National Storage Affiliates(US:NSA)2021-11-03 23:57Financial Performance - Net income for the three months ended September 30, 2021, was $40.7 million, an increase of $19.3 million compared to $21.4 million for the same period in 2020[150]. - Total revenue increased by $41.4 million, or 37.8%, for the three months ended September 30, 2021, compared to the same period in 2020, driven by acquisitions and increased occupancy rates[153]. - Rental revenue rose by $39.7 million, or 39.9%, for the three months ended September 30, 2021, with non-same store rental revenue contributing $22.4 million and same store rental revenue increasing by $17.3 million, or 18.7%[154]. - Average occupancy improved from 90.4% in Q3 2020 to 96.0% in Q3 2021, significantly impacting revenue growth[153]. - Net income attributable to common shareholders was $26.9 million for the three months ended September 30, 2021, compared to $10.2 million in the same period of 2020, an increase of $16.7 million[152]. - Funds from operations (FFO) attributable to common shareholders for the nine months ended September 30, 2021, was $177.5 million, compared to $120.7 million for the same period in 2020[182]. - Core FFO attributable to common shareholders for the nine months ended September 30, 2021, was $178.4 million, compared to $122.4 million for the same period in 2020[182]. - Diluted earnings per share increased to $0.26 for Q3 2021, compared to $0.15 in Q3 2020, and $0.71 for the nine months ended September 30, 2021, up from $0.32 in the same period of 2020[184]. - Net Operating Income (NOI) for Q3 2021 was $105.1 million, an increase from $72.0 million in Q3 2020, and $283.2 million for the nine months ended September 30, 2021, compared to $208.7 million in the same period of 2020[187]. Acquisitions and Portfolio Growth - The company acquired 119 self storage properties for $1.0 billion during the nine months ended September 30, 2021, comprising approximately 8.3 million rentable square feet[138]. - As of September 30, 2021, the company owned a portfolio of 763 self storage properties, totaling approximately 47.6 million rentable square feet[137]. - The same store portfolio consisted of 560 consolidated self storage properties as of September 30, 2021[147]. - The company has a potential acquisition opportunity with a 75% third-party interest in its unconsolidated real estate ventures, valued at approximately $1.5 billion[140]. - The company acquired 33 self-storage properties between October 1, 2020, and December 31, 2020, and an additional 119 properties during the nine months ended September 30, 2021, contributing to NOI growth[197]. Expenses and Costs - Property operating expenses rose by $7.9 million, or 25.1%, for the three months ended September 30, 2021, largely due to increased expenses from newly acquired properties[157]. - General and administrative expenses increased by $2.2 million, or 20.3%, for the three months ended September 30, 2021, attributed to higher supervisory and personnel costs[158]. - Depreciation and amortization expenses increased by $10.1 million, or 34.7%, for the three months ended September 30, 2021, due to acquisitions and increased amortization of customer leases[159]. - Interest expense increased by $2.9 million, or 18.9%, for the three months ended September 30, 2021, primarily due to additional borrowings from recent note issuances[160]. - Property operating expenses rose by $18.3 million, or 19.8%, for the nine months ended September 30, 2021, mainly due to increased expenses from newly acquired properties[171]. - General and administrative expenses increased by $4.5 million, or 13.8%, for the nine months ended September 30, 2021, driven by higher supervisory and administrative fees[172]. - Depreciation and amortization increased by $20.1 million, or 23.0%, for the nine months ended September 30, 2021, due to the acquisition of new properties and increased amortization of customer leases[173]. - Interest expense increased by $5.9 million, or 12.7%, for the nine months ended September 30, 2021, primarily due to higher borrowings from recent note issuances[174]. Cash Flow and Financing - Cash provided by operating activities increased to $238.7 million for the nine months ended September 30, 2021, compared to $167.6 million in the same period of 2020, reflecting the acquisition of 152 self-storage properties[197]. - Cash used in investing activities increased to $985.8 million for the nine months ended September 30, 2021, compared to $268.5 million for the same period in 2020, primarily due to the acquisition of 119 self-storage properties for $946.3 million[198]. - Cash provided by financing activities was $799.0 million for the nine months ended September 30, 2021, compared to $97.8 million in 2020, with significant borrowings including $540.0 million under the Revolver and $763.4 million from the issuance of common shares[201]. - The company issued 10,120,000 common shares in a public offering at $51.25 per share, resulting in net proceeds of approximately $497.4 million[210]. - As of September 30, 2021, the company had a total credit facility of $1.4 billion, with remaining capacity to borrow $494.3 million while remaining compliant with financial covenants[202]. - The company declared a cash dividend of $0.41 per common share and OP unit on August 25, 2021, payable on September 30, 2021[215]. Market and Operational Insights - The company experienced sustained improvement in property operating results during the third and fourth quarters of 2020 and continuing through the third quarter of 2021[145]. - The ongoing impact of the COVID-19 pandemic continues to be monitored, with the company maintaining compliance with federal, state, and local guidelines[144]. - The self-storage business experiences minor seasonal fluctuations, with the highest occupancy typically in July and the lowest in February, indicating potential revenue variability throughout the year[230]. - The company utilizes interest rate swaps to mitigate exposure to interest rate risk, converting variable rate debt to fixed rate[231]. - Interest rate risk is a primary market risk for the company, influenced by external economic and political factors, which could affect future income and cash flows[231].