National Storage Affiliates Sees Trough in Fundamentals as Q1 2025 Revenue Growth Surpasses Expectations
National Storage Affiliates Trust (NSA) has reported a strong start to the year, with its first quarter 2025 earnings surpassing expectations. The company's President and CEO, Dave Cramer, highlighted the 130 basis points of sequential improvement in same-store revenue growth on a year-over-year basis, with all but three of their reported same-store markets seeing a sequential increase in revenue.
The company has been busy implementing strategies to improve its operations, including the use of artificial intelligence (AI) to optimize call flows and staffing hours. This is reflected in the 5% increase in moving contract rates in April compared to first quarter levels. Meanwhile, occupancy increased by 20 basis points in April to finish at 83.8% occupied.
Cramer pointed out that markets where NSA has been further along in implementing these strategies are showing benefits, with Portland being a prime example. The city is now one of the company's top performers, delivering positive revenue growth in the quarter. Houston also saw similar trends, generating 2.2% revenue growth in the first quarter.
While there remains uncertainty in the broader economic and capital markets, NSA has remained disciplined in its approach to acquisitions. The company successfully closed on three assets totaling approximately $40 million during the first quarter and sold two properties for $10 million. Proceeds from asset sales will be used to pay down the revolver and fund future acquisitions.
The company is optimistic about its prospects, with Cramer stating that it believes it has found a trough in fundamentals. NSA continues to operate its marketing and revenue management efforts effectively, leading to better results. The company's existing customer base remains healthy, and its length of stay remains above historical averages, with bad debt expense remaining within expected ranges.
In summary, National Storage Affiliates Trust has made a strong start to the year, with its Q1 2025 earnings surpassing expectations. The company's focus on improving operations and its disciplined approach to acquisitions have positioned it well for future growth.
