National Storage Affiliates Trust · NYSE:NSA
National Storage Affiliates Trust — Q1 2023 Earnings Presentation
45 slides from National Storage Affiliates Trust's earnings presentation, May 2, 2023
Slide 1: Driving Growth: Company Update
P E O P L E . P R O C E S S . P L AT F O R M . DRIVING GROWTH Company Update June 2023
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 NATIONAL STORAGE AFFILIATES Company Overview CONSISTENT GROWTH MULTI-FACETED Growth Strategy FLEXIBLE CAPITAL STRUCTURE Supports Future Growth ESG Overview APPENDIX (including Definitions and Methodology)
Slide 4: Self Storage Industry Overview
SELF STORAGE Industry Overview 1
Slide 5: Highly Fragmented Industry: Consolidation Opportunity
2023 COMPANY UPDATE | PAGE 5 HIGHLY FRAGMENTED INDUSTRY: Market Share by Number of Facilities(1) CONSOLIDATION OPPORTUNITY (Approximately 51,000 self storage facilities in the U.S.) Self Storage Top Operator Market Share(1) All Other NSA Public 17% 2% Operators TOP 5 32% 19%(3) 28% TOP 25 48% 31% TO
Slide 6: Self Storage: Higher Returns, Lower Volatility
2023 COMPANY UPDATE | PAGE 6 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) 20.
Slide 7: National Storage Affiliates Company Overview
NATIONAL STORAGE AFFILIATES Company Overview 2
Slide 8: Q1 2023 Update
2023 COMPANY UPDATE | PAGE 8 Q1 2023 UPDATE WELL DIVERSIFIED ACROSS $10.2B 1,117 42 TOTAL ENTERPRISE VALUE(1) PROPERTIES STATES + PUERTO RICO 5.7% 4.8% 89.7% Y-O-Y SAME STORE REVENUE Y-O-Y SAME STORE NOI SAME STORE AVG. OCCUPANCY GROWTH GROWTH -2.9% $161M 10% Y-O-Y CORE FFO/SHARE Y-O-Y GROWTH IN WHO
Slide 9: Portfolio Metrics – 2023 Same Store Pool
2023 COMPANY UPDATE | PAGE 9 PORTFOLIO METRICS – 2023 SAME STORE POOL Year-over-year comparisons are challenging, although street rates have continued to increase YTD METRIC Q1 2023 MAY 2023 Period-End Occupancy 89.8% 90.0% Year-Over-Year Change in Period-End Occupancy -380 bps -450 bps Year-Over-Ye
Slide 10: NSA Family of Brands
2023 COMPANY UPDATE | PAGE 10 NSA FAMILY OF BRANDS TOTAL PORTFOLIO BY PROPERTY COUNT Corporate Brands 71% PRO Brands 29% CORPORATE BRANDS (788 properties; 185 of which are in joint ventures) CORPORATE BRAND STORES PRO BRANDS (329 properties) Wholly-Owned 77% Joint Venture 23% INDUSTRY OVERVIEW | COM
Slide 11: Strategic Focus in Sun Belt Markets
2023 COMPANY UPDATE | PAGE 11 STRATEGIC FOCUS IN SUN BELT MARKETS Sun Belt(1) 66% BY STORE COUNT Largest MSA (Riverside-San Bernardino-Ontario, CA) 7.5% OF SAME STORE 185 REVENUE IN Q1 2023 % of NSA properties = 0% < 2% 2 - 5% 5 - 10% >10% Joint Venture Managed by NSA Corporate Property Management P
Slide 12: Secondary Market Outperformance
2023 COMPANY UPDATE | PAGE 12 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 2018 - 2022 % of Same Store NOI % of Same Store Revenues 7.2% 51%
Slide 13: Sun Belt Outperformance
2023 COMPANY UPDATE | PAGE 13 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(1) Annual Average Same Store Growth Same Store Revenue Composi
Slide 14: NSA's Markets Are Well Positioned vs Peers
2023 COMPANY UPDATE | PAGE 14 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 3.0% LSI NSA 2.5% PSA 2.5% 2.2% 0.0% 0.5% 1% 1.5% 2% 2.5% 3% 3.5% (1) Source: Evercore ISI 1Q 2023 Sto
Slide 15: NSA's Top Markets – Supply Outlook Favorable
2023 COMPANY UPDATE | PAGE 15 NSA’S TOP 15 MARKETS – SUPPLY OUTLOOK FAVORABLE 4.0 McAllen-Edinburg- North Port-Sarasota- Mission, TX Bradenton, FL 3.5 Est Supply Growth/ Est Demand Growth Brownsville- Harlingen, TX 3.0 2.5 2.0 Portland-Vancouver- Hillsboro, OR-WA Supply Outpacing Demand 1.5 Orlando-
Slide 16: Affordability Analysis – NSA Well Positioned
2023 COMPANY UPDATE | PAGE 16 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 EXR 2.2% LSI NSA 2.4% PSA 2.4% 2.6% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% (1) B
Slide 17: Occupancy Trends
2023 COMPANY UPDATE | PAGE 17 OCCUPANCY TRENDS Core Pool of 430 Stores Owned Since Jan 1, 2018 100.0% 98.0% 96.0% 2019 94.0% 2020 92.0% 2021 90.0% 2022 88.0% 2023 86.0% 84.0% 82.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec INDUSTRY OVERVIEW | COMPANY OVERVIEW | CONSISTENT GROWTH | MULTI-FACETE
Slide 18: Timeline of Key Milestones
2023 COMPANY UPDATE | PAGE 18 TIMELINE OF KEY MILESTONES 2013 2020 Internalization NSA formed by three of largest PRO, SecurCare founding PROs, SecurCare 2019 New PRO: Blue Sky Self Storage Northwest and Optivest 9th PRO: Southern Self Storage 10th PRO: Moove In Self Storage $150M Inaugural DPP 2014
Slide 19: Why Invest in NSA?
2023 COMPANY UPDATE | PAGE 19 WHY INVEST IN NSA? The self storage sector has proven recession Attractive dividend growth - NSA’s dividend resilient and has been the best performing REIT rate has grown 93% over the past five years sub-sector over the long term1 (Q2 2023 vs Q2 2018), and has a current
Slide 20: Consistent Growth
CONSISTENT GROWTH 3
Slide 21: Trailing Five Years of Performance (Q2 2018 – Q1 2023)
2023 COMPANY UPDATE | PAGE 21 TRAILING FIVE YEARS OF PERFORMANCE (Q2 2018 – Q1 2023) $0.80 $0.80 $0.80 1,200 1,200 78.0 72.0 $0.70 $0.70 $0.70 1,000 1,000 66.0 $0.60 $0.60 $0.60 60.0 54.0 800 800 $0.50 $0.50 $0.50 48.0 42.0 $0.40 $0.40 $0.40 600 600 36.0 $0.30 $0.30 $0.30 30.0 400 400 24.0 $0.20 $0.
Slide 22: Trailing Five Years: Core FFO Growth and Total Shareholder Return
2023 COMPANY UPDATE | PAGE 22 TRAILING FIVE YEARS OF PERFORMANCE (Q2 2018 – Q1 2023) Average Quarterly Core FFO Per Share Growth Total Shareholder Return 17.5% 185.1% CUBE EXR 14.4% 120.3% LSI NSA 14.2% 104.1% PSA 10.5% 99.5% 10.2% 84.6% 0% 5% 10% 15% 20% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180%
Slide 23: Trailing Five Years: Same Store Revenue and NOI Growth
2023 COMPANY UPDATE | PAGE 23 TRAILING FIVE YEARS OF PERFORMANCE (Q2 2018 – Q1 2023) Average Quarterly Same Store Average Quarterly Same Store Revenue Growth NOI Growth 7.9% 10.2% CUBE EXR 7.7% 9.6% LSI NSA 7.5% 9.4% PSA 6.5% 8.0% 5.8% 6.7% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 0.0% 2.0% 4.0%
Slide 24: Multi-Faceted Growth Strategy
MULTI-FACETED Growth Strategy 4
Slide 25: People, Process & Platform: Driving Internal Growth
2023 COMPANY UPDATE | PAGE 25 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 C
Slide 26: Sector-Leading Margin Improvement
2023 COMPANY UPDATE | PAGE 26 SECTOR-LEADING MARGIN IMPROVEMENT Same-Store NOI Margin Expansion Since Same-Store NOI Margin Beginning of 2017 through 2022(1) Full-Year 2022 6.4% 80.2% CUBE EXR 4.4% 76.5% LSI NSA 3.3% 74.4% PSA 1.9% 73.4% 1.0% 72.5% 0% 2% 4% 6% 8% 60% 65% 70% 75% 80% 85% (1) Based on
Slide 27: Multi-Faceted Acquisition Strategy
2023 COMPANY UPDATE | PAGE 27 MULTI-FACETED ACQUISITION STRATEGY 1,200 1,000 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 INDUSTRY OVERVIEW | COMPANY OVERVIEW | CON
Slide 28: Extraordinary Portfolio Growth
2023 COMPANY UPDATE | PAGE 28 EXTRAORDINARY PORTFOLIO GROWTH 3-Year Portfolio Growth: Increase in NRSF 3-Year Portfolio Growth: NRSF in Millions 2020 – 2022(1) 2020 – 2022(1) 69.1% 35.3 CUBE EXR 38.7% 23.8 LSI NSA 20.9 15.4 PSA % 20.5% 11.8 16.6% 7.5 0% 20% 40% 60% 80% 0% 10% 20% 30% 40% (1) Based o
Slide 29: Relationship-Driven Transactions Fuel Growth
2023 COMPANY UPDATE | PAGE 29 RELATIONSHIP-DRIVEN TRANSACTIONS FUEL GROWTH Annual Acquisition Volume Since IPO(1) 2020 – 2022 Acquisition Volume by Source 2015 $313.0 2016 $1,351.4 2017 $486.1 2018 $1,651.5 Captive Pipeline / New PRO 2019 $447.8 15% 2020 $565.2 Off-Market 38% 2021 $2,175.0 Marketed
Slide 30: Robust Long-Term Acquisition Pipeline
2023 COMPANY UPDATE | PAGE 30 ROBUST LONG-TERM ACQUISITION PIPELINE CAPTIVE ACQUISITION PIPELINE • TOTAL 98 Properties • Estimated value $1.4 billion ACQUISITION PIPELINE 283 $3.0 POTENTIAL BUYOUT OF JV PARTNER INTEREST PROPERTIES BILLION • 185 Properties • JV Partner ownership interest 75% • Curren
Slide 31: Flexible Capital Structure Supports Future Growth
FLEXIBLE CAPITAL STRUCTURE Supports Future Growth 5
Slide 32: Flexible Capital Structure: Capital for Growth and Credit Metrics
2023 COMPANY UPDATE | PAGE 32 FLEXIBLE CAPITAL STRUCTURE CAPITAL FOR GROWTH KEY CREDIT METRICS(1) BBB+ RATED $950M MULTIPLE SOURCES UNSECURED JOINT 6.3x 3.8x By Kroll Bond Unsecured Revolving & SECURED VENTURE Net Debt/ Interest Adjusted Coverage Rating Agency Line of Credit OF EQUITY DEBT EBITDA Ra
Slide 33: Total Enterprise Value - $10.2 Billion
2023 COMPANY UPDATE | PAGE 33 FLEXIBLE CAPITAL STRUCTURE Total Enterprise Value - $10.2 Billion Debt Equity 36% 64% INDUSTRY OVERVIEW | COMPANY OVERVIEW | CONSISTENT GROWTH | MULTI-FACETED GROWTH STRATEGY | CAPITAL STRUCTURE | ESG OVERVIEW | APPENDIX
Slide 34: Equity Capitalization
2023 COMPANY UPDATE | PAGE 34 FLEXIBLE CAPITAL STRUCTURE Equity Capitalization – Large Investment By Management and PROs OP Equity SP Equity Preferred Equity Common Equity 27% 12% 5% 56% INDUSTRY OVERVIEW | COMPANY OVERVIEW | CONSISTENT GROWTH | MULTI-FACETED GROWTH STRATEGY | CAPITAL STRUCTURE | ES
Slide 35: Investment Grade Balance Sheet Provides Strength and Flexibility
2023 COMPANY UPDATE | PAGE 35 INVESTMENT GRADE BALANCE SHEET PROVIDES Total Principal Debt Outstanding STRENGTH AND FLEXIBILITY TO FINANCE GROWTH Moderate Variable Rate Exposure Minimal Secured Debt $3.7B Weighted Average Variable Secured Maturity(1)(2) 16% 8% 5.4 years Fixed / Swapped Unsecured 84%
Slide 36: Well-Laddered Debt Maturity Schedule
2023 COMPANY UPDATE | PAGE 36 WELL-LADDERED DEBT MATURITY SCHEDULE Debt Maturity Schedule ($ in millions)(1) 1,000 800 600 400 200 - 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Thereafter RLOC Term Loans Private Placement Mortgage (1) After giving pro forma effect to the $120 million of senior
Slide 37: ESG Overview
ESG Overview 06
Slide 38: Environmental
• Over 900 of our properties have LED lighting ENVIRONMENTAL • 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 • Expect to add solar on up to an additio
Slide 39: Social
SOCIAL • National Storage Affiliates has partnered with Feeding America to provide 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 2022 • 62% of our employees are women(1) •
Slide 40: Governance
2023 COMPANY UPDATE | PAGE 40 GOVERNANCE NSA’s Corporate Governance Score is above the peers and the overall REIT average according to Green Street(1) 69 CUBE EXR 62 LSI NSA 51 PSA REIT 45 Average 40 40 0 10 20 30 40 50 60 70 80 (1) Source: Green Street, Executive Compensation & Corporate Governance
Slide 41: Governance: Corporate Governance Highlights
2023 COMPANY UPDATE | PAGE 41 GOVERNANCE Corporate Governance Highlights GRESB – participated in the 2022 Opted out of MUTA assessment and committed to participate in the 2023 assessment Vendor code of conduct No “poison pill” plan 7 of 10 trustees are independent Annual election of all trustees Ris
Slide 42: Appendix
APPENDIX 07
Slide 43: Definitions and Methodology
2023 COMPANY UPDATE | PAGE 43 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 31, 2023, of $23.01 and $41.78,
Slide 44: Contact Us
2023 COMPANY UPDATE | PAGE 44 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 Eas
Slide 45: National Storage Affiliates
SA NATIONAL STORAGE AFFILIATES
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