National Storage Affiliates (NYSE:NSA) Q1 2018 Earnings Conference Call Transcript
May 03, 2018 • 01:00 pm ET
these three years.
While we are proud of these accomplishments, we're not content to rest on our laurels. Our strong results are only a starting point for NSA, and we believe our platform is uniquely designed to continue to deliver outsized growth and value creation over the long term. The first quarter of 2018 was really no different. Our first quarter core FFO per share once again grew at a double-digit pace, up 10.3% from the first quarter last year, taking advantage of both the strength of our operating platform and our unique acquisition strategy.
Turning to acquisitions. We've had success in finding external growth opportunities and are pleased to report we closed on 25 wholly owned properties and one joint venture property in the first quarter of this year, making this our strongest first quarter of acquisitions on record. Total consideration for these acquisitions, which added 1.4 million square feet to our portfolio, was approximately $145 million, funded through cash, the assumption of mortgage debt and the issuance of OP equity.
Notably, this included our first issuance of perpetual preferred OP units, which provide another source of equity for us to offer sellers to achieve a tax-efficient transaction. All new acquisitions in the first quarter were primarily within our existing markets, including Phoenix, Texas, Florida and Kansas.
Now I'd like to take a moment to update you on our view of market conditions. First, fundamentals on the demand side remained solid. Economic growth has accelerated, and we see resilience in the labor market as tax cuts are fueling job creation and increased consumer spending. This has resulted in steady growth in demand for self-storage space in almost all of our markets and a significant increase in move-in activity over last year. On the other hand, while demand remains good, we expect that we'll continue to see our pricing power impacted by new supply in several markets, where supply growth is exceeding demand growth.
In particular, we're seeing this in Portland, Oklahoma City, Raleigh and Dallas. Fortunately, it looks like we're starting to see a slowdown in the planned construction of new facilities, which we believe will result in deliveries peaking late this year and supply and demand approaching equilibrium in most of our markets in 2019. At this point, the percentage of our stores exposed to new supply is less than 20%, roughly in line with last quarter.
As we've discussed, self-storage is a local business, and our partnership with our PROs enables us to utilize their on-the-ground knowledge and expertise to manage our business amidst increasing competition.
With this backdrop, I'd like to remind you of several key differentiators for NSA. Our portfolio is focused in markets with strong job growth and population drivers, which have historically generated sufficient demand to absorb new supply. In addition, we've been in this business for decades. Our belief is that maintaining street rates and passing along reasonable rate increases to existing customers while accepting modest declines in occupancy is a better