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Yahoo
07-05-2025
- Business
- Yahoo
National Storage Affiliates Trust (NSA) Q1 2025 Earnings Call Highlights: Navigating Challenges ...
Q : Can you provide context on the 5% increase in contract rates from March and the 20 basis points rise in occupancy? Is this typical for April, and how do these rates compare year-over-year? A : David Cramer, CEO: We've seen sequential improvements in our rate scheme throughout the year, with street and contract rates increasing from January through April and into May. Our focus has been on maximizing revenue through occupancy, rate growth, and marketing spend. Our new schedule shows in-place customer rate growth and move-in rate growth, with move-in rates turning positive in March and continuing to improve in April and May. Core FFO per share declined by 10% from the prior year period due to a decrease in same-store NOI and an increase in interest expense. NSA's marketing and pricing strategies, including the use of AI, have led to better search rankings and optimized rate decisions. Net Debt-to-EBITDA: 6.9 times at quarter end, expected to be 6% to 6.5% in the latter half of the year. Story Continues Q: How are you progressing with revenue synergies for the PRO properties, and can you update us on the occupancy gap you aimed to close by summer? A: David Cramer, CEO: The transition mainly occurred in the third and fourth quarters of last year. We've seen traction from consolidated pricing and marketing efforts. Initially, there was a 250 to 300 basis point occupancy gap, which we aim to close by mid-summer. We're making good progress, particularly in rate growth, and expect further traction in marketing and occupancy by then. Q: Can you quantify the expected revenue growth pickup in the second half of the year, given the first quarter's negative 3% revenue growth? A: Brandon Togashi, CFO: We started the year with mid-single-digit negative same-store NOI growth, slightly worse than expected due to OpEx items like winter storm impacts. We expect continued sequential improvement, with revenue and NOI turning positive in the back half of the year, although the exact timing is uncertain. Q: How much of the month-to-month improvement is due to seasonality versus actual demand improvements? A: David Cramer, CEO: Seasonality plays a role, with activity picking up in the spring leasing season. However, we've also seen success in street rate improvements since late last year, which is atypical for early months. Our ECRI program remains productive, and while occupancy may not rise as strongly as last year, our revenue has improved significantly. Q: Can you discuss the dynamics of street rates and occupancy, and how you expect these to play out through the spring leasing season? A: David Cramer, CEO: We've had success in improving street and move-in rates, leading to better contract rates. While occupancy is a focus, our marketing and top-of-the-funnel efforts are gaining traction. We're balancing revenue growth with occupancy, and the improved rates reduce pressure on occupancy numbers. Q: What is the current state of the transaction market, and what are your acquisition and disposition plans? A: David Cramer, CEO: We're seeing deal flow and are patient in matching deals with our cost of capital. We have active JV partners and are making progress on dispositions, aiming for $200 million this year. Acquisitions are lumpy, and we're being selective in our purchases. Q: What occupancy assumptions are baked into your guidance, and have you seen any signs of a housing market recovery? A: Brandon Togashi, CFO: Our guidance assumes a moderately better demand than last year, with occupancy increases expected. We're seeing encouraging demand in expected markets, but it's still early in the leasing season. Q: Can you quantify the operating expense savings from the PRO internalization, and will there be additional benefits in 2025? A: Brandon Togashi, CFO: We've realized G&A savings of about $2.5 million annually, with tenant insurance economics and property-level personnel cost savings also contributing. We're at a good run rate, and these benefits are largely reflected in our current numbers. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Business Wire
05-05-2025
- Business
- Business Wire
National Storage Affiliates Trust Reports First Quarter 2025 Results
GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--National Storage Affiliates Trust ("NSA" or the "Company") (NYSE: NSA) today reported the Company's first quarter 2025 results. First Quarter 2025 Highlights Reported net income of $19.5 million for the first quarter of 2025, a decrease of 79.5% compared to the first quarter of 2024. Reported diluted earnings per share of $0.10 for the first quarter of 2025 compared to $0.65 for the first quarter of 2024. Reported core funds from operations ("Core FFO") of $73.4 million, or $0.54 per share for the first quarter of 2025, a decrease of 10.0% per share compared to the first quarter of 2024. Reported a decrease in same store net operating income ("NOI") of 5.7% for the first quarter of 2025 compared to the same period in 2024, driven by a 3.0% decrease in same store total revenues and a 3.7% increase in same store property operating expenses. Reported same store period-end occupancy of 83.6% as of March 31, 2025, a decrease of 240 basis points compared to March 31, 2024. Acquired three wholly-owned self storage properties for approximately $13.5 million during the first quarter of 2025. David Cramer, President and Chief Executive Officer, commented, "Our first quarter results were in-line with our expectations. We're encouraged with the sequential improvement in the pace of year-over-year same store revenue and NOI growth from the fourth quarter, implying that the troughs in same store growth are now behind us. Although occupancy levels remain muted, street rates and in-place contract rents have grown sequentially every month of this year through April, providing momentum into the spring leasing season." Mr. Cramer further commented, "Despite increased economic uncertainty, we remain positive on the medium-term outlook for the self storage sector, and NSA specifically." Financial Results (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 costs relate to expenses incurred as a part of the internalization of the PRO structure. Expand Net income decreased $75.6 million for the first quarter of 2025 as compared to the same period in 2024. This decrease was primarily due to larger gains on the sale of self storage properties recognized in the first quarter of 2024. Additionally, the decrease was a result of lower NOI, driven by property dispositions and negative same store NOI growth. These impacts were partially offset by a $3.1 million increase in management fees and other revenue and a $2.5 million decrease in general and administrative expenses compared to the same period in 2024. The decrease in FFO and Core FFO per share and unit for the first quarter of 2025 was primarily driven by a decrease in same store NOI and an increase in interest expense. These impacts were partially offset by decreased management fees paid to former PROs, reflected within general and administrative expenses, following the internalization of the PRO structure. Same Store Operating Results (771 Stores) Year-over-year same store total revenue decreased 3.0% for the first quarter of 2025 as compared to the same period in 2024. The decrease for the first quarter was driven primarily by a 190 basis point decrease in average occupancy and a 1.0% decrease in average annualized rental revenue per occupied square foot. Markets which generated above portfolio average same store total revenue growth include: Portland, Houston and San Juan, PR. Markets which generated below portfolio average same store total revenue growth include: Riverside-San Bernardino, Atlanta and Sarasota. Year-over-year same store property operating expenses increased 3.7% for the first quarter of 2025 as compared to the same period in 2024. The increase was primarily driven by increases in marketing, repairs and maintenance, and utilities expense, partially offset by decreases in personnel costs. Investment Activity During the first quarter, NSA invested $13.5 million in the acquisition of three wholly-owned self storage properties consisting of approximately 107,000 rentable square feet configured in approximately 1,000 storage units. Balance Sheet As of March 31, 2025, NSA has no debt maturities in the next 12 months and approximately $522.5 million of available capacity on its $950.0 million revolving line of credit. Common Share Dividends On February 13, 2025, NSA's Board of Trustees declared a quarterly cash dividend of $0.57 per common share. The first quarter 2025 dividend was paid on March 31, 2025 to shareholders of record as of March 14, 2025. 2025 Guidance NSA reaffirms its previously provided Core FFO guidance estimates and related assumptions for the year ended December 31, 2025: Ranges for Full Year 2025 Low High Earnings per share - diluted $ 0.63 $ 0.69 Impact of the difference in weighted average number of shares and GAAP accounting for noncontrolling interests, two-class method and treasury stock method (0.14 ) (0.19 ) Add real estate depreciation and amortization 1.47 1.50 Add (subtract) equity in losses (earnings) of unconsolidated real estate ventures 0.13 0.14 Add NSA's share of FFO of unconsolidated real estate ventures 0.16 0.17 Add acquisition costs and NSA's share of unconsolidated real estate venture acquisition costs 0.01 0.02 Add integration costs 0.04 0.05 Core FFO per share and unit $ 2.30 $ 2.38 Expand (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) 2025 guidance reflects NSA's 2025 same store pool comprising 771 stores. 2024 actual results reflect NSA's 2024 same store pool comprising 776 stores. (3) NSA's actual results for full year 2024 exclude the contribution of wholly-owned self storage properties into the 2024 Joint Venture for approximately $346.5 million. Expand 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 and as exhibit 99.1 to the Company's Form 8-K furnished to the SEC on May 5, 2025. 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 Time on Tuesday, May 6, 2025 to discuss its first quarter 2025 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 Conference Call and Webcast: Date/Time: Tuesday, May 6, 2025, 1:00 pm ET Webcast available at: Domestic (Toll Free US & Canada): 877.407.9711 International: 412.902.1014 A replay of the webcast will be available for 30 days on NSA's website at Upcoming Industry Conference NSA management is scheduled to participate in Nareit's REITweek 2025 Conference on June 2-5, 2025 in New York City, New York. About National Storage Affiliates Trust National Storage Affiliates Trust is a real estate investment trust headquartered in Greenwood Village, Colorado, focused on the ownership, operation and acquisition of self storage properties predominantly located within the top 100 metropolitan statistical areas throughout the United States. As of March 31, 2025, the Company held ownership interests in and operated 1,075 self storage properties, located in 41 states and Puerto Rico with approximately 70.2 million rentable square feet. NSA is one of the largest owners and operators of self storage properties among public and private companies in the United States. For more information, please visit the Company's website at NSA is included in the MSCI US REIT Index (RMS/RMZ), the Russell 1000 Index of Companies and the S&P MidCap 400 Index. 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 and disposition of properties, including those under contract and the Company's ability to execute on its acquisition pipeline; the timing of acquisitions under contract; the Company's ability to realize the benefits from the internalization of the PRO structure; and the Company's guidance estimates for the year ended December 31, 2025. 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 Balance Sheets (dollars in thousands, except per share amounts) (unaudited) March 31, 2025 2024 ASSETS Real estate Self storage properties $ 5,873,499 $ 5,864,134 Less accumulated depreciation (1,095,918 ) (1,051,638 ) Self storage properties, net 4,777,581 4,812,496 Cash and cash equivalents 19,266 50,408 Restricted cash 909 345 Debt issuance costs, net 4,921 5,632 Investment in unconsolidated real estate ventures 235,591 246,193 Other assets, net 196,079 218,482 Operating lease right-of-use assets 20,657 20,906 Total assets $ 5,255,004 $ 5,354,462 LIABILITIES AND EQUITY Liabilities Debt financing $ 3,426,666 $ 3,449,087 Accounts payable and accrued liabilities 92,016 98,657 Interest rate swap liabilities 1,196 471 Operating lease liabilities 22,662 22,888 Deferred revenue 20,272 20,012 Total liabilities 3,562,812 3,591,115 Equity Preferred shares of beneficial interest, par value $0.01 per share. 50,000,000 authorized, 14,697,845 and 14,695,458 issued (in series) and outstanding at March 31, 2025 and December 31, 2024, respectively, at liquidation preference 340,955 340,895 Common shares of beneficial interest, par value $0.01 per share. 250,000,000 shares authorized, 76,450,466 and 76,344,661 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively 764 763 Additional paid-in capital 1,249,291 1,249,426 Distributions in excess of earnings (566,346 ) (530,652 ) Accumulated other comprehensive income 9,315 15,548 Total shareholders' equity 1,033,979 1,075,980 Noncontrolling interests 658,213 687,367 Total equity 1,692,192 1,763,347 Total liabilities and equity $ 5,255,004 $ 5,354,462 Expand Reconciliation of Net Income to FFO and Core FFO (in thousands, except per share and unit amounts) (unaudited) Three Months Ended March 31, 2025 2024 Net income $ 19,519 $ 95,088 Add (subtract): Real estate depreciation and amortization 47,661 46,964 Equity in losses of unconsolidated real estate ventures 5,739 1,630 Company's share of FFO in unconsolidated real estate ventures 5,052 5,685 Gain on sale of self storage properties (1,425 ) (61,173 ) Distributions to preferred shareholders and unitholders (5,568 ) (5,568 ) FFO attributable to subordinated performance units (1) — (10,730 ) FFO attributable to common shareholders, OP unitholders, and LTIP unitholders 70,978 71,896 Add (subtract): Acquisition costs 403 507 Integration costs (2) 2,042 — Core FFO attributable to common shareholders, OP unitholders, and LTIP unitholders $ 73,423 $ 72,403 Weighted average shares and units outstanding - FFO and Core FFO: (3) Weighted average shares outstanding - basic 76,372 80,236 Weighted average restricted common shares outstanding 21 22 Weighted average OP units outstanding 52,147 37,633 Weighted average DownREIT OP unit equivalents outstanding 5,769 2,120 Weighted average LTIP units outstanding 925 693 Total weighted average shares and units outstanding - FFO and Core FFO 135,234 120,704 FFO per share and unit $ 0.52 $ 0.60 Core FFO per share and unit $ 0.54 $ 0.60 Expand (1) Amounts represent distributions declared for subordinated performance unitholders and DownREIT subordinated performance unitholders for the periods presented. (2) Integration costs relate to expenses incurred as a part of the internalization of the PRO structure. (3) 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. 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). All subordinated performance units and DownREIT subordinated performance units were converted into OP units on July 1, 2024, in connection with the internalization of the PRO structure. See footnote (4) 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. Expand (4) 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 have only been convertible into OP units (i) after a lock-out period and (ii) upon certain events or conditions. All outstanding subordinated performance units and DownREIT subordinated performance units were converted into OP units on July 1, 2024, in connection with the internalization of the PRO structure. 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. (5) 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 (4). Expand Net Operating Income (dollars in thousands) (unaudited) Three Months Ended March 31, 2025 2024 Net income $ 19,519 $ 95,088 (Subtract) add: Management fees and other revenue (12,135 ) (9,074 ) General and administrative expenses 13,145 15,674 Other 4,476 3,492 Depreciation and amortization 48,116 47,331 Interest expense 40,475 38,117 Equity in losses of unconsolidated real estate ventures 5,739 1,630 Acquisition and integration costs 2,445 507 Income tax expense 1,120 886 Gain on sale of self storage properties (1,425 ) (61,173 ) Non-operating income (360 ) (98 ) Net Operating Income $ 121,115 $ 132,380 Expand EBITDA and Adjusted EBITDA (dollars in thousands) (unaudited) Three Months Ended March 31, 2025 2024 Net income $ 19,519 $ 95,088 Add: Depreciation and amortization 48,116 47,331 Company's share of unconsolidated real estate venture depreciation and amortization 5,411 4,552 Interest expense 40,475 38,117 Income tax expense 1,120 886 EBITDA 114,641 185,974 Add (subtract): Acquisition costs 403 507 Effect of hypothetical liquidation at book value (HLBV) accounting for unconsolidated 2024 Joint Venture (1) 5,381 2,764 Gain on sale of self storage properties (1,425 ) (61,173 ) Integration costs, excluding equity-based compensation (2) 930 — Equity-based compensation expense (3) 3,079 1,855 Adjusted EBITDA $ 123,009 $ 129,927 Expand (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 costs relate to expenses incurred as a part of the internalization of the PRO structure. (3) Equity-based compensation expense is a non-cash item recorded within general and administrative expenses and acquisition and integration costs in our consolidated statements of operations. For the three months ended March 31, 2025, $1.1 million relates to the internalization of the PRO structure and is included in acquisition and integration costs. Expand
Yahoo
28-02-2025
- Business
- Yahoo
National Storage Affiliates Trust (NSA) Q4 2024 Earnings Call Highlights: Navigating Challenges ...
Core FFO per Share: $0.60 for Q4 2024; $2.44 for the full year 2024. Same-Store Revenue Growth: Declined 4.3% in Q4 2024. Same-Store NOI Growth: Declined 5.5% for the full year 2024. Same-Store Rent Revenue per Square Foot: Declined 2.5% in Q4 2024. Average Occupancy: Declined 180 basis points year-over-year in Q4 2024. Expense Growth: 4.7% in Q4 2024; 3.7% for the full year 2024. Leverage: 6.5 times net debt to EBITDA at quarter end. Revolver Balance: Approximately $430 million with over $500 million of availability. 2025 Guidance - Same-Store Revenue Growth: Flat. 2025 Guidance - Same-Store Operating Expense Growth: 3.5%. 2025 Guidance - Same-Store NOI Growth: Negative 1.4%. 2025 Guidance - Core FFO per Share: $2.34. 2025 Guidance - Acquisition and Disposition Ranges: $100 million to $300 million. Warning! GuruFocus has detected 8 Warning Signs with NSA. Release Date: February 27, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. National Storage Affiliates Trust (NYSE:NSA) successfully internalized its PRO structure, consolidating brands and onboarding approximately 250 properties and over 380 employees to its corporate platform. The company deployed $150 million of growth capital in a newly formed joint venture and repurchased $275 million of common shares, indicating strong capital management. NSA's markets have a higher average percentage of homeowners versus renters, making its portfolio more sensitive to housing market recovery, which is expected to benefit the company. The supply of new storage facilities is expected to decline substantially over the next few years, which should improve market conditions for NSA. NSA reported core FFO per share of $0.60 for the fourth quarter of 2024 and $2.44 for the full year, at the high end of its guidance range, driven by better-than-expected G&A and management fees. The company faces challenging operating conditions due to elevated supply and muted demand from historically low home sales. NSA's same-store revenue and NOI growth were down 3% and 5.5% respectively over the prior year, indicating pressure on financial performance. Interest expense is expected to contribute to a decline in core FFO per share in 2025, partly due to the expiration of interest rate swaps. The company anticipates near-term negative NOI growth, with the first quarter being seasonally the weakest, which will put additional pressure on leverage. NSA's guidance for 2025 reflects uncertainty regarding interest rates and their impact on the housing market, which could affect the spring leasing season. Q: Can you explain the expected improvement in revenue growth for 2025, particularly regarding occupancy and rate growth? A: David Cramer, President and CEO, explained that 2024 was a transition year with internalization and platform consolidation. For 2025, they anticipate a normal seasonal pattern with occupancy peaking in the summer, expecting a 250 basis point improvement. They also foresee low-single-digit growth in average contract rates due to improved tools and positioning. Brandon Togashi, CFO, added that the negative revenue growth in Q4 2024 was due to occupancy and rent per square foot declines, which they expect to tighten in Q1 2025. Q: Is your growth being impacted by state restrictions due to the California wildfires? A: David Cramer stated that the impact is minimal, as only eight stores in their portfolio are in areas with pricing restrictions, representing a small percentage of their total stores. Q: How do you view the acquisition and disposition environment, and what are your plans for capital recycling? A: David Cramer mentioned that they plan to recycle capital by selling identified assets to improve operational efficiency. They have $10 million worth of properties under contract for sale and are actively evaluating acquisition opportunities. The acquisition environment remains healthy, with no significant changes in deal flow or cap rates. Q: How does the current housing market affect your business, and is a recovery factored into your guidance? A: Brandon Togashi noted that their guidance assumes no worse conditions than 2024, with modest improvement expected. They believe pent-up mobility demand will gradually unlock, benefiting from job-driven mobility and improved supply outlook. The internalization of PROs is also expected to enhance performance. Q: What are your expectations for supply and its impact on your markets in 2025? A: David Cramer explained that new supply deliveries are expected to decline, with 2025 seeing about a 50-100 basis point improvement from 2024. While new supply is decreasing, it will take time to absorb existing supply, particularly in markets like Phoenix and Atlanta. They anticipate improved stability as supply pressures ease. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
