And I guess have you seen any real change in stabilized cap rates or bid-ask spreads in the market year-to-date versus last year?

Peter Stubbs

Yes. The best place to see the split is the table in the press release, and you'll see a footnote over the column and the stuff that's to happen going forward. So of those 28 properties, 27 of those are JVs. And then I'll have Joe comment on the market.

Joseph Margolis

Yes. I don't think I could accurately give you a market cap rate. The transactions that we see close all seem to have some unique story or circumstances of why the asset was sold at the price it was. I'm not sure there's enough volume that I'm comfortable of saying this is the clearing price or the clearing yield for an asset of a particular quality in a particular market. It gets a very quiet and uncertain market right now.

Eric Luebchow

Alright, I appreciate it. Thank you.

Joseph Margolis

Sure.

Operator

Caitlin Burrows, Goldman Sachs.

Caitlin Burrows

Hi good morning there. I was wondering if you could just comment on your supply outlook for the year?

Joseph Margolis

So in the first quarter, we saw deliveries in our micro markets of our same-store pool was as expected. We expected about 10% kind of on a square foot basis increase in those markets in 2025. And we're -- in the first quarter, we were tracking to that. I would not at all be surprised if the new deliveries goes down further just from what we're seeing in conversations with developers, inquiries in our ManagementPlus platform.
It is difficult now to understand what your costs are going to be and understand what your returns are going to be and it's significantly slowing down development

Caitlin Burrows

Got it. Makes sense. And then it looks like actually, post quarter, you guys did some buybacks. So just wondering how you decided to do that, and how you were thinking about that opportunity versus other uses of capital?

Joseph Margolis

It's a great way to ask the question because that is the decision. It's a capital allocation decision. And our stock price got to a point where we thought it was a very easy decision to allocate capital to that. We put a program in place. We were hoping to slowly buy a sizable amount of stock without moving the market.
And two hours later, the president put a pause on tariffs and the stock jumped and our program ended. So we only ended up buying a little bit of stock. I think it was at a favorable price. I wish we had a greater opportunity to buy more, and we'll continue going forward to look at that as one of our many options of how to allocate capital.

Caitlin Burrows

Thanks.

Joseph Margolis

You're welcome.

Operator

Michael Griffin, Evercore ISI.

Michael Griffin

Great, thanks. Wondering if you could give a little more context and color on kind of these upcoming JV buyouts or acquisitions you have for the remainder of the year. Can we get a sense, is it you approaching your partner? I imagine you obviously own and probably manage these properties, so you have a good sense for how they're operating on the ground.
I mean are these capital partners more finite life vehicles that need to bring capital back to investors. Like give us a sense of what the kind of property mix is here and how these deals came to be?

Joseph Margolis

Sure. So we have two joint venture buyouts that have been agreed to but not closed. Both situations, this is a capital allocation decision for the partner. They'd like to take this capital and put it somewhere else. One is a 2019 venture with 11 stores, one is a 2021 venture with 16 stores. We will realize a $3.1 million promote in one and a $4.2 million promote in the other.
The -- in the first one, we'll invest about $100 million at a first-year yield of 7.7%. And the second one, we will have incremental capital of about $55 million at about 7.4%. So both accretive and good uses of capital.

Peter Stubbs

Yes. And maybe just one clarifying point there. That's the cash invested. We're also assuming debt on both of those JVs to get to the total purchase price that's in the tables in the press release.

Michael Griffin

Yes. That's certainly helpful context, Scott. And then, Scott, I know you laid out kind of in your prepared remarks as it relates to guidance, you're not expecting a recovery in the housing market. But I imagine job growth is also relatively correlated with storage demand. We've obviously got this -- the jobs report coming out on Friday.
I think if that really starts to fall off a cliff, whether it's bigger declines than people expect or maybe job losses. I mean, have you done any analysis around that and how that could impact your expectations for growth?

Peter Stubbs

We have. We've looked for correlated factors over the years and job creation, job growth does impact it. We clearly prefer strong job growth than shrinking jobs. But at the same time, change is what drives self-storage. And good times, bad times, there's going to be change. And so even during the last downturn, 2008, 2009, we saw negative same-store growth of 2.9%. So we feel like self-storage is set up to not be recessionary. Nothing is recession-proof, but it does very well in the downturn also.

Michael Griffin

Great. That's it for me. Thanks for the time.

Operator

Ravi Vaidya, Mizuho

Ravi Vaidya

As we look ahead to the peak leasing season here, which markets do you expect to see strong and outsized demand from, and which ones maybe a bit more concerning or something to monitor, whether it be a weak pricing, lower demand or higher operating expenses?

Joseph Margolis

I would think the answer to that question relates to supply, really. So the markets that have -- are still absorbing supply, Atlanta, some of the Florida markets and the Southwest Coast, Phoenix maybe, will have more difficulty than the markets that have already absorbed supply or never really were in that type of supply situation

Operator

Ki Bin Kim, Truist Securities.

Ki Bin Kim

Just going back to the bridge loan topic. Can you illustrate for us like how much more demand you might be seeing in that program given the volatility in the cost of capital market?

Joseph Margolis

I think we're seeing steady demand. I'm not sure we're seeing increasing demand when you say more demand. I think we're seeing steady demand in that business. And it's kind of a wide variety of demand, fewer new development projects, right, at C/O, more borrowers who are buying out an equity partner or tried to sell and couldn't or didn't want to at the price they could sell so they're looking for a temporary solution.
And other people who want to do additions to their property or other situations like that. But I think demand is more steady than increasing.

Ki Bin Kim

Okay. And on the LSI assets, you mentioned improving rentals and occupancy. For rate for the comparable properties to EXR, like where is that gap today? And how has it trended?

Joseph Margolis

Overall, the trend is positive. Where the LSI stores are improving, their rate growth is better than the Extra Space properties. We're not really looking at 2 separate pools anymore and reporting on that. We will just report our same-store pool, and you can look at prior pools where the change is 95% LSI to see the difference in performance.

Operator

Michael Mueller, JP Morgan.

Michael Mueller

I guess first question, if a recession actually happens, can you talk about how you think you'd approach operating the portfolio to the playbook from the GFC?

Joseph Margolis

Yes, really, really good question. I think we're in a much, much better position than we were in 2009 to maximize performance in the downturn. We just didn't have the systems, the data, the experience back then that we have now. And we did a bunch of things back then that in hindsight, we didn't need to do, right? We had a vacate problem in 2009, not a demand problem, which was interesting.
Our problem was really on the vacate side. And we tried unilaterally lowering customers' rates to get them not to vacate. And obviously, that doesn't work. When people don't need storage, they don't need storage. So I'm much more confident that our systems will react real time to what's going on to optimize performance. And all we can do is do the best we can in the situation that's presented to us. But we are set up well to perform as best as we can regardless of the cards we're dealt.

Michael Mueller

Got it. Okay. Maybe one other quick one, too. Can you give a sense as to what portion of, I guess, the bridge loans that you extend ultimately translate into some sort of acquisition? Has there been a consistent ratio in the conversion of, say, number of loans to acquisition transactions?

Joseph Margolis

So we've closed about $2.5 billion worth of bridge loans, and we bought about $595 million of collateral. So that's about 24% of all loans by dollars end up being acquisitions. It's lumpy, though, I will tell you that. It's not a consistent quarter after quarter. It's more situational.
But it's one of the great attributes and in addition to the fees we get the interest, the management economics, the expansion of our relationships, it's one of the other great benefits of this program is it's a somewhat proprietary acquisition pipeline.

Michael Mueller

Got it. Thank you.

Joseph Margolis

Sure.

Operator

Brendan Lynch, Barclays Bank.

Brendan Lynch

We're a few months on from the fires in Los Angeles. Can you give us an update on how it's impacting operations and customer behavior?

Joseph Margolis

So we don't see the increase in demand from fires like we do from hurricanes. So there's not a change in customer behavior that way in terms of demand. Obviously, our pricing has been restricted by the state of emergency that's in place. We think that's going to affect overall portfolio performance by about 20 basis points in revenue this year.
And it kind of is what it is. There's -- we will -- sorry to repeat myself. We will optimize given the situation that we're in.

Brendan Lynch

That makes sense. Another question on the marketing spend. It was down 12.5% year-over-year at a time when you're increasing occupancy. How should we think about that marketing spend going forward? And what is changing in your approach?

Peter Stubbs

Yes. So marketing spend we view as a tool to maximize revenue. And so if we have opportunities to spend more, to drive more demand, to increase pricing, we're going to do it. Now that should be offset by some of the savings from the LSIs going to a single brand. We do expect savings there in terms of only bidding on one. But we absolutely view it as an opportunity and also an expense.

Brendan Lynch

Great, thank you.

Operator

Omotayo Okusanya, Deutsche Bank.

Omotayo Okusanya

A quick one on guidance. Again, you almost doubled your acquisition outlook, but just to kind of kept guidance the same. Can you just walk us through a little bit of that train of thought?

Peter Stubbs

Yes. So the increase in guidance is offset by a portion of the decrease in equity and earnings. Equity and earnings is going down by about $17 million. That decrease relates to 2 components. The first is the repayment of the SmartStop preferred which is about $10 million of the $17 million and the other $7 million is effectively moving into non-same-store NOI.

Omotayo Okusanya

Okay. That's helpful. And then, again, pardon me if I missed this, but ECRI trends in 1Q, could you just talk a little bit about exactly how much you increased ECRIs? And then I think there was a prior question about how that could potentially be impacted by a slowdown in the economy or a recession, and how you're kind of thinking about it for the rest of the year?

Joseph Margolis

So really no change to our ECRI program in the first quarter other than with respect to Los Angeles and other states of emergencies where we're legally restricted and also no change in customer behavior. As we've discussed previously, we track move-outs in response to ECRI every month, and we see that's -- we've been very steady with no increase in move-outs to the ECRI.

Omotayo Okusanya

Got you. Last one, if I may ask, any interest at all in doing anything internationally? Again, you have a peer that's doing things all the way in the UK all the way in Australia. I'm just kind of curious how you kind of think about some of those markets where maybe the product itself is not quite as mature, and there might be a little bit more opportunity for growth?

Joseph Margolis

Yes. We certainly look at international opportunities. We were invested in Mexico for a while. We've looked at lots of other opportunities. And there's really two big hurdles we want to jump over before we go outside the US. One is that we want to make at least and preferably more return on the dollar invested overseas as the dollar invested here net of taxes in currency and setting up systems and all the costs of going international.
So it's got to be accretive net of all of those things. And then secondly, it's got to be scalable. We're not really interested in buying two assets in Toronto. It's not worth the headache. So if we can find something that's accretive for our shareholders, and we can make it scalable over time, then we'd be very interested in it. And we certainly look at a lot of opportunities, and we'll pull the trigger if we can ever satisfy those conditions.

Omotayo Okusanya

Sounds good.

Operator

Anthony Peak, Key Bank Capital Markets.

Anthony Peak

Just a couple of quick follow-ups here. First, Joe, you noted that there could be some instances of demand from tenants that might need to downsize from a flex space and look to a larger storage unit or multiple units. Are you seeing any use cases like that worth noting? Anything to report along those lines? Or was that just a point that you were making to sort of simply demonstrate the business's various demand drivers?

Joseph Margolis

It's really the latter. It's -- we have seen that. It's anecdotal. We don't have enough volume of that to track over time. It's not a major part of our business. But the point that I was trying to make is that while positive economic growth, job growth creates storage demand and we prefer that, there is also storage demand that's created by negative economic circumstances. And I was just trying to give an example.

Anthony Peak

Okay. Got it. And then I understand you're not breaking out the LSI portfolio going forward. But I'm just curious, the contribution to same-store growth this year, that tailwind from the LSI portfolio, do you expect that to increase during the year? Or is the impact sort of greatest early in the year to start the year here in the first quarter, for example?

Peter Stubbs

We would expect it to not increase, to be flat to slightly moderating.

Anthony Peak

Okay. And then just one more. Going back to the third-party management platform, you've seen pretty sizable growth there over the last couple of years. Are there any constraints at all to growing that platform as you look ahead? Any sort of obstacles that you face or any plans to do anything more strategic with the third-party management business over time?

Joseph Margolis

Well, once we manage every store in the country, we'll be done. That's the constraint. I don't think so. I think we have a scalable platform. The larger we get, the more advantages we have of scale in terms of data and costs and efficiencies. So I think we can continue to grow this platform, maybe not 100 stores a quarter, but certainly, we can continue to grow it.
We can -- as we expand into new markets, that gives us more opportunities. And it's an integral part of our business that gives us benefits across lots of verticals. It helps our bridge loan business, helps our acquisition business, helps us with data. So I don't think we'd want to do something strategic, if you mean like carve it off and sell it. I don't think that's in the plans.

Anthony Peak

Okay, all right. Thank you.

Operator

Michael Griffin, Evercore ISI.

Michael Griffin

Just wanted a little more clarity. I noticed, I think the move-in volume quarter-over-quarter -- or, year-over-year in the same-store pool, looked like it was down about 12%, 165,000 units this quarter versus 188,000 first quarter of last year. Is there anything to read into this? I mean that seems like a pretty notable drop off, but any color you have here would be helpful? Thank you.

Peter Stubbs

Some of that is a function on the comp from last year. We actually had a very good rental volume last year. But overall move-in and move-out volume are down, but probably the more important number here is occupancy. I mean occupancy and revenue growth are doing what we would expect. So I wouldn't tell you there's anything to read into it.

Operator

Caitlin Burrows, Goldman Sachs.

Caitlin Burrows

A quick follow-up on the business use realizing that it's a small part of your business. I'm just wondering if you have any idea if that's like 2% of your business or 6% or more, or you don't know?

Joseph Margolis

So we don't know exactly because it's easy to track the customer that signs their lease in the corporate name. But we also have lots of businesses that sign their lease in an individual name and they're a landscaper or a local business. So we know about 5% or 6% of our tenants sign in business names. So probably our, -- not probably, our overall business use is somewhere north of that.
And it's gone down over time as a larger portion of our portfolio is multistory buildings where a fewer percentage of our units are the first floor 10/10s, outside access that the businesses prefer, that most businesses prefer. You got it.

Caitlin Burrows

Thanks.

Joseph Margolis

Sure. You're welcome.

Operator

There are no further questions at this time. I will now turn the call over to Josesh Margolis, CEO. Please continue.

Joseph Margolis

Yes. Thank you, everyone, for your interest in Extra Space and your good questions. We're encouraged by the start of the year, as we tried to say, and we're prepared for whatever the future puts in front of us. I hope everyone has a great day. Thank you.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.