National Storage Affiliates Trust

Greetings and welcome to the National Storage Affiliates second quarter 2021 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 your host, George Hoagland. Vice President of Investor Relations for National Storage Affiliates. Thank you, Mr. Hoagland. You may begin.

We'd like to thank you for joining us today for the second quarter 2021 Earnings Conference Call of National Storage Affiliates Trust. On the line with me here today are NSA CEO Tamara Fisher, COO Dave Kramer, and CFO Brandon Tagashi. Following prepared remarks, management will accept questions from registered financial analysts. In addition to the press release distributed yesterday, we furnished 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 and represent management's estimates as of today, August 4th, 2021. The company assumes no obligation to revise or update any forward-looking statement because of changing market conditions or other circumstances after the date of this conference call. The company cautions that actual results may differ materially from those projected in any forward-looking statement. For additional detail concerning our forward-looking statements, please refer to our public filings with the SEC. 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. I will now turn the call over to Tammy.

Thanks, George, and thanks, everyone, for joining our call today. Before diving into our Q2 results and our revised full-year 2021 guidance, I'd like to acknowledge and thank the entire NSA team, including our pros and their teams, for the dedication and effort that allowed us to deliver such exceptional second quarter results. I'd also like to thank our shareholders for their ongoing support, which allowed us to complete a very successful, upsized equity raise a few weeks ago. The results we announced yesterday, including growth in same-store NOI of 21.5%, and growth in core FFO per share of just over 34% were consistent with flash numbers we provided in conjunction with our recent equity offering. The healthy fundamentals and active transactional environment, which led to a strong first quarter, really kicked into high gear during the second quarter, and these positive trends continue into the third quarter. We're at record high levels of occupancy, street rate growth is dynamic, And to top it off, we're seeing unprecedented volume of assets come to market. On the acquisition front, we've been very busy this year, and we expect the pace of deals coming to market to remain elevated in the second half. During the second quarter, we invested $270 million in 20 properties, bringing first-half volume to 43 properties valued at $435 million. And year-to-date, we've closed or have under contract 100-plus properties valued at nearly $900 million. Cap rates on these deals range from about 5% to 7% and vary based on location, source of the deal, whether it was marketed, off-market, or from our captive pipeline, and if there's a portfolio premium or some element of lease-up involved. But the weighted average cap rate on all of our transactions closed and under contract is in the mid-to-high-five cap range. we continue to see meaningful competition for transactions, and the amount of capital seeking to establish or expand a position in self-storage continues to drive cap rate compression, especially on larger portfolios. Fortunately, though, about two-thirds of our deals closed and under contract this year have been off-market or from our captive pipeline, where we tend to buy at cap rates slightly above market. Our exceptional second quarter results and our outlook for the remainder of the year give us confidence to increase guidance on key metrics, including year-over-year growth in same-store NOI of 16%, growth in core FFO per share of 24%, and increased expectations for acquisition volume to over a billion dollars. Brandon will provide more color on our revised guidance in his comments. In summary, and it probably goes without saying, it's a great time to be in self-storage. We continue to benefit from our commitment to secondary and tertiary markets, as well as our differentiated pro structure, which we're able to leverage to drive results and take advantage of the robust transaction volume that we're seeing this year. I'll now turn over the call to Dave to provide color on what we're seeing on the ground. Dave?