National Storage Affiliates Trust · NYSE:NSA
National Storage Affiliates Trust — Q1 2024 Earnings Presentation
46 slides from National Storage Affiliates Trust's earnings presentation, May 2, 2024
Slide 1: Company Update June 2024
COMPANY UPDATE JUNE 2024 NATIONAL STORAGE AFFILIATES
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
STRATEGIC INITIATIVES OVERVIEW TABLE OF CONTENTS SELF STORAGE INDUSTRY OVERVIEW 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: Strategic Initiatives Overview
STRATEGIC INITIATIVES OVERVIEW 4 1
Slide 5: Strategic Initiatives Overview
STRATEGIC INITIATIVES OVERVIEW NSA has made significant progress on optimizing the portfolio, balance sheet and platform to best position the Company for accelerated growth in 2025 and beyond • $540 million portfolio sale of 71 assets to a private buyer Non-core • Drives operating efficiencies throu
Slide 6: PRO Internalization Overview
PRO INTERNALIZATION OVERVIEW NSA received unanimous support from all eight PROs to internalize the PRO structure effective July 1, 2024 • PRO management agreements to be acquired • Purchase contracts and certain intellectual property (brand, trade names and trademarks) Internalization • NSA will pay
Slide 7: PRO Internalization Strategic Rationale
PRO INTERNALIZATION STRATEGIC RATIONALE Twelve Existing Brands Simplified Structure and • Will no longer pay performance distributions to PROs Financial Reporting • Greater potential upside in FFO per share growth • Eliminate management fees to the PROs upon completion of Significant G&A Savings tra
Slide 8: nsastorage.com - Digital Consolidation Enhances Customer Experience
nsastorage.com - DIGITAL CONSOLIDATION ENHANCES CUSTOMER EXPERIENCE Search Engine Authority Optimal Use of Multiple Brands in Markets Resource Efficiencies STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY
Slide 9: Illustrative Market Focused Brand Strategy – Dallas MSA
ILLUSTRATIVE MARKET FOCUSED BRAND STRATEGY – DALLAS MSA Currently - 5 Different Brands in Market After – 1 Dominant Brand in Market STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRU
Slide 10: Illustrative Market Focused Brand Strategy – Riverside MSA
ILLUSTRATIVE MARKET FOCUSED BRAND STRATEGY – RIVERSIDE MSA Currently - 4 Different Brands in Market After – 2 Dominant Brands in Market STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL
Slide 11: PRO Internalization Final Takeaways
PRO INTERNALIZATION FINAL TAKEAWAYS • Sunbelt focused with balanced approach to primary and secondary markets NSA Will Remain • Still utilize OP units to facilitate tax-deferred transactions for sellers to stimulate external growth Differentiated • Former PROs remain vested in NSA’s success due to s
Slide 12: History of Successful Internalizations
HISTORY OF SUCCESSFUL INTERNALIZATIONS April 2020 217 properties across 13 states / 12.7m SF Increased NSA managed stores from 215 to 432 $0.05 FFO per share accretion Executive team actively involved in NSA leadership January 2022 93 properties across 3 states / 4.7m SF Increased NS
Slide 13: Self Storage Industry Overview
SELF STORAGE INDUSTRY OVERVIEW 13 2
Slide 14: Highly Fragmented Industry: Consolidation Opportunity
HIGHLY FRAGMENTED INDUSTRY: Market Share by # of Facilities(1) (Approximately 52,000 self storage facilities in the U.S.) CONSOLIDATION OPPORTUNITY Self Storage Top Operator Market Share All Other 22% NSA Public TOP 5 2% Operators 37% 20%(3) 29% TOP 25 49% 32% TOP 50 55% Large All Other 34% Private
Slide 15: Self Storage: Higher Returns, Lower Volatility
SELF STORAGE: HIGHER RETURNS, LOWER VOLATILITY SELF STORAGE HAS OUTPERFORMED OVER THE PAST 30 YEARS NAREIT Equity REIT Sectors: 30 Yrs. Avg. Return vs. Volatility(1) Even in the worst five-year period, self storage delivered >4.5% average total shareholder return per year(1) 18.0% 20.0% Lower Volati
Slide 16: Company Overview
COMPANY OVERVIEW 16 3
Slide 17: Q1 2024 Update
Q1 2024 UPDATE WELL-DIVERSIFIED ACROSS $8.9B 1,050 42 TOTAL ENTERPRISE VALUE(1) PROPERTIES STATES + PUERTO RICO -1.5% -3.7% 85.6% Y-O-Y SAME STORE REVENUE Y-O-Y SAME STORE NOI SAME STORE AVG. OCCUPANCY GROWTH GROWTH -9.1% $600M+ 1.8% Y-O-Y CORE FFO/SHARE Y-O-Y GROWTH IN TRANSACTION ACTIVITY GROWTH D
Slide 18: Portfolio Metrics Update – 2024 Same Store Pool
PORTFOLIO METRICS UPDATE – 2024 SAME STORE POOL Year-over-year comparisons remain challenging due to muted housing transition and fundamentals continuing to moderate from unsustainable levels METRIC Q1 2024 May 2024 Period-End Occupancy 85.9% 86.7% Year-Over-Year Change in Period-End Occupancy -350
Slide 19: 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) 7.7% OF SAME STORE REVENUE IN Q1 2024 % of NSA properties = 0% < 2% 2 - 5% 5 - 10% >10% (1) NSA defi nes the Sun Belt a s the following s tates: AL, AR, AZ, CA, FL, GA, LA, MS, NC, N
Slide 20: 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 21: 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 22: 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 2024 - 2029 3.4% CUBE EXR NSA 2.5% PSA 2.3% 2.3% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% (1) Source: Evercore ISI 4Q 2023 Stora ge Demographic Update (Ma rch
Slide 23: NSA's Top Markets – Supply Outlook Favorable
NSA’S TOP 15 MARKETS – SUPPLY OUTLOOK FAVORABLE 4.5 4.0 McAllen-Edinburg- Mission, TX North Port-Sarasota- 3.5 Bradenton, FL Est Supply Growth / Est Demand Growth 3.0 2.5 Brownsville- Harlingen, TX 2.0 Las Vegas-Henderson- Supply Paradise, NV Portland-Vancouver-Hillsboro, Outpacing OR-WA Demand 1.5
Slide 24: 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% CUBE 2.1% EXR 2.2% NSA 2.5% PSA 2.4% 2.5% 2.4% 2.6% 2.6% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% (1) Ba s ed on util
Slide 25: Why Invest in NSA?
WHY INVEST IN NSA? The self storage sector has proven Attractive dividend yield - NSA’s dividend recession resilient and has been the best rate has grown 87% over the past five performing REIT sub-sector over the long years (Q1 2024 vs Q1 2019) and has a term(1) current yield of 6.1%(2) Simplificati
Slide 26: Track Record of Performance
TRACK RECORD OF PERFORMANCE 26 4
Slide 27: Trailing Five Years of Performance (Q2 2019 – Q1 2024)
TRAILING FIVE YEARS OF PERFORMANCE (Q2 2019 – Q1 2024) $0.80 $0.80 1,200 90 $0.70 $0.70 80 1,000 70 $0.60 $0.60 800 60 $0.50 $0.50 50 $0.40 $0.40 600 40 $0.30 $0.30 400 30 $0.20 $0.20 20 200 $0.10 $0.10 10 $- $- 0 0 Q2-19 Q2-20 Q2-21 Q2-22 Q2-23 Q2-19 Q2-20 Q2-21 Q2-22 Q2-23 Core FFO/share Dividend/
Slide 28: Trailing Five Years: Core FFO Growth and Total Shareholder Return
TRAILING FIVE YEARS OF PERFORMANCE (Q2 2019 – Q1 2024) Average Quarterly Core FFO Total Shareholder Return Per Share Growth 13.8% 72.7% CUBE EXR NSA 12.2% 71.9% PSA 10.5% 71.6% 10.3% 63.9% 0% 5% 10% 15% 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVE
Slide 29: Trailing Five Years: Same Store Revenue and NOI Growth
TRAILING FIVE YEARS OF PERFORMANCE (Q2 2019 – Q1 2024) Average Quarterly Same Store Average Quarterly Same Store Revenue Growth NOI Growth(1) 7.4% 8.9% CUBE EXR NSA 6.8% 8.2% PSA 6.3% 7.7% 6.1% 6.8% 0% 2% 4% 6% 8% 0% 2% 4% 6% 8% 10% (1) Begi nning i n 2020, PSA’s same store NOI fi gures reflect “Sam
Slide 30: Multi-Faceted Growth Strategy
MULTI-FACETED GROWTH STRATEGY 30 5
Slide 31: 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 32: 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) Ba s ed on reported full-year same-store NOI marg
Slide 33: 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 Marketed 2020 $565.2 44% 2019 $447.8 Off-Market 2018 $1,651.5 36% 2017 $486.1 Captive Pipeline / PRO 20% 2016 $1,351.4 2015 $313.0 $0 $50
Slide 34: Flexible Capital Structure Supports Future Growth
FLEXIBLE CAPITAL STRUCTURE SUPPORTS FUTURE GROWTH 34 6
Slide 35: Flexible Capital Structure: Capital for Growth, Key Credit Metrics
FLEXIBLE CAPITAL STRUCTURE CAPITAL FOR GROWTH KEY CREDIT METRICS(1) BBB+ RATED $950M MULTIPLE UNSECURED JOINT 6.2x 3.4x Outlook Negative Unsecured Revolving SOURCES & SECURED VENTURES Net Debt/ Interest Adjusted Coverage By Kroll Bond Line of Credit OF EQUITY DEBT EBITDA Ratio Rating Agency (1) See
Slide 36: Flexible Capital Structure
FLEXIBLE CAPITAL STRUCTURE Total Enterprise Value - $8.9 Billion(1) Debt Equity 37% 63% (1) See a ppendix for definition. STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRUCTURE | CO
Slide 37: 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 $3.3B Variable Secured Weighted Average 4% 7% Maturity 5.0 YEARS Fixed Unsecured Swapped 96% 93% Effective Interest Rate 4.1% See d
Slide 38: Well-Laddered Debt Maturity Schedule
WELL-LADDERED DEBT MATURITY SCHEDULE Debt Maturity Schedule ($ in millions)(1) 600 500 400 300 200 100 - 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Thereafter RLOC Term Loans Private Placement Mortgage (1) As s umes exercise of maturity extension options on Term Loan B, which extends the matu
Slide 39: Corporate Responsibility Overview
CORPORATE RESPONSIBILITY OVERVIEW 39 7
Slide 40: Sustainability
• Over 850 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 41: 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 42: Corporate Governance Highlights
CORPORATE GOVERNANCE HIGHLIGHTS GRESB – participated in the 2023 assessment Opted out of MUTA Vendor code of conduct No “poison pill” plan 9 of 12 trustees are independent Annual election of all trustees Separate chairman and CEO roles Cybersecurity subcommittee STRATEGIC INITIATIVES OVERVIEW | SELF
Slide 43: Appendix
APPENDIX (including Definitions and Methodology) 43 8
Slide 44: 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 March 28, 2024, of $22.92 and $39.16, respectively, and the Company’
Slide 45: Contact Us
CONTACT US INVESTOR RELATIONS George Hoglund, CFA Vice President – Investor Relations 720-630-2160 ghoglund@nsareit.net CORPORATE HEADQUARTERS National Storage Affiliates Trust 8400 East Prentice Avenue 9th Floor Greenwood Village, CO 80111 WEBSITE www.nationalstorageaffiliates.com SELF STORAGE INDU
Slide 46: National Storage Affiliates
SA NATIONAL STORAGE AFFILIATES
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