Extra Space Storage Inc

Thank you for standing by, and welcome to Extra Space Storage's first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker 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 touchtone telephone. Please be advised that today's conference may be recorded. Should you require any further assistance, please press star 0. I would now like to hand the conference over to your host, Vice President, Capital Markets, Jeff Norman. Please go ahead.

Thank you, Lateef. Welcome to Extra Space Storage's first quarter 2021 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 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, April 29, 2021. 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.

Thanks, Jeff, and thank you, everyone, for joining today's call. We are off to a great start in 2021. The strong fundamentals we discussed on our fourth quarter call not only continued, but actually accelerated as we moved through the first three months of the year. Same-store occupancy remained at all-time highs for extra space, with sequential growth in January and February at a time of the year where occupancy normally declines. Occupancy increased further in March, ending the quarter with a year-over-year positive delta of 480 basis points. Our elevated occupancy has given us significant pricing power, which has also accelerated during the quarter, with achieved rates increasing from 10 percent in January to well into the teens by the end of March. These trends fueled same-store revenue growth of 4.6 percent, despite 110 basis point drag on revenue growth from lower year-over-year late fees. We had excellent expense control with a 0.2 percent decrease in same-store expenses. The result was same-store NOI growth of 6.5 percent, a sequential acceleration of 310 basis points from Q4, and year-over-year core FFO growth of 21 percent. With fundamentals holding and performance comps becoming much easier in the upcoming months, We expect continued acceleration in revenue growth through the second quarter. Our concern of a dramatic increase in vacates has not materialized, and now we are into our busy leasing season when demand is typically strongest. We believe that vacate risk to our elevated occupancy has likely been postponed until the end of the summer or even into the fall. Turning to external growth, The acquisition market continues to be expensive, and we remain disciplined but opportunistic. Year to date, we've been able to close or put under contract a little over $300 million in acquisitions. These are primarily lease-up properties, and several of the properties came from our bridge lending program. Looking forward, we anticipate the majority of additional acquisitions to be completed in joint ventures, and we have plenty of capital to invest if we find additional opportunities that create long-term value for our shareholders. We were very active in Q1 on the third-party management front, adding 61 stores in the quarter, which include the previously announced J-CAP stores. Our growth was partially offset by dispositions where owners sold to other operators at prices we viewed as unattractive to the REIT. While this trend presents a headwind, we still expect solid growth in our third-party management platform for the year. As I said on our last call, we are mindful of the risks we face. These include difficult fourth-quarter operational comps, a tight labor market, and new supply and state of emergency orders in certain markets. That said, current fundamentals are the strongest we have seen in some time. and our team is prepared to use all our available tools to optimize performance. Our first quarter outperformance, coupled with steady external growth and the improving 2021 outlook, allow us to increase our industry-leading annual guidance seven and a half cents at the midpoint. I would now like to turn the time over to Scott.