Life Storage, Inc.

Good morning and welcome to the Life Storage first quarter 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw from the question queue, please press star then two. Please note this event may be recorded. I would now like to turn the conference over to Dave Dodman, Senior Vice President of Strategic Planning and Investor Relations. Please go ahead.

Good morning, and welcome to our first quarter 2020 earnings conference call. Leading today's discussion will be Joe Sapphire, Chief Executive Officer of Life Storage, and Andy Gregory, Chief Financial Officer. As a reminder, the following discussion and answers to your questions contain forward-looking statements. Our actual results may differ from those projected due to risks and uncertainties with the company's business. Additional information regarding these factors can be found in the company's SEC filings. A copy of our press release and quarterly supplement may be found on the investor relations page at lifestorage.com. As a reminder, during today's question and answer session, we ask that you please limit yourself to two questions to allow time for everyone who wishes to participate. Please recue with any follow-up questions thereafter. At this time, I'll turn the call over to Joe.

Thanks, Dave. Good morning. I hope that you and your families are all safe and healthy. Before touching on our results, I will first say a few words regarding COVID-19. Our top priority over the past several weeks has been to protect our employees, our customers, and, of course, our liquidity. As an essential business, we have been extremely proactive ensuring our stores remain open and staffed and that our employees feel safe and secure working at them. Our home office, including our 24-7 call center, has operated remotely for eight weeks now without any significant challenges, a testament to our team's ability to quickly mobilize our business continuity plans. We have also made accommodations for customers by curtailing our in-place rent increases and our auction process. With regards to liquidity, we've paused wholly owned acquisitions and slowed our expansion and enhancements program. Now, with regards to the first quarter, our results were very strong and serve as another reminder of the merits of our strategic initiatives to drive revenue growth and improve operating margins. We grew core FFO by 6.9% for the quarter, putting us well on pace to achieve our previous annual guidance of core FFO growth of 7%, which obviously did not consider the impact of COVID-19 and the broad stay-at-home orders. Same-store expenses, excluding property taxes, declined for the fourth straight quarter, and the pace of decline continued to accelerate to negative 5.3% in the first quarter. On the revenue side, the growth of our third-party management portfolio continued to fuel management fees up more than 40%. And our multi-year strategy to diverse our portfolio has served us well. For example, Houston today accounts for roughly 7% of our same-store revenue, whereas it was 12% when oil prices fell dramatically back in 2015. And RentNow, our online rental platform to allow customers to self-serve, what a game-changer it has been for us over the past two months. As a reminder, we piloted this program almost two years ago, and we've been operating it across our portfolio for over a year. As such, the associated operating procedures for store teams to support this sales channel are well established and contributed significantly to our ability to create a safer environment to our teammates and customers to conduct business. Rent now accounted for roughly 50% of rentals in April, up from 11% in the fourth quarter of 2019. The second generation of this platform, which we call RentNow 2.0, is in place at almost 750 stores today, and we will complete this rollout in just a couple more weeks. With RentNow 2.0, customers can select premium, standard, or value pricing for a unit type based on their personal preference. This dynamic pricing is normally done at the store level, but we've integrated this functionality directly into our online platform. And in closing, we are in unprecedented times, and although we are slightly encouraged by some recent trends, including the first week of May, we do not have sufficient visibility into customer behaviors in the coming months to confidently provide reliable annual guidance and therefore have withdrawn the guidance we provided this past February. I will now pass over to Andy to walk us through the quarter in more detail.