In 2020, the coronavirus pandemic may have slowed or stopped property acquisitions in some sectors, but that was hardly the case at self-storage REIT National Storage Affiliates Trust.
The fourth quarter of 2020 represented the REIT’s busiest quarter ever for wholly owned acquisitions, President and CEO Tamara Fischer said. During the quarter, National Storage Affiliates Trust spent $260.5 million on 33 wholly owned acquisitions and two expansion projects. For the full year, the REIT allocated $543.3 million for 77 wholly owned acquisitions.
This year, Greenwood Village, CO-based National Storage Affiliates Trust anticipates maintaining a similar level of acquisitions. It’s forecasting acquisition activity of $400 million to $650 million in 2021. During the company’s Feb. 23 earnings call, Fischer said those acquisitions should be completed at cap rates of 5.5% to 6%.
What’s the rush?
So, why was the REIT so busy making acquisitions in 2020, especially toward the end of the year? “I think we saw sellers who are a little anxious about upcoming potential changes to tax regulations, potential tax reform,” said Fischer, citing heightened interest from mom-and-pop sellers.
Fischer said that while National Storage Affiliates Trust looks at almost every self-storage portfolio that hits the market, the REIT continues to concentrate largely on assets in secondary and tertiary markets.
“If anything, I think we’re maybe even more committed to the secondary and tertiary markets than we have been historically,” said Fischer, citing the work-from-anywhere trend as one of the reasons.
All in all, Fischer said the REIT is “firing on all cylinders.”
A look at 2021
For 2021, National Storage Affiliates Trust forecasts same-store revenue growth of 3% to 4.5%, compared with 1.7% in 2020. Meanwhile, it estimates same-store NOI growth this year of 2.4% to 5%, compared with 2.2% in 2020. In the category of same-store property operating expenses, the REIT foresees a jump of 3.5% to 5% this year, compared with 0.5% in 2020.
National Storage Affiliates Trust says average same-store occupancy was 91.8% as of Dec. 31, up 460 basis points from the same time in 2019.