Extra Space Storage Inc

Good day, everyone, and thank you for standing by. Welcome to the second quarter 2024 Extra Space Storage Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please, the advice at today's conference is being recorded. I will hand the call over to the Vice President of Investor Relations, Jared Conley. Please go ahead.

Thank you, Carmen. Welcome to Extra Space Storage's second quarter 2024 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 represents management's estimates as of today, July 31st, 2024. 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 time over to Joe Margolis, Chief Executive Officer.

Thanks, Jared, and thank you, everyone, for joining today's call. We had a great quarter, exceeding our internal FFO per share projections due to our performance in multiple areas of our business, allowing us to increase our 2024 FFO outlook. We experienced steady improvement in extra space same-store occupancy for the second quarter, ending at 94.3 percent, and continue to see occupancy gains in July. Our second quarter occupancy represents 110 basis point sequential gain over our first quarter occupancy and a 30 basis point improvement year over year. In the same period, the average move-in rate improved by approximately 12%. However, it is still about 8% below last year's average move-in rate. The combination of increased move-in rate and occupancy gain contributed to a 0.6% increase in extra space same-store revenue year-over-year. Same-store expenses increased by 6% for the quarter compared to the same period last year, marginally better than internal projections. As expected, we saw significant gains in occupancy for the life storage same-store pool, finishing the quarter at 93.8%. This represents an increase of 400 basis points year over year and a 200 basis point improvement over first quarter levels. The occupancy gains drove revenue growth for the life storage same store pool of 1.8% year over year. Given the occupancy gains, we expected to generate significant pricing power at the life storage properties. Midway through the quarter, we eliminated the move-in rate discounts and placed new customer pricing for the life storage properties on par with comparable extra space stores. However, the pricing improvement at the life storage stores has been below our internal projections. We are confident our approach is maximizing revenue at these stores. However, progress has been slower than anticipated. We remain convinced that we will continue to close the rate gap between life storage and extra space stores over time. Life storage same-store property expenses increased by 0.8% year over year, significantly better than our internal projections. The team has done a great job finding additional expense efficiencies, and we can now project lower expenses, particularly with respect to property taxes and in the controllable areas of R&M, utilities, and payroll for the second half of the year. Turning to growth, while the transaction environment remains muted, our capital light external growth programs continue to make gains. In the quarter, we added 77 third-party managed stores, netting 14 stores after factoring in the expected departure of a large portfolio that internalized management. Year-to-date, we have added 86 net stores to the platform, one of the strongest first halves of the year ever. Additionally, our bridge loan program expanded with $433 million in new loans originated in this quarter. Our greater scale and sophisticated operating platform have led to meaningful wins in other areas of the business, including G&A and tenant insurance. We are working hard to continue to find efficiencies in all areas of the business to drive FFO growth, despite the difficult operating environment at the stores. I will now turn the time over to Scott.