National Storage Affiliates(NSA) - 2025 Q3 - Quarterly Results

Financial Performance - Reported net income of $29.0 million for Q3 2025, a decrease of 2.5% compared to Q3 2024[6] - Core funds from operations (Core FFO) of $76.5 million, or $0.57 per share, representing an 8.1% decrease per share compared to Q3 2024[6] - Year-over-year same store total revenue decreased by 2.6% for Q3 2025, primarily due to a 150 basis point decrease in average occupancy[12] - For the three months ended September 30, 2025, total revenue was $188.7 million, a decrease of 2.4% from $193.6 million in the same period of 2024[32] - Rental revenue for the same period was $169.9 million, down 2.9% from $174.5 million year-over-year[32] - Net income attributable to common shareholders for the three months ended September 30, 2025, was $13.3 million, compared to $13.6 million in the prior year, reflecting a decrease of 2.0%[32] - Funds From Operations (FFO) attributable to common shareholders for the three months ended September 30, 2025, was $75.1 million, down from $82.4 million in the prior year[36] - Core FFO per share for the three months ended September 30, 2025, was $0.57, compared to $0.62 in the same period of 2024[36] - Net Operating Income (NOI) for the three months ended September 30, 2025, was $121.02 million, a decrease from $129.16 million in 2024[40] - EBITDA for the three months ended September 30, 2025, was $122.51 million, slightly down from $123.61 million in 2024[41] Occupancy and Store Performance - Same store period-end occupancy was 84.5% as of September 30, 2025, a decrease of 140 basis points from September 30, 2024[6] - The company operated 1,069 self-storage properties as of September 30, 2025, with approximately 69.8 million rentable square feet[26] - Total occupancy rate for the same store pool decreased to 84.5% in Q3 2025 from 85.9% in Q3 2024, a decline of 1.4%[61] - Average occupancy for the total portfolio was 84.5% in Q3 2025, down from 85.9% in Q3 2024[68] - Average occupancy at period end was 84.5% in Q3 2025, compared to 85.0% in Q2 2025[68] - The average occupancy across all MSAs was 84.5% in Q3 2025, compared to 85.9% in Q3 2024, reflecting a 1.4% decline[61] Revenue and Expenses - Total revenue for the three months ended September 30, 2025, was $3,259 million, a significant increase from $28,011 million in the same period in 2018[56] - Property operating expenses for the three months ended September 30, 2025, were $1,376 million, a decrease from $9,022 million in 2018, indicating improved cost management[56] - Year-to-date property operating expenses increased by 4.4% to $157,795,000 from $151,172,000 in 2024[64] - Total property operating expenses for YTD 2025 were $157.795 million, an increase from $151.172 million in YTD 2024[68] - Average annualized rental revenue per occupied square foot was $15.68 in Q3 2025, down from $15.78 in Q3 2024[68] Acquisitions and Dispositions - The company acquired two self-storage properties for approximately $32.0 million during Q3 2025[6] - The company acquired 7 self-storage properties during 2025, totaling 3,392 units and 407,630 square feet, with total acquisition costs amounting to $74,879,000[46] - In the quarter ended September 30, 2025, the company disposed of 2 self-storage properties, generating net proceeds of $5,962,000 from 553 units and 82,972 square feet sold[47] Debt and Financing - As of September 30, 2025, NSA has approximately $543.6 million of available capacity on its $950.0 million revolving line of credit[16] - The company’s debt financing stood at $3.40 billion as of September 30, 2025, slightly down from $3.45 billion at the end of 2024[34] - As of September 30, 2025, total debt amounts to $3,403,399,000 with a weighted average effective interest rate of 4.50%[48] - The net debt to annualized current quarter adjusted EBITDA ratio is 6.7x, while the trailing twelve-month fixed charge coverage ratio is 2.6x[52] - Total leverage ratio stands at 46.6%, which is below the covenant limit of 60.0%[52] Guidance and Future Outlook - The company expects an improvement in self-storage fundamentals supported by an improving supply/demand balance in 2026 and beyond[5] - NSA reaffirms its Core FFO guidance for the year ended December 31, 2025, with estimates of $2.17 to $2.23 per share[18] - The company plans to participate in the Jefferies Real Estate Conference on November 17-19, 2025, and the Nareit REITworld 2025 Annual Conference on December 8-11, 2025[25] Management and Operational Metrics - Funds from operations (FFO) is a key performance measure for NSA, defined as net income excluding real estate depreciation and amortization, with adjustments for equity in earnings from unconsolidated ventures[78] - Core FFO is further adjusted to eliminate the impact of non-core items, such as acquisition costs and executive severance costs, providing a clearer view of operational performance[79] - Net operating income (NOI) represents rental revenue plus other property-related revenue less property operating expenses, serving as a primary measure of economic productivity for NSA's properties[82][91] - The company emphasizes that FFO and Core FFO should be considered alongside GAAP measures like total revenues and net income for a comprehensive understanding of performance[80]