National Storage Affiliates Trust

Greetings. Welcome to National Storage Affiliation Third Quarter 2023 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 third quarter 2023 Earnings Conference Call of National Storage Affiliates Trust. On the line with me here today are NSA's President and CEO, 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've 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, Nantron'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, November 2, 2023. 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 details 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-debt 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 Dave.

Thanks, George, and thanks, everyone, for joining our call today. The third quarter was largely in line with our expectations as we continue to execute on the everyday blocking and tackling of our business. Our teams did a great job navigating the dynamics of the seasonality and the competitive environment. In the back half of the year, occupancy continues to follow typical seasonal patterns, and we are nearing year-over-year occupancy delta. Our consumer remains healthy and stable, allowing us to execute on our revenue management strategies. There were several positive items to highlight this quarter, including the completion of our $250 million net private placement. Our teams did a great job in the timing and execution of that transaction, Treasury rates are higher today than when we priced the offerings, so we're pleased to have that capital raise behind us. We also continue to execute on acquisitions for our captive pipeline, while our pros continue to replenish that pipeline by making acquisitions outside of the REIT. This illustrates one of the many strengths of our pro structure. We remain pleased with our geographic exposure and our secondary market performance. Our MSAs outside the top 25 continue to outperform the portfolio average in revenue growth. However, we are facing near-term headwinds, including high interest rates, which has muted the housing market, thus slowing consumer transitions. We're in a very competitive customer acquisition environment, which is pressuring street rates. We have challenging comps in parts of Florida due to hurricane-driven demand last year. We're also dealing with elevated new supply in a few select markets like Atlanta, Phoenix, and Las Vegas. That said, all of these challenges eventually will ease, which gives me confidence in the overall outlook for NSA. In the meantime, we continue to focus on the things we can control, especially our efforts in regards to people, process, and platforms. Our customer acquisition teams did a great job maximizing rental conversions by adjusting marketing spend and front-end pricing. Our revenue management team continues to utilize improved AI technology to maximize our ECRI program. I'm confident that the investments in technology that we're making today will continue to enhance our results going forward. We're also encouraged by the progress to date around our strategic dialogue involving overall portfolio optimization into generating equity capital through programmatic joint ventures, non-core asset sales, and portfolio recapitalizations. We expect to provide an update on these initiatives over the next few quarters. I think it's important not to lose sight of the long-term attractiveness of this sector and the positive attributes that will benefit us going forward. A few things to keep in mind. The new supply outlook is favorable. In our markets, deliveries are expected to drop by over 20% by 2025. The consumer remains healthy and stable. Our consumer link to stay remains well above pre-pandemic levels. Payment activity and bed net expense remain in line with long-term averages. Technology initiatives will continue to improve our ability to attract new customers and enhance our revenue management strategies, allowing us to react quickly to changing environments. We believe NSA is well-positioned within the sector to have a strong performance in the future. As I reflect on the sector's strong performance over the last five years, I want to point out that during that timeframe, our average same-store NOI growth was over 9%, and our core FFO per share increased 86%. Both are very strong results. I'll now turn the call over to Brandon to discuss our financial results.