Rapid acquisitions continue to fuel the growth of National Storage Affiliates Trust (NSA), contributing to a strong first quarter in which total revenue jumped 40 percent from a year ago, the company reported May 10 during its first quarter earnings call.
“The self-storage sector remains strong,” said CEO Arlen Nordhagen. “There’s steadily increasing demand in most of our markets, which continue to benefit from above-average employment and population growth.”
The company has expanded its portfolio considerably in 2016, acquiring 39 properties year to date. That includes 14 properties from Hide-Away Storage Services in Sarasota, FL. NSA, based in Greenwood Village, CO, also added Hide-Away as its seventh regional operator—which the company internally refers to as PROs.
Gobbling up facilities
NSA was particularly busy after March 31, buying 22 properties, including the 14 from Hide-Away. Year-to-date NSA spent more than $260 million in self-storage property buys and added more than 2.7 million rentable square feet – a 17 percent increase since Dec. 31, 2015. NSA now owns 315 self-storage properties in 18 states, which have a combined 146,000 units and almost 19 million rentable square feet.
NSA will continue to focus on three areas to make further acquisitions: new PRO stores, captive pipeline stores and third-party acquisitions.
“We’re in discussions with a number of sellers and PROs with large equity positions in their properties,” Nordhagen said, “We’ve expanded our presence in our existing markets, entered the Indianapolis market and significantly grew our West Florida market with the Hide-away purchase.”
NSA also modified its credit facility during the first quarter, increasing its capacity to $675 million.
Ramping up revenue management
NSA’s new revenue-management system, designed to push maximize rate of occupancy, is operating in 117 stores in 19 markets with four PROs.
Nordhagen said he has seen positive results so far, which is being implemented and tested by the company’s PROs.
“We believe the rollout of the system was an important contributor to our 9.1 percent same-store revenue growth this quarter over first quarter of last year. We will add more stores to the system throughout the year,” Nordhagen said.
For the three months ended March 31, NSA generated revenue of $39.65 million, net income of $4.8 million and basic earnings per share of 10 cents. That compares with revenue of $27.4 million and a net income loss of minus $2.77 million in the year-ago period. FFO was $11.2 million, or 23 cents per share, in the first quarter, up from $3.8 million and 18 cents per share one year ago.
Net operating income was $26.4 million in Q1, an increase of 42.9 percent from $18.4 million in Q1 2015.
Same-store total revenue was $30.5 million for Q1, up 9.1 percent from one year ago. Same-store net income rose 11.3 percent to $20.4 million year-over-year.