Extra Space Storage Inc

Hello, and welcome to Q1 2019 Extra Space Storage, Inc. Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference is being recorded. I now would like to introduce your host for today's call, Jeff Norman. You may begin.

Thank you, Tawanda. Welcome to Extra Space Storage's first quarter 2019 earnings call. In addition to our press release, we have furnished unaudited supplemental financial information on our website. Please remember that management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act. Actual results could differ materially from those stated or implied by our forward-looking statements due to risk and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in the company's latest filings with the SEC, which we encourage our listeners to review. Forward-looking statements represent management's estimates as of today, May 1, 2019. The company assumes no obligation to revise or update any forward-looking statements because of changing market conditions, or other circumstances after the date of this conference call. I would now like to turn the call over to Joe Margolis, Chief Executive Officer.

Hello, everyone. Thank you for joining us for our first quarter call and for your interest in extra space storage. We had a good first quarter with positive rate growth and high occupancies, resulting in same-store revenue growth of 4.2% and same-store NOI growth of 4.8%. This contributed to better-than-expected FFO growth, which was two cents above the top end of our guidance. Performance continues to be steady despite new supply, and we are well-positioned heading into the summer leasing season. While we are very pleased with the better-than-expected first quarter results, our views for the balance of 2019 remain generally unchanged. We still believe 2018 was likely the high watermark for total deliveries, and we expect 2019 deliveries to be only modestly lower. Further, we expect the total impact on performance from new supply to be greater in 2019 than it was in 2018 due to the cumulative impact of several years of elevated development. We are seeing this impact in the lease up of our CFO stores. LeaseUp has slowed from a pace that was well above pro formas in 2015 through 17 to trends that today are more in line with historic norms and with our underwriting. That being said, our people and our systems are working hard to maximize performance in a challenging operating environment. Our digital marketing platform continues to drive qualified traffic to our stores. We have maintained occupancies above the market averages in MSAs with new supply, but it comes at a cost. Costs per click are elevated due to a competitive bidding environment, and we are choosing to pull the advertising lever harder in order to ensure web visibility. In the current environment, large operators like Extra Space are best positioned for success on the web. In the quarter, we invested $270 million in acquisitions. We continue to have success acquiring properties through off market transactions. For example, and as we mentioned last quarter, we bought a joint venture partners interest in 12 properties in Los Angeles and the Bay Area for $192 million. We continue to explore other opportunities to enhance shareholder returns through mutually beneficial partnerships. We also continue to see significant growth in our third-party management platform. In the quarter, we added 46 stores, while only two stores left the platform, both due to a property sale. Additions to our third-party platform continue to be a mix of newly constructed and existing properties, bringing high-quality stores into our system, as well as additional income. Between our third-party program and our JV stores, we have 805 managed stores with a strong remaining pipeline for the year. I would now like to turn the time over to Scott.