National Storage (NSA) Q4 2025 Earnings Transcript

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DATE

Thursday, February 26, 2026 at 1 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — David G. Cramer
• Chief Financial Officer — Brandon S. Togashi
• Vice President of Investor Relations — George Hoglund

TAKEAWAYS

• Core FFO Per Share -- $0.57 for the quarter and $2.23 for the year, at the high end of guidance and “beating consensus.”
• Same-Store Revenue -- Declined 70 basis points, a sequential improvement from a 260-basis-point decline in the prior quarter, with nine out of 21 reported markets delivering positive growth.
• Occupancy -- Down 70 basis points year over year at year-end, compared to down 140 basis points at the end of the previous quarter; January occupancy up 20 basis points year over year, and the positive trend continued into February.
• Same-Store Operating Expenses -- Decreased 80 basis points for the quarter; for the full year, grew 3.1%, which was slightly below the low end of full-year guidance.
• Payroll Costs -- Reduced by 4.1% for the quarter and 2.8% for the year, attributed to ongoing operational efficiencies.
• Marketing Expense -- Increased by 37% for the quarter and 31% for the year as management invested in customer acquisition, with leadership highlighting resulting gains in rental volume and platform performance.
• Preferred Equity Investments Platform -- Introduced during the year, with over $50 million already under contract for deployment across three properties.
• Acquisition and Disposition Activity -- Sold 15 properties totaling $97 million and acquired 10 properties totaling $75 million for the year; completed an additional $24 million in property sales during the quarter and $21 million in sales plus $10 million in acquisitions subsequent to quarter end.
• Leverage -- Net debt to EBITDA at quarter end was 6.6x, just above the targeted 5.5x-6.5x range, with $375 million in maturities in 2026 primarily expected to be refinanced with a new term loan.
• 2026 Guidance Highlights -- Same-store revenue growth projected at 90 basis points, operating expense growth at 3%, flat same-store NOI growth, and core FFO per share at $2.19; guidance includes $50 million–$150 million in acquisitions and dispositions each.
• Move-In Rental Volume -- Rental volume finished about 11% higher year over year for the fourth quarter, despite a roughly 10% decline in October due to a hurricane comp; January and February volumes tracked even higher.
• RevPAR and Achieved Rate Trends -- “Modest improvement” in achieved rate was sustained throughout the year, supported by ongoing enhancements to ECRI (existing customer rate increase) initiatives, even as roll-downs remained in the low to mid-30% range.
• Portfolio Optimization -- Five states exited and the number of brands consolidated to six; majority of portfolio repositioning work expected to be completed in 2026, transitioning to ongoing maintenance thereafter.
• Dividend Coverage -- Management stated, “the guidance would imply we are not covering the dividend this year,” with expectations of returning to full coverage by the fourth quarter and stronger positioning if fundamentals continue to improve into 2027.

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RISKS

• President and Chief Executive Officer Cramer said, "the guidance would imply we are not covering the dividend this year," and that coverage is not expected until the back half of the year or 2027 contingent on fundamental improvement.
• Chief Financial Officer Togashi cited "$375 million of maturities this year" with expected partial-year interest rate headwind from anticipated refinancing costs rising above the 4.5% blended in-place rate.
• Other property-related income, including tenant insurance, is expected to be a “drag” on same-store revenue growth again in 2026, though the comparison becomes easier mid-year.
• In certain markets such as Phoenix and Atlanta, oversupply continues to weigh on sequential revenue improvement, limiting the pace of positive inflection until new development slows materially.

SUMMARY

Management confirmed that operational transformation and platform integration initiatives are complete, enabling consistent execution and eliminating sources of distraction cited in prior periods. Strategic emphasis on marketing and dynamic pricing drove a double-digit year-over-year lift in rental volumes, underpinning stabilization in occupancy and a pronounced sequential improvement in same-store revenue decline. The company introduced and began deploying a preferred equity investment platform, actively managing capital by cycling out non-core assets and concentrating investment in targeted markets for densification and joint venture growth. January and February data showed continued positive momentum in occupancy and rental flows, reinforcing management’s guidance for gradual sequential improvement in same-store revenue through 2026 and an expected return to full dividend coverage by year-end or into 2027. Guidance for 2026 is built on existing market dynamics rather than speculative catalysts, with no material tailwinds from a housing recovery assumed, and leverage is forecast to remain at the upper end of the target range as refinancing activity and continued portfolio optimization proceed.

• President and Chief Executive Officer Cramer said, “All the work we put into our people, process, and platforms is complete, and so there is no distraction or no moving pieces right now.”
• Marketing investments and digital tools, including AI, have measurably increased rental conversion rates and customer acquisition efficiency, with visibility and outranking improvements translating to “rental volumes being up 20%–30%.”
• Same-store move-in rates are expected to be negative for the first four to five months due to difficult comps, then inflect to neutral or positive in the latter half, with ECRI magnitude of increases higher year over year and cadence unchanged.
• Portfolio disposition program will conclude most major divestitures in 2026, after which sales will occur only on an opportunistic basis as conditions warrant.
• Markets with supply-demand equilibrium, such as Colorado Springs and Wichita, are producing sequential rate and occupancy gains, while others with continued oversupply will require further supply absorption before pricing power returns.
• New supply is anticipated to fall below historical levels beginning in 2027, but guidance for the current year does not embed any impact from a recovery in housing transactions or related catalysts.
• The company’s preferred equity investments platform aims to deploy capital on a two-year timetable, with three properties under contract and pacing committed to “get that out as quick as possible.”
• Expense growth for 2026 will be led by property taxes (3%-5%), with payroll expected to remain flat and marketing expense growing in the “teens” percentage range; insurance expense is forecast to decline on renewal.
• In response to regulatory volatility, Chief Financial Officer Togashi noted, "There is always some element" of weather- or emergency-induced rent restrictions across parts of the portfolio, but these events are generally localized and short in impact.

INDUSTRY GLOSSARY

• ECRI (Existing Customer Rate Increase): Strategic program of periodic rental rate increases applied to existing tenants as part of yield management for self-storage REITs.
• PRO Internalization: The conversion process through which participating regional operators (PROs) in a self-storage REIT’s network are fully integrated into the company’s centralized operations and management structure.
• Achieved Rate: Blended average rate realized across all occupied units, factoring in both new and renewal leases, as well as promotional adjustments.
• Roll-Down: The reduction in average realized rent when new tenants lease units at lower rates than outgoing tenants, measured as a percentage.
• Preferred Equity Investments Platform: A vehicle for providing equity capital on preferential terms, typically offering a priority return, used to finance the acquisition or development of real estate assets.

Full Conference Call Transcript

Operator: Greetings. Welcome to National Storage Affiliates Trust Fourth Quarter 2025 Conference Call. At this time, participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. It is now my pleasure to introduce your host, George Hoglund, Vice President of Investor Relations for National Storage Affiliates Trust. Thank you, Mr. Hoglund. You may begin.

George Hoglund: We would like to thank you for joining us today for the fourth quarter 2025 earnings conference call of National Storage Affiliates Trust. On the line with me here today are National Storage Affiliates Trust's President and CEO, David G. Cramer, and CFO, Brandon S. Togashi. Following prepared remarks, management will accept questions from registered financial analysts. Please limit your questions to one question and one follow-up, and then return to the queue if you have more questions. In addition to the press release distributed yesterday afternoon, we furnished our supplemental package with additional detail on our results, which may be found in the Investor Relations section on our website at nsastorage.com.

On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements that are subject to risks and uncertainties and represent management's estimates as of today, February 26, 2026. The company assumes no obligation to revise or update any forward-looking statement because of changing market conditions or other circumstances after the date of this conference call. The company cautions that actual results may differ materially from those projected in any forward-looking statement. For additional details concerning our forward-looking statements, please refer to our public filings with the SEC.

We also encourage listeners to review the definitions and reconciliations of non-GAAP financial measures such as FFO, core FFO, and net operating income contained in the supplemental information package available in the Investor Relations section on our website and in our SEC filings. I will now turn the call over to David.

David G. Cramer: Thanks, George, and thanks, everyone, for joining our call today. The fourth quarter provided further confirmation that our portfolio performance has inflected in a positive direction. We are benefiting from the significant operational efforts executed by our team over the past few years, positioning National Storage Affiliates Trust for outsized growth. We produced solid results for the quarter and delivered wins in several areas, including although one of our 21 reported MSAs saw improvement in same-store revenue growth versus what we reported in Q3. Same-store revenue growth was down 70 basis points in the fourth quarter compared to down 260 basis points in the third quarter, a substantial improvement. We experienced sequential improvement each month of the quarter.

Year-over-year occupancy also continued to improve, finishing the year down 70 basis points. Remember, we were down 140 basis points at the end of the third quarter. Our core FFO per share results came in at the top end of our guidance range, beating consensus. Looking at the full year, we delivered a handful of notable accomplishments, including consolidated another brand, reducing the number of remaining brands to six, and an additional growth driver with the formation of our preferred equity investments platform. We continue to execute on our portfolio optimization program by exiting five states and selling 15 properties totaling $97 million. We also acquired 10 properties totaling $75 million across our joint ventures and on balance sheet.

Most importantly, we exited the year on solid footing with positive momentum that has carried into 2026, as January end-of-month occupancy was up 20 basis points year over year. We have clearly turned the corner. Tremendous efforts undertaken by our team to internalize the PRO structure, dispose of non-core assets, upgrade and centralize our marketing, revenue management, and operations platforms, along with the consolidation of brands and the move to one web domain are paying off. Looking at 2026 and beyond, the backdrop for self storage is improving. First, new supply is currently stable and is projected to decline over the next few years to levels well below long-term historical averages, with the impact becoming more meaningful in 2027.

Second is momentum in the current administration to address home affordability, which could provide a boost to the housing transaction market and self storage demand. Lastly, increased stability in self storage pricing practices could lead to rising street rates, providing a near-term lift to revenue growth. Now, let me comment on our relative position within the sector. Our portfolio fundamentals have inflected positively, and we have the most to gain from a recovery in the level of housing turnover. Our enthusiasm is supported by the fact that we are starting the year with strong rental volume, inflection from negative to positive year-over-year occupancy, and an encouraging trajectory of same-store revenue growth, while we remain focused on disciplined expense controls.

As we enter the spring leasing season, we will continue to focus on driving internal growth with increased marketing spend, competitive position in terms of rate and promotion, solid execution from the sales process, and remaining assertive with our ECRI strategies. Meanwhile, we continue to improve our portfolio through capital recycling, reinvesting in our properties, while also growing our portfolio through expansions and acquisitions. I will now turn the call over to Brandon to discuss our financial results.

Brandon S. Togashi: Thank you, David. Yesterday afternoon, we reported core FFO per share of $0.57 for the fourth quarter and $2.23 for the full year, at the high end of our guidance range, as our focus on operational improvements is starting to be reflected in our results. The same-store revenue and NOI coming in for the high end of the full-year guidance ranges. For the quarter, same-store revenues declined 70 basis points, driven by lower average occupancy of 120 basis points, partially offset by year-over-year growth in average revenue per square foot of 100 basis points. This is meaningful improvement from the 2.6% revenue decline in the third quarter, with nine of our reported 21 markets delivering positive revenue growth.

For the full year, same-store revenues declined 2.3%. Expenses declined 80 basis points in the fourth quarter, while growing 3.1% for the year, slightly below the low end of our full-year guidance range, benefiting from our meaningful expense control efforts. Most notable savings came from payroll costs that were down 4.1% in the quarter and 2.8% for the year, as we continue to find efficiencies with hours of operations and staffing. Meanwhile, marketing was up 37% for the quarter and 31% for the year, as we continue to invest in customer acquisition spend in markets where we clearly see the benefits.

Outside of same-store operations, a lighter tropical storm season led to favorable results within our insurance captive, where we retain a portion of the property casualty coverage for our stores. This resulted in lower expense in the other line item within operating expenses compared to the run rate from the first three quarters. Moving to the transaction environment, we completed the sale of three assets during the quarter for $24 million, and subsequent to quarter end, we sold three additional properties for $21 million and acquired one wholly owned property for $10 million.

Our portfolio optimization program will remain active in 2026, as we prioritize scaling in markets while generating proceeds for deleveraging and funding attractive investments through our JV and preferred equity programs. Our on-balance-sheet investments will largely be to fulfill 1031 requirements. Now speaking to the balance sheet, we have ample liquidity and maintain healthy access to various sources of capital. We have $375 million of maturities this year, consisting of a $275 million term loan that is due in July and $100 million of unsecured notes due in May and October. We have optionality and will most likely address these maturities with a new term loan. Our current revolver balance is approximately $400 million, giving us $550 million of availability.

Our leverage continues to come down with net debt to EBITDA of 6.6x at quarter end, just slightly above our 5.5x to 6.5x target range. Now moving to 2026 guidance, which we introduced yesterday, and the full details of which are in our earnings release. Midpoints of key items of our guidance are as follows: same-store revenue growth of 90 basis points, same-store operating expense growth of 3%, flat same-store NOI growth, and core FFO per share of $2.19. We have also guided to acquisition and disposition ranges of $50 million to $150 million. In both cases, these amounts represent National Storage Affiliates Trust’s share.

With regard to same-store revenue, we foresee the year-over-year growth steadily improving as we progress through these next couple of quarters. As David mentioned, our occupancy is slightly positive year over year at the January end, and that spread has continued into February. At the midpoint of our guidance range, a $0.04 decline in core FFO per share is due to growth in G&A of approximately $0.02. This growth primarily comes from assuming target-level cash incentive comp, as the expense in 2025 for our corporate team was below target levels given company performance.

The remaining $0.02 is attributable to a combination of headwinds from debt refinancings and the tough comp for our insurance captive based on my earlier comments regarding the favorable results in 2025. Thanks again for joining our call today. Let us now turn it back to the operator to take your questions. Operator?

Operator: Thank you. As a reminder, our first question is from Samir Upadhyay Khanal with Bank of America. Please proceed.

Samir Upadhyay Khanal: Good afternoon, everybody. I guess, David, when I look at your guidance, you are calling for a healthy improvement here in revenue growth. You are down about 70 basis points in 4Q getting to about 1% at the midpoint. I think this sort of puts you even above the peers here. So maybe help us kind of walk through kind of how you get there. Talk about the breakdown of, let us call it, occupancy through the year, rate growth, move-in rate growth, and even ECRIs. How are you thinking about all that? Thanks.

David G. Cramer: Yes, Samir, thanks for joining. Thanks for the question. I will start off and then I will have Brandon walk a little bit of the cadence. I think where I would start is what is different today versus where we were a year ago when we were giving guidance is our transitioning is done. Our platform is working very, very well. Our synergies and our strategies are working very, very well. All the work we put into our people, process, and platforms is complete, and so there is no distraction or no moving pieces right now.

And so as we sit here in 2026 versus where we were a year ago, we had just come up a PRO internalization and had a lot of moving pieces. Right now, we are no longer chasing occupancy. To say that occupancy in January was 20 basis points up year over year, that is something we have not seen for a couple of years, and so that gives us a high level of confidence that we will continue to work on that occupancy gains throughout the year. Rate environment is stable. We have seen good contract rate growth through 2025. We expect to have solid contract rate growth through the year of 2026.

And that comes from also the strength in the ECRI program. We are now more assertive than we have been historically. And that is because we have a high confidence level in our marketing program and our customer acquisitions platforms. We are seeing very, very high levels of rental volume. We finished on a square footage basis about 11% up year over year in the fourth quarter. Keep in mind that was muted because we were down about 10% in October because of a hurricane comp. And thus far in January and February, those numbers are even stronger.

So we are just very, very pleased with the rental output we are getting at the top through the top of the funnel all the way through to the rentals themselves. And so I think for us, looking at all the things we are thinking about, RevPAR is positive. Occupancy is positive. Contract rate is going in the right direction. And our platforms are really working. I think for us, where we are coming from, where we have been, we still are very confident on how 2026 will play out. And I will let Brandon kind of walk you through the cadence of the year.

Brandon S. Togashi: Yes. I think the main thing I would add, Samir, and you touched on it in your question, the negative 70 basis points that we delivered in the fourth quarter, David’s remarks in the opening about how that improved. So it was more negative to start the fourth quarter, and it got less negative, trending towards flattish as we got to the end of the fourth quarter. Then based on the data points that we have given for end-of-month January occupancy, my remarks about how that has continued into February, we just feel comfortable that we are starting the year within a negative 30 to positive 210 revenue range.

Whereas, a year ago, we were delivering a quarter and starting the year that was, frankly, well below the low end. So it required much more of an improvement than what is required now.

Samir Upadhyay Khanal: No. Thank you for that. And I guess just as a follow-up, maybe as we are talking about the guidance, maybe you can hit on expense growth here, right? I mean, you have about 3% for this year. Maybe talk kind of the components to kind of get there as we think about 2026? Thanks.

Brandon S. Togashi: Yes, Samir, I will go. Most significant line item is property taxes, so we will start there. We are assuming a range of 3% to 5%. That is consistent with multiyear averages for our portfolio. Personnel, you saw the good success that we had in that line item, both in the fourth quarter as well as for the full year 2025. We are expecting similar successes. I expect that line item to be flattish 2026 over 2025.

And then outside of those two line items, I would say the largest percentage increase is going to continue to be marketing expense, not to the tune of the 30-plus percent that we saw this year, but still probably in teens on a year-over-year growth rate. And after that, a lot of the other line items fall generally in that low- to mid-single-digit range that we have for the total OpEx guide. The one exception being insurance. We do believe we are in a better market. Our renewal is on April 1. And so we are forecasting that line item to be a year-over-year decrease in the cost.

Samir Upadhyay Khanal: Okay. Thank you.

Brandon S. Togashi: Thanks, Samir.

Operator: Our next question is from Michael Goldsmith with UBS. Please proceed.

Michael Goldsmith: Good afternoon. Thanks so much for taking my question. Question on the January occupancy being up 20 basis points. Can you talk a little bit about what is driving that? I think you talked a little bit about strong rental volumes. It seems like marketing spend is up. Can you walk some of the moving pieces? Are you cutting rate to drive that occupancy higher during the slower season? Just trying to understand the moving pieces and context around the occupancy improvement. Thanks.

David G. Cramer: Yes, sure, Michael. Thanks for the question. Thanks for being here. I think it is a combination of all those things. Clearly, committed to a higher marketing spend related to 2025. And that was based upon our conviction that we were seeing the activity at the top of the funnel and our ability to convert those into rentals. And so we have done a really good job looking at the sales process all the way through the funnel and our conversion rates. And so that would include how you use discounting, where you are priced in the markets, the amount of marketing spend, and when you are spending that money.

Some of the AI technologies and the modeling we have are really starting to pay off, and the teams are doing a really, really good job as we model our marketing spend and model our dynamic pricing and use of discounts to really work on that closure within that funnel. And so we have seen a significant improvement in our ability to really work the conversion rates through that funnel. So I would tell you from a pricing standpoint, we are keeping the same competitive position we kept through the back half of the year.

We did a good job holding occupancy, not having the seasonal trough that you normally would have, and that is a function of marketing spend, pricing, discounting, and then use of call center and staffing hours and those things. So I think all those things in place, we are not undercutting markets, we are not going out and trying to move markets one way or the other, we are just staying within the appropriate competitor set to get the results we want.

Michael Goldsmith: Thanks for that, David. And as a follow-up, where do you see yourself to the point of actually having pricing power? Right? Occupancy is improving, you are improving operationally, you are talking about strong rental volume. So is there a certain level of occupancy where you think you would have pricing power?

David G. Cramer: It is a really good question, and it really varies by market and by store. So we do have markets that are having some good success. A couple of the ones that jump off the page: Wichita, Colorado Springs, even Portland. If you look at Portland, where supply and demand are in check, those markets are responding well to not only street rate or market pricing, but the ECRI programs, and what you are able to drive through the ECRI programs are working very effectively.

And that is really, I think, as you look at our portfolio, we do have a lot of stable markets where they are benefiting very much from all of the changes we have made within the company. And all of the adaption that we have done within the company is helping those markets. The other markets, Michael, like Phoenix and Atlanta and Gulf Coast Florida and such, it is really a supply issue where until you really get that balance and get a better demand profile, get these stores filled up, it is going to be harder to get pricing power.

The one thing I would add into that too is it is also we have noticed you have to get granular down to the unit size. It is one thing to scrape overall properties and look at overall occupancies and overall pricing power, but there are subsets of unit types that are seeing pricing power within some of our markets because the supply and demand is in check on that particular demand for that unit.

Michael Goldsmith: Thank you very much. Good luck in 2026.

David G. Cramer: Thank you. Appreciate it.

Operator: Our next question is from Juan Sanabria with BMO Capital Markets. Please proceed.

Juan Sanabria: Good morning and congrats on the successes on the post PRO internalization. Just hoping for a little bit more color on the move-in rate trends throughout the fourth quarter and into January, as well as how the quantum and cadence of ECRIs has changed maybe year over year or however you could help us contextualize that?

David G. Cramer: Sure. I will start and then Brandon will jump in here. I think what you have seen and you will see from us is our move-in rates as they went through the fourth quarter narrowed on a year-over-year spread. And that is because if you think about two years ago in 2024 when we were internalizing the PROs, we reset street rates pretty hard in really 2024 and left them elevated outside of the competition range, probably until April or May 2025. And so our comps on a year-over-year basis are tougher the first five, six months of this year just on the move-in rents. Now, for us, we are getting the rental volume we want.

We are effectively priced where we want to be priced in the markets. But I think you will see us go negative on move-in rates probably the first four or five months of the year and then get back to more of a neutral to positive position from June, July on. But we are seeing significant rental volume. Again, I will reiterate, we are not undercutting the market. We just adjusted our competitive position to really work on customer count and do as smart as we can to get to a better revenue output. The back half of that question was I am sorry. I have drawn a blank now. I have a blank.

Juan Sanabria: ECRIs and how that has changed, the quantum or cadence.

David G. Cramer: Yes. Thanks, Juan. Sorry about that. The cadence has not changed. So we are still hitting the ECRIs around the same timing that we have been hitting them. I do know our magnitude of rate increases has increased on a year-over-year basis. All of the testing and the things that we are doing, and our confidence and ability to attract new customers and drive additional rental volumes, is allowing us to be more assertive on the rate increases through all of the steps, whether it be first, second, third, fourth, across the board. And so that is also helpful as we look at our revenue projections this year.

Juan Sanabria: Great. And then I was just hoping you could comment on when you are leasing units, if the size or the number of square feet that is being taken up has changed? I know at one point, I think it was last year, that had gone down for a bit. But curious on the latest thoughts around how many square feet people are actually leasing today and how that has trended?

David G. Cramer: Yes. Good question and good memory. We certainly, this time last year, were facing probably about a five to six square foot per rental square footage roll-down. We have since closed that back up. We are back up to where most of our rentals are either at the same level or a little bit bigger in square footage. And so that is also very much helping in stabilizing occupancy and making sure we are attracting the customers for the units that we are vacating. So feeling good about that progress we made. That really flipped for us starting in September, and we have been able to hold it all the way through February thus far.

Juan Sanabria: Thank you. Thank you.

Operator: Our next question is from Todd Michael Thomas with KeyBanc Capital Markets. Please proceed.

Todd Michael Thomas: Yes, hi, thanks. Appreciate the detail on January and some February data with regards to occupancy and move-in rents. It seems you have recovered a lot of ground. You described 2025 as sort of a tale of two halves, first half being a little weaker followed by an improvement in trends in the second half. Is 2026 from a revenue growth standpoint also expected to be sort of a tale of two halves? Or do you think you can continue to recover in the back half of the year when some of your comps begin to normalize?

Brandon S. Togashi: Yes, Todd, this is Brandon. I do think that we will have the benefit of some easier comps in the first half of the year and partway through the third quarter as well. The fourth quarter will be the tougher comp. We see year-over-year same-store revenue growth steadily increasing as we go throughout the year until maybe we plateau a little bit because of what you touched on. It does get a little bit tougher of a comp starting in the back half of the third quarter and then really for the entirety of the fourth quarter.

Todd Michael Thomas: Okay. And then, Brandon, David too, think you both touched on reducing leverage as a priority. And I just wanted to ask whether the guidance includes any sort of deleveraging initiatives, really primarily, I guess, outside of organic EBITDA growth? And do you have a leverage target for year-end 2026?

Brandon S. Togashi: Yes. So our 5.5x to 6.5x range remains a long-term target for us. We are just outside the top end of that in 2025. Based on the midpoint of the same-store NOI guide, Todd, as you know, flat on that metric, and FFO being relatively flat, it is really calling for leverage to stay fairly neutral, a little bit of seasonality depending on which quarter you go through because the metric is calculated on an annualization of the given quarter, as you know. But outside of that, I would say by the end of 2026, it is going to be fairly similar to 2025. Capital deployment will affect that.

You saw in the guide on acquisitions and dispositions at the midpoint of each, we are saying that would be neutral. Obviously, it changes month by month based on the deals that we are seeing, the success we are having on some of the disposition initiatives. Any of the particular deals in front of us that we are underwriting for acquisition largely through the joint ventures, as we said earlier. So the timing and the success on those fronts could drive it and move it a little bit. But generally, at the midpoints you are seeing, it is pretty constant.

Todd Michael Thomas: Okay. Thank you.

Brandon S. Togashi: Thanks, Todd.

Operator: Our next question is from Salil Mehta with Green Street Advisors. Please proceed.

Salil Mehta: Hi, good afternoon and thanks for taking my question. Just a quick one here to start off. Sorry if I missed this before. I know you guys mentioned January and February occupancy, but did you guys provide any color on where move-in rates are thus far into 1Q?

David G. Cramer: Yes. Hey, thanks for joining, Salil. What we talked about is our move-in rates will inflect negative for the first probably four or five months of the year, and it is due to a little tougher comp from 2025 and where we are positioned in our markets to make sure that we are maximizing flow through the funnel and conversions and customer count, working towards our revenue goal, because that is what we are trying to work towards. But I think you will see some negative move-in rates for the next probably until about June, and then we think they will inflect back to a more neutral to positive for the back half of the year.

Salil Mehta: Great. Thanks for that insight. And given the roughly, I guess, 1% move-in rate growth and overall rental rate growth in the quarter, how are you guys balancing the trade-off between occupancy and rate growth going forward? Is one going to be a bigger priority than the other? You guys kind of mentioned that you are not chasing occupancy. Does that mean that you are happy with where occupancy levels are at currently?

David G. Cramer: Yes. I think you are touching on it. It is a balancing point of marketing spend and the use of price and discount to get better conversion, and really occupancy can lead to revenue. And so for us, we think we are at a point where we can use those levers effectively and drive some more customer count, which will increase our revenue. And so the fact that we are starting the year coming out of January on a positive note on a year-over-year basis, as we look at our year, we think we will be able to continue to work on the occupancy side of the house effectively with that, and that is a nice revenue output for us.

So that is, as you think about our year, we think we will be more occupied at the end of 2026 than we were at 2025.

Salil Mehta: Great. Thanks for the color. That is it for me. Thank you.

Operator: Our next question is from Michael Anderson Griffin with Evercore ISI. Please proceed.

Michael Anderson Griffin: Great, thanks. David, I am curious if you can touch a little bit on sort of organic customer demand. Obviously, I think it is a positive seeing the same-store revenue growth inflect into next year, but it feels like that is more an enhancement of marketing initiatives and capturing more of the top-of-funnel demand as opposed to the pie maybe expanding a bit. So can you talk a little bit about organic customer trends? How are new customers versus renewals? And really, is the inflection driven by, I guess, capturing more of the pie of customers out there rather than expectations for more customers to come back to the market?

David G. Cramer: Yes. Good question. Thanks for being here. I would agree with your premise, and I think we are approaching 2026 with a mind frame that the competitive environment will be very similar to what we faced in 2025. Nationally, we know that new deliveries are coming down. But that number takes a while to be absorbed. And so I think as you think about our stores that are facing competitors in the three- and five-mile ring, we do not see a material change in the number of stores facing in that competitor set in 2026. So, we are going to be very focused on just executing and trying to take more of the pie.

And certainly, every month you go deeper into absorbing new supply, it helps, but we did not, in our guidance at our midpoint, really model into any catalysts or anything that is really materially different than the way we are thinking about how the competition is going to look for 2026.

Michael Anderson Griffin: That is certainly some helpful context. And then maybe just on the external growth opportunities, it seems that particularly the acquisitions component of that might be more in kind of the JV structures that you have laid out. But can you give us a sense of what kind of product type you are targeting with those, whether it is going-in cap rates, your yield requirements, just maybe give us a sense of kind of external growth priorities and the investment pipeline for the year ahead.

David G. Cramer: Yes. Hey, a really great question. First of all, we are targeting markets where we can densify or get better synergies, get better operational efficiencies. And that has been part of our portfolio optimization program now for a couple of years. And so the markets we are targeting are really around where we think we can have good efficiencies and good success in buying properties. We are probably a little less attracted to the markets that are really struggling right now because we will want those markets to improve before we want to step into them. But we have a number of markets where we have had good success.

We have seen the inflection points, we are seeing them go in a positive direction, and we are very actively working in those markets to come up with acquisitions. The best cost of capital right now for us is our JVs and the new structure, the preferred equity structure. We will lean into that this year as well. And then we will buy on balance sheet if needed, primarily used to fulfill 1031s as we come across those with the dispositions.

But we are willing and able to buy, but we are just being very diligent with money right now, because certainly you have to be very smart and you have to be very diligent on how you put your money out and deploy it.

Michael Anderson Griffin: Great. That is it for me. Thanks for the time.

David G. Cramer: Yes. Absolutely. Thank you.

Operator: Our next question is from Ravi Vijay Vaidya with Mizuho Securities. Please proceed.

Ravi Vijay Vaidya: Hi there. Thank you for taking my question. I wanted to ask about the rent per occupied square foot. You have seen strong improvement there on both a year-over-year basis and a quarter-on-quarter basis. Do you, how do you see this metric trending in 1Q 2026 and throughout the balance of 2026 as well? Do you think it is going to be stable, accelerating, or decelerating?

David G. Cramer: Good question. Thanks for joining. We approach 2026 with continued improvement in the achieved rate. It becomes more challenging when you have bigger roll-downs like we are facing today. So our roll-downs are in the low to mid-30s at this point. So the strength of our ECRI program and the improvement we have made around how we implement the ECRI program will help offset that rent roll-down. But we did throughout the year show modest improvement in achieved rate as we went through the year.

Ravi Vijay Vaidya: Got it. That is helpful. And I wanted to ask another question about the guide. I know that you mentioned that you do not have any housing-related catalysts or any other demand catalysts for achieving the same-store revenue guide, but what are some of the potential levers of maybe upside or elements of conservatism that might be baked in given that the broader operating environment remains a bit choppy? Thanks.

David G. Cramer: Yes. Good question. And Brandon, if you want to jump in. Certainly, things that can move the guide around, and one of the primary things is asking rents. If we see good improvement in asking rents and we see a good spring leasing season, and that is the hard part about sitting here today, it is February, and if we were sitting here in May, I think we would have a lot more light on how active the spring leasing season was. Historically, we are able to drive the street rate asking rents up, as this industry does.

And so the one thing that we do not know and that could push the guide up, or it may push it to the low end if street rates do not cooperate and you get a more volatile competitive environment, as far as the revenue side of the house goes. And that would affect occupancy and it would affect obviously what you are driving home for the achieved rate if you are moving on that street rate. Anything else?

Brandon S. Togashi: Ravi, I mean, the one thing I might add is just that is outside of our control, obviously. It is just the regulatory environment and then any state of emergency declarations due to severe weather or other events. Our portfolio is not currently subject to significant restrictions there, but obviously that could play a factor. There is always some element to that throughout the portfolio as you go throughout the year. In the state of Oklahoma, we had some restrictions in 2025 that impacted our OKC and Tulsa markets.

So that is just one variable, but we try to, as much as you can, incorporate some element of that as we think about kind of the normal course revenue management program.

Ravi Vijay Vaidya: Got it. Thank you.

Brandon S. Togashi: Thank you.

Operator: Our next question is from Ronald Kamdem with Morgan Stanley. Please proceed.

Ronald Kamdem: Hey, just two quick ones. Just, can you just contextualize your dividend payout ratio for this year? And sort of, I think you talked about sort of an inflection. Is it sort of a 2027 or 2028? Like, when do you sort of anticipate getting that back to sort of even as this inflection sort of plays out? Thanks.

David G. Cramer: Hey, Ron. Thanks. This is David. Thanks for the question. Yes, certainly, the guidance would imply we are not covering the dividend this year. We will be light on covering the total payout. Certainly, as we think about it, we are in an inflection point. We are seeing fundamentals turn positive. We are seeing our organic growth turn positive, and there are moving pieces with investment activity and things like that can move FFO around. We did come off of covering the dividend third quarter and fourth quarter of last year. And so, I think we have very good discussions with our board. Our board is very in tune to what the outlook of the company is.

And right now, I think to your point, as we finish the end of the year, we probably will be back to where we are covering 100% of the dividend towards the back half, really the fourth quarter of the year, and then in 2027, if the fundamentals keep improving, we will certainly be in a much better position. But we are certainly aware where the payout ratio is, and we are working very hard to accomplish that to be lower.

Ronald Kamdem: Great. That is helpful. And then my second question, I think the release noted that all but one market saw sequential improvement, which I thought was interesting. Can you just double-click on whether the heavy supply markets versus maybe the lower supply, how those are performing and what your expectations are in terms of the strength of the inflection? Thanks.

David G. Cramer: Yes, good question. I will start, and if Brandon wants to come in here. But you are touching on it. The markets where we are still facing a tremendous amount of competition that needs to be absorbed are the ones that are really not inflecting positive and are going to take time, and really it is just time. And in some markets like Phoenix, they need to stop building because they are still building in Phoenix. And so you make two steps forward and then you have to take three steps back if somebody adds some more product to the market.

The markets that do not have that, and I mentioned a couple of them earlier, Colorado Springs, Wichita, Portland, we are seeing nice, solid sequential growth in rate, and occupancies have been steady, and we are seeing some pricing power in those markets and we are having good success. So fortunately, we do have a diversified portfolio. We have a lot of our markets that are going in the right direction, and so that makes us feel very good as we think we have hit that positive inflection point.

And even a market like Atlanta, which is improving, it is still very much negative, but we are seeing some consistency and some stability in some of these markets, which is encouraging to us.

Ronald Kamdem: That is it for me. Thank you.

David G. Cramer: Yes. Thank you.

Operator: Our next question is from Eric Wolfe with Citigroup. Please proceed.

Eric Wolfe: Hey, thanks. You mentioned the positive trends on occupancy year to date. I was just wondering if it was possible for you to update us on where RevPAR has been trending, just to understand how average realized rents have been moving through the early part of the year, especially given your comment around seeing more success on ECRIs?

David G. Cramer: Thanks for joining and good question. RevPAR is following similar trends. We are seeing improvement in RevPAR that would be consistent with nice, solid ECRI gains and obviously the improvement and stabilization in occupancy and slight improvement in occupancy, but the RevPAR is growing, yes.

Eric Wolfe: Okay. And it looks like your other property-related income or revenue is a 40 basis point drag on your same-store revenue growth this quarter. Can you just talk about what is embedded in your guidance for that line item? And where you see it trending throughout 2026?

Brandon S. Togashi: Yes, Eric, it is Brandon. That line item will continue to be a little bit of a drag. That includes our tenant insurance dollars that are retained at the store. We have always had some amount of tenant insurance dollars reported within the store-level NOI, dating back to the PRO structure. So that has just remained. And as we talk about all the things that David hit on here, the jockeying between street rates, marketing spend, our discounting and promotion initiatives, the at-the-time-of-rental upsell on tenant insurance, we have altered that over the past couple of quarters in order to prioritize getting that rental. And so that has created a little bit of a drag in that line item.

So we expect that to continue in 2026, although that comp gets easier as we get to the middle part of the year.

Eric Wolfe: Got it. That is helpful. Thank you.

Operator: Our next question is from Omotayo Okusanya with Deutsche Bank. Please proceed.

Omotayo Okusanya: First question I had was, again, while guidance does not really contemplate any change in the housing market, just curious how you guys are thinking about some of these affordability initiatives that President Trump is trying to make happen and maybe just kind of take a look at all that. Kind of feel like the housing market could get better, so this could potentially be a positive catalyst? Or do you kind of look at it and kind of say it is more, you see a whole bunch of refinancing activity because mortgage rates are now down to percent, but it is still not low enough to really stimulate housing demand?

David G. Cramer: Yes. This is David. Thanks for joining the question. That is a hard one. I mean, we are encouraged with the fact that at least everybody is talking about it and they are trying to find a solution or some solutions to get progress there. Our guide did not look at 2026 for any type of cracker or catalyst in that piece of it. We just approached 2026 that it would probably remain the same. Any improvement of that would be much welcomed. We would be positioned for outsized impact should they crack any of that and open up the resale market or things like that. But I think we see the same that you do.

There is a lot of listings, there is a lot of stuff going on out there. We have just not seen any significant improvement yet.

Omotayo Okusanya: That is helpful. And then second question, the preferred equity platform, could you just talk a little bit, it is kind of like everything is now kind of in place. Just talk a little bit about how deployment is going to work there and how quickly you think you can kind of put out capital?

David G. Cramer: Yes, sure. It is a two-year program that we set up where we wanted to get the capital out in two years. Certainly, we are working very, very hard. We do have three properties under contract today, totaling a little over $50 million. So we are pleased that we have got that stood up and we have got properties under contract. We would like to get that out as quick as possible, if we can find the right deals. You know, it is hard to handicap those.

These transactions are lumpy, and timing cannot be particularly seen, but we are happy that we are up and running with it, and we are certainly looking at a lot of properties and there are a lot of opportunities.

Omotayo Okusanya: Great. Thank you. Thank you.

Operator: Our next question is from Wesley Keith Golladay with Baird. Please proceed.

Wesley Keith Golladay: Hey, good afternoon, everyone. I just have a quick question on the portfolio optimization. When you get through this year’s dispositions, will you be largely done with the program?

David G. Cramer: Wes, this is David. I think so. We have done the majority of the heavy lifting and the larger work. This year, we will wrap up a lot of that. And then after that, it will just be as things materialize. So yes, most of the heavy lifting is done.

Wesley Keith Golladay: Okay.

David G. Cramer: Thank you.

Operator: Our next question is from Adabelle Azer with Barclays. Please proceed.

Adabelle Azer: Hi, thank you for taking my question. Can you remind us of your strategy for payroll and how you think about the trade-off between lowering payroll costs versus potentially losing sales?

David G. Cramer: Yes. Adabelle, thanks for joining. We have been working for a number of years on how to model payroll, and I can tell you with the data we have today and much better tools that we have today, we certainly want to meet the customer when they want to meet us and how they want to shop with us. And so, there is no singular answer to staffing levels. We have markets where we have to have more staffing with more hours and markets with less. But what I do know is we have a much better line of sight. What we have been working on is hours of operation, and that would be: can we be open later?

Can we be closed earlier? Do we need to be open eight hours, ten hours, twelve hours a day? Do we need to be open six hours a day? We have certainly put a lot of emphasis around our customer care center, and our call center teams are doing amazing things. Plus, we have implemented AI there, so we have a lot of automation built in there where we do not have to be around. We have put, obviously, the barcodes on the window. We have an app stood up. But for us, it is pretty fluid in markets and pretty fluid in stores, but we have seen payroll savings.

We do think there are more additional payroll savings for us as we go forward. But we will not try to do that at the expense of the customer. But I do believe clearly the customer expectation of when they want us around and how they want us has changed. There is definitely that digital transformation that is real. It allows us to just be a little more flexible when we are at the store.

Adabelle Azer: That is really helpful. Thank you. And then one more. You guys have invested a lot in your website and platform over the last year or two. How much more of a benefit do you see coming from improved search rankings and higher conversion rates?

David G. Cramer: Another good question. We have certainly put a lot of effort there, and we have seen a lot of success. If you look at our visibility scores and our outranking scores, it is a true testament to the rental volume. So when we talk about rental volumes being up 20%–30%, that is all of these things coming together and working very, very well. So we are extremely happy. Obviously, you are never done. Always working and trying to find another penny here and another rental there.

And so the teams are working very hard with their modeling and how we are evolving our AI modeling, and there is a lot of progress around what we are doing with Google and around how we are looking at search and how we are looking at our paid search and our effectiveness around all of those channels that are available to us. And so, I am very pleased with the progress, but still more to come there.

Adabelle Azer: Great. Thank you. Thank you.

Operator: Our final question is from Michael Goldsmith with UBS. Please proceed.

Michael Goldsmith: Hey guys, back for a couple of follow-ups. First, I think you mentioned some restrictions in Oklahoma. Can you kind of clarify what you are referring to there?

David G. Cramer: Yes. I will jump in a little bit, Michael. What we had last year is they had high wind and fire danger restrictions around counties because it was so dry. And so what we faced for a number of months was a restriction on how much we could increase rate at a certain particular time. And so we sat a little calmer on Oklahoma through probably five or six months of that year, and then we had a pretty good lift in January around working back through the portfolio in Oklahoma and catching folks back up to where we wanted them to be.

Like Brandon said, a lot of these state of emergencies are generally pretty short in nature, and they are not as widespread. I mean, it would be by county or by city sometimes. And that one just happened to be a wildfire one that hung on because they had such dry conditions for such a long period of time.

Michael Goldsmith: Got it. Thanks for that. And then, Brandon, a follow-up just on the refinancing. Can you walk through what is on tap for this year and just how you are thinking about it?

Brandon S. Togashi: Yes. The $375 million that we have coming due this year is concentrated: $275 million on that term loan and then $100 million on the private placement notes. As you can see on schedule four in the supplemental, the blended rate on that $375 million is about 4.5%. And so if we, as I said earlier, executed a refinancing of all of that through the term loan market, depending on whether we take some of that floating or fix it all for the tenor, you are probably in the mid to high 4s. And so let us just say that is a half a percent of rate reset on that notional. And it is a partial-year impact in 2026, Michael.

So that kind of gets to some of that interest expense headwind that I mentioned earlier. But that is kind of the plan A. There is obviously the private placement market or secured market. So we feel comfortable with being able to address the maturity. That will be the main focus for our finance team. And then I was also referring to, in my comments earlier, and you see it footnoted in our guidance table, one of our joint ventures has about $360 million of debt that comes due in October. And so currently, the plan there would be to refinance that. And so that is a 3.5% in-place interest rate.

So there would be a rate reset at the JV level, and then we would pick up our 25% share of that. So that is all incorporated into the guide.

Michael Goldsmith: Thanks. I appreciate the extra time.

Brandon S. Togashi: Of course. Thank you. Thanks, Michael.

Operator: There are no further questions at this time. I would like to turn the call back over to Mr. Hoglund for closing comments.

George Hoglund: Yes. Thank you all for joining us today, and we appreciate your continued interest in National Storage Affiliates Trust. We look forward to seeing many of you next week at the conference in Florida. Thank you.

Operator: Thank you. This will conclude today’s conference. You may disconnect at this time, and thank you for your participation.

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