National Storage Affiliates Trust (NSA): A Bull Case Theory 

We came across a bullish thesis on National Storage Affiliates Trust on Valueinvestorsclub.com by Rtg123. In this article, we will summarize the bulls’ thesis on NSA. National Storage Affiliates Trust’s share was trading at $31.71 as of February 2nd. NSA’s trailing and forward P/E were 52.18 and 59.17 respectively according to Yahoo Finance.

National Storage Affiliates Trust is a real estate investment trust headquartered in Greenwood Village, Colorado, focused on the ownership, operation and acquisition of self-storage properties predominantly located within the top 100 metropolitan statistical areas throughout the United States.

NSA presents a compelling bullish opportunity within the U.S. self-storage sector, as the company is currently operating at a rare combination of trough operating metrics and trough valuation multiples.

The self-storage industry’s supply-demand dynamics are turning increasingly favorable, with housing turnover near historic lows and poised to recover as interest rates decline. Given that housing turnover drives more than half of self-storage demand, even a modest recovery could materially lift sector fundamentals. At the same time, new supply starts are approaching post-GFC trough levels, setting up an attractive backdrop for improving occupancy and pricing power.

NSA stands out as the most depressed name among self-storage REITs, with approximately two-thirds of its portfolio concentrated in Sunbelt markets that experienced overbuilding and unsustainable post-COVID demand. This has resulted in NSA’s occupancy levels lagging peers, but also creates significant upside leverage as conditions normalize.

Management has already highlighted a positive rate of change heading into the fourth quarter, despite still-weak demand, underscoring that the worst appears to be behind the company. Move-in rates have inflected positively, rising roughly 3.5% in the third quarter versus 1.3% in the second quarter, while occupancy declines have stabilized, leaving meaningful room for recovery.

From a valuation perspective, self-storage cap rates are at their widest since 2010, and NSA trades at an approximately 75 basis point cap rate premium to the sector, compared with parity pre-COVID. The stock offers a roughly 7.6% dividend yield that is nearly covered even on trough earnings.

A normalization in sector multiples alone could drive roughly 30% upside, with NSA potentially seeing closer to 40% due to its relative discount, before factoring in improving fundamentals. Taken together, NSA offers the potential for an attractive ~25% three-year IRR, supported by multiple rerating, earnings recovery, and improving housing-driven demand.

Previously, we covered a bullish thesis on Public Storage (PSA) by Antoni Nabzdyk in December 2024, which highlighted the company’s market leadership, prime asset locations, strong profitability, and reliable dividend profile. PSA’s stock price has depreciated by approximately 8.81% since our coverage due to sector-wide demand softness and valuation compression. Rtg123 shares a similar view but emphasizes National Storage Affiliates Trust’s deeper cyclical trough, discounted valuation, and recovery-driven upside within the self-storage industry.

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Disclosure: None.