As it absorbs the second-quarter purchase of 24 wholly owned facilities for $185.3 million, National Storage Affiliates Trust expects to pounce on more potential acquisitions once asking prices fall.
Arlen Nordhagen, chairman and CEO of the Greenwood Village, CO-based REIT, said during the company’s second-quarter earnings call that he and his colleagues are keeping an eye on possible acquisition targets amid “a lot of developer panic” over sluggish lease-up activity at new properties.
“But honestly, we have not seen the prices of those come down enough to do very much [buying] yet,” Nordhagen told Wall Street analysts. “We do think that they’ll keep coming down, and once they do, we’re going to be very interested in [bidding on them].”
The $185.3 million in acquisitions completed in the second quarter represent a considerable portion of the $400 million to $500 million in purchases that National Storage Affiliates envisions carrying out this year. The 24 newly acquired properties offer about 12,300 units in roughly 1.8 million rentable square feet.
Year to date, National Storage Affiliates has made nearly $400 million in acquisitions. Nordhagen said the REIT’s more than $1 billion “captive” pipeline of acquisitions comprises over 100 facilities.
Other second-quarter highlights for National Storage Affiliates included:
- The top markets for above-average performance on a same-store basis were Atlanta, GA; Indianapolis, IN; and Las Vegas, NV. In these metro areas, recent demand growth has exceeded supply growth, Nordhagen said.
- The bottom markets for below-average performance on a same-store basis were Dallas, TX; Phoenix, AZ; and Portland, OR. In these metros, “we continue to face the most impactful headwinds from elevated new supply,” Nordhagen said.
- Same-store NOI jumped 5.5 percent compared with the same period in 2018.
- Same-store revenue grew 4.7 percent versus the same time last year.
- Projected same-store revenue growth for 2019 changed from a range of 2.5 percent to 3.5 percent to a range of 3.5 percent to 4 percent.
- Projected same-store NOI growth for 2019 changed from a range of 2.5 percent to 3.5 percent to a range of 3.5 percent to 4.5 percent.
- Average same-store occupancy increased 40 basis points to 89.6 percent.