National Storage Affiliates Trust Reports First Quarter 2025 Results

May 05 2025 21:05 BST

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--May 5, 2025-- 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

($ in thousands, except per share and unit data)	Three Months Ended March 31,
	2025		2024		Change
Net income	$	19,519	$	95,088	(79.5	)%

Funds From Operations ("FFO")⁽¹⁾	$	70,978	$	71,896	(1.3	)%
Add acquisition costs		403		507	(20.5	)%
Add integration costs⁽²⁾		2,042		—	—	%
Core FFO⁽¹⁾	$	73,423	$	72,403	1.4	%

Earnings per share - basic	$	0.10	$	0.67	(85.1	)%
Earnings per share - diluted	$	0.10	$	0.65	(84.6	)%

FFO per share and unit⁽¹⁾	$	0.52	$	0.60	(13.3	)%
Core FFO per share and unit⁽¹⁾	$	0.54	$	0.60	(10.0	)%

(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 costs relate to expenses incurred as a part of the internalization of the PRO structure.

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)

($ in thousands, except per square foot data)	Three Months Ended March 31,
	2025			2024			Change
Total revenues	$	168,657		$	173,787		(3.0	)%
Property operating expenses		52,245			50,402		3.7	%
Net Operating Income (NOI)	$	116,412		$	123,385		(5.7	)%
NOI Margin		69.0	%		71.0	%	(2.0	)%

Average Occupancy		83.9	%		85.8	%	(1.9	)%
Average Annualized Rental Revenue Per Occupied Square Foot	$	15.70		$	15.86		(1.0	)%

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'sBoard 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						Actual Results for Full Year 2024
	Low			High			Actual Results for Full Year 2024
Core FFO per share⁽¹⁾	$	2.30		$	2.38		$	2.44

Same store operations⁽²⁾
Total revenue growth		(1.25	)%		1.25	%		(3.0	)%
Property operating expenses growth		3.0	%		4.0	%		3.7	%
NOI growth		(2.8	)%		0.0	%		(5.5	)%

General and administrative expenses
General and administrative expenses (excluding equity-based compensation), in millions	$	45.5		$	47.5		$	49.7
Equity-based compensation, in millions	$	8.0		$	8.5		$	7.9

Management fees and other revenue, in millions	$	49.5		$	51.5		$	42.7
Core FFO from unconsolidated real estate ventures, in millions	$	21.5		$	23.5		$	24.2

Acquisitions - consolidated and joint venture (at share), in millions⁽³⁾	$	100.0		$	300.0		$	101.8
Dispositions - consolidated and joint venture (at share), in millions⁽³⁾	$	100.0		$	300.0		$	273.1


	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

(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.

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 www.nsastorage.com 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 www.nsastorage.com.

Conference Call and Webcast:

Date/Time: Tuesday, May 6, 2025, 1:00 pm ET

Webcast available at: www.nsastorage.com.

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 www.nsastorage.com.

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 www.nsastorage.com. NSA is included in the MSCI US REIT Index (RMS/RMZ), the Russell 1000 Index of Companies and the S&P MidCap 400 Index.

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 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 Statements of Operations (in thousands, except per share amounts) (unaudited)

	Three Months Ended March 31,
	2025			2024
REVENUE
Rental revenue	$	169,475		$	180,382
Other property-related revenue		6,744			6,692
Management fees and other revenue		12,135			9,074
Total revenue		188,354			196,148
OPERATING EXPENSES
Property operating expenses		55,104			54,694
General and administrative expenses		13,145			15,674
Depreciation and amortization		48,116			47,331
Other		4,476			3,492
Total operating expenses		120,841			121,191
OTHER (EXPENSE) INCOME
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	)
Non-operating income		360			98
Gain on sale of self storage properties		1,425			61,173
Other (expense) income, net		(46,874	)		21,017
Income before income taxes		20,639			95,974
Income tax expense		(1,120	)		(886	)
Net income		19,519			95,088
Net income attributable to noncontrolling interests		(6,525	)		(36,061	)
Net income attributable to National Storage Affiliates Trust		12,994			59,027
Distributions to preferred shareholders		(5,114	)		(5,110	)
Net income attributable to common shareholders	$	7,880		$	53,917

Earnings per share - basic	$	0.10		$	0.67
Earnings per share - diluted	$	0.10		$	0.65

Weighted average shares outstanding - basic		76,372			80,236
Weighted average shares outstanding - diluted		76,372			138,148

National Storage Affiliates Trust Consolidated Balance Sheets (dollars in thousands, except per share amounts) (unaudited)

	March 31,			December 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


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

(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.

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 March 31,
	2025			2024
Earnings per share - diluted	$	0.10		$	0.65
Impact of the difference in weighted average number of shares⁽⁴⁾		(0.04	)		0.10
Impact of GAAP accounting for noncontrolling interests, two-class method and treasury stock method⁽⁵⁾		0.04			—
Add real estate depreciation and amortization		0.35			0.39
Add equity in losses of unconsolidated real estate ventures		0.04			0.01
Add Company's share of FFO in unconsolidated real estate ventures		0.04			0.05
Subtract gain on sale of self storage properties		(0.01	)		(0.51	)
FFO attributable to subordinated performance unitholders		—			(0.09	)
FFO per share and unit		0.52			0.60
Add acquisition costs		—			—
Add integration costs		0.02			—
Core FFO per share and unit	$	0.54		$	0.60

(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⁾.

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

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

(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.

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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

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National Storage Affiliates Trust Reports First Quarter 2025 Results