Hello everyone, and welcome to the CubeSmart Second Quarter 2022 Earnings Call. My name is Victoria, and I will be coordinating your call today. If you'd like to ask a question during the presentation, please press star one on your telephone keypad. If you have joined us online, please press the red flag icon. When preparing to ask your question, please ensure that your line is unmuted locally. I'll now pass over to Josh Schutzer, Vice President of Finance to begin. Please go ahead. Thank you, Victoria. Good morning, everyone. Welcome to CubeSmart's second quarter 2022 earnings call. Participants on today's call include Christopher Marr, President and Chief Executive Officer, and Timothy Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q&A session. In addition to our earnings release, which was issued yesterday evening, supplemental operating and financial data is available under the Investor Relations section of the company's website at www.cubesmart.com. The company's remarks will include certain forward-looking statements regarding earnings and strategies that involve risks, uncertainties, and other factors that may cause the actual results to differ materially from these forward-looking statements. The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to or files with the Securities and Exchange Commission, specifically the Form 8-K we filed this morning, together with our earnings release filed with the Form 8-K, and the Risk Factors section of the company's annual report on Form 10-K. In addition, the company's remarks include reference to non-GAAP measures. A reconciliation between GAAP and non-GAAP measures can be found in the second quarter financial supplement posted on the company's website at www.CubeSmart.com. I will now turn the call over to Chris. All right. Thank you, Josh, and good morning to everybody. Another strong quarter for CubeSmart. Our results were very solid across all of our key performance metrics, reflecting our high-quality portfolio, systems, and teammates. Highlights of the second quarter include 19% same-store NOI growth and 24% funds from operations per share growth. Tim will share more details and color on our financial results for the quarter, our significantly improved outlook, and the strength of our balance sheet during his prepared remarks. Looking across all of our markets, we saw consistent performance, up and down, the coasts and throughout the central part of the United States. Self-storage continues to be performing quite well. Our consumer continues to be pretty healthy and we're very encouraged by the first half of 2022 and look forward to a very successful second half as well. When you look at market performance, certainly all of our Florida markets have demonstrated significant strength throughout the quarter. We continue to experience strong demand both coasts of Florida and we see the related occupancy and rate strength that comes along with that strong demand. As we foreshadowed earlier in the year, Washington, D.C. continues and is our most challenging major market with new supply significantly impacting all of our stores in the District of Columbia. We've been able to maintain market occupancy and navigate the challenging rate environment in what will likely be several more quarters of impact from that supply. Again, I think positives to Cube and to self-storage is that the consumer and the demand for our product continues to be strong. Our New York City assets were very steady performers during the quarter. We are closely monitoring economic conditions with rising interest rates, commodity shortages due to the war in the Ukraine, and supply chain issues. All of us are certainly experiencing the impact personally. Our self-storage customers continue to demonstrate the resilience we have experienced historically. As we expected entering the year, we are gradually experiencing trends resembling pre-pandemic norms, and our forward guidance assumes those trends continue into the end of the year. In short, great quarter, very bullish on the back half of the year, and I think we're set up very well entering 2023 and have high expectations that the magic of self-storage will continue into next year. Thank you for participating, and I'll now turn the call over to Tim for his comments. Thanks, Chris, and thank you to everyone on the call for your continued interest and support. As Chris touched on, operating fundamentals were very constructive during the second quarter and are continuing into the back half of the year. That strength showed up in our earnings release last evening as we reported a strong beat to second quarter expectations and a meaningful raise in our guidance for the year. Same-store performance, as Chris touched on, included headline results of 14% revenue growth and 2.5% expense growth, yielding NOI growth of 19% for the quarter. Average occupancy in the second quarter was 95.1%, and quarter-ending occupancy was 95.3%. Strong demand continues to be evidenced not only in physical occupancy, but also in strong pricing power, both in net effective rates to new customers as well as in existing customer rate increases. All of that contributing to the 14% growth in same-store revenue for the quarter. Same-store expense growth for the quarter at 2.5% year-over-year continues to demonstrate good overall expense control. We continue to see pressure in line items, including property taxes and utility costs, but those were offset by efficiencies in personnel and advertising during the quarter. We reported FFO per share as adjusted of $0.62 for the quarter, representing 24% growth over last year. We remain active and disciplined in our pursuit of external growth opportunities, and while we're not seeing the same elevated levels of deal volume that we were seeing a year ago, our team remains busy underwriting a lot of potential opportunities. We continue to find select opportunities that we find attractive that fit our disciplined investment strategy. We opened up one new development in the quarter in Vienna, Virginia. We closed on one wholly owned store acquisition for $23 million, and on the co-investment front, we closed on one store in New Jersey for $33.2 million. On the third-party management front, we added 35 stores in the second quarter and ended the quarter with 680 third-party stores under management. Our balance sheet position remains strong as we continue to focus on funding our growth in a manner that's conservative and consistent with our BBB/A-2 credit ratings. Our conservative leverage levels, our revolver capacity, our low levels of floating rate debt, and lack of any near-term maturities have us well positioned to pursue external growth opportunities. Details of our 2022 revised earnings guidance and related assumptions were included in our release last night. Based on the strong operating fundamentals we've discussed, we've increased our guidance range for full year FFO per share by 4% or $0.095 per share at the midpoint. Much of that guidance increase is based on an improved outlook for our same-store performance. Guidance for our same-store revenue growth for the year increased by 275 basis points to a new range of 11.5%-12.5% growth. Our outlook for same-store expense growth improved to a range of 3.5%-4.5%. Those combining to result in an improvement to our expected same-store NOI growth of 450 basis point improvement at the midpoint to a new range of 15%-16%. Clearly, we're sitting here in a great position at the halfway point of the year. Our team continues to work hard to best position our portfolio and our company for growth in all parts of the cycle, and we believe our results continue to validate the strength of the CubeSmart brand and the strength of the CubeSmart platform. Thanks again for joining us on the call this morning. At this time, Victoria, why don't we open it up for some questions? Of course. We will now start our Q&A session. If you'd like to ask a question, please press star one on your telephone keypad. If you have joined us online, please press the red flag icon. When preparing to ask your question, please ensure that your line is unmuted locally. Our first question comes from Jeffrey Spector at Bank of America. Please go ahead. Hi, good morning. It's Lizzy Doykan on for Jeff. I just wanted to ask about, you know, what you're seeing in terms of health of the consumer. Are there any signposts of weakness that you've noticed, you know, say, by customer income levels across markets or, you know, any kind of signpost based on regions? Thanks for that question. As we look across the country, our consumer and their behavior is consistent market by market. We constantly look at trends in payment as, you know, one of the signs of any potential impact from what's going on in the macro economy. I would say at this point, you know, what we have seen seems to be more of just signs of a return to that pre-pandemic norm, as I said. We see a little bit of an uptick in auctions, a little bit of an uptick in write-offs, a little bit of an uptick in receivables, all of which, however, aren't yet back to what we would have thought as normal in 2017, 2018, 2019. Continue to monitor in particular, given everything that's going on in the backdrop of the economy. I would say at this point, the self-storage customer continues to appear to be on pretty solid footing economically and continues to be pretty resilient, and that's true across markets, across urban and suburban properties. Great. To follow up on that, I'm wondering if, you know, you've seen any difference in what drove move-in trends or the demand in your New York market? Yeah. New York activity has been very steady. I would say probably the steadiest market that we have in the country. Continue to see elongating lengths of stay, continuing to see good demand. I think it was a market where our same-store occupancy actually ticked up a bit year-over-year. I would say on the rate side, it's also been a less volatile rate market. The consumer seems pretty healthy. I think when you look at the cost of housing in New York, and I know a lot of this is Manhattan specific, which you know really only impacts our one store, but even when you get out into Brooklyn and Queens, you know clearly it's more expensive to find housing for folks. You know, I think the silver lining to that for storage is it does tend to have folks think about smaller apartments or perhaps having a roommate, et cetera. I think that's been beneficial to us. Thank you. Separately, I was wondering about the supply picture that you talked about, for D.C. Is there anything new in terms of the Deliveries that, you know, you haven't discussed before or is this all this has been expected, you know, they're just waiting to hit, and it's been in the pipeline. You know, if you could comment on anything new to this picture there. Yeah. There's not anything that has opened new. Actually, I don't think anything's opened new in the last two quarters. These are stores that were delivered in, largely in 2021. There were several that came on at one time, and they all are in, you know, in an area where they have an impact to some degree on every one of our stores in the District of Columbia. We knew this going into the year. I think when we talked at the end of last year and introduced guidance for this year, you know, Washington D.C. Metro was gonna be our one of our markets on our list that we had an expectation going into 2022 was gonna be challenged by the impact of that supply. You know, the positive is, I think, given market conditions, the supply is leasing up. We just have to get, you know, rental rates for those, the new stores to come up to market to help stabilize things. Okay. Thanks for the color. You're welcome. Thanks. Thank you for your question. Our next question comes from Keegan Carl at Berenberg Capital Markets. Please go ahead. Hey, guys. Thanks for taking the time. Maybe first, just on expense growth guidance for the back half of the year, can you give us a little bit more color, and what improvements in particular are you seeing versus your prior expectations? I'm sorry, Keegan. Which line items? Yeah, yeah. Overall, 2.5% expense growth for the quarter and an improved outlook down to that 3.5%-4.5% range. When you take the expense grouping and think about the two largest drivers, the two biggest components of same-store expenses being property taxes and personnel, you have kind of the tale of two cities there. Taxes continue to be under pressure. You know, we historically say inflation, above inflationary levels, but I'm not sure that's the right term anymore. You know, we've experienced over the last several years as a sector that line item increasing in that kind of 5%-8% range, and we're still looking at that type of range here for 2022. Offsetting that, though, is the personnel line item for us, where we have found and continue to find a lot of efficiencies, utilizing technology and utilizing, you know, some staffing efficiency models to reduce some store hours and reduce coverages, that have us in a really good position from a year-over-year perspective on the personnel line item. Then after you get beyond those two big categories, you get into a whole host of other things that also you have some going in one direction, some going in the other. Under pressure line item would be utilities, of course, with the cost of electricity and natural gas and the like, that will certainly be at the higher end of pressure. We've had some pretty good news on property insurance, countering that a bit. Under pressure on a line item like credit card fees, get some relief on that on a line item like advertising, where we were, you know, pretty aggressive in 2021, so we have a little bit of an opportunity on a comparative basis to have some help in the overall expense pool on the advertising line item. A lot of things going in different directions, but overall pretty pleased that our ability to control expense is down in that 3.5%-4.5% range for the year. Got it. That, that's very helpful. Just if we think about your length of stay, how's that trending? You know, I guess relative to last quarter and just kind of going forward, where do you see things sort of normalizing that here? Yeah. The length of stay, you know, continues to elongate both stickiness of the customer as well as the obviously the longer we own assets, you know, that does tend to continue to move out over time. When you think about from a customer perspective, you know, it's elongated out to you know to a point where we've got about 64% of our total customers have now been with us for greater than one year, and about 46.5% have been with us greater than two years. Got it. Thanks for the time, guys. Appreciate it. Thank you. Thank you for your question. Our next question comes from Juan Sanabria at BMO Capital Markets. Please go ahead. Good morning. Just hoping you could talk a little bit about the guidance assumptions for the back half of the year. What's assumed for an occupancy decline, and and maybe what the ending point is to think about how 2023 may start at least? Hey, Juan. I'll start and then Tim can provide additional detail if it's appropriate. Yeah, I think it's probably safe. Well, first of all, let me start with the statement that we always make. We don't manage to occupancy, we manage to maximize the revenue from each customer. That being said, for sake of some guideposts, we would expect that our, you know, our occupancy in December is probably down ±150 basis points from where we were last year is what's kind of baked in. In terms of how we think about starting 2023, we would assume we end 2022 and get into 2023 with high single digit same-store revenue growth. Just hoping for maybe some commentary on spot numbers for July for both occupancy and as well as maybe the street rate trend through the second quarter and into July. If you could just give us a sense of the snapshot of how we're doing today and how that trended through the second quarter. Rate trends in the second quarter, net effective rates for our new customers averaged down about 1%. That trend went from you know, modestly positive in April and then declined down a bit in May and June to get us to that average of about down 1%. As we've got into July and the comps from last year get increasingly more difficult, you know, that's in that 3%-4% range here in July. Occupancy at the end of July is basically flat to where we were at the end of June. Thank you very much. Thank you. Our next question comes from Samir Khanal at Evercore ISI. Please go ahead. Hey, good morning, everybody. Chris, you know, with much focus on 2023, I guess, I mean, how do you feel about the supply picture in kind of your top markets, you know, like New York, let's call it maybe over the next 12-18 months as we think about growth for next year? Yeah. Continue to be very constructive about deliveries in 2023. I think again, you're gonna have the inevitable slippage, if that's a word, from, you know, projects that are supposed to deliver in the fourth quarter of this year that drag out into next year. If you take that semantics aside, I think the uncertainty in construction costs, certainly the escalation of costs, the supply chain issues I referred to, I think are all creating some headwinds for supply. I think that will benefit, you know, those of us who own assets, as we get into 2023. Our outlook on you know on new openings in 2023 is not significantly changed from where we were at the end of last quarter. We continue to think it will be quite muted in New York City specifically as we look out into next year. Again, the outlook is consistent with what we would have talked about a quarter ago. We have an expectation of one store I think is still left to be open either later this year or next year in the Bronx. Two or so later this year in Brooklyn. As I think I talked on last call, Queens has 5 or so, but I think those are pretty spread out in the borough and not necessarily all impactful to CubeSmart. As we get into next year, as we talked about in New York, I think the impact of supply continues to be more muted as we go through 2023. I think based on everything we see today, late 2023, 2024, we would expect that the material impact of supply on our stores in the outer boroughs has dissipated. Got it. I guess just switching gears on the transaction front. I think you've done, you know, under $100 million so far this year, and I think the upper end of your guidance is about close to $300 million. I'm just curious, you know, what are you seeing on the pipeline, and then, you know, the ability to kind of hit that high end this year? Hey, it's Tim. We have, as I mentioned in my opening remarks, we continue to see an awful lot of opportunities to evaluate. We are and remain very focused on our strategy of finding complementary high-quality assets in the markets that we're focused on at yields and returns that make sense to us. Thus far this year, we've found just a handful of such opportunities. Super hard to predict what's gonna come across our desk next week. I would say overall, not only are the overall number of opportunities lower this year than they were last year, which is not a surprise because last year was very abnormal, abnormally high as it relates to deal volume and opportunities as you know. What's also different this year is the quality of what we're seeing isn't the same high quality of the assets and the portfolios that traded last year. It's really a combination of those things, and we try to provide that guidance to be helpful and directional. If we find opportunities that make sense to us, that fit our strategy to get to the high end of that range, great. If it's double that range, great. If it's not another deal for the rest of the year, then so be it. But we will be disciplined, and we know what we're looking for, and when we find those opportunities, we'll transact. Thank you. Thanks. Thank you for your question. Our next question comes from Ki Bin Kim at Truist. Please go ahead. Thanks. Good morning. It's interesting to see your vacate activity up only 3% year-over-year, as that increase is much lower than many of your peers. My question is, can you update us on what the ECRI program looks like today in terms of frequency and level of increases? Does that moderate level of vacate activity alter your thinking? Hey, Ki Bin. We can't speak for our peers, but certainly, we are very happy with the impact our rate increase program is having. We've gotten more aggressive progressively over time and are more dynamic than what had been a very programmatic approach. The average increase has grown consistently month to month over the last year. We're continuously testing different timing and amounts to capture more customers quickly, and we think we still have some room to continue to push that in the back half of the year. If you think about upside cases for us, that certainly would be one of them in the back half of the year. Can you update us on where your in-place rents are today versus market? Yes. Throughout the second quarter, our in-place customers averaged about 4.4% higher than new customer rates. Okay. Thank you. Yeah. Yeah, and just a little more detail on that question. You know, the number, as you think about the trend throughout the year, that differential pushed positive in June and July, and then has now reverted back again negative here in early August. Again, return to some of the more traditional cyclical types of impacts that we see in storage pre-pandemic. Thank you. Thank you. Our next question comes from Michael Mueller at JP Morgan. Please go ahead. Yeah. Hi, just a couple quick ones here. I guess as follow-up to the prior question on ECRI, can you give us a rough idea of the magnitude of what the increases have been on average this year, say, compared to last year? Then just for clarification, Chris, did you mention when you talked about entering 2023 with high single-digit revenue growth, I mean, should we assume that is kind of a same-store revenue outlook for 2023, or were you intending for that to come across as something else? Yeah. Let me take them in reverse order. We were merely giving a guidepost for how we thought we would wrap up 2022 and begin 2023. What happens then from that entry point of a high single-digit same-store revenue growth through the end of 2023, we're not providing any sort of guidance around that at this point, and not surprisingly, it will absolutely depend upon you know, how the U.S. economy is situated, you know, not only as we enter 2023, but as we navigate through the year, which certainly there's a significant amount of uncertainty around that as we sit here today. In terms of the magnitude of the existing customers, it really is dynamic both in timing and in amount. It tends to be a pretty broad range. I mean, we have customers who have experienced quite a small increase because of how long they've been with us and the increases they've received over time to at the other end of the spectrum, you know, some folks that we push on more aggressively because of the occupancy of that particular cube they're in in that market, as well as the history that they have had with Cube. It is, again, I want to say it's very dynamic, and as a result, you know, hard to. I think an average doesn't really tell the true story. You know, I think what we are focused in on is also, in combining with the ability to push along increases, that customer experience. You know, I think it's dangerous to have something that's more bait and switch to a customer, where they don't understand why they're getting such a large increase potentially so soon in their experience when, you know, they hadn't had that shared with them on the front end. You know, it is a balance of providing a great customer experience while also, you know, trying to maximize revenues. Got it. Okay. Thank you. Okay. Thank you. At this time, there are no further questions, and I would like to pass it back over to Christopher Marr. All right. Excellent. Well, thank you, all. We obviously experienced a solid rental season. Fundamentals for storage are strong. Demand continues to support pricing power. As I mentioned, we do see a further normalization of trends, but, you know, as we answered in a question, that lower impact of supply, we think is a very supportive backdrop going forward. We believe that the companies that will navigate this period of economic uncertainty, in the best manner possible are those that are focused on being lean and agile. Certainly, we believe that applies to CubeSmart. We continue to make sure that our operating structure and our cost structure fit that definition of lean and agile, and I think that will serve us well, regardless of what direction the economy takes here over the next 18 months. Thank you all for participating in the second quarter conference call, and we do very much look forward to speaking to you again at the end of the third quarter. Have a great rest of your summer. Thank you, everyone, for joining today's call. You may now dis-