National Storage Affiliates Trust

Greetings and welcome to the National Storage Affiliates second quarter 2022 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 2022 Earnings Conference Call of National Storage Affiliates Trust. On the line with me here today are NSA CEO Tamara Fisher, President and COO Dave Kramer, and CFO Brandon Tagashi. Following prepared remarks, management will accept questions from registered financial analysts. Please limit your questions to one question and one follow-up, and then return to the queue if you have more questions. In addition to the press release distributed yesterday afternoon, 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 They contain forward-looking statements that are subject to risks and uncertainties and represent management's estimates as of today, August 4th, 2022. 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 report 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. We had another great quarter with growth in core FFO per share of 29.1% and same-store NOI growth of 17.3%. Our results are reflective of the ongoing strength of the self-storage industry, our differentiated pro structure, and our exposure to secondary, Sunbelt, and suburban markets. This exceptional growth allowed our board to increase our dividend again in the second quarter to 55 cents per share. an increase of 45% over the second quarter last year. Overall, self-storage fundamentals remain very healthy, as the industry is coming off historic levels of year-over-year growth. The moderation in growth is largely playing out as expected this year, but the self-storage sector is well positioned for today's inflationary environment, given that we meet a needs-based demand with average monthly rents that represent a small portion of a customer's disposable income. Because our units are leased on a month-to-month basis, we have the flexibility to quickly adjust rents according to market trends, and this permits us to increase rents to offset inflationary pressures on the expense side. I would add that self-storage has weathered past downturns well, supported by unique counter-cyclical demand factors, including demand driven by household contraction and necessity-based relocation. Following the great financial crisis, Self-storage same-store revenues saw a return to peak pre-recession levels within two years, well ahead of other property types. Finally, given the benefits of our differentiated pro structure and our geographic exposure, we remain very confident in NSA's future prospects. Having said that, the resilience of the sector and our outstanding results don't always manifest themselves in a rising share price, as demonstrated by the year-to-date sell-off. So, our board has decided to put in place a share repurchase plan to provide greater flexibility in our capital allocation strategies. Based on our favorable outlook for NSA, today's depressed stock price provides us with a compelling investment opportunity. Turning to the acquisition environment, during the second quarter, we acquired eight wholly owned properties, investing $115 million in an average cap rate of 5.6%. And as we mentioned on our last call, one of our joint ventures acquired a partially stabilized seven-property portfolio strategically located in the Houston MSA for approximately $208 million. While investor demand for self-storage properties remains strong, we've seen the buyer pool narrow somewhat, and property sellers are becoming more realistic with respect to price expectations given the current increasing and volatile capital environment. We're seeing more deals retrade than we've seen in the recent past, with a few deals being pulled for the time being and some buyers backing out of transactions, but not able to secure attractive financing. Overall, we're encouraged by the number of deals coming to market and by what seems to be more realistic pricing expectations. Subsequent to quarter end, we've acquired six properties valued at $72 million, and the pipeline remains active. The second quarter played out largely as contemplated when we raised guidance last quarter. We've maintained our full-year guidance, which implies 25% core FFO per share growth at the midpoint. Brandon will elaborate further on guidance in his comments. I'll now turn the call over to Dave to discuss current trends and operations and talk about a couple of new strategic technology initiatives we have underway. Dave?