8-K: National Storage Affiliates Trust Reports Decreased Fourth Quarter and Full Year 2024 Results

National Storage Affiliates Trust reports a decrease in net income and Core FFO for both the fourth quarter and full year 2024, alongside a drop in same-store NOI.

Summary

• National Storage Affiliates Trust (NSA) reported its fourth quarter and full year 2024 results.
• Net income for the fourth quarter of 2024 was $26.1 million, a 75.8% decrease compared to the fourth quarter of 2023.
• Diluted earnings per share for the fourth quarter of 2024 were $0.15, compared to $0.72 for the fourth quarter of 2023.
• Core Funds From Operations (FFO) for the fourth quarter of 2024 were $81.2 million, or $0.60 per share, an 11.8% decrease per share compared to the fourth quarter of 2023.
• Same store Net Operating Income (NOI) decreased by 7.5% for the fourth quarter of 2024, driven by a 4.3% decrease in same store total revenues and a 4.7% increase in same store property operating expenses.
• Same store period-end occupancy was 84.4% as of December 31, 2024, a decrease of 140 basis points compared to December 31, 2023.
• NSA acquired four wholly-owned self storage properties for approximately $39.6 million during the fourth quarter of 2024.
• NSA entered into a new sales agreement for an At the Market (ATM) program authorizing the sale of up to $400.0 million of its common shares.
• Net income for full year 2024 was $183.3 million, a decrease of 22.7% compared to full year 2023.
• Diluted earnings per share for full year 2024 were $1.18, compared to $1.48 for full year 2023.
• Core FFO for full year 2024 was $308.7 million, or $2.44 per share, a decrease of 9.3% per share compared to full year 2023.
• Same store NOI decreased by 5.5% for full year 2024, driven by a 3.0% decrease in same store total revenues and a 3.7% increase in same store property operating expenses.
• NSA acquired seven wholly-owned self storage properties for approximately $64.9 million and 18 self storage properties through unconsolidated real estate ventures for approximately $147.9 million during full year 2024.
• NSA completed the sales of 40 wholly-owned self storage properties for net proceeds of approximately $273.1 million and contributed 56 wholly-owned self storage properties to a joint venture for approximately $346.5 million during full year 2024.
• NSA repurchased 7,400,322 common shares for approximately $275.2 million under the share repurchase program.
• NSA completed the internalization of the Company's participating regional operator (PRO) structure.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the reported decreases in key financial metrics, although management expresses optimism about future positioning and benefits from the PRO structure internalization.

Positives

• NSA acquired four wholly-owned self storage properties for approximately $39.6 million during the fourth quarter of 2024.
• NSA completed the sales of 40 wholly-owned self storage properties for net proceeds of approximately $273.1 million.
• NSA completed the internalization of the Company's participating regional operator (PRO) structure.
• NSA has no debt maturities in 2025 and approximately $512.5 million of available capacity on its $950.0 million revolving line of credit.

Negatives

• Net income for the fourth quarter of 2024 decreased by 75.8% compared to the fourth quarter of 2023.
• Core FFO per share for the fourth quarter of 2024 decreased by 11.8% compared to the fourth quarter of 2023.
• Same store NOI decreased by 7.5% for the fourth quarter of 2024.
• Same store period-end occupancy decreased by 140 basis points as of December 31, 2024, compared to December 31, 2023.
• Net income for full year 2024 decreased by 22.7% compared to full year 2023.
• Core FFO per share for full year 2024 decreased by 9.3% compared to full year 2023.
• Same store NOI decreased by 5.5% for full year 2024.

Risks

• The company faces uncertainty in the macro environment for 2025.
• Decreases in NOI are attributed to property sales and contributions to joint ventures.
• The company's 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.

Future Outlook

NSA anticipates Core FFO per share to be in the range of $2.30 to $2.38 for the year ended December 31, 2025, with same store total revenue growth between -1.25% and 1.25% and property operating expenses growth between 3.0% and 4.0%.

Management Comments

• David Cramer, President and Chief Executive Officer, commented, Same store results were in line with our expectations for the fourth quarter as we were pleased to finish the heavy lifting from the internalization of our PRO structure.
• Core FFO per share came in at the high end of our expectations due primarily to lower-than-expected general and administrative expenses, better-than-expected contributions from our unconsolidated real estate ventures, and favorable property and tenant insurance outcomes.
• Mr. Cramer further commented, We were focused throughout 2024 positioning NSA to realize outsized benefits as market fundamentals improve.
• While there is uncertainty in the macro environment for 2025, we have no near term debt maturities, and we remain focused on executing operationally and realizing the expected accretion that weve previously highlighted from the internalization of our PRO structure.

Industry Context

The self-storage industry is sensitive to economic conditions, and NSA's results reflect the impact of broader market trends, including changes in occupancy rates and rental revenue per square foot.

Comparison to Industry Standards

• Comparing NSA's performance to industry peers such as Public Storage (PSA) and Extra Space Storage (EXR) would provide a more comprehensive assessment.
• These companies also report metrics like FFO, same-store revenue growth, and occupancy rates, which can be used to benchmark NSA's results.
• For example, if PSA or EXR are showing stronger same-store revenue growth, it could indicate that NSA is underperforming in certain markets or aspects of its operations.

Stakeholder Impact

• Shareholders may be concerned about the decreased financial performance, as reflected in lower earnings per share and FFO.
• Employees may experience uncertainty due to the ongoing internalization of the PRO structure.
• Customers may not be directly impacted, but changes in property management or investment strategies could indirectly affect service quality or pricing.
• Creditors should note that NSA has no near term debt maturities and has available capacity on its revolving line of credit.

Next Steps

• NSA will hold its fourth quarter 2024 earnings conference call on Thursday, February 27, 2025.
• NSA management is scheduled to participate in Citi's 2025 Global Property CEO Conference on March 3 5, 2025.

Key Dates