National Storage Affiliates(US:NSA)2025-11-04 21:07Revenue Performance - Total revenue decreased by $4.9 million, or 2.5%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to a decline in average occupancy from 86.0% to 84.5%[135] - Rental revenue decreased by $4.6 million, or 2.6%, for the three months ended September 30, 2025, attributed to the same decline in average occupancy and the sale of 12 self storage properties[136] - Total revenue decreased by $14.3 million, or 2.5%, for the nine months ended September 30, 2025, attributed to a decline in average occupancy from 85.8% to 83.8%[150] - Rental revenue decreased by $20.0 million, or 3.8%, for the nine months ended September 30, 2025, driven by lower average occupancy and the sale of self-storage properties[151] - Total rental revenue for the three months ended September 30, 2025, was $169.9 million, down from $174.5 million in 2024, reflecting a decrease of $4.6 million[176] Operating Expenses - Total operating expenses increased slightly by $0.7 million, or 0.6%, for the three months ended September 30, 2025, compared to the same period in 2024[134] - Property operating expenses increased by $6.5 million, or 4.1%, for the nine months ended September 30, 2025, compared to the same period in 2024[154] - Same store portfolio property operating expenses increased by $2.5 million, or 4.9%, for the three months ended September 30, 2025, driven by higher marketing, property tax, and utilities expenses[179] - Total property operating expenses for the nine months ended September 30, 2025, increased by $6.5 million, or 4.1%, compared to the same period in 2024[180] Net Income - Net income attributable to common shareholders for the three months ended September 30, 2025, was $13.31 million, a decrease of $0.28 million compared to the same period in 2024[134] - Net income for the three months ended September 30, 2025, was $29.0 million, slightly down from $29.8 million in 2024[184] - Net income attributable to common shareholders decreased from $79.5 million to $35.5 million for the nine months ended September 30, 2025[149] Funds from Operations (FFO) - Funds from operations (FFO) attributable to common shareholders for the three months ended September 30, 2025, was $75,070,000, down from $82,365,000 in 2024, a decline of 8.9%[168] - Core FFO for the nine months ended September 30, 2025, was $224,313,000, slightly down from $227,508,000 in 2024, indicating a decrease of 1.1%[168] - FFO per share for the three months ended September 30, 2025, was $0.56, down from $0.61 in 2024, a decrease of 8.2%[171] - Core FFO per share for the nine months ended September 30, 2025, was $1.66, compared to $1.84 in 2024, indicating a decline of 9.8%[171] Property and Portfolio Information - As of September 30, 2025, the company owned 807 self storage properties across 33 states and Puerto Rico, comprising approximately 51.6 million rentable square feet[126] - The company's unconsolidated real estate ventures currently own 262 properties, with a third-party interest valued at approximately $2.1 billion[127] - The company disposed of 12 self storage properties during the nine months ended September 30, 2025, and contributed 56 properties to the 2024 Joint Venture in the previous year[132] Cash Flow and Capital Expenditures - Operating cash flow decreased to $265.7 million for the nine months ended September 30, 2025, down from $282.9 million in the same period of 2024, primarily due to a decline in rental revenue and average occupancy dropping from 85.8% to 83.8%[197] - Cash provided by investing activities was $10.8 million for the nine months ended September 30, 2025, a significant decrease from $470.9 million in the same period of 2024, with $72.1 million from the sale of 12 self-storage properties[198] - Total capital expenditures increased to $26.6 million for the nine months ended September 30, 2025, compared to $13.5 million in 2024, with recurring capital expenditures at $15.7 million and value-enhancing expenditures at $9.7 million[200] Debt and Interest Rates - Interest expense increased by $7.4 million, or 6.4%, for the nine months ended September 30, 2025, due to the maturity of interest rate swaps and an increase in variable-rate debt from $186.8 million to $404.4 million[158] - The effective interest rates for outstanding loans as of September 30, 2025, were 4.11% for Term Loan D and 5.03% for Term Loan E[203] - As of September 30, 2025, the company had $404.4 million of debt subject to variable interest rates, which could impact future earnings by approximately $4.0 million annually with a 100 basis point change in reference rates[227] Shareholder Distributions - During the nine months ended September 30, 2025, the company paid $131.0 million in distributions to common shareholders and $15.3 million to preferred shareholders[219] - A cash dividend of $0.57 per common share and OP unit was declared, with a record date of September 15, 2025[220] - Cash distributions of $0.375 per Series A and B Preferred Shares were also declared, with the same record date of September 15, 2025[220] Market and Regulatory Environment - The self-storage business experiences seasonal fluctuations, with higher occupancy typically in July and lower in February, affecting revenue and profit realization[222] - Interest rate risk is the primary market risk, with the company using interest rate swaps to convert variable rate debt to fixed rates[226] - The enactment of the One Big Beautiful Bill Act (OBBB) on July 4, 2025, introduces major changes affecting the taxation of REITs and their investors[224]