Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

May 2, 2024

Documents

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-37351
National Storage Affiliates Trust
(Exact name of Registrant as specified in its charter)
 
Maryland 46-5053858
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

8400 East Prentice Avenue, 9th Floor
Greenwood Village, Colorado 80111
(Address of principal executive offices) (Zip code)

(720) 630-2600
(Registrant's telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbols Name of each exchange on which registered
Common Shares of Beneficial Interest, $0.01 par value per share NSA New York Stock Exchange
Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share NSA Pr A New York Stock Exchange
Series B Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share NSA Pr B New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☒ Accelerated Filer ☐
Non-accelerated Filer ☐ Smaller Reporting Company ☐
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    
Yes ☐  No ☒
As of April 29, 2024, 74,964,186 common shares of beneficial interest, $0.01 par value per share, were outstanding.


NATIONAL STORAGE AFFILIATES TRUST
TABLE OF CONTENTS
FORM 10-Q
Page
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (Unaudited)
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (Unaudited)
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2024 and 2023 (Unaudited)
Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2024 and 2023 (Unaudited)
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (Unaudited)
Notes to Condensed Consolidated Financial Statements (Unaudited)
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
ITEM 4. Controls and Procedures
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
ITEM 1A. Risk Factors
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
ITEM 3. Defaults Upon Senior Securities
ITEM 4. Mine Safety Disclosures
ITEM 5. Other Information
ITEM 6. Exhibits
Signatures


2

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
(Unaudited)
March 31, December 31,
2024 2023
ASSETS
Real estate
Self storage properties $ 5,797,653  $ 5,792,174 
Less accumulated depreciation (919,723) (874,359)
Self storage properties, net
 4,877,930  4,917,815 
Cash and cash equivalents 64,233  64,980 
Restricted cash 24,847  22,713 
Debt issuance costs, net 7,731  8,442 
Investment in unconsolidated real estate ventures 240,025  211,361 
Other assets, net 130,015  134,002 
Assets held for sale, net —  550,199 
Operating lease right-of-use assets 22,084  22,299 
Total assets $ 5,366,865  $ 5,931,811 
LIABILITIES AND EQUITY
Liabilities
Debt financing $ 3,285,547  $ 3,658,205 
Accounts payable and accrued liabilities 87,875  92,766 
Interest rate swap liabilities —  3,450 
Operating lease liabilities 24,009  24,195 
Deferred revenue 22,362  27,354 
Total liabilities 3,419,793  3,805,970 
Commitments and contingencies (Note 11)
Equity
Series A Preferred shares of beneficial interest, par value $0.01 per share. 50,000,000 authorized, 9,017,588 and 9,017,588 issued and outstanding at March 31, 2024 and December 31, 2023, respectively, at liquidation preference
 225,439  225,439 
Series B Preferred shares of beneficial interest, par value $0.01 per share. 7,000,000 authorized, 5,668,128 and 5,668,128 issued and outstanding at March 31, 2024 and December 31, 2023, respectively, at liquidation preference
 115,212  115,212 
Common shares of beneficial interest, par value $0.01 per share. 250,000,000 authorized, 76,873,100 and 82,285,995 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
 769  823 
Additional paid-in capital 1,347,512  1,509,563 
Distributions in excess of earnings (439,741) (449,907)
Accumulated other comprehensive income 27,836  21,058 
Total shareholders' equity 1,277,027  1,422,188 
Noncontrolling interests 670,045  703,653 
Total equity 1,947,072  2,125,841 
Total liabilities and equity $ 5,366,865  $ 5,931,811 
See notes to condensed consolidated financial statements.

3

NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2024 2023
REVENUE
Rental revenue $ 180,382  $ 194,129 
Other property-related revenue 6,692  6,807 
Management fees and other revenue 9,074  7,057 
Total revenue 196,148  207,993 
OPERATING EXPENSES
Property operating expenses 54,694  56,483 
General and administrative expenses 15,674  14,821 
Depreciation and amortization 47,331  55,458 
Other 3,492  1,173 
Total operating expenses 121,191  127,935 
OTHER INCOME (EXPENSE)
Interest expense (38,117) (37,948)
Loss on early extinguishment of debt —  (758)
Equity in (losses) earnings of unconsolidated real estate ventures
 (1,630) 1,678 
Acquisition costs (507) (844)
Non-operating income (expense) 98  (598)
Gain on sale of self storage properties 61,173  — 
Other income (expense), net 21,017  (38,470)
Income before income taxes 95,974  41,588 
Income tax expense (886) (1,196)
Net income 95,088  40,392 
Net income attributable to noncontrolling interests
 (36,061) (11,433)
Net income attributable to National Storage Affiliates Trust
 59,027  28,959 
Distributions to preferred shareholders
 (5,110) (3,962)
Net income attributable to common shareholders
 $ 53,917  $ 24,997 
Earnings per share - basic $ 0.67  $ 0.28 
Earnings per share - diluted $ 0.65  $ 0.24 
Weighted average shares outstanding - basic 80,236  89,499 
Weighted average shares outstanding - diluted 138,148  148,622 
Dividends declared per common share $ 0.56  $ 0.55 

See notes to condensed consolidated financial statements.

4

NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
2024 2023
Net income $ 95,088  $ 40,392 
Other comprehensive income (loss)
Unrealized gain (loss) on derivative contracts 20,413  (12,953)
Reclassification of other comprehensive income to interest expense
 (9,314) (7,761)
Other comprehensive income (loss)
 11,099  (20,714)
Comprehensive income 106,187  19,678 
Comprehensive income attributable to noncontrolling interests
 (39,781) (4,881)
Comprehensive income attributable to National Storage Affiliates Trust
 $ 66,406  $ 14,797 

See notes to condensed consolidated financial statements.

5

NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(dollars in thousands, except number of shares)
(Unaudited)
Accumulated
Additional Distributions Other
Preferred Shares Common Shares Paid-in In Excess Of Comprehensive Noncontrolling Total
Number Amount Number Amount Capital Earnings (Loss) Income Interests Equity
Balances, December 31, 2022 9,017,588  $ 225,439  89,842,145  $ 898  $ 1,777,984  $ (396,650) $ 40,530  $ 740,813  $ 2,389,014 
Issuance of preferred shares 5,668,128  115,212  —  —  (1,938) —  —  —  113,274 
OP equity issued:
Acquisition of properties
 —  —  —  —  —  —  —  37,257  37,257 
Issuance of Series A-1 preferred units —  —  —  —  —  —  —  750  750 
Redemptions of OP Units —  —  67,431  1  1,093  —  30  (1,124) — 
Repurchase of common shares —  —  (1,622,874) (16) (69,295) —  —  —  (69,311)
Effect of changes in ownership for consolidated entities —  —  —  —  (18,720) —  (1,245) 19,965  — 
Equity-based compensation expense —  —  —  —  101  —  —  1,548  1,649 
Issuance of restricted common shares —  —  12,417  —  —  —  —  —  — 
Vesting and forfeitures of restricted common shares, net —  —  (2,977) —  (89) —  —  —  (89)
Preferred share dividends —  —  —  —  —  (3,962) —  —  (3,962)
Common share dividends —  —  —  —  —  (48,755) —  —  (48,755)
Distributions to noncontrolling interests —  —  —  —  —  —  —  (34,431) (34,431)
Other comprehensive loss —  —  —  —  —  —  (14,162) (6,552) (20,714)
Net income —  —  —  —  —  28,959  —  11,433  40,392 
Balances, March 31, 2023 14,685,716  $ 340,651  88,296,142  $ 883  $ 1,689,136  $ (420,408) $ 25,153  $ 769,659  $ 2,405,074 
See notes to condensed consolidated financial statements.

6

NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(dollars in thousands, except number of shares)
(Unaudited)
Accumulated
Additional Distributions Other
Preferred Shares Common Shares Paid-in In Excess Of Comprehensive Noncontrolling Total
Number Amount Number Amount Capital Earnings (Loss) Income Interests Equity
Balances, December 31, 2023 14,685,716  $ 340,651  82,285,995  $ 823  $ 1,509,563  $ (449,907) $ 21,058  $ 703,653  $ 2,125,841 
Redemptions of OP Units —  —  72,802  1  1,025  —  19  (1,426) (381)
Repurchase of common shares —  —  (5,491,925) (55) (203,518) —  —  —  (203,573)
Effect of changes in ownership for consolidated entities —  —  —  —  40,676  —  (620) (40,056) — 
Equity-based compensation expense —  —  —  —  109  —  —  1,746  1,855 
Issuance of restricted common shares —  —  8,886  —  —  —  —  —  — 
Vesting and forfeitures of restricted common shares, net —  —  (2,658) —  (88) —  —  —  (88)
Equity offering costs —  —  —  —  (255) —  —  —  (255)
Preferred share dividends —  —  —  —  —  (5,110) —  —  (5,110)
Common share dividends —  —  —  —  —  (43,751) —  —  (43,751)
Distributions to noncontrolling interests —  —  —  —  —  —  —  (33,653) (33,653)
Other comprehensive income —  —  —  —  —  —  7,379  3,720  11,099 
Net income —  —  —  —  —  59,027  —  36,061  95,088 
Balances, March 31, 2024 14,685,716  $ 340,651  76,873,100  $ 769  $ 1,347,512  $ (439,741) $ 27,836  $ 670,045  $ 1,947,072 
See notes to condensed consolidated financial statements.

7

NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
2024 2023
OPERATING ACTIVITIES
Net income $ 95,088  $ 40,392 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 47,331  55,458 
Amortization of debt issuance costs 1,709  1,600 
Amortization of debt discount and premium, net (255) (150)
Gain on sale of self storage properties (61,173) — 
Other —  969 
Equity-based compensation expense 1,855  1,649 
Equity in losses (earnings) of unconsolidated real estate ventures
 1,630  (1,678)
Distributions from unconsolidated real estate ventures
 5,479  5,981 
Change in assets and liabilities, net of effects of self storage property acquisitions:
Other assets 13,010  7,730 
Accounts payable and accrued liabilities (5,681) (3,043)
Deferred revenue (4,992) 845 
Net Cash Provided by Operating Activities 94,001  109,753 
INVESTING ACTIVITIES
Acquisition of self-storage properties —  (9,920)
Capital expenditures (5,374) (8,450)
Deposits and advances for self storage properties and other acquisitions —  (200)
Expenditures for corporate furniture, equipment and other (230) (678)
Investment in unconsolidated real estate venture (35,774) — 
Acquisition of management company assets and interest in reinsurance company from PRO retirement —  (16,924)
Net proceeds from sale of self storage properties 608,777  — 
Net Cash Provided by (Used In) Investing Activities 567,399  (36,172)
FINANCING ACTIVITIES
Borrowings under debt financings 240,000  325,815 
Redemption of OP units (381) — 
Repurchase of common shares (203,528) (69,311)
Principal payments under debt financings (613,401) (232,459)
Payment of dividends to common shareholders (43,751) (48,755)
Payment of dividends to preferred shareholders (5,110) (3,664)
Distributions to noncontrolling interests (33,809) (34,513)
Debt issuance costs —  (1,057)
Equity offering costs (33) — 
Net Cash Used In Financing Activities (660,013) (63,944)
Increase in Cash, Cash Equivalents and Restricted Cash 1,387  9,637 
See notes to condensed consolidated financial statements.

8

NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
2024 2023
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period 87,693  42,199 
End of period $ 89,080  $ 51,836 

Supplemental Cash Flow Information
Cash paid for interest
 $ 33,605  $ 29,521 
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Consideration exchanged in property acquisitions
Issuance of OP Units and subordinated performance units —  37,257 
Issuance of Series B preferred shares —  113,274 
Other net liabilities assumed —  85 
Change in accrued capital spending (125) 463 

See notes to condensed consolidated financial statements.

9

NATIONAL STORAGE AFFILIATES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2024
(Unaudited)





1. ORGANIZATION AND NATURE OF OPERATIONS
National Storage Affiliates Trust was organized in the state of Maryland on May 16, 2013 and is a fully integrated, self-administered and self-managed real estate investment trust focused on the self storage sector. As used herein, "NSA," the "Company," "we," "our," and "us" refers to National Storage Affiliates Trust and its consolidated subsidiaries, except where the context indicates otherwise. The Company has elected and believes that it has qualified to be taxed as a real estate investment trust for U.S. federal income tax purposes ("REIT") commencing with its taxable year ended December 31, 2015.
Through its controlling interest as the sole general partner of NSA OP, LP (its "operating partnership"), a Delaware limited partnership formed on February 13, 2013, the Company is focused on the ownership, operation, and acquisition of self storage properties predominantly located within the top 100 metropolitan statistical areas throughout the United States. Pursuant to the Agreement of Limited Partnership (as amended, the "LP Agreement") of its operating partnership, the Company's operating partnership is authorized to issue preferred units, Class A Units ("OP units"), different series of Class B Units ("subordinated performance units"), and Long-Term Incentive Plan Units ("LTIP units"). The Company also owns certain of its self storage properties through other consolidated limited partnership subsidiaries of its operating partnership, which the Company refers to as "DownREIT partnerships." The DownREIT partnerships issue equity ownership interests that are intended to be economically equivalent to the Company's OP units ("DownREIT OP units") and subordinated performance units ("DownREIT subordinated performance units").
The Company owned 809 consolidated self storage properties in 38 states and Puerto Rico with approximately 51.9 million rentable square feet in approximately 407,000 storage units as of March 31, 2024. These properties are managed with local operational focus and expertise by the Company and its participating regional operators ("PROs"). As of March 31, 2024, the Company directly managed 476 of these self storage properties through its corporate brands of iStorage, SecurCare, Northwest and Move It, and the PROs managed the remaining 333 self storage properties. These PROs are Optivest Properties LLC and its controlled affiliates ("Optivest"), Guardian Storage Centers LLC and its controlled affiliates ("Guardian"), Arizona Mini Storage Management Company d/b/a Storage Solutions and its controlled affiliates ("Storage Solutions"), Hide-Away Storage Services, Inc. and its controlled affiliates ("Hide-Away"), an affiliate of Shader Brothers Corporation d/b/a Personal Mini Storage ("Personal Mini"), Southern Storage Management Systems, Inc. d/b/a Southern Self Storage ("Southern"), affiliates of Investment Real Estate Management, LLC d/b/a Moove In Self Storage of York, Pennsylvania ("Moove In") and Blue Sky Self Storage, LLC, a strategic partnership between Argus Professional Storage Management and GYS Development LLC ("Blue Sky").
As of March 31, 2024, the Company also managed through its property management platform an additional portfolio of 241 properties owned by the Company's unconsolidated real estate ventures. These properties contain approximately 16.7 million rentable square feet, configured in approximately 135,000 storage units and located across 24 states. The Company owns a 25% equity interest in each of its unconsolidated real estate ventures.
As of March 31, 2024, in total, the Company operated and held ownership interests in 1,050 self storage properties located across 42 states and Puerto Rico with approximately 68.7 million rentable square feet in approximately 542,000 storage units.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed consolidated financial statements are presented on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles ("GAAP") and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. The Company's results of operations for the quarterly and year to date periods are not necessarily indicative of the results to be expected for the full year or any other future period.

10

On January 3, 2023, the operating partnership, as borrower, the Company, and certain of the operating partnership's subsidiaries, as subsidiary guarantors, entered into a third amended and restated credit agreement with KeyBank National Association, as administrative agent, and a syndicated group of lenders party thereto, which expanded the total borrowing capacity of its credit facility by $405.0 million to $1.955 billion. The Company presented changes in borrowings from certain lenders on a net basis in its prior year interim condensed consolidated statement of cash flows. The Company has corrected this error in the accompanying condensed consolidated statement of cash flows for the quarterly period ended March 31, 2023 to present on a gross basis the constructive receipts and payments under debt financings of $129.8 million and $129.8 million, respectively. The corrections had no impact to the total net cash used in financing activities in any interim period. The Company evaluated this adjustment both qualitatively and quantitatively and has concluded that this adjustment is immaterial to all impacted periods.
Principles of Consolidation
The Company's financial statements include the accounts of its operating partnership and its controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation of entities.
When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a variable interest entity ("VIE"), and if the Company is deemed to be the primary beneficiary, in accordance with authoritative guidance issued on the consolidation of VIEs. When an entity is not deemed to be a VIE, the Company considers the provisions of additional guidance to determine whether the general partner controls a limited partnership or similar entity when the limited partners have certain rights. The Company consolidates all entities that are VIEs and of which the Company is deemed to be the primary beneficiary. The Company has determined that its operating partnership is a VIE. The sole significant asset of National Storage Affiliates Trust is its investment in its operating partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of its operating partnership.
As of March 31, 2024, the Company's operating partnership was the primary beneficiary of, and therefore consolidated, 22 partnerships that are considered VIEs, which owned 49 self storage properties. The net book value of the real estate owned by these VIEs was $415.9 million and $418.9 million as of March 31, 2024 and December 31, 2023, respectively. For certain DownREIT partnerships which are subject to fixed rate mortgages payable, the carrying value of such fixed rate mortgages payable held by these VIEs was $188.7 million and $188.7 million as of March 31, 2024 and December 31, 2023, respectively. The creditors of the consolidated VIEs do not have recourse to the Company's general credit.
Revenue Recognition
Rental revenue
Rental revenue consists of space rentals and related fees. Management has determined that all of the Company's leases are operating leases. Substantially all leases may be terminated on a month-to-month basis and rental income is recognized ratably over the lease term using the straight-line method. Rents received in advance are deferred and recognized on a straight-line basis over the related lease term associated with the prepayment. Promotional discounts and other incentives are recognized as a reduction to rental income over the applicable lease term.
Other property-related revenue
Other property-related revenue primarily consists of ancillary revenues such as tenant insurance and/or tenant warranty protection-related access fees, sales of storage supplies and truck rentals which are recognized in the period earned.
The Company and certain of the Company’s PROs have tenant insurance and/or tenant warranty protection plan-related arrangements with insurance companies and the Company’s tenants. During the three months ended March 31, 2024 and 2023, the Company recognized $5.6 million and $5.5 million, respectively, of tenant insurance and tenant warranty protection plan revenues.
The Company sells boxes, packing supplies, locks, other retail merchandise and rents moving trucks at its properties. During the three months ended March 31, 2024 and 2023, the Company recognized retail sales of $0.5 million and $0.6 million, respectively.

11

Management fees and other revenue
Management fees and other revenue consist of property management fees, platform fees, call center fees, acquisition fees, amounts related to the facilitation of tenant warranty protection or tenant insurance programs for certain stores in the Company's consolidated portfolio and unconsolidated real estate ventures, access fees associated with tenant insurance-related arrangements, and profit distributions from the Company's interest in a reinsurance company.
With respect to the 2016 Joint Venture, the 2018 Joint Venture and the 2024 Joint Venture (as each is defined in Note 5), the Company provides supervisory and administrative property management services, centralized call center services, and technology platform and revenue management services to the properties in the unconsolidated real estate ventures. The property management fees for the 2016 Joint Venture and 2018 Joint Venture are equal to 6% of monthly gross revenues and net sales revenues from the assets of the unconsolidated real estate ventures, and the platform fees are equal to $1,250 per month per unconsolidated real estate venture property. The property management fees for the 2024 Joint Venture are equal to 4% of monthly gross revenues and net sales revenues from the assets of the unconsolidated real estate venture. With respect to the 2016 Joint Venture and 2024 Joint Venture, the call center fee is equal to 1% of each of monthly gross revenues and net sales revenues from the 2016 Joint Venture and 2024 Joint Venture properties, respectively. During the three months ended March 31, 2024 and 2023, the Company recognized property management fees, call center fees and platform fees of $4.3 million and $4.2 million, respectively.
The Company also earns acquisition fees for properties acquired by the unconsolidated real estate ventures subsequent to the initial portfolios of each of the 2016 Joint Venture, the 2018 Joint Venture and the 2024 Joint Venture (each as defined in Note 5). The 2023 Joint Venture (as defined in Note 5) does not currently hold any properties. These fees are based on a percentage of the gross capitalization of the acquired assets determined by the members of the 2016 Joint Venture, the 2018 Joint Venture, the 2023 Joint Venture and the 2024 Joint Venture, and are generally earned when the unconsolidated real estate ventures obtain title and control of an acquired property. During the three months ended March 31, 2024 and 2023, the Company recognized acquisition fees of $0 and $0, respectively.
The Company provides or makes available tenant insurance or tenant warranty protection programs for tenants at its properties. For certain of the properties in the Company’s consolidated portfolio and unconsolidated real estate ventures, the Company provides such tenant insurance through the Company’s wholly-owned captive insurance company and a separate reinsurance company in which the Company has a partial ownership interest. With respect to properties in all of the Company’s unconsolidated real estate ventures, the Company receives 50% of all proceeds from tenant insurance and tenant warranty protection programs at each unconsolidated real estate venture property in exchange for facilitating the programs at those properties. During the three months ended March 31, 2024 and 2023, the Company recognized $4.7 million and $2.8 million, respectively, of revenue related to these activities.
Gain on sale of self storage properties
The Company recognizes gains from disposition of properties only upon closing in accordance with the guidance on sales of nonfinancial assets. Profit on real estate sold is recognized upon closing when all, or substantially all, of the promised consideration has been received and is nonrefundable and the Company has transferred control of the facilities to the purchaser.
Investments in Unconsolidated Real Estate Ventures
The Company’s investments in its unconsolidated real estate ventures are recorded under the equity method of accounting in the accompanying condensed consolidated financial statements. Under the equity method, the Company’s investments in unconsolidated real estate ventures are stated at cost and adjusted for the Company’s share of net earnings or losses and reduced by distributions. Equity in earnings (losses) is recognized based on the Company’s 25% ownership interest in the earnings (losses) of the unconsolidated real estate ventures, except for the 2024 JV, for which the Company follows the hypothetical liquidation at book value ("HLBV") method. The Company follows the "nature of the distribution approach" for classification of distributions from its unconsolidated real estate ventures in its condensed consolidated statements of cash flows. Under this approach, distributions are reported on the basis of the nature of the activity or activities that generated the distributions as either a return on investment, which are classified as operating cash flows, or a return of investment (e.g., proceeds from the unconsolidated real estate ventures' sale of assets) which are reported as investing cash flows.

12

Noncontrolling Interests
All of the limited partner equity interests ("OP equity") in the operating partnership not held by the Company are reflected as noncontrolling interests. Noncontrolling interests also include ownership interests in DownREIT partnerships held by entities other than the operating partnership or its subsidiaries. In the condensed consolidated statements of operations, the Company allocates net income (loss) attributable to noncontrolling interests to arrive at net income (loss) attributable to National Storage Affiliates Trust.
For transactions that result in changes to the Company's ownership interest in its operating partnership, the carrying amount of noncontrolling interests is adjusted to reflect such changes. The difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest is adjusted is reflected as an adjustment to additional paid-in capital on the condensed consolidated balance sheets.
Allocation of Net Income (Loss)
The distribution rights and priorities set forth in the operating partnership's LP Agreement differ from what is reflected by the underlying percentage ownership interests of the unitholders. Accordingly, the Company allocates GAAP income (loss) utilizing the HLBV method, in which the Company allocates income or loss based on the change in each unitholders’ claim on the net assets of its operating partnership at period end after adjusting for any distributions or contributions made during such period. The HLBV method is commonly applied to equity investments where cash distribution percentages vary at different points in time and are not directly linked to an equity holder’s ownership percentage.
The HLBV method is a balance sheet-focused approach to income (loss) allocation. A calculation is prepared at each balance sheet date to determine the amount that unitholders would receive if the operating partnership were to liquidate all of its assets (at GAAP net book value) and distribute the resulting proceeds to its creditors and unitholders based on the contractually defined liquidation priorities. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is used to derive each unitholder's share of the income (loss) for the period. Due to the stated liquidation priorities and because the HLBV method incorporates non-cash items such as depreciation expense, in any given period, income or loss may be allocated disproportionately to unitholders as compared to their respective ownership percentage in the operating partnership, and net income (loss) attributable to National Storage Affiliates Trust could be more or less net income than actual cash distributions received and more or less income or loss than what may be received in the event of an actual liquidation. Additionally, the HLBV method could result in net income (or net loss) attributable to National Storage Affiliates Trust during a period when the Company reports consolidated net loss (or net income), or net income (or net loss) attributable to National Storage Affiliates Trust in excess of the Company's consolidated net income (or net loss). The computations of basic and diluted earnings (loss) per share may be materially affected by these disproportionate income (loss) allocations, resulting in volatile fluctuations of basic and diluted earnings (loss) per share.
Other Comprehensive Income (Loss)
The Company has cash flow hedge derivative instruments that are measured at fair value with unrealized gains or losses recognized in other comprehensive income (loss) with a corresponding adjustment to accumulated other comprehensive income (loss) within equity, as discussed further in Note 12. Under the HLBV method of allocating income (loss) discussed above, a calculation is prepared at each balance sheet date by applying the HLBV method including, and excluding, the assets and liabilities resulting from the Company's cash flow hedge derivative instruments to determine comprehensive income (loss) attributable to National Storage Affiliates Trust. As a result of the distribution rights and priorities set forth in the operating partnership's LP Agreement, in any given period, other comprehensive income (loss) may be allocated disproportionately to unitholders as compared to their respective ownership percentage in the operating partnership and as compared to their respective allocation of net income (loss).
Cash and Cash Equivalents
The Company considers all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents. From time to time, the Company maintains cash balances in financial institutions in excess of federally insured limits. The Company has never experienced a loss that resulted from exceeding federally insured limits.

13

Restricted Cash
The Company's restricted cash consists of escrowed funds deposited with financial institutions resulting from property sales for which we elected to purchase replacement property in accordance with Section 1031 of the Code, for real estate taxes, insurance and other reserves for capital improvements in accordance with the Company's loan agreements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS
Shareholders' Equity
At the Market ("ATM") Program
On February 27, 2019, the Company entered into a sales agreement with certain sales agents, pursuant to which the Company may sell from time to time up to an aggregate of $250.0 million of common shares of beneficial interest, $0.01 par value per share of the Company ("common shares") and 6.000% Series A cumulative redeemable Preferred Shares of beneficial interest ("Series A Preferred Shares") in sales deemed to be "at the market" offerings (the "sales agreement"). On May 19, 2021, the Company entered into an amendment to the sales agreement with certain sales agents, whereby the Company increased the aggregate gross sale price under the program to $400.0 million, which included $31.0 million of the remaining available offered shares. The sales agreement contemplates that, in addition to the issuance and sale by the Company of offered shares to or through the sale agents, the Company may enter into separate forward sale agreements with any forward purchaser. Forward sale agreements, if any, will include only the Company's common shares and will not include any Series A Preferred Shares. If the Company enters into a forward sale agreement with any forward purchaser, such forward purchaser will attempt to borrow from third parties and sell, through the related agent, acting as sales agent for such forward purchaser (each, a "forward seller"), offered shares, in an amount equal to the offered shares subject to such forward sale agreement, to hedge such forward purchaser’s exposure under such forward sale agreement. The Company may offer the common shares and Series A Preferred Shares through the agents, as the Company's sales agents, or, as applicable, as forward seller, or directly to the agents or forward sellers, acting as principals, by means of, among others, ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale or at negotiated prices.
During the three months ended March 31, 2024, the Company did not sell any common shares through the ATM program. As of March 31, 2024, the Company had $169.1 million of capacity remaining under its most recent ATM Program.
Common Share Repurchase Program
On July 11, 2022, the Company approved a share repurchase program authorizing, but not obligating, the repurchase of up to $400.0 million of the Company's common shares of beneficial interest from time to time. On December 1, 2023, the Company approved a new share repurchase program authorizing, but not obligating, the repurchase of up to $275.0 million of the Company's common shares from time to time. The timing, manner, price and amount of any repurchase transactions will be determined by the Company in its discretion and will be subject to share price, availability, trading volume and general market conditions. During the three months ended March 31, 2024 the Company repurchased 5,491,925 common shares for approximately $203.5 million.
Noncontrolling Interests
All of the OP equity in the Company's operating partnership not held by the Company are reflected as noncontrolling interests. Noncontrolling interests also include ownership interests in DownREIT partnerships held by entities other than the Company's operating partnership. NSA is the general partner of its operating partnership and is authorized to cause its operating partnership to issue additional partner interests, including OP units and subordinated performance units, at such prices and on such other terms as it determines in its sole discretion.

14

As of March 31, 2024 and December 31, 2023, units reflecting noncontrolling interests consisted of the following:
March 31, 2024 December 31, 2023
Series A-1 preferred units 1,212,340  1,212,340 
OP units 37,658,350  37,635,683 
Subordinated performance units 7,967,581  7,991,271 
LTIP units 866,906  785,932 
DownREIT units
DownREIT OP units 2,120,491  2,120,491 
DownREIT subordinated performance units 4,133,474  4,133,474 
Total 53,959,142  53,879,191 
Series A-1 Preferred Units
The 6.000% Series A-1 Cumulative Redeemable Preferred Units ("Series A-1 preferred units") rank senior to OP units and subordinated performance units in the Company's operating partnership with respect to distributions and liquidation. The Series A-1 preferred units have a stated value of $25.00 per unit and receive distributions at an annual rate of 6.000%. These distributions are cumulative. The Series A-1 preferred units are redeemable at the option of the holder after the first anniversary of the date of issuance, which redemption obligations may be satisfied at the Company’s option in cash in an amount equal to the market value of an equivalent number of the Series A Preferred Shares or the issuance of Series A Preferred Shares on a one-for-one basis, subject to adjustments. The Series A Preferred Shares are redeemable by the Company for a cash redemption price of $25.00 per share, plus accrued but unpaid dividends beginning in October 2022.
OP Units and DownREIT OP units
OP units in the Company's operating partnership are redeemable for cash or, at the Company's option, exchangeable for the Company's common shares on a one-for-one basis, and DownREIT OP units are redeemable for cash or, at the Company's option, exchangeable for OP units in its operating partnership on a one-for-one basis, subject to certain adjustments in each case. The holders of OP units are generally not entitled to elect redemption until one year after the issuance of the OP units. The holders of DownREIT OP units are generally not entitled to elect redemption until five years after the date of the contributor's initial contribution.
The increase in OP units outstanding from December 31, 2023 to March 31, 2024 was due to 43,556 OP units issued upon the voluntary conversion of 23,690 subordinated performance units and the conversion of 62,330 LTIP units into an equivalent number of OP units, partially offset by the redemption of 72,802 OP units for an equal number of common shares and the redemption of 10,417 OP units for cash.
Subordinated Performance Units and DownREIT Subordinated Performance Units
Subordinated performance units may also, under certain circumstances, be convertible into OP units which are exchangeable for common shares as described above, and DownREIT subordinated performance units may, under certain circumstances, be exchangeable for subordinated performance units on a one-for-one basis. Subordinated performance units are only convertible into OP units after a two year lock-out period and then generally (i) at the holder’s election only upon the achievement of certain performance thresholds relating to the properties to which such subordinated performance units relate or (ii) at the Company's election upon a retirement event of a PRO that holds such subordinated performance units or upon certain qualifying terminations. The holders of DownREIT subordinated performance units are generally not entitled to elect redemption until at least five years after the date of the contributor's initial contribution.

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Following such lock-out period, a holder of subordinated performance units in the Company's operating partnership may elect a voluntary conversion one time each year on or prior to December 1st to convert a pre-determined portion of such subordinated performance units into OP units in the Company's operating partnership, with such conversion effective January 1st of the following year, with each subordinated performance unit being converted into the number of OP units determined by dividing the average cash available for distribution, or CAD, per unit on the series of specific subordinated performance units over the one-year period prior to conversion by 110% of the CAD per unit on the OP units determined over the same period. CAD per unit on the series of specific subordinated performance units and OP units is determined by the Company based generally upon the application of the provisions of the LP Agreement applicable to the distributions of operating cash flow and capital transactions proceeds.
The decrease in subordinated performance units outstanding from December 31, 2023 to March 31, 2024 was due to the voluntary conversion of 23,690 subordinated performance units into 43,556 OP units.
LTIP Units
LTIP units are a special class of partnership interest in the Company's operating partnership that allow the holder to participate in the ordinary and liquidating distributions received by holders of the OP units (subject to the achievement of specified levels of profitability by the Company's operating partnership or the achievement of certain events). LTIP units may also, under certain circumstances, be convertible into OP units on a one-for-one basis, which are then exchangeable for common shares as described above.
The increase in LTIP units outstanding from December 31, 2023 to March 31, 2024 was due to issuance of 143,304 compensatory LTIP units to employees, net of forfeitures, partially offset by the conversion of 62,330 LTIP units into an equivalent number of OP units.
4. SELF STORAGE PROPERTIES
Self storage properties are summarized as follows (dollars in thousands):
March 31, 2024 December 31, 2023
Land $ 1,035,562  $ 1,035,562 
Buildings and improvements 4,750,848  4,746,105 
Furniture and equipment 11,243  10,507 
Total self storage properties 5,797,653  5,792,174 
Less accumulated depreciation (919,723) (874,359)
Self storage properties, net $ 4,877,930  $ 4,917,815 
Depreciation expense related to self storage properties amounted to $45.4 million and $52.1 million during the three months ended March 31, 2024 and 2023, respectively.
5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES
2024 Joint Venture
During the three months ended March 31, 2024, a wholly owned subsidiary of the Company (the "2024 NSA Member") entered into an agreement (the "2024 JV Agreement") to form a joint venture (the "2024 Joint Venture") with an affiliate of Heitman Capital Management LLC (the "2024 JV Investor" and, together with the 2024 NSA Member, the "2024 JV Members"). The 2024 Joint Venture was capitalized with approximately $140.8 million in equity (approximately $35.2 million from the 2024 NSA Member in exchange for a 25% ownership interest and approximately $105.6 million from the 2024 JV Investor in exchange for a 75% ownership interest) and proceeds from a $210.0 million interest-only secured debt financing with an interest rate of 6.05% per annum and a term of five years.
A subsidiary of the Company is acting as the non-member manager of the 2024 Joint Venture (the "2024 NSA Manager"). The 2024 NSA Manager directs, manages and controls the day-to-day operations and affairs of the 2024 Joint Venture but may not cause the 2024 Joint Venture to make certain major decisions involving the business of the 2024 Joint Venture without the consent of both 2024 JV Members, including the approval of annual budgets, sales and acquisitions of properties, financings, and certain actions relating to bankruptcy.

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The Company's investment in the 2024 Joint Venture is accounted for using the equity method of accounting and is included in investment in unconsolidated real estate ventures in the Company’s condensed consolidated balance sheets. The Company’s earnings from its investment in the 2024 Joint Venture are presented in equity in earnings (losses) of unconsolidated real estate ventures on the Company’s condensed consolidated statements of operations.
During the three months ended March 31, 2024, pursuant to a contribution agreement executed by the 2024 JV Members on December 21, 2023, the Company contributed to the 2024 Joint Venture 56 self storage properties located across seven states, consisting of approximately 3.2 million rentable square feet configured in over 24,000 storage units.
2023 Joint Venture
During the three months ended December 31, 2023, the Company, through a newly formed subsidiary (the "2023 NSA Member"), entered into an agreement (the "2023 JV Agreement") to form a joint venture (the "2023 Joint Venture") with a state pension fund advised by Heitman Capital Management LLC (the "2023 JV Investor," together with the 2023 NSA Member, the "2023 JV Members") to acquire and operate self storage properties. The 2023 JV Agreement provides for equity capital contributions by the 2023 JV Members of up to $400.0 million over a twenty-four month investment period (subject to two six-month extension options if both of the 2023 JV Members agree) starting in December 2023, with the 2023 JV Investor holding a 75% ownership interest and the 2023 NSA Member holding a 25% ownership interest.
A subsidiary of the Company is acting as the non-member manager of the 2023 Joint Venture (the "2023 NSA Manager"). The 2023 NSA Manager directs, manages and controls the day-to-day operations and affairs of the 2023 Joint Venture but may not cause the 2023 Joint Venture to make certain major decisions involving the business of the 2023 Joint Venture without the consent of both 2023 JV Members, including the approval of annual budgets, sales and acquisitions of properties, financings, and certain actions relating to bankruptcy.
The Company's investment in the 2023 Joint Venture is accounted for using the equity method of accounting and is included in investment in unconsolidated real estate ventures in the Company’s condensed consolidated balance sheets. The Company’s earnings from its investment in the 2023 Joint Venture are presented in equity in earnings (losses) of unconsolidated real estate ventures on the Company’s condensed consolidated statements of operations. As of March 31, 2024, the 2023 Joint Venture had not completed any acquisition activity and had no operations.
2018 Joint Venture
As of March 31, 2024, the Company's unconsolidated real estate venture, formed in September 2018 with an affiliate of Heitman America Real Estate REIT LLC (the "2018 Joint Venture"), owned and operated a portfolio of 104 self storage properties containing approximately 7.8 million rentable square feet, configured in approximately 64,000 storage units and located across 17 states.
2016 Joint Venture
As of March 31, 2024, the Company's unconsolidated real estate venture, formed in September 2016 with a state pension fund advised by Heitman Capital Management LLC (the "2016 Joint Venture"), owned and operated a portfolio of 81 properties containing approximately 5.7 million rentable square feet, configured in approximately 47,000 storage units and located across 13 states.

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The following table presents the combined condensed financial position of the Company's unconsolidated real estate ventures as of March 31, 2024 and December 31, 2023 (dollars in thousands):
March 31, 2024 December 31, 2023
ASSETS
Self storage properties $ 2,543,250  $ 2,200,522 
Less accumulated depreciation (386,720) (369,412)
Self storage properties, net 2,156,530  1,831,110 
Other assets 42,052  37,826 
Total assets $ 2,198,582  $ 1,868,936 
LIABILITIES AND EQUITY
Debt financing $ 1,212,507  $ 1,003,223 
Other liabilities 27,871  28,333 
Equity 958,204  837,380 
Total liabilities and equity $ 2,198,582  $ 1,868,936 
The following tables present the combined condensed operating information of the Company's unconsolidated real estate ventures for the three months ended March 31, 2024 and 2023 (dollars in thousands):
Three Months Ended March 31,
2024 2023
Total revenue $ 56,096  $ 53,752 
Property operating expenses (17,603) (15,049)
Supervisory, administrative and other expenses (3,658) (3,529)
Depreciation and amortization (18,206) (17,883)
Interest expense (12,100) (10,411)
Acquisition and other expenses (59) (232)
Net income $ 4,470  $ 6,648 
6. ACQUISITIONS AND DISPOSITIONS
Acquisitions
The Company did not acquire any self storage properties during the three months ended March 31, 2024. Self storage property acquisitions are accounted for as asset acquisitions and accordingly, transaction costs related to acquisitions are capitalized as part of the basis of the acquired properties. The Company recognizes the estimated fair value of acquired assets and assumed liabilities on the respective dates of such acquisitions.
Dispositions
During the three months ended March 31, 2024, the Company sold 39 self storage properties to a third party for net proceeds of $265.1 million and contributed 56 self storage properties to the 2024 Joint Venture for net proceeds of $343.7 million. The Company recorded a net gain on the dispositions of $61.2 million.

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7. OTHER ASSETS
Other assets consist of the following (dollars in thousands):
March 31, 2024 December 31, 2023
Customer in-place leases, net of accumulated amortization of $886 and $3,263, respectively
$ 562  $ 1,609 
Receivables:
Trade, net 8,742  9,842 
PROs and other affiliates 4,235  7,784 
Receivables from unconsolidated real estate ventures 4,943  4,446 
Interest rate swaps 37,218  29,610 
Prepaid expenses and other 9,002  14,743 
Corporate furniture, equipment and other, net 2,699  2,659 
Trade names 8,851  8,851 
Management contracts, net of accumulated amortization of $7,124 and $6,777, respectively
 13,702  14,049 
Tenant reinsurance intangible, net of accumulated amortization of $4,187 and $3,839, respectively
 31,879  32,227 
Goodwill 8,182  8,182 
Total $ 130,015  $ 134,002 
Amortization expense related to customer in-place leases amounted to $1.0 million and $2.5 million for the three months ended March 31, 2024 and 2023, respectively. Amortization expense related to management contracts amounted to $0.3 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively. Amortization expense related to the tenant reinsurance intangible amounted to $0.3 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively.

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8. DEBT FINANCING
The Company's outstanding debt as of March 31, 2024 and December 31, 2023 is summarized as follows (dollars in thousands):
Interest Rate(1)
March 31, 2024 December 31, 2023
Credit Facility:
Revolving line of credit 6.71  % $ 138,000  $ 381,000 
Term loan B 2.95  % 145,000  275,000 
Term loan C 2.93  % 325,000  325,000 
Term loan D 3.96  % 275,000  275,000 
Term loan E 4.79  % 130,000  130,000 
2028 Term loan facility 4.62  % 75,000  75,000 
April 2029 Term loan facility 4.27  % 100,000  100,000 
June 2029 Term loan facility 5.37  % 285,000  285,000 
May 2026 Senior Unsecured Notes 2.16  % 35,000  35,000 
October 2026 Senior Unsecured Notes 6.46  % 65,000  65,000 
July 2028 Senior Unsecured Notes 5.75  % 120,000  120,000 
October 2028 Senior Unsecured Notes 6.55  % 100,000  100,000 
2029 Senior Unsecured Notes 3.98  % 100,000  100,000 
August 2030 Senior Unsecured Notes 2.99  % 150,000  150,000 
October 2030 Senior Unsecured Notes 6.66  % 35,000  35,000 
November 2030 Senior Unsecured Notes 2.72  % 75,000  75,000 
May 2031 Senior Unsecured Notes 3.00  % 90,000  90,000 
August 2031 Senior Unsecured Notes 4.08  % 50,000  50,000 
November 2031 Senior Unsecured Notes 2.81  % 175,000  175,000 
August 2032 Senior Unsecured Notes 3.09  % 100,000  100,000 
November 2032 Senior Unsecured Notes 5.06  % 200,000  200,000 
May 2033 Senior Unsecured Notes 3.10  % 55,000  55,000 
October 2033 Senior Unsecured Notes 6.73  % 50,000  50,000 
November 2033 Senior Unsecured Notes 2.96  % 125,000  125,000 
2036 Senior Unsecured Notes 3.06  % 75,000  75,000 
Fixed Rate Mortgages payable 3.61  % 222,228  222,757 
Total principal 3,295,228  3,668,757 
Unamortized debt issuance costs and debt premium, net
 (9,681) (10,552)
Total debt $ 3,285,547  $ 3,658,205 
(1)Represents the effective interest rate as of March 31, 2024. Effective interest rate incorporates the stated rate plus the impact of interest rate cash flow hedges and discount and premium amortization, if applicable. For the revolving line of credit, the effective interest rate excludes fees for unused borrowings.
As of March 31, 2024, the Company's unsecured credit facility provided for total borrowings of $1.825 billion (the "credit facility") consisting of the following components: (i) a revolving line of credit (the "Revolver") which provides for a total borrowing commitment up to $950.0 million, under which the Company may borrow, repay and re-borrow amounts, (ii) a $145.0 million tranche B term loan facility (the "Term Loan B"), (iii) a $325.0 million tranche C term loan facility (the "Term Loan C"), (iv) a $275.0 million tranche D term loan facility (the "Term Loan D") and (v) a $130.0 million tranche E term loan facility (the "Term Loan E"). As of March 31, 2024, the Company had an expansion option under the credit facility, which, if exercised in full, would provide for a total credit facility of $2.370 billion.

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As of March 31, 2024, the Company had outstanding letters of credit totaling $6.4 million and would have had the capacity to borrow remaining Revolver commitments of $805.6 million while remaining in compliance with the credit facility's financial covenants. At March 31, 2024, the Company was in compliance with all such covenants.
Future Debt Obligations
Based on existing debt agreements in effect as of March 31, 2024, the scheduled principal and maturity payments for the Company's outstanding borrowings are presented in the table below (dollars in thousands):
Year Ending December 31, Scheduled Principal and Maturity Payments Amortization of Premium and Unamortized Debt Issuance Costs Total
Remainder of 2024 $ 166,435  $ (2,378) $ 164,057 
2025 327,185  (2,185) 325,000 
2026 377,322  (1,840) 375,482 
2027 355,369  (1,230) 354,139 
2028 385,624  (990) 384,634 
2029 487,789  (380) 487,409 
Thereafter 1,195,504  (678) 1,194,826 
$ 3,295,228  $ (9,681) $ 3,285,547 

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9. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2024 and 2023 (dollars in thousands, except per share amounts):
Three Months Ended
March 31,
2024 2023
Earnings per common share - basic and diluted
Numerator
Net income $ 95,088  $ 40,392 
Net income attributable to noncontrolling interests
 (36,061) (11,433)
Net income attributable to National Storage Affiliates Trust
 59,027  28,959 
Distributions to preferred shareholders
 (5,110) (3,962)
Distributed and undistributed earnings allocated to participating securities
 (13) (17)
Net income attributable to common shareholders - basic
 53,904  24,980 
Effect of assumed conversion of dilutive securities
 35,218  11,305 
Net income attributable to common shareholders - diluted
 $ 89,122  $ 36,285 
Denominator
Weighted average shares outstanding - basic
 80,236  89,499 
Effect of dilutive securities:
Weighted average OP units outstanding
 37,633  38,736 
Weighted average DownREIT OP unit equivalents outstanding
 2,120  2,120 
Weighted average LTIP units outstanding
 128  76 
Weighted average subordinated performance units and DownREIT subordinated performance unit equivalents
 18,031  18,191 
Weighted average shares outstanding - diluted
 138,148  148,622 
Earnings per share - basic $ 0.67  $ 0.28 
Earnings per share - diluted $ 0.65  $ 0.24 
As discussed in Note 2, the Company allocates GAAP income utilizing the HLBV method, in which the Company allocates income or loss based on the change in each unitholders' claim on the net assets of its operating partnership at period end after adjusting for any distributions or contributions made during such period. Due to the stated liquidation priorities and because the HLBV method incorporates non-cash items such as depreciation expense, in any given period, income or loss may be allocated disproportionately to National Storage Affiliates Trust and noncontrolling interests, resulting in volatile fluctuations of basic and diluted earnings (loss) per share.
Outstanding equity interests of the Company's operating partnership and DownREIT partnerships are considered potential common shares for purposes of calculating diluted earnings (loss) per share as the unitholders may, through the exercise of redemption rights, obtain common shares, subject to various restrictions. Basic earnings per share is calculated based on the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by further adjusting for the dilutive impact using the treasury stock method for unvested LTIP units subject to a service condition outstanding during the period and the if-converted method for any convertible securities outstanding during the period.
Generally, following certain lock-out periods, OP units in the Company's operating partnership are redeemable for cash or, at the Company's option, exchangeable for common shares on a one-for-one basis, subject to certain adjustments and DownREIT OP units are redeemable for cash or, at the Company's option, exchangeable for OP units in its operating partnership on a one-for-one basis, subject to certain adjustments in each case.

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LTIP units may also, under certain circumstances, be convertible into OP units on a one-for-one basis, which are then exchangeable for common shares as described above. Certain LTIP units vested prior to or upon the completion of the Company's initial public offering and certain LTIP units have vested upon the satisfaction of a service or market condition or will vest upon the satisfaction of future service and market conditions. Vested LTIP units and unvested LTIP units that vest based on a service or market condition are allocated income or loss in a similar manner as OP units. Unvested LTIP units subject to a service or market condition are evaluated for dilution using the treasury stock method. For the three months ended March 31, 2024, 562,792 unvested LTIP units that vest based on a service or market condition are excluded from the calculation of diluted earnings per share as they are not dilutive to earnings per share. For the three months ended March 31, 2024, 208,400 LTIP units that vest upon the future acquisition of properties are excluded from the calculation of diluted earnings per share because the contingency for the units to vest has not been attained as of the end of the reported period.
Subordinated performance units may also, under certain circumstances, be convertible into OP units which are exchangeable for common shares as described above, and DownREIT subordinated performance units may, under certain circumstances, be exchangeable for subordinated performance units on a one-for-one basis. Subordinated performance units are only convertible into OP units, after a two year lock-out period and then generally (i) at the holder’s election only upon the achievement of certain performance thresholds relating to the properties to which such subordinated performance units relate or (ii) at the Company's election upon a retirement event of a PRO that holds such subordinated performance units or upon certain qualifying terminations. Although subordinated performance units may only be convertible after a two year lock-out period, the Company assumes a hypothetical conversion of each subordinated performance unit (including each DownREIT subordinated performance unit) into OP units (with subsequently assumed redemption into common shares) for the purposes of calculating diluted weighted average common shares. This hypothetical conversion is calculated using historical financial information, and as a result, is not necessarily indicative of the results of operations, cash flows or financial position of the Company upon expiration of the two-year lock out period on conversions.
Participating securities, which consist of unvested restricted common shares, receive dividends equal to those received by common shares. The effect of participating securities for the periods presented above is calculated using the two-class method of allocating distributed and undistributed earnings.
10. RELATED PARTY TRANSACTIONS
Supervisory and Administrative Fees
For the self storage properties that are managed by the PROs, the Company has entered into asset management agreements with the PROs to provide leasing, operating, supervisory and administrative services. The asset management agreements generally provide for fees ranging from 5% to 6% of gross revenue for the managed self storage properties. During the three months ended March 31, 2024 and 2023, the Company incurred $5.1 million and $5.2 million, respectively, for supervisory and administrative fees to the PROs. Such fees are included in general and administrative expenses in the accompanying condensed consolidated statements of operations.
Payroll Services
For the self storage properties that are managed by the PROs, the employees responsible for operations are employees of the PROs who charge the Company for the costs associated with the respective employees. For the three months ended March 31, 2024 and 2023, the Company incurred $6.9 million and $6.5 million, respectively, for payroll and related costs reimbursable to these PROs. Such costs are included in property operating expenses in the accompanying condensed consolidated statements of operations.
11. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company is subject to litigation, claims, and assessments that may arise in the ordinary course of its business activities. Such matters include contractual matters, employment related issues, and regulatory proceedings. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters will not have a material adverse effect on the Company's financial position, results of operations, or liquidity.

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12. FAIR VALUE MEASUREMENTS
Recurring Fair Value Measurements
The Company sometimes limits its exposure to interest rate fluctuations by entering into interest rate swap agreements. The interest rate swap agreements moderate the Company's exposure to interest rate risk by effectively converting the interest on variable rate debt to a fixed rate. The Company does not use derivatives for trading or speculative purposes. The Company measures its interest rate swap derivatives at fair value on a recurring basis. The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) and are subsequently reclassified into earnings in the period that the hedged transaction affects earnings.
Information regarding the Company's interest rate swaps measured at fair value, which are classified within Level 2 of the GAAP fair value hierarchy, is presented below (dollars in thousands):
Fair Value
Number of Contracts Notional Amount Other Assets, net Interest Rate Swap Liabilities
As of March 31, 2024
Interest Rate Swaps 14 $ 1,230,000  $ 37,218  $ — 
As of December 31, 2023
Interest Rate Swaps 17 $ 1,335,000  $ 29,610  $ 3,450 
The following table presents the effect of our derivative instruments on our consolidated financial statements (dollars in thousands):
Fair value at December 31, 2022 $ 50,983 
Gains on interest rate swaps reclassified into interest expense from accumulated other comprehensive income (loss)
 (7,761)
Unrealized losses on interest rate swaps and forward starting swaps included in accumulated other comprehensive income (loss)
 (12,953)
Fair value at March 31, 2023 $ 30,269 
Fair value at December 31, 2023 $ 26,160 
(Gains) and losses on interest rate swaps reclassified into interest expense from accumulated other comprehensive income (loss)
 (9,355)
Unrealized gains and realized (losses) on interest rate swaps and forward starting swaps included in accumulated other comprehensive income (loss)
 20,413 
Fair value at March 31, 2024 $ 37,218 
As of March 31, 2024 and December 31, 2023, the Company had outstanding interest rate swaps with aggregate current notional amounts of $1,230.0 million and $1,335.0 million, respectively, designated as cash flow hedges. As of March 31, 2024, the Company's swaps had a weighted average remaining term of approximately 2.85 years.
In connection with the issuance of fixed rate unsecured notes in the second quarter of 2023, we entered into $50.0 million of forward starting interest rate swaps on March 16, 2023, and a $25.0 million forward starting interest rate swap on March 24, 2023, locking the interest rate of compounded SOFR at 3.25% through April 5, 2023. These interest rate swaps have been designated as cash flow hedges. The realized loss of $1.6 million of the compounded SOFR swaps are included in unrealized and realized gains (loss) on derivative instruments in comprehensive income (loss) and will be reclassified into interest expense over 10 years, which is the term of anticipated unsecured fixed rate debt including any replacement debt thereof. Amounts reported in accumulated other comprehensive (loss) income will be reclassified into interest expense as interest payments are made on the anticipated debt.

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The fair value of these swaps are included in other assets and liabilities in the Company's condensed consolidated balance sheets, and the Company recognizes any changes in the fair value as an adjustment of accumulated other comprehensive income (loss) within equity. If the forward rates at March 31, 2024 remain constant, the Company estimates that during the next 12 months, the Company would reclassify into earnings, as a reduction in interest expense, approximately $25.0 million of the unrealized gains and losses included in accumulated other comprehensive income (loss). If market interest rates remain above the 2.62% weighted average fixed rate under these interest rate swaps the Company will continue to receive payments due to it from its counterparties to the interest rate swaps.
There were no transfers between levels of the three-tier fair value measurement hierarchy during the three months ended March 31, 2024 and 2023. For financial assets and liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including SOFR yield curves. The Company uses valuation techniques for Level 2 financial assets and liabilities which include SOFR yield curves at the reporting date as well as assessing counterparty credit risk. Counterparties to these contracts are highly rated financial institutions. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company's derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the counterparties. As of March 31, 2024, the Company determined that the effect of credit valuation adjustments on the overall valuation of its derivative positions are not significant to the overall valuation of its derivatives. Therefore, the Company has determined that its derivative valuations are appropriately classified in Level 2 of the fair value hierarchy.
Fair Value Disclosures
The carrying values of cash and cash equivalents, restricted cash, trade receivables, and accounts payable and accrued liabilities reflected in the balance sheets at March 31, 2024 and December 31, 2023, approximate fair value due to the short term nature of these financial assets and liabilities. The carrying value of variable rate debt financing, comprising the Revolver, term loans under our credit facility and our term loan facilities, reflected in the condensed consolidated balance sheets at March 31, 2024 and December 31, 2023 approximates fair value as the changes in their associated interest rates reflect the current market and credit risk is similar to when the loans were originally obtained.
The fair values of fixed rate private placement notes and mortgages were estimated using the discounted estimated future cash payments to be made on such debt; the discount rates used approximated current market rates for loans, or groups of loans, with similar maturities and credit quality (categorized within Level 2 of the fair value hierarchy).
The following table presents the carrying value and estimated fair value of our fixed rate private placement notes and mortgages (dollars in thousands):
Carrying Value(1)
Fair Value
March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023
Liabilities
Private Placement Notes $ 1,600,000  $ 1,600,000  $ 1,412,658  $ 1,417,147 
Mortgage Notes 222,228  222,757  208,835  211,480 
(1) Carrying value represents the principal balance outstanding


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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
We make forward-looking statements in this report that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may," or similar expressions, we intend to identify forward-looking statements.
The forward-looking statements contained in this report reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement.
Statements regarding the following subjects, among others, may be forward-looking:
•market trends in our industry, interest rates, inflation, the debt and lending markets or the general economy;
•our business and investment strategy;
•the acquisition or disposition of properties, including those under contract, and the ability of our acquisitions to achieve underwritten capitalization rates and our ability to execute on our acquisition pipeline;
•the internalization of retiring participating regional operators ("PROs") into the Company;
•the timing of acquisitions or dispositions;
•our relationships with, and our ability and timing to attract additional, PROs;
•our ability to effectively align the interests of our PROs with us and our shareholders;
•the integration of our PROs and their managed portfolios into the Company, including into our financial and operational reporting infrastructure and internal control framework;
•our operating performance and projected operating results, including our ability to achieve market rents and occupancy levels, reduce operating expenditures and increase the sale of ancillary products and services;
•our ability to access additional off-market acquisitions;
•actions and initiatives of the U.S. federal, state and local government and changes to U.S. federal, state and local government policies, regulations, tax laws and rates, related accounting guidance, and the execution and impact of these actions, initiatives, policies, regulations, guidance and laws;
•the state of the U.S. economy generally or in specific geographic regions, states, territories or municipalities;
•economic trends and economic recoveries;
•our ability to obtain and maintain financing arrangements on favorable terms;
•general volatility of the securities markets in which we participate;
•impacts from highly infectious or contagious diseases, including unfavorable changes to economic conditions that could adversely affect occupancy levels, rental rates, expenses and the ability of the Company's tenants to pay rent;
•changes in the value of our assets;
•projected capital expenditures;
•the impact of technology on our products, operations, and business;
•the implementation of our technology and best practices programs (including our ability to effectively implement our integrated Internet marketing strategy);

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•changes in interest rates, the degree to which our hedging strategies may or may not protect us from interest rate volatility and the impact of such changes on the economy and our industry;
•our ability to continue to qualify and maintain our qualification as a real estate investment trust for U.S. federal income tax purposes ("REIT");
•availability of qualified personnel;
•the timing of conversions of each series of Class B common units of limited partner interest ("subordinated performance units") in NSA OP, LP (our "operating partnership") and subsidiaries of our operating partnership into Class A common units of limited partner interest ("OP units") in our operating partnership, the conversion ratio in effect at such time and the impact of such convertibility on our diluted earnings (loss) per share;
•the risks of investing through joint ventures, including whether the anticipated benefits from a joint venture are realized or may take longer to realize than expected;
•risks related to or a consequence of natural disasters or acts of violence, pandemics, active shooters, terrorism, insurrection or war that affect the markets in which we operate;
•estimates relating to our ability to make distributions to our shareholders in the future; and
•our understanding of our competition.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions, and expectations can change as a result of many possible events or factors, not all of which are known to us. Readers should carefully review our financial statements and the notes thereto, as well as the sections entitled "Business," "Risk Factors," "Properties," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," described in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and the other documents we file from time to time with the SEC. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Overview
National Storage Affiliates Trust is a fully integrated, self-administered and self-managed real estate investment trust organized in the state of Maryland on May 16, 2013. We have elected and we believe that we have qualified to be taxed as a REIT commencing with our taxable year ended December 31, 2015. We serve as the sole general partner of our operating partnership, a Delaware limited partnership formed on February 13, 2013 to conduct our business, which is focused on the ownership, operation, and acquisition of self storage properties located predominantly within the top 100 metropolitan statistical areas throughout the United States.
Our vice chairperson of the board of trustees and former chief executive officer, Arlen D. Nordhagen, co-founded SecurCare Self Storage, Inc. in 1988 to invest in and manage self storage properties. While growing SecurCare to over 150 self storage properties, Mr. Nordhagen recognized a market opportunity for a differentiated public self storage REIT that would leverage the benefits of national scale by integrating multiple experienced regional self storage operators with local operational focus and expertise. We believe that his vision, which is the foundation of the Company, aligns the interests of our PROs, with those of our public shareholders by allowing our PROs to participate alongside our shareholders in our financial performance and the performance of our PROs' managed portfolios. This structure offers our PROs a unique opportunity to serve as regional property managers for their managed portfolios and directly participate in the potential upside of those properties while simultaneously diversifying their investment to include a broader portfolio of self storage properties. Over time, largely through our unconsolidated real estate ventures and internalization of three of our PROs, SecurCare, Northwest, and Move It, we have developed a full service internally-staffed property management platform to complement our PRO structure.

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Our Structure
Through our property management platform, we direct, manage and control the day-to-day operations and affairs of a majority of our consolidated properties and our unconsolidated real estate ventures. As of March 31, 2024, our property management platform managed and controlled 476 of our consolidated properties and 241 of our unconsolidated real estate venture properties. The properties are managed by us under the brands of iStorage, Move It, Northwest and SecurCare.
We earn certain customary fees for managing and operating the properties in the unconsolidated real estate ventures and we facilitate tenant insurance and/or tenant warranty protection programs for tenants at these properties in exchange for half of all proceeds from such programs.
For the properties that are managed by our PROs, our structure promotes operator accountability as subordinated performance units issued to our PROs in exchange for the contribution of their properties are entitled to distributions only after those properties satisfy minimum performance thresholds. In the event of a material reduction in operating cash flow, distributions on our subordinated performance units will be reduced before or disproportionately to distributions on our common shares held by our common shareholders. In addition, we expect our PROs will generally co-invest subordinated equity in the form of subordinated performance units in each acquisition that they source, and the value of these subordinated performance units will fluctuate with the performance of their managed portfolios. Therefore, our PROs are incentivized to select acquisitions that are expected to exceed minimum performance thresholds, thereby increasing the value of their subordinated equity stake. We expect that our shareholders will benefit from the higher levels of property performance that our PROs are incentivized to deliver.
As of March 31, 2024, the Company had eight PROs: Optivest, Guardian, Storage Solutions, Hide Away, Personal Mini, Southern, Moove In and Blue Sky. We seek to further expand our platform by continuing to recruit additional established self storage operators, while integrating our operations through the implementation of centralized initiatives, including management information systems, revenue enhancement, and cost optimization programs. Our national platform allows us to capture cost savings by eliminating redundancies and utilizing economies of scale across the property management platforms of our PROs while also providing greater access to lower-cost capital.
Our Consolidated Properties
We seek to own properties that are well located in high quality sub-markets with highly accessible street access and attractive supply and demand characteristics, providing our properties with strong and stable cash flows that are less sensitive to the fluctuations of the general economy. Many of these markets have multiple barriers to entry against increased supply, including zoning restrictions against new construction and new construction costs that we believe are higher than our properties' fair market value. We have an attractive, high quality potential acquisition pipeline that we expect will continue to drive our future growth.
As of March 31, 2024, we owned a geographically diversified portfolio of 809 self storage properties, located in 38 states and Puerto Rico, comprising approximately 51.9 million rentable square feet, configured in approximately 407,000 storage units. Of these properties, 306 were acquired by us from our current and former PROs, 502 were acquired from third-party sellers and one was acquired from the 2016 Joint Venture.
Our Unconsolidated Real Estate Ventures
We seek to opportunistically partner with institutional funds and other institutional investors to acquire attractive portfolios utilizing a promoted return structure. We believe there is significant opportunity for continued external growth by partnering with institutional investors seeking to deploy capital in the self storage industry. In addition, we consider the 75% third-party interest in the Company's unconsolidated real estate ventures, which currently own 241 properties, to present a potential acquisition opportunity. This 75% third-party share of gross real estate assets is approximately $1.9 billion based on the historical book value of the joint ventures. Were we to pursue an acquisition of these interests, it could potentially drive our future growth.
2024 Joint Venture
During the three months ended March 31, 2024, we entered into the 2024 Joint Venture, in which we have a 25% ownership interest. During 2024, we contributed 56 self storage properties containing approximately 3.2 million rentable square feet, configured in over 24,000 storage units and located across seven states.

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2023 Joint Venture
As of March 31, 2024, our 2023 Joint Venture, in which we have a 25% ownership interest, did not own or operate any self storage properties. The 2023 JV Agreement allows for equity capital contributions of up to $400 million from the 2023 JV Members over a 24 month period starting in December 2023, with options to extend the investment time period by two additional six month periods.
2018 Joint Venture
As of March 31, 2024, our 2018 Joint Venture, in which we have a 25% interest, owned and operated a portfolio of 104 properties containing approximately 7.8 million rentable square feet, configured in approximately 64,000 storage units and located across 17 states.
2016 Joint Venture
As of March 31, 2024, our 2016 Joint Venture, in which we have a 25% ownership interest, owned and operated a portfolio of 81 properties containing approximately 5.7 million rentable square feet, configured in approximately 47,000 storage units and located across 13 states.
Results of Operations
When reviewing our results of operations it is important to consider the timing of acquisition and disposition activity. We contributed 56 self storage properties to the 2024 Joint Venture and sold an additional 39 self storage properties to a third party during the three months ended March 31, 2024. We also sold 32 self storage properties to a third party during December 2023 and acquired 20 self storage properties during the year ended December 31, 2023. As a result of these and other factors, we do not believe that our historical results of operations discussed and analyzed below are comparable or necessarily indicative of our future results of operations or cash flows.
The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the accompanying condensed consolidated financial statements in Item 1. Certain figures, such as interest rates and other percentages, included in this section have been rounded for ease of presentation. Percentage figures included in this section have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our condensed consolidated financial statements or in the associated text. Certain other amounts that appear in this section may similarly not sum due to rounding.
Three Months Ended March 31, 2024 compared to the Three Months Ended March 31, 2023
The following table illustrates the changes in rental revenue, other property-related revenue, management fees and other revenue, property operating expenses, and other expenses for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 (dollars in thousands):

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Three Months Ended March 31,
2024 2023 Change
Rental revenue $ 180,382  $ 194,129  $ (13,747)
Other property-related revenue 6,692  6,807  (115)
Management fees and other revenue 9,074  7,057  2,017 
Total revenue 196,148  207,993  (11,845)
Property operating expenses 54,694  56,483  (1,789)
General and administrative expenses 15,674  14,821  853 
Depreciation and amortization 47,331  55,458  (8,127)
Other 3,492  1,173  2,319 
Total operating expenses 121,191  127,935  (6,744)
Other income (expense)
Interest expense (38,117) (37,948) (169)
Loss on early extinguishment of debt —  (758) 758 
Equity in (losses) earnings of unconsolidated real estate ventures
 (1,630) 1,678  (3,308)
Acquisition costs (507) (844) 337 
Non-operating income (expense) 98  (598) 696 
Gain on sale of self storage properties 61,173  —  61,173 
Other income (expense), net
 21,017  (38,470) 59,487 
Income before income taxes
95,974  41,588  54,386 
Income tax expense
 (886) (1,196) 310 
Net income
 95,088  40,392  54,696 
Net income attributable to noncontrolling interests (36,061) (11,433) (24,628)
Net income attributable to National Storage Affiliates Trust
 59,027  28,959  30,068 
Distributions to preferred shareholders (5,110) (3,962) (1,148)
Net income attributable to common shareholders
 $ 53,917  $ 24,997  $ 28,920 
Total Revenue
Our total revenue, including management fees and other revenue, decreased by $11.8 million, or 5.7%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This decrease was primarily attributable to (i) the sale of 39 self storage properties to a third party during the three months ended March 31, 2024, (ii) the sale of 32 self storage properties to a third party during December 2023, and (iii) the contribution of 56 self storage properties to the 2024 Joint Venture during the three months ended March 31, 2024. The decrease in total revenue was also attributable to a decrease in total portfolio average occupancy from 88.6% for the three months ended March 31, 2023 to 85.2% for the three months ended March 31, 2024. Average occupancy is calculated based on the average of the month-end occupancy immediately preceding the period presented and the month-end occupancies included in the respective period presented.

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Rental Revenue
Rental revenue decreased by $13.7 million, or 7.1%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The decrease in rental revenue was primarily attributable to (i) the sale of 39 self storage properties to a third party during the three months ended March 31, 2024, (ii) the sale of 32 self storage properties to a third party during December 2023, and (iii) the contribution of 56 self storage properties to the 2024 Joint Venture during the three months ended March 31, 2024. Annualized total portfolio rental revenues (including fees and net of any discounts and uncollectible customer amounts) divided by average occupied square feet ("average annualized rental revenue per occupied square foot") increased from $14.97, for the three months ended March 31, 2023 to $15.70, or 4.9%, for the three months ended March 31, 2024, driven primarily by increased contractual lease rates for in-place tenants.
Other Property-Related Revenue
Other property-related revenue represents ancillary income from our self storage properties, such as tenant insurance-related fees and sales of storage supplies. Other property-related revenue decreased by $0.1 million, or 1.7%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This decrease primarily resulted from a decrease in tenant insurance revenue due to the disposition of properties during the three months ended March 31, 2024.
Management Fees and Other Revenue
Management fees and other revenue, which includes revenue related to managing and operating the unconsolidated real estate ventures and other revenue from our tenant insurance programs, increased by $2.0 million, or 28.6%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. This increase was primarily attributable to changes in our tenant insurance programs.
Property Operating Expenses
Property operating expenses decreased by $1.8 million, or 3.2%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease in property operating expenses was primarily attributable to (i) the sale of 39 self storage properties to a third party during the three months ended March 31, 2024, (ii) the sale of 32 self storage properties to a third party during December 2023, and (iii) the contribution of 56 self storage properties to the 2024 Joint Venture during the three months ended March 31, 2024.
General and Administrative Expenses
General and administrative expenses increased $0.9 million, or 5.8%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. This increase was primarily attributable to increases in personnel and professional services costs.
Depreciation and Amortization
Depreciation and amortization decreased $8.1 million, or 14.7%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. This decrease was primarily attributable to (i) the sale of 39 self storage properties to a third party during the three months ended March 31, 2024, (ii) the sale of 32 self storage properties to a third party during December 2023, and (iii) the contribution of 56 self storage properties to the 2024 Joint Venture during the three months ended March 31, 2024.
Other
Other expenses increased $2.3 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. This increase was primarily attributable to increases in administrative costs relating to our tenant insurance programs and our reserves for casualty-related expenses and losses.
Interest Expense
Interest expense increased $0.2 million, or 0.4%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase in interest expense was primarily attributable to an increase in effective interest rate under our revolving line of credit from 6.20%, as of March 31, 2023, to 6.71% as of March 31, 2024.

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Loss on Early Extinguishment of Debt
Loss on early extinguishment of debt decreased $0.8 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. During the three months ended March 31, 2023, in connection with an amendment to our credit facility, two of the lenders that were included in the syndicated group of lenders prior to the amendment are no longer participating lenders following the amendment, which constitutes an extinguishment of debt for accounting purposes. Additionally, in connection with the amendment we retired two term loans prior to their contractual maturity. Loss on early extinguishment of debt includes costs incurred related to these extinguishments, and the write off of $0.4 million of unamortized debt issuance costs related to the retired term loans or attributed to the entities no longer included in the lender syndicate.
Equity In (Losses) Earnings Of Unconsolidated Real Estate Ventures
Equity in earnings of unconsolidated real estate ventures represents our share of earnings and losses incurred through our ownership interests in the 2024 Joint Venture, 2018 Joint Venture and the 2016 Joint Venture. During the three months ended March 31, 2024, we recorded $1.6 million of equity in losses from our unconsolidated real estate ventures compared to $1.7 million of earnings for the three months ended March 31, 2023. The decrease was primarily attributable to the non-cash impact of applying hypothetical liquidation at book value (HLBV) to the 2024 Joint Venture, which allocates income (loss) on a hypothetical liquidation of the underlying joint venture at book value as of March 31, 2024.
Gain on Sale of Self Storage Properties
Gain on sale of self storage properties increased $61.2 million, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase in gain on sale of self storage properties was primarily attributable to the sale of 39 self storage properties to a third party and contribution of 56 self storage properties to the 2024 Joint Venture during three months ended March 31, 2024, for net proceeds of $608.8 million.
Net Income Attributable to Noncontrolling Interests
As discussed in Note 2 in Item 1, we allocate GAAP income (loss) utilizing the HLBV method, in which we allocate income or loss based on the change in each unitholders' claim on the net assets of our operating partnership at period end after adjusting for any distributions or contributions made during such period.
Due to the stated liquidation priorities and because the HLBV method incorporates non-cash items such as depreciation expense, in any given period, income or loss may be allocated disproportionately to noncontrolling interests. Net income attributable to noncontrolling interests was $36.1 million for the three months ended March 31, 2024, compared to $11.4 million for the three months ended March 31, 2023.
Non-GAAP Financial Measures
FFO and Core FFO
Funds from operations, or FFO, is a widely used performance measure for real estate companies and is provided here as a supplemental measure of our operating performance. The December 2018 Nareit Funds From Operations White Paper - 2018 Restatement defines FFO as net income (as determined under GAAP), excluding: real estate depreciation and amortization, gains and losses from the sale of certain real estate assets, gains and losses from change in control, mark-to-market changes in value recognized on equity securities, impairment write-downs of certain real estate assets and impairment of investments in entities when it is directly attributable to decreases in the value of depreciable real estate held by the entity, and after adjusting equity in earnings (losses) to reflect our share of FFO in unconsolidated real estate ventures. Distributions declared on subordinated performance units and DownREIT subordinated performance units represent our allocation of FFO to noncontrolling interests held by subordinated performance unitholders and DownREIT subordinated performance unitholders. For purposes of calculating FFO attributable to common shareholders, OP unitholders, and LTIP unitholders, we exclude distributions declared on subordinated performance units, DownREIT subordinated performance units, preferred shares and preferred units. We define Core FFO as FFO, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our core operating performance. These further adjustments consist of acquisition costs, gains on debt forgiveness, gains (losses) on early extinguishment of debt, casualty-related expenses, losses, and related recoveries and adjustments for unconsolidated partnerships and joint ventures.

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Management uses FFO and Core FFO as key performance indicators in evaluating the operations of our properties. Given the nature of our business as a real estate owner and operator, we consider FFO and Core FFO as key supplemental measures of our operating performance that are not specifically defined by GAAP. We believe that FFO and Core FFO are useful to management and investors as a starting point in measuring our operational performance because FFO and Core FFO exclude various items included in net income (loss) that do not relate to or are not indicative of our operating performance such as gains (or losses) from sales of self storage properties and depreciation, which can make periodic and peer analyses of operating performance more difficult. Our computation of FFO and Core FFO may not be comparable to FFO reported by other REITs or real estate companies.
FFO and Core FFO should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income (loss). FFO and Core FFO do not represent cash generated from operating activities determined in accordance with GAAP and are not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO and Core FFO should be compared with our reported net income (loss) and considered in addition to cash flows computed in accordance with GAAP, as presented in our consolidated financial statements.

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The following table presents a reconciliation of net income to FFO and Core FFO for the three months ended March 31, 2024 and 2023 (dollars in thousands, except per share and unit amounts):
Three Months Ended
March 31,
2024 2023
Net income $ 95,088  $ 40,392 
Add (subtract):
Real estate depreciation and amortization 46,964  55,152 
Equity in losses (earnings) of unconsolidated real estate ventures
 1,630  (1,678)
Company's share of FFO in unconsolidated real estate ventures 5,685  6,149 
Gain on sale of self storage properties (61,173) — 
Distributions to preferred shareholders and unitholders
 (5,568) (3,962)
FFO attributable to subordinated performance unitholders(1)
(10,730) (11,787)
FFO attributable to common shareholders, OP unitholders, and LTIP unitholders
 71,896  84,266 
Add:
Acquisition costs 507  844 
Loss on early extinguishment of debt —  758 
Core FFO attributable to common shareholders, OP unitholders, and LTIP unitholders
 $ 72,403  $ 85,868 
Weighted average shares and units outstanding - FFO and Core FFO:(2)
Weighted average shares outstanding - basic 80,236  89,499 
Weighted average restricted common shares outstanding
 22  25 
Weighted average OP units outstanding
 37,633  38,736 
Weighted average DownREIT OP unit equivalents outstanding
 2,120  2,120 
Weighted average LTIP units outstanding
 693  551 
Total weighted average shares and units outstanding - FFO and Core FFO
 120,704  130,931 
FFO per share and unit $ 0.60  $ 0.64 
Core FFO per share and unit $ 0.60  $ 0.66 
(1) Amounts represent distributions declared for subordinated performance unitholders and DownREIT subordinated performance unitholders for the periods presented.
(2)
NSA combines OP units and DownREIT OP units with common shares because, after the applicable lock-out periods, OP units in the Company's operating partnership are redeemable for cash or, at NSA's option, exchangeable for common shares on a one-for-one basis and DownREIT OP units are also redeemable for cash or, at NSA's option, exchangeable for OP units in our operating partnership on a one-for-one basis, subject to certain adjustments in each case. Subordinated performance units, DownREIT subordinated performance units, and LTIP units may also, under certain circumstances, be convertible into or exchangeable for common shares (or other units that are convertible into or exchangeable for common shares). See footnote(1) to the following table for additional discussion of subordinated performance units, DownREIT subordinated performance units, and LTIP units in the calculation of FFO and Core FFO per share and unit.

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The following table presents a reconciliation of earnings per share - diluted to FFO and Core FFO per share and unit for the three months ended March 31, 2024 and 2023:
Three Months Ended
March 31,
2024 2023
Earnings per share - diluted $ 0.65  $ 0.24 
Impact of the difference in weighted average number of shares(1)
0.10  0.04 
Add real estate depreciation and amortization
 0.39  0.42 
Add (subtract) equity in losses (earnings) of unconsolidated real estate ventures
 0.01  (0.01)
Add Company's share of FFO in unconsolidated real estate ventures
 0.05  0.04 
Subtract gain on sale of self storage properties
 (0.51) — 
FFO attributable to subordinated performance unitholders
 (0.09) (0.09)
FFO per share and unit
 0.60  0.64 
Add acquisition costs
 —  0.01 
Add loss on early extinguishment of debt —  0.01 
Core FFO per share and unit
 $ 0.60  $ 0.66 
(1)
Adjustment accounts for the difference between the weighted average number of shares used to calculate diluted earnings per share and the weighted average number of shares used to calculate FFO and Core FFO per share and unit. Diluted earnings per share is calculated using the two-class method for the company's restricted common shares and the treasury stock method for certain unvested LTIP units, and assumes the conversion of vested LTIP units into OP units on a one-for-one basis and the hypothetical conversion of subordinated performance units, and DownREIT subordinated performance units into OP units, even though such units may only be convertible into OP units (i) after a lock-out period and (ii) upon certain events or conditions. For additional information about the conversion of subordinated performance units, DownREIT subordinated performance units and LTIP units into OP units, see Note 9 in Item 1. The computation of weighted average shares and units for FFO and Core FFO per share and unit includes all restricted common shares and LTIP units that participate in distributions and excludes all subordinated performance units and DownREIT subordinated performance units because their effect has been accounted for through the allocation of FFO to the related unitholders based on distributions declared.
Net Operating Income
Net operating income, or NOI, represents rental revenue plus other property-related revenue less property operating expenses. NOI is not a measure of performance calculated in accordance with GAAP.
We believe NOI is useful to investors in evaluating our operating performance because:
•NOI is one of the primary measures used by our management and our PROs to evaluate the economic productivity of our properties, including our ability to lease our properties, increase pricing and occupancy and control our property operating expenses;
•NOI is widely used in the real estate industry and the self storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending upon accounting methods, the book value of assets, and the impact of our capital structure; and
•We believe NOI helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of the cost basis of our assets from our operating results.
There are material limitations to using a non-GAAP measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income (loss). We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income (loss). NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues and net income (loss).

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As of March 31, 2024, our same store portfolio consisted of 776 self storage properties. Our same store portfolio is defined as those properties owned and operated since the first day of the earliest year presented, excluding any properties sold, expected to be sold or subject to significant changes such as expansions or casualty events which cause the portfolio's year-over-year operating results to no longer be comparable. The following table illustrates the changes in rental revenue, other property-related revenue, and property operating expenses, for the three months ended March 31, 2024 and 2023 (dollars in thousands):
Three Months Ended March 31,
2024 2023 Change
Rental revenue
Same store portfolio
 $ 167,775  $ 170,683  $ (2,908)
Non-same store portfolio
 12,607  23,446  (10,839)
Total rental revenue
 180,382  194,129  (13,747)
Other property-related revenue
Same store portfolio
 6,096  5,845  251 
Non-same store portfolio
 596  962  (366)
Total other property-related revenue
 6,692  6,807  (115)
Property operating expenses
Same store portfolio
 49,655  47,530  2,125 
Non-same store portfolio
 5,039  8,953  (3,914)
Total property operating expenses
 54,694  56,483  (1,789)
Net operating income
Same store portfolio
 124,216  128,998  (4,782)
Non-same store portfolio
 8,164  15,455  (7,291)
Total net operating income
 $ 132,380  $ 144,453  $ (12,073)
Rental Revenue
Same store portfolio rental revenues decreased $2.9 million, or 1.7%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This decrease in same store portfolio rental revenue was driven primarily by a decrease in average occupancy from 89.4% for the three months ended March 31, 2023 to 85.6% for the three months ended March 31, 2024. Average annualized same store rental revenue per occupied square foot increased from $15.43 to $15.80, or 2.4%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, driven primarily by increased contractual lease rates for in-place tenants.
Other Property-Related Revenue
Same store other property-related revenue increased $0.3 million, or 4.3%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.
Property Operating Expenses
Same store property operating expenses increased $2.1 million, or 4.5%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase in same store property operating expenses was a result of increases in insurance and marketing costs during the three months ended March 31, 2024.

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The following table presents a reconciliation of net income to NOI for the three months ended March 31, 2024 and 2023 (dollars in thousands):
Three Months Ended
March 31,
2024 2023
Net income $ 95,088  $ 40,392 
(Subtract) Add:
Management fees and other revenue (9,074) (7,057)
General and administrative expenses 15,674  14,821 
Other 3,492  1,173 
Depreciation and amortization 47,331  55,458 
Interest expense 38,117  37,948 
Equity in losses (earnings) of unconsolidated real estate ventures
 1,630  (1,678)
Loss on early extinguishment of debt —  758 
Acquisition costs 507  844 
Income tax expense 886  1,196 
Gain on sale of self storage properties (61,173) — 
Non-operating (income) expense (98) 598 
Net Operating Income
$ 132,380  $ 144,453 
Our consolidated NOI shown in the table above does not include our proportionate share of NOI for our unconsolidated real estate ventures. For additional information about our 2016 Joint Venture, 2018 Joint Venture, 2023 Joint Venture and 2024 Joint Venture see Note 5 to the condensed consolidated financial statements in Item 1.
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss), as determined under GAAP, plus interest expense, loss on early extinguishment of debt, income taxes, depreciation and amortization expense and the Company's share of unconsolidated real estate venture depreciation and amortization. We define Adjusted EBITDA as EBITDA plus acquisition costs, equity-based compensation expense, losses on sale of properties, impairment of long-lived assets and casualty-related expenses, losses and recoveries, minus gains on sale of properties and debt forgiveness, and after adjustments for unconsolidated partnerships and joint ventures, including the removal of the non-cash effect of applying hypothetical liquidation at book value (HLBV) for purposes of allocating GAAP net income (loss) for the 2024 Joint Venture. These further adjustments eliminate the impact of items that we do not consider indicative of our core operating performance. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
We present EBITDA and Adjusted EBITDA because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. EBITDA and Adjusted EBITDA have limitations as an analytical tool. Some of these limitations are:
•EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures, contractual commitments or working capital needs;
•EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

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•Adjusted EBITDA excludes equity-based compensation expense, which is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period;
•EBITDA and Adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
•other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.
We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income (loss). EBITDA and Adjusted EBITDA should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues and net income (loss).
The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended March 31, 2024 and 2023 (dollars in thousands):
Three Months Ended
March 31,
2024 2023
Net income $ 95,088  $ 40,392 
Add (subtract):
Depreciation and amortization 47,331  55,458 
Company's share of unconsolidated real estate venture depreciation and amortization 4,552  4,471 
Interest expense 38,117  37,948 
Income tax expense 886  1,196 
Loss on early extinguishment of debt
 —  758 
EBITDA
 185,974  140,223 
Add (subtract):
Acquisition costs 507  844 
Effect of hypothetical liquidation at book value (HLBV) accounting for unconsolidated 2024 Joint Venture(1)
2,764  — 
Gain on sale of self storage properties (61,173) — 
Equity-based compensation expense(2)
1,855  1,649 
Adjusted EBITDA
$ 129,927  $ 142,716 
(1) Reflects the non-cash impact of applying HLBV to the 2024 Joint Venture, which allocates GAAP income (loss) based on a hypothetical liquidation of the underlying joint venture at book value as of the reporting date.
(2) Equity-based compensation expense is a non-cash item that is included in general and administrative expenses in our consolidated statements of operations.
Liquidity and Capital Resources
Liquidity Overview
Liquidity is the ability to meet present and future financial obligations. Our primary source of liquidity is cash flow from our operations. Additional sources are proceeds from dispositions of self storage properties (including contributions to joint ventures), equity and debt offerings, debt financings including additional borrowing capacity under the credit facility, and expansion options available under the 2028 Term Loan Facility, the June 2029 Term Loan Facility, and our credit facility.

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Our short-term liquidity requirements consist primarily of property operating expenses, property acquisitions, capital expenditures, general and administrative expenses and principal and interest on our outstanding indebtedness. A further short-term liquidity requirement relates to distributions to our common and preferred shareholders and holders of preferred units, OP units, LTIP units, subordinated performance units, DownREIT OP units and DownREIT subordinated performance units. We expect to fund short-term liquidity requirements from our operating cash flow, cash on hand and borrowings under our credit facility.
Our long-term liquidity needs consist primarily of the repayment of debt, property acquisitions, and capital expenditures. We acquire properties through the use of cash, preferred units, OP units and subordinated performance units in our operating partnership or DownREIT partnerships. We expect to meet our long-term liquidity requirements with operating cash flow, cash on hand, secured and unsecured indebtedness, and the issuance of equity and debt securities.
The availability of credit and its related effect on the overall economy may affect our liquidity and future financing activities, both through changes in interest rates and access to financing. During the last year, the Federal Reserve Board has continued to raise interest rates from historically low levels and paused raising interest rates as of August 2023. Although the Federal Reserve Board has signaled an intention to reduce interest rates in 2024, there is no assurance that this will occur or that the Federal Reserve Board will not maintain or raise interest rates in the future. Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted, could be affected by various risks and uncertainties. We believe that, as a publicly-traded REIT, we will have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of debt and additional equity securities. However, we cannot assure you that this will be the case.
Cash Flows
At March 31, 2024, we had $64.2 million in cash and cash equivalents and $24.8 million of restricted cash, a decrease in cash and cash equivalents of $0.7 million and an increase in restricted cash of $2.1 million from December 31, 2023. Restricted cash primarily consists of escrowed funds deposited with financial institutions resulting from property sales for which we elected to purchase replacement property in accordance with Section 1031 of the Code, and for real estate taxes, insurance, and other reserves for capital improvements in accordance with our loan agreements. The following discussion relates to changes in cash due to operating, investing, and financing activities, which are presented in our condensed consolidated statements of cash flows included in Item 1 of this report.
Operating Activities
Cash provided by our operating activities was $94.0 million for the three months ended March 31, 2024 compared to $109.8 million for the three months ended March 31, 2023, a decrease of $15.8 million. Our operating cash flow decreased primarily due to a decrease in rental revenue, partially offset by a decrease in property operating expenses driven by (i) the sale of 39 self storage properties to a third party during the three months ended March 31, 2024, (ii) the sale of 32 self storage properties to a third party during December 2023, and (iii) the contribution of 56 self storage properties to the 2024 Joint Venture during the three months ended March 31, 2024.
Investing Activities
Cash provided by investing activities was $567.4 million for the three months ended March 31, 2024 compared to $36.2 million of cash used in investing activities for the three months ended March 31, 2023. The primary sources of cash for the three months ended March 31, 2024 were the $608.8 million of proceeds from our sale of 39 self storage properties to a third party and contribution of 56 self storage properties to the 2024 Joint Venture, partially offset by our investment in 2024 Joint Venture of $35.8 million, and capital expenditures of $5.4 million.
Capital expenditures totaled $5.4 million and $8.5 million during the three months ended March 31, 2024 and 2023, respectively. We generally fund post-acquisition capital additions from cash provided by operating activities.
We categorize our capital expenditures broadly into three primary categories:
•recurring capital expenditures, which represent the portion of capital expenditures that are deemed to replace the consumed portion of acquired capital assets and extend their useful life;
•value enhancing capital expenditures, which represent the portion of capital expenditures that are made to enhance the revenue and value of an asset from its original purchase condition; and

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•acquisitions capital expenditures, which represent the portion of capital expenditures capitalized during the current period that were identified and underwritten prior to a property's acquisition.
A summary of the capital expenditures for these categories, along with a reconciliation of the total for these categories to the capital expenditures reported in the accompanying condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, are presented below (dollars in thousands):
Three Months Ended
March 31,
2024 2023
Recurring capital expenditures $ 2,771  3,017 
Value enhancing capital expenditures 1,825  1,293 
Acquisitions capital expenditures 903  3,677 
Total capital expenditures 5,499  7,987 
Change in accrued capital spending (125) 463 
Capital expenditures per statement of cash flows $ 5,374  $ 8,450 
Financing Activities
Cash used in our financing activities was $660.0 million for the three months ended March 31, 2024 compared to $63.9 million for the three months ended March 31, 2023. Our primary uses of financing cash flows for the three months ended March 31, 2024 were for principal payments on existing debt of $613.4 million (which included $483.0 million of principal repayments under the Revolver, $130.0 million repayment of Term Loan B and $0.4 million of scheduled fixed rate mortgage principal amortization payments), common share repurchases of $203.5 million, payments of dividends to common shareholders of $43.8 million, distributions to noncontrolling interests of $33.8 million and distributions to preferred shareholders of $5.1 million. Our sources of financing cash flows for the three months ended March 31, 2024 primarily consisted of $240.0 million of borrowings under our Revolver.
Credit Facility and Term Loan Facilities
As of March 31, 2024, our credit facility provided for total borrowings of $1.825 billion, consisting of the following components: (i) a Revolver which provides for a total borrowing commitment up to $950.0 million, whereby we may borrow, repay and re-borrow amounts under the Revolver, (ii) a $145.0 million Term Loan B, (iii) a $325.0 million Term Loan C, (iv) a $275.0 million Term Loan D and (v) a $130.0 million Term Loan E. The Revolver is set to mature in January 2027; provided that we may elect up to two times to extend the maturity by six months each up to January 2028 by paying an extension fee for each such election of 0.0625% of the total borrowing commitment thereunder at the time of extension and meeting other customary conditions with respect to compliance. The Term Loan B matures in July 2024, provided that we have the option to elect to extend the maturity to January 2025, subject to certain conditions being met and payment of an extension fee of 0.0625% of the amount of the Term Loan B, the Term Loan C matures in January 2025, the Term Loan D matures in July 2026 and the Term Loan E matures in March 2027. The Revolver, Term Loan B, Term Loan C, Term Loan D and Term Loan E are not subject to any scheduled reduction or amortization payments prior to maturity. As of March 31, 2024, we have an expansion option under the credit facility, which, if exercised in full, would provide for a total credit facility of $2.370 billion.
As of March 31, 2024, $145.0 million was outstanding under the Term Loan B with an effective interest rate of 2.95%, $325.0 million was outstanding under the Term Loan C with an effective interest rate of 2.93%, $275.0 million was outstanding under the Term Loan D with an effective interest rate of 3.96% and $130.0 million was outstanding under the Term Loan E with an effective interest rate of 4.79%. As of March 31, 2024, we would have had the capacity to borrow remaining Revolver commitments of $805.6 million while remaining in compliance with the credit facility's financial covenants.
We have a 2028 Term Loan Facility that matures in December 2028 and is separate from the credit facility in an aggregate amount of $75.0 million. As of March 31, 2024 the entire amount was outstanding under the 2028 Term Loan Facility with an effective interest rate of 4.62%. We have an expansion option under the 2028 Term Loan Facility, which, if exercised in full, would provide for total borrowings in an aggregate amount up to $125.0 million.

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We have an April 2029 Term Loan Facility that matures in April 2029 and is separate from the credit facility and 2028 Term Loan Facility in an aggregate amount of $100.0 million. As of March 31, 2024 the entire amount was outstanding under the April 2029 Term Loan Facility with an effective interest rate of 4.27%.
We have a June 2029 Term Loan Facility that matures in June 2029 and is separate from the credit facility, 2028 Term Loan Facility, and April 2029 Term Loan Facility in an aggregate amount of $285.0 million. As of March 31, 2024 the June 2029 Term Loan Facility had an effective interest rate of 5.37%. We have an expansion option under the June 2029 Term Loan Facility, which, if exercised in full, would provide for total borrowings in an aggregate amount up to $300.0 million.
2029 and August 2031 Senior Unsecured Notes
On August 30, 2019, our operating partnership issued $100.0 million of 3.98% senior unsecured notes due August 30, 2029 and $50.0 million of 4.08% senior unsecured notes due August 30, 2031 in a private placement to certain institutional investors.
August 2030 and August 2032 Senior Unsecured Notes
On October 22, 2020, our operating partnership issued $150.0 million of 2.99% senior unsecured notes due August 5, 2030 and $100.0 million of 3.09% senior unsecured notes due August 5, 2032 in a private placement to certain institutional investors.
May 2026, May 2031 and May 2033 Senior Unsecured Notes
On May 26, 2021, our operating partnership issued $55.0 million of 3.10% senior unsecured notes due May 4, 2033. On July 26, 2021, our operating partnership issued $35.0 million of 2.16% senior unsecured notes due May 4, 2026 and $90.0 million of 3.00% senior unsecured notes due May 4, 2031.
November 2030, November 2031, November 2033, and 2036 Senior Unsecured Notes
On December 14, 2021, our operating partnership issued $75.0 million of 2.72% senior unsecured notes due November 30, 2030, $175.0 million of 2.81% senior unsecured notes due November 30, 2031 and $75.0 million of 3.06% senior unsecured notes due November 30, 2036. On January 28, 2022, our operating partnership issued $125.0 million of 2.96% senior unsecured notes due November 30, 2033.
November 2032 Senior Unsecured Notes
On September 28, 2022, our operating partnership issued $200.0 million of 5.06% senior unsecured notes due November 16, 2032.
July 2028 Senior Unsecured Notes
On April 27, 2023, our operating partnership issued $120.0 million of 5.61% senior unsecured notes due July 5, 2028 in a private placement to certain institutional investors. The July 2028 Notes have an effective interest rate of 5.75% after taking into account the effect of interest rate swaps.
October 2026, October 2028, October 2030 and October 2033 Senior Unsecured Notes
On October 5, 2023, our operating partnership issued $65.0 million of 6.46% senior unsecured notes due October 5, 2026, $100.0 million of 6.55% senior unsecured notes due October 5, 2028, $35.0 million of 6.66% senior unsecured notes due October 5, 2030 and $50.0 million of 6.73% senior unsecured notes due October 5, 2033 in a private placement to certain institutional investors.
Fixed Rate Mortgage Payable
On July 9, 2021, we entered into an agreement with a single lender for an $88.0 million debt financing secured by eight of our self storage properties. This interest-only loan matures in July 2028 and has a fixed interest rate of 2.77%.
Equity Transactions
Issuance of Common Shares
During the three months ended March 31, 2024, after receiving notices of redemption from certain OP unitholders, we elected to issue 72,802 common shares to such holders in exchange for 72,802 OP units in satisfaction of the operating partnership's redemption obligations.

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Common Share Repurchases
During the three months ended March 31, 2024, we repurchased 5,491,925 common shares for approximately $203.5 million.
Issuance and Redemption of OP Equity
During the three months ended March 31, 2024, we issued 43,556 OP units upon the conversion of 23,690 subordinated performance units, and 62,330 OP units upon the conversion of an equivalent number of LTIP units. In addition, we redeemed 10,417 OP units for cash.
Dividends and Distributions
On February 15, 2024, our board of trustees declared a cash dividend and distribution, respectively, of $0.56 per common share and OP unit to shareholders and OP unitholders of record as of March 15, 2024. On February 15, 2024, our board of trustees also declared cash distributions of $0.375 per Series A Preferred Share, Series B Preferred Share and Series A-1 preferred unit to shareholders and unitholders of record as of March 15, 2024. On March 15, 2024, our board of trustees declared cash distributions of $10.7 million, in aggregate, to subordinated performance unitholders of record as of March 15, 2024. Such dividends and distributions were paid on March 29, 2024.
Cash Distributions from our Operating Partnership
Under the LP Agreement of our operating partnership, to the extent that we, as the general partner of our operating partnership, determine to make distributions to the partners of our operating partnership out of the operating cash flow or capital transaction proceeds generated by a real property portfolio managed by one of our PROs, the holders of the series of subordinated performance units that relate to such portfolio are entitled to share in such distributions. Under the LP Agreement of our operating partnership, operating cash flow with respect to a portfolio of properties managed by one of our PROs is generally an amount determined by us, as general partner of our operating partnership, equal to the excess of property revenues over property related expenses from that portfolio. In general, property revenue from the portfolio includes:
(i)all receipts, including rents and other operating revenues;
(ii)any incentive, financing, break-up and other fees paid to us by third parties;
(iii)amounts released from previously set aside reserves; and
(iv)any other amounts received by us, which we allocate to the particular portfolio of properties.
In general, property-related expenses include all direct expenses related to the operation of the properties in that portfolio, including real property taxes, insurance, property-level general and administrative expenses, employee costs, utilities, property marketing expense, property maintenance and property reserves and other expenses incurred at the property level. In addition, other expenses incurred by our operating partnership will also be allocated by us, as general partner, to the property portfolio and will be included in the property-related expenses of that portfolio. Examples of such other expenses include:
(i)corporate-level general and administrative expenses;
(ii)out-of-pocket costs, expenses and fees of our operating partnership, whether or not capitalized;
(iii)the costs and expenses of organizing and operating our operating partnership;
(iv)amounts paid or due in respect of any loan or other indebtedness of our operating partnership during such period;
(v)extraordinary expenses of our operating partnership not previously or otherwise deducted under item (ii) above;
(vi)any third-party costs and expenses associated with identifying, analyzing, and presenting a proposed property to us and/or our operating partnership; and
(vii)reserves to meet anticipated operating expenditures, debt service or other liabilities, as determined by us.

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To the extent that we, as the general partner of our operating partnership, determine to make distributions to the partners of our operating partnership out of the operating cash flow of a real property portfolio managed by one of our PROs, operating cash flow from a property portfolio is required to be allocated to OP unitholders and to the holders of series of subordinated performance units that relate to such property portfolio as follows:
First, an amount is allocated to OP unitholders in order to provide OP unitholders (together with any prior allocations of capital transaction proceeds) with a cumulative preferred allocation on the unreturned capital contributions attributed to the OP units in respect of such property portfolio. The preferred allocation for all of our existing portfolios is 6%. As of March 31, 2024, our operating partnership had an aggregate of $2,625.9 million of unreturned capital contributions with respect to common shareholders and OP unitholders, with respect to the various property portfolios.
Second, an amount is allocated to the holders of the series of subordinated performance units relating to such property portfolio in order to provide such holders with an allocation (together with prior distributions of capital transaction proceeds) on their unreturned capital contributions. Although the subordinated allocation for the subordinated performance units is non-cumulative from period to period, if the operating cash flow from a property portfolio related to a series of subordinated performance units is sufficient, in the judgment of the general partner (with the approval of a majority of our independent trustees), to fund distributions to the holders of such series of subordinated performance units, but we, as the general partner of our operating partnership, decline to make distributions to such holders, the amount available but not paid as distributions will be added to the subordinated allocation corresponding to such series of subordinated performance units. The subordinated allocation for the outstanding subordinated performance units is 6%. As of March 31, 2024, an aggregate of $209.2 million of unreturned capital contributions has been allocated to the various series of subordinated performance units.
Thereafter, any additional operating cash flow is allocated to OP unitholders and the applicable series of subordinated performance units equally.
Following the allocation described above, we as the general partner of our operating partnership, will generally cause our operating partnership to distribute the amounts allocated to the relevant series of subordinated performance units to the holders of such series of subordinated performance units. We, as the general partner, may cause our operating partnership to distribute the amounts allocated to OP unitholders or may cause our operating partnership to retain such amounts to be used by our operating partnership for any purpose. Any operating cash flow that is attributable to amounts retained by our operating partnership pursuant to the preceding sentence will generally be available to be allocated as an additional capital contribution to the various property portfolios.
The foregoing description of the allocation of operating cash flow between the OP unitholders and subordinated performance unitholders is used for purposes of determining distributions to holders of subordinated performance units but does not necessarily represent the operating cash flow that will be distributed to OP unitholders (or paid as dividends to holders of our common shares). Any distribution of operating cash flow allocated to the OP unitholders will be made at our discretion (and paid as dividends to holders of our common shares at the discretion of our board of trustees).
Under the LP Agreement of our operating partnership, capital transactions are transactions that are outside the ordinary course of our operating partnership's business, involve the sale, exchange, other disposition, or refinancing of any property, and are designated as capital transactions by us, as the general partner. To the extent the general partner determines to distribute capital transaction proceeds, the proceeds from capital transactions involving a particular property portfolio are required to be allocated to OP unitholders and to the series of subordinated performance units that relate to such property portfolio as follows:
First, an amount determined by us, as the general partner, of such capital transaction proceeds is allocated to OP unitholders in order to provide OP unitholders (together with any prior allocations of operating cash flow) with a cumulative preferred allocation on the unreturned capital contributions attributed to the OP unitholders in respect of such property portfolio that relate to such capital transaction plus an additional amount equal to such unreturned capital contributions.
Second, an amount determined by us, as the general partner, is allocated to the holders of the series of subordinated performance units relating to such property portfolio in order to provide such holders with a non-cumulative subordinated allocation on the unreturned capital contributions made by such holders in respect of such property portfolio that relate to such capital transaction plus an additional amount equal to such unreturned capital contributions.

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The preferred allocation and subordinated allocation with respect to capital transaction proceeds for each portfolio is equal to the preferred allocation and subordinated allocation for distributions of operating cash flow with respect to that portfolio.
Thereafter, any additional capital transaction proceeds are allocated to OP unitholders and the applicable series of subordinated performance units equally.
Following the allocation described above, we, as the general partner of our operating partnership, will generally cause our operating partnership to distribute the amounts allocated to the relevant series of subordinated performance units to the holders of such series of subordinated performance units. We, as general partner of our operating partnership, may cause our operating partnership to distribute the amounts allocated to the OP unitholders or may cause our operating partnership to retain such amounts to be used by our operating partnership for any purpose. Any capital transaction proceeds that are attributable to amounts retained by our operating partnership pursuant to the preceding sentence will generally be available to be allocated as an additional capital contribution to the various property portfolios.
The foregoing allocation of capital transaction proceeds between the OP unitholders and subordinated performance unitholders is used for purposes of determining distributions to holders of subordinated performance units but does not necessarily represent the capital transaction proceeds that will be distributed to OP unitholders (or paid as dividends to holders of our common shares). Any distribution of capital transaction proceeds allocated to the OP unitholders will be made at our discretion (and paid as dividends to holders of our common shares at the discretion of our board of trustees).
Allocation of Capital Contributions
We, as the general partner of our operating partnership, in our discretion, have the right to increase or decrease, as appropriate, the amount of capital contributions allocated to our operating partnership in general and to each series of subordinated performance units to reflect capital expenditures made by our operating partnership in respect of each portfolio, the sale or refinancing of all or a portion of the properties comprising the portfolio, the distribution of capital transaction proceeds by our operating partnership, the retention by our operating partnership of cash for working capital purposes and other events impacting the amount of capital contributions allocated to the holders. In addition, to avoid conflicts of interests, any decision by us to increase or decrease allocations of capital contributions must also be approved by a majority of our independent trustees.
Off-Balance Sheet Arrangements
Except as disclosed in the notes to our financial statements, as of March 31, 2024, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purposes entities, which typically are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, except as disclosed in the notes to our financial statements, as of March 31, 2024, we have not guaranteed any obligations of unconsolidated entities, nor made any commitments to provide funding to any such entities, that creates any material exposure to any financing, liquidity, market or credit risk.
Seasonality
The self storage business is subject to minor seasonal fluctuations. A greater portion of revenues and profits are generally realized from May through September. Historically, our highest level of occupancy has typically been in July, while our lowest level of occupancy has typically been in February. Results for any quarter may not be indicative of the results that may be achieved for the full fiscal year.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk refers to the risk of loss from adverse changes in market prices and interest rates. Our future income, cash flows, and fair values of financial instruments are dependent upon prevailing market interest rates. The primary market risk to which we believe we are exposed is interest rate risk. Interest rate risk is highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. We use interest rate swaps to moderate our exposure to interest rate risk by effectively converting the interest on variable rate debt to a fixed rate. We make limited use of other derivative financial instruments and we do not use them for trading or other speculative purposes.

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As of March 31, 2024, we had $138.0 million of debt subject to variable interest rates (excluding variable-rate debt subject to interest rate swaps). If our reference rates (currently one-month SOFR) were to increase or decrease by 100 basis points, the increase or decrease in interest expense on the variable-rate debt (excluding variable-rate debt subject to interest rate swaps) would decrease or increase future earnings and cash flows by approximately $1.4 million annually.
Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.
ITEM 4. Controls and Procedures
Disclosure Controls and Procedures
The Company's management, with the participation of the Company's chief executive officer and chief financial officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the chief executive officer and chief financial officer concluded that the Company's disclosure controls and procedures, as of the end of the period covered by this report, are effective.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports.

PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
We are not currently subject to any legal proceedings that we consider to be material.
ITEM 1A. Risk Factors
For a discussion of our potential risks and uncertainties, see the Company's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC under the heading Item 1A. "Risk Factors" beginning on page 17, which is accessible on the SEC's website at www.sec.gov.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
During the three months ended March 31, 2024, the Company, in its capacity as general partner of its operating partnership, caused the operating partnership to issue 72,802 common shares to satisfy redemption requests from certain limited partners.
As of April 29, 2024, other than those OP units held by the Company, after reflecting the transactions described herein, 40,638,116 OP units of its operating partnership were outstanding (including 866,906 outstanding LTIP units in the operating partnership and 2,120,491 outstanding OP units ("DownREIT OP units") in certain consolidated subsidiaries of the operating partnership, which are convertible into, or exchangeable for, OP units on a one-for-basis, subject to certain conditions) and 12,101,055 subordinated performance units (including 4,133,474 subordinated performance units in certain subsidiaries of the operating partnership ("DownREIT subordinated performance units")).
These issuances were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

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Issuer Purchases of Equity Securities
On July 11, 2022, the Company approved a share repurchase program authorizing the repurchase of up to $400.0 million of the Company's common shares, under which $256,892 of common shares remain available for repurchase. On December 1, 2023, the Company approved a new share repurchase program authorizing, but not obligating, the repurchase of up to an additional $275.0 million of the Company's common shares, under which approximately $71,581,850 of common shares remain available for repurchase. The table below summarizes all of our repurchases of common shares during three months ended March 31, 2024:
Period Total number of shares purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs
January 1 - January 31, 2024 856,036 $ 38.35  856,036  $ 242,427,606 
February 1 - February 29, 2024 1,817,617 36.63  1,817,617  175,854,346 
March 1 - March 31, 2024 2,818,272 36.91  2,818,272  71,838,742 
Total/Weighted Average
 5,491,925 $ 37.04  5,491,925  $ 71,838,742 
Use of Proceeds
Not applicable.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
Not applicable.
ITEM 6. Exhibits
The following exhibits are filed with this report:
Exhibit Number Exhibit Description

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101.INS* XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH* Inline XBRL Taxonomy Extension Schema
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase
104* Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Filed herewith.
** Furnished herewith.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
National Storage Affiliates Trust
By: /s/ DAVID G. CRAMER
David G. Cramer
president and chief executive officer
(principal executive officer)
By: /s/ BRANDON S. TOGASHI
Brandon S. Togashi
chief financial officer
(principal accounting and financial officer)
Date: May 2, 2024

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