Ladies and gentlemen, and welcome to the Life Storage second quarter earnings release conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Alex Gress. Sir, the floor is yours. Good morning, and thank you for joining us today for the second quarter 2022 earnings conference call of Life Storage. Leading today's discussion will be Joe Saffire, Chief Executive Officer of Life Storage, and Andy Gregoire, Chief Financial Officer. Following prepared remarks, management will accept questions from registered financial analysts. As a reminder, the following discussion and answers to your questions contain forward-looking statements that are subject to risks and uncertainties and represent management estimates as of today, August fourth, 2022. The company assumes no obligation to revise or update any forward-looking statement because of the changing market conditions or other circumstances after the date of this conference call. Additional information regarding these factors can be found in the company's public SEC filings. In addition to the press release distributed yesterday, we furnished our supplemental package with additional detail on our results, which may be found on the investor relations section on our website at lifestorage.com. As a reminder, during today's question- and- answer session, we ask that you please limit yourselves to two questions to allow time for everyone who wishes to participate. Please re-queue any follow-up questions thereafter. At this time, I'll turn the call over to Joe. Thanks, Alex, and good morning, everyone. I am pleased to report another outstanding quarter. I would like to acknowledge and thank each and every Life Storage team member that executes every day to help us achieve these outstanding results. Demand for self-storage has remained strong, allowing for the continuation of strong pricing power. Asking rates remained at record levels through the quarter, helping us maintain 21 straight months of positive rent roll-up. Additionally, our focus on revenue optimization resulted in same-store achieved rate growth of 20% over last year, with occupancy accelerating through the second quarter to end with an average of 94%. As a result of these strong operating fundamentals, we achieved core funds from operations of $1.65 per share for the quarter, which is a 37.5% increase over last year. With this strong performance, we increased our recently paid quarterly dividend by 8%, which is now 46% higher from one year ago. In regard to external growth, we continue to add more scale to our existing markets through acquisitions and further growth to our third-party management platform. In the second quarter, we acquired 13 wholly owned stores for $262.6 million while also adding 17 stores to our third-party management platform. We have remained focused on strategic growth, enabling us to grow our wholly owned portfolio close to 18% from one year ago. These acquisitions represent properties in top markets, including Sun Belt markets such as Florida, California, Texas, and Georgia. Slightly over 75% of what we closed year to date are stabilized properties, while the remaining 25% are lease-up properties that will provide strong upside in future years. Looking forward, our current acquisition pipeline remains strong with an additional $258 million under contract. Including joint ventures, our third-party management portfolio totaled 385 stores at the end of the second quarter, growing 13% over last year, and it continues to be a source of off-market acquisition opportunities. Year to date through July, six of our wholly owned acquisitions came from our third-party management platform. As we look towards the full year, we now estimate our adjusted funds from operations per share to increase to a midpoint of $6.30 for the year, which would be over 24% growth from 2021. Additionally, we also raised our wholly owned acquisition guidance to between $800 million-$1 billion. With that, I will hand it over to Andy to provide further details on the quarter and our guidance. Thanks, Joe. Last night, we reported quarterly core funds from operations of $1.65 per share for the second quarter, an increase of 37.5% over the same quarter last year, and well above the high end of our guidance. The continued sequential increase in FFO was a result of excellent same store and acquisition performance. Second quarter same store revenue increased 18.9% over the second quarter of 2021, primarily driven by increased rental rates. We remain highly occupied, with occupancy averaging 94% during the quarter, a 40 basis point increase over the first quarter's average occupancy. The occupancy growth was partially held back by our continuing to be aggressive with rates on new and existing customers, leading to a significant increase in our achieved rates per square foot. Same-store realized rents per sq ft were up 20% year-over-year in the second quarter, representing the continuation of double-digit rate growth for the last 4 quarters. Our existing customer rate increase strategies continue to be effective, with a weighted average increases above historical norms. We also experienced another quarter of positive rent roll-up, with same-store move-ins paying on average over 7% more per sq ft than move-outs. As Joe noted, this represents 21 straight months of positive rent roll-up, with asking rates remaining at record levels during the second quarter. Same-store operating expenses grew only 4.3% for the quarter versus last year's same quarter, and were primarily driven by credit card fees, repairs and maintenance, and utilities expense. Payroll and benefits remained flat on a same-store basis. The net effect of that same-store revenue and expense performance was a 370 basis point expansion in quarterly same-store net operating income margin to 73%, resulting in year-over-year growth in same-store NOI of 25.4% for the second quarter. This marks our fifth consecutive quarter of same-store NOI growth over 20%. Turning to the balance sheet. We supported our acquisition activity by utilizing our credit facility and issuing equity securities during the quarter. Specifically, we drew $168 million from our credit facility and issued an additional $7.8 million of common stock via our ATM program during the quarter. Subsequent to quarter end, we closed on the refinancing of our existing credit facility that was scheduled to mature in March of 2023. With the refinancing, we increased the facility from $500 million to $1.25 billion through a syndicate of 10 banks that included two new banks. This new facility provides committed liquidity to Life Storage through January 2027, with terms comparable to or improved from the terms of our existing facility. On a pro forma basis, accounting for the new credit facility at quarter end, we had significant capital available with $947 million available on our credit facility. Our balance sheet remains strong with our net debt to recurring EBITDA ratio at 4.6x at quarter end, down from 5.0 x one year ago. Our debt service coverage increased to a healthy 5.7 x at June 30. We have no significant debt maturities until April of 2024, when $175 million becomes due, and our pro forma average debt maturity is 6.2 years. In addition, at June 30, just over 90% of our debt was fixed rate. We are updating our 2022 guidance. We now expect same-store revenue to grow between 13.25% and 14.25%, which will be driven by improved rental rates. This increase should result in a 16.5%-17.5% growth in same-store NOI. The improved same-store performance is expected to be partially offset with the increased cost of capital. Based on this outlook, we now anticipate core FFO per share for 2022 to be between $6.27 and $6.33, or 24.3% growth over the prior year at the midpoint. With that operator, we can now open the call for questions. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is coming from Smedes Rose. Please announce your affiliation, then pose your question. Hi, it's Smedes with Citi. I wanted to ask you just a couple of questions. You know, it's no surprise that the guidance would look for some slowdown in the back half of the year, given the more difficult comps. I'm just wondering how you're thinking sort of specifically about how that might play out, kind of the balance between rate and occupancy as we move through the year. Good morning, Smedes. On an occupancy front, what we've built into the guidance is a normal cyclical trend in occupancy. Last year, we saw occupancy drop about 190 basis points from July to the end of the year. This year we've in guidance, we've shown that at 250. 250 basis points is typically what we would see prior to the pandemic. That's what we've built in the guidance. Rate-wise, we could see rates, you know, we've got some tough comps here, that would put rates, street rates below where they were last year, anywhere from 0% - 5% below where they were last year. Okay. I just wanna ask you mentioned drawing down on the credit facility. Would you look to term that out at some point? Is that included in your guidance at all, or? We did not include terming that out in the guidance. That would be our plan to term that out, but the markets are a little disjointed at the moment. When we feel better about those markets, we expect to go back to the public markets with a 10-year, is typically what we do. Okay. Thank you, guys. Thanks, Smedes. Your next question for today is coming from Keegan Carl at Berenberg Capital Markets. Hey, guys. Thanks for taking the questions. Maybe just one more on occupancy. Obviously, it was strong in the quarter. Are you guys seeing any changes in customer behavior relative to your expectations at this time of the year? Not really, Keegan. You know, I think it's just a little bit of, kind of back to a little bit of normalization. You know, we had elevated auctions kind of catching up still from last year, so that was part of the reduction in occupancy, and that really is, you know, not a regional thing. It's pretty much in all our markets. Other than that, no, we're not seeing anything unusual. Got it. You guys raised that position guidance again. Just kind of curious, how much competition are you guys seeing, maybe particularly in the Sun Belt relative to last quarter? Are you seeing any change in cap rates at all? Yeah, it's an interesting time. I think, you know, as a, you know, a bit of a pause over the last few months in terms of sellers coming out with product, given, you know, that Andy suggested the difficulty in the debt markets. You know, we actually had a pretty strong pipeline headed into the year and been focused on closing a lot of that. You know, we have seen some portfolios out there that have actually re-traded. You know, we're still active. You know, we're doing mostly onesie-twosies. We're not seeing anything close to last year in terms of, you know, the scale of portfolios coming out. Again, it really is probably a result of what's going on in the macro environment. Things are, you know, I think getting a little bit better. I think you know, maybe we'll see a little surprise in the second half of the year if markets cooperate. You know, we're really pleased with what we've been able to get under contract, and we still have a lot of work to do to close on what's in the pipeline. I think in terms of competition, yeah, I think there is probably a little bit less than a year ago just because of, you know, the cost of doing deals now and the cost of debt is obviously a lot higher than last year. Just on cap rates, are you seeing any material movement? I wouldn't say material, but I think you can read into it that there's, you know, less deal flow because of the spread between, you know, the buyers and the sellers is widening. You know, sellers in this sector, as you know, they don't need to sell. It's a great business. It's got great cash flow. It's, we all know the positives of it. You know, sellers are really never needing to sell, but if the price is there, they will. Right now, I think it's just a bit of kind of, you know, what we saw, you know, two or three years ago when there wasn't a lot going on in terms of sellers. I think if things improve, you know, we could see some more activity later this year into next. I would suspect the deals that are closing today may be 25, 30, 40 basis points, you know, higher than maybe six months ago. Perfect. Thanks for your time, guys. Really appreciate it. Thanks, Keegan. Your next question for today is coming from Juan Sanabria at BMO Capital Markets. Hi, good morning. Just wanted to go back to the guidance question and just get a sense of what the exit is assumed for the fourth quarter for same-store revenue, and if you have any thoughts about 2023 as it relates to where you're ending the year up and how you're thinking about kind of the maybe a range of outcomes for next year, given the strength that we have seen to date. Good morning, Juan. The second half, you know, we're still looking at, if you look at the second half of the year, double-digit revenue growth. We do see deceleration as we go through the year, that those are tough comps that we're looking at, as you've seen from the activity in the last few years, what our revenue growth had been for the last five quarters at over 14%. So we would see some deceleration. Again, second half in total will be still double-digit revenue growth, but we see that decel would set us up nicely, probably very close ending the year to double digits. Our guidance is slightly below, but I think it sets up nicely for next year. I don't think we're prepared to talk about the rest of next year other than it starts out very strong. Okay, just on the expense side, you guys had a fantastic quarter, particularly relative to some of the other prints we've seen in storage and elsewhere. Just on the payroll side, you guys have had very modest growth there. Is that, do you think that continues, or is there something in the numbers that maybe gets normalized out as man-hours maybe increase, or have you taken FTEs out and that's not as much of a pressure maybe for you as others? Yeah, no. Thanks, Juan. You know, for some time now, we've been really focused on payroll and FTE per store, embracing technologies and new technologies and just generally finding ways to do more with less. There's really nothing unusual in there except that we've been you know, continuing with our strategy for further efficiencies. You know, Dave's now been the head of operations for you know, this year, and he knows the strategy behind it. He's been doing a great job of keeping control over payroll. I know it's quite tough in this environment. Yeah, we're really pleased with the result, and you know, we continue to look for ways to you know, reduce hours at the store level. You know, fortunately, we've been successful at it. Thanks, guys. You're welcome. Your next question for today is coming from Samir Khanal at Evercore ISI. Hey, Joe. Good morning. I guess just wanted to get your view on kind of the potential slowdown in the housing market with mortgage rates being higher here. Clearly, that had been sort of a big driver with sort of housing mobility in the storage industry. How do you think about that, you know, impact potentially maybe in the back half or even into 2023? Yeah. Hi, Samir. You know, obviously, you know, storage is used for a number of reasons and, you know, there's definitely been a slowdown in the sale of homes, but, you know, that sometimes is a good thing for storage. You know, people decide not to buy, you know, a house with a second bedroom or a third bedroom or a fourth bedroom and will turn to storage instead. Same with apartments. You know, with inflation, people may have to deal with, you know, being in a place that maybe isn't the perfect size for them, and again, turn to storage. Also, you know, what's interesting is just, you know, what we haven't seen in a number of years is the staging in the sale process where, you know, homeowners will have to stage their house because it's not selling. You know, we haven't seen that in a while 'cause obviously things would sell pretty quickly. You know, we're seeing some of that come back, where people are having to make a little bit more effort to sell their house. Right now we're not too concerned. Obviously, you know, we'll see how the rest of the year plays out, but we had, you know, very good demand throughout the peak season. It's still. We're still seeing some nice move-in volumes. You know, demand is very strong and, you know, pre-COVID, you know, maybe wouldn't see as much demand, but today there's so many more uses and needs for self-storage that we are benefiting from, and we don't see that slowing down. I guess my second question is around 2023 because that's where sort of the investor focus is today. I know you haven't provided guidance, but maybe walk us through how to think about, you know, sort of the puts and takes to come up with a growth number for next year. I mean, do you feel where you stand today, do you feel better about growth for 2023 maybe versus three months ago? Just trying to kinda get your sense of how to think about 2023 at this point. You know, I think if when you look at where we're gonna end the year, it's stronger than we thought three months ago. I think we're gonna start the year stronger. How does the consumer react next year to rate increases versus this year? You know, it's all we'll have to determine that as we go through. We'll see if there's any change as we go through the remainder of the year. Right now, I would say we're feeling a little better than we were three months ago on how 2023 will look. Thanks very much, guys. Your next question is coming from Jeffrey Spector at Bank of America. Great. Good morning and congratulations on the quarter. My first question, I'm sorry if you discussed this already, but I didn't hear anything. Just to confirm, are there any signposts of weakness, let's say, by customer income levels across the markets or any signposts of weakness based on regions? No, I wouldn't say, Jeff, that there's any real regional difference. You know, obviously consumers are feeling it in, you know, all walks of life with inflation, and it's nice to see gas coming down. You know, we have seen some of our late fees go up, which is, you know, kind of getting back to normal. You know, I think, pre-COVID, that's kind of where we are now with late fees. Other than that, you know, I think we're still in a good spot. You know, again, this is a needed product. You know, it's not something that can easily be canceled like a Netflix subscription. This is something, especially for those who are working from home, you know, they need to keep those items in storage. I think we're in a good spot. Again, it's, you know, on average, $160 a month is an affordable option for many folks. You know, we feel very good about the consumer, and obviously, the employment is still very strong. People have jobs and they're able to make their payments. Other than little late fees rising to kind of getting closer to pre-COVID levels, we don't really see anything else. Thank you. Then, just one question on kinda on the transition from 2022 into 2023. I remember 2021 into 2022, you know, a key point was higher occupancy levels. Is that the assumption now at this point, and how does that compare, let's say, versus historically? You know, your guidance, let's say, ending 2022 into 2023 versus historically. I assume that the occupancy in particular is looking to be stronger than historically, but please confirm. Yes, Jeff. We would think that high occupancy in our guidance would end the year above historical norms. It'd be in the 91%-92% range, in that range there. Would be below last year's record, but still above our historical. Typically, at the end of the year would be about 90%, so we're still above historical levels we expect to be at the end of the year. It does help us out compared to historical levels where that occupancy will start in 2023. Great. Thank you. Thanks, Jeff. Once again, if there are any questions or comments, please press star one on your phone at this time. Your next question for today is coming from Ki Bin Kim at Truist. Thanks, guys. Good morning. Just wanted to go back to your comments about street rate. Did you give color on what it was during the quarter and how that progressed into July year-over-year? We did not give the color yet, Ki Bin, but street rates during the quarter on average were 7% almost 8% higher than they were a year ago, subsequent to the quarter end. Slightly negative in July compared to last July, but very, very high from historical levels. I think July is still 1 in the top 4 months of rates, highest rates. Still very strong, slightly below last year, which was incredible. Slightly negative in July, and I think earlier you mentioned for the remainder of the year, you think it's gonna be 0% to -5%. Is that right? Yes. That's what we embedded in guidance. Correct. Yeah. On ECRIs, can you describe what that program looks like today and how that might have changed? I remember at least pre-COVID, you guys used to concentrate your ECRI more so in the summer than just programmatically, you know, pro rata throughout the year. I'm not sure if that's changed at all. Just trying to get a sense of what drove that much better than expected sequential increase in same-store NOI. Why. Yeah. Hi, Ki Bin. You know, obviously our revenue management team does a great job. You know, our ECRI strategy continues to evolve. You know, it's compared to three years ago, it'd be, you know, black and white, completely different. We do a lot of testing. We have more data today, and we have a data science team. We're trying to be smarter about the decisions we make, and that continues to change. You know, it's different from it was the way we did it last year. I think typically we like to do more of our rate increases, you know, during the peak season 'cause that's when your phones are ringing the most. That really is not changed. You know, I think most of the sector does something similar to that. You don't wanna do a lot of your rate increases, you know, in the slow demand months of October, November, December. You know, we are trying to do things a little bit different. We use data to make smarter decisions. You know, I think this time next year we probably are gonna be doing something even more different than today. We'll continue to work to do better. You know, we're really proud of what our revenue management team has been doing. They've been embracing different technologies and algorithms and data, and I think the results show that they're doing a really good job. Is it fair to say that there was a more pronounced contribution from ECRI than even last year? Yeah. Our average customer increase was higher than it was last year, so we've been aggressive and continue to be aggressive. Okay. Thank you. Thanks, Ki Bin. Your next question for today is coming from Michael Mueller at JP Morgan. Yeah. Hi. Kind of have a follow-up to Ki Bin's question here. Have you seen over the past few months any changes in the level of ECRI that you're passing through, you know, just because of the evolving macro backdrop, or have you seen any changes in terms of the level of customer pushback to those increases? Well, you know, you always get, you know, pushbacks whenever you do a rate increase. It's, you know, we know that the more you do, the more move-outs you're gonna get. I think you're seeing, you know, the sector, given, you know, the strong pricing power and demand and high occupancy that, you know, the sector is able to push through more rate increases and you're seeing, you know, move-outs start to pick up, and that's across the sector. You know, we had enjoyed, you know, several quarters of very unusual low move-outs. You know, that's kinda what we're seeing. Some changes there. Obviously, the more you push, the more move-outs you're gonna get and more pushback you're gonna get. When there's still strong demand, you know, it's a risk you're willing to take. For us, you know, we continue to have rent roll-ups, so it's a very good trade for us. Again, it's all about revenue optimization, not necessarily occupancy. It's all things combined, and that's kind of been our strategy and will continue to be so. Got it. It sounds like if we're thinking about the backdrop of the economic picture getting a little more challenging, a little more unclear over the past few months, you haven't seen a direct change in any of the attributes in your business really tied to that thus far? No, other than the rise of move-outs, you know, which is a combination of, you know, increased auctions, which, you know, kind of still playing catch up there. Obviously the level of in-place rate increases will drive more move-outs. Nothing that wasn't expected at the beginning of the year with where we plan to be. Got it. Okay. Thank you. Your next question is coming from Spenser Allaway at Green Street. Thank you. Just wondering if you guys could provide a little bit of color on development starts or just some color on supply in your markets? Yeah. Hi, Spenser. You know, again, really nothing new from last quarter's call. You know, we still, you know, are feeling okay about the new supply that's coming on. You know, we haven't seen a significant rise in construction or planning. I think there's still some headwinds with the development sector and the price of materials and the timing to get entitlements, and obviously interest rates are now going up. I mean, definitely there is new development. We're always dealing with that in most markets, but no single market stands out. We still feel pretty good about the situation. Obviously, you know, we'll monitor it, and we monitor it every month. Right now, nothing unusual. Okay. Great. Maybe I can just go back to that last question, but maybe just ask it slightly different. If you guys still have positive rent roll and your peers don't, you know, moving in obviously to the third quarter, do you feel like you have outsized pricing power moving forward in the back half of the year? You know, I think we like the position we're in, Spenser, with the rent roll-up. I think we are unusual in the sector, but so does it give us more pricing power? I think it gives us the ability to be aggressive with our in-place customers. Street rates are very competitive out there, and we track the industry closely. So I would think pricing power from a street rate, maybe not so. From an in-place customer increase, I think we do have a little bit more room to run there. Okay, great. Thank you. You're welcome. There are no further questions in queue. I would like to turn the floor back over to Joe for closing remarks. Well, thank you everyone for joining us this morning. I hope everyone has a terrific August and the remainder of the summer, and we'll talk to everyone in a few months. Thank you. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.