National Storage Affiliates Trust

Greetings and welcome to the National Storage Affiliates fourth quarter 2020 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, George Hoglund, Vice President of Investor Relations for National Storage Affiliates. Thank you, Mr. Hoglund. You may begin.

We'd like to thank you for joining us today for the fourth quarter 2020 Earnings Conference Call of National Storage Affiliates Trust. Since this is our first earnings call of the Biden presidency, I'd like to quote our new president and say to all of the potential investors that haven't yet purchased NSA stock, come on, man. In addition to the press release distributed yesterday, we filed an 8K with the SEC containing our supplemental package with additional detail on our results, which may be found in the investor relations section on our website at NationalStorageAffiliates.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements that are subject to risks and uncertainties, including uncertainty related to the scope, Thank you for joining us today. We also encourage listeners to review the definitions and reconciliations of non-GAAP financial measures such as FFO, Core FFO, and Net Operating Income contained in the Supplemental Information Package available in the Investor Relations section on our website and in our SEC filings. On the line with me here today are NSA's CEO Tamara Fischer, COO Dave Cramer, and CFO Brandon Togashi. Following prepared remarks, management will accept questions from registered financial analysts. I will now turn the call over to Tammy.

Thanks, George, and thank you everyone for joining our call today. Before we discuss 2020 results and our outlook for 2021, I wanted to acknowledge all those who have been affected by recent severe weather and related events. We are and will continue doing our best to support our team members and communities as they recover from these difficult challenges. Now, moving on to results. We ended 2020 with a bang, delivering strong same-store NOI growth, closing our busiest quarter ever in terms of wholly-owned acquisition volume, and to top it off, we announced in December the addition of a significant new pro, Blue Sky Self Storage. Occupancy is near record highs, street rates are up year-over-year and growing, and our revenue management strategies are largely back to normal. The positive momentum in fundamentals is making for a strong start to 2021, and Brandon will elaborate further on that later in the call. Overall, I'm very proud of our team for delivering a stellar fourth quarter, which positions us well for 2021. We continue to benefit from the resilience of the self-storage sector, the diversification of our portfolio, and the strength of our pro structure. Customer demand for storage is stronger than ever and has altered the seasonality that we normally experience in the winter months. Usually, the self-storage sector experiences a seasonal decline in occupancy during the fall and winter months, cropping in January or February. But in 2020, we experienced unusual demand toward the end of the third quarter and beginning of the fourth. So, occupancy rose through October and has held relatively stable since then, forgoing the normal seasonal decline. While we always knew the self-storage business to be resilient, we've been amazed at how well our business has performed over the past several months. As we've discussed, recent healthy consumer demand for storage is driven by a number of factors, which we think will continue to support occupancy at least near term, including work from home, which is causing people to clear out a room for a home office and spending more time on household projects in general, remote learning, which is driving the need to clear space for home classrooms, a booming housing market, businesses storing inventory and furniture as they create open space for social distancing purposes, and finally, what I'll call the Triple S, migration. That is, migration to Sunbelt, suburban, and secondary markets that substantially benefits our portfolio. Our core FFO per share increased 15% in the fourth quarter compared to the fourth quarter last year, driven by a combination of strong same-store growth, healthy acquisition volume, and the internalization of our SecureCare Pro in April of 2020. For the full year, core FFO per share increased 11%. I think it's quite notable that despite the pandemic and associated recession, we were still able to deliver double-digit earnings growth for the year, which really attests to the benefits of our pro structure our secondary market exposure, and the resilience of the self-storage sector. Our outstanding performance and strong trends gave us the confidence to increase our fourth quarter dividend to 35 cents per share, representing growth of 6.1% year over year, and continuing our record of increasing dividends twice per year since going public. Turning to new supply, we've seen completions trending down on a year over year basis, while an increase in abandoned projects is reducing the forward pipeline. But we've also seen delays push deliveries into 2021 in some cases. We believe new supply in our markets this year will be similar to 2020 and expect a steady decline thereafter. We'll continue to face headwinds from new supply in Portland, Phoenix, and certain sub-markets in Dallas, Atlanta, and West Florida. Fortunately, though, the current boost in demand is alleviating some of that pressure, especially in Portland and Phoenix. On the acquisitions front, we had our busiest quarter ever in terms of wholly owned acquisitions, investing $260 million in 33 properties and two expansion projects. For the full year, we acquired 77 wholly owned properties valued at $543 million and had investment activity of about $22 million in our JVs. We've remained active in the new year and have invested nearly $85 million in the acquisition of 13 properties to date. And we also currently have another 10 properties valued at about $70 million under contract. In summary, we're currently firing on all cylinders as fundamentals continue to strengthen. We remain busy on the transaction front and we recently added another pro who we're confident will help drive strong external growth results. I'll now turn the call over to Brandon to discuss operating results and balance sheet activity.