Public Storage

Ladies and gentlemen, thank you for standing by, and welcome to the Public Storage First Quarter 2021 Earnings Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation. If you have a question at that time, please press star on your touchtone phone. If you wish to remove yourself in the queue, please press the pound key. It is now my pleasure to turn the floor over to Ryan Burke, Vice President of Investor Relations. Ryan, you may begin.

Thank you, Angela. Hello, everyone. Thank you for joining us for our first quarter 2021 earnings call. I'm here with Joe Russell and Tom Boyle. Before we begin, we want to remind you that certain matters discussed during this call may constitute forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to certain economic risks and uncertainties. All forward-looking statements speak only as of today, April 29th, 2021, and we assume no obligation to update, revise, or supplement these statements. They become untrue because of subsequent events. A reconciliation to GAAP of the non-GAAP financial measures we have applied on this call is included in our earnings release. You can find our earnings release, supplement report, SEC reports, and an audio replay of this conference call on our website at publicstorage.com. We do ask that you initially limit yourself to two questions. Of course, if you have more beyond that, please feel free to jump back in the queue. With that, I'll turn the call over to Joe.

Thanks, Ryan. Good morning and thank you for joining us. Before we begin, we continue to wish everyone good health as we all face the many impacts from the pandemic. This morning, Tom and I will begin the call by covering a few areas tied to Q1 performance along with our inaugural guidance for 2021. As you know, on May 3rd, we are hosting an Investor Day virtually and hope you can join us. We will share our key strategies and introduce you to the executive leadership team that will drive our growth in the coming years. Looking at Q1, a number of historic metrics played through. Customer demand for self-storage has remained elevated. We continue to see consistent customer behavior across all markets with increased move-in rates extended customer length of stay, and more latitude to resume traditional rate increases to existing customers. The ban has been tied to both historic drivers, coupled with the longer lasting impacts from more consumers needing storage. This includes work from home, study from home, elevated home sales and remodeling, and the migration in and out of metropolitan markets. With the economy improving and additional government stimulus, consumer balance sheets are healthy and our customers' payment patterns remain strong. Both same-store and non-same-store assets are performing well, with lease-ups particularly in non-same-store assets outpacing our projections as NOI grew by 46%. To investments, 2021 is shaping up to be a robust year of acquisition activity. With the addition of the recently announced EZ Storage portfolio, our year-to-date 2020 acquisition activity, either closed or under contract, is $2.5 billion. Of note, since 2019, we have acquired, developed, and redeveloped approximately 22 million square feet and have expanded our portfolio by 13%, having invested $4.3 billion. In regard to the easy storage acquisition, I would like to mention a few highlights of this significant transaction and how it matched four specific areas tied to our unique capabilities. First, the integration of the assets into the public storage brand and operating platform will be seamless as we already had a broad presence in these markets with 115 assets. We now enjoy even stronger presence with now 163 assets with unmatched brand presence across the mid-Atlantic region. Second, eight of the easy storage assets are poised for expansion, along with one that has begun ground-up development. The public storage development team has taken lead on these opportunities and is ready to execute on each one of them. allowing us to expand the portfolio by approximately 10% over the next 24 months. As you know, Public Storage has the only development team among the self-storage REITs and is well poised to unlock more value from this portfolio by virtue of our unique development capabilities. Third, our ability to fund a large acquisition and close in a very short timeline In this case, six weeks from selection to close was due to our efficient and primed capital structure. This transaction is immediately accretive to FFO and NOI. And fourth, our well-earned reputation of being a buyer of choice in the investment community. I want to thank the Manginero family and the EZStorage team for choosing Public Storage and the great work they put into this outstanding portfolio over the last two plus decades. We appreciate their assistance in integrating this outstanding portfolio into our platform and welcome many of their employees and customers to Public Storage. Looking to full 2021, we are encouraged by core customer demand our well-located portfolio, the strength of our balance sheet, and the quality and dedication of the 5,000 plus team members at Public Storage, all of whom are committed to enhancing the leading brand in the self-storage industry. With that, let me hand the call over to Tom. Thanks, Joe.