National Storage Affiliates Trust Reports Second Quarter 2024 Results
National Storage Affiliates Trust (NYSE: NSA) reported its Q2 2024 results, showing a decrease in net income of 29.0% to $32.3 million compared to Q2 2023. Diluted earnings per share fell to $0.16 from $0.28 year-over-year. Core FFO decreased 8.8% to $0.62 per share. Same store net operating income (NOI) decreased by 5.6%, driven by a 2.8% decrease in revenues and a 4.8% increase in operating expenses. The company acquired three properties for $25.2 million and repurchased 1,908,397 common shares for $71.6 million. NSA also completed the internalization of its participating regional operator (PRO) structure on July 1, 2024, which is expected to benefit results going forward. The company updated its 2024 guidance, lowering Core FFO per share estimates to $2.36-$2.44 from $2.40-$2.56 previously.
National Storage Affiliates Trust (NYSE: NSA) ha riportato i risultati del secondo trimestre 2024, mostrando una riduzione del reddito netto del 29,0% a $32,3 milioni rispetto al secondo trimestre 2023. Utili per azione diluiti sono scesi a $0,16 da $0,28 su base annuale. Core FFO è diminuito dell'8,8% a $0,62 per azione. Il reddito operativo netto degli stessi negozi (NOI) è diminuito del 5,6%, a causa di una diminuzione del 2,8% delle entrate e di un aumento del 4,8% delle spese operative. L'azienda ha acquisito tre proprietà per $25,2 milioni e ha riacquistato 1.908.397 azioni comuni per $71,6 milioni. NSA ha anche completato l'internalizzazione della sua struttura di operatore regionale partecipante (PRO) il 1 luglio 2024, il che dovrebbe avvantaggiare i risultati in futuro. L'azienda ha aggiornato le stime per il 2024, abbassando le previsioni per il Core FFO per azione a $2,36-$2,44 rispetto ai precedenti $2,40-$2,56.
National Storage Affiliates Trust (NYSE: NSA) informó sus resultados del segundo trimestre de 2024, mostrando una disminución en el ingreso neto del 29,0% a $32,3 millones en comparación con el segundo trimestre de 2023. Las ganancias por acción diluidas cayeron a $0,16 desde $0,28 en comparación con el año anterior. Core FFO disminuyó un 8,8% a $0,62 por acción. El ingreso operativo neto de tiendas comparables (NOI) disminuyó un 5,6%, impulsado por una disminución del 2,8% en los ingresos y un aumento del 4,8% en los gastos operativos. La compañía adquirió tres propiedades por $25,2 millones y recompró 1.908.397 acciones comunes por $71,6 millones. NSA también completó la internalización de su estructura de operador regional participativo (PRO) el 1 de julio de 2024, lo que se espera beneficie los resultados en adelante. La compañía actualizó su guía para 2024, reduciendo las estimaciones de Core FFO por acción a $2,36-$2,44 desde $2,40-$2,56 anteriormente.
National Storage Affiliates Trust (NYSE: NSA)는 2024년 2분기 실적을 발표하면서 순이익이 29.0% 감소하여 3,230만 달러에 달했다고 밝혔습니다. 희석주당순이익은 작년 동기 0.28달러에서 0.16달러로 감소했습니다. Core FFO는 주당 0.62달러로 8.8% 감소했습니다. 같은 매장 순운영수익(NOİ)은 수익의 2.8% 감소와 운영비용의 4.8% 증가로 인해 5.6% 감소했습니다. 회사는 3개의 자산을 2,520만 달러에 인수하고 190만8397주를 7160만 달러에 재매입했습니다. NSA는 또한 2024년 7월 1일 지역 참여 운영자(PRO) 구조의 내부화를 완료했으며, 이는 향후 실적에 긍정적인 영향을 미칠 것으로 예상됩니다. 회사는 2024년 가이드를 업데이트하며 Core FFO 주당 예상치를 이전의 2.40달러~2.56달러에서 2.36달러~2.44달러로 하향 조정했습니다.
National Storage Affiliates Trust (NYSE: NSA) a rapporté ses résultats pour le deuxième trimestre 2024, montrant une baisse du revenu net de 29,0 % à 32,3 millions de dollars par rapport au deuxième trimestre 2023. Le bénéfice dilué par action est tombé à 0,16 $ contre 0,28 $ d'une année sur l'autre. Core FFO a diminué de 8,8 % à 0,62 $ par action. Le revenu net d'exploitation (NOI) des mêmes magasins a diminué de 5,6 %, entraîné par une baisse de 2,8 % des revenus et une augmentation de 4,8 % des charges d'exploitation. L'entreprise a acquis trois propriétés pour 25,2 millions de dollars et racheté 1 908 397 actions ordinaires pour 71,6 millions de dollars. NSA a également achevé l'internalisation de sa structure d'opérateur régional participant (PRO) le 1er juillet 2024, ce qui devrait favoriser les résultats à l'avenir. La société a mis à jour ses prévisions pour 2024, abaissant les estimations de Core FFO par action à 2,36 $ - 2,44 $ contre 2,40 $ - 2,56 $ auparavant.
National Storage Affiliates Trust (NYSE: NSA) hat seine Ergebnisse für das zweite Quartal 2024 veröffentlicht, die einen Rückgang des Nettogewinns um 29,0 % auf 32,3 Millionen USD im Vergleich zum zweiten Quartal 2023 zeigen. Der verwässerte Gewinn pro Aktie fiel von 0,28 USD auf 0,16 USD im Jahresvergleich. Core FFO sank um 8,8 % auf 0,62 USD pro Aktie. Der Netto-Betriebsgewinn (NOI) für vergleichbare Läden ging um 5,6 % zurück, bedingt durch einen Rückgang der Einnahmen um 2,8 % und einen Anstieg der Betriebskosten um 4,8 %. Das Unternehmen erwarb drei Immobilien für 25,2 Millionen USD und repurchase 1.908.397 Stammaktien für 71,6 Millionen USD. NSA hat auch die Internalisierung seiner regionalen Beteiligungsbetriebstruktur (PRO) am 1. Juli 2024 abgeschlossen, was sich voraussichtlich positiv auf die Ergebnisse in der Zukunft auswirken wird. Das Unternehmen hat seine Prognose für 2024 aktualisiert und die Schätzungen für den Core FFO pro Aktie auf 2,36 bis 2,44 USD gesenkt, von zuvor 2,40 bis 2,56 USD.
- Acquired three self storage properties for $25.2 million
- Repurchased 1,908,397 common shares for $71.6 million
- Completed internalization of PRO structure, expected to benefit future results
- Formed two new joint ventures
- Net income decreased 29.0% to $32.3 million in Q2 2024
- Diluted earnings per share fell to $0.16 from $0.28 year-over-year
- Core FFO decreased 8.8% to $0.62 per share
- Same store NOI decreased by 5.6%
- Same store revenues decreased by 2.8%
- Same store property operating expenses increased by 4.8%
- Lowered 2024 Core FFO per share guidance to $2.36-$2.44 from $2.40-$2.56
Insights
NSA's Q2 2024 results show significant challenges, with net income decreasing 29% to
The internalization of the PRO structure is a major strategic shift, potentially leading to cost savings but also creating short-term operational challenges. The repurchase of 1.9 million shares for
With guidance lowered, particularly for same-store revenue growth (now
The self-storage sector is facing significant headwinds, as evidenced by NSA's results. The 2.8% decrease in same-store revenues and 4.8% increase in operating expenses reflect broader market challenges. The 280 bps drop in occupancy is particularly noteworthy, indicating softening demand.
Regional variations are apparent, with markets like San Juan, Wichita and New Orleans outperforming, while Atlanta, Phoenix and Sarasota-Bradenton underperform. This suggests localized factors are influencing performance, possibly related to migration patterns or local economic conditions.
The muted housing market is a key factor suppressing demand, as fewer moves typically result in less need for storage. Additionally, the absorption of new supply, especially in Sunbelt markets, is creating a more competitive environment. These pressures are likely to persist through the latter half of the year, challenging operators to maintain pricing power and occupancy levels.
NSA's internalization of its PRO structure marks a significant strategic shift. This move aims to streamline operations and reduce costs by eliminating supervisory and administrative fees. However, the 12-month transition period could create short-term operational challenges and integration costs.
The company's focus on strategic initiatives is evident, including non-core asset sales, debt repayment and share repurchases. These actions position NSA for potential future growth and demonstrate a proactive approach to capital allocation. The formation of new joint ventures, like the one with Heitman Capital Management, provides avenues for growth with shared risk.
NSA's guidance revision reflects a realistic assessment of market conditions. The focus on the "People, Process and Platform" projects suggests a commitment to operational efficiency. However, the success of these initiatives and the PRO internalization will be important in navigating the current challenging environment and positioning for future growth when sector headwinds subside.
Second Quarter 2024 Highlights
-
Reported net income of
$32.3 million 29.0% compared to the second quarter of 2023. Reported diluted earnings per share of$0.16 $0.28 -
Reported core funds from operations ("Core FFO") of
$71.2 million $0.62 8.8% per share compared to the second quarter of 2023. -
Reported a decrease in same store net operating income ("NOI") of
5.6% for the second quarter of 2024 compared to the same period in 2023, driven by a2.8% decrease in same store total revenues and an increase of4.8% in same store property operating expenses. -
Reported same store period-end occupancy of
87.0% as of June 30, 2024, a decrease of 280 basis points compared to June 30, 2023. -
Acquired three wholly-owned self storage properties for approximately
$25.2 million -
Repurchased 1,908,397 of the Company's common shares for approximately
$71.6 million
Highlights Subsequent to Quarter-End
- Effective July 1, 2024 (the "Closing Date"), the Company completed the internalization of its participating regional operator ("PRO") structure. As a result, the Company purchased the PROs' management contracts, and in some cases, their brand names, related intellectual property and certain rights to the PROs' tenant insurance programs. As of the Closing Date, the Company will no longer pay supervisory and administrative fees or reimbursements under the previous agreements with the PROs. The Company plans to transition the majority of operations in a phased approach, which is expected to occur over the 12 month period following the Closing Date, and the Company has executed new asset management and property management agreements with a number of the PROs for all or a part of this transitionary period at newly negotiated management fees. In connection with the internalization, on July 1, 2024, 11,906,167 subordinated performance units and DownREIT subordinated performance units converted into 17,984,787 OP units and DownREIT OP units.
-
On July 29, 2024, the Company repaid in full the remaining
$145.0 million -
On July 30, 2024, a joint venture between a subsidiary of NSA and a state pension fund advised by Heitman Capital Management, LLC (the "2023 Joint Venture") acquired a portfolio of five self storage properties for approximately
$71.9 million $18.0 million
David Cramer, President and Chief Executive Officer, commented, “We are focused on the internalization of the PRO structure that we announced in early June and closed on July 1st. We’ve made significant progress on our strategic initiatives over the past few quarters, including the sale of non-core assets, repayment of floating rate debt, formation of two new joint ventures, repurchase of common shares, and now the internalization of the PRO structure, all of which position NSA for growth going forward. I'd like to acknowledge and thank our PROs and the NSA team members for the significant time and effort that they have devoted to these initiatives as well as our People, Process and Platform projects, which we expect will significantly benefit our results going forward.”
Mr. Cramer further commented, “We continue to feel pressure on operating results in this very competitive environment due to factors including less demand as a result of a muted housing market and the absorption of new supply, which is felt most prominently in the Sunbelt markets. We believe that these pressures will remain throughout the back half of the year. We also acknowledge that the transition of the PRO-managed stores creates an additional lift for our team in the near-term. We are acutely focused on navigating today’s challenges and remain well-positioned to benefit when sector headwinds subside.”
Financial Results
($ in thousands, except per share and unit data) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||
|
|
|
2024 |
|
|
2023 |
|
|
Growth |
|
|
2024 |
|
|
2023 |
|
|
Growth |
||
Net income |
$ |
32,280 |
|
$ |
45,476 |
|
|
(29.0 |
)% |
|
$ |
127,368 |
|
$ |
85,868 |
|
|
48.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Funds From Operations ("FFO")(1) |
$ |
70,118 |
|
$ |
88,478 |
|
|
(20.8 |
)% |
|
$ |
142,012 |
|
$ |
172,744 |
|
|
(17.8 |
)% |
|
Add back acquisition costs |
|
480 |
|
|
239 |
|
|
100.8 |
% |
|
|
987 |
|
|
1,083 |
|
|
(8.9 |
)% |
|
Add integration and executive severance costs(2) |
|
626 |
|
|
— |
|
|
— |
% |
|
|
626 |
|
|
— |
|
|
— |
% |
|
Subtract casualty-related recoveries(3) |
|
— |
|
|
(522 |
) |
|
— |
% |
|
|
— |
|
|
(522 |
) |
|
— |
% |
|
Add loss on early extinguishment of debt |
|
— |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
758 |
|
|
— |
% |
|
Core FFO(1) |
$ |
71,224 |
|
$ |
88,195 |
|
|
(19.2 |
)% |
|
$ |
143,625 |
|
$ |
174,063 |
|
|
(17.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per share - basic and diluted |
$ |
0.16 |
|
$ |
0.28 |
|
|
(42.9 |
)% |
|
$ |
0.85 |
|
$ |
0.56 |
|
|
51.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
FFO per share and unit(1) |
$ |
0.61 |
|
$ |
0.68 |
|
|
(10.3 |
)% |
|
$ |
1.20 |
|
$ |
1.32 |
|
|
(9.1 |
)% |
|
Core FFO per share and unit(1) |
$ |
0.62 |
|
$ |
0.68 |
|
|
(8.8 |
)% |
|
$ |
1.22 |
|
$ |
1.34 |
|
|
(9.0 |
)% |
|
(1) |
Non-GAAP financial measures, including FFO, Core FFO and NOI, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information. |
|
(2) |
Integration and executive severance costs are recorded within the line items "General and administrative expenses" and "Non-operating income (expense)" in our condensed consolidated statements of operations. Integration costs relate to expenses incurred as a part of the internalization of the PRO structure. |
|
(3) |
Casualty-related recoveries relate to casualty-related expenses incurred during 2022 and are recorded in the line item "Other" within operating expenses in our consolidated statements of operations. |
|
Net income decreased
The decreases in FFO and Core FFO for the second quarter of 2024 and year-to-date were the result of a decrease in NOI of
Same Store Operating Results (776 Stores)
($ in thousands, except per square foot data) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
Growth |
|
|
2024 |
|
|
|
2023 |
|
|
Growth |
|||
Total revenues |
$ |
174,182 |
|
|
$ |
179,243 |
|
|
(2.8 |
)% |
|
$ |
348,053 |
|
|
$ |
355,771 |
|
|
(2.2 |
)% |
|
Property operating expenses |
|
49,840 |
|
|
|
47,576 |
|
|
4.8 |
% |
|
|
99,495 |
|
|
|
95,108 |
|
|
4.6 |
% |
|
Net Operating Income (NOI) |
$ |
124,342 |
|
|
$ |
131,667 |
|
|
(5.6 |
)% |
|
$ |
248,558 |
|
|
$ |
260,663 |
|
|
(4.6 |
)% |
|
NOI Margin |
|
71.4 |
% |
|
|
73.5 |
% |
|
(2.1 |
)% |
|
|
71.4 |
% |
|
|
73.3 |
% |
|
(1.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average Occupancy |
|
86.4 |
% |
|
|
89.6 |
% |
|
(3.2 |
)% |
|
|
86.0 |
% |
|
|
89.5 |
% |
|
(3.5 |
)% |
|
Average Annualized Rental Revenue Per Occupied Square Foot |
$ |
15.66 |
|
|
$ |
15.57 |
|
|
0.6 |
% |
|
$ |
15.73 |
|
|
$ |
15.50 |
|
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year-over-year same store total revenues decreased
Year-over-year same store property operating expenses increased
Disposition and Investment Activity
During the second quarter, NSA invested
During the second quarter, NSA sold one self storage property, consisting of approximately 155,000 rentable square feet configured in approximately 1,000 storage units for approximately
On July 1, 2024, as part of the internalization of the PRO structure, the Company paid consideration in cash and equity for the purchase of the PRO management contracts and, in some cases, their brand names and related intellectual property at a value of approximately
Balance Sheet
During the second quarter, NSA repurchased 1,908,397 of the Company's common shares for approximately
Common Share Dividends
On May 16, 2024, NSA's Board of Trustees declared a quarterly cash dividend of
2024 Guidance
The following table outlines NSA's updated and prior Core FFO guidance estimates and related assumptions for the year ended December 31, 2024. The Company's revisions to Core FFO guidance estimates are primarily driven by lower same store growth assumptions. Certain line items in the table below have been adjusted for the impact of the internalization of the PRO structure, such as general and administrative expenses, management fees and other revenue, and subordinated performance unit distributions. Additionally, the Core FFO per share guidance incorporates an estimated weighted average share count of approximately 135.0 million beginning July 1, 2024, or approximately 126.6 million for the full year 2024.
|
Current Ranges for
|
|
Prior Ranges for
|
|
Actual
|
|||||||||||||||
|
Low |
|
High |
|
Low |
|
High |
|
||||||||||||
Core FFO per share(1) |
$ |
2.36 |
|
|
$ |
2.44 |
|
|
$ |
2.40 |
|
|
$ |
2.56 |
|
|
$ |
2.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Same store operations(2) |
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenue growth |
|
(3.75 |
)% |
|
|
(2.25 |
)% |
|
|
(4.0 |
)% |
|
|
0.0 |
% |
|
|
2.4 |
% |
|
Property operating expenses growth |
|
3.5 |
% |
|
|
5.0 |
% |
|
|
3.0 |
% |
|
|
5.0 |
% |
|
|
4.7 |
% |
|
NOI growth |
|
(6.5 |
)% |
|
|
(4.5 |
)% |
|
|
(6.0 |
)% |
|
|
(2.0 |
)% |
|
|
1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|||||||||||
General and administrative expenses (excluding equity-based compensation), in millions |
$ |
50.0 |
|
|
$ |
52.0 |
|
|
$ |
54.5 |
|
|
$ |
56.5 |
|
|
$ |
52.6 |
|
|
Equity-based compensation, in millions |
$ |
7.75 |
|
|
$ |
8.25 |
|
|
$ |
7.25 |
|
|
$ |
7.75 |
|
|
$ |
6.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Management fees and other revenue, in millions |
$ |
39.5 |
|
|
$ |
41.5 |
|
|
$ |
32.0 |
|
|
$ |
34.0 |
|
|
$ |
34.4 |
|
|
Core FFO from unconsolidated real estate ventures, in millions |
$ |
22.0 |
|
|
$ |
24.0 |
|
|
$ |
23.5 |
|
|
$ |
25.5 |
|
|
$ |
24.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subordinated performance unit distributions, in millions |
$ |
21.6 |
|
|
$ |
21.6 |
|
|
$ |
40.0 |
|
|
$ |
44.0 |
|
|
$ |
49.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Acquisitions of self storage properties, in millions |
$ |
100.0 |
|
|
$ |
300.0 |
|
|
$ |
100.0 |
|
|
$ |
300.0 |
|
|
$ |
229.5 |
|
|
|
||||||||||||||||
|
|
Current Ranges for
|
|
Prior Ranges for
|
||||||||||||
|
|
Low |
|
High |
|
Low |
|
High |
||||||||
Earnings per share - diluted |
$ |
1.10 |
|
|
$ |
1.17 |
|
|
$ |
1.31 |
|
|
$ |
1.48 |
|
|
Impact of the difference in weighted average number of shares and GAAP accounting for noncontrolling interests, two-class method and treasury stock method |
|
0.18 |
|
|
|
0.11 |
|
|
|
0.05 |
|
|
|
(0.01 |
) |
|
Add real estate depreciation and amortization |
|
1.45 |
|
|
|
1.49 |
|
|
|
1.57 |
|
|
|
1.66 |
|
|
Add (subtract) equity in losses (earnings) of unconsolidated real estate ventures |
|
0.11 |
|
|
|
0.13 |
|
|
|
0.11 |
|
|
|
0.09 |
|
|
Add NSA's share of FFO of unconsolidated real estate ventures |
|
0.17 |
|
|
|
0.19 |
|
|
|
0.20 |
|
|
|
0.22 |
|
|
FFO attributable to subordinated unitholders |
|
(0.17 |
) |
|
|
(0.17 |
) |
|
|
(0.34 |
) |
|
|
(0.38 |
) |
|
Less gain on sale of self storage properties |
|
(0.50 |
) |
|
|
(0.50 |
) |
|
|
(0.51 |
) |
|
|
(0.51 |
) |
|
Add integration and executive severance costs |
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
Add acquisition costs and NSA's share of unconsolidated real estate venture acquisition costs |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
Core FFO per share and unit |
$ |
2.36 |
|
|
$ |
2.44 |
|
|
$ |
2.40 |
|
|
$ |
2.56 |
|
|
(1) |
The table above provides a reconciliation of the range of estimated earnings per share - diluted to estimated Core FFO per share and unit. |
|
(2) |
2024 guidance reflects NSA's 2024 same store pool comprising 776 stores. 2023 actual results reflect NSA's 2023 same store pool comprising 724 stores. |
Supplemental Financial Information
The full text of this earnings release and supplemental financial information, including certain financial information referenced in this release, are available on NSA's website at http://ir.nationalstorageaffiliates.com/quarterly-reporting and as exhibit 99.1 to the Company's Form 8-K furnished to the SEC on August 5, 2024.
Non-GAAP Financial Measures & Glossary
This press release contains certain non-GAAP financial measures. These non-GAAP measures are presented because NSA's management believes these measures help investors understand NSA's business, performance and ability to earn and distribute cash to its shareholders by providing perspectives not immediately apparent from net income (loss). These measures are also frequently used by securities analysts, investors and other interested parties. The presentations of FFO, Core FFO and NOI in this press release are not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, NSA's method of calculating these measures may be different from methods used by other companies, and, accordingly, may not be comparable to similar measures as calculated by other companies that do not use the same methodology as NSA. These measures, and other words and phrases used herein, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information.
Quarterly Teleconference and Webcast
The Company will host a conference call at 1:00 pm Eastern Daylight Time on Tuesday, August 6, 2024 to discuss its second quarter 2024 financial results. At the conclusion of the call, management will accept questions from certified financial analysts. All other participants are encouraged to listen to a webcast of the call by accessing the link found on the Company's website at www.nationalstorageaffiliates.com.
Conference Call and Webcast:
Date/Time: Tuesday, August 6, 2024, 1:00 pm EDT
Webcast available at: www.nationalstorageaffiliates.com
Domestic (Toll Free US &
International: 412.902.1014
A replay of the webcast will be available for 30 days on NSA's website at www.nationalstorageaffiliates.com.
Upcoming Industry Conference
NSA management is scheduled to participate in the upcoming 2024 BofA Securities Global Real Estate Conference on September 10-11, 2024, in
About National Storage Affiliates Trust
National Storage Affiliates Trust is a real estate investment trust headquartered in
NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. These forward-looking statements include information about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans and objectives. Changes in any circumstances may cause the Company's actual results to differ significantly from those expressed in any forward-looking statement. When used in this release, the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: market trends in the Company's industry, interest rates, inflation, the debt and lending markets or the general economy; the Company's business and investment strategy; the acquisition of properties, including those under contract and the Company's ability to execute on its acquisition pipeline; the timing of acquisitions under contract; and the Company's guidance estimates for the year ended December 31, 2024. For a further list and description of such risks and uncertainties, see the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission, and the other documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
National Storage Affiliates Trust Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
REVENUE |
|
|
|
|
|
|
|
|||||||||
Rental revenue |
$ |
174,369 |
|
|
$ |
199,311 |
|
|
$ |
354,751 |
|
|
$ |
393,440 |
|
|
Other property-related revenue |
|
6,557 |
|
|
|
7,613 |
|
|
|
13,249 |
|
|
|
14,420 |
|
|
Management fees and other revenue |
|
9,522 |
|
|
|
8,587 |
|
|
|
18,596 |
|
|
|
15,644 |
|
|
Total revenue |
|
190,448 |
|
|
|
215,511 |
|
|
|
386,596 |
|
|
|
423,504 |
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|||||||||
Property operating expenses |
|
52,201 |
|
|
|
57,094 |
|
|
|
106,895 |
|
|
|
113,577 |
|
|
General and administrative expenses |
|
16,189 |
|
|
|
14,404 |
|
|
|
31,863 |
|
|
|
29,225 |
|
|
Depreciation and amortization |
|
46,710 |
|
|
|
56,705 |
|
|
|
94,041 |
|
|
|
112,163 |
|
|
Other |
|
3,375 |
|
|
|
3,220 |
|
|
|
6,867 |
|
|
|
4,393 |
|
|
Total operating expenses |
|
118,475 |
|
|
|
131,423 |
|
|
|
239,666 |
|
|
|
259,358 |
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|||||||||
Interest expense |
|
(37,228 |
) |
|
|
(39,693 |
) |
|
|
(75,345 |
) |
|
|
(77,641 |
) |
|
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(758 |
) |
|
Equity in (losses) earnings of unconsolidated real estate ventures |
|
(4,449 |
) |
|
|
1,861 |
|
|
|
(6,079 |
) |
|
|
3,539 |
|
|
Acquisition costs |
|
(480 |
) |
|
|
(239 |
) |
|
|
(987 |
) |
|
|
(1,083 |
) |
|
Non-operating income (expense) |
|
337 |
|
|
|
196 |
|
|
|
435 |
|
|
|
(402 |
) |
|
Gain on sale of self storage properties |
|
2,668 |
|
|
|
— |
|
|
|
63,841 |
|
|
|
— |
|
|
Other expense, net |
|
(39,152 |
) |
|
|
(37,875 |
) |
|
|
(18,135 |
) |
|
|
(76,345 |
) |
|
Income before income taxes |
|
32,821 |
|
|
|
46,213 |
|
|
|
128,795 |
|
|
|
87,801 |
|
|
Income tax expense |
|
(541 |
) |
|
|
(737 |
) |
|
|
(1,427 |
) |
|
|
(1,933 |
) |
|
Net income |
|
32,280 |
|
|
|
45,476 |
|
|
|
127,368 |
|
|
|
85,868 |
|
|
Net income attributable to noncontrolling interests |
|
(15,218 |
) |
|
|
(16,028 |
) |
|
|
(51,279 |
) |
|
|
(27,461 |
) |
|
Net income attributable to National Storage Affiliates Trust |
|
17,062 |
|
|
|
29,448 |
|
|
|
76,089 |
|
|
|
58,407 |
|
|
Distributions to preferred shareholders |
|
(5,110 |
) |
|
|
(5,119 |
) |
|
|
(10,220 |
) |
|
|
(8,799 |
) |
|
Net income attributable to common shareholders |
$ |
11,952 |
|
|
$ |
24,329 |
|
|
$ |
65,869 |
|
|
$ |
49,608 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per share - basic and diluted |
$ |
0.16 |
|
|
$ |
0.28 |
|
|
$ |
0.85 |
|
|
$ |
0.56 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding - basic and diluted |
|
75,160 |
|
|
|
88,312 |
|
|
|
77,698 |
|
|
|
88,902 |
|
|
National Storage Affiliates Trust Consolidated Balance Sheets (dollars in thousands, except per share amounts) (unaudited) |
||||||||
|
|
|
|
|
||||
|
|
June 30, |
|
December 31, |
||||
|
|
|
2024 |
|
|
|
2023 |
|
ASSETS |
|
|
|
|||||
Real estate |
|
|
|
|||||
Self storage properties |
$ |
5,818,388 |
|
|
$ |
5,792,174 |
|
|
Less accumulated depreciation |
|
(961,977 |
) |
|
|
(874,359 |
) |
|
Self storage properties, net |
|
4,856,411 |
|
|
|
4,917,815 |
|
|
Cash and cash equivalents |
|
58,975 |
|
|
|
64,980 |
|
|
Restricted cash |
|
8,064 |
|
|
|
22,713 |
|
|
Debt issuance costs, net |
|
7,055 |
|
|
|
8,442 |
|
|
Investment in unconsolidated real estate ventures |
|
230,295 |
|
|
|
211,361 |
|
|
Other assets, net |
|
138,522 |
|
|
|
134,002 |
|
|
Assets held for sale, net |
|
— |
|
|
|
550,199 |
|
|
Operating lease right-of-use assets |
|
21,779 |
|
|
|
22,299 |
|
|
Total assets |
$ |
5,321,101 |
|
|
$ |
5,931,811 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|||||
Liabilities |
|
|
|
|||||
Debt financing |
$ |
3,365,836 |
|
|
$ |
3,658,205 |
|
|
Accounts payable and accrued liabilities |
|
93,042 |
|
|
|
92,766 |
|
|
Interest rate swap liabilities |
|
— |
|
|
|
3,450 |
|
|
Operating lease liabilities |
|
23,731 |
|
|
|
24,195 |
|
|
Deferred revenue |
|
21,427 |
|
|
|
27,354 |
|
|
Total liabilities |
|
3,504,036 |
|
|
|
3,805,970 |
|
|
Equity |
|
|
|
|||||
Series A Preferred shares of beneficial interest, par value |
|
225,439 |
|
|
|
225,439 |
|
|
Series B Preferred shares of beneficial interest, par value |
|
115,212 |
|
|
|
115,212 |
|
|
Common shares of beneficial interest, par value |
|
752 |
|
|
|
823 |
|
|
Additional paid-in capital |
|
1,293,694 |
|
|
|
1,509,563 |
|
|
Distributions in excess of earnings |
|
(469,768 |
) |
|
|
(449,907 |
) |
|
Accumulated other comprehensive income |
|
25,881 |
|
|
|
21,058 |
|
|
Total shareholders' equity |
|
1,191,210 |
|
|
|
1,422,188 |
|
|
Noncontrolling interests |
|
625,855 |
|
|
|
703,653 |
|
|
Total equity |
|
1,817,065 |
|
|
|
2,125,841 |
|
|
Total liabilities and equity |
$ |
5,321,101 |
|
|
$ |
5,931,811 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of Net Income to FFO and Core FFO |
||||||||||||||||
(in thousands, except per share and unit amounts) (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net income |
$ |
32,280 |
|
|
$ |
45,476 |
|
|
$ |
127,368 |
|
|
$ |
85,868 |
|
|
Add (subtract): |
|
|
|
|
|
|
|
|||||||||
Real estate depreciation and amortization |
|
46,339 |
|
|
|
56,398 |
|
|
|
93,302 |
|
|
|
111,551 |
|
|
Equity in losses (earnings) of unconsolidated real estate ventures |
|
4,449 |
|
|
|
(1,861 |
) |
|
|
6,079 |
|
|
|
(3,539 |
) |
|
Company's share of FFO in unconsolidated real estate ventures |
|
6,177 |
|
|
|
6,176 |
|
|
|
11,862 |
|
|
|
12,325 |
|
|
Gain on sale of self storage properties |
|
(2,668 |
) |
|
|
— |
|
|
|
(63,841 |
) |
|
|
— |
|
|
Distributions to preferred shareholders and unitholders |
|
(5,568 |
) |
|
|
(5,402 |
) |
|
|
(11,136 |
) |
|
|
(9,365 |
) |
|
FFO attributable to subordinated performance units(1) |
|
(10,891 |
) |
|
|
(12,309 |
) |
|
|
(21,622 |
) |
|
|
(24,096 |
) |
|
FFO attributable to common shareholders, OP unitholders, and LTIP unitholders |
|
70,118 |
|
|
|
88,478 |
|
|
|
142,012 |
|
|
|
172,744 |
|
|
Add (subtract): |
|
|
|
|
|
|
|
|||||||||
Acquisition costs |
|
480 |
|
|
|
239 |
|
|
|
987 |
|
|
|
1,083 |
|
|
Integration and executive severance costs(2) |
|
626 |
|
|
|
— |
|
|
|
626 |
|
|
|
— |
|
|
Casualty-related recoveries(3) |
|
— |
|
|
|
(522 |
) |
|
|
— |
|
|
|
(522 |
) |
|
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
758 |
|
|
Core FFO attributable to common shareholders, OP unitholders, and LTIP unitholders |
$ |
71,224 |
|
|
$ |
88,195 |
|
|
$ |
143,625 |
|
|
$ |
174,063 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares and units outstanding - FFO and Core FFO:(4) |
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding - basic |
|
75,160 |
|
|
|
88,312 |
|
|
|
77,698 |
|
|
|
88,902 |
|
|
Weighted average restricted common shares outstanding |
|
21 |
|
|
|
28 |
|
|
|
22 |
|
|
|
26 |
|
|
Weighted average OP units outstanding |
|
37,644 |
|
|
|
38,755 |
|
|
|
37,638 |
|
|
|
38,746 |
|
|
Weighted average DownREIT OP unit equivalents outstanding |
|
2,120 |
|
|
|
2,120 |
|
|
|
2,120 |
|
|
|
2,120 |
|
|
Weighted average LTIP units outstanding |
|
673 |
|
|
|
523 |
|
|
|
683 |
|
|
|
537 |
|
|
Total weighted average shares and units outstanding - FFO and Core FFO |
|
115,618 |
|
|
|
129,738 |
|
|
|
118,161 |
|
|
|
130,331 |
|
|
|
|
|
|
|
|
|
|
|||||||||
FFO per share and unit |
$ |
0.61 |
|
|
$ |
0.68 |
|
|
$ |
1.20 |
|
|
$ |
1.32 |
|
|
Core FFO per share and unit |
$ |
0.62 |
|
|
$ |
0.68 |
|
|
$ |
1.22 |
|
|
$ |
1.34 |
|
|
(1) |
Amounts represent distributions declared for subordinated performance unitholders and DownREIT subordinated performance unitholders for the periods presented. |
|
(2) |
Integration and executive severance costs are recorded within the line items "General and administrative expenses" and "Non-operating income (expense)" in our condensed consolidated statements of operations. Integration costs relate to expenses incurred as a part of the internalization of the PRO structure. |
|
(3) |
Casualty-related recoveries relate to casualty-related expenses incurred during 2022 and are recorded in the line item "Other" within operating expenses in our consolidated statements of operations. |
|
(4) |
NSA combines OP units and DownREIT OP units with common shares because, after the applicable lock-out periods, OP units in the Company's operating partnership are redeemable for cash or, at NSA's option, exchangeable for common shares on a one-for-one basis and DownREIT OP units are also redeemable for cash or, at NSA's option, exchangeable for OP units in the Company's operating partnership on a one-for-one basis, subject to certain adjustments in each case. Subordinated performance units, DownREIT subordinated performance units and LTIP units may also, under certain circumstances, be convertible into or exchangeable for common shares (or other units that are convertible into or exchangeable for common shares). See footnote(5) for additional discussion of subordinated performance units, DownREIT subordinated performance units, and LTIP units in the calculation of FFO and Core FFO per share and unit. |
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Earnings Per Share - Diluted to FFO and Core FFO Per Share and Unit |
||||||||||||||||
(in thousands, except per share and unit amounts) (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Earnings per share - diluted |
$ |
0.16 |
|
|
$ |
0.28 |
|
|
$ |
0.85 |
|
|
$ |
0.56 |
|
|
Impact of the difference in weighted average number of shares(5) |
|
(0.06 |
) |
|
|
(0.09 |
) |
|
|
(0.29 |
) |
|
|
(0.18 |
) |
|
Impact of GAAP accounting for noncontrolling interests, two-class method and treasury stock method(6) |
|
0.13 |
|
|
|
0.12 |
|
|
|
0.42 |
|
|
|
0.21 |
|
|
Add real estate depreciation and amortization |
|
0.40 |
|
|
|
0.43 |
|
|
|
0.79 |
|
|
|
0.85 |
|
|
Add (subtract) equity in losses (earnings) of unconsolidated real estate ventures |
|
0.04 |
|
|
|
(0.02 |
) |
|
|
0.05 |
|
|
|
(0.03 |
) |
|
Add Company's share of FFO in unconsolidated real estate ventures |
|
0.05 |
|
|
|
0.05 |
|
|
|
0.10 |
|
|
|
0.09 |
|
|
Subtract gain on sale of self storage properties |
|
(0.02 |
) |
|
|
— |
|
|
|
(0.54 |
) |
|
|
— |
|
|
FFO attributable to subordinated performance unitholders |
|
(0.09 |
) |
|
|
(0.09 |
) |
|
|
(0.18 |
) |
|
|
(0.18 |
) |
|
FFO per share and unit |
|
0.61 |
|
|
|
0.68 |
|
|
|
1.20 |
|
|
|
1.32 |
|
|
Add acquisition costs |
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
Add integration and executive severance costs |
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
Add loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
Core FFO per share and unit |
$ |
0.62 |
$ |
0.68 |
$ |
1.22 |
$ |
1.34 |
||||||||
(5) |
Adjustment accounts for the difference between the weighted average number of shares used to calculate diluted earnings per share and the weighted average number of shares used to calculate FFO and Core FFO per share and unit. Diluted earnings per share is calculated using the two-class method for the company's restricted common shares and the treasury stock method for certain unvested LTIP units, and assumes the conversion of vested LTIP units into OP units on a one-for-one basis and the hypothetical conversion of subordinated performance units, and DownREIT subordinated performance units into OP units, even though such units may only be convertible into OP units (i) after a lock-out period and (ii) upon certain events or conditions. For additional information about the conversion of subordinated performance units and DownREIT subordinated performance units into OP units, see Note 10 to the Company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission. The computation of weighted average shares and units for FFO and Core FFO per share and unit includes all restricted common shares and LTIP units that participate in distributions and excludes all subordinated performance units and DownREIT subordinated performance units because their effect has been accounted for through the allocation of FFO to the related unitholders based on distributions declared. |
|
(6) |
Represents the effect of adjusting the numerator to consolidated net income prior to GAAP allocations for noncontrolling interests, after deducting preferred share and unit distributions, and before the application of the two-class method and treasury stock method, as described in footnote(5). |
|
|
||||||||||||||||
Net Operating Income |
||||||||||||||||
(dollars in thousands) (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net income |
$ |
32,280 |
|
|
$ |
45,476 |
|
|
$ |
127,368 |
|
|
$ |
85,868 |
|
|
(Subtract) add: |
|
|
|
|
|
|
|
|||||||||
Management fees and other revenue |
|
(9,522 |
) |
|
|
(8,587 |
) |
|
|
(18,596 |
) |
|
|
(15,644 |
) |
|
General and administrative expenses |
|
16,189 |
|
|
|
14,404 |
|
|
|
31,863 |
|
|
|
29,225 |
|
|
Other |
|
3,375 |
|
|
|
3,220 |
|
|
|
6,867 |
|
|
|
4,393 |
|
|
Depreciation and amortization |
|
46,710 |
|
|
|
56,705 |
|
|
|
94,041 |
|
|
|
112,163 |
|
|
Interest expense |
|
37,228 |
|
|
|
39,693 |
|
|
|
75,345 |
|
|
|
77,641 |
|
|
Equity in losses (earnings) of unconsolidated real estate ventures |
|
4,449 |
|
|
|
(1,861 |
) |
|
|
6,079 |
|
|
|
(3,539 |
) |
|
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
758 |
|
|
Acquisition costs |
|
480 |
|
|
|
239 |
|
|
|
987 |
|
|
|
1,083 |
|
|
Income tax expense |
|
541 |
|
|
|
737 |
|
|
|
1,427 |
|
|
|
1,933 |
|
|
Gain on sale of self storage properties |
|
(2,668 |
) |
|
|
— |
|
|
|
(63,841 |
) |
|
|
— |
|
|
Non-operating (income) expense |
|
(337 |
) |
|
|
(196 |
) |
|
|
(435 |
) |
|
|
402 |
|
|
Net Operating Income |
$ |
128,725 |
|
|
$ |
149,830 |
|
|
$ |
261,105 |
|
|
$ |
294,283 |
|
|
EBITDA and Adjusted EBITDA |
||||||||||||||||
(dollars in thousands) (unaudited) |
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net income |
$ |
32,280 |
|
|
$ |
45,476 |
|
|
$ |
127,368 |
|
|
$ |
85,868 |
|
|
Add: |
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
|
46,710 |
|
|
|
56,705 |
|
|
|
94,041 |
|
|
|
112,163 |
|
|
Company's share of unconsolidated real estate ventures depreciation and amortization |
|
5,141 |
|
|
|
4,315 |
|
|
|
9,693 |
|
|
|
8,786 |
|
|
Interest expense |
|
37,228 |
|
|
|
39,693 |
|
|
|
75,345 |
|
|
|
77,641 |
|
|
Income tax expense |
|
541 |
|
|
|
737 |
|
|
|
1,427 |
|
|
|
1,933 |
|
|
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
758 |
|
|
EBITDA |
|
121,900 |
|
|
|
146,926 |
|
|
|
307,874 |
|
|
|
287,149 |
|
|
Add (subtract): |
|
|
|
|
|
|
|
|||||||||
Acquisition costs |
|
480 |
|
|
|
239 |
|
|
|
987 |
|
|
|
1,083 |
|
|
Effect of hypothetical liquidation at book value (HLBV) accounting for unconsolidated 2024 Joint Venture(1) |
|
5,485 |
|
|
|
— |
|
|
|
8,249 |
|
|
|
— |
|
|
Gain on sale of self storage properties |
|
(2,668 |
) |
|
|
— |
|
|
|
(63,841 |
) |
|
|
— |
|
|
Integration and executive severance costs, excluding equity-based compensation(2) |
|
223 |
|
|
|
— |
|
|
|
223 |
|
|
|
— |
|
|
Casualty-related recoveries(3) |
|
— |
|
|
|
(522 |
) |
|
|
— |
|
|
|
(522 |
) |
|
Equity-based compensation expense |
|
2,331 |
|
|
|
1,677 |
|
|
|
4,186 |
|
|
|
3,326 |
|
|
Adjusted EBITDA |
$ |
127,751 |
|
|
$ |
148,320 |
|
|
$ |
257,678 |
|
|
$ |
291,036 |
|
|
(1) |
Reflects the non-cash impact of applying HLBV to the 2024 Joint Venture, which allocates GAAP income (loss) on a hypothetical liquidation of the underlying joint venture at book value as of the reporting date. |
|
(2) |
Integration and executive severance costs are recorded within the line items "General and administrative expenses" and "Non-operating income (expense)" in our condensed consolidated statements of operations. Integration costs relate to expenses incurred as a part of the internalization of the PRO structure. |
|
(3) |
Casualty-related recoveries relate to casualty-related expenses incurred during 2022 and are recorded in the line item "Other" within operating expenses in our consolidated statements of operations. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240805039849/en/
National Storage Affiliates Trust
Investor/Media Relations
George Hoglund, CFA
Vice President - Investor Relations
720.630.2160
ghoglund@nsareit.net
Source: National Storage Affiliates Trust
FAQ
What was NSA's net income for Q2 2024?
How did NSA's same store net operating income (NOI) perform in Q2 2024?
How many properties did NSA acquire in Q2 2024?
What is NSA's updated Core FFO per share guidance for 2024?
When did NSA complete the internalization of its PRO structure?
