CubeSmart

Good morning, ladies and gentlemen, and welcome to the CubeSmart first quarter 2024 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, April 26, 2024. I would now like to turn the conference over to Mr. Josh Schutzer, Vice President of Finance. Please go ahead, sir.

Thank you, Laura. Good morning, everyone. Welcome to Q-SMART's first quarter 2024 earnings call. Participants on today's call include Chris Marr, President and Chief Executive Officer, and Tim Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q&A session. In addition to our earnings release, which was issued yesterday evening, Supplemental operating and financial data is available under the investor relations section of the company's website at www.cubesmart.com. The company's remarks will include certain forward-looking statements regarding earnings and strategy that involve risks, uncertainties, and other factors that may cause the actual results to differ materially from these forward-looking statements. The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to or files with the Securities and Exchange Commission specifically the Form 8K we filed this morning together with our earnings release filed with the Form 8K and the risk factor section of the company's annual report on Form 10K. In addition, the company's remarks include reference to non-GAAP measures. A reconciliation between GAAP and non-GAAP measures can be found in the first quarter financial supplement posted on the company's website at www.cubesmart.com. I will now turn the call over to Chris.

Thank you, Josh. Good morning, and thank you all for joining the call. as it was well into the first quarter when we shared our thoughts on our 2024 and first quarter guidance, as one would expect our first quarter performance metrics were in line with our expectations. Rental rates to new customers followed their historic pattern, reaching their seasonal low in mid-February before beginning their gradual move up into the end of March. Our key metrics related to consumer health, those being write-offs, receivables, units at auction, all remained in line with historic norms. Against the backdrop of a healthy consumer and typical first quarter seasonality and asking rates, our existing customer rate increases during the quarter were consistent in both timing and magnitude. Demand activity during the quarter varied by market. Our more urban-oriented markets, such as the New York MSA and its Connecticut suburbs, Chicago and Boston, experienced growth in year-over-year rentals san diego county also experienced positive year-over-year rental volumes no doubt continuing to benefit from the storage west transaction sunbelt markets such as atlanta and all of our major florida markets experienced a decline in year-over-year rentals some supply impacted markets such as northern virginia and nashville seem to be bottoming out from that supply impact and are beginning to show signs of stabilization. Phoenix is also showing signs of turning the corner with positive year over year growth in rentals and occupancy, albeit at rental rates well below 2023 levels. While Tucson continues to struggle to find its footing while being impacted by new supply. New York continues to be our top performing market with consistent positive performance metrics across the boroughs and positive and improving performance in supply impact in Staten Island and North Jersey. Overall, trends are more constructive in our urban stores, which tend to attract a customer solving for their smaller living space. As we move through April, trends thus far have our negative rate and occupancy gaps to last year narrowing from their first quarter levels. As we expected entering the year, the environment over the next three months will be highly impactful on how the entire year plays out. The macroeconomic data over the last few months has certainly been very volatile. It seems every week we receive conflicting data, most recently an unexpected slowdown in first quarter GDP growth. Other industries, such as intermodal transportation, warehouse leasing, used car dealers, home retailers have expressed cautionary views on consumer demand. One factor that makes our business so resilient is that there are countless life events that create demand for self storage. Obviously, one demand driver of the many for our industry is single family home sales. Over the last few months, the housing data has also been inconsistent. According to realtor.com, the number of homes actively listed for sale in February was 15% higher than the same month last year. They also note that the week of April 14 is the optimal time to list your home for sale, as the third week of April brings the best combination of housing market factors for sellers. On the other hand, March home sales were disappointing, and mortgage rates have climbed above 7%. Then you have yesterday's Commerce Department report and a possible positive sign for the housing market. Residential investment surged 13.9%, its largest increase since the fourth quarter of 2020. So while housing stats are certainly volatile, consensus remains for modestly increased activity over the historical lows experienced in 2023. Another of the many demand drivers for our product is movement within multifamily housing. In the multifamily sector, headwinds from new supply are contributing to rents that are flat or slightly declining in Sunbelt markets. According to RealPage, rents are down year-over-year in Atlanta, Nashville, Austin, Dallas, Orlando, and Fort Lauderdale, which may spur existing apartment renters to move or increase demand from first-time renters. Both are good for our industry. On the supply side of the equation, new store openings in our top markets continue their pattern of declining every year since their 2019 peak. The period between now and the end of July will be both illuminating and impactful on our expectations for full-year 2024 performance. We remain confident in the long-term fundamental drivers of our business continuing to generate solid growth. Thank you for listening, and I will now turn it over to Tim Martin, our Chief Financial Officer, for his insights into our first quarter.