Self-Storage Consolidation Driven by Scale Benefits, CEO Says

Arlen Nordhagen, chairman, president and CEO of National Storage Affiliates (NYSE: NSA), joined REIT.com for a CEO Spotlight video interview at REITWeek 2016: NAREIT’s Investor Forum at the Waldorf Astoria New York.

National Storage currently owns 318 self-storage facilities located in 18 states.

Nordhagen said the company’s decision to increase its quarterly dividend by 10 percent reflected strong growth in funds from operation (FFO) per share.

Nordhagen also discussed National Storage’s recruitment of “participating regional operators” (PROs) to join the NSA network. When they join, PROs operate under their regional brand names, but are put on to a common internet marketing platform, Nordhagen explained. This allows the PROs to continue to reap the benefits from their local expertise and reputation, he said.

Meanwhile, Nordhagen noted that National Storage is driving consolidation within the industry. He pointed out that there are about 50,000 self-storage properties across the United States and about 35,000 owners.

“The opportunity for consolidation has been there for years. The thing that’s different now is that the scale benefits of internet marketing and technology, which become more and more critical, are really driving the economic benefit,” Nordhagen said.

“I do believe we’ll start to see some pretty material consolidation” with NSA playing an “aggressive” role in that process, he added.