National Storage Affiliates Trust Reports First Quarter 2024 Results

GREENWOOD VILLAGE, Colo. - (BUSINESS WIRE) - National Storage Affiliates Trust ("NSA" or the "Company") (NYSE: NSA) today reported the Company’s first quarter 2024 results.

•Reported net income of $95.1 million for the first quarter of 2024, an increase of 135.4% compared to the first quarter of 2023. Reported diluted earnings per share of $0.65 for the first quarter of 2024 compared to $0.24 for the first quarter of 2023.

•Reported core funds from operations ("Core FFO") of $72.4 million, or $0.60 per share for the first quarter of 2024, a decrease of 9.1% per share compared to the first quarter of 2023.

•Reported a decrease in same store net operating income ("NOI") of 3.7% for the first quarter of 2024 compared to the same period in 2023, driven by a 1.5% decrease in same store total revenues and an increase of 4.5% in same store property operating expenses.

•Reported same store period-end occupancy of 85.9% as of March 31, 2024, a decrease of 350 basis points compared to March 31, 2023.

•Repurchased 5,491,925 of the Company's common shares for approximately $203.5 million under the previously announced share repurchase program.

•As previously announced, entered into a new joint venture (the "2024 Joint Venture") agreement between a subsidiary of NSA (the "2024 JV NSA Member") and a subsidiary of Heitman Capital Management LLC (the "2024 JV Investor" and together with the 2024 JV NSA Member, the "2024 JV Members"), with NSA as a 25% owner and the 2024 JV Investor as a 75% owner. NSA contributed 56 wholly-owned properties for approximately $346.5 million to the 2024 Joint Venture. A subsidiary of NSA serves as the manager of the 2024 Joint Venture.

•Completed the sale of 71 wholly-owned self storage properties for approximately $540.0 million pursuant to a previously announced agreement entered into during the fourth quarter of 2023. 32 of the properties were sold in December 2023, while the remaining 39 properties were sold during the first quarter of 2024.

•As previously announced, repaid $130.0 million of Term Loan Tranche B. After this repayment and taking into account the Company's interest rate swaps, the Company has no variable rate debt exposure other than the revolving line of credit.

•Through April 29, 2024, repurchased an additional 1,908,397 of the Company's common shares for approximately $71.6 million under the previously announced share repurchase program.

David Cramer, President and Chief Executive Officer, commented, “We completed a handful of strategic milestones during the first quarter, which places NSA in a position to thrive as business fundamentals and capital markets improve. We’re excited about the medium- and long-term outlook for both NSA and the self storage sector in general.”

Mr. Cramer further commented, “Our team performed well in what remains a challenging operating environment characterized by continued pressure on street rates and significant competition to attract new customers. Rental volume and occupancy are increasing from the seasonal trough in February, but the next few months will be key determinants of full-year performance.”

(1) Non-GAAP financial measures, including FFO, Core FFO and NOI, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information.

Net income increased $54.7 million for the first quarter of 2024 as compared to the same period in 2023. The increase resulted primarily from the gain on the sales of 39 self storage properties to a third party and 56 self storage properties contributed to the 2024 Joint Venture during the first quarter of 2024.

The decrease in FFO and Core FFO for the first quarter of 2024 was primarily due to a decrease in NOI, primarily driven by the sales of (i) 32 self storage properties to a third party in December 2023, (ii) 39 self storage properties to a third party in the first quarter of 2024, and (iii) 56 self storage properties contributed to the 2024 Joint Venture in the first quarter of 2024, and a decrease in same store NOI. The decrease in FFO and Core FFO per share and unit was largely driven by a decrease in same store NOI, an increase in general and administrative expenses, and a decrease in NSA's share of FFO from its unconsolidated real estate ventures.

Year-over-year same store total revenues decreased 1.5% for the first quarter of 2024 as compared to the same period in 2023. The decrease was driven primarily by a 380 basis point decrease in average occupancy, partially offset by a 2.4% increase in average annualized rental revenue per occupied square foot. Markets which generated above portfolio average same store total revenue growth for the first quarter of 2024 include: Oklahoma City, San Juan and Tulsa. Markets which generated below portfolio average same store total revenue growth for the first quarter of 2024 include: Portland, Riverside and Phoenix.

Year-over-year same store property operating expenses increased 4.5% for the first quarter of 2024. The increase primarily resulted from increases in insurance and marketing expenses.

During the first quarter, NSA sold 39 self storage properties, consisting of approximately 2.4 million rentable square feet configured in approximately 18,000 storage units for approximately $265.1 million. The 39 self storage properties were part of an agreement to sell 71 wholly-owned self storage properties, 32 of which were sold in December 2023.

During the first quarter, NSA formed the 2024 Joint Venture with the 2024 JV Investor. On February 13, 2024, NSA contributed to the 2024 Joint Venture 56 self storage properties located across seven states, consisting of approximately 3.2 million rentable square feet configured in over 24,000 storage units for approximately $346.5 million. The 2024 Joint Venture was capitalized with approximately $140.8 million in equity (approximately $35.2 million from NSA in exchange for a 25% ownership interest and approximately $105.6 million from the 2024 JV Investor in exchange for a 75% ownership interest) and proceeds from a $210.0 million interest-only secured debt financing with an interest rate of 6.05% per annum and a term of five years. All of the properties in the 2024 Joint Venture continue to be operated by NSA's management platform.

During the first quarter, NSA repurchased 5,491,925 of the Company's common shares for approximately $203.5 million under the previously announced share repurchase program. As of April 29, 2024, NSA has repurchased the remaining $71.6 million of the total $275.0 million authorized under the program.

During the first quarter, NSA repaid $130.0 million of Term loan Tranche B, reducing the outstanding balance on the term loan to $145.0 million. After this repayment and taking into account NSA's interest rate swaps, NSA has no variable rate debt other than the revolving line of credit. As of April 29, 2024, NSA has approximately $736.6 million of capacity remaining on its revolving line of credit.

Common Share Dividends

On February 15, 2024, NSA's Board of Trustees declared a quarterly cash dividend of $0.56 per common share, representing a 1.8% increase from the first quarter 2023. The first quarter 2024 dividend was paid on March 29, 2024 to shareholders of record as of March 15, 2024.

NSA reaffirms its previously provided Core FFO guidance estimates and related assumptions for the year ended December 31, 2024:

The full text of this earnings release and supplemental financial information, including certain financial information referenced in this release, are available on NSA's website at http://ir.nationalstorageaffiliates.com/quarterly-reporting and as exhibit 99.1 to the Company's Form 8-K furnished to the SEC on May 1, 2024.

This press release contains certain non-GAAP financial measures. These non-GAAP measures are presented because NSA's management believes these measures help investors understand NSA's business, performance and ability to earn and distribute cash to its shareholders by providing perspectives not immediately apparent from net income (loss). These measures are also frequently used by securities analysts, investors and other interested parties. The presentations of FFO, Core FFO and NOI in this press release are not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, NSA's method of calculating these measures may be different from methods used by other companies, and, accordingly, may not be comparable to similar measures as calculated by other companies that do not use the same methodology as NSA. These measures, and other words and phrases used herein, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information.

The Company will host a conference call at 1:00 pm Eastern Time on Thursday, May 2, 2024 to discuss its first quarter 2024 financial results. At the conclusion of the call, management will accept questions from certified financial analysts. All other participants are encouraged to listen to a webcast of the call by accessing the link found on the Company's website at www.nationalstorageaffiliates.com.

Conference Call and Webcast:

Date/Time: Thursday, May 2, 2024, 1:00 pm ET

Webcast available at: www.nationalstorageaffiliates.com

Domestic (Toll Free US & Canada): 877.407.9711

International: 412.902.1014

A replay of the webcast will be available for 30 days on NSA's website at www.nationalstorageaffiliates.com.

NSA management is scheduled to participate in Nareit REITweek: 2024 Investor Conference on June 4 - 6, 2024 in New York, New York.

National Storage Affiliates Trust is a real estate investment trust headquartered in Greenwood Village, Colorado, focused on the ownership, operation and acquisition of self storage properties predominantly located within the top 100 metropolitan statistical areas throughout the United States. As of March 31, 2024, the Company held ownership interests in and operated 1,050 self storage properties located in 42 states and Puerto Rico with approximately 68.7 million rentable square feet. NSA is one of the largest owners and operators of self storage properties among public and private companies in the United States. For more information, please visit the Company’s website at www.nationalstorageaffiliates.com. NSA is included in the MSCI US REIT Index (RMS/RMZ), the Russell 1000 Index of Companies and the S&P MidCap 400 Index.

Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. 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. These forward-looking statements include information about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans and objectives. Changes in any circumstances may cause the Company's actual results to differ significantly from those expressed in any forward-looking statement. When used in this release, the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: market trends in the Company's industry, interest rates, inflation, the debt and lending markets or the general economy; the Company's business and investment strategy; the acquisition of properties, including those under contract and the Company's ability to execute on its acquisition pipeline; the timing of acquisitions under contract; the internalization of retiring participating regional operators ("PROs") into the Company; and the Company's guidance estimates for the year ended December 31, 2024. For a further list and description of such risks and uncertainties, see the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission, and the other documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact:

National Storage Affiliates Trust

Investor/Media Relations

George Hoglund, CFA

Vice President - Investor Relations (in thousands, except per share amounts)

720.630.2160

ghoglund@nsareit.net

(unaudited)

(dollars in thousands, except per share amounts)

(unaudited)

			March 31,						December 31,
			2024						2023
ASSETS
Real estate
Self storage properties			$	5,797,653					$	5,792,174
Less accumulated depreciation			(919,723)						(874,359)
Self storage properties, net			4,877,930						4,917,815
Cash and cash equivalents			64,233						64,980
Restricted cash			24,847						22,713
Debt issuance costs, net			7,731						8,442
Investment in unconsolidated real estate ventures			240,025						211,361
Other assets, net			130,015						134,002
Assets held for sale, net			—						550,199
Operating lease right-of-use assets			22,084						22,299
Total assets			$	5,366,865					$	5,931,811
LIABILITIES AND EQUITY
Liabilities
Debt financing			$	3,285,547					$	3,658,205
Accounts payable and accrued liabilities			87,875						92,766
Interest rate swap liabilities			—						3,450
Operating lease liabilities			24,009						24,195
Deferred revenue			22,362						27,354
Total liabilities			3,419,793						3,805,970
Equity
Series A Preferred shares of beneficial interest, par value $0.01 per share. 50,000,000 authorized, 9,017,588 and 9,017,588 issued and outstanding at March 31, 2024 and December 31, 2023, respectively, at liquidation preference			225,439						225,439
Series B Preferred shares of beneficial interest, par value $0.01 per share. 7,000,000 authorized, 5,668,128 and 5,668,128 issued and outstanding at March 31, 2024 and December 31, 2023, respectively, at liquidation preference			115,212						115,212
Common shares of beneficial interest, par value $0.01 per share. 250,000,000 shares authorized, 76,873,100 and 82,285,995 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively			769						823
Additional paid-in capital			1,347,512						1,509,563
Distributions in excess of earnings			(439,741)						(449,907)
Accumulated other comprehensive income			27,836						21,058
Total shareholders' equity			1,277,027						1,422,188
Noncontrolling interests			670,045						703,653
Total equity			1,947,072						2,125,841
Total liabilities and equity			$	5,366,865					$	5,931,811

Supplemental Schedule 1
Funds From Operations and Core Funds From Operations
(in thousands, except per share and unit amounts) (unaudited)
Reconciliation of Net Income to FFO and Core FFO
			Three Months Ended March 31,
			2024						2023
Net income			$	95,088					$	40,392
Add (subtract):
Real estate depreciation and amortization			46,964						55,152
Equity in losses (earnings) of unconsolidated real estate ventures			1,630						(1,678)
Company's share of FFO in unconsolidated real estate ventures			5,685						6,149
Gain on sale of self storage properties			(61,173)						—
Distributions to preferred shareholders and unitholders			(5,568)						(3,962)
FFO attributable to subordinated performance unitholders(1)			(10,730)						(11,787)
FFO attributable to common shareholders, OP unitholders, and LTIP unitholders			71,896						84,266
Add:
Acquisition costs			507						844
Loss on early extinguishment of debt			—						758
Core FFO attributable to common shareholders, OP unitholders, and LTIP unitholders			$	72,403					$	85,868
Weighted average shares and units outstanding - FFO and Core FFO:(2)
Weighted average shares outstanding - basic			80,236						89,499
Weighted average restricted common shares outstanding			22						25
Weighted average OP units outstanding			37,633						38,736
Weighted average DownREIT OP unit equivalents outstanding			2,120						2,120
Weighted average LTIP units outstanding			693						551
Total weighted average shares and units outstanding - FFO and Core FFO			120,704						130,931
FFO per share and unit			$	0.60					$	0.64
Core FFO per share and unit			$	0.60					$	0.66

(1)			Amounts represent distributions declared for subordinated performance unitholders and DownREIT subordinated performance unitholders for the periods presented.
(2)			NSA combines OP units and DownREIT OP units with common shares because, after the applicable lock-out periods, OP units in the Company's operating partnership are redeemable for cash or, at NSA's option, exchangeable for common shares on a one-for-one basis and DownREIT OP units are also redeemable for cash or, at NSA's option, exchangeable for OP units in the Company's operating partnership on a one-for-one basis, subject to certain adjustments in each case. Subordinated performance units, DownREIT subordinated performance units and LTIP units may also, under certain circumstances, be convertible into or exchangeable for common shares (or other units that are convertible into or exchangeable for common shares). See footnote(3) for additional discussion of subordinated performance units, DownREIT subordinated performance units, and LTIP units in the calculation of FFO and Core FFO per share and unit.

Supplemental Schedule 3
Portfolio Summary
As of March 31, 2024
(dollars in thousands) (unaudited)
Wholly-Owned Store Data by State (Consolidated)																														Total Operated Store Data by State (Consolidated & Unconsolidated)
State/Territories						Stores						Units						Rentable Square Feet						Occupancy at Period End						State/Territories						Stores						Units						Rentable Square Feet						Occupancy at Period End
Texas						172						79,125						11,022,419						87.0		%				Texas						194						93,318						12,721,002						87.2		%
California						87						52,491						6,649,002						84.5		%				Florida						103						58,899						6,690,569						85.1		%
Florida						76						43,865						4,974,715						85.4		%				California						99						59,139						7,428,174						84.5		%
Oregon						70						29,266						3,661,064						87.4		%				Georgia						72						33,791						4,609,559						82.0		%
Georgia						50						22,155						3,022,172						81.7		%				Oregon						70						29,266						3,661,064						87.4		%
Arizona						34						18,857						2,174,517						83.5		%				Oklahoma						39						17,619						2,443,201						86.6		%
North Carolina						34						16,760						2,097,037						87.1		%				Arizona						36						19,864						2,284,622						82.7		%
Oklahoma						33						15,300						2,137,081						86.5		%				North Carolina						34						16,760						2,097,037						87.1		%
Louisiana						25						11,451						1,389,281						83.0		%				Ohio						27						14,878						1,853,164						86.0		%
Pennsylvania						22						10,439						1,296,010						85.4		%				Louisiana						25						11,451						1,389,281						83.0		%
Colorado						22						9,488						1,197,278						86.4		%				Alabama						25						11,552						1,734,718						82.2		%
Washington						19						6,633						871,169						85.0		%				Michigan						25						15,933						2,018,423						86.6		%
Puerto Rico						15						12,867						1,393,645						92.0		%				Pennsylvania						25						12,073						1,456,480						85.4		%
Nevada						15						7,559						962,542						87.0		%				Colorado						22						9,488						1,197,278						86.4		%
New Hampshire						15						7,127						889,586						87.8		%				Kansas						21						7,773						1,069,751						88.7		%
Kansas						14						4,924						670,702						87.7		%				New Jersey						20						13,491						1,602,151						84.7		%
Indiana						12						6,533						827,774						84.4		%				Tennessee						20						10,249						1,311,184						86.5		%
Alabama						11						6,035						909,580						79.0		%				Washington						19						6,633						871,169						85.0		%
New Mexico						10						5,505						716,727						86.7		%				Nevada						19						9,177						1,215,055						86.4		%
Other(1)						73						40,305						5,085,542						82.8		%				Indiana						19						9,824						1,286,579						84.6		%
Total						809						406,685						51,947,843						85.5		%				Puerto Rico						15						12,867						1,393,645						92.0		%
																														Massachusetts						15						11,057						1,209,486						84.0		%
																														New Hampshire						15						7,127						889,586						87.8		%
																														Minnesota						12						5,727						732,395						80.6		%
																														Illinois						10						6,764						728,208						83.8		%
																														New Mexico						10						5,505						716,727						86.7		%
																														Other(2)						59						31,620						4,051,622						83.5		%
																														Total						1,050						541,845						68,662,130						85.5		%

(1)			Other states in NSA's owned portfolio as of March 31, 2024 include Arkansas, Connecticut, Idaho, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Jersey, New York, Ohio, South Carolina, Tennessee, Utah, Virginia, Wisconsin and Wyoming.
(2)			Other states in NSA's operated portfolio as of March 31, 2024 include Arkansas, Connecticut, Delaware, Idaho, Iowa, Kentucky, Maryland, Mississippi, Missouri, Montana, New York, Rhode Island, South Carolina, Utah, Virginia, Wisconsin and Wyoming.