National Storage Affiliates Trust

Greetings. Welcome to the National Storage Affiliates First Quarter 2024 Conference Call. At this time, all participants are in 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 now begin.

We'd like to thank you for joining us today for the first quarter 2024 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 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, May 2, 2024. 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. 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-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 Dave.

Thanks, George, and thanks, everyone, for joining our call today. During the quarter, we completed many of our strategic initiatives that we've been discussing in previous calls. These initiatives enable us to leverage our balance sheet in access to growth capital, increase earnings per share, and ultimately position our company for future growth. We continue our focus on enhancing our operating platforms to ensure a better customer experience. These initiatives are still ongoing, but we are starting to see improvements in rental activity and conversions from our advanced web presence and upgraded call center operations. On the rental front, we experienced three months of positive net rentals through the end of April, contributing to a seasonal uptick in occupancy, which ended April at 86%, have 50 basis points from the end of February. During the quarter, we experienced a meaningful year-over-year increase in leases being fully executed online, in large part due to improvements made to the lease signing experience. Additionally, our call center answered over 30% more calls during the quarter compared to last year. To continue to enhance and simplify our customer journey, and by leveraging intelligence in our customer acquisition strategies, we expect to see continued improvements in the customer experience we offer and overall performance. We're also being more aggressive on our pricing strategy. While this is helping to drive rental volume, it is putting pressure on our move-in rates, which average down about 14% year-over-year for the quarter. Consumer base remains healthy, with 65% of our tenants having stayed with us over a year, while 49% have been with us over two years. Our ECRA program remains largely consistent with the past couple of quarters in terms of frequency and magnitude. Ultimately, the quarter played out as we expected, but it's still early in the spring leasing season with the peak months ahead of us. That said, looking across our different Sunbelt markets, we continue to face many challenges due to several factors, including absorption of new supply, a muted housing market, and a very competitive pricing environment. Results are mixed in these markets with revenue in Phoenix, Sarasota, and Las Vegas all coming in below portfolio average, while markets like Oklahoma City, Savannah, and Corpus Christi were better than average for the quarter. We continue to work hard in these markets to deliver a superior customer experience and recognize some of our markets are going to be slower to recover. It is important to point out that we have markets that are currently healthy and delivering solid results. We remain very confident in the growth prospects of our Sobel markets due to attractive population and migration trends. I'm very pleased with our strategic positioning heading into this next phase of growth. We're starting to see opportunities on the acquisitions front. We're finding a variety of deals in many of our strongest performing markets where we have good insights into rental demand and street rates, allowing us to be more precise in our underwriting. These are deals that make sense for us to pursue as they improve our overall portfolio quality, add depth to our existing markets, and increase our operational efficiency. We currently have over 25 million under contract, and approximately $200 million of properties in various stages of negotiation. We expect to fund these acquisitions through a combination of 1031 proceeds, joint venture capital, and debt. We won't comment on pricing until the deals are closed. These transactions make economic sense for us and our JV partners. We represent the start of us putting the dry powder to work that was generated from our portfolio optimization strategies. I'll now turn the call over to Brandon to discuss our financial results.