National Storage Affiliates Trust · NYSE:NSA
National Storage Affiliates Trust — Q4 2023 Earnings Presentation
45 slides from National Storage Affiliates Trust's earnings presentation, Feb 29, 2024
Slide 1: People. Process. Platform. Driving Growth - Company Update
PEOPLE PROCESS PLATFORM P EO P L E . P R O C E S S . P L AT FO R M . D R I V I N G G R OW T H Company Update March 2024
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES FORWARD-LOOKING STATEMENTS: We make forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, f
Slide 3: Table of Contents
SELF STORAGE INDUSTRY OVERVIEW TABLE OF CONTENTS COMPANY OVERVIEW TRACK RECORD OF PERFORMANCE MULTI-FACETED GROWTH STRATEGY FLEXIBLE CAPITAL STRUCTURE SUPPORTS FUTURE GROWTH CORPORATE RESPONSIBILITY OVERVIEW APPENDIX (including Definitions and Methodology) 3
Slide 4: Self Storage Industry Overview
SELF STORAGE INDUSTRY OVERVIEW 4 1
Slide 5: Highly Fragmented Industry: Consolidation Opportunity
HIGHLY FRAGMENTED INDUSTRY: Market Share by # of Facilities(1) (Approximately 51,000 self storage facilities in the U.S.) CONSOLIDATION OPPORTUNITY Self Storage Top Operator Market Share All Other NSA Public 17% TOP 5 2% Operators 32% 19%(3) 28% TOP 25 48% 31% TOP 50 53% Large All Other 33% Private
Slide 6: Self Storage: Higher Returns, Lower Volatility
SELF STORAGE: HIGHER RETURNS, LOWER VOLATILITY SELF STORAGE HAS OUTPERFORMED OVER THE PAST 29 YEARS NAREIT Equity REIT Sectors: 29 Yrs. Avg. Return vs. Volatility(1) Even in the worst five-year period, self storage delivered >4.5% total shareholder return per year(1) 18.0% 20.0% Lower Volatility Avg
Slide 7: Company Overview
COMPANY OVERVIEW 7 2
Slide 8: Full-Year 2023 Update
FULL-YEAR 2023 UPDATE WELL-DIVERSIFIED ACROSS $9.9B 1,050 42 TOTAL ENTERPRISE VALUE(1) PROPERTIES(2) STATES + PUERTO RICO 2.4% 1.6% 89.1% Y-O-Y SAME STORE REVENUE Y-O-Y SAME STORE NOI SAME STORE AVG. OCCUPANCY GROWTH GROWTH -4.3% $230M 3.7% Y-O-Y CORE FFO/SHARE Y-O-Y GROWTH IN WHOLLY-OWNED ACQUISITI
Slide 9: Portfolio Sale Drives Operating Efficiencies and Enhances Growth Opportunities
PORTFOLIO SALE DRIVES OPERATING EFFICIENCIES AND ENHANCES GROWTH OPPORTUNITIES • Properties: 71 Storage facilities • Transaction Price: $540M(1) • Total Storage RSF: 4.4 million • States: 14 • MSAs: 33 • Occupancy(2): 84% (vs NSA same store 87%) • Average facility size: 62K RSF (vs NSA portfolio 65K
Slide 10: Portfolio Sale Increases Overall Property Concentration (Midwest)
PORTFOLIO SALE INCREASES OVERALL PROPERTY CONCENTRATION Selling properties in non-core Midwest markets SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRUCTURE SUPPORTS FUTURE GROWTH | CORPORATE RESPONSIBILITY | APPE
Slide 11: Portfolio Sale Increases Overall Property Concentration (Southeast)
PORTFOLIO SALE INCREASES OVERALL PROPERTY CONCENTRATION Selling properties in non-core Southeast markets SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRUCTURE SUPPORTS FUTURE GROWTH | CORPORATE RESPONSIBILITY | AP
Slide 12: Joint Venture Contribution to Unlock Value
JOINT VENTURE CONTRIBUTION TO UNLOCK VALUE • Properties: 56 Storage facilities, reflecting a mix of primary and secondary markets • Geography: Located in attractive Sun Belt and Midwest markets • Contribution value: $346.5M • Total Storage RSF: 3.2 million • States: 7 • Joint Venture Structure: Heit
Slide 13: NSA Family of Brands
TOTAL PORTFOLIO NSA FAMILY OF BRANDS BY PROPERTY COUNT (1) Corporate Brands 68% PRO Brands 32% CORPORATE BRANDS (717 properties; 185 of which are in joint ventures) CORPORATE BRAND STORES PRO BRANDS (333 properties) Wholly-Owned 74% Joint Venture 26% (1) Total portfolio of 1,050 properties excludes
Slide 14: Strategic Focus in Sun Belt Markets
STRATEGIC FOCUS IN SUN BELT MARKETS Sun Belt(1) 65% BY STORE COUNT Largest MSA (Riverside-San Bernardino-Ontario, CA) 8.3% OF SAME STORE REVENUE IN Q4 2023 % of NSA properties = 0% < 2% 2 - 5% 5 - 10% >10% (1) NSA defines the Sun Belt as the following states: AL, AR, AZ, CA, FL, GA, LA, MS, NC, NM,
Slide 15: Secondary Market Outperformance
SECONDARY MARKET OUTPERFORMANCE NSA properties outside of the top 25 MSAs have outperformed over the past five years and we have increased our exposure to these markets(1) Annual Average Same Store Growth % of Same Store Revenues % of Same Store NOI 2019 - 2023 7.7% 25% 25% MSA 101+ MSA 101+ MSA 101
Slide 16: Sun Belt Outperformance
SUN BELT OUTPERFORMANCE NSA’s properties in Sun Belt Markets have outperformed over the past five years and given domestic migration, employment and housing trends - we expect this outperformance to continue over the long-term Annual Average Same Store Growth Same Store Revenue Composition Same Stor
Slide 17: NSA's Markets Are Well Positioned vs Peers
NSA’S MARKETS ARE WELL POSITIONED VS PEERS Population growth in NSA’s markets is expected to outpace the peers(1) Projected Population Growth 2023 - 2028 3.2% CUBE EXR NSA 2.6% PSA 2.5% 2.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% (1) Source: Evercore ISI 3Q 2023 Storage Demographic Update (November
Slide 18: NSA's Top Markets - Supply Outlook Favorable
NSA’S TOP 15 MARKETS – SUPPLY OUTLOOK FAVORABLE 4.0 North Port-Sarasota- Bradenton, FL 3.5 Brownsville- Harlingen, TX 3.0 Est Supply Growth / Est Demand Growth McAllen-Edinburg- Mission, TX 2.5 2.0 Las Vegas-Henderson- Supply Paradise, NV Portland-Vancouver-Hillsboro, 1.5 Outpacing OR-WA Phoenix-Mes
Slide 19: Affordability Analysis - NSA Well Positioned
AFFORDABILITY ANALYSIS – NSA WELL POSITIONED Storage Rent in NSA’s Markets is More Affordable on Average Relative to Peers Typical 10x10 Unit Annual Rent as a % of Median HH Income(1) 2.0% 2.1% CUBE EXR 2.2% NSA 2.5% PSA 2.4% 2.6% 2.4% 2.6% 2.6% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% (1) Based on utiliz
Slide 20: Timeline of Key Milestones
TIMELINE OF KEY MILESTONES 2013 2020 2021 NSA formed by three Internalization Record $2.2B of acquisitions founding PROs, SecurCare of largest PRO, SecurCare Record same store NOI growth Northwest and Optivest New PRO: Blue Sky Self Storage 1,000 store milestone 2014 2019 2022 4th PRO: Guardian 9th
Slide 21: Why Invest in NSA?
WHY INVEST IN NSA? The self storage sector has proven recession resilient and has been the best performing REIT sub-sector over Attractive dividend yield - NSA’s dividend rate has the long term(1) grown 87% over the past five years (Q4 2023 vs Q4 2018), and has a current yield of 6.1%(2) NSA has out
Slide 22: Track Record of Performance
TRACK RECORD OF PERFORMANCE 22 3
Slide 23: Trailing Five Years of Performance (Q1 2019 - Q4 2023)
TRAILING FIVE YEARS OF PERFORMANCE (Q1 2019 – Q4 2023) $0.80 $0.80 1,200 90.0 84.0 $0.70 $0.70 78.0 1,000 72.0 $0.60 $0.60 66.0 800 60.0 $0.50 $0.50 54.0 $0.40 $0.40 600 48.0 42.0 $0.30 $0.30 36.0 400 30.0 $0.20 $0.20 24.0 200 $0.10 $0.10 18.0 12.0 $- $- 0 6.0 Q1-19 Q1-20 Q1-21 Q1-22 Q1-23 Q1-19 Q1-
Slide 24: Trailing Five Years: Core FFO Growth and Total Shareholder Return
TRAILING FIVE YEARS OF PERFORMANCE (Q1 2019 – Q4 2023) Average Quarterly Core FFO Total Shareholder Return Per Share Growth 15.0% 110.5% CUBE EXR NSA 12.6% 97.4% PSA 10.7% 94.9% 10.5% 83.3% 0% 5% 10% 15% 20% 0% 20% 40% 60% 80% 100% 120% SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECOR
Slide 25: Trailing Five Years: Same Store Revenue and NOI Growth
TRAILING FIVE YEARS OF PERFORMANCE (Q1 2019 – Q4 2023) Average Quarterly Same Store Average Quarterly Same Store Revenue Growth NOI Growth(1) 7.6% 9.2% CUBE EXR NSA 7.1% 8.8% PSA 6.4% 7.9% 6.1% 6.9% 0% 2% 4% 6% 8% 0% 2% 4% 6% 8% 10% (1) Beginning in 2020, PSA’s same store NOI figures reflect “Same s
Slide 26: Multi-Faceted Growth Strategy
MULTI-FACETED GROWTH STRATEGY 26 4
Slide 27: People, Process & Platform: Driving Internal Growth
PEOPLE, PROCESS & PLATFORM: DRIVING INTERNAL GROWTH SEAMLESS & ENHANCED CUSTOMER EXPERIENCE • Streamlining the unit selection process • Online lease • Remote site management OPERATIONAL EXCELLENCE • Continuous improvements to Web and Mobile experience • NSA-Built Call Center Solution DELIVERING NOI
Slide 28: Sector-Leading Margin Improvement
SECTOR-LEADING MARGIN IMPROVEMENT Same-Store NOI Margin Expansion Since Beginning Same-Store NOI Margin of 2017 through 2023(1) Full-Year 2023 CUBE 5.5% 79.7% EXR NSA 2.8% 75.9% PSA 1.9% 73.5% 0.4% 73.3% 0% 1% 2% 3% 4% 5% 6% 7% 0% 20% 40% 60% 80% (1) Based on reported full-year same-store NOI margin
Slide 29: Multi-Faceted Acquisition Strategy
MULTI-FACETED ACQUISITION STRATEGY 1,200 1,000 Cumulative Number Of Properties 800 600 400 200 0 At Formation 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Captive Pipeline 3rd Party Acquisitions New PROs Strategic Joint Ventures SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK REC
Slide 30: Relationship-Driven Transactions Fuel Growth
RELATIONSHIP-DRIVEN TRANSACTIONS FUEL GROWTH Annual Acquisition Volume Since IPO(1) 2020 – 2023 Acquisition Volume by Source 2023 $229.5 2022 $783.4 2021 $2,175.0 2020 $565.2 Captive Pipeline / New PRO 20% 2019 $447.8 2018 $1651.5 Off-Market 36% 2017 $486.1 Marketed 2016 $1351.4 44% 2015 $313.0 $0 $
Slide 31: Robust Long-Term Acquisition Pipeline
ROBUST LONG-TERM ACQUISITION PIPELINE CAPTIVE ACQUISITION PIPELINE TOTAL ACQUISITION • 113 Properties PIPELINE • Estimated value $1.7 billion 298 $3.3 PROPERTIES BILLION POTENTIAL BUYOUT OF JV PARTNER INTEREST • 185 Properties • JV Partner ownership interest 75% • Current estimated value of JV partn
Slide 32: Flexible Capital Structure Supports Future Growth
FLEXIBLE CAPITAL STRUCTURE SUPPORTS FUTURE GROWTH 32 5
Slide 33: Flexible Capital Structure: Capital for Growth and Key Credit Metrics
FLEXIBLE CAPITAL STRUCTURE BBB+ CAPITAL FOR GROWTH KEY CREDIT METRICS(1) RATED $950M MULTIPLE UNSECURED JOINT 6.1x 3.3x Unsecured Revolving SOURCES & SECURED VENTURES Net Debt/ Interest By Kroll Bond Adjusted Coverage Rating Agency Line of Credit OF EQUITY DEBT EBITDA Ratio (1) See Appendix for calc
Slide 34: Flexible Capital Structure: Total Enterprise Value
FLEXIBLE CAPITAL STRUCTURE Total Enterprise Value - $9.9 Billion(1) Debt Equity 37% 63% (1) See appendix for definition. SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRUCTURE SUPPORTS FUTURE GROWTH | CORPORATE RES
Slide 35: Equity Capitalization - Large Investment by Management and PROs
FLEXIBLE CAPITAL STRUCTURE Equity Capitalization – Large Investment by Management and PROs OP Equity SP Equity Preferred Equity Common Equity 27% 12% 6% 55% SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRUCTURE SU
Slide 36: Investment Grade Balance Sheet Provides Strength and Flexibility
INVESTMENT GRADE BALANCE SHEET PROVIDES Total Principal Debt STRENGTH AND FLEXIBILITY TO FINANCE GROWTH Outstanding Moderate Variable Rate Exposure Minimal Secured Debt $3.7B Variable Secured Weighted Average 14% 6% Maturity 4.9 YEARS Fixed Unsecured Swapped 86% 94% Effective Interest Rate 4.4% See
Slide 37: Well-Laddered Debt Maturity Schedule
WELL-LADDERED DEBT MATURITY SCHEDULE Debt Maturity Schedule ($ in millions)(1) 1,000 800 600 400 200 - 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Thereafter RLOC Term Loans Private Placement Mortgage (1) Assumes exercise of maturity extension options on Term Loan B, which extends the maturity
Slide 38: Corporate Responsibility Overview
CORPORATE RESPONSIBILITY OVERVIEW 38 6
Slide 39: Sustainability
• Over 900 of our properties have LED lighting SUSTAINABILITY • Vast majority of properties have motion- sensor- controlled lighting • All HVAC replacements completed with energy efficient models • Approximately 20 of our properties have solar arrays installed • Target increasing solar installations
Slide 40: Community & Team
COMMUNITY & TEAM • National Storage Affiliates has partnered with Feeding America to provide over 1.5 million meals annually to individuals facing food insecurity. • Our SecurCare brand was recognized by Newsweek Media as one of America’s Best Customer Service Brands for 2024 • 63% of our employees
Slide 41: Corporate Governance Highlights
CORPORATE GOVERNANCE HIGHLIGHTS GRESB – participated in the 2023 assessment Opted out of MUTA Vendor code of conduct No “poison pill” plan 8 of 11 trustees are independent Annual election of all trustees Separate chairman and CEO roles Cybersecurity subcommittee SELF STORAGE INDUSTRY OVERVIEW | COMP
Slide 42: Appendix
APPENDIX (including Definitions and Methodology) 42 7
Slide 43: Definitions and Methodology
DEFINITIONS AND METHODOLOGY Total Enterprise Value: The sum of the Company’s debt principal outstanding plus the perpetual preferred series A and common equity (on a fully diluted basis) valued at the closing price per share, as of December 29, 2023, of $23.64 and $41.47, respectively, and the Compa
Slide 44: Contact Us
CONTACT US INVESTOR RELATIONS George Hoglund, CFA Vice President – Investor Relations 720-630-2160 ghoglund@nsareit.net Marti Dowling Senior Director – Investor Relations 720-630-2624 mdowling@nsareit.net CORPORATE HEADQUARTERS National Storage Affiliates Trust 8400 East Prentice Avenue 9th Floor Gr
Slide 45: National Storage Affiliates
SA NATIONAL STORAGE AFFILIATES
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