Extra Space Storage Inc

Ladies and gentlemen, thank you for standing by, and welcome to the Extra Space Storage Incorporated first quarter 2020 earnings conference call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Jeff Norman, Vice President, Investor Relations. Thank you. Please go ahead, sir.

Thank you, Daniel. Welcome to Extra Space Storage's first quarter 2020 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 statement is defined in the private securities litigation reform act. Actual results could differ materially from those stated or implied by our forward-looking statement due to risks 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 7, 2020. 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 meeting. I would now like to turn the call over to Joe Margolis, Chief Executive Officer.

Thank you, Jeff. Good morning and good afternoon to everyone, and thank you for your interest in Extra Space. Before I discuss the first quarter and the balance of 2020, I would like to make a couple of introductory remarks. First, I understand that every one of us has had our daily routines interrupted, stress put on our lives, and may have dealt with the illness of family and friends. I sympathize with the difficulties everyone has endured and greatly appreciate the professionalism, positive attitudes, and support shown by everyone on this call. If times of crisis reveal our true nature, then our industry can be very proud of itself. I hope you and your loved ones are well, healthy, and managing through this. Secondly, I'm frequently asked what makes Extra Space different or special. In response, I'd describe our portfolio, our operating and technology platforms, and most importantly, our people. While all of these have performed well during this crisis, it is our people, particularly our store managers, who have really stepped up and delivered in an extraordinary manner. All of our employees, regardless of role or region of the country, have adapted quickly to changing operating procedures and requirements and have gone to great efforts to keep our stores open and our customers safe. And all of this was done while they were under the same personal stress and worry that we all are feeling. I could not be prouder of the people who make up Extra Space and feel extremely lucky to be part of such a great team. I know that whatever challenges lie ahead, this team will strive to optimize performance while upholding Extra Space's values. With respect to performance, Q1 was a strong quarter. Even with the impact of COVID-19 in the latter part of March, property revenue for the quarter was in line with expectations and same store revenue growth was 1.9%. Core FFO per share growth was 6.9%, four cents higher than the top end of our guidance. We continued to see strong external growth through third party management with 48 stores added to the platform and in bridge loan activity. External growth through acquisitions is currently muted as we patiently wait for opportunities that present attractive risk-reward metrics. Our balance sheet is in great shape. We have been in contact with all of our lenders and partners, and we are very comfortable that we have sufficient capital options to satisfy upcoming maturities, as well as having additional capacity to be opportunistic if attractive investments become available in this unusual environment. We are proud of our strong start to the year. And while we are fortunate that we have been able to keep our stores open, execute new leases, and continue to provide our customers access to their belongings, we certainly have not been immune to the impacts of COVID-19. The financial impact of the changes to our operations caused by the pandemic, such as the decision to pause auctions, temporarily suspend existing customer rent increases, and a reduction in rental activity due to stay-at-home orders, create a wide range of possible FFO outcomes, some of which fall outside of our initial guidance. While we considered simply revising our annual guidance range, we recognized that in order to provide accurate guidance, one key driver impacting all primary revenue assumptions is the timing of lifting stay-at-home orders across the country and subsequent customer behavior. We are encouraged by the activity we see in markets like Detroit, Salt Lake City, and most impactful to our portfolio multiple California markets where rental activity is improving. But the uncertainty of when other major markets, like New York City, will reopen and how customers will respond in such dense urban markets reduces our performance visibility for the balance of the year. Therefore, since these key factors remain unclear and will vary from market to market, we do not believe it would be prudent to provide guidance that would reasonably capture the full span of possibilities. It would also encourage us to produce guidance that may be overly cautious in order to include even remote possibilities. However, we believe it is important to be transparent with the information that we have to help our investors understand our company and the sector so they can make informed decisions. As we provide point in time metrics, we urge you not to lose sight of the big picture. It is still a very good time to be invested in storage. Demand for our need-based product, while temporarily slowed, will continue. The life transitions that have made demand so durable in the past will continue. The advantages over smaller operators with our diversified portfolio sophisticated platform, and top-notch team are still in place. Our balance sheet quality is better than ever, and external growth opportunities will likely increase going forward. I would now like to turn the time over to Scott to walk through some of those metrics in more detail.