Mobile Infrastructure Corporation

Good day and welcome to the Mobile Infrastructure Corporation Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Casey Coterie, Investor Relations Representative. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us to review Mobile's third quarter 2024 performance. With us today from Mobile are Manuel Chavez, CEO, and Stephanie Hogue, President. In a moment, we will hear management statements about the company's results of operations as of the third quarter of 2024. Before we begin, we would like to remind everyone that today's discussion includes forward-looking statements, including projections and estimates of future events, business or industry trends, or business or financial results. Actual results may vary significantly from those statements and may be affected by the risks mobile has identified, in today's press release and those identified in its filings with the SEC, including Mobile's most recent annual report on Form 10-K and its most recent quarterly report on Form 10-Q. Mobile assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. Today's discussion also contains references to non-GAAP financial measures that Mobile believes provide useful information to its investors. These non-GAAP measures should not be considered in isolation from or as a substitute for GAAP results. Mobile's earnings release and the most recent quarterly report on Form 10-Q provide a reconciliation of these measures to the most directly comparable GAAP measures and a list of the reasons why Mobile uses these measures. I will now turn the call over to Mobile's CEO, Manuel Chavez, to discuss third quarter 2024 performance. Manuel?

Thank you, Casey, and thanks to all participating in today's call to review our third quarter results and discuss our business outlook. We continue to make operational and financial progress in the third quarter, increasing our net operating income, or NOI, by 3.8% to bring year-to-date NOI growth to 9.5%, in line with high single-digit guidance provided at the beginning of this year. Revenue growth of 21% reflects the year-to-date conversion of 29 of our 41 parking assets to managed contracts from leases, as well as a modest contribution from organic growth. This strategic shift has strengthened our operating model in several ways. We now have greater access to parking data, which we are using to increase utilization, and the real-time insight we are gaining into marketplace conditions informs our marketing and pricing decisions. Additionally, we now have more ability to control expenses at the asset level, which has enabled us to use our resources more efficiently. We are pleased to see third quarter recurring contract parking volumes increase year on year for the second consecutive quarter, offsetting sluggish transient parking demand at hospitality and event locations in our markets. In fact, we believe we are at an inflection point as COVID related cancellations of corporate parking contracts, which have masked the success we have had in bringing on new business for much of 2024 are mostly behind us. It appears that by now, most of the corporates located in our markets have resolved their policies with respect to the number of days that employees are required to spend in the offices, which provides us with a baseline of occupancy for our nearby parking facilities. In the third quarter, our revenue per available stall, or Rev Pass, showed a year-on-year growth for the first time this year, which is a good indication of the improved performance of our underlying assets. In addition to the wind down of COVID-related corporate contract cancellations, two other secular trends have begun to emerge. that should modestly benefit our results in the fourth quarter and have a more meaningful positive impact on our 2025 performance. First, we are seeing early indications of return to office trends in our markets. This has been particularly notable in the healthcare, professional services, and food and beverage sectors, building on the strength we have seen earlier this year from employees returning to in-person work at social services and municipal offices. Second, and even more potentially impactful, is the conversion of Class B downtown commercial offices to residential apartment living, which is taking place across several of our markets with specific strength near many of our Midwestern locations. The first of these projects will begin delivering space in Q4, creating a pickup and demand at our adjacent parking location where we have substantial capacity. These conversions represent an important demand driver for our company as the shift from the previous commercial usage of 8 a.m. to 5 p.m. parking access to a 24-7 parking access should result in a significant increase in utilization and revenue. And in addition to the residential aspect, certain of these projects include hotels and new amenity-rich commercial spaces. The pace of these conversions has accelerated since the beginning of the year, and there are a number of similar projects under construction in our markets that are scheduled for completion in 2025 and 2026. And the developers of these new residential units are keen to offer parking as part of their sales proposition. Our analytics, expertise in micro market relationships and well located downtown parking assets have given the company a first-mover advantage to capture these new growth opportunities, and we are actively engaged in discussions on pricing and number of required spaces with developers. As we work to increase the utilization and profitability of our assets, we are also keeping a close eye on opportunities to capture premiums on our asset values. This was the case with one of our parking lots. in the third quarter in Indianapolis, which was just sold for over $4.6 million. The proceeds were a significant multiple of the annual income we were receiving on this property. This highlights the fact that our assets can have an even higher value for other uses, and when this reaches a level that makes sense, we are willing to sell to optimize value, far above the net asset value of $7.25 per share that is based on what is deemed the fair market value of our assets minus outstanding debt. When there is a motivated buyer who is assembling downtown real estate, we are in a strong position to benefit. We also continue to evaluate opportunities to expand our portfolio with assets that have multiple demand drivers and where we can leverage our market expertise. In summary, we like our market positioning and see several opportunities for upside, namely newer residential projects close to our location and greater consistency in demand for parking. I will now turn the call over to Mogul's president, Stephanie Hogue, who will provide a more detailed review of our third quarter operating and business results. Stephanie?