National Storage Affiliates Trust Reports First Quarter 2024 Results
First Quarter 2024 Highlights
-
Reported net income of
$95.1 million for the first quarter of 2024, an increase of 135.4% compared to the first quarter of 2023. Reported diluted earnings per share of$0.65 for the first quarter of 2024 compared to$0.24 for the first quarter of 2023. -
Reported core funds from operations ("Core FFO") of
$72.4 million , or$0.60 per share for the first quarter of 2024, a decrease of 9.1% per share compared to the first quarter of 2023. - Reported a decrease in same store net operating income ("NOI") of 3.7% for the first quarter of 2024 compared to the same period in 2023, driven by a 1.5% decrease in same store total revenues and an increase of 4.5% in same store property operating expenses.
-
Reported same store period-end occupancy of 85.9% as of
March 31, 2024 , a decrease of 350 basis points compared toMarch 31, 2023 . -
Repurchased 5,491,925 of the Company's common shares for approximately
$203.5 million under the previously announced share repurchase program. -
As previously announced, entered into a new joint venture (the "2024 Joint Venture") agreement between a subsidiary of
NSA (the "2024 JV NSA Member") and a subsidiary ofHeitman Capital Management LLC (the "2024 JV Investor" and together with the 2024 JV NSA Member, the "2024 JV Members"), withNSA as a 25% owner and the 2024 JV Investor as a 75% owner.NSA contributed 56 wholly-owned properties for approximately$346.5 million to the 2024 Joint Venture. A subsidiary ofNSA serves as the manager of the 2024 Joint Venture. -
Completed the sale of 71 wholly-owned self storage properties for approximately
$540.0 million pursuant to a previously announced agreement entered into during the fourth quarter of 2023. 32 of the properties were sold inDecember 2023 , while the remaining 39 properties were sold during the first quarter of 2024. -
As previously announced, repaid
$130.0 million of Term Loan Tranche B. After this repayment and taking into account the Company's interest rate swaps, the Company has no variable rate debt exposure other than the revolving line of credit.
Highlights Subsequent to Quarter-End
-
Through
April 29, 2024 , repurchased an additional 1,908,397 of the Company's common shares for approximately$71.6 million under the previously announced share repurchase program.
Financial Results
($ in thousands, except per share and unit data) |
Three Months Ended |
|||||||||
|
2024 |
|
2023 |
|
Growth |
|||||
Net income |
$ |
95,088 |
|
$ |
40,392 |
|
135.4 |
% |
||
|
|
|
|
|
|
|||||
Funds From Operations ("FFO")(1) |
$ |
71,896 |
|
|
$ |
84,266 |
|
|
(14.7 |
)% |
Add back acquisition costs |
|
507 |
|
|
|
844 |
|
|
(39.9 |
)% |
Add loss on early extinguishment of debt |
|
— |
|
|
|
758 |
|
|
— |
% |
Core FFO(1) |
$ |
72,403 |
|
|
$ |
85,868 |
|
|
(15.7 |
)% |
|
|
|
|
|
|
|||||
Earnings per share - basic |
$ |
0.67 |
|
|
$ |
0.28 |
|
|
139.3 |
% |
Earnings per share - diluted |
$ |
0.65 |
|
|
$ |
0.24 |
|
|
170.8 |
% |
|
|
|
|
|
|
|||||
FFO per share and unit(1) |
$ |
0.60 |
|
|
$ |
0.64 |
|
|
(6.3 |
)% |
Core FFO per share and unit(1) |
$ |
0.60 |
|
|
$ |
0.66 |
|
|
(9.1 |
)% |
(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. |
Net income increased
The decrease in FFO and Core FFO for the first quarter of 2024 was primarily due to a decrease in NOI, primarily driven by the sales of (i) 32 self storage properties to a third party in
Same Store Operating Results (776 Stores)
($ in thousands, except per square foot data) |
Three Months Ended |
|||||||||
|
2024 |
|
2023 |
|
Growth |
|||||
Total revenues |
$ |
173,871 |
|
|
$ |
176,528 |
|
|
(1.5 |
)% |
Property operating expenses |
|
49,655 |
|
|
|
47,530 |
|
|
4.5 |
% |
Net Operating Income (NOI) |
$ |
124,216 |
|
|
$ |
128,998 |
|
|
(3.7 |
)% |
NOI Margin |
|
71.4 |
% |
|
|
73.1 |
% |
|
(1.7 |
)% |
|
|
|
|
|
|
|||||
Average Occupancy |
|
85.6 |
% |
|
|
89.4 |
% |
|
(3.8 |
)% |
Average Annualized Rental Revenue Per Occupied Square Foot |
$ |
15.80 |
|
|
$ |
15.43 |
|
|
2.4 |
% |
Year-over-year same store total revenues decreased 1.5% for the first quarter of 2024 as compared to the same period in 2023. The decrease was driven primarily by a 380 basis point decrease in average occupancy, partially offset by a 2.4% increase in average annualized rental revenue per occupied square foot. Markets which generated above portfolio average same store total revenue growth for the first quarter of 2024 include:
Year-over-year same store property operating expenses increased 4.5% for the first quarter of 2024. The increase primarily resulted from increases in insurance and marketing expenses.
Disposition and Investment Activity
During the first quarter,
During the first quarter,
Balance Sheet
During the first quarter,
During the first quarter,
Common Share Dividends
On
2024 Guidance
|
Current Ranges for F ull Year 2024 |
|
Actual Results for Full Year 2023 |
||
|
Low |
|
High |
|
|
Core FFO per share(1) |
|
|
|
|
|
|
|
|
|
|
|
Same store operations(2) |
|
|
|
|
|
Total revenue growth |
(4.0)% |
|
0.0% |
|
2.4% |
Property operating expenses growth |
3.0% |
|
5.0% |
|
4.7% |
NOI growth |
(6.0)% |
|
(2.0)% |
|
1.6% |
|
|
|
|
|
|
General and administrative expenses |
|
|
|
|
|
General and administrative expenses (excluding equity-based compensation), in millions |
|
|
|
|
|
Equity-based compensation, in millions |
|
|
|
|
|
|
|
|
|
|
|
Management fees and other revenue, in millions |
|
|
|
|
|
Core FFO from unconsolidated real estate ventures, in millions |
|
|
|
|
|
|
|
|
|
|
|
Subordinated performance unit distributions, in millions |
|
|
|
|
|
|
|
|
|
|
|
Acquisitions of self storage properties, in millions |
|
|
|
|
|
|
Current Ranges for F ull Year 2024 |
||
|
Low |
|
High |
Earnings per share - diluted |
|
|
|
Impact of the difference in weighted average number of shares and GAAP accounting for noncontrolling interests, two-class method and treasury stock method |
0.05 |
|
(0.01) |
Add real estate depreciation and amortization |
1.57 |
|
1.66 |
Add (subtract) equity in losses (earnings) of unconsolidated real estate ventures |
0.11 |
|
0.09 |
Add |
0.20 |
|
0.22 |
FFO attributable to subordinated unitholders |
(0.34) |
|
(0.38) |
Less gain on sale of self storage properties |
(0.51) |
|
(0.51) |
Add acquisition costs and |
0.01 |
|
0.01 |
Core FFO per share and unit |
|
|
|
|
|
|
|
(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 |
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
Non-GAAP Financial Measures & Glossary
This press release contains certain non-GAAP financial measures. These non-GAAP measures are presented because
Quarterly Teleconference and Webcast
The Company will host a conference call at
Conference Call and Webcast:
Date/Time:
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
About
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; the internalization of retiring participating regional operators ("PROs") into the Company; and the Company's guidance estimates for the year ended
Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
|||||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
REVENUE |
|
|
|
||||
Rental revenue |
$ |
180,382 |
|
|
$ |
194,129 |
|
Other property-related revenue |
|
6,692 |
|
|
|
6,807 |
|
Management fees and other revenue |
|
9,074 |
|
|
|
7,057 |
|
Total revenue |
|
196,148 |
|
|
|
207,993 |
|
OPERATING EXPENSES |
|
|
|
||||
Property operating expenses |
|
54,694 |
|
|
|
56,483 |
|
General and administrative expenses |
|
15,674 |
|
|
|
14,821 |
|
Depreciation and amortization |
|
47,331 |
|
|
|
55,458 |
|
Other |
|
3,492 |
|
|
|
1,173 |
|
Total operating expenses |
|
121,191 |
|
|
|
127,935 |
|
OTHER INCOME (EXPENSE) |
|
|
|
||||
Interest expense |
|
(38,117 |
) |
|
|
(37,948 |
) |
Loss on early extinguishment of debt |
|
— |
|
|
|
(758 |
) |
Equity in (losses) earnings of unconsolidated real estate ventures |
|
(1,630 |
) |
|
|
1,678 |
|
Acquisition costs |
|
(507 |
) |
|
|
(844 |
) |
Non-operating income (expense) |
|
98 |
|
|
|
(598 |
) |
Gain on sale of self storage properties |
|
61,173 |
|
|
|
— |
|
Other income (expense), net |
|
21,017 |
|
|
|
(38,470 |
) |
Income before income taxes |
|
95,974 |
|
|
|
41,588 |
|
Income tax expense |
|
(886 |
) |
|
|
(1,196 |
) |
Net income |
|
95,088 |
|
|
|
40,392 |
|
Net income attributable to noncontrolling interests |
|
(36,061 |
) |
|
|
(11,433 |
) |
Net income attributable to |
|
59,027 |
|
|
|
28,959 |
|
Distributions to preferred shareholders |
|
(5,110 |
) |
|
|
(3,962 |
) |
Net income attributable to common shareholders |
$ |
53,917 |
|
|
$ |
24,997 |
|
|
|
|
|
||||
Earnings per share - basic |
$ |
0.67 |
|
|
$ |
0.28 |
|
Earnings per share - diluted |
$ |
0.65 |
|
|
$ |
0.24 |
|
|
|
|
|
||||
Weighted average shares outstanding - basic |
|
80,236 |
|
|
|
89,499 |
|
Weighted average shares outstanding - diluted |
|
138,148 |
|
|
|
148,622 |
|
Consolidated Balance Sheets (dollars in thousands, except per share amounts) (unaudited) |
|||||||
|
|
|
|
||||
|
2024 |
|
2023 |
||||
ASSETS |
|
|
|
||||
Real estate |
|
|
|
||||
Self storage properties |
$ |
5,797,653 |
|
|
$ |
5,792,174 |
|
Less accumulated depreciation |
|
(919,723 |
) |
|
|
(874,359 |
) |
Self storage properties, net |
|
4,877,930 |
|
|
|
4,917,815 |
|
Cash and cash equivalents |
|
64,233 |
|
|
|
64,980 |
|
Restricted cash |
|
24,847 |
|
|
|
22,713 |
|
Debt issuance costs, net |
|
7,731 |
|
|
|
8,442 |
|
Investment in unconsolidated real estate ventures |
|
240,025 |
|
|
|
211,361 |
|
Other assets, net |
|
130,015 |
|
|
|
134,002 |
|
Assets held for sale, net |
|
— |
|
|
|
550,199 |
|
Operating lease right-of-use assets |
|
22,084 |
|
|
|
22,299 |
|
Total assets |
$ |
5,366,865 |
|
|
$ |
5,931,811 |
|
LIABILITIES AND EQUITY |
|
|
|
||||
Liabilities |
|
|
|
||||
Debt financing |
$ |
3,285,547 |
|
|
$ |
3,658,205 |
|
Accounts payable and accrued liabilities |
|
87,875 |
|
|
|
92,766 |
|
Interest rate swap liabilities |
|
— |
|
|
|
3,450 |
|
Operating lease liabilities |
|
24,009 |
|
|
|
24,195 |
|
Deferred revenue |
|
22,362 |
|
|
|
27,354 |
|
Total liabilities |
|
3,419,793 |
|
|
|
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 |
|
769 |
|
|
|
823 |
|
Additional paid-in capital |
|
1,347,512 |
|
|
|
1,509,563 |
|
Distributions in excess of earnings |
|
(439,741 |
) |
|
|
(449,907 |
) |
Accumulated other comprehensive income |
|
27,836 |
|
|
|
21,058 |
|
Total shareholders' equity |
|
1,277,027 |
|
|
|
1,422,188 |
|
Noncontrolling interests |
|
670,045 |
|
|
|
703,653 |
|
Total equity |
|
1,947,072 |
|
|
|
2,125,841 |
|
Total liabilities and equity |
$ |
5,366,865 |
|
|
$ |
5,931,811 |
|
Reconciliation of Net Income to FFO and Core FFO (in thousands, except per share and unit amounts) (unaudited) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
Net income |
$ |
95,088 |
|
|
$ |
40,392 |
|
Add (subtract): |
|
|
|
||||
Real estate depreciation and amortization |
|
46,964 |
|
|
|
55,152 |
|
Equity in losses (earnings) of unconsolidated real estate ventures |
|
1,630 |
|
|
|
(1,678 |
) |
Company's share of FFO in unconsolidated real estate ventures |
|
5,685 |
|
|
|
6,149 |
|
Gain on sale of self storage properties |
|
(61,173 |
) |
|
|
— |
|
Distributions to preferred shareholders and unitholders |
|
(5,568 |
) |
|
|
(3,962 |
) |
FFO attributable to subordinated performance unitholders(1) |
|
(10,730 |
) |
|
|
(11,787 |
) |
FFO attributable to common shareholders, OP unitholders, and LTIP unitholders |
|
71,896 |
|
|
|
84,266 |
|
Add: |
|
|
|
||||
Acquisition costs |
|
507 |
|
|
|
844 |
|
Loss on early extinguishment of debt |
|
— |
|
|
|
758 |
|
Core FFO attributable to common shareholders, OP unitholders, and LTIP unitholders |
$ |
72,403 |
|
|
$ |
85,868 |
|
|
|
|
|
||||
Weighted average shares and units outstanding - FFO and Core FFO:(2) |
|
|
|
||||
Weighted average shares outstanding - basic |
|
80,236 |
|
|
|
89,499 |
|
Weighted average restricted common shares outstanding |
|
22 |
|
|
|
25 |
|
Weighted average OP units outstanding |
|
37,633 |
|
|
|
38,736 |
|
Weighted average DownREIT OP unit equivalents outstanding |
|
2,120 |
|
|
|
2,120 |
|
Weighted average LTIP units outstanding |
|
693 |
|
|
|
551 |
|
Total weighted average shares and units outstanding - FFO and Core FFO |
|
120,704 |
|
|
|
130,931 |
|
|
|
|
|
||||
FFO per share and unit |
$ |
0.60 |
|
|
$ |
0.64 |
|
Core FFO per share and unit |
$ |
0.60 |
|
|
$ |
0.66 |
|
(1) |
Amounts represent distributions declared for subordinated performance unitholders and DownREIT subordinated performance unitholders for the periods presented. |
|
(2) |
|
Reconciliation of Earnings (Loss) Per Share - Diluted to FFO and Core FFO Per Share and Unit (in thousands, except per share and unit amounts) (unaudited) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
Earnings per share - diluted |
$ |
0.65 |
|
|
$ |
0.24 |
|
Impact of the difference in weighted average number of shares(3) |
|
0.10 |
|
|
|
0.04 |
|
Add real estate depreciation and amortization |
|
0.39 |
|
|
|
0.42 |
|
Add (subtract) equity in losses (earnings) of unconsolidated real estate ventures |
|
0.01 |
|
|
|
(0.01 |
) |
|
|
0.05 |
|
|
|
0.04 |
|
Subtract gain on sale of self storage properties |
|
(0.51 |
) |
|
|
— |
|
FFO attributable to subordinated performance unitholders |
|
(0.09 |
) |
|
|
(0.09 |
) |
FFO per share and unit |
|
0.60 |
|
|
|
0.64 |
|
Add acquisition costs |
|
— |
|
|
|
0.01 |
|
Add loss on early extinguishment of debt |
|
— |
|
|
|
0.01 |
|
Core FFO per share and unit |
$ |
0.60 |
|
|
$ |
0.66 |
|
(3) |
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 |
Net Operating Income (dollars in thousands) (unaudited) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
Net income |
$ |
95,088 |
|
|
$ |
40,392 |
|
(Subtract) add: |
|
|
|
||||
Management fees and other revenue |
|
(9,074 |
) |
|
|
(7,057 |
) |
General and administrative expenses |
|
15,674 |
|
|
|
14,821 |
|
Other |
|
3,492 |
|
|
|
1,173 |
|
Depreciation and amortization |
|
47,331 |
|
|
|
55,458 |
|
Interest expense |
|
38,117 |
|
|
|
37,948 |
|
Equity in losses (earnings) of unconsolidated real estate ventures |
|
1,630 |
|
|
|
(1,678 |
) |
Loss on early extinguishment of debt |
|
— |
|
|
|
758 |
|
Acquisition costs |
|
507 |
|
|
|
844 |
|
Income tax expense |
|
886 |
|
|
|
1,196 |
|
Gain on sale of self storage properties |
|
(61,173 |
) |
|
|
— |
|
Non-operating (income) expense |
|
(98 |
) |
|
|
598 |
|
Net Operating Income |
$ |
132,380 |
|
|
$ |
144,453 |
|
EBITDA and Adjusted EBITDA (dollars in thousands) (unaudited) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
Net income |
$ |
95,088 |
|
|
$ |
40,392 |
|
Add (subtract): |
|
|
|
||||
Depreciation and amortization |
|
47,331 |
|
|
|
55,458 |
|
Company's share of unconsolidated real estate venture depreciation and amortization |
|
4,552 |
|
|
|
4,471 |
|
Interest expense |
|
38,117 |
|
|
|
37,948 |
|
Income tax expense |
|
886 |
|
|
|
1,196 |
|
Loss on early extinguishment of debt |
|
— |
|
|
|
758 |
|
EBITDA |
|
185,974 |
|
|
|
140,223 |
|
Add (subtract): |
|
|
|
||||
Acquisition costs |
|
507 |
|
|
|
844 |
|
Effect of hypothetical liquidation at book value (HLBV) accounting for unconsolidated 2024 Joint Venture(1) |
|
2,764 |
|
|
|
— |
|
Gain on sale of self storage properties |
|
(61,173 |
) |
|
|
— |
|
Equity-based compensation expense |
|
1,855 |
|
|
|
1,649 |
|
Adjusted EBITDA |
$ |
129,927 |
|
|
$ |
142,716 |
|
(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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501283311/en/
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