National Storage Affiliates Trust (NSA) Q2 2024 earnings summary

Executive summary

• Q2 2024 results showed ongoing pressure from a competitive environment, muted housing demand, and new supply absorption, especially in Sun Belt markets, with total revenue down 11.6% year-over-year to $190.4 million.

• Net income for Q2 2024 was $32.3 million, down 29% year-over-year, and diluted EPS was $0.16, down from $0.28.

• Core FFO per share for Q2 2024 was $0.62, down 8.8% year-over-year, mainly due to lower same-store NOI.

• Strategic initiatives advanced, including completion of the PRO structure internalization and significant progress on transitioning stores to the NSA platform.

• Major portfolio changes included the sale of 40 properties and contribution of 56 to a joint venture, generating $616.8 million in proceeds and a $63.8 million gain.

Financial highlights

• Same-store revenue declined 2.8%, with a 60 bps increase in rent per sq ft offset by a 320 bps drop in average occupancy.

• Q2 2024 rental revenue fell 12.5% year-over-year to $174.4 million; NOI margin for same store pool was 71.4%.

• Expense growth was 4.8%, driven by R&M, marketing, and insurance, partially offset by lower property taxes.

• Adjusted EBITDA for Q2 2024 was $127.8 million, down from $148.3 million in Q2 2023.

• Average occupancy declined to 86.1% in Q2 2024 from 89.0% in Q2 2023.

Outlook and guidance

• Full-year 2024 Core FFO per share now projected at $2.36–$2.44, revised downward due to persistent weak demand and Sun Belt challenges.

• 2024 same store total revenue expected to decline 3.75% to 2.25%; NOI expected to decline 6.5% to 4.5%.

• Occupancy delta expected to improve from -300 bps in July to -100 bps by year-end, with average back-half occupancy at -200 bps year-over-year.

• Street rates expected to improve from double-digit declines to high single-digit declines by year-end.

• Management expects continued integration of the internalized PRO structure over the next 12 months.