National Storage Affiliates Trust · NYSE:NSA
National Storage Affiliates Trust — Q3 2024 Earnings Presentation
49 slides from National Storage Affiliates Trust's earnings presentation, Oct 31, 2024
Slide 1: Company Update
Company Update N o ve m b e r 2 0 2 4
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 internalized its PRO structure, effective as of July 1, 2024 • PRO management agreements were acquired • Management contracts and certain intellectual property (brand, trade names and trademarks) Internalization • NSA paid 4x EBITDA from the management of the PRO-man
Slide 7: PRO Internalization: Strategic Rationale
PRO Internalization: Strategic Rationale 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 phased Significant G&A Savings management transit
Slide 8: Brand Strategy: Consolidation Underway
Brand Strategy: Consolidation Underway Twelve Existing Brands Seven Market Focused Brands Note: Red circles reflect four brands that have already been transitioned as of November 13, 2024. STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANC
Slide 9: Illustrative Market Focused Brand Strategy – Dallas MSA
Illustrative Market Focused Brand Strategy – Dallas MSA Before - 5 Different Brands in Market After – 1 Focused Brand in Market STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRUCTUR
Slide 10: Illustrative Market Focused Brand Strategy – Riverside MSA
Illustrative Market Focused Brand Strategy – Riverside MSA Before - 4 Different Brands in Market After – 2 Focused Brands in Market STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRU
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: PRO Internalization: Progress To Date
PRO Internalization: Progress To Date Customer Acquisitions / Platforms Areas Covered Planned Completion 100% • Consistent marketing strategy (SEO, paid, brand) • Includes all previous PRO- Complete(1) • Cohesive pricing strategy (promotions, ECRI) managed stores (333) • Centralized web platform (NS
Slide 13: NSAstorage.com – Consolidation Of Websites
NSAstorage.com – Consolidation Of Websites All NSA Stores Now On NSAstorage.com No Longer Compete Increase Conversion Rate Reduce Cost Of With More Store Choices Against Ourselves In Individual Clicks Google Ad Auctions On Website Migrated Over To One Website Note: As of November 13, 2024. STRATEGIC
Slide 14: NSAstorage.com Consolidation: Began in May 2024
NSAstorage.com Consolidation: Began in May 2024 Early Positive Implications: Improved Ranking In Local Search Results (Lower Numbers Are Better) January – Before Transition(1) October – 5 Months Into Transition(1) 7.1 8.6 10.0 ID MA 2.7 OR 3.7 5.1 ID MA 13.5 OR 6.2 10.7 6.7 RI 5.7 8.9 IA OH NJ 2.0 4
Slide 15: Long Term Testing: Informs Evolving Machine Learning Models
Long Term Testing: Informs Evolving Machine Learning Models Strategy Predict Split Up Similar MSAs Into Strategic Move-Outs Variations For Effective Testing From Churn + ECRI Set Marketing Rental Street Rates ECRI Forecasting Goal Spend Model: Tying Together Pricing, ECRI & Paid Measuring Success Ch
Slide 16: NSA Is Excited About Our Strategy To Gain Upside Momentum
NSA Is Excited About Our Strategy To Gain Upside Momentum Longer Term Strength In Technology & Customer Experience Support Center Of Excellence Near Term PRO Internalization Storage Selector Customer Experience Portal Brand Consolidation NSAstorage.com Data Warehouse & Medium Term Custom Centralized
Slide 17: Self Storage Industry Overview
Self Storage Industry Overview 17 2
Slide 18: 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 NSA Public 22% TOP 5 2% Operators 37% 20%(3) 29% TOP 25 49% 32% TOP 50 55% Large All Other 34% Private
Slide 19: 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 20: Company Overview
Company Overview 20 3
Slide 21: Q3 2024 Update
Q3 2024 Update Well-Diversified Across $10.3B 1,070 42 Total Enterprise Value(1) Properties States + Puerto Rico -3.5% -5.3% 86.3% Y-O-Y Same Store Revenue Y-O-Y Same Store NOI Same Store Avg. Occupancy Growth Growth -7.5% $148M 0.0% Y-O-Y Core FFO/Share Y-O-Y Growth In Transaction Activity Growth D
Slide 22: 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 competitive pressures METRIC Q3 2024 October 2024 Period-End Occupancy 85.6% 85.7% Year-Over-Year Change in Period-End Occupancy -270 bps -160 bps Year-Over-Year Change i
Slide 23: Strategic Focus In Sunbelt Markets
Strategic Focus In Sunbelt Markets Sunbelt(1) 66% By Store Count Largest MSA (Riverside-San Bernardino-Ontario, CA) 7.6% Of Same Store Revenue In Q3 2024 % of NSA properties = 0% < 2% 2 - 5% 5 - 10% >10% (1) NSA defines the Sunbelt as the following states: AL, AR, AZ, CA, FL, GA, LA, MS, NC, NM, NV,
Slide 24: Secondary Market Outperformance
Secondary Market Outperformance NSA properties outside of the top 25 MSAs have outperformed NSA properties in the top 25 MSAs 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%
Slide 25: Long-Term Sunbelt Outperformance
Long-Term Sunbelt Outperformance NSA’s properties in Sunbelt Markets have outperformed NSA properties outside of the Sunbelt Markets 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
Slide 26: 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 Storage Demographic Update (March 20
Slide 27: NSA's Top Markets – Supply Outlook Favorable
NSA’S Top 15 Markets – Supply Outlook Favorable 4.0 3.5 McAllen-Edinburg- Mission, TX 3.0 Est Supply Growth / Est Demand Growth North Port-Sarasota- Bradenton, FL 2.5 Brownsville- Harlingen, TX 2.0 Las Vegas-Henderson- Paradise, NV Supply Outpacing 1.5 Demand Portland-Vancouver-Hillsboro, Atlanta-Sa
Slide 28: 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 73% over the past five performing REIT sub-sector over the long years (Q4 2024 vs Q4 2019) and has a term(1) current yield of 5.3%(2) Simplificati
Slide 29: Track Record Of Performance
Track Record Of Performance 29 4
Slide 30: Trailing Five Years Of Performance (Q4 2019 – Q3 2024)
Trailing Five Years Of Performance (Q4 2019 – Q3 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 Q4-19 Q4-20 Q4-21 Q4-22 Q4-23 Q4-19 Q4-20 Q4-21 Q4-22 Q4-23 Core FFO/share Dividend/
Slide 31: Trailing Five Years Of Performance: Core FFO and TSR
Trailing Five Years Of Performance (Q4 2019 – Q3 2024) Average Quarterly Core FFO Total Shareholder Return Per Share Growth 11.8% 87.4% CUBE EXR NSA 11.8% 84.4% PSA 10.0% 83.1% 9.9% 81.3% 0% 5% 10% 15% 20% 0% 20% 40% 60% 80% 100% STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMP
Slide 32: Trailing Five Years Of Performance: Same Store Growth
Trailing Five Years Of Performance (Q4 2019 – Q3 2024) Average Quarterly Same Store Average Quarterly Same Store Revenue Growth NOI Growth(1) 7.1% 8.5% CUBE EXR NSA 6.1% 7.4% PSA 6.0% 7.2% 5.8% 6.6% 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 33: Multi-Faceted Growth Strategy
Multi-Faceted Growth Strategy 33 5
Slide 34: 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 35: 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 36: Relationship-Driven Transactions Fuel Growth
Relationship-Driven Transactions Fuel Growth Annual Acquisition Volume Since IPO(1) 2020 – 2023 Acquisition Volume by Source 2024 YTD $173.1 2023 $229.5 2022 $783.4 2021 $2,175.0 Off-Market / Captive Pipeline 2020 $565.2 56% 2019 $447.8 2018 $1,651.5 Marketed 44% 2017 $486.1 2016 $1,351.4 2015 $313.
Slide 37: Flexible Capital Structure Supports Future Growth
Flexible Capital Structure Supports Future Growth 37 6
Slide 38: Flexible Capital Structure
Flexible Capital Structure CAPITAL FOR GROWTH KEY CREDIT METRICS(1) BBB+ RATED $950M MULTIPLE UNSECURED JOINT 6.4x 3.3x Outlook Negative Unsecured Revolving SOURCES & SECURED VENTURES Net Debt/ Interest Line of Credit Adjusted Coverage By Kroll Bond OF EQUITY DEBT EBITDA Ratio Rating Agency (1) See
Slide 39: Flexible Capital Structure: Total Enterprise Value
Flexible Capital Structure Total Enterprise Value - $10.3 Billion(1) Debt Equity 33% 67% (1) See appendix for definition. STRATEGIC INITIATIVES OVERVIEW | SELF STORAGE INDUSTRY OVERVIEW | COMPANY OVERVIEW | TRACK RECORD OF PERFORMANCE | MULTI-FACETED GROWTH STRATEGY | FLEXIBLE CAPITAL STRUCTURE | CO
Slide 40: Investment Grade Balance Sheet Provides Strength And Flexibility
Investment Grade Balance Sheet Provides Strength And Total Principal Debt Flexibility To Finance Growth Outstanding Minimal Variable Rate Exposure See description of terms in Appendix: Definitions and Methodology. Minimal Secured Debt $3.4B Variable Secured Weighted Average 5% 6% Maturity 5.2 YEARS
Slide 41: Well-Laddered Debt Maturity Schedule
Well-Laddered Debt Maturity Schedule Debt Maturity Schedule ($ in millions)(1) 1,000 800 600 400 200 - 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 RLOC Term Loans Private Placement Mortgage (1) Based on actual consolidated debt as of September 30, 2024. Figures assume exercise o
Slide 42: Corporate Responsibility Overview
Corporate Responsibility Overview 42 7
Slide 43: 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 • In 2024, entered into agreement targe
Slide 44: 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 45: Corporate Governance Highlights
Corporate Governance Highlights GRESB – participated in the 2024 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 chairperson and CEO roles Cybersecurity subcommittee STRATEGIC INITIATIVES OVERVIEW | S
Slide 46: Appendix
Appendix (including Definitions and Methodology) 46 8
Slide 47: 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 valued at the closing price per share, as of September 30, 2024, of $24.99 and $48.20, respectively, and the Company’s perpetual preferred s
Slide 48: 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.nsastorage.com SELF STORAGE INDUSTRY OVERVIEW |
Slide 49: NSA Storage
A NSA STORAGE
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