National Storage Affiliates (NYSE:NSA) Q1 2018 Earnings Conference Call Transcript

May 03, 2018 • 01:00 pm ET

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National Storage Affiliates (NYSE:NSA) Q1 2018 Earnings Conference Call Transcript

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Presentation
Executive
Tamara Fischer

NOI growth. In the South, our Florida stores also had a good quarter, as did our stores in Shreveport and most of North Carolina. In the Northwest, our Washington stores turned in another strong performance, as did our stores in Bend, Oregon. We felt the impact of new supply in Portland, but we continue to achieve rate growth while absorbing modest decreases in occupancy.

Certain submarkets in Texas, especially around Dallas, were impacted by new supply, which resulted in higher advertising and marketing spend. Our stores in Oklahoma City and Tulsa both remain challenged by new supply as well as relatively lower economic growth.

Lastly, the challenges from new supply in the Raleigh-Durham market are impacting our stores there and weighing down an otherwise strong performance from our North Carolina portfolio. We'll continue to benefit from both our geographic diversity as well as the depth of our PRO networks in their respective markets, enabling us to focus on meaningful growth over the long term rather than short-term quarterly movement.

With respect to our balance sheet, we continue to work on expanding our sources of capital to maintain ample capacity and liquidity to fund our growth in our portfolio. For example, during the first quarter, we completed our first preferred OP unit issuance, closed a new $125 million term loan and simultaneously expanded our credit facility borrowing capacity, including an accordion option to $1.3 billion.

At the end of the first quarter, our net-debt-to-EBITDA ratio was 5.8x, which is well within our stated target range of 5.5x to 6.5x. At the end of the quarter, we had just $73 million outstanding on our $400 million revolving line of credit and only $3 million of debt maturities through 2019, leaving us with the flexibility and dry powder to achieve our growth objectives.

Finally, we are reaffirming our guidance for 2018, notably, core FFO in the range of $1.33 to $1.37 per share, same-store NOI growth of 4% to 5.5% based on revenue growth of 4% to 5% and expense growth of 3% to 4%. We anticipate our acquisition activity will range between $250 million and $400 million for balance sheet acquisitions with an additional $50 million to $100 million of acquisitions in our joint venture, where NSA is a 25% equity owner.

Thanks again for joining us today, and we'll now turn the call back to the operator to take your questions. Operator?