National Storage Affiliates Trust: Checking In With This 4.4%-Yielding Storage REIT

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Achilles Research


  • National Storage Affiliates Trust is a fast-growing self-storage REIT.
  • The company spent hundreds of millions of dollars in 2018 in order to scale its real estate platform and grow FFO.
  • Shares sell for an elevated 2019e FFO multiple due to high investor expectations with respect to above-average FFO and dividend/share growth.
  • An investment in NSA yields 4.4 percent. There is strong chance that the yield on cost will rise going forward.

National Storage Affiliates Trust (NYSE:NSA) is a fast-growing real estate investment trust in the storage sub-sector. The REIT is acquiring new properties at a fast clip which has boosted its funds from operations per-share growth since its IPO. The REIT has a low FFO payout ratio and raises its dividend twice a year. The share price continues to reflect high FFO growth expectations going forward. An investment in NSA at today's price point yields 4.4 percent.

Who Is National Storage Affiliates Trust?

National Storage Affiliates Trust is a self-storage REIT with an equity value of $1.6 billion. The REIT competes against other storage REITs in the sector, including CubeSmart (CUBE), Life Storage, Inc. (LSI), Public Storage (PSA), and Extra Space Storage, Inc. (EXR). National Storage Affiliates Trust is a relatively young company that had its IPO in April 2015.

National Storage Affiliates Trust's real estate portfolio consists of 698 storage facilities, 522 of which are wholly-owned and 176 of which are part of the REIT's joint ventures. The company's properties can be found in 34 U.S. states and in Puerto Rico.

Source: National Storage Affiliates Trust Investor Presentation

The storage market is highly fragmented, meaning there are lots of REITs in the sector that all have relatively small market shares. Based on portfolio size, National Storage Affiliates Trust is the 5th largest storage REIT in the sector.

Source: National Storage Affiliates Trust

National Storage Affiliates Trust is growing aggressively through acquisitions as opposed to organic business development. In 2018, the real estate investment trust purchased 57 wholly-owned storage properties for $356.6 million and invested in another 106 joint venture facilities valued at were valued at $1.3 billion.

Management's aggressive stance on acquisition has resulted in explosive portfolio growth over the last couple of years. Since formation, National Storage Affiliate Trust's portfolio size

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This article was written by

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I am a dividend investor and look for undervalued investments in the stock market. I identify misunderstood and undervalued equity investments and hold those securities until their price approximates my estimate of intrinsic value. I am a long-term investor only. I am building a $100,000 high-yield income portfolio. I am running this portfolio as an experiment to see if long-term sustainable income can be generated from a diversified pool of high-risk, high-yield securities. I am willing to accept high risk in order to meet my performance goals.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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