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Table of Contents
Page
 
 
 
Earnings Release
 
 
Consolidated Statements of Operations
 
 
Consolidated Balance Sheets
 
 
Schedule 1 - Funds From Operations and Core Funds From Operations
 
 
Schedule 2 - Other Non-GAAP Financial Measurements
 
 
Schedule 3 - Portfolio Summary
 
 
Schedule 4 - Debt and Equity Capitalization
 
 
Schedule 5 - Summarized Information for Unconsolidated Real Estate Ventures
 
 
Schedule 6 - Same Store Performance Summary By State
 
 
Schedule 7 - Same Store Performance Summary By MSA
 
 
Schedule 8 - Same Store Operating Data - Trailing Five Quarters
 
 
Schedule 9 - Reconciliation of Same Store Data and Net Operating Income to Net Income
 
 
Schedule 10 - Selected Financial Information
 
 
Glossary
 
 
 
 
 
 
 
 



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May 2, 2019

National Storage Affiliates Trust Reports First Quarter 2019 Results

GREENWOOD VILLAGE, Colo. - (BUSINESS WIRE) - National Storage Affiliates Trust (“NSA” or the "Company") (NYSE: NSA) today reported the Company’s first quarter 2019 results.
First Quarter 2019 Highlights
Reported earnings per share of $0.08 for the first quarter of 2019.
Reported core funds from operations ("Core FFO") of $0.37 per share for the first quarter of 2019, an increase of 15.6% compared to the first quarter of 2018.
Achieved same store net operating income ("NOI") growth of 6.7% for the first quarter of 2019 compared to the same period in 2018, driven by a 4.8% increase in same store total revenues and a 0.9% increase in same store property operating expenses.
Acquired 32 wholly-owned self storage properties for $194.6 million during the first quarter of 2019. Consideration for these acquisitions included the issuance of approximately $33.4 million of OP equity.
Added Southern Self Storage of Palm Beach Gardens, Florida as NSA’s ninth Participating Regional Operator (“PRO”) and Moove In Self Storage of York, Pennsylvania as NSA’s tenth PRO.
Highlights Subsequent to Quarter-End
NSA's operating partnership was assigned an investment grade issuer rating of BBB with Stable Outlook by Kroll Bond Rating Agency ("KBRA").
Entered into an agreement with a lender for a new $100 million term loan which matures in ten years and has an effective interest rate of 4.27%, after taking into account the effect of interest rate swaps for the term of the loan.
Arlen Nordhagen, Chairman and Chief Executive Officer, commented, "We are very proud of our solid operating performance during the first quarter, which along with the acquisition of nearly $200 million of wholly-owned self storage properties, highlights the unique benefits of our PRO platform. This robust growth benefited from the previously announced addition of our two new PROs, Southern and Moove In, as we continue to broaden our geographic footprint and leverage the local expertise of our PROs across the U.S."
Tamara Fischer, President and Chief Financial Officer, commented, "Our first quarter results were excellent on both the revenue and expense front. The 63 stores added to the same store pool at the beginning of this year had a positive impact on both our same store revenues and NOI for the quarter, while our continued focus on sharpening our operating efficiencies and commitment to controlling operating expenses helped to maximize same store NOI growth. We are encouraged by our first quarter results and trends subsequent to quarter-end, especially in light of increasing supply pressure. At present, however, we are maintaining our full-year same store NOI growth and Core FFO per share guidance for 2019 until after we get further along in the peak spring and summer leasing season."
Ms. Fischer further commented, "We're pleased to present an enhanced supplemental financial reporting package which includes, among other things, additional detail related to our same store portfolio by metropolitan statistical area ("MSA") and summarized same store operating data for the trailing five quarters."




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Financial Results
($ in thousands, except per share and unit data)
Three Months Ended March 31,
 
2019
 
2018
 
Growth
Net income
$
12,940

 
$
11,973

 
8.1
 %
 
 
 
 
 
 
Funds From Operations ("FFO")(1)
$
32,580

 
$
25,678

 
26.9
 %
Add back acquisition costs
157

 
180

 
(12.8
)%
Core FFO(1)
$
32,737

 
$
25,858

 
26.6
 %
 
 
 
 
 
 
Earnings (loss) per share - basic
$
0.08

 
$
0.16

 
(50.0
)%
Earnings (loss) per share - diluted
$
0.08

 
$
0.09

 
(11.1
)%
 
 
 
 
 
 
FFO per share and unit(1)
$
0.37

 
$
0.31

 
19.4
 %
Core FFO per share and unit(1)
$
0.37

 
$
0.32

 
15.6
 %
(1) Non-GAAP financial measures, including FFO, Core FFO and NOI, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information. 
Net income increased $1.0 million for the first quarter of 2019 as compared to the same period in 2018. The increase was the result of $10.1 million of additional NOI generated primarily from both 64 wholly-owned self storage properties acquired between April 1, 2018 and March 31, 2019 and same store NOI growth, partially offset by increases in interest expense, depreciation and amortization, general and administrative expenses and GAAP losses from the Company's unconsolidated real estate ventures.
The increases in FFO and Core FFO for the first quarter of 2019 were primarily the result of incremental NOI from properties acquired between April 1, 2018 and March 31, 2019, same store NOI growth, and incremental FFO from the Company's unconsolidated real estate ventures, partially offset by higher interest expense and increases in distributions to subordinated performance unitholders.
Same Store Operating Results (439 Stores)
($ in thousands, except per square foot data)
Three Months Ended March 31,
 
2019
 
2018
 
Growth
Total revenues
$
72,309

 
$
68,975

 
4.8
%
Property operating expenses
22,283

 
22,085

 
0.9
%
Net Operating Income (NOI)
$
50,026

 
$
46,890

 
6.7
%
NOI Margin
69.2
%
 
68.0
%
 
1.2
%
 
 
 
 
 
 
Average Occupancy
87.7
%
 
87.3
%
 
0.4
%
Average Annualized Rental Revenue Per Occupied Square Foot
$
11.82

 
$
11.36

 
4.0
%
Year-over-year same store total revenues increased 4.8% for the first quarter of 2019 as compared to the same period in 2018. The increase was driven by a 4.0% increase in average annualized rental revenue per occupied square foot and a 40 basis point increase in average occupancy.
Year-over-year same store property operating expenses increased 0.9% for the first quarter of 2019 as compared to the same period in 2018. These increases primarily resulted from increases in property taxes and repairs and maintenance expenses partially offset by decreases in insurance costs.
Year-over-year same store property NOI increased 6.7% for the first quarter of 2019 as compared to the same period in 2018. Markets that generated above portfolio average same store NOI growth include: Riverside, Atlanta, Indianapolis

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and Las Vegas.  Markets that generated below portfolio average same store NOI growth include: Portland, Dallas, Oklahoma City and Phoenix.
Investment Activity
NSA acquired 32 wholly-owned self storage properties located across 10 states consisting of approximately 1.7 million rentable square feet configured in approximately 15,000 storage units during the first quarter of 2019. Consideration for these acquisitions included approximately $160.5 million of net cash, the issuance of approximately $5.1 million of OP units, $24.4 million of subordinated performance units, $3.9 million of Series A-1 preferred units and the assumption of approximately $0.7 million of other working capital liabilities.
Balance Sheet
NSA adopted the new lease accounting standard at the beginning of 2019, which requires the Company to recognize most leases for which it is the lessee on balance sheet as lease liabilities with corresponding right-of-use assets. As of March 31, 2019, NSA recorded operating lease liabilities of $24.2 million with corresponding operating lease right-of-use assets of $23.1 million, primarily related to leasehold interests in land.
Subsequent to March 31, 2019, NSA entered into an agreement with a lender for a new $100 million unsecured term loan. The term loan matures in ten years and has an effective interest rate of 4.27%, after taking into account the effect of interest rate swaps for the term of the loan. NSA used the proceeds from the term loan to repay outstanding amounts under its revolving line of credit.
Investment Grade Rating
Subsequent to March 31, 2019, KBRA assigned an issuer rating of BBB with Stable Outlook to NSA OP, LP, NSA's operating partnership. KBRA has also assigned a BBB- rating to the Company’s outstanding Series A perpetual preferred shares.
Common Share Dividends
On February 21, 2019, NSA's Board of Trustees declared a quarterly cash dividend of $0.30 per common share, which was paid on March 29, 2019 to shareholders of record as of March 15, 2019.

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2019 Guidance
NSA reaffirms its previously provided FFO guidance estimates and related assumptions for the year ended December 31, 2019:
 
 
Ranges for Full Year 2019
 
 
Low
 
High
Core FFO per share(1)
 
$1.48
 
$1.52
 
 
 
 
 
Same store operations (439 stores)
 
 
Total revenue growth
 
2.5%
 
3.5%
Property operating expenses growth
 
2.5%
 
3.5%
NOI growth
 
2.5%
 
3.5%
 
 
 
 
 
General and administrative expenses (as a percent of revenue)
 
11.0%
 
12.0%
General and administrative expenses (excluding equity-based compensation)
 
10.0%
 
10.5%
Equity-based compensation
 
1.0%
 
1.5%
 
 
 
 
 
Management fees and other revenue, in millions
 
$20.0
 
$21.0
Core FFO from unconsolidated real estate venture, in millions
 
$15.0
 
$16.0
 
 
 
 
 
Subordinated performance unit distributions, in millions
 
$32.0
 
$34.0
 
 
 
 
 
Wholly-owned acquisitions, in millions
 
$300.0
 
$500.0
Joint venture acquisitions, in millions
 
$20.0
 
$100.0
(1) The following table provides a reconciliation of the range of estimated earnings (loss) per share - diluted to estimated Core FFO per share and unit:
 
Ranges for Full Year 2019
 
Low
 
High
Earnings (loss) per share - diluted
$0.10
 
$0.20
Impact of the difference in weighted average number of shares and GAAP accounting for noncontrolling interests, two-class method and treasury stock method
0.44
 
0.36
Add real estate depreciation and amortization, including NSA's share of unconsolidated venture real estate depreciation and amortization
1.29
 
1.33
FFO attributable to subordinated unitholders
(0.36)
 
(0.38)
Add acquisition costs and NSA's share of unconsolidated real estate venture acquisition costs
0.01
 
0.01
Core FFO per share and unit
$1.48
 
$1.52
Supplemental Financial Information
The full text of this earnings release and supplemental financial information, including certain financial information referenced in this release, are available on NSA's website at http://ir.nationalstorageaffiliates.com/quarterly-reporting and as exhibit 99.1 to the Company's Form 8-K furnished to the SEC on May 2, 2019.

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Non-GAAP Financial Measures & Glossary
This press release contains certain non-GAAP financial measures. These non-GAAP measures are presented because NSA's management believes these measures help investors understand NSA's business, performance and ability to earn and distribute cash to its shareholders by providing perspectives not immediately apparent from net income (loss). These measures are also frequently used by securities analysts, investors and other interested parties. The presentations of FFO, Core FFO and NOI in this press release are not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, NSA's method of calculating these measures may be different from methods used by other companies, and, accordingly, may not be comparable to similar measures as calculated by other companies that do not use the same methodology as NSA. These measures, and other words and phrases used herein, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information.
Quarterly Teleconference and Webcast
The Company will host a conference call at 1:00pm Eastern Time on Friday, May 3, 2019 to discuss its financial results. At the conclusion of the call, management will accept questions from certified financial analysts. All other participants are encouraged to listen to a webcast of the call by accessing the link found on the Company's website at www.nationalstorageaffiliates.com.
Conference Call and Webcast:
Date/Time: Friday, May 3, 2019, 1:00pm ET
Webcast available at: www.nationalstorageaffiliates.com
Domestic (Toll Free US & Canada): 877.407.9711
International: 412.902.1014
Replay:
Domestic (Toll Free US & Canada): 877.660.6853
International: 201.612.7415
Conference ID: 13689772
A replay of the call will be available for one week through Friday, May 10, 2019. A replay of the webcast will be available for 30 days on NSA's website at www.nationalstorageaffiliates.com.
Upcoming Industry Conferences
NSA management is scheduled to participate in the REITweek 2019 Investor Conference on June 4 – 6, 2019 in New York, New York.
About National Storage Affiliates Trust
National Storage Affiliates Trust is a Maryland real estate investment trust focused on the ownership, operation and acquisition of self storage properties located within the top 100 metropolitan statistical areas throughout the United States. The Company currently holds ownership interests in and operates 709 self storage properties located in 35 states and Puerto Rico with approximately 44.9 million rentable square feet. NSA is one of the largest owners and operators of self storage properties among public and private companies in the United States. For more information, please visit the Company’s website at www.nationalstorageaffiliates.com. NSA is included in the MSCI US REIT Index (RMS/RMZ), the Russell 2000 Index of Companies and the S&P SmallCap 600 Index.

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NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. These forward-looking statements include information about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans and objectives. Changes in any circumstances may cause the Company's actual results to differ significantly from those expressed in any forward-looking statement. When used in this release, the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: market trends in the Company's industry, interest rates, the debt and lending markets or the general economy; the Company's business and investment strategy; the acquisition of properties, including those under contract, our ability to execute on our acquisition pipeline; the timing of acquisitions under contract; and the Company's guidance estimates for the year ended December 31, 2019. For a further list and description of such risks and uncertainties, see the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, and the other documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
CONTACT:
National Storage Affiliates Trust
Investor/Media Relations
George Hoglund, CFA
Vice President - Investor Relations
720.630.2160
ghoglund@nsareit.net

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National Storage Affiliates Trust
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended March 31,
 
2019
 
2018
REVENUE
 
 
 
Rental revenue
$
82,855

 
$
72,011

Other property-related revenue
2,824

 
2,321

Management fees and other revenue
4,893

 
2,161

Total revenue
90,572

 
76,493

OPERATING EXPENSES
 
 
 
Property operating expenses
26,457

 
25,226

General and administrative expenses
10,766

 
8,306

Depreciation and amortization
24,349

 
21,368

Total operating expenses
61,572

 
54,900

OTHER (EXPENSE) INCOME

 

Interest expense
(13,211
)
 
(9,635
)
Equity in losses of unconsolidated real estate ventures
(2,102
)
 
(52
)
Acquisition costs
(157
)
 
(180
)
Non-operating expense
(98
)
 
(84
)
Gain on sale of self storage properties

 
474

Other expense
(15,568
)
 
(9,477
)
Income before income taxes
13,432

 
12,116

Income tax expense
(492
)
 
(143
)
Net income
12,940

 
11,973

Net income attributable to noncontrolling interests
(5,529
)
 
(1,513
)
Net income attributable to National Storage Affiliates Trust
7,411

 
10,460

Distributions to preferred shareholders
(2,588
)
 
(2,588
)
Net income attributable to common shareholders
$
4,823

 
$
7,872

 
 
 
 
Earnings (loss) per share - basic
$
0.08

 
$
0.16

Earnings (loss) per share - diluted
$
0.08

 
$
0.09

 
 
 
 
Weighted average shares outstanding - basic
56,655

 
50,299

Weighted average shares outstanding - diluted
56,655

 
99,935


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National Storage Affiliates Trust
Consolidated Balance Sheets
(dollars in thousands, except per share amounts)
(unaudited)
 
March 31,
 
December 31,
 
2019
 
2018
ASSETS
 
 
 
Real estate
 
 
 
Self storage properties
$
2,832,745

 
$
2,637,723

Less accumulated depreciation
(267,796
)
 
(246,261
)
Self storage properties, net
2,564,949

 
2,391,462

Cash and cash equivalents
15,878

 
13,181

Restricted cash
3,545

 
3,182

Debt issuance costs, net
1,017

 
1,260

Investment in unconsolidated real estate ventures
238,606

 
245,125

Other assets, net
48,926

 
75,053

Operating lease right-of-use assets
23,110

 

Total assets
$
2,896,031

 
$
2,729,263

LIABILITIES AND EQUITY
 
 
 
Liabilities
 
 
 
Debt financing
$
1,414,926

 
$
1,278,102

Accounts payable and accrued liabilities
37,682

 
33,130

Operating lease liabilities
24,166

 

Deferred revenue
16,069

 
15,732

Total liabilities
1,492,843

 
1,326,964

Equity
 
 
 
Preferred shares of beneficial interest, par value $0.01 per share. 50,000,000 authorized, 6,900,000 issued and outstanding at March 31, 2019 and December 31, 2018, at liquidation preference
172,500

 
172,500

Common shares of beneficial interest, par value $0.01 per share. 250,000,000 shares authorized, 56,698,686 and 56,654,009 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
567

 
567

Additional paid-in capital
839,162

 
844,276

Distributions in excess of earnings
(126,309
)
 
(114,122
)
Accumulated other comprehensive income
7,526

 
13,618

Total shareholders' equity
893,446

 
916,839

Noncontrolling interests
509,742

 
485,460

Total equity
1,403,188

 
1,402,299

Total liabilities and equity
$
2,896,031

 
$
2,729,263



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Supplemental Schedule 1
 
 
 
 
 
 
 
Funds From Operations and Core Funds From Operations
(in thousands, except per share and unit amounts) (unaudited)
 
 
 
 
Reconciliation of Net Income to FFO and Core FFO
 
 
 
 
 
Three Months Ended March 31,
 
2019
 
2018
Net income
$
12,940

 
$
11,973

Add (subtract):
 
 
 
Real estate depreciation and amortization
24,027

 
21,075

Company's share of unconsolidated real estate venture real estate depreciation and amortization
5,457

 
1,377

Gain on sale of self storage properties

 
(474
)
Company's share of unconsolidated real estate venture loss on sale of properties
202

 

Distributions to preferred shareholders and unitholders
(2,753
)
 
(2,689
)
FFO attributable to subordinated performance unitholders(1)
(7,293
)
 
(5,584
)
FFO attributable to common shareholders, OP unitholders, and LTIP unitholders
32,580

 
25,678

Add:
 
 
 
Acquisition costs
157

 
180

Core FFO attributable to common shareholders, OP unitholders, and LTIP unitholders
$
32,737

 
$
25,858

 
 
 
 
Weighted average shares and units outstanding - FFO and Core FFO:(2)
 
 
 
Weighted average shares outstanding - basic
56,655

 
50,299

Weighted average restricted common shares outstanding
30

 
30

Weighted average OP units outstanding
29,948

 
29,135

Weighted average DownREIT OP unit equivalents outstanding
1,848

 
1,835

Weighted average LTIP units outstanding
747

 
665

Total weighted average shares and units outstanding - FFO and Core FFO
89,228

 
81,964

 
 
 
 
FFO per share and unit
$
0.37

 
$
0.31

Core FFO per share and unit
$
0.37

 
$
0.32

 
 
 
 
(1) Amounts represent distributions declared for subordinated performance unitholders and DownREIT subordinated performance unitholders for the periods presented.
(2) NSA combines OP units and DownREIT OP units with common shares because, after the applicable lock-out periods, OP units in the Company's operating partnership are redeemable for cash or, at NSA's option, exchangeable for common shares on a one-for-one basis and DownREIT OP units are also redeemable for cash or, at NSA's option, exchangeable for OP units in the Company's operating partnership on a one-for-one basis, subject to certain adjustments in each case. Subordinated performance units, DownREIT subordinated performance units and LTIP units may also, under certain circumstances, be convertible into or exchangeable for common shares (or other units that are convertible into or exchangeable for common shares). See footnote(3) for additional discussion of subordinated performance units, DownREIT subordinated performance units, and LTIP units in the calculation of FFO and Core FFO per share and unit.

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Supplemental Schedule 1 (continued)
 
 
 
 
 
 
 
Funds From Operations and Core Funds From Operations
(in thousands, except per share and unit amounts) (unaudited)
 
 
 
 
Reconciliation of Earnings (Loss) Per Share - Diluted to FFO and Core FFO Per Share and Unit
 
 
 
 
 
Three Months Ended March 31,
 
2019
 
2018
Earnings (loss) per share - diluted
$
0.08

 
$
0.09

Impact of the difference in weighted average number of shares(3)
(0.03
)
 
0.02

Impact of GAAP accounting for noncontrolling interests, two-class method and treasury stock method(4)
0.07

 

Add real estate depreciation and amortization
0.27

 
0.26

Add Company's share of unconsolidated real estate venture real estate depreciation and amortization
0.06

 
0.02

Subtract gain on sale of self storage properties

 
(0.01
)
FFO attributable to subordinated performance unitholders
(0.08
)
 
(0.07
)
FFO per share and unit
0.37

 
0.31

Add acquisition costs

 
0.01

Core FFO per share and unit
$
0.37

 
$
0.32

 
 
 
 
(3) Adjustment accounts for the difference between the weighted average number of shares used to calculate diluted earnings per share and the weighted average number of shares used to calculate FFO and Core FFO per share and unit. Diluted earnings per share is calculated using the two-class method for the company's restricted common shares and the treasury stock method for certain unvested LTIP units, and assumes the conversion of vested LTIP units into OP units on a one-for-one basis and the hypothetical conversion of subordinated performance units, and DownREIT subordinated performance units into OP units, even though such units may only be convertible into OP units (i) after a lock-out period and (ii) upon certain events or conditions. For additional information about the conversion of subordinated performance units and DownREIT subordinated performance units into OP units, see Note 10 to the Company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission. The computation of weighted average shares and units for FFO and Core FFO per share and unit includes all restricted common shares and LTIP units that participate in distributions and excludes all subordinated performance units and DownREIT subordinated performance units because their effect has been accounted for through the allocation of FFO to the related unitholders based on distributions declared.
(4) Represents the effect of adjusting the numerator to consolidated net income (loss) prior to GAAP allocations for noncontrolling interests, after deducting preferred share and unit distributions, and before the application of the two-class method and treasury stock method, as described in footnote(3).

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Supplemental Schedule 2
 
 
 
 
 
 
 
Other Non-GAAP Financial Measurements
 
 
 
(dollars in thousands) (unaudited)
 
 
 
 
 
 
 
Net Operating Income
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2019
 
2018
Net income
$
12,940

 
$
11,973

(Subtract) add:
 
 
 
Management fees and other revenue
(4,893
)
 
(2,161
)
General and administrative expenses
10,766

 
8,306

Depreciation and amortization
24,349

 
21,368

Interest expense
13,211

 
9,635

Equity in losses of unconsolidated real estate ventures
2,102

 
52

Acquisition costs
157

 
180

Income tax expense
492

 
143

Gain on sale of self storage properties

 
(474
)
Non-operating expense
98

 
84

Net Operating Income
$
59,222

 
$
49,106

 
 
 
 
EBITDA and Adjusted EBITDA
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2019
 
2018
Net income
$
12,940

 
$
11,973

Add:
 
 
 
Depreciation and amortization
24,349

 
21,368

Company's share of unconsolidated real estate venture depreciation and amortization
5,457

 
1,377

Interest expense
13,211

 
9,635

Income tax expense
492

 
143

EBITDA
56,449

 
44,496

Add (subtract):
 
 
 
Acquisition costs
157

 
180

Gain on sale of self storage properties

 
(474
)
Company's share of unconsolidated real estate venture loss on sale of properties
202

 

Equity-based compensation expense
1,112

 
867

Adjusted EBITDA
$
57,920

 
$
45,069


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Supplemental Schedule 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portfolio Summary
As of March 31, 2019
(dollars in thousands) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholly-Owned Store Data by State (Consolidated)
 
Total Operated Store Data by State (Consolidated & Unconsolidated)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State/Territories
 
Stores
 
Units
 
Rentable Square Feet
 
Occupancy at Period End
 
State/Territories
 
Stores
 
Units
 
Rentable Square Feet
 
Occupancy at Period End
California
 
83

 
49,547

 
6,223,156

 
91.2
%
 
California
 
93

 
55,749

 
6,977,091

 
91.1
%
Oregon
 
61

 
24,492

 
3,106,759

 
83.5
%
 
Florida
 
65

 
41,170

 
4,325,157

 
85.4
%
Texas
 
60

 
24,175

 
3,420,283

 
88.9
%
 
Texas
 
64

 
26,510

 
3,696,992

 
88.5
%
Georgia
 
39

 
16,303

 
2,179,286

 
88.6
%
 
Oregon
 
61

 
24,492

 
3,106,759

 
83.5
%
Florida
 
38

 
25,774

 
2,603,172

 
86.7
%
 
Georgia
 
50

 
22,452

 
3,051,594

 
88.8
%
North Carolina
 
33

 
15,387

 
1,885,559

 
91.9
%
 
Oklahoma
 
36

 
16,118

 
2,196,744

 
86.3
%
Arizona
 
30

 
16,505

 
1,875,250

 
87.9
%
 
North Carolina
 
33

 
15,387

 
1,885,559

 
91.9
%
Oklahoma
 
30

 
13,875

 
1,902,992

 
86.3
%
 
Arizona
 
32

 
17,514

 
1,985,080

 
87.8
%
Louisiana
 
25

 
12,043

 
1,502,598

 
82.5
%
 
Louisiana
 
25

 
12,043

 
1,502,598

 
82.5
%
Indiana
 
16

 
8,787

 
1,134,658

 
89.7
%
 
Michigan
 
24

 
15,626

 
1,977,673

 
87.4
%
Kansas
 
16

 
5,731

 
763,249

 
85.0
%
 
Ohio
 
22

 
12,352

 
1,518,814

 
89.2
%
Washington
 
15

 
4,950

 
623,996

 
84.9
%
 
New Jersey
 
17

 
11,456

 
1,346,052

 
88.5
%
Nevada
 
13

 
6,620

 
840,166

 
91.9
%
 
Nevada
 
17

 
8,239

 
1,092,443

 
91.6
%
Colorado
 
11

 
5,055

 
615,613

 
89.1
%
 
Indiana
 
16

 
8,787

 
1,134,658

 
89.7
%
New Hampshire
 
11

 
4,665

 
570,795

 
92.7
%
 
Kansas
 
16

 
5,731

 
763,249

 
85.0
%
Ohio
 
8

 
3,572

 
454,168

 
90.2
%
 
Alabama
 
15

 
6,329

 
940,922

 
88.4
%
Other(1)
 
42

 
19,958

 
2,412,379

 
86.1
%
 
Washington
 
15

 
4,950

 
623,996

 
84.9
%
Total
 
531

 
257,439

 
32,114,079

 
88.1
%
 
Colorado
 
11

 
5,055

 
615,613

 
89.1
%
 
 

 

 

 
 
 
New Hampshire
 
11

 
4,665

 
570,795

 
92.7
%
 
 
 
 
 
 
 
 
 
 
Other(2)
 
83

 
46,006

 
5,420,609

 
85.7
%
 
 

 

 

 
 
 
Total
 
706

 
360,631

 
44,732,398

 
87.8
%





(1) Other states and territories in NSA's owned portfolio as of March 31, 2019 include Alabama, Illinois, Kentucky, Maryland, Massachusetts, Mississippi, Missouri, New Jersey, New Mexico, Pennsylvania, South Carolina, Virginia and Puerto Rico.
(2) Other states and territories in NSA's operated portfolio as of March 31, 2019 include Delaware, Illinois, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia and Puerto Rico.

12

image0a87.jpg

Supplemental Schedule 3 (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portfolio Summary
 
 
(dollars in thousands) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019 Acquisition Activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Self Storage Properties Acquired
During the Quarter Ended:
 
 
 
 
 
 
 
Summary of Investment
 
Stores
 
Units
 
Rentable Square Feet
 
Cash and Acquisition Costs
 
Value of OP Equity
 
Other Liabilities
 
Total
 
 
 
 
 
March 31, 2019(3)
 
32
 
14,952
 
1,745,495

 
$
160,531

 
$
33,356

 
$
674

 
$
194,561

 
2019 Divestiture Activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unconsolidated Real Estate Venture Dispositions Closed During the Quarter Ended: (at 100%)(4)
 
Stores
 
Units
 
Rentable Square Feet
 
Gross Proceeds
 
 
March 31, 2019(5)
 
1
 
318
 
40,930

 
$
4,075






















(3) NSA acquired self storage properties located in Arizona (1), Florida (4), Georgia (5), Louisiana (11), Maryland (1), New Hampshire (1), New Jersey (2), New Mexico (1), Oregon (1), and Pennsylvania (5).
(4) Values represent entire unconsolidated real estate ventures at 100%, not NSA's proportionate share. NSA's ownership in each of the unconsolidated real estate ventures is 25%.
(5) The divestiture completed during the quarter ended March 31, 2019 was a sale from one of NSA's unconsolidated real estate ventures into the consolidated portfolio of NSA.

13

image0a87.jpg

Supplemental Schedule 4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt and Equity Capitalization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Summary (dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Interest Rate(1)
 
Basis of Rate
 
Maturity Date
 
2019
 
2020
 
2021
 
2022
 
2023
 
2024
 
Thereafter
 
Total
Credit Facility:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving line of credit
3.89%
 
Variable
 
May 2020
 
$

 
$
277,500

 
$

 
$

 
$

 
$

 
$

 
$
277,500

Term loan - Tranche A
2.91%
 
Swapped To Fixed
 
May 2021
 

 

 
235,000

 

 

 

 

 
235,000

Term loan - Tranche B
2.94%
 
Swapped To Fixed
 
May 2022
 

 

 

 
155,000

 

 

 

 
155,000

Term loan - Tranche C
3.71%
 
Swapped To Fixed
 
February 2024
 

 

 

 

 

 
105,000

 

 
105,000

Term loan - Tranche D
3.79%
 
Swapped To Fixed
 
January 2023
 

 

 

 

 
125,000

 

 

 
125,000

Term loan facility - 2023
2.63%
 
Swapped To Fixed
 
June 2023
 

 

 

 

 
100,000

 

 

 
100,000

Term loan facility - 2023
3.79%
 
Variable
 
June 2023
 

 

 

 

 
75,000

 

 

 
75,000

Term loan facility - 2028
4.62%
 
Swapped To Fixed
 
December 2028
 

 

 

 

 

 

 
75,000

 
75,000

Fixed rate mortgages payable
4.18%
 
Fixed
 
October 2020 - October 2031
 

 
36,296

 
3,744

 

 
83,400

 
20,351

 
123,069

 
266,860

Total Principal/Weighted Average
3.61%
 
 
 
3.89 years
 
$

 
$
313,796

 
$
238,744

 
$
155,000

 
$
383,400

 
$
125,351

 
$
198,069

 
$
1,414,360

Unamortized debt issuance costs and debt premium, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
566

Total Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
$
1,414,926

Debt Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Covenant
 
Amount
Net Debt to Annualized Current Quarter Adjusted EBITDA
 
n/a
 
6.0x
Trailing Twelve Month Fixed Charge Coverage Ratio
 
> 1.5x
 
3.2x
Total Leverage Ratio
 
 
< 60.0%
 
43.7%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Effective interest rate incorporates the stated rate plus the impact of interest rate cash flow hedges and discount and premium amortization, if applicable. For the $400 million revolving line of credit, the effective interest rate excludes fees which range from 0.15% to 0.25% for unused borrowings.

14

image0a87.jpg

Supplemental Schedule 4 (continued)
 
 
 
 
Debt and Equity Capitalization
 
 
 
 
As of March 31, 2019
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
Preferred Shares and Units
 
 
 
 
 
 
 
Outstanding
 
 
6.000% Series A cumulative redeemable preferred shares of beneficial interest
6,900,000

 
 
6.000% Series A-1 cumulative redeemable preferred units
501,918

 
 
 
 
 
 
Common Shares and Units
 
 
 
 
 
 
 
Outstanding
 
If Converted
Common shares of beneficial interest
56,669,468

 
56,669,468

Restricted common shares
29,218

 
29,218

Total shares outstanding
56,698,686

 
56,698,686

Operating partnership units
30,229,228

 
30,229,228

DownREIT operating partnership unit equivalents
1,848,261

 
1,848,261

Total operating partnership units
32,077,489

 
32,077,489

Long-term incentive plan units(2)
538,720

 
538,720

Total shares and Class A equivalents outstanding
89,314,895

 
89,314,895

Subordinated performance units(3)
10,739,868

 
14,713,619

DownREIT subordinated performance unit equivalents(3)
4,371,622

 
5,989,122

Total subordinated partnership units
15,111,490

 
20,702,741

Total common shares and units outstanding
104,426,385

 
110,017,636









(2) Balances exclude 224,000 long-term incentive plan ("LTIP") units which only vest and participate in dividend distributions upon the future contribution of properties from the PROs.
(3) If converted balance assumes that each subordinated performance unit (including each DownREIT subordinated performance unit) is convertible into OP units, notwithstanding the two-year lock-out period on conversions for certain series of subordinated performance units, and that each subordinated performance unit would on average convert on a hypothetical basis into an estimated 1.37 OP units based on historical financial information for the trailing twelve months ended March 31, 2019. The hypothetical conversions are calculated by dividing the average cash available for distribution, or CAD, per subordinated performance unit by 110% of the CAD per OP unit over the same period. The Company anticipates that as CAD grows over time, the conversion ratio will also grow, including to levels that may exceed these amounts.

15

image0a87.jpg

Supplemental Schedule 5
 
 
 
 
 
Summarized Information for Unconsolidated Real Estate Ventures
(dollars in thousands) (unaudited)
 
 
Combined Balance Sheet Information
 
 
 
 
 
 Total Venture at 100%(1)
 
March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
 
Self storage properties, net
 
$
1,876,504

 
$
1,894,412

Other assets
 
34,334

 
50,915

Total assets
 
$
1,910,838

 
$
1,945,327

LIABILITIES AND EQUITY
 
 
 
 
Debt financing
 
$
947,391

 
$
956,357

Other liabilities
 
17,122

 
16,516

Equity
 
946,325

 
972,454

Total liabilities and equity
 
$
1,910,838

 
$
1,945,327

 
 
 
 
 
Combined Operating Information
 
 
 
 
 
 
 
Three Months Ended March 31, 2019
 
 
 Total Venture at 100%(1)
 
NSA Proportionate Share (Venture at 25%)(2)
Total revenue
 
$
39,795

 
$
9,949

Property operating expenses
 
12,544

 
3,136

Net operating income
 
27,251

 
6,813

Supervisory, administrative and other expenses
 
(2,653
)
 
(663
)
Depreciation and amortization
 
(21,826
)
 
(5,457
)
Interest expense
 
(10,020
)
 
(2,505
)
Loss on sale of self storage properties
 
(806
)
 
(202
)
Acquisition and other expenses
 
(408
)
 
(102
)
Net loss
 
$
(8,462
)
 
$
(2,116
)
Add (subtract):
 
 
 
 
Equity in earnings adjustments related to amortization of basis differences
 
 
 
14

Company's share of unconsolidated real estate venture real estate depreciation and amortization
 
 
 
5,457

Company's share of unconsolidated real estate venture loss on sale of properties
 
 
 
202

Company's share of FFO and Core FFO from unconsolidated real estate ventures
 
 
 
$
3,557

(1) Values represent entire unconsolidated real estate venture at 100%, not NSA's proportionate share. NSA's ownership in the unconsolidated real estate venture is 25%.
(2) NSA's proportionate share of its unconsolidated real estate venture is derived by applying NSA's 25% ownership interest to each line item in the GAAP financial statements of the unconsolidated real estate venture to calculate NSA's share of that line item. NSA believes this information offers insights into the financial performance of the Company, although the presentation of such information, and its combination with NSA's consolidated results, may not accurately depict the legal and economic implications of holding a noncontrolling interest in the unconsolidated real estate venture. The operating agreement of the unconsolidated real estate venture provides for the distribution of net cash flow to the unconsolidated real estate venture’s investors no less than monthly, generally in proportion to the investors’ respective ownership interests, subject to a promoted distribution to NSA upon the achievement of certain performance benchmarks by the non-NSA investor.

16

image0a87.jpg

Supplemental Schedule 6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same Store Performance Summary By State
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in thousands, except per square foot data) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2019 compared to Three Months Ended March 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
Property Operating Expenses
 
Net Operating Income
 
Net Operating Income Margin
State
Stores
1Q 2019
 
1Q 2018
 
Growth
 
1Q 2019
 
1Q 2018
 
Growth
 
1Q 2019
 
1Q 2018
 
Growth
 
1Q 2019
 
1Q 2018
 
Growth
California
80

 
$
18,816

 
$
17,857

 
5.4
%
 
$
5,144

 
$
5,128

 
0.3
 %
 
$
13,672

 
$
12,729

 
7.4
%
 
72.7
%
 
71.3
%
 
1.4
 %
Oregon
58

 
9,275

 
9,169

 
1.2
%
 
2,500

 
2,548

 
(1.9
)%
 
6,775

 
6,621

 
2.3
%
 
73.0
%
 
72.2
%
 
0.8
 %
Texas
58

 
7,222

 
6,920

 
4.4
%
 
2,705

 
2,735

 
(1.1
)%
 
4,517

 
4,185

 
7.9
%
 
62.5
%
 
60.5
%
 
2.0
 %
Georgia
33

 
4,136

 
3,750

 
10.3
%
 
1,407

 
1,259

 
11.8
 %
 
2,729

 
2,491

 
9.6
%
 
66.0
%
 
66.4
%
 
(0.4
)%
Oklahoma
30

 
3,601

 
3,543

 
1.6
%
 
1,136

 
1,129

 
0.6
 %
 
2,465

 
2,414

 
2.1
%
 
68.5
%
 
68.1
%
 
0.4
 %
North Carolina
29

 
4,057

 
3,869

 
4.9
%
 
1,283

 
1,166

 
10.0
 %
 
2,774

 
2,703

 
2.6
%
 
68.4
%
 
69.9
%
 
(1.5
)%
Florida
28

 
6,490

 
6,288

 
3.2
%
 
1,997

 
1,982

 
0.8
 %
 
4,493

 
4,306

 
4.3
%
 
69.2
%
 
68.5
%
 
0.7
 %
Arizona
16

 
3,151

 
3,036

 
3.8
%
 
884

 
871

 
1.5
 %
 
2,267

 
2,165

 
4.7
%
 
71.9
%
 
71.3
%
 
0.6
 %
Indiana
16

 
2,502

 
2,284

 
9.5
%
 
839

 
810

 
3.6
 %
 
1,663

 
1,474

 
12.8
%
 
66.5
%
 
64.5
%
 
2.0
 %
Louisiana
14

 
1,839

 
1,802

 
2.1
%
 
644

 
638

 
0.9
 %
 
1,195

 
1,164

 
2.7
%
 
65.0
%
 
64.6
%
 
0.4
 %
Washington
13

 
1,743

 
1,718

 
1.5
%
 
485

 
506

 
(4.2
)%
 
1,258

 
1,212

 
3.8
%
 
72.2
%
 
70.5
%
 
1.7
 %
Nevada
11

 
1,899

 
1,703

 
11.5
%
 
524

 
596

 
(12.1
)%
 
1,375

 
1,107

 
24.2
%
 
72.4
%
 
65.0
%
 
7.4
 %
Colorado
11

 
1,717

 
1,670

 
2.8
%
 
569

 
586

 
(2.9
)%
 
1,148

 
1,084

 
5.9
%
 
66.9
%
 
64.9
%
 
2.0
 %
New Hampshire
10

 
1,562

 
1,433

 
9.0
%
 
560

 
531

 
5.5
 %
 
1,002

 
902

 
11.1
%
 
64.1
%
 
62.9
%
 
1.2
 %
Other(1)
32

 
4,299

 
3,933

 
9.3
%
 
1,606

 
1,600

 
0.4
 %
 
2,693

 
2,333

 
15.4
%
 
62.6
%
 
59.3
%
 
3.3
 %
Total/Weighted Average
439

 
$
72,309

 
$
68,975

 
4.8
%
 
$
22,283

 
$
22,085

 
0.9
 %
 
$
50,026

 
$
46,890

 
6.7
%
 
69.2
%
 
68.0
%
 
1.2
 %













(1) Other states in NSA's same store portfolio include Alabama, Illinois, Kansas, Kentucky, Maryland, Massachusetts, Mississippi, Missouri, New Mexico, Ohio, South Carolina and Virginia.

17

image0a87.jpg

Supplemental Schedule 6 (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same Store Performance Summary By State
 
 
 
 
 
 
 
 
 
 
 
(dollars in thousands, except per square foot data) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2019 compared to Three Months Ended March 31, 2018
 
 
Rentable Square Feet
 
Occupancy at Period End
 
Average Occupancy
 
Average Annualized Rental Revenue per Occupied Square Foot
State
Units
 
1Q 2019
 
1Q 2018
 
Growth
 
1Q 2019
 
1Q 2018
 
Growth
 
1Q 2019
 
1Q 2018
 
Growth
California
48,007

6,070,633

 
91.4
%
 
91.6
%
 
(0.2
)%
 
90.1
%
 
90.9
%
 
(0.8
)%
 
$
13.17

 
$
12.34

 
6.7
 %
Oregon
23,654

2,990,834

 
83.4
%
 
85.8
%
 
(2.4
)%
 
82.6
%
 
85.1
%
 
(2.5
)%
 
14.72

 
14.20

 
3.7
 %
Texas
23,219

3,295,196

 
88.8
%
 
88.2
%
 
0.6
 %
 
88.0
%
 
87.3
%
 
0.7
 %
 
9.69

 
9.38

 
3.3
 %
Georgia
13,692

1,850,804

 
89.5
%
 
86.8
%
 
2.7
 %
 
88.2
%
 
86.1
%
 
2.1
 %
 
9.80

 
9.19

 
6.6
 %
Oklahoma
13,875

1,902,992

 
86.3
%
 
83.8
%
 
2.5
 %
 
85.3
%
 
83.5
%
 
1.8
 %
 
8.62

 
8.67

 
(0.6
)%
North Carolina
13,091

1,599,584

 
91.5
%
 
89.4
%
 
2.1
 %
 
90.7
%
 
89.1
%
 
1.6
 %
 
10.72

 
10.42

 
2.9
 %
Florida
18,807

1,991,476

 
87.2
%
 
87.1
%
 
0.1
 %
 
87.2
%
 
87.2
%
 

 
14.48

 
14.30

 
1.3
 %
Arizona
9,124

1,066,959

 
87.8
%
 
88.5
%
 
(0.7
)%
 
86.3
%
 
87.1
%
 
(0.8
)%
 
13.25

 
12.64

 
4.8
 %
Indiana
8,787

1,134,658

 
89.7
%
 
85.4
%