National Storage Affiliates Trust (NSA) Q3 2024 earnings summary

Executive summary

• Q3 2024 Core FFO per share was $0.62, down 7.5% year-over-year, with net income at $29.8M and diluted EPS at $0.18, mainly due to lower same-store NOI, occupancy declines, and property sales.

• Revenue for Q3 2024 was $193.6M, down 11.6% year-over-year, impacted by property sales and joint venture contributions.

• Internalization of the PRO structure was completed July 1, 2024, converting performance units, acquiring management contracts, and eliminating prior management fees.

• Two portfolio acquisitions totaling $148M were completed, and 18 properties were acquired through a joint venture.

• 40 properties were sold and 56 contributed to a joint venture, generating $616.8M in proceeds and a $63.8M gain.

Financial highlights

• Same-store revenues declined 3.5% year-over-year, with a 290 basis point drop in average occupancy and a 0.9% decrease in rent revenue per occupied sq. ft.

• Q3 2024 NOI was $129.2M, down from $151.0M in Q3 2023; NOI margin was 71.3%.

• Expense growth was 1.2% in Q3, mainly from property taxes and insurance, with G&A expenses at $13.1M.

• Q3 2024 FFO per share/unit was $0.61; Core FFO per share/unit was $0.62.

• $470M in debt was paid off in Q3, with $350M in new senior unsecured notes issued at a 5.6% coupon.

Outlook and guidance

• 2024 Core FFO guidance reaffirmed at $2.36–$2.44 per share/unit, with same-store NOI expected to decline 4.5% to 6.5%.

• Q4 Core FFO per share expected to decline sequentially to around $0.56, reflecting seasonality and absence of one-time Q3 benefits.

• Full benefits from internalization and operational improvements anticipated in 2025, with green shoots expected as leasing cycles normalize.

• Acquisitions for 2024 expected in the $100–$300M range.

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