Life Storage, Inc.

Good day, ladies and gentlemen, and welcome to the Life Storage Third Quarter Earnings Release Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Alex Gress. Sir, the floor is yours.

Good morning and thank you for joining us today for the third quarter 2022 Earnings Conference Call of Life Storage. Leading today's discussion will be Joe Sapphire, Chief Executive Officer of Life Storage, and Andy Gregory, Chief Financial Officer. Following prepared remarks, management will accept questions from registered financial analysts. As a reminder, the following discussion and answers to your questions contain forward-looking statements that are subject to risks and uncertainties and represent management estimates as of today November 3rd, 2022. The company assumes no obligation to revise or update any forward-looking statement because of the changing market conditions or other circumstances after the date of this conference call. Additional information regarding these factors can be found in the company's public SEC filings. In addition to the press release distributed yesterday, we furnished our supplemental package with additional detail on our results, which may be found on the investor relations section on our website 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 rekey with any follow-up questions thereafter. At this time, I'll turn the call over to Joe.

Thanks, Alex, and good morning, everyone. I want to start off first by thanking and recognizing all of our life storage teammates, both in Florida and throughout our company, who continue the hard work to provide support to our customers impacted by Hurricane Ian. All of our stores in Florida are open for business, and that would not have been possible without the tremendous efforts from our teammates. I would also like to say how thrilled we are that Newsweek awarded us for the fifth year the best customer service award in America for the storage centers category. This award is a true reflection of the world-class team we have here at Life Storage. Now turning to the quarter, I am pleased to report another outstanding quarter across all segments of our company. While we are seeing a return to more normal seasonal trends, our operating fundamentals and metrics remain very strong and higher than pre-pandemic levels. We believe we are well positioned as we head into 2023. To highlight a few notable results and trends from the quarter, we achieved the same store revenue growth of 14.9% for the quarter over last year. We continue to see strong and balanced revenue performance across our entire portfolio with 94% of our major markets achieving quarterly double digit revenue growth for five quarters in a row. A realized rental rate per square foot this quarter was 17.1% higher than in the same quarter last year. This is also five quarters in a row of realized rental rates per square foot growth greater than 14%. Same store NOI growth this quarter is 18.4% higher than the same quarter a year ago. That puts us at five quarters in a row with same store NOI growth of 18% or greater. As a result of these strong operating fundamentals, we achieved adjusted funds from operations of $1.73 per share for the quarter, which is 26.3% increase over last year. That also puts us at six quarters in a row with adjusted funds from operations growth greater than 25%. In regard to external growth, in the third quarter, we acquired 11 wholly owned stores for $217.5 million, And subsequent to quarter end, we acquired seven wholly owned facilities for $142 million. We view these acquisitions as complimentary to our existing portfolio, and four of these properties are coming from our third party management platform. About two thirds of these properties are stabilized, with the remaining in lease up, which will provide strong upside in future years. Outside of wholly owned acquisitions, In the quarter, we added to our joint venture portfolio with 15 stores for a $52.7 million investment. And subsequent to the quarter end, we invested in seven stores for $25.3 million. These joint ventures enable us to participate in top markets and quality properties that provide future upside with a moderate capital investment. Including joint ventures, our third-party management portfolio surpassed 400 stores at the end of the third quarter, growing more than 12% over last year with the addition of 25 stores this quarter. We view our third-party management platform as a strong strategic pillar for us that drives fee income and supports off-market acquisition opportunities. Year-to-date through October, 10 of our wholly owned acquisitions and a consolidated joint venture came from our third-party management platform. As we look towards the full year, we now estimate our adjusted funds from operations per share to increase to a midpoint of $6.44 for the year, which would be 27% growth from 2021. Andy will walk you through the quarter in more detail and our positive guidance updates. But before I hand it over to Andy one last time, on behalf of myself, the Board, and the entire Life Storage team, I want to thank Andy for his invaluable contributions and dedication to life storage for nearly 25 years. We wish him all the very best in retirement and thank him for leaving behind a strong finance team that will continue to position us for future success. And with that, I'll hand it over to Andy.