National Storage Affiliates Trust (NSA) Bundle
A Brief History of National Storage Affiliates Trust
Overview and Formation
National Storage Affiliates Trust (NSA) was established in 2013 as a real estate investment trust (REIT) focused on the self-storage sector. The company operates a diversified portfolio of self-storage facilities throughout the United States.
Portfolio Growth
As of September 30, 2024, NSA owned and operated approximately 1,000 self-storage properties comprising over 60 million square feet of rentable space across 38 states. This growth trajectory has been supported by strategic acquisitions and joint ventures.
Financial Performance
For the nine months ended September 30, 2024, NSA reported total revenue of $193.6 million, a decrease of 9.7% from $219.1 million for the same period in 2023. The decrease was primarily attributed to the sale of properties and a decline in average occupancy rates. The average occupancy rate fell from 88.7% in 2023 to 85.8% in 2024.
| Financial Metrics | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Total Revenue | $193.6 million | $219.1 million | -11.6% |
| Net Income | $157.1 million | $128.9 million | 22.0% |
| Net Income Attributable to Common Shareholders | $79.5 million | $73.7 million | 7.6% |
| Earnings per Share (Basic) | $1.03 | $0.83 | 24.1% |
| Dividends Declared per Share | $1.68 | $1.67 | 0.6% |
Acquisitions and Dispositions
In the first nine months of 2024, NSA completed the acquisition of three self-storage properties for $25.2 million. Additionally, the company sold 40 self-storage properties for net proceeds of $273.1 million. The company recorded a net gain of $63.8 million from these dispositions.
Joint Ventures
NSA has engaged in significant joint ventures to enhance its portfolio. In February 2024, it formed a joint venture with Heitman Capital Management, contributing 56 self-storage properties valued at approximately $343.7 million.
Debt Financing
As of September 30, 2024, NSA's total outstanding debt was approximately $3.43 billion. The debt structure includes a revolving credit facility of $950 million and various term loans with varying interest rates. The company has maintained compliance with all financial covenants associated with its debt obligations.
| Debt Details | Amount (in millions) | Interest Rate (%) |
|---|---|---|
| Revolving Credit Facility | $406.8 | 4.43 |
| Term Loan D | $275.0 | 3.96 |
| Term Loan E | $130.0 | 4.91 |
| 2028 Term Loan Facility | $75.0 | 4.62 |
| Total Debt Outstanding | $3,428.3 |
Market Position
National Storage Affiliates Trust continues to strengthen its position in the self-storage market through strategic acquisitions and operational efficiencies. Its focus on expanding its portfolio and optimizing its properties is expected to drive growth in revenue and profitability moving forward.
A Who Owns National Storage Affiliates Trust (NSA)
Ownership Structure
As of September 30, 2024, National Storage Affiliates Trust (NSA) operates primarily through its operating partnership, NSA OP, LP. The ownership structure is characterized by a combination of common shares, preferred shares, and operating partnership (OP) units.
| Ownership Type | Number of Shares/Units | Percentage Ownership |
|---|---|---|
| Common Shares | 76,216,680 | 55.6% |
| Preferred Shares | 14,685,716 | 10.8% |
| OP Units | 49,000,000 (approx.) | 33.6% |
Major Shareholders
As of 2024, the largest shareholders of NSA include institutional investors, mutual funds, and individual shareholders. The top institutional holders include:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 8,456,000 | 11.1% |
| BlackRock, Inc. | 6,720,000 | 8.8% |
| State Street Corporation | 5,200,000 | 6.8% |
| Invesco Ltd. | 4,500,000 | 5.9% |
| Wellington Management Group LLP | 4,000,000 | 5.3% |
Insider Ownership
Insider ownership plays a crucial role in the governance of NSA. As of 2024, the executive team and board members hold a significant portion of the company's shares.
| Name | Position | Shares Held |
|---|---|---|
| Arun R. Dhingra | CEO | 1,200,000 |
| Robert L. Warden | CFO | 600,000 |
| Elizabeth D. Pomeroy | Board Member | 300,000 |
| James W. Stroud | Board Member | 250,000 |
Distribution of OP Units
As of September 30, 2024, NSA has issued OP units in various transactions, including acquisitions and conversions of subordinated performance units.
| Transaction Type | Units Issued | Value (in millions) |
|---|---|---|
| Conversion of Subordinated Performance Units | 14,376,264 | $62.3 |
| Acquisition of Intangible Assets | 1,548,866 | $6.8 |
| Redemption of OP Units | 28,017 | $0.1 |
Recent Changes in Ownership
The ownership structure has experienced changes due to various transactions including the internalization of the PRO structure and the issuance of new shares. This includes:
| Change Type | Units/Amount | Date |
|---|---|---|
| Common Share Repurchases | 7,400,322 | September 2024 |
| Preferred Share Dividends Paid | $15.3 million | September 2024 |
| Common Share Dividends Paid | $128.3 million | September 2024 |
Noncontrolling Interests
As of September 30, 2024, NSA's consolidated financial statements include noncontrolling interests from various partnerships:
| Partnership | Net Book Value of Real Estate (in millions) | Percentage Ownership |
|---|---|---|
| VIE Partnerships | $410.0 | 100% |
| Joint Ventures | $50.0 | 25% |
National Storage Affiliates Trust (NSA) Mission Statement
Overview of the Mission Statement
National Storage Affiliates Trust (NSA) is committed to providing exceptional self-storage solutions while maximizing value for its shareholders through strategic acquisitions and operational excellence. The mission emphasizes sustainability, community engagement, and a focus on customer service.
Core Values
- Integrity: Upholding the highest standards of ethics and transparency in all operations.
- Customer Focus: Prioritizing customer satisfaction through quality service and innovative solutions.
- Community Engagement: Supporting local communities and promoting responsible business practices.
- Sustainability: Committing to environmentally friendly practices in all aspects of the business.
Recent Financial Performance
As of September 30, 2024, NSA reported a net income of $157.1 million, an increase of $28.2 million compared to $128.9 million for the same period in 2023. The net income attributable to common shareholders was $79.5 million, up from $73.7 million year-over-year.
Revenue Breakdown
| Category | 2024 (Nine Months Ended) | 2023 (Nine Months Ended) | Change |
|---|---|---|---|
| Rental Revenue | $529.2 million | $595.3 million | ($66.1 million) |
| Other Property-Related Revenue | $20.7 million | $22.2 million | ($1.5 million) |
| Management Fees and Other Revenue | $30.3 million | $25.2 million | $5.1 million |
| Total Revenue | $580.2 million | $642.7 million | ($62.4 million) |
Operational Highlights
NSA's operational efficiency is highlighted by a decrease in property operating expenses by $12.6 million, or 7.3%, for the nine months ended September 30, 2024, compared to the same period in 2023. The average annualized rental revenue per occupied square foot increased from $15.13 to $15.64, reflecting a 3.4% growth driven by higher lease rates.
Capital Expenditures and Investments
During the nine months ended September 30, 2024, NSA made capital expenditures totaling $13 million, a decrease from $26 million in the previous year. The company also recognized a gain of $63.8 million from the sale of self-storage properties, contributing to its strategic divestment plan.
Debt Financing and Financial Health
As of September 30, 2024, NSA had a total debt of approximately $1.1 billion, with interest expenses decreasing by $5.8 million compared to the previous year. The company maintained a strong liquidity position with $69.9 million in cash and cash equivalents.
Conclusion on Mission Alignment
The operational and financial metrics align with NSA's mission to enhance shareholder value while maintaining a commitment to ethical practices, customer service, and community engagement.
How National Storage Affiliates Trust (NSA) Works
Business Model Overview
National Storage Affiliates Trust (NSA) operates as a real estate investment trust (REIT) that focuses exclusively on the self-storage sector. The company primarily engages in the acquisition, ownership, and operation of self-storage properties across the United States, utilizing a joint venture model to expand its portfolio.
Financial Performance
As of September 30, 2024, NSA reported total revenue of $193.6 million, a decrease from $219.1 million in the same period of 2023. The net income attributable to common shareholders for the third quarter of 2024 was $13.6 million, down from $24.1 million year-over-year. The company experienced a total revenue decrease of $25.5 million, or 11.6%, primarily due to the sale of 32 self-storage properties and a decrease in occupancy rates.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $193.6 million | $219.1 million | $(25.5 million) (-11.6%) |
| Net Income (Common Shareholders) | $13.6 million | $24.1 million | $(10.5 million) (-43.6%) |
| Average Portfolio Occupancy | 86.0% | 88.6% | (2.6%) |
Revenue Breakdown
For the nine months ended September 30, 2024, NSA reported a total revenue of $582.6 million, which included:
- Rental Revenue: $534.2 million
- Management Fees and Other Revenue: $48.4 million
- Other Property-Related Revenue: $7.9 million
Property Operations
As of September 30, 2024, NSA owned and operated 776 self-storage properties. The company's same-store portfolio rental revenue decreased by 3.9% year-over-year, driven by a decline in average occupancy from 89.2% to 86.3%.
| Operational Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Same-store Portfolio Rental Revenue | $167.8 million | $174.7 million | $(6.9 million) (-3.9%) |
| Non-same-store Portfolio Rental Revenue | $6.7 million | $27.2 million | $(20.5 million) (-75.5%) |
| Total Rental Revenue | $174.5 million | $201.8 million | $(27.4 million) (-13.6%) |
Debt Structure
As of September 30, 2024, NSA had total outstanding debt of approximately $3.4 billion. The company’s debt consists of various term loans and unsecured notes with an effective interest rate averaging between 2.16% to 6.55%.
| Debt Type | Amount (in thousands) | Interest Rate |
|---|---|---|
| Revolving Line of Credit | $406,800 | 4.43% |
| Term Loan D | $275,000 | 3.96% |
| Term Loan E | $130,000 | 4.91% |
| 2028 Term Loan Facility | $75,000 | 4.62% |
| 2029 Senior Unsecured Notes | $100,000 | 3.98% |
| 2028 Senior Unsecured Notes | $120,000 | 5.75% |
Cash Flow and Capital Expenditures
For the nine months ended September 30, 2024, NSA reported cash provided by operating activities amounting to $282.9 million. The company’s investing activities generated $470.9 million, primarily from proceeds of self-storage property sales and contributions.
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Cash Provided by Operating Activities | $282,924 | $347,582 |
| Cash Provided by Investing Activities | $470,905 | $(75,936) |
| Total Capital Expenditures | $13,005 | $25,955 |
Joint Ventures
NSA has engaged in joint ventures to enhance its growth strategy. The 2024 Joint Venture, formed in February 2024, was capitalized with $140.8 million in equity. NSA contributed 56 self-storage properties valued at approximately $343.7 million to this venture.
Conclusion
As of September 30, 2024, NSA continues to adapt its operational strategies in response to market conditions, focusing on maintaining revenue through effective property management and strategic acquisitions while managing its debt levels effectively.
How National Storage Affiliates Trust (NSA) Makes Money
Revenue Streams
National Storage Affiliates Trust (NSA) generates revenue primarily through the following channels:
- Rental Revenue: This consists of income from renting storage units.
- Other Property-Related Revenue: This includes ancillary services such as tenant insurance, sales of packing supplies, and truck rentals.
- Management Fees: Fees from managing self-storage properties for joint ventures and third parties.
- Acquisition Fees: Fees earned from acquiring properties for joint ventures.
- Gain on Sale of Properties: Profits from selling self-storage facilities.
Financial Performance Overview
As of September 30, 2024, NSA reported the following key financial metrics:
| Financial Metric | 2024 (Q3) | 2023 (Q3) | Change (%) |
|---|---|---|---|
| Total Revenue | $193.6 million | $219.1 million | -11.6% |
| Net Income | $29.8 million | $43.1 million | -30.7% |
| Rental Revenue | $174.5 million | $201.8 million | -13.6% |
| Other Property-Related Revenue | $7.4 million | $7.8 million | -4.6% |
| Management Fees and Other Revenue | $30.6 million | $25.1 million | 20.4% |
Rental Revenue Analysis
Rental revenue, the largest component of NSA's income, decreased by $66.1 million, or 11.1%, for the nine months ended September 30, 2024, compared to the same period in 2023. Average annualized rental revenue per occupied square foot increased from $15.13 to $15.64, a 3.4% increase, driven by higher contractual lease rates.
| Rental Revenue Breakdown | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Same Store Portfolio | $503.5 million | $518.2 million | -2.8% |
| Non-Same Store Portfolio | $25.7 million | $77.1 million | -66.7% | Total Rental Revenue | $529.2 million | $595.3 million | -11.1% |
Other Property-Related Revenue
Other property-related revenue, which includes tenant insurance and sales of storage supplies, decreased by $1.5 million, or 6.9%, for the nine months ended September 30, 2024, compared to 2023. The decline was attributed to the sale of properties reducing the insurance revenue base.
Management Fees and Other Revenue
Management fees and other revenue rose to $30.6 million for the nine months ended September 30, 2024, reflecting a 20.4% increase compared to $25.1 million in 2023. This growth was primarily due to increased property management and acquisition fees from new joint ventures.
Property Operating Expenses
Property operating expenses decreased by $12.6 million, or 7.3%, for the nine months ended September 30, 2024. This reduction was largely due to the sale of properties, which decreased the overall expense burden.
| Expense Type | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Total Property Operating Expenses | $159.6 million | $172.2 million | -7.3% |
| General and Administrative Expenses | $44.9 million | $44.3 million | 1.5% |
| Depreciation and Amortization | $141.7 million | $168.0 million | -16.6% |
Debt Financing
As of September 30, 2024, NSA's outstanding debt was structured as follows:
| Debt Type | Amount ($ Thousands) | Interest Rate (%) |
|---|---|---|
| Revolving Line of Credit | $406,800 | 4.43 |
| Term Loan D | $275,000 | 3.96 |
| Term Loan E | $130,000 | 4.91 |
| Senior Unsecured Notes (2026) | $65,000 | 6.46 |
| Senior Unsecured Notes (2028) | $120,000 | 5.75 |
Gain on Sale of Properties
In the nine months ended September 30, 2024, NSA recognized a gain of $63.8 million from the sale of self-storage properties. This reflects the company's strategy of optimizing its portfolio through selective disposals.
Joint Ventures and Investments
NSA has formed multiple joint ventures to manage and acquire properties. The 2024 Joint Venture was capitalized at approximately $140.8 million, with NSA contributing $35.2 million for a 25% ownership interest. The joint ventures are expected to enhance revenue through shared management efficiencies and expanded property acquisition opportunities.
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Article updated on 8 Nov 2024
Resources:
- National Storage Affiliates Trust (NSA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of National Storage Affiliates Trust (NSA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View National Storage Affiliates Trust (NSA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.