National Storage Affiliates Trust Reports Second Quarter 2024 Results
Second Quarter 2024 Highlights
-
Reported net income of
$32.3 million for the second quarter of 2024, a decrease of 29.0% compared to the second quarter of 2023. Reported diluted earnings per share of$0.16 for the second quarter of 2024 compared to$0.28 for the second quarter of 2023. -
Reported core funds from operations ("Core FFO") of
$71.2 million , or$0.62 per share for the second quarter of 2024, a decrease of 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 a 2.8% decrease in same store total revenues and an increase of 4.8% 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 toJune 30, 2023 . -
Acquired three wholly-owned self storage properties for approximately
$25.2 million during the second quarter of 2024. -
Repurchased 1,908,397 of the Company's common shares for approximately
$71.6 million under the Company's previously announced share repurchase program.
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, onJuly 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 of Term Loan Tranche B using the revolving line of credit. -
On
July 30, 2024 , a joint venture between a subsidiary ofNSA and a state pension fund advised byHeitman Capital Management, LLC (the "2023 Joint Venture") acquired a portfolio of five self storage properties for approximately$71.9 million . The venture financed the acquisition with capital contributions from the venture members, of which the Company contributed approximately$18.0 million .
Financial Results
($ in thousands, except per share and unit data) |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
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 14.1% and 11.3%, respectively, which were partially offset by a decrease in interest expense of 6.2% and 3.0%, respectively, as compared to the same periods in 2023. The decrease in FFO and Core FFO per share and unit for the second quarter of 2024 and year-to-date was largely driven by a decrease in same store NOI and an increase in general and administrative expenses.
Same Store Operating Results (776 Stores)
($ in thousands, except per square foot data) |
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||
|
|
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 2.8% for the second quarter of 2024 and 2.2% year-to-date as compared to the same period in 2023. The decrease for the second quarter was driven primarily by a 320 basis point decrease in average occupancy, partially offset by a 0.6% increase in average annualized rental revenue per occupied square foot. The year-to-date same store total revenue decrease was driven primarily by a 350 basis point decrease in average occupancy, partially offset by a 1.5% increase in average annualized rental revenue per occupied square foot. Markets which generated above portfolio average same store total revenue growth for the second quarter of 2024 include:
Year-over-year same store property operating expenses increased 4.8% for the second quarter of 2024 and 4.6% year-to-date as compared to the same periods in 2023. The increases primarily resulted from increases in marketing and insurance expense.
Disposition and Investment Activity
During the second quarter,
During the second quarter,
On
Balance Sheet
During the second quarter,
Common Share Dividends
On
2024 Guidance
The following table outlines
|
Current 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
|
|
|
||||||||||||
|
|
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 |
|
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 |
|
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 |
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; and the Company's guidance estimates for the year ended
Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
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 |
|
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 |
|
|
Consolidated Balance Sheets (dollars in thousands, except per share amounts) (unaudited) |
||||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
|
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 |
|
Six Months Ended |
|||||||||||||
|
|
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) |
|
|
|
|
|
|
|
|
|
||||||||||
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 |
|
Six Months Ended |
|||||||||||||
|
|
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 |
) |
|
|
|
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 |
|
(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 |
|
Six Months Ended |
|||||||||||||
|
|
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 |
|
Six Months Ended |
|||||||||||||
|
|
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/
Investor/Media Relations
Vice President - Investor Relations
720.630.2160
ghoglund@nsareit.net
Source: