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National Storage Affiliates Trust (NSA)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $190.1M, diluted EPS $0.15, and Core FFO per share $0.60, with Core FFO landing at the high end of management’s expectations due to lower G&A, stronger JV contributions, and favorable property and tenant insurance outcomes .
  • Same-store performance remained soft: revenues down 4.3% YoY, NOI down 7.5% YoY, average occupancy 85.2% (down 180 bps YoY); period-end occupancy was 84.4% (down 140 bps YoY) .
  • 2025 guidance introduced: Core FFO per share $2.30–$2.38; same-store revenue growth -1.25% to +1.25%; NOI growth -2.8% to 0.0%; management reaffirmed a focus on operational execution post-PRO internalization .
  • Balance sheet/Catalysts: no 2025 maturities and ~$512.5M revolver availability; new $400M ATM and $350M buyback programs provide flexibility; medium-term narrative hinges on internalization accretion, ECRI execution, declining supply, and an eventual housing recovery .

What Went Well and What Went Wrong

What Went Well

  • Core FFO at high end of expectations, aided by lower-than-expected G&A, better JV contribution, and favorable insurance outcomes; management: “Core FFO per share came in at the high end of our expectations…” .
  • Internalization “heavy lifting” completed; consolidation of brands, platforms, and ECRI tools positions NSA for efficiencies and accretion: “Now that the heavy lifting is behind us, we can fully concentrate our efforts on maximizing the performance…” .
  • Liquidity and flexibility: no 2025 maturities and ~$512.5M of revolver capacity; $400M ATM and $350M buyback stood up; leverage within longer-term comfort range once organic growth inflects .

What Went Wrong

  • Same-store deterioration: revenue -4.3% YoY, NOI -7.5% YoY, margin down 250 bps YoY; occupancy down 180 bps (average) and 140 bps (period-end) .
  • Operating expense pressures: property tax true-ups, marketing, and utilities drove 4.7% YoY same-store OpEx growth in Q4; full-year OpEx up 3.7% YoY .
  • Leverage at 6.5x net debt/EBITDA with near-term pressure expected until organic growth turns positive in 2H 2025; swap expirations add ~$0.05 of FFO headwind .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Total Revenue ($USD Millions)$215.4 $193.6 $190.1
Rental Revenue ($USD Millions)$198.7 $174.5 $171.0
Other Property-Related Revenue ($USD Millions)$7.5 $7.4 $6.7
Management Fees & Other Revenue ($USD Millions)$9.2 $11.7 $12.4
Diluted EPS ($USD)$0.72 $0.18 $0.15
FFO per Share & Unit ($USD)$0.68 $0.61 $0.59
Core FFO per Share & Unit ($USD)$0.68 $0.62 $0.60
Same-Store KPIsQ4 2023Q3 2024Q4 2024
Total Revenue ($USD Millions)$178.3 $174.8 $170.7
Property OpEx ($USD Millions)$47.6 $50.2 $49.8
NOI ($USD Millions)$130.7 $124.6 $120.9
NOI Margin (%)73.3% 71.3% 70.8%
Average Occupancy (%)87.0% 86.3% 85.2%
Avg Annualized Rent per Occupied Sq Ft ($)$15.96 $15.67 $15.56
Balance Sheet & LeverageQ3 2024Q4 2024
Net Debt / Annualized Current Quarter Adjusted EBITDA6.4x 6.5x
Revolver Availability ($USD Millions)~$550 ~$512.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core FFO per ShareFY 2025N/A$2.30–$2.38 New
Same-Store Total Revenue Growth (%)FY 2025N/A-1.25% to 1.25% New
Same-Store Property OpEx Growth (%)FY 2025N/A3.0% to 4.0% New
Same-Store NOI Growth (%)FY 2025N/A-2.8% to 0.0% New
G&A excl. Equity Comp ($USD Millions)FY 2025N/A$45.5–$47.5 New
Equity-Based Comp ($USD Millions)FY 2025N/A$8.0–$8.5 New
Mgmt Fees & Other Rev ($USD Millions)FY 2025N/A$49.5–$51.5 New
Core FFO from Unconsolidated JVs ($USD Millions)FY 2025N/A$21.5–$23.5 New
Acquisitions at Share ($USD Millions)FY 2025N/A$100–$300 New
Dispositions at Share ($USD Millions)FY 2025N/A$100–$300 New
Diluted EPS ($USD)FY 2025N/A$0.64–$0.70 New
Core FFO per ShareFY 2024$2.36–$2.44 Actual $2.44 Achieved High End
Quarterly Dividend ($/Share)Q4 2024N/A$0.57 (paid Dec 31, 2024) Maintained
Quarterly Dividend ($/Share)Q1 2025N/A$0.57 (announced Feb 13, 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Technology/Marketing & ECRIBuilding AI/data warehouse; enhanced call center and web platform; confident pushing ECRI faster and at higher magnitude without adverse behavior Early internalization benefits; improved conversion/positioning; ECRI execution supporting contract rate Consolidated domains; single property management system; stronger ECRI program, sequential contract rate +30 bps in Dec Improving execution post-internalization
Housing/MacroMuted demand; seasonality weak; expectation of 2025 spring leasing improvement contingent on macro recovery October rental activity improved; occupancy down YoY but narrowing; cautious view on demand inflection Near bottom in housing; modest improvement assumed at guidance midpoint; pent-up mobility expected to unlock over time Stabilizing with cautious optimism
Supply DynamicsDevelopment costs high; expect downhill slope of supply impact over time Elevated supply still weighing in Sunbelt; examples (Phoenix, Atlanta, W. FL) Deliveries expected to decline (3.5% in 2024 → ~3% in 2025 → ~2% by 2027 per Yardi); absorption will take time Improving, but absorption lag
Regional TrendsSunbelt under pressure; non-Sunbelt more stable; portfolio diversified Portland stabilizing; Puerto Rico performing; Sunbelt headwinds persist Above-average growth in San Juan, Wichita, Portland; below-average in Riverside-SB, Atlanta, Phoenix Mixed; some stabilization
Regulatory/Legal——CA pricing restrictions minimal exposure (~8 stores), limited impact Neutral

Management Commentary

  • Strategic positioning: “Now that the heavy lifting is behind us, we can fully concentrate our efforts on maximizing the performance… using our consolidated operating platforms and upgraded marketing tools… This will directly impact our shareholders’ returns as we no longer share the upside with our PROs.” (David Cramer) .
  • Macro and supply outlook: “We are near a bottom in the housing market… supply is coming down… deliveries… decline substantially… from 3.5% in 2024 to 2% by 2027… [which] will likely drive healthy momentum into 2026 and beyond.” (David Cramer) .
  • Guidance drivers: “Core FFO per share of $2.34 [midpoint]. Roughly half of the $0.10 decline [vs 2024]… interest expense… other half… negative organic growth, partially offset by accretion from the internalization.” (Brandon Togashi) .
  • Near-term leverage: “Our leverage was 6.5x… near-term negative NOI growth… will put additional pressure… We expect this temporary pressure to ease as our organic growth inflects to positive in the back half of the year…” (Brandon Togashi) .

Q&A Highlights

  • Guidance construction: Modest improvement in demand at midpoint; occupancy trough-to-peak assumed ~200–250 bps vs 140 bps last year; sequential contract rate improvement expected through summer .
  • Capital recycling: ~$10M of dispositions under contract; more assets identified for sale; acquisitions pipeline steady, JV capital favored; cap rates mid-5s (primary, stabilized) to low-mid-6s (secondary/suburban) .
  • ECRI strategy: More assertive timing/magnitude across cohorts; strengthened post-internalization; supporting contract rate with minimal observed adverse customer behavior .
  • Supply outlook: Deliveries moderating; absorption required in challenged markets (Phoenix, Atlanta, West Coast FL); Portland exemplifies post-supply stabilization trajectory .
  • Leverage/Programs: Target comfort range 5.5–6.5x; may temporarily exceed; ATM/buyback opportunistic; potential near-term dispositions to help toggle leverage .

Estimates Context

  • We attempted to retrieve S&P Global consensus (EPS and revenue) for Q4 2024 and prior quarters, but data was unavailable at the time of this report due to request limits. As a result, we cannot quantify a beat/miss versus Wall Street consensus for Q4 2024.*
  • Company-level indicator: Core FFO per share came in at the high end of management’s expectations, aided by lower G&A and stronger JV contributions; same-store metrics tracked at guided midpoints (revenue -3%, NOI -5.5% for FY) .

*Values retrieved from S&P Global

Key Takeaways for Investors

  • Execution pivot: With PRO internalization complete, 2025 is about operational execution—ECRI cadence, contract rate, and marketing scale should matter more than macro alone .
  • Near-term headwinds vs 2H inflection: Expect continued pressure on NOI and leverage in 1H; watch for spring leasing season indicators (occupancy trough-to-peak, contract rate trajectory) .
  • Balance sheet optionality: No 2025 maturities and >$500M revolver capacity; new ATM and buyback provide capital flexibility for M&A and balance sheet management .
  • Supply normalization: Declining deliveries support pricing power over time; focus on absorption pace in Phoenix/Atlanta/West FL and stabilization examples like Portland .
  • Capital recycling: Dispositions and targeted acquisitions (often via JV) should improve portfolio quality and operations; monitor timing-related dilution/accretion .
  • Guidance watchpoints: 2025 Core FFO midpoint $2.34 implies interest expense headwinds (~$0.05) and organic growth drag partially offset by internalization accretion—track G&A run-rate and tenant insurance economics .
  • Trading implications: Near-term prints likely hinge on early 2025 demand signals and pricing stability; a stronger-than-average spring leasing season could shift sentiment positively given easier 2H comps and improving supply backdrop .