NSA - Earnings call transcript Q4 2017 | National Storage Affiliates Trust

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Operator

Greetings, and welcome to the National Storage Affiliates Fourth Quarter and Year End 2017 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Marti Dowling, Director of Investor Relations for National Storage Affiliates. Thank you, Mrs. Dowling, you may now begin.

Marti Dowling

everyone. Hello, to and joining call year-end Storage Trust. like the today of you Affiliates quarter fourth XXXX thank would us for for National We earnings conference

have statements today's call, press that questions our section containing management's package on prepared Investor also with are our this answers In and and risks be the your forward-looking differ on actual supplemental materially cautions On release detail remarks may our which to X-K from with in website the morning, to uncertainties. addition Relations we results, furnished additional found an contain SEC those the distributed nationalstorageaffiliates.com. statements. that may company to subject may projected at The forward-looking any in results

statements, detail to SEC. our refer the with additional our filings concerning forward-looking please public For

website to contained financial non-GAAP and We section the also made Operations, measures is its net the Vice core in the Arlen Fischer; of SEC. Senior Chief Affiliates' encourage Investor Storage Treadwell. in operating available Financial the filings Executive Nordhagen; supplemental Chief FFO, such listeners reconciliations and with in definitions by National package call Officer, hosted the FFO President conference Tamara and of income on review as Today's Steve company's Relations and information Officer,

over prepared Arlen. questions will I from call accept turn remarks, the to management will Following registered financial now analysts.

Arlen Nordhagen

thank and Marti, you, Thanks, call. today’s everyone, joining conference for earnings

strategy, and We and results. this balance which tremendous differentiated PROs drive with operational strong we From advantages organic continue quarter growth operating which presence that platform our full our sheet pleased our proof with nearly industry superior very and provides fourth is growth. local that continued strong by perspective, believe to an XXXX are metric. drives from national year leading expertise We market combines represents outperformance every our results,

new supply same-store We XXXX markets. several feel coming year of full our by X.X%. online X.X%, revenue did NOI the same-store by grew in impact the grew For and

XXXX fourth fourth still pace but the to expanded From were the X%. X yearly was quarter industry-leading combined quarter in XX% added at which we joint XX square growth and numbers X We feet across close portfolio, averages, the states. nearly wholly-owned an portfolio perspective, our year. growth So, below million represents with in venture to our for same-store XX acquisitions, acquisitions NOI acquisitions approximately

result pace, we leveraged a ended year strong As states. across self-storage XXX diversified multiple to enhanced fund we of access external To this acquisition portfolio well-priced capital. a our with properties, the growth, sources our of of XX and

fourth preferred common of markets During opportunistically we the $XXX the quarter, accessed and equity. million and million equity of equity raising preferred common $XXX

well-positioned of facility's credit and at Our continued XXXX. is $XXX capacity million almost our undrawn for with balance our and sheet stands $X.X in billion growth total now all available, revolver

results and combine strong double-digit expansion Our disciplined portfolio to organic drive growth. core FFO

FFO million increased full-year year. share nearly by the equity XX.X%, Our despite of per the during of core total issuances impact $XXX

success. We’re for and I to making thank continued results their extremely of would a to proud hard work like team NSA our these dedication and world-class

like about to talk we're XXXX. into seeing I’d Next, what forward moving

changes to like would our I First, pool. outline to same-store

stores same-store same-store same-store potential our and our of be newly both year's XXXX, XXXX These comparable XXXX are added similar stores. properties expect by pool of Because total of XX our XXX to a and growth added, geographic these For stores performance occupancy the to stores will geographically of particular a same-store XXXX are in increase diversified across new to performance we pool. these to they new of diversification pool of this XX states. terms

remain consumers fundamentals our moment and job tax the world supply The economy momentum impact benefiting for that growth will in continues and update supporting economic you our growth deliver a with Second, and self-storage view growth I’d XXXX market healthy on like in beyond. to The income. which of of demand cuts discretionary form intact. drive to take demand to dynamics, higher

to deliveries markets, brought particularly From strong self-storage we household properties. XXXX results with a to areas supply good and several the our across perspective, years for new these the new markets of have that supply but the continue in the and job will new all into feel And impact demand continue in as market. see industry expect We absorbed strong to growth. XXXX construction growth in last over

of specific is We our be continue a business new approximately stores. local self-storage in radius impacted X-mile market the of directly Overall, this and locations year. our we to emphasize expect to by impact supply to very a that XX% one is within the any stores

Specifically, in have exposure Florida, Atlanta Raleigh-Durham, to meaningful and supply. new our stores West Portland, Dallas

at demand prepared demand wherein our to balance. industry exceed stores but anticipate new has to growth, with be XXXX being NOI fortunately, growth supply. our of outsized of that enjoyed fact where remaining is and expect in just approximately supply substantially is from XXXX five sub XX% is supply of the Looking the coming not to MSAs a several demand MSAs The materially being including to five-year MSA we growth. where supply we offset demand approximately markets, this we’re NOI XX% the in and we forecast the by our compete NOI our markets of XX% year years below complete perspective, But in generated be good growth supply growth that five-year generated is to and

the order We hold increases long-term to rates customers impact NOI to ongoing to reasonable will work and Street continued to growth. limit existing in

rely market in growth platform solid our management From results. nimble remain our financial expertise, continue to PROs perspective, We an will and revenue local for well-positioned external our optimize XXXX. another on and also we’re to year

at marginal held Our has expectations. some in PROs continue with source reasonable values seller market opportunities and good steady to decreases pricing

XX stores year-to-date valued our acquired base Our at to we’ve per goal already. is asset million externally XX% year, approximately approximately $XXX grow by and

our four let of Finally, pillars of strategy. growth me remind you external the

which than at valued PROs captive NSA properties stands over not that our $XXX but which million. pipeline, does properties First, at consists yet XXX manage, of currently own already our more

our PROs of sourced XXXX, were volume Second, us. approximately our acquisitions acquisitions third-party to two-thirds source In PRO for a by of network. significant our continue

we Additionally, high-quality ongoing years. discussions evaluate with have potential we few and PROs operators. continue X like PROs X several new another to Ultimately, private the to add next would And lastly. to over

growing venture well-positioned in about we portfolio pleased with diverse we turn venture. leverage We again are to valued assets In utilize our Overall, $XX of platform our our XXXX, our to call continue while execute acquired income. joint and sheet, XXXX with to five joint continue we’re at on Tammy. that, to very growth balance believe now stores through the and fee differentiated as we well-proven million outperform strategy. our XXXX once and I’ll a With now high-quality results we over to strategy our

Tamara Fischer

Arlen. Thanks,

core quarter, For of and fourth core FFO increase $X.XX, reported we the of prior the FFO million, year. share per X.X% $XX.X over a

we FFO share $X.XX, core million over full-year, FFO representing and core the a $XX.X of per of For reported increase last XX.X% year.

same-store growth as growth venture activity, fees. organic joint is as driven well continued core Our our robust and platform portfolio increased our by in acquisition FFO

the offerings. by Our dilutive strong equity partially offset common and growth was preferred our impact topline fourth-quarter of

operations. now Turning to

Same-store our point was square average offset fourth average increase in by same-store foot, a rent XX-basis the decrease grew revenue which X.X%. by occupancy X.X% NOI increased by X%, quarter, to per For in total a driven XX%.

focus to typically of revenue new in even growth face to supply. occupancy as on decreases, long-term our are continue of driver rate We due growth key mind the which

growth Street increase rates. average this From controllable advertising supply. taxes expectation fourth ability increased largely the driving demonstrated personnel our effective costs customer the perspective, rental X.X% to to the in operating new with current we have our And expenses the property cycle in-line in with quarter. existing an expect while expense base, We line our growth rates expense the strategy on during remain to our through property remains and holding

point For in we same-store property average to square at X.X% X.X% by increased Southern expenses. remained quarter portfolio, increase the results, strongest full-year by markets supply average foot. and a fourth secondary our Offset where per driven XXXX, occupancy operating in slightly quarter same-store the achieved in revenues a X.X% in our our rent our XX-basis our NRI in State Carolina Similar healthy. fourth annual markets for dynamics demand Washington in Within North the growth were California, in year. total decrease growth X.X%, performing

were Portland, Our primary Phoenix. challenges in Oklahoma Atlanta City, and

continues most remaining growth performance The for positioned per these is foot square challenges of and be markets. each yet New capture rent portfolio certain well-diversified keep supply growth of strong gains to we growth. rates despite same-store in in current steady driving to economy our top healthy occupancy our Overall, with markets. employment continue offsetting supply population long-term markets revenue has positive average in in believe to impacted our we

borrowings position sheet, conditions continued We to of $XXX balance flexible our completed have from million. on and our favorable recognizing repay million. a competitive diversify our revolver ourselves In shares of expand then common in balance remains these Shares capital completed sources. we X% X.X XXXX. to our offering market we million December, an and And portfolio advantage in follow-on Series to offering we a growth offerings October NSA, XXXX, inaugural Preferred A for equity proceeds raising used sheet raising $XXX the as Turning for

end of of of our low X.X with debt at times. the our ratio fourth quarter, debt of end the X.X% range times of our below X.X cost the X.X subject slightly average to which is weighted Our times, At XX% debt-to-EBITDA net year-end target was to variable-rates. was only

well are maturities debt Our providing plenty near-term of flexibility. laddered,

maturities January, $X five-year facility $XXX approximately debt add under We amended in average to credit our X.X just and million have maturity In years. XXXX XXXX loan. weighted term in is million and we our

is largely billion, our options in to capacity revolver $XXX total new available of acquisitions. inclusive Our million and is $X.X our now finance reporting

Now, guidance me our XXXX. for let introduce

normal have to we to supply in a about that remarks, to to due discussed XX% expect realized range anticipate his the industry the taken Arlen when the of establishing in We to per and XXXX coming of year. account meaningfully FFO we we growth factors opening XXXX in first expense be expect our investors. impact As $X.XX into in be And share. quarter. And $X.XX guidance core these to seasonality, new

X%. NOI which to and We on X.X%, of growth to X.X% X% growth growth of based of to X% expect X% revenue expense is same-store

of $XX Ohio. will of The is acquisitions XX% activity portfolio grow acquisition stores, NSA an where million between We XXX million venture in wholly-owned California, year-end. portfolio $XXX Florida, which $XXX million Indiana, to anticipate largest $XXX to additions additional XX% represents are acquisitions wholly-owned with will same-store equity range and our joint a Our at million our for owner. and

revenues. XX% expense assumes G&A range equity-based and X% Finally, between non-cash cash X% will of our compensation with that our between guidance revenues and X.X% ranging of

our are team, call our portfolio, Thanks to the questions. create our turn joining for long-term Operator? operator and confident sheet in our to We’re value We’ll to for us take to balance today. shareholders the continue XXXX. your well-positioned again back now

Operator

Thank you. Please first comes [Operator Our the question. your Thomas Instructions] of line with Todd proceed KeyBanc with Capital Markets. from question

Todd Thomas

Hi. Good afternoon.

so in heard from demand steady, so on revenue basis that could another to XXX that generally above-average I and point and X% we’ve you’re guidance, that that and there you're was like growth growth X% first just behind good most Just the that’s seeing if comment you deceleration on sort expecting that from was seems noted growth of curious growth, XXXX, Arlen question others revenue demand forecast? you is demand year

Arlen Nordhagen

Hi Todd.

early XX is in but which It that comment growth. that’s year nationwide, seen that we about the the below if of long-term X% we with averages running demand the the growth growth similar more and probably standpoint agree a would of see top the right so steady, now, growth in on years. have demand last the demand little about XXXXs, kind is a per particularly what in above X% running saw in that Supply X% average to think in we you I from of think, couple supply is to growth running of in X% I MSAs.

the about would reflection exposure the less that’s average, So, into our and we’ve think that little is industry average X.X% supply a be in year, have all if revenue are that growth expectations of we peers on we a is historical that average would X% year mid-point about so slightly the revenue where there for a XX-year below this being sector new markets XX% projecting factored our X% the you above, that average to the the outsize growth. of to but compare fact that, about

Todd Thomas

Okay.

that sort demand that’s impacting that specifically is about? growth growth. So, though related the you're to thinking is primarily population no There of driver other

Arlen Nordhagen

of maybe call fairly bit a little year. it will, I’d There but it’s increased X% you that’s is just, that’s a absorption if small, -

is no growth, in probably in were my cases that that at So, in grow market if market. you population your X% estimate will most had demand a about absolutely

Todd Thomas

then Hampshire, that is comments? at Phoenix at a and so strategy to few some loss, discuss then this your more revenue thinking occupancy, And little bit occupancy in strategy year-end, there Okay. see those little markets, you markets, ability slipped little you in occupancy to in like guess I store, bit, overall modest outsized primarily, the can and what markets strategy on Tammy some you New where stabilize just average of is about loss touched in whether a with the how occupancy was of consistent further the looks the sort same of it about push those talked Atlanta did bit you're right know you and year-over-year it's down expense you a the a maximizing

Steve Treadwell

to relatively going we be little portfolio flat-to-mildly With across certain new on to Overall, Street setting the rates, that before will where the we be we we entire think cognizant further can we Hi but Todd. we're forward occupancy markets are rates of discounting keep we are constant appropriately, we're those occupancy. and and a are on hold as our strategy and It use to bit but to really is that acknowledging out get Steve. respect there certainly line marginal going the trying supply there that the down mentioned pressures where down, rental. probably certainly the

Oklahoma difficult markets that Year. City expect So, those Tammy Portland, and recently continue somewhat Phoenix, been all Atlanta, the highlighted have more we to New in

Arlen Nordhagen

Arlen. is this Todd,

really to look note stores. we have at other do submarket to specific The thing around each is, the

it’s do impact if in that on have the it’s on of a if Street of, other big one in is Atlanta, on you the supply thing any look So, impact if Atlanta, to is it us, going at down block terms whereas us. new know there have it’s side we but it a wouldn’t

our So, specifically. budgets reflect that

Todd Thomas

Sure, for and year-over-year, where assume year it understood. in to be in more market you’re XXX mean like that? little promotions occupancy down Atlanta basis would discounts I ended a But over a example, safe offering points the that increasing

Arlen Nordhagen

and occupancy discounting key down and do from as Yes, it’s that is Street to we keep from our would keep specific, our our and focus also being to rates competitor promotions very going much. try hit more and but use

Todd Thomas

be Okay. I'm the or you out management, just platform And to different from it’s operating thoughts objectives, under a the quarter scale to just and updated realize your potentially lastly, in portfolio, PROs of more I the rebranding itself lends objective, one the not it’s Arlen, but there. to maybe thing, get it’s arguably accomplishes third-party bringing same was I Public same Storage stand this aggressive of was curious sort so end where discussing increased their benefit just on intent to NSA terms curious

Arlen Nordhagen

providing that that’s search have generic more than operate to system, search amount brand is get continue common unfortunately relates our PROs. them, unified of whether peers. think we nine self-storage literally our other brand vast brands, signing the pay-per-click-type that that we local to through benefits get probably don't near people web the a is PROs that majority there them. or for using market many by our near stores under at out made for going basically totally but than we’re of I public that and term, external so growth storage, is can't more having things, why any to as And side search for without the good high operating get they teams, by through And be approach. organically platform we up than that very skilled benefits the a of which get the the market that’s the can rankings the a the so platforms we under we our deals, expertise, mean can't marketing of small much get additional in acquisition and but While emphasis a expertise, you acquisition it

Todd Thomas

Okay. Thank you.

Arlen Nordhagen

Todd. Thanks

Operator

you. Thank

question comes question. the your of proceed next Rose Smedes Please line with with from Our Group. Citi

Smedes Rose

Hi same-store did outlook to just first say you, what you. that the seeing of on to at thank I you wanted you adding were pool XXXX? all just your same ask at X that you're year's X, growth last XX as would grow from pace in the

Arlen Nordhagen

as same the at grow the would XXX. it pace remaining No,

Smedes often same-store are we perform same numbers exact you fundamentally at pickup big XX that other the as going address give the and change in So, pool does get XXX. those almost a question, wanted this we really the to to the

Smedes Rose

That’s fourth like pretty Okay. And clarity get on. quarter. strong it up far then is really was the we Thank thus what quarter to looks I question just, acquisition the activity first you're had you. wanted picked in other the and in

is coming developments understand the this PROs you? Is acquisitions stand-alone that is platform? for from coming little wanted source procuring better. or guess to So, online they're your from, a that I just Or the that

Arlen Nordhagen

stabilized total mix, have a some It’s as a few so by PROs had There that the mix, acquisitions also third-party a between captive those we it’s mentioned will it’s well. The of quarters. stores few they I two pipeline had also PROs. but sourced stabilized other developments JV acquisitions. somewhat from be are of PROs, almost there but contributed our of the part as lot that PROs had that We in nondevelopment a sourced a

QX so avenues of of I to all far. it’s the that growth mentioned those coming and where basically play we’re of four external QX So, combination in

Smedes Rose

around or end? to the on of are acquisitions being And takes ask high-end at large, the your the low puts kind it’s outlook, quite just what range Okay. wanted then you and I just

Arlen Nordhagen

have really, that Bottom midpoint acquisitions already months with we we’ll our probably midpoint what pipeline very that point the just achieve and couple normal sometime line this have year, we positive captive with highest and small the new million and hit least should that range. year during a in that at identifiable we low the with we end should we portfolio to of to first this feel hit or the already, XXX in is hit with between but and least the see I, what’s the that comes at PRO at closing of and will then really with either

Smedes Rose

you right, guys. All thank

Arlen Nordhagen

Smedes. Thanks,

Operator

Thank you.

comes the Stender with of from proceed question Fargo. next Todd Our Wells your line question. with Please

Todd Stender

some thanks And Can for and those, just thanks. detail, cap the QX so the I cap give guess but on Hi maybe the the acquisitions, to on your you rates you of a are demand outlook. for acquisitions already color these of maybe newly it like range sounds the rate QX, buying built, have just you’re more stabilized don't at, assets? back maybe

Arlen Nordhagen

Yes, say we X.X, rate a average cap on better, so average take a think from the which one past about hi is that’s X.XX a or and that. X.X developments, around year might range, you I right weighted can't experience, other those, with to or but we rate Todd. the forward little If range year like ones have been the something as bit average away really on consistent X.XX new cap last our maybe

go with seeing not more expecting cap So, down they lot rates again. seeing at definitely and are are where we sellers expectations or it’s realistic least very to comparable the

Todd Stender

the REITs what’s attribute you Is don't of saying what market the you that the have prices do to? what a maybe want the is stock add, reflection, currency that impacting to And they they think? to so that public of

Arlen Nordhagen

up. several things, there interest is one clearly think is moving the I rates

the trading with at then third part our the lot the situation. think is demand I most of frankly just what you as and for We is that good disciplined. demand now, supply are identify nowhere multiples still buyers the are I think pretty being general out buyers public near right stocks there, good Another but the have a

Todd Stender

a acquisition committed JV how dollar What amount JV versus for And wholly-owned? And that to sourced? go guidance, JV's? have you’ve to a set property the Thanks. funding be you those into were to a do Okay. mean would generally

Steve Treadwell

sourcing Yes, We this four team and is market exclusive it that the on and really as acquisitions Steve. on as JV internal JV underwriting, acquisitions, territories. have an on is do focused, far works works the

Philly basically look acquire. of East to So, Northern those the Northern area Metro where are and And Coast that's The Florida, California. Alabama, we

do, a the JV have venture means at partner time by we a terms volume we $XXX but of is acquisitions inception. commitment We to with can our joint of total of in commitment go was that the commitment. the would That million that beyond restriction that like no

Todd Stender

Great. Thank you.

Steve Treadwell

Thanks Todd.

Operator

Thank you.

Please with next the Corak proceed from Our question comes B. Riley your question. with of David FBR. line

David Corak

Hi, out good there. morning

that what terms the pipeline, assigned assets to the to captive should within the the in what and available stabilizations debt and Within are assumptions pipeline, in of maturities be some acquire of probabilities within acquiring XXXX?

Arlen Nordhagen

obviously the or is year every then be able a maturity the either versus controls we based go upon the much list minority totally maturity timing just probability so Yes, and be manager. debt PRO higher to If a acquire on it that both third-party debt of assign the a properties probability. or is stabilization partner the through captive if will PRO pipeline it, and

million combination the assets maturity pipeline the debt XX of at have that XXXX that XXX weighting project with captive we into come a NSA. So, between million specifically schedule, and from we and probability for as should that the we looked year in of this

David Corak

we about is how next early set to had up from of kind now you’ve months you, XX question kind is, now to Okay. market from Thanks. the to of though of idea matter if the stop, some rate? a markets, active rate as they rate all that the once in been kind door a And thus been helpful. competitor supplying Have significantly you year does a back board, or competitors you a that are going of far? but integrity similar has right know the better of then in effective as rates slashing if real forward fast That’s of you're higher

Arlen Nordhagen

Yes David.

basis we made in price we try we not how and store do. store discounting on to rates need rates, to hit but down basis the by with to a discounts goal to do of play way in compete with all strategic or Street So, and to the type a terms that where take the higher compete, asking we’ve

helped. so successful successful very we’re that’s in and new on been customers. threatened supply rates far, that with that We’ve And are even on raising also stores in-place by

it's So, draconian might think as out as not that there. you

compete We with stores has and that I are And extent, this new to are think rates. of able filled and ready flashing to filling-up and supply, everybody compete. everybody just to demand we the be when absorbed has can else positioned compete be will up we without effectively new out come by some been like the we

problem as don't going that forward. I see So, a

David Corak

year little And talked prepared you Okay. drivers Thanks guidance wiggle side? either might where but Steve. of you there this be and bit in expense can some remarks, this of Tammy the a us then on room primary growth through your walk on kind

Tamara Fischer

Sure.

driver same-store property OpEx biggest the tax be our think this I of expenses. year will

of fully that come-in in that X% range the X% something to we range believe XXXX in taxes expect but our the in could we again to We in fully David. we it saw that is to go X% will up X%, expenses So see and that of controllable believe property also XXXX.

David Corak

helpful. That's Thank guys. Okay. you,

Arlen Nordhagen

you. Thank

Operator

Thank you.

question George question. proceed from comes your next Jefferies. Hoglund Our with Please with

George Hoglund

going here going them properties development within can within the or acquire CFO PROs, of give on of one on? stuff have question to agreeing the on what’s sense PROs have a just level the Hi whether us they development it’s guys. I you

Arlen Nordhagen

in what the increasing more which Yeah, I with cautious George, more say that on actually the development the consistent seeing is with well. developers as sophisticated there of are would supply, new PROs light out we’re being

at our lot developments but around stages total, a a now of of thing, similar cancelled. looking to various seeing think our PROs development. getting doing We’re delaying and at PROs they are probably are deals I and XX have People in properties that right new XX you are either that are combined

them Some be some construction, of finishing just of them might under be permitting. might

We at them it lot a acquisition, a that look would MSA, CFO those of really in everything has us the do find a unless anything at CFO if looking we he and investment good be delayed. to do too Some dilutive if he may don't be generally first to risk up, we and PRO to is offer as of we we kind it opportunity might directly want it NSA, an we on it’s or too then do pro let the would think is themselves. in would there have that of much filling and to take do it we opportunity risk and decline but the and it to on not

George Hoglund

then XXXX? And any anticipate just would on the doing JV you in side, Okay. new JVs

Arlen Nordhagen

at I a always look good can't we word, say anticipate is but it.

that do have right certainly worthwhile opportunity along make open under are it but to that, also already the up we in JV comes grow and it right billion JV to format things Now, contract going we’re those always and general for you existing pretty like we our for got quickly some properties if as to it something new sure. really a has know We half know it we them. JV-type for come and a predict like now, can't I anything but $X for to to be like don't sizable us in just have

JV keep have potential have So, just that relationships to move our with could I we powder dry and partners react quickly. and

George Hoglund

actually, one squeeze if And that. I to just more and can on tag Okay.

the markets. market commented quality-wise your portfolios geographically Some in that interested market? they they or the larger be that be in-line means some geographic in portfolios there at may Are your you’re not which had peers in, for portfolios looking would of might out there that currently on be more

Arlen Nordhagen

look Well if any them. come always up, at we

I are them, a there but out is portfolio right look there we're some sizable very now now high-quality So, call a - I - not there and properties. on things wouldn't at, that development they’re think are these particularly big, right pretty of that some taking that’s market that’s the

share already market we at would will the there I markets say we’re continue anything our that that’s to out and primarily So, our look want increase in. presence in though that to

So, Manhattan, we if in portfolio in interested came that. be wouldn't a up

in in we anything if overlap we not market, that are We with comes something that there. will but look and at markets

George Hoglund

for Thanks the color. Okay.

Arlen Nordhagen

Thanks.

Operator

Thank you.

from of R.J. your comes Milligan the question. W. Co. question next Our proceed Please line with Baird with Robert &

Will Harman

in Will for what these Appreciate what activities but Hi, XX on just Top outside This some outside can then on and is of terms good afternoon XX you're the new can color on is you us R.J. supply, of your provide seeing top development you percent just commentary of guys. markets? remind the of MSAs portfolio Harman new

Arlen Nordhagen

I X.X%, that X%. year, our read So, on down and we don't mean but independent Top they top XX% have of MSAs, on probably portfolio based that XX demand XX right - on we’ve Will grew my that MSAs only supply the I our MSAs, XX% is XX the XX us off go MSAs our would about correct in looking. number stores XX% exact is of into we XX our my OP. around grew so put at based at tell external but of In last it in guess to And Top where at through you reports can we would appear top if Top break it the head, and the have of that about some about MSAs

from supply markets. in to supply. the in was up, you see So, less see lot growth where the the It’s you a you obviously on MSAs pressure continuing the we Top are XX occupancy, and those XX top new are and rates, less MSAs way the MSAs mostly and more and know a where and XX really lot whereas have

Will Harman

are your new guidance PROs could at be Got little you. does the the it And any midpoint, like then addition provide why of more a at going The to for unit. in they looking flat just flat looks it’s guidance include the XXXX distributions, SP year-over-year? color you on just or this

Arlen Nordhagen

shareholders we that Yes. which time that we in OP equity include it that addition new and a fourth of the not the quarter every model is our equity, of to common increase do reflects time we new new priority of what raised with raise goes pool. It every we the XXXX return the PROs, does lot the really

going And increase the so it PROs makes that to SP to amount harder much equity. for

because a largely really more give our fact of shareholders a common and unit works waterfall reflection XXXX. of And in for we real so priority and the the of reflection regular holders a the to the the way that guidance of that’s that’s that always OP

Will Harman

question you you. you times QX? to sheet, X is so does the And and balance still preferred is, then that in what times Got last include if guys are X targeting that now talked the had leverage, just targeting previously on about offered you

Tamara Fischer

range. stated So, we have I our re-thought think

over now Our sort to target we're how X.X long term. times X.X thinking times about the with range it of is

Will Harman

Does that include preferred?

Tamara Fischer

include No, it doesn’t right. preferred,

Will Harman

That's Okay. guys. it us. for Thanks

Arlen Nordhagen

Thanks, Will.

Operator

you. Thank

proceed your Our question DA Please question. comes with next Davidson. Oxford with Barry from

Barry Oxford

can maybe are PROs as the them, Thanks guys. color Arlen, a just opportunity maybe down more Great. how year? you line on far one and what us far two we give with maybe as might you little this the of or expect

Arlen Nordhagen

that… say Barry, I Well would

Barry Oxford

get I answer, a tough it. question to it’s know I

Arlen Nordhagen

years do about we as can totally pretty five is. is, It if have and ultimately that partly X got big depends trigger with whether basically two last are year slots it - end then on and maybe pull five And the or another when is one. or course that three more tell will and how we is up I to more. I X and off And we with I only ended to say total they there for like are as honestly I shut PROs really larger but that. far talking can go would or have of but of happens up we we if people there are we thought would that never they when so have of two to it the been X, for timing they that - smaller cut predict XX serious, that and you at three would each off if is hard larger might it predict. but A PRO to

when maybe one years year that unfortunately, say So, a two not very rough happens. the exactly to still I’m as guessing but estimate, best is good at to guess

Barry Oxford

slowdown get squeeze related of supply your when - the or guidance, of from looking last the obviously My part that’s and and same-store, to Right. It’s current hard. the definitely is of happening, some fact running going efficiencies systems of it. I XXXX from now question, forward portfolio XXXX I’m at harder kind to out necessarily? or your to it’s the but also been any up have that just not a be

Steve Treadwell

the have with it’s of worth point also a life cycle Steve. the to platform are our XX that. it’s XXX same-store stores. year this agree of driver that We matured, going big our matured profile Barry, portfolio Hi where has as Certainly, add even they is pool supply matured, growth a the But we similar think deceleration. of remaining I and has stores we have our to

So, some for factor maturity that is in of portfolio deceleration. a the an impact

Barry Oxford

thanks guys. Appreciate Great, Right. it.

Arlen Nordhagen

Thank you, Barry.

Operator

next line Stanley. question. Vikram Our comes Malhotra Morgan of is Malhotra, Instructions] with the Mr. Please your from line with proceed open. your [Operator question now

Arlen Nordhagen

We hear Vikram you. are there? can't you

Operator

comes Bank Please the question. of of Our next Juan with America. your with from question proceed line Sanabria

Juan Sanabria

Hi good afternoon.

little hoping Just you a supply. bit expand on could

you supply for year stores hoping was number exposed if XXXX, just see XXXX the that that year-over-year? for to you have contextualize said think could the your I maybe I to are you XX% help of delta this us

Arlen Nordhagen

It’s was Juan. XXXX, less XX%. in a actually than It bit higher little a than it less little is

like new the directly up XX.X% we actual carries, I very It of radius real years, That because because for long the how number, exact when impact is openings of those two XXXX have looked prior that’s previous around stores. that our we but think our is have two XX%. new at number supply XXXX. will I look in the a opened years very at at closely within those kind in the impact number we either it added XXXX looked so or - X-mile the is was and don't stores

a I around right and lot. it So, we XX% XX.X%. changed hasn't XX.X% the it or, at are now but can't it if say was was

change, there won't bit little of more. really be a but So, a lot

Juan Sanabria

what Okay. and effective rates net on you growth, us by can a on you your could for if XXXX? forecast know what I but it, provide grew Street don't guidance And Street remind rate just then basis in and XXXX

Steve Treadwell

on Just a comment QX.

we basically Street QX, flat-to-mildly saw were positive. For rates

consistent our is about we with potentially rate continued We average effective QX. to you foot customers, it rates this to down, with up flat, contract and square mildly expect expect be in guidance rate think are be in we X.X% our but that have or occupied we Street year, for when rent per

We driven customers. and increases expect similar see this existing that’s to going to by to rent really year behavior be

to in we been have and Street So, for successful raising but moving the rates our rents existing still customers year. revenues continue successful from on will let’s headroom be that around, and this raise

Juan Sanabria

on network what quick PROs underwriting just And new of the whole how that’s one starts kind the as at me. cash Do for sense if cash one guys in your all? yields for a you changed development today and of have of a over or time

Arlen Nordhagen

more was on. the would There I would on on of developments thinking about say it is look no by they risk to for a new one Juan has almost what risk. versus of they to before lot coming compared Yes, points up cash developments probably were supply what new that yields for XXX cash that because new at, gone XX now basis

at anyone take because looking to development new a they return. look now It’s of in if yields I I is see that right frankly to kind risk least is stabilized think new that for on at development wouldn't for more X.X% cash or business that the the certainly can't I X% least development. need X% So, cash take

Juan Sanabria

you. Thank Great.

Arlen Nordhagen

Thank you, Juan.

Operator

to There like time. you. back the at this call would I Mr. are any Nordhagen over closing for no to remarks. Thank further turn questions

Arlen Nordhagen

Thank earnings today's you. And for all quarter us year-end for joining and call. thank you fourth

appreciate Wells and to Thank Citi look Conferences you and national the support over bye. month. again. many you continued affiliates in Bye, and of upcoming storage seeing As Fargo your always, of we we interest next forward at the

Operator

concludes teleconference. you. today's Thank This

disconnect may and a wonderful Thank your lines participation you You day. at time. have this your for

National Storage Affiliates Trust (NSA) 26 Feb 182017 Q4 Earnings call transcript