Life Storage, Inc.

Good morning, ladies and gentlemen, and welcome to the Life Storage Second Quarter Earnings Release. At this time, all participants have been placed on a listen-only mode, and the floor will be opened for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, David Dodman, Senior Vice President, Investor Relations and Strategic Planning. Sir, the floor is yours.

Good morning, and welcome to our Second Quarter 2021 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. Also, 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 re-queue with any follow-up questions thereafter. At this time, I'll turn the call over to Joe.

Good morning, and thank you for joining today's call. I'm very pleased to report another outstanding quarter. Demand continues to be strong across our footprint, driving significant margin expansion as we maintain record occupancy, strong pricing power, and disciplined cost control. With this strong demand, we achieved average quarterly occupancy that was 420 basis points higher than last year. We grew occupancy 170 basis points during the second quarter. This has allowed us to be more aggressive with rates, which has helped to drive an increase in net effective rates by more than 50% through the end of June. Our footprint continues to expand through both acquisitions and third-party management as we leverage our deep relationships. The vast majority of our acquisitions were off-market, including 13 stores from our third-party management portfolio through the first half of 2021. We closed on a record $534 million of wholly owned acquisitions through the first half of this year already matching our total acquisition volume of last year. These acquisitions are expected to generate a blended year one cap rate of 4.5% and represent a nice mix of markets and maturity with almost one-third in lease-up and roughly 70% in the Sunbelt region. In addition to $22 million of closed acquisition subsequent to the quarter end, as well as an additional $80 million currently under contract, We have a strong late stage pipeline of attractive opportunities that our team continues to work on. Our third party management portfolio totaled 340 stores at quarter end and we added 19 more stores in July as owners and developers are attracted to our operating performance and innovative technology platforms. Our team has evaluated a record number of management opportunities this year and the pipeline continues to grow. We also continue to show strong progress in Warehouse Anywhere, including rental income associated with these business customers. Warehouse Anywhere's year-to-date revenue is up almost 30% to a $14 million run rate, including $9 million of annualized fee income. Our tech-enabled Enterprise and Lightspeed products have growing pipelines of companies in search of inventory management and last-mile logistics support. Many of these businesses would unlikely be using self-storage if it were not for the solutions provided by Warehouse Anywhere. With this strong demand and performance, we exceeded our expectations substantially for the quarter and are therefore once again increasing our guidance for the remainder of the year. We have increased the midpoint of our estimated adjusted funds from operations per share 8.5% to $4.74 this year, which would be 19.4% growth over 2020. And with that, I will hand it over to Andy to provide further details on the quarter and revisions to our guidance.