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Public Storage (NYSE:PSA)
Q2 2020 Earnings Call
Aug 6, 2020, 12:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Public Storage Second Quarter 2020 Earnings Call. [Operator Instructions]

It is now my pleasure to turn the floor over to Ryan Burke, Vice President of Investor Relations. Ryan, you may begin.

Ryan C. Burke -- Vice President of Investor Services

Thank you, Maria, and thanks to all of you for joining us for our second quarter 2020 earnings call. I'm here with Joe Russell and Tom Boyle. Before we begin, we want to remind you that all statements other than statements of historical fact included on this call are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected by the statements. These risks and other factors could adversely affect our business and future results that are described in yesterday's earnings release and in our reports filed with the SEC. All forward-looking statements speak only as of today, August 6, 2020. We assume no obligation to update or revise any of these statements, whether as a relative new information, future events or otherwise. A reconciliation to GAAP and the non-GAAP measures we provided on the call is included in our earnings release you can find our press release, SEC reports and an audio replay of this conference call on our website at publicstorage.com. As usual, we do ask that you keep your questions limited to 2. After you ask 2, please feel free to jump back in queue.

With that, I'll turn it over to Joe.

Joseph D. Russell, Jr -- President and Chief Executive Officer

Thank you, Ryan, and thanks for joining us today. Before I open the call for questions, I would first like to acknowledge and thank the full Public Storage team along with our customers and business partners as we have come together to ensure a safe environment. In the last four months, during this pandemic, we have moved in over 400,000 new customers as we continue to operate our entire 2,500 property portfolio. Clearly, this volume of activity has been a validation of the strength of our platform and the resiliency of self-storage.

With that, I would now like to open the call for questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Jeff Spector of Bank of America.

Jeffrey Alan Spector -- BofA Merrill Lynch -- Analyst

Great, thank you. Joe, maybe I'll start the first question just on that point. As you mentioned, the volume is very strong, and the results were better in the quarter, I think, than initially expected if we compare comments to the last call. But at the same time, I know your team is cautious on the second half of the year. I guess, can you tie those comments together?

Joseph D. Russell, Jr -- President and Chief Executive Officer

Sure, Jeff. Yes, there's no question, as I noted, that we've been very determined and focused on the amount of volume we've been able to pull into the portfolio, coupled with, obviously, a number of crosscurrents. So if you step back and think about the last four months during the pandemic, we kind of think of going through four different phases. And the early part of the pandemic March and April, we did a number of things to ensure all the right safety protocols. We suspended auctions and really make sure that our entire environment was safe and secure as we were able to continue to operate all of our properties. We saw a little bit of degradation in demand after an initial rush that came to us through primarily college and university shutting down early. So we saw a bit of a rush, but then not long after that, we started to see a bit of degradation. But then going into the next phase, the second phase, we began to put even more focus on customer focus. We, again, suspended auctions, and we opened up to a degree, some of the customer accommodation practices, again, to be reflective of the environment. And we became more focused on different tools around top-of-funnel demand through advertising and other things that were proving to be actually quite effective. So we started to see the residual benefit of that. And again, a lift in demand and move-in volume. The next phase, again, we continue along those same lines, but continue to put even more focus on the ways in which we were able to draw new customers to the portfolio, while month-after-month, seeing a very positive impact from far fewer move-outs. And then finally, the most recent phase, as we stand through the month of July, we've actually now gone back to auctions. We have reinstituted rent increases in many parts of the portfolio. And again, we're starting to see very good reaction to the amount of activity, both on move-ins and lack of or the lower move-outs. So speaking to the second half of the year, yes, we do see a number of different pressures that I'll have Tom walk you through in a little bit more detail. But overall, as I noted, we've been very pleased by the overall resiliency and the ability on our part to continue to drive this level of demand. And literally, we are dealing with, in many markets, record high levels of occupancy. Tom, why don't you give a little bit more color on the second half of the year?

Tom Boyle -- Chief Financial Officer

Yes. Thanks, Joe. So as Joe mentioned, operating metrics really started to improve as we moved through the second quarter and have continued that post quarter we can spend more time there, if you like. But I think part of your question was around the discussion around same store revenue trends. So how do those operating metrics translate to financial metrics. And while operating metrics improved throughout the second quarter. Financial metrics, we saw revenue growth in the same store pool deteriorate. So if you think about the second quarter in aggregate into components. Same store occupancy was up about 20 basis points. Same store rents were down 2%. So that leads you to your negative 1.8% performance for rental income in the same store pool in the second quarter. Fee collections were down 32% in the quarter. Those fee collections were down for two primary reasons. Earlier in the quarter, it related to customer accommodations and customers requesting fee relief. And so we did grant the vast majority of those requests. But collections, frankly, were quite good through the quarter. And so as we move through the second quarter, our fee collections were lower year-over-year on about a 30% basis because customers were paying us sooner. And we anticipate that's likely to continue, or at least we've seen it continue through July at this point, which is leading to lower fee collections. So that was the second quarter. As we think about the other component of your question around the second half, I just highlighted that rents were down 2% in the second quarter on average. We ended the quarter down 3.1% on contract rents. So clearly, we're starting the third quarter in a lower year-over-year rent growth position, and we're still seeing fee collections lower because of good collections.

Jeffrey Alan Spector -- BofA Merrill Lynch -- Analyst

Very helpful. I guess my one follow-up then. Just to confirm, but are we saying that the second half you think could be worse than 2Q? I think that's where I'm a bit confused. Because this seems like...

Tom Boyle -- Chief Financial Officer

We highlighted in the MD&A in the 10-Q, which is we think it's likely that the second half will have same store revenue performance worse than the second quarter.

Operator

Our next question comes from the line of Smedes Rose of Citi.

Smedes Rose -- Citigroup Inc -- Analyst

Hi, thanks.I just wanted to I was interested that you talked about in your Q that bad debt expense was in line with historic levels. So does that just tie into what you Jeff talked about where you're granting fee relief so that they so customers don't necessarily kind of fall into a bad debt category? Or is there is something maybe I'm just not understanding correctly?

Tom Boyle -- Chief Financial Officer

No. I think it's really pretty simple. Collection trends through the quarter were good. We had customers that were paying us earlier. We did have customers that while we had auctions pause for a period of time, stayed with us for a longer period of time. We've begun to work through that during the quarter. And so right now, we're sitting with about 20 basis points of occupancy that is delayed auction activities. But as you think about bad debt through the quarter, it was pretty consistent year-over-year. And frankly, as we sit here today, away from what was written off in the second quarter, the receivable as we ended the quarter was actually down a little bit year-over-year. Stepping back, it's obviously a focus of the team to focus on basics through the quarter, running spaces and collecting rent. And I think we saw good customer reaction and validation that our spaces are important to them, and we saw good payment activity and rental activity. I think there's also broader things that work. There's no question that governments stimulus government support for many individuals throughout the economy we suspect helped our collection trends through the quarter. And as we look across industries, credit cards or otherwise, many other industries are seeing similar collection trends as the government has done a good bit to support individual's finances.

Smedes Rose -- Citigroup Inc -- Analyst

Okay. And then just as a follow-up. You continue to make acquisitions and see things that you're purchasing. Just wondering if you could just speak to what's, I guess, compelling about the opportunities? Is it cap rates? Is it just the ability to manage it better? Or kind of what are you sort of seeing now this is maybe versus kind of pre-pandemic, I guess, on your acquisition activity?

Joseph D. Russell, Jr -- President and Chief Executive Officer

Yes. Sure, Smedes. There's no question at the beginning of the pandemic, investment market on many fronts basically went into pause mode. We had again, in the March and April time frame, a handful of assets that have been already vetted. We still thought they were very attractive investments for us to make. We closed on those deals toward the earlier part of the quarter. And then as things settle down, we actually began to see and continue through today a bit of an elevation of return to market and/or just conversations that we had in motion prior to the pandemic, a variety of different deals that continue to be particularly attractive. So for the most part, the types of assets that are commanding normal or consistent cap rates pre-pandemic would be stabilized assets. There's still a lot of capital on the sidelines that's out looking for those types of investments. What we've done alternatively is look for, again, value opportunities particularly around assets that may not be stabilized and/or in parts of our markets that we think round out our presence. So we are seeing a little bit more opening up of owners that are coming back to the market, some of which do not see a way to basically get out of some of the constraints they may be under for either lending reasons or not making the yields that they had expected. And those conversations are becoming more vibrant, I'll tell you that. And with that, we've got, again, as we pointed to in the press release, we've got a few assets that are in motion, and we're confident that we'll probably see more. There still are very few bigger portfolios on the market today. We are also seeing maybe no surprise a few more land holding opportunities coming up as well, where again, owners that have taken down positions in land, maybe have taken them through various stages entitlement that are not again seeing the pro forma and return expectations come through, particularly with what's going on with rates across most markets are looking for a way to come out of those positions. So the acquisition team is busy looking at many different types of opportunities, and we'll see how this continues to play forth in the coming quarters.

Smedes Rose -- Citigroup Inc -- Analyst

Great, thank you. Appreciate it.

Operator

Our next question comes from the line of Spenser Allaway of Green Street Advisors.

Spenser Bowes Allaway -- Green Street Advisors -- Analyst

Maybe just a follow-up on the resumed rate increases. Can you perhaps just quantify or provide more color around what percent of the portfolio has now seen rate increases? And whether they have been to the same degree that you would have sent out to existing customers pre-COVID?

Tom Boyle -- Chief Financial Officer

Sure. Thanks, Spenser. This is Tom. So as Joe mentioned, we did pause existing tenant rate increases for the second quarter. They did resume on July 1. And we resumed it really on a test basis on July one and have since more broadly resumed on August one and expect to on September one as well. In terms of the breadth of it across the country, those increases are broadly spread throughout the country. So in the vast majority of the country, we're able to send existing tenant rate increases. The magnitude of them compared to prior years, though, is lower. And we did that on a test basis on July one to try to understand consumer behavior during the pandemic, and we saw encouraging trends there. But as we look forward, there are headwinds to sending the same sorts of increases as we did in prior years really related to state and local jurisdictions and the price-related regulations there. And so we would anticipate that the magnitude of the increases will be lower on a year-over-year basis for the next several months or longer, depending on how long those regulations stay in place.

Spenser Bowes Allaway -- Green Street Advisors -- Analyst

Okay, thank you.

Tom Boyle -- Chief Financial Officer

Thank you.

Operator

Our next question comes from the line of John Kim with BMO Capital Markets.

Piljung Kim -- BMO Capital Markets -- Analyst

Can I just ask a follow-up on that rate increase, what percentage were accepted? And if you could maybe provide some parameters around the average increase?

Tom Boyle -- Chief Financial Officer

Yes, sure. In terms of the percentage of those accepted. I'm not going to get into details there, but I would say on a year-over-year basis, we saw good trends there as it relates to acceptance and continued rental activity with Public Storage. In terms of the magnitude, typically, I've highlighted that upper single-digit to 10% type increases. This year, we're averaging a little bit below that because of the things I just highlighted for Spenser. So on average, a little bit lower than that.

Piljung Kim -- BMO Capital Markets -- Analyst

And then you mentioned the revenue decline being more pronounced in the second half of the year. I'm wondering if you could also provide commentary on the expense side. And if there's any potential savings from either marketing or other variable costs?

Joseph D. Russell, Jr -- President and Chief Executive Officer

Yes, I'll begin with part of what you saw in the second quarter. We had elevated payroll costs that was tied to our PS Cares fund, where we were, again, boosting pay rate within our hourly employee ranks as well as providing a number of different accommodations reflective of the environment to support cost tied to child care, more opportunity to take PTO and, again, look at the different opportunities or challenges that the workforce at large was dealing with. So the pay rate increase did end at the end of the second quarter. So you'll see some moderation down in the elevated cost of payroll, which was about 20% in the second quarter. And then we'll also, as you see, be looking at lower taxes potentially because we saw property taxes come in lower at about 3.6% in the second quarter. And then the other thing that we're going to keep an eye on is the cost of advertising and promotions with the remaining rest of the year.

Tom Boyle -- Chief Financial Officer

Yes. And I'd just highlight that there's pretty good line-by-line details in the MD&A in our 10-Q. But we would anticipate that the growth moderates from the second quarter.

Piljung Kim -- BMO Capital Markets -- Analyst

Got it, thanks.

Operator

Our next question comes from the line of Ki Bin Kim of Trust.

Ki Bin Kim -- Truist Securities -- Analyst

Just going back to the existing customer rate increase program. I mean, it's my understanding that if you stop that program for three months, it really doesn't make a big impact, right? If you stop it for a prolonged period of time, that's when it starts to bleed into results, and you start to see a bigger impact. So I'm just curious, like what was the lack of contribution, if you will, in the second quarter from stopping that program? And how should that change going forward?

Tom Boyle -- Chief Financial Officer

Sure. Taking a step back, pausing on existing tenants for any month will have a meaningful impact on in place rents. And so as we pause throughout the second quarter, there was a cumulative impact of several months of not sending existing tenant increases. And as I highlighted, not only did we not send those during the second quarter when we resent them and are sending increases in the second half, they are at lower magnitude, given some of the regulations and things that we're doing to be mindful of the environment. So as you think about contribution to second quarter rental rate trends, you saw that, on average, rent per occupied square foot was down 2% in the second quarter. The largest component of that decline from the end of the first quarter to the end of the second quarter was really no or very little contribution from existing tenant rate increases. The rest of it was rent roll down, which we disclosed are move-in and move-out trend throughout the second quarter, which was also here clearly contributing factors, particularly early on in the quarter.

Ki Bin Kim -- Truist Securities -- Analyst

And in terms of looking forward, that should moderate, I'm assuming. Could your funding the lender letters out again, even though it's the lower rate?

Tom Boyle -- Chief Financial Officer

Yes. We shouldn't have the same level of rental rate decline from existing tenants because we will be sending them out.

Ki Bin Kim -- Truist Securities -- Analyst

Okay. And just going back to the late fees and admin charges that were down, I think, 30% or so year-over-year. Can you just give a little more color on what those fees are? Is it just late fees? And I'm assuming mean if operations start to return back to normal, that segment price should normalize pretty quickly? Or am I missing something?

Tom Boyle -- Chief Financial Officer

Sure. So the different components of the late charges and administrative fees break down into several components. One is administrative fees that are charged and move-in. And so that line item will trend based on move-in volumes. And you've seen that over time, if move-in volumes are down, you're going to see those admin fees be a little bit down. So we did see that in the second quarter. The other charges are related to late and then lean and lean sale fees, the largest component of it being late fees. So if a customer doesn't pay the rent on time, a fee is charged to their account. That's where we saw improving collection trends reduce the amount of fees collected as we move through the quarter. I would say that, that down 32% in fees collected actually remained somewhat consistent through the second quarter and into July, but the composition of the driver changed as we move through the quarter. In the month of April and the first part of May, the majority of the driver there was fee accommodation, customers requesting fee relief. I shared on the last call that during the month of April, we had about 7% of our customers' request. Some sort of customer accommodation or either rent or fee relief. The majority of that was fee relief, and the majority of that was granted. As we move through the quarter, the amount of requests that we received diminished, and collection trends improved such that by the time we got into June, that down 30% and fee collections was driven primarily by better collection trends, and that's continued through July. In terms of how much into the future, we can anticipate the fee trends will remain that way. It's hard to call. You would have asked us in March, whether collections would be meaningfully better year-over-year as we move through the quarter. I don't think I would have sat here and told you that. But now having seen it for a number of months and seen it through the month of July and good trends even as we get into August here, it does feel like it's part of the environment. And as I highlighted, there's no question there's bigger factors there at work. And so it's certainly a potential driver of lower same store revenues in the second half because we continue to see it play out through the third quarter.

Joseph D. Russell, Jr -- President and Chief Executive Officer

And just even getting a little bit more perspective, Ki Bin, as Tom said, through the quarter and even through July, that level of customer request has continued to diminish, coupled with the fact customers are paying on time. So the customer behavior through the pandemic has actually been quite strong. And it validates the way in which our platform has been well tuned to not only address an environment like this, but it's been able to optimize the collection process as a whole.

Tom Boyle -- Chief Financial Officer

Yes. And I think clearly, lower fee collections isn't a great thing from a same store revenue trend standpoint, but it's a great thing for the shape of our customers in the business and validates the demand for self-storage as well as the customers' value in using our space.

Ki Bin Kim -- Truist Securities -- Analyst

Right. I mean no one can argue that if people are paying on time and you have less late fees. That's a bad thing. So I'm assuming then it's a good thing, right? So I'm assuming that kind of the mix of that fee structure of that lower year-over-year is now the sign-up fee, the administrative fee, that's probably lower, right, or making a bigger impact?

Tom Boyle -- Chief Financial Officer

Well, it's that late fee. It's customers paying us on time, and we're seeing that in through July and August.

Joseph D. Russell, Jr -- President and Chief Executive Officer

One other thing to add is auction activity, as I mentioned, through the phases, we had paused on option activity for a chunk of the second quarter. We are doing actions again. We do have a few municipalities where we're being held back, but our auction overhang is actually quite limited. It accounts for only about 20 basis points of our overall occupancy. So that too talks to the way that we continue to be optimized around our entire collection process, our customer engagement process, and we've been able to calibrate that very efficiently even in an environment where there's been a number of hurdles that had limited us, particularly at the beginning of the pandemic to do auctions, and we are basically back in the auction business in many parts of the portfolio. We're certainly abiding by areas where we're unable to do auctions, but the meaningful chunk of that part of our business has returned.

Tom Boyle -- Chief Financial Officer

And maybe, Ki Bin, I'll just respond to that to provide what the real benefit of that is as we move through the quarter. It really allowed us to rerent that space as we got it back. And so as we move through the quarter, we spoke about earlier around how average occupancy was up about 20 basis points. We ended the quarter up 50 basis points. And again, that age delinquency really represented about 20 basis points there. So call it up 30 basis points on a net basis. That's really continued to improve. And at July 31, our occupancy was up 140 basis points. And again, about 20 basis points of impact of delayed auction activity. So net up about a 120 basis points in occupancy, and that's really related to the operating trends that Joe highlighted, as we move through the different phases and improving trends in move-ins and continued lower move-outs coupled with the fact that our delinquency process was under way, allowed us to rerent that space and move occupancy higher as we move through July.

Ki Bin Kim -- Truist Securities -- Analyst

Okay, thanks. That's all helpful.

Tom Boyle -- Chief Financial Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Ronald Kamdem of Morgan Stanley.

Ronald Kamdem -- Morgan Stanley -- Analyst

Just two quick ones from me. One is just trying to get a better understanding. We're hearing a lot about migration out of urban into sort of the suburban areas with the pandemic, where it's a little bit less density. And the question is really, are you seeing sort of anything in your portfolio that would suggest that's true? So are properties maybe that are in sort of more suburban markets, have they seen better activity than, say, your New York or California or something like that?

Joseph D. Russell, Jr -- President and Chief Executive Officer

Ron, it's too soon to really tell if there's going to be a material and long-standing shift around suburban versus urban. We track by both areas. We look at density, from a population standpoint, how our properties are performing. You mentioned New York. Ironically, at the moment, New York has actually been a huge beneficiary of the amount of demand that we've seen over the last quarter or so. San Francisco is the same. But again, we are not stepping back in basically putting any kind of a label on suburban versus urban. It's way too soon to tell. We have good diversification across all of our markets, I guess, whether they're in suburban or urban markets, and we will continue to track and see the lingering impact from the pandemic. And again, just a shift in overall patterns about where people choose to live, it's way too soon to tell. One thing that has been pronounced that we see from a demand standpoint in both markets is the work-from-home impact. We see many more of our customers coming to us because they are not going to a traditional office. They need more space at home. And by virtue of that, they're putting more stuff in our facilities. So that's been a meaningful additional demand factor that we've seen both in urban and suburban markets.

Ronald Kamdem -- Morgan Stanley -- Analyst

Got it. That's helpful. And then the second question was just on just in July operating trends. I don't know if you mentioned it already, but just what the occupancy is sitting at and what the change in pricing?

Tom Boyle -- Chief Financial Officer

Yes, sure. So I hit on that just a moment ago, but I'll give a little bit more context on operating trends in July. Move-in volumes were better in the month of July. Move-in volumes were down about 2%. Move-out volumes were actually down about 15%, which led to an increase in occupancy through the month. And I just highlighted July 30, our occupancy was up around a 140 basis points year-over-year. I would note that about 20 basis points of that is related to delayed auction activity. Overall, July, we saw continued improving operating trends, as Joe mentioned earlier.

Joseph D. Russell, Jr -- President and Chief Executive Officer

One area I would also add on is our non same store portfolio, in particular, has been quite vibrant. We have a fair amount of both new development acquisition opportunities for customers to move-in, and we've seen an inordinate amount of move-in activity, which has been quite a good surprise or a good benefit based on a number of things we're seeing from a trend standpoint. So I mentioned that we've moved in about 400,000 customers in the last four months. If you just look at Q2 of the 300,000 or so customers have moved in, 60,000 of those move-ins came into our non same store portfolio. The non same store portfolio continues to do quite well from an occupancy growth standpoint, and we're up about 11%. And continue to see very good trends and tractions relative to both new builds, redevelopment and acquisitions that we've added into the portfolio that total pulled about 13.5 million square feet, and we continue to see very good performance and fill ups across all markets. Frankly, we haven't seen any of our acquisitions development going backwards in this environment, they have done the absolute opposite where they're filling up pretty dramatically.

Ronald Kamdem -- Morgan Stanley -- Analyst

Great, thank you, sir.

Operator

Our next question comes from the line of Rick Skidmore of Goldman Sachs.

Richard Wynn Skidmore -- Goldman Sachs Group, -- Analyst

Joe, just to follow-up on a previous question. On the external growth front, it sounds like your focus would be more domestic versus international. Is that the right way we should be thinking about your comments on the acquisition front?

Joseph D. Russell, Jr -- President and Chief Executive Officer

So Rick, we're going to continue, as we always have, to look in many markets, both within and outside the U.S. I wouldn't say that our focus has changed over the long-term any differently. There's no question over the last few months. We've put particular focus on everything that's going on right here in the United States, but over time, we will continue to assess and look at opportunities beyond the United States.

Richard Wynn Skidmore -- Goldman Sachs Group, -- Analyst

And then one bigger picture question, Joe. In the past, you've talked about supply growth and supply growth saving in 2020. Can you just talk about what you're seeing from a supply growth standpoint? Has the pandemic load developments or financing for new projects and are you starting to see that manifest itself in your markets?

Joseph D. Russell, Jr -- President and Chief Executive Officer

Sure. There is still a healthy amount of supply that continues to be delivered into 2020. Last quarter, we talked about the likelihood that it would be anywhere, say, 15% to 20% or so less than what was predicted, which would 0.2%, plus or minus have $5 billion or so level of deliveries in 2020. We think that's probably closer to $4 billion or less. There doesn't appear to be any slowdown this year anyway, relative to those deliveries taking place, although some of them are taking longer, no surprise, many cities have slowed down their own approval processes, whether through inspections, again, final occupancy permits, etc. So we still think that there's a healthy amount of supply. It kind of goes into the level of supply you saw in the 2017 or so era. Now looking out to 2021 and beyond, I would expect, based, again, on what I mentioned earlier, there will likely be more constraints around funding that many of these developers look for relative to construction loans. And again, the investment hurdles that either they and/or their partners are going to require to move forward on any particular acquisition or any particular development, excuse me. So we're likely to see, again, another leg down. I don't know how hard and dramatic that might be, but it would be a welcome relief, particularly in the markets that we've been pointing to over the last couple of years that have been hit heavy with new supply. So too soon to tell yet the lingering impact into 2021 and beyond, but we're likely to see, again, another leg down.

Richard Wynn Skidmore -- Goldman Sachs Group, -- Analyst

Thanks, Joe. Appreciate the color.

Operator

Our next question comes from the line of Mike Mueller of JPMorgan.

Michael William Mueller -- JPMorgan Chase & Co -- Analyst

Just wondering how were the year-over-year move-in rate comps in July versus 2Q is down 14%?

Tom Boyle -- Chief Financial Officer

Sure. Very specific question. So move-in rate change in the month of July was down a little over 4%. Move-in volumes down about 2%, move-in rate down about 4%.

Michael William Mueller -- JPMorgan Chase & Co -- Analyst

Okay. Got it. And I'm curious, the expansion of the third-party management business, how has that trended over the past four months or so with the pandemic?

Joseph D. Russell, Jr -- President and Chief Executive Officer

Yes, Mike. The number of properties we added to the platform in the quarter was 9. We have 106 properties now. The backlog continues to grow. It's still dominated by properties that are going through various phases of construction, although we are also seeing stabilized and/or lease-up assets coming into the portfolio and the platform as well. So not unlike what we saw in the acquisition arena, to some degree, it got a little quieter for a month or two on the early part of the pandemic. But as things have settled down, we're seeing good activity, and we continue to bring new properties into the platform, whether they're new, and we're actually opening them. We opened, again, several in the quarter, and we're bringing more into the portfolios are going through different phases of completion and development. The backlog is healthy, and we're continuing to add to it.

Michael William Mueller -- JPMorgan Chase & Co -- Analyst

Got it, OK.

Operator

[Operator Instructions] Our next question comes from the line of Steve Sakwa of Evercore ISI.

Stephen Thomas Sakwa -- Evercore ISI -- Analyst

I don't know if you can answer this or maybe talk a little bit about the differences, but you said that your occupancy was effectively only inflated, if you will, by 20 to 30 basis points from the lack of auctions. And one of your peers yesterday talked about that number being closer to 150 to maybe 200 basis points. And I'm just really trying to figure out, is there differences or what the differences are that would cause such a large delta? And then is there anything around maybe the unemployment insurance payments that came into folks over the last four months, providing them with more income that might have helped on the collection front? And therefore, your fees are down, as you talked about, and that helps kind of keep the delinquencies and the auction process down, but it just seem to be a very wide difference between you and your peer.

Tom Boyle -- Chief Financial Officer

Yes Steve, it's Tom. I think we've spoken about this, I'll reiterate some of the comments. I obviously can't speak to what others are seeing in the industry, but I'll comment on what we're seeing, which we did see better cash trends and that's driving lower fees. It's also, as we move back to the conducting auctions that's reduced the amount of backlog. So a combination of conducting lean sales as well as better collections, leading to about 20 basis points age delinquency. I would highlight that we obviously worked with customers throughout the second quarter on different ways as I highlighted, about 7% of our customers requested some form of relief in the second quarter, and we're very receptive to those sorts of requests as we help the customers that we're having a tough time. But those really started to moderate as we move through the quarter. And as Joe highlighted, as we move through the different phases of the second quarter, we started to see better trends there. I think your comment around government support is a good one. And I do think that be it unemployment benefits or $1,200 checks. There's no question that across the country, folks got some support through the second quarter, which likely helped collections in our business and in many businesses.

And I don't think we're alone to highlight that collections were good. Through the second quarter, I think if you were to listen to banks or to credit card companies they would likely say something similar. So I think that there is some support there. And ultimately, we'll see what the trajectory is of that support going forward. And that could certainly have an impact on our collection trends and others in the industry as well. But we generally covered most of the different components of it. I think to maybe one more stat as we just throw stats around on this particular topic, I highlighted that customers are paying us earlier, and that's resulted in, if you just look at the snapshot at June 30, our rent receivable from customers who are less than 60 days is down about 35%. So customers are paying for their storage space and finding good value in it, and we're working with them and obviously, working with those that have been impacted by the pandemic to make sure that they receive the appropriate accommodation as well.

Stephen Thomas Sakwa -- Evercore ISI -- Analyst

Okay. And then maybe a twist on Mike Mueller's question. I think he asked about the kind of the move-in rate. You said it was down 4%. But if you looked at the July move-in rate against the July move-out rate, which I know you provide those quarterly in the 10-Qs. Do you have an idea? Or do you know what that spread was in July?

Tom Boyle -- Chief Financial Officer

I don't have that number right in front of me. I could tell you that the move-out rate was down 6% year-over-year. And the move-in rate was down 4%. So good trends as it relates to year-over-year comps, I don't my fingertips have the rate per square foot, but we can follow-up with that if that's important to Steve.

Stephen Thomas Sakwa -- Evercore ISI -- Analyst

Okay, thanks, that's it from me.

Operator

Our next question comes from the line of Todd Stender of Wells Fargo.

Todd Jakobsen Stender -- Wells Fargo Securities -- Analyst

Just as we look at your two newly developed properties that you opened in the quarter with the backdrop that you're looking potentially at slowing trends for the second half of the year. Can you just kind of compare your forecasted lease-up period to a stabilized occupancy, maybe your current expectations to how they were compared to originally underwritten?

Joseph D. Russell, Jr -- President and Chief Executive Officer

Well, Todd, I would just back up and give you maybe a little bit of perspective on how we traditionally look at lease-up periods to begin with, which, frankly, is, at the end of the day, no different now than it might have been pre-pandemic. It's typical for a property to take three or four years to go through not only occupancy lease-up at the level of stability and stabilization that you're going to see from the maturing of the customer base, etc. So if anything, as I've mentioned, we've actually been seeing accelerated lease-up in properties that we put into development, redevelopment or even acquisition. And again, just because, again, we're even seeing that acceleration right now. We're not stepping back and retooling or resetting expectations. We'll have to see over time how this demand continues to trend. But it begins with the same premise, which it takes up to that three to four years typically for a property to get to that level of stabilization. We're going to look at that time period typically to decide whether or not to put the property in the same store. And again, look at the stability that typically plays out across different markets, etc. So no real change yet in the way that we're modeling and looking at the time frame for stabilization.

Todd Jakobsen Stender -- Wells Fargo Securities -- Analyst

Understood. Thank you.

Operator

Our next question comes from the line of Todd Thomas of Capital Markets.

Todd Michael Thomas -- KeyBanc Capital Markets Inc -- Analyst

Joe, maybe, Tom, you talked now about improving trends throughout the second quarter and into July. A couple of times, including the improvements in move-in rates, down just 4% year-over-year in July. I understand that the in-place contract rents are lower at 3.1% at quarter-end versus the down 2% for the second quarter on average. So the financial impact will continue to get worse in the second half. But how much of a lag would you expect there to be before the in-place contractual rents on a year-over-year basis begin to stabilize and maybe begin to improve if trends, in general, remain consistent?

Tom Boyle -- Chief Financial Officer

Sure. That's a good question. Unfortunately, I don't have a crystal ball in terms of exactly how the environment is going to play out from here. We're absolutely in an uncertain environment and one that none of us have lived through in the past to be able to understand what the healthcare impact, what the government policy impact will be and where we go from here is hard to predict. No question starting the quarter with contract rents down 3.1% is a much worse place than where we started the second quarter from a year-over-year standpoint. The benefits we have going into the third and fourth quarter are that right now, we are sending existing tenant rate increases, but we're also being mindful of what the local jurisdictions regulations are around that and also the impact to our customer base in what is a tough healthcare environment. And so I think it's hard to project going forward right now, magnitude of those increases is lower year-over-year. So that's not going to be a meaningful contributor to the upside of rental rate growth. And move-in and move-out trends, we're seeing good demand trends now and lower move-outs. We've highlighted in the past that in the last downturn, we did see elevated move-outs. We've seen the exact opposite this time to date. But we're also mindful that the healthcare situation could be having a significant impact on those trends. And as we move through this year and into next year, the developments on those fronts, I think, will likely impact our move-in and move-out trends as well. So I know that's a long-winded way of saying I don't really know when things would change materially. But I gave you a sense of what some of the drivers would be that would move-in place rents.

Todd Michael Thomas -- KeyBanc Capital Markets Inc -- Analyst

Okay. As we move further throughout the year here into the back half of the year, and we're looking at, I guess, potentially a more elongated leasing season. Do you expect to have a little bit more seasonal pricing power in August, September, maybe October on a year-over-year basis than you would ordinarily in prior years?

Tom Boyle -- Chief Financial Officer

I think the one thing I'd remind you there is that we're still facing an environment that we were in the first quarter of significant new supply being delivered into many of our markets in addition to navigating through this unique pandemic environment. I think Joe highlighted the improving operating trends. If you looked at it on a market-by-market basis, I would say the healthcare environment and situation was the biggest driver of market variance of operating trends in April. But as we move through the quarter into June and July, the biggest differentials from a market standpoint on operating trends, like move-ins and move-outs has been more the typical things that we would have been talking about, the impact of new supply in many of our submarkets. And I think that's likely to persist here, as Joe mentioned, future deliveries. So I don't think the operating environment is such that while we've seen improving trends, and it's going to get materially better in any sort of base case. But ultimately, we'll see where we go. We are still dealing with a lot of the headwinds that we spoke about earlier in the year.

Todd Michael Thomas -- KeyBanc Capital Markets Inc -- Analyst

All right. And just a follow-up on a prior question just regarding population trends and work-from-home trends. I know public footprints, national in scope and you're diversified, but you do have larger concentrations in some markets like L.A. and San Fran, New York. Are you having any discussions or strategic discussions at around sort of reallocating capital or thinking about investing differently in sort of a post-pandemic environment? Or is it too soon to think about those strategies?

Joseph D. Russell, Jr -- President and Chief Executive Officer

It's yes, it's still too soon, Todd. We will obviously continue to assess the variety of different impacts. This kind of environment puts into different markets and submarkets. The business is still very dominated by that very small trade area, that three to 5-mile zone and in an urban environment even much smaller. So again, the portfolio is highly diversified we enjoy the benefits of the diversification, and we'll continue to assess that on an ongoing basis, just like we always have.

Operator

And ladies and gentlemen, that was our final question. I'd like to turn the floor back over to Ryan Burke for any additional closing remarks.

Ryan C. Burke -- Vice President of Investor Services

Thank you, Maria, and thanks to all of you for joining us today. Take care.

Operator

[Operator Closing Remarks]

Duration: 51 minutes

Call participants:

Ryan C. Burke -- Vice President of Investor Services

Joseph D. Russell, Jr -- President and Chief Executive Officer

Tom Boyle -- Chief Financial Officer

Jeffrey Alan Spector -- BofA Merrill Lynch -- Analyst

Smedes Rose -- Citigroup Inc -- Analyst

Spenser Bowes Allaway -- Green Street Advisors -- Analyst

Piljung Kim -- BMO Capital Markets -- Analyst

Ki Bin Kim -- Truist Securities -- Analyst

Ronald Kamdem -- Morgan Stanley -- Analyst

Richard Wynn Skidmore -- Goldman Sachs Group, -- Analyst

Michael William Mueller -- JPMorgan Chase & Co -- Analyst

Stephen Thomas Sakwa -- Evercore ISI -- Analyst

Todd Jakobsen Stender -- Wells Fargo Securities -- Analyst

Todd Michael Thomas -- KeyBanc Capital Markets Inc -- Analyst

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