[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) H1 2025 financial statements show decreased assets, revenues, and net income, driven by lower property sale gains and reduced operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $5.18 billion by June 30, 2025, from $5.35 billion, primarily due to reduced property values, impacting total equity Condensed Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$5,181,285** | **$5,354,462** | | Self storage properties, net | $4,695,617 | $4,812,496 | | Cash and cash equivalents | $26,121 | $50,408 | | **Total Liabilities** | **$3,543,603** | **$3,591,115** | | Debt financing | $3,402,659 | $3,449,087 | | **Total Equity** | **$1,637,682** | **$1,763,347** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue slightly decreased, but H1 2025 saw significant declines in total revenue and net income, primarily due to lower property sale gains Q2 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $188,842 | $190,448 | -0.8% | | Net Income | $30,958 | $32,280 | -4.1% | | Net Income Attributable to Common Shareholders | $14,357 | $11,952 | +20.1% | | EPS (basic and diluted) | $0.19 | $0.16 | +18.8% | Six Months Ended June 30 Statement of Operations Highlights (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $377,196 | $386,596 | -2.4% | | Gain on sale of self storage properties | $10,996 | $63,841 | -82.8% | | Net Income | $50,477 | $127,368 | -60.4% | | Net Income Attributable to Common Shareholders | $22,237 | $65,869 | -66.2% | | EPS (basic and diluted) | $0.29 | $0.85 | -65.9% | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 cash flow from operations decreased, with investing activities sharply lower due to reduced property sales, and financing activities also decreased Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $165,502 | $177,217 | | Net Cash Provided by Investing Activities | $25,549 | $544,654 | | Net Cash Used In Financing Activities | ($213,859) | ($742,525) | | **Decrease in Cash, Cash Equivalents and Restricted Cash** | **($22,808)** | **($20,654)** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's self-storage REIT operations, including 807 consolidated properties, $3.4 billion debt, and the internalization of its PRO management structure - As of June 30, 2025, the company owned **807 consolidated self-storage properties** and managed an additional **260 properties** through unconsolidated real estate ventures[31](index=31&type=chunk)[32](index=32&type=chunk) - During the first six months of 2025, the company acquired **four properties** for approximately **$24.9 million** and sold **ten properties** for net proceeds of approximately **$67.1 million**, resulting in a net gain of **$11.0 million**[82](index=82&type=chunk)[84](index=84&type=chunk) - Total debt financing stood at approximately **$3.4 billion** as of June 30, 2025, composed of a credit facility, various term loans, senior unsecured notes, and fixed-rate mortgages[87](index=87&type=chunk) - Effective July 1, 2024, the company internalized its PRO (participating regional operators) structure by purchasing the PROs' management contracts, transitioning most operations in-house[98](index=98&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 revenue decline from lower occupancy and property sales, H1 2025 net income drop, and declining non-GAAP metrics, while maintaining adequate liquidity [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Q2 2025 total revenue decreased 0.8% from lower rental revenue, partially offset by increased management fees and reduced G&A, while H1 2025 net income fell sharply - Q2 2025 rental revenue decreased by **$4.5 million (2.6%)** YoY, attributed to a drop in average portfolio occupancy from **86.1% to 83.6%** and the sale of **11 properties**[135](index=135&type=chunk)[136](index=136&type=chunk) - Q2 2025 General and Administrative expenses decreased by **$3.4 million (20.9%)** YoY, primarily due to lower management fees paid following the internalization of the PRO structure[140](index=140&type=chunk) - For the first six months of 2025, the gain on sale of self-storage properties was **$11.0 million**, a significant decrease from **$63.8 million** in the same period of 2024, heavily impacting net income[161](index=161&type=chunk) [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) Key non-GAAP metrics declined, with Q2 2025 Core FFO per share at $0.55 and same-store NOI down 6.1%, reflecting decreased rental revenue and increased operating expenses Core FFO per Share and Unit | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0.55 | $0.62 | -11.3% | | Six Months Ended June 30 | $1.09 | $1.22 | -10.7% | Same Store Portfolio Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Rental Revenue | $162,570K | $167,825K | -3.1% | | Property Operating Expenses | $52,720K | $50,407K | +4.6% | | Net Operating Income (NOI) | $116,255K | $123,777K | -6.1% | Adjusted EBITDA (in thousands) | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $123,825 | $127,751 | -3.1% | | Six Months Ended June 30 | $246,834 | $257,678 | -4.2% | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity stems from operations, property sales, and a $1.355 billion credit facility, with H1 2025 cash used for debt payments, dividends, and capital expenditures - Primary sources of liquidity are cash flow from operations, proceeds from property dispositions, and access to debt and equity markets[189](index=189&type=chunk) - As of June 30, 2025, the company had a **$1.355 billion credit facility**, with **$544.1 million** of borrowing capacity remaining under its **$950.0 million** revolver[199](index=199&type=chunk)[200](index=200&type=chunk) - During H1 2025, the company paid **$87.2 million** in dividends to common shareholders and **$10.2 million** to preferred shareholders[217](index=217&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate fluctuations, with **$403.9 million** in unhedged variable-rate debt, where a 1% rate change impacts annual earnings by **$4.0 million** - The company's main market risk exposure is to interest rate fluctuations[224](index=224&type=chunk) - As of June 30, 2025, the company had **$403.9 million** of debt subject to variable interest rates, excluding debt covered by interest rate swaps[225](index=225&type=chunk) - A hypothetical **100 basis point (1%)** change in interest rates would result in an approximate **$4.0 million** annual change in interest expense on the unhedged variable-rate debt[225](index=225&type=chunk) [Controls and Procedures](index=53&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[227](index=227&type=chunk) - No changes in internal control over financial reporting occurred during the six months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[228](index=228&type=chunk) [PART II. OTHER INFORMATION](index=53&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=53&type=section&id=ITEM%201.%20Legal%20Proceedings) The company reports that it is not currently subject to any legal proceedings that it considers to be material - As of the filing date, the company is not involved in any material legal proceedings[231](index=231&type=chunk) [Risk Factors](index=54&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to 2024 Form 10-K risk factors, except for a new risk concerning potential adverse effects of recent U.S. and international tariff actions - A new risk factor has been added regarding the potential adverse effects of U.S. and international tariffs on the company's business, financial condition, and results of operations[234](index=234&type=chunk)[235](index=235&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company issued **108,506 common shares** for OP unit redemptions and has **$350.3 million** remaining in its share repurchase program - In Q2 2025, the company issued **108,506 common shares** in exchange for an equal number of OP units to satisfy redemption requests from limited partners[236](index=236&type=chunk) - The company's share repurchase program had approximately **$350.3 million** of remaining capacity as of June 30, 2025[240](index=240&type=chunk)[241](index=241&type=chunk) [Exhibits](index=55&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and CEO/CFO certifications - The report includes standard exhibits such as Articles of Amendment, Bylaws, and CEO/CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906[246](index=246&type=chunk)[248](index=248&type=chunk)

Financial Data and Key Metrics Changes - The company reported core FFO per share of $0.55 for Q2 2025, an 11% decline from the prior year, primarily due to decreased same store NOI and increased interest expense [13][17]. - Same store revenues declined by 3%, driven by a lower average occupancy of 240 basis points and a year-over-year decline in average revenue per square foot of 30 basis points [13][15]. - Same store NOI growth was negative 6.1% for the quarter, with expense growth at 4.6%, mainly due to property taxes, marketing, repair and maintenance, and utilities [13][15]. Business Line Data and Key Metrics Changes - The company sold 10 properties in non-core markets and acquired one property in Texas and an annex in California, focusing on improving balance sheet metrics [7][8]. - The occupancy rate increased by 140 basis points sequentially during Q2 to finish at 85%, with further improvement to 85.3% in July [10]. - RevPath improved for five consecutive months, with the year-over-year delta decreasing from 4.2% in February to 1.6% in July [11]. Market Data and Key Metrics Changes - The company noted continued pressure from new supply in several markets, which has impacted performance more than expected [6]. - The housing market remains challenging, with no meaningful improvement in macroeconomic conditions affecting occupancy and revenue [5][6]. - The company expects new supply to decline over the next few years, supporting an improving supply-demand backdrop [9]. Company Strategy and Development Direction - The company is focused on improving its portfolio and occupancy position through increased marketing spend and the use of concessions [9]. - Management remains confident in the outlook for NSA, expecting to realize full benefits from the pro internalization as the housing market recovers [8][9]. - The company is being disciplined in capital allocation, balancing share repurchases with potential acquisitions [26][27]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the elevated use of concessions during the quarter was a near-term drag on revenues [7]. - The company is optimistic about the potential for recovery in the housing market, particularly in Sunbelt and suburban markets [9]. - Management believes they have hit bottom in fundamentals and are starting to see positive trends operationally [10]. Other Important Information - The company has ample liquidity with no significant debt maturities until 2026, maintaining a revolver balance of $400 million [16]. - The adjusted guidance for 2025 includes same store revenue growth of negative 2% to 3% and core FFO per share of $2.17 to $2.23 [17]. Q&A Session Summary Question: Can you walk through the scenarios for the updated guidance? - Management explained that the revised guidance is primarily anchored to same store revenue growth, with expectations of seasonal occupancy trends and the impact of higher discounts and concessions [20][21]. Question: How are you thinking about share repurchases? - Management views the current stock price as attractive and plans to balance share repurchases with capital allocation for acquisitions [26][27]. Question: How is the ECRI strategy performing in light of market pressures? - Management reported no significant changes in the ECRI program and noted that they are adjusting their approach based on customer behavior and churn [31][32]. Question: What is the competitive landscape like in your markets? - Management indicated that new supply has likely peaked in many markets, leading to more stability in asking rents and occupancy levels [51][52]. Question: Can you elaborate on the green shoots in your new marketing strategy? - Management highlighted improvements in visibility scores and top-of-funnel demand due to increased marketing spend and rebranding efforts [55][56]. Question: What are the challenges with the pro internalization? - Management noted that challenges are more market-driven rather than specific to individual pro properties, with some markets being particularly competitive [90][91]. Question: How many properties are earmarked for sale? - Management confirmed they have identified properties for potential sale and are evaluating strategies for reinvestment in the portfolio [96][97].

Financial Data and Key Metrics Changes - The company reported core FFO per share of $0.55 for Q2 2025, an 11% decline from the prior year, primarily due to decreased same store NOI and increased interest expense [13] - Same store revenues declined by 3%, driven by a lower average occupancy of 240 basis points and a year-over-year decline in average revenue per square foot of 30 basis points [13] - Expense growth was 4.6% in Q2, with property taxes, marketing, repair and maintenance, and utilities being the main drivers [14] Business Line Data and Key Metrics Changes - Same store NOI growth was negative 6.1%, reflecting the challenges faced in the current operating environment [14] - The company sold 10 properties in non-core markets and acquired one property in Texas, along with an annex in California [7][8] - RevPath improved for five consecutive months, with the year-over-year delta decreasing from 4.2% in February to 1.6% in July [11] Market Data and Key Metrics Changes - Occupancy increased by 140 basis points sequentially during Q2 to finish at 85%, with further improvement to 85.3% in July [10] - The year-over-year occupancy decline narrowed to 150 basis points in July from 220 basis points in June [10] - The company noted that new supply is projected to decline over the next few years, supporting an improving supply-demand backdrop [9] Company Strategy and Development Direction - The company is focused on improving its balance sheet metrics and remains disciplined in capital use, expecting to be a net seller of assets for the year [8][15] - Increased marketing spend and the use of concessions are part of the strategy to improve portfolio performance and occupancy [9] - The company is optimistic about the long-term outlook, particularly as the housing market recovers and new supply declines [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that macroeconomic conditions have not improved meaningfully, impacting occupancy and revenue expectations [6] - The elevated use of concessions during the quarter was a near-term drag on revenues, but management believes these actions are necessary given the current environment [7] - Management expressed confidence in the outlook for NSA, expecting to realize benefits from pro internalization and improved market conditions [8] Other Important Information - The company has ample liquidity with no significant debt maturities until 2026 and a current revolver balance of $400 million [15] - Adjusted guidance for 2025 includes same store revenue growth of negative 2% to 3% and core FFO per share of $2.17 to $2.23 [16] Q&A Session Summary Question: Can you walk through the scenarios underpinning the updated guidance? - Management explained that the revised guidance reflects expectations of occupancy trends and seasonal declines, with less dependency on macro conditions compared to earlier in the year [20][22] Question: How are you thinking about share repurchases given current share prices? - Management indicated that share repurchases are considered attractive but will be balanced with capital allocation decisions and maintaining balance sheet metrics [24] Question: How is the ECRI strategy performing in light of market pressures? - Management reported no significant changes in the ECRI program and noted that they are adjusting risk scores based on customer behavior [29][30] Question: What is the current state of your marketing strategy and its impact? - Management highlighted improvements in visibility scores and increased top-of-funnel demand due to enhanced marketing efforts and rebranding [56][78] Question: Can you elaborate on the challenges faced during the pro internalization? - Management noted that challenges are more market-driven rather than specific to individual properties, with some markets being particularly competitive [88] Question: What is the outlook for property dispositions and acquisitions? - Management confirmed that they have identified properties for sale and are being disciplined in capital allocation, focusing on optimizing existing portfolio performance [92][106]

Core Insights - National Storage Affiliates Trust (NSA) reported a decline in key financial metrics for Q2 2025, with core funds from operations (Core FFO) per share at $0.55, down 11.3% from $0.62 in Q2 2024 [1][2] - GAAP revenue was $188.8 million, a decrease of 0.8% year-over-year, while diluted earnings per share (EPS) increased to $0.19, up 18.8% from $0.16 in Q2 2024 [1][2] - Management revised full-year guidance downward, indicating limited signs of near-term stabilization in key operating trends [1] Financial Performance - Core FFO per share for Q2 2025 was $0.55, compared to $0.62 in Q2 2024, reflecting an 11.3% decline [2] - GAAP revenue decreased to $188.8 million from $190.4 million in Q2 2024, marking a 0.8% decline [2] - Same store net operating income fell 6.1%, driven by a 3.0% decrease in same store total revenues and a 4.6% increase in same store property operating expenses [5] Operational Overview - NSA operates 1,067 self-storage facilities across the U.S. and Puerto Rico, with approximately 69.7 million rentable square feet [3] - The company is focusing on expanding through acquisitions and internalizing property management to control costs and improve operational efficiency [4] - Occupancy rates in the same store pool dropped to 85.0% from 87.2% in Q2 2024, with average occupancy at 84.2%, down 240 basis points [6] Strategic Initiatives - The internalization of the property management platform aimed to reduce general and administrative expenses, which decreased from $16.2 million in Q2 2024 to $12.8 million in Q2 2025 [7] - Increased marketing investments contributed to a rise in operating expenses, with same store property operating expenses increasing by 4.6% year-over-year [7] - NSA's growth strategy through acquisitions slowed, with only one wholly-owned property acquired for $11.4 million and one joint venture property for approximately $18.0 million [8] Future Outlook - Management lowered fiscal 2025 guidance for Core FFO per share to a range of $2.17–$2.23, with expectations for same store revenue and net operating income growth also reduced [11] - Same store revenue is projected to decline between 3.0% to 2.0% year-over-year for 2025, while same store NOI is expected to decrease between 5.75% to 4.25% [11] - The company plans to reduce acquisition activity, expecting $50–100 million for 2025, down from the original $100–300 million range [11]

Core Insights - National Storage (NSA) reported revenue of $188.84 million for the quarter ended June 2025, reflecting a decrease of 0.8% year-over-year and a surprise of -0.36% compared to the Zacks Consensus Estimate of $189.53 million [1] - The earnings per share (EPS) for the quarter was $0.55, significantly higher than the $0.16 reported in the same quarter last year, but below the consensus estimate of $0.58, resulting in an EPS surprise of -5.17% [1] Revenue Breakdown - Rental revenue was reported at $169.84 million, slightly below the average estimate of $172.35 million, but showing a year-over-year increase of 1.1% [4] - Management fees and other revenue reached $12.23 million, compared to the estimated $12.43 million, marking a substantial year-over-year increase of 28.4% [4] - Other property-related revenue was $6.77 million, slightly above the two-analyst average estimate of $6.75 million, with a year-over-year change of 8.4% [4] Stock Performance - Over the past month, shares of National Storage have returned -9.2%, contrasting with the Zacks S&P 500 composite's increase of 0.6% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - National Storage (NSA) reported quarterly funds from operations (FFO) of $0.55 per share, missing the Zacks Consensus Estimate of $0.58 per share, and down from $0.62 per share a year ago, representing an FFO surprise of -5.17% [1] - The company posted revenues of $188.84 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.36%, and down from $190.45 million year-over-year [2] - National Storage shares have lost about 21.9% since the beginning of the year, while the S&P 500 has gained 6.1% [3] 分组2 - The current consensus FFO estimate for the coming quarter is $0.59 on revenues of $191.03 million, and for the current fiscal year, it is $2.31 on revenues of $762.96 million [7] - The Zacks Industry Rank for REIT and Equity Trust - Other is currently in the top 38% of over 250 Zacks industries, indicating that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

[Earnings Release](index=3&type=section&id=Earnings%20Release) Overview of NSA's Q2 2025 performance, financial highlights, management commentary, and revised guidance [Second Quarter 2025 Highlights and Management Commentary](index=3&type=section&id=Second%20Quarter%202025%20Highlights%20and%20Management%20Commentary) Q2 2025 declines in net income, Core FFO, and same-store NOI, driven by soft demand and concessions Key Financial Metrics | Metric | Q2 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | | Net Income | $31.0 million | -4.1% | | Core FFO per Share | $0.55 | -11.3% | | Same Store NOI | - | -6.1% | | Same Store Period-End Occupancy | 85.0% | -220 bps | - Management commentary indicates that positive sequential trends in contract rates and occupancy were outweighed by persistent softness in storage demand, driven by low existing home sales and supply pressure in Sunbelt markets[6](index=6&type=chunk) - The elevated use of concessions during the quarter, while driving rental volume, had a near-term negative impact on revenues, contributing to the downward revision of full-year guidance[6](index=6&type=chunk) - Subsequent to the quarter-end, an unconsolidated real estate venture acquired one self storage property for approximately **$21.8 million** in July 2025[6](index=6&type=chunk) [Financial Results](index=4&type=section&id=Financial%20Results) Q2 2025 net income decreased **4.1%** to **$31.0 million**, Core FFO per share fell **11.3%** due to lower NOI and higher interest expense Financial Performance Summary (in thousands, except per share) | Metric | Three Months Ended June 30, 2025 | Change vs 2024 | Six Months Ended June 30, 2025 | Change vs 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $30,958 | (4.1)% | $50,477 | (60.4)% | | FFO per share and unit | $0.54 | (11.5)% | $1.06 | (11.7)% | | Core FFO per share and unit | $0.55 | (11.3)% | $1.09 | (10.7)% | - The substantial year-to-date decrease in net income was primarily attributed to larger gains on the sale of self storage properties recognized in the first quarter of 2024[10](index=10&type=chunk) - The decrease in FFO and Core FFO per share was driven by a decline in same-store NOI and an increase in interest expense[11](index=11&type=chunk) [Same Store Operating Results (771 Stores)](index=4&type=section&id=Same%20Store%20Operating%20Results%20(771%20Stores)) Same-store NOI for 771 stores declined **6.1%** in Q2 2025 due to **3.0%** revenue drop and **4.6%** expense increase Same Store Operating Results (in thousands) | Metric | Three Months Ended June 30, 2025 | Change vs 2024 | | :--- | :--- | :--- | | Total revenues | $168,975 | (3.0)% | | Property operating expenses | $52,720 | 4.6% | | Net Operating Income (NOI) | $116,255 | (6.1)% | | Average Occupancy | 84.2% | (2.4)% | - The decrease in Q2 same-store revenue was driven by a **240 basis point** drop in average occupancy and a **0.3%** decline in average annualized rental revenue per occupied square foot[13](index=13&type=chunk) - Markets with above-average same-store revenue growth included Portland, Houston, and San Juan, PR, while Riverside-San Bernardino, Atlanta, and Phoenix were below average[13](index=13&type=chunk) - The increase in same-store property operating expenses was primarily driven by higher costs for marketing, repairs and maintenance, and property taxes[14](index=14&type=chunk) [Investment and Disposition Activity](index=5&type=section&id=Investment%20and%20Disposition%20Activity) NSA invested **$11.4 million** in acquisitions, contributed **$4.5 million** to a JV, and agreed to sell ten properties for **$66.5 million** - Acquired one wholly-owned property and one annex for approximately **$11.4 million**[16](index=16&type=chunk) - A joint venture acquired one property for **$18.0 million**, with NSA contributing **$4.5 million**[15](index=15&type=chunk) - Agreed to sell ten wholly-owned properties for approximately **$66.5 million**, with eight closing in Q2 for **$60.0 million**, and proceeds used to pay down the revolving line of credit[17](index=17&type=chunk) [Balance Sheet and Dividends](index=5&type=section&id=Balance%20Sheet%20and%20Dividends) NSA maintained **$544.1 million** in credit capacity and declared a **$0.57** quarterly cash dividend - The company has approximately **$544.1 million** of available capacity on its revolving line of credit as of June 30, 2025[18](index=18&type=chunk) - A quarterly cash dividend of **$0.57** per common share was declared and paid during the second quarter of 2025[19](index=19&type=chunk) [2025 Guidance](index=6&type=section&id=2025%20Guidance) NSA revised 2025 guidance downwards, lowering Core FFO per share and same-store revenue growth Revised 2025 Guidance | Guidance Metric | Current 2025 Range | Prior 2025 Range | | :--- | :--- | :--- | | Core FFO per share | $2.17 - $2.23 | $2.30 - $2.38 | | Same store total revenue growth | (3.0)% - (2.0)% | (1.25)% - 1.25% | | Same store NOI growth | (5.75)% - (4.25)% | (2.8)% - 0.0% | | Acquisitions (in millions) | $50.0 - $100.0 | $100.0 - $300.0 | - The primary driver for the revised guidance is lower same-store growth assumptions[20](index=20&type=chunk) [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) Presents consolidated statements of operations and balance sheets, detailing revenue, expenses, assets, and liabilities [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues **$188.8 million**, net income **$31.0 million**, YTD net income significantly lower at **$50.5 million** Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenue | $188,842 | $190,448 | | Total operating expenses | $120,543 | $118,475 | | Interest expense | ($41,269) | ($37,228) | | Gain on sale of self storage properties | $9,571 | $2,668 | | Net income | $30,958 | $32,280 | [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$5.18 billion**, liabilities to **$3.54 billion**, and equity to **$1.64 billion** Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Self storage properties, net | $4,695,617 | $4,812,496 | | Total assets | $5,181,285 | $5,354,462 | | Debt financing | $3,402,659 | $3,449,087 | | Total liabilities | $3,543,603 | $3,591,115 | | Total equity | $1,637,682 | $1,763,347 | [Supplemental Schedules](index=11&type=section&id=Supplemental%20Schedules) Provides detailed reconciliations and additional financial/operational data, including non-GAAP measures and portfolio summaries [Schedule 1 - Funds From Operations and Core Funds From Operations](index=11&type=section&id=Schedule%201%20-%20Funds%20From%20Operations%20and%20Core%20Funds%20From%20Operations) Reconciles Q2 2025 GAAP Net Income of **$31.0 million** to FFO of **$72.3 million** and Core FFO of **$74.4 million** Funds From Operations and Core Funds From Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income | $30,958 | $32,280 | | FFO attributable to common shareholders | $72,341 | $70,118 | | Core FFO attributable to common shareholders | $74,381 | $71,224 | | FFO per share and unit | $0.54 | $0.61 | | Core FFO per share and unit | $0.55 | $0.62 | [Schedule 2 - Other Non-GAAP Financial Measurements](index=13&type=section&id=Schedule%202%20-%20Other%20Non-GAAP%20Financial%20Measurements) Reconciles Q2 2025 NOI to **$121.0 million**, EBITDA to **$125.2 million**, and Adjusted EBITDA to **$123.8 million** Other Non-GAAP Financial Measurements (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income | $30,958 | $32,280 | | Net Operating Income | $120,985 | $128,725 | | EBITDA | $125,176 | $121,900 | | Adjusted EBITDA | $123,825 | $127,751 | [Schedule 3 - Portfolio Summary](index=14&type=section&id=Schedule%203%20-%20Portfolio%20Summary) NSA operated 1,067 properties (**69.7 million** sq ft) with YTD investments of **$42.9 million** and dispositions of **$67.1 million** - The total operated portfolio consists of **1,067 properties** with approximately **550,000 units** and **69.7 million rentable square feet**, with an overall occupancy of **84.8%**[45](index=45&type=chunk) Top 5 States by Number of Stores | Top 5 States (Total Operated) | Number of Stores | | :--- | :--- | | Texas | 203 | | Florida | 105 | | California | 98 | | Georgia | 72 | | Oregon | 70 | 2025 Year-to-Date Activity | 2025 YTD Activity | Stores | Total Investment / Net Proceeds | | :--- | :--- | :--- | | Total Investments | 5 | $42.9 million | | Total Dispositions | 10 | $67.1 million | [Schedule 4 - Debt and Equity Capitalization](index=16&type=section&id=Schedule%204%20-%20Debt%20and%20Equity%20Capitalization) NSA's total debt was **$3.4 billion** with a **4.52%** weighted average interest rate and **135.3 million** common shares/units Debt Metrics | Debt Metric | Value | | :--- | :--- | | Total Debt | ~$3.4 billion | | Weighted Average Effective Interest Rate | 4.52% | | Net Debt to Annualized Current Quarter Adjusted EBITDA | 6.8x | | Total Leverage Ratio | 45.8% | - Total common shares and units outstanding were **135,290,513** as of June 30, 2025[58](index=58&type=chunk) [Schedule 5 - Summarized Information for Unconsolidated Real Estate Ventures](index=18&type=section&id=Schedule%205%20-%20Summarized%20Information%20for%20Unconsolidated%20Real%20Estate%20Ventures) NSA's unconsolidated ventures own 260 properties with **$2.72 billion** assets, **$1.21 billion** debt, and **$61.7 million** Q2 2025 revenue Unconsolidated Ventures Summary (at 100%) | Unconsolidated Ventures (at 100%) | As of June 30, 2025 | | :--- | :--- | | Number of Stores | 260 | | Gross Book Value of Real Estate Assets | $2.72 billion | | Outstanding Debt | $1.21 billion | | NSA's Investment Carrying Value | $231.4 million | Combined Operating Information (at 100%) | Combined Operating Info (at 100%) | Three Months Ended June 30, 2025 | | :--- | :--- | | Total revenue | $61.7 million | | Net operating income | $40.3 million | | FFO and Core FFO | $23.2 million | [Schedule 6 - Same Store Performance Summary By MSA](index=19&type=section&id=Schedule%206%20-%20Same%20Store%20Performance%20Summary%20By%20MSA) Q2 2025 same-store NOI varied by MSA, with Houston up **4.1%** and North Port-Sarasota down **21.6%** Q2 2025 Same Store NOI Change by MSA | MSA | Q2 2025 Same Store NOI Change | | :--- | :--- | | **Top Performers** | | | Houston-Pasadena-The Woodlands, TX | 4.1% | | San Juan-Bayamón-Caguas, PR | 2.2% | | **Bottom Performers** | | | North Port-Bradenton-Sarasota, FL | (21.6)% | | Atlanta-Sandy Springs-Roswell, GA | (16.4)% | | Shreveport-Bossier City, LA | (13.2)% | [Schedule 7 - Same Store Operating Data - Trailing Five Quarters](index=23&type=section&id=Schedule%207%20-%20Same%20Store%20Operating%20Data%20-%20Trailing%20Five%20Quarters) Same-store NOI for 771 stores declined from **$123.8 million** in Q2 2024 to **$116.3 million** in Q2 2025, with occupancy decreasing Same Store Operating Data - Trailing Five Quarters | Metric | 2Q 2024 | 3Q 2024 | 4Q 2024 | 1Q 2025 | 2Q 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net operating income ($M) | $123.8 | $124.5 | $120.9 | $116.4 | $116.3 | | Occupancy at period end | 87.2% | 85.9% | 84.7% | 83.6% | 85.0% | [Schedule 8 - Reconciliation of Same Store Data and Net Operating Income to Net Income](index=24&type=section&id=Schedule%208%20-%20Reconciliation%20of%20Same%20Store%20Data%20and%20Net%20Operating%20Income%20to%20Net%20Income) Reconciles Q2 2025 total rental revenue of **$169.8 million** and NOI of **$121.0 million** to consolidated Net Income of **$31.0 million** Q2 2025 Revenue Breakdown (in thousands) | Q2 2025 Revenue Breakdown ($ in thousands) | Amount | | :--- | :--- | | Same store portfolio rental revenue | $162,570 | | Non-same store portfolio rental revenue | $7,268 | | **Total rental revenue** | **$169,838** | - The schedule reconciles from a total Net Operating Income of **$121.0 million** down to a Net Income of **$31.0 million** for Q2 2025 by accounting for items such as G&A, depreciation, and interest expense[72](index=72&type=chunk) [Schedule 9 - Selected Financial Information](index=25&type=section&id=Schedule%209%20-%20Selected%20Financial%20Information) Q2 2025 total capital expenditures increased to **$6.2 million**, G&A expenses decreased to **$12.8 million** due to lower supervisory costs Capital Expenditures (in thousands) | Capital Expenditures ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Recurring capital expenditures | $3,429 | $3,025 | | Value enhancing capital expenditures | $1,927 | $346 | | **Total consolidated portfolio capital expenditures** | **$6,199** | **$4,016** | - General and administrative expenses for Q2 2025 were **$12.8 million**, a decrease from **$16.2 million** in Q2 2024, mainly due to lower supervisory and administrative costs[73](index=73&type=chunk) [Glossary](index=26&type=section&id=Glossary) Defines key non-GAAP financial measures and operational terms like FFO, Core FFO, NOI, and Same Store Portfolio - Defines Funds From Operations (FFO) as net income excluding real estate depreciation, gains/losses from property sales, and other specific items, providing a measure of a REIT's operating performance[81](index=81&type=chunk) - Defines Core FFO as FFO further adjusted to remove items not considered indicative of core operating performance, such as acquisition costs, integration costs, and casualty-related expenses[81](index=81&type=chunk) - Defines Net Operating Income (NOI) as rental revenue plus other property-related revenue less property operating expenses, serving as a primary measure to evaluate property economic productivity[85](index=85&type=chunk)[94](index=94&type=chunk) - The Same Store Portfolio is defined as properties owned and operated on a stabilized basis since the first day of the earliest year presented, allowing for comparable year-over-year analysis[92](index=92&type=chunk)

Core Viewpoint - Morgan Stanley's strategy team highlights 15 stocks with short-term catalytic potential, indicating that S&P 500 index earnings growth in Q2 may exceed expectations [1] Earnings Expectations - The market anticipates a 5% year-over-year increase in S&P 500 Q2 earnings per share and over 4% revenue growth, but actual growth may be stronger [1] - The seven major tech companies are expected to see a 14% increase in net profit, while the remaining 493 constituents may experience a 3% decline [1] - Despite analysts lowering earnings expectations from April to May, the earnings revision has rebounded from -25% to approximately 1%, suggesting Q2 earnings will likely exceed expectations, aligning with the historical average of 4%-5% [1] Recommended Stocks - **argenx SE (ARGX.US)**: undervalued R&D pipeline, target price $700 [2] - **Atlassian (TEAM.US)**: continuous revenue growth potential over 20% and expected margin expansion, target price $320 [3] - **Chewy (CHWY.US)**: benefits from marketing and product optimization, expected revenue to maintain or exceed Q1 levels, target price $50 [4] - **CVS Health (CVS.US)**: advantages from competitor store closures and growth in pharmacy benefit management, target price $80 [4] - **DraftKings (DKNG.US)**: potential earnings inflection point in Q2, with actual licensing rates offsetting tax and regulatory pressures, target price $52 [4] - **Eaton Corporation (ETN.US)**: benefits from improved profit margins in U.S. electrical business, target price $375 [5] - **Eli Lilly (LLY.US)**: core products Mounjaro and Zepbound expected to contribute $8.2 billion in revenue, exceeding expectations may lead to 2025 guidance upgrades, target price $1,135 [5] - **F5 (FFIV.US)**: positive outlook due to demand growth in cloud and load balancing products, target price $305 [6] - **NVIDIA (NVDA.US)**: strong end-user demand and accelerated shipments of rack-level products supporting supply-side growth, target price $170 [7] - **Omada Health (OMDA.US)**: operational leverage through technology empowerment and multi-disease sales, target price $25 [8] - **Southwest Airlines (LUV.US)**: potential stock rebound if internal guidance is met and baggage fee impacts are confirmed as limited, target price $38 [9] - **Valley National Bank (VLY.US)**: expected net interest income growth of 3% quarter-over-quarter, target price $11 [10] - **Western Digital (WDC.US)**: undervalued gross margin expansion prospects, target price $85 [11] Cautious Outlook - **National Storage Affiliates Trust (NSA.US)**: cautious due to expected funds from operations (FFO) per share being below market and company guidance, target price $30 [12] - **Teradyne (TER.US)**: revenue and earnings per share forecasts for FY2026 are 7% and 14% below Wall Street expectations, target price $74 [13] Summary - Overall, Morgan Stanley's recommendations combine company fundamentals, industry trends, and market sentiment, providing diversified options for investors [14]

Group 1 - The article discusses the features of the investing group Trade With Beta, which includes frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, hedging strategies, and an actively managed portfolio [1] - The service offers a chat room for discussion among sophisticated traders and investors, allowing for real-time engagement and idea sharing [1] - The analyst has disclosed a beneficial long position in the shares of NSA.PR.B, indicating a personal investment interest in the discussed securities [1]

Strategic Initiatives and Internalization - NSA sold a $540 million portfolio of 71 non-core assets to a private buyer[12] - NSA contributed 56 assets valued at $346.5 million into a new joint venture (2024 JV)[12] - A new joint venture (2023 JV) was formed with $400 million of committed equity capital for acquisitions, implying $1 billion of buying power with leverage up to 60%, and acquired 18 properties totaling approximately $148 million YTD[12] - Since launching the program in 2022, NSA repurchased 18.2 million common shares totaling $675 million, retiring 12% of total common shares and OP units outstanding[12] - NSA internalized its PRO structure, effective as of July 1, 2024, acquiring management agreements, intellectual property, and tenant insurance program rights for $94.9 million, consisting of 1,548,866 OP units and $32.6 million in cash[13] Financial Performance and Portfolio - NSA's total enterprise value is $10.3 billion[55] - Q3 2024 same store NOI growth was -5.3% year-over-year[55] - Q3 2024 core FFO/share growth was -7.5% year-over-year[55] - NSA's dividend rate has grown 73% over the past five years (Q4 2024 vs Q4 2019)[72] Market Position and Growth Strategy - NSA defines the Sunbelt as the following states: AL, AR, AZ, CA, FL, GA, LA, MS, NC, NM, NV, OK, SC, TN and TX, and 66% of NSA's stores are in the Sunbelt[59, 60]