National Storage Affiliates Trust (NSA): 5 FORCES Analysis [Nov-2025 Updated]

You're trying to map out the next move for National Storage Affiliates Trust, and the reality is, we're in a tricky spot, transitioning from a tough downturn toward what I think will be a proper bull market in 2026. The numbers from late 2025 tell a clear story of pressure: operating expenses rose 4.9% in Q3 while same-store revenue fell 2.6%, hammering NOI down 5.7%, largely because customers hold all the cards with a street-to-contract rent spread near 48%. Before you commit capital, you need to see how intense the rivalry is, how low switching costs are for renters, and why high rates are actually helping keep new competitors at bay; dive into the full Five Forces analysis below to see exactly where the leverage sits right now.

National Storage Affiliates Trust (NSA) - Porter's Five Forces: Bargaining power of suppliers

You're looking at National Storage Affiliates Trust's supplier landscape as of late 2025, and the pressure from operating costs is definitely front and center. For a REIT like National Storage Affiliates Trust, suppliers are primarily those providing essential services, materials, and labor to keep the 771 same-store properties running smoothly.

The immediate impact of broader economic conditions is clear in the operating results. High inflation translated directly into higher costs for the portfolio. Specifically, year-over-year same-store property operating expenses increased by 4.9% in the third quarter of 2025. This was also reflected in the year-to-date increase of 4.4% for the same metric compared to the first nine months of 2024.

The bargaining power of certain suppliers is high because their costs are non-negotiable inputs for property operation. You can see this clearly when you break down the drivers of that Q3 2025 expense increase:

• Property tax expense remains a significant, non-negotiable cost driver.
• Utility costs also exerted upward pressure on expenses.
• Marketing spend, a key supplier category for customer acquisition, was up 29% versus the prior year in Q3 2025.

Here's a quick look at the cost pressure on National Storage Affiliates Trust's same-store operations for Q3 2025:

Land and construction costs represent another area where supplier power is felt, though it impacts new supply more than current operations. While National Storage Affiliates Trust is focused on acquisitions and joint ventures rather than ground-up development for its core portfolio, industry-wide elevated costs still constrain the overall supply pipeline, which is a long-term benefit to existing asset owners. For context, general industry estimates suggest land acquisition can account for 25-30% of a total project budget, with construction costs alone ranging from $25 to $75 per square foot in 2025. Data from Q2 2025 showed a notable rise in self-storage projects being placed on hold, directly attributable to rising costs and tighter financing conditions, confirming this supplier-side constraint on new inventory.

On the labor and management side, National Storage Affiliates Trust has taken steps to reduce the power of external management suppliers. The company completed the internalization of its Participating Regional Operating (PRO) structure, which was expected to yield annual General and Administrative (G&A) savings between $7.5 million and $9.0 million by eliminating supervisory and administrative fees previously paid to the PROs. This strategic move shifts management labor from external partners to National Storage Affiliates Trust's direct platform, which should slightly reduce the direct bargaining power of those third-party property management entities.

The overall supplier power dynamic for National Storage Affiliates Trust is characterized by significant, non-negotiable cost inflation in essential services like property taxes and utilities, countered slightly by the successful internalization of management functions, which locks in G&A savings.

Finance: draft 13-week cash view by Friday.

National Storage Affiliates Trust (NSA) - Porter's Five Forces: Bargaining power of customers

The bargaining power of customers for National Storage Affiliates Trust is definitely trending toward the moderate-to-high end of the spectrum right now. You see this pressure reflected directly in the top-line results, which points to local market oversupply and, frankly, customers being very price sensitive.

The numbers from the third quarter of 2025 make this clear. Same-store total revenues fell by 2.6% year-over-year for the quarter ending September 30, 2025. This drop wasn't just about fewer people; it was driven by lower pricing per square foot alongside occupancy softness.

Customer switching costs aren't zero-moving is a hassle, after all-but they are low enough that renters can shop around if the price isn't right. This lack of stickiness means National Storage Affiliates Trust has to fight for every lease.

Occupancy is certainly under pressure, which hands more choice to the renter. As of September 30, 2025, same store period-end occupancy stood at 84.5%. That figure is down 140 basis points compared to September 30, 2024. When occupancy dips, management has less pricing power, so customers gain leverage.

While I don't have the exact street-to-contract rent spread for late 2025, the pressure on new customer acquisition is evident in the revenue decline. What we do see is that the pressure on revenue directly impacts profitability, with same store Net Operating Income (NOI) falling 5.7% in Q3 2025, even as property operating expenses rose 4.9%.

Here's a quick look at the key operational metrics reflecting this customer environment for Q3 2025:

Management is trying to counter this by improving digital engagement. For example, web shopping sessions increased by 23% in October 2025, which suggests they are putting more effort into capturing the digitally-savvy customer base.

The impact on the bottom line, driven by these customer dynamics, is clear in the per-share results:

• Core Funds From Operations (Core FFO) per share: $0.57 for Q3 2025.
• Core FFO per share decline: 8.1% year-over-year for Q3 2025.
• 2025 Core FFO per share guidance midpoint: Between $2.17 and $2.23.

To be fair, the company is still generating cash flow, reporting Core FFO of $76.5 million in the quarter. Still, the pressure from customers demanding lower rates is the primary headwind affecting revenue growth.

National Storage Affiliates Trust (NSA) - Porter's Five Forces: Competitive rivalry

The competitive rivalry within the self-storage Real Estate Investment Trust (REIT) space remains a defining characteristic of National Storage Affiliates Trust's operating environment. You see this pressure reflected directly in the top-line performance figures National Storage Affiliates Trust reported for the third quarter of 2025.

Rivalry is intense among the major REITs: Public Storage, Extra Space Storage, and CubeSmart. These firms command significant market share, which directly impacts National Storage Affiliates Trust's ability to grow revenue and maintain pricing power. As of May 2025 data, Public Storage held an estimated 11.4% market share, Extra Space Storage held 8.6%, while National Storage Affiliates Trust was at 3.4%, and CubeSmart at 2.6%. This disparity in scale creates inherent competitive dynamics.

National Storage Affiliates Trust's same-store NOI decline of 5.7% in Q3 2025 reflects this intense competition for new customers and the need to offer concessions. This decline was driven by a 2.6% decrease in same-store total revenues, which itself was largely due to a 140 basis point decrease in same-store period-end occupancy, which stood at 84.5% as of September 30, 2025. To be fair, operating expenses in the same-store pool still rose by 4.9% year-over-year in Q3 2025, driven by marketing and utility costs.

The industry is consolidating, increasing the scale and operational efficiency of rivals. Larger players leverage their size for cost advantages, which is visible when comparing facility counts. For instance, Extra Space Storage and Public Storage manage substantially larger portfolios in terms of facility count than National Storage Affiliates Trust.

Here's a quick look at the scale differences based on available data:

National Storage Affiliates Trust competes using a differentiated regional brand strategy. This approach aims to build local recognition rather than relying solely on national scale. As of Q3 2025, the company streamlined its operations to six brands after completing the rebranding of its Moove In branded stores to iStorage. This contrasts with the more monolithic branding of some competitors.

The competitive tactics vary significantly by geography, showing how rivalry plays out on a local level. You can see this in the rate strategies employed by CubeSmart and Public Storage in major markets:

• CubeSmart in the New York MSA achieved rates 14.8% higher than Public Storage in Q1 2025.
• CubeSmart in New York achieved rates 31.4% higher than Extra Space Storage in Q1 2025.
• Public Storage in the Los Angeles MSA achieved rates 27.6% above Extra Space Storage in Q1 2025.
• Public Storage in Los Angeles led in expense efficiency with an average expense ratio of just 14.53% over the past year.

The pressure on pricing is evident in National Storage Affiliates Trust's same-store performance metrics for Q3 2025:

• Same-Store Net Operating Income (NOI) Decline: 5.7%
• Same-Store Total Revenue Decline: 2.6%
• Same-Store Property Operating Expense Increase: 4.9%
• Core Funds From Operations (Core FFO) Per Share Decline: 8.1%

Finance: draft a sensitivity analysis on the impact of a further 100 basis point occupancy drop on Q4 2025 NOI by next Tuesday.

National Storage Affiliates Trust (NSA) - Porter's Five Forces: Threat of substitutes

The threat of substitutes for National Storage Affiliates Trust's core offering-traditional, on-site self-storage-is generally considered low when looking at the primary use cases that drive the bulk of demand. You see, the core demand is tied to significant life events, which are hard to replace with a simple alternative. For instance, the average renter stays for about 20 months, suggesting a commitment that goes beyond a quick fix offered by many substitutes.

Substitutes do exist, primarily in the form of portable storage containers and temporary residential storage solutions. The portable storage container rental market in North America hit approximately $2.5 billion in 2024, and analysts project this segment will expand at a rate of roughly 6.3% annually through 2030. Globally, the portable storage services market size in 2025 is estimated at $15 billion, with a projected Compound Annual Growth Rate (CAGR) of 7% through 2033. While this is a growing market, it is significantly smaller than the established self-storage sector National Storage Affiliates Trust operates in.

To put the scale into perspective, here's a quick comparison between the primary industry and its main substitute:

Downsizing or decluttering remains a behavioral substitute-people deciding to simply get rid of items rather than store them. However, the core demand driven by housing market dynamics proves quite resilient. For example, the median age for a first-time homebuyer last year was 38, notably higher than the 33 recorded in 2020. This delay in homeownership keeps more households in the renter pool longer, which generally translates to sustained demand for extra space, a key driver for National Storage Affiliates Trust.

Still, high housing costs and ongoing urbanization continue to buttress the underlying need for extra space, making the market less susceptible to substitution. The self-storage industry is expanding steadily in 2025, explicitly fueled by rising housing costs and smaller homes. This structural demand means that even if a consumer temporarily uses a portable unit during a move, the underlying pressure to find long-term, secure space remains, often leading them back to a traditional self-storage facility like those operated by National Storage Affiliates Trust.

The resilience is also seen in the pricing environment for National Storage Affiliates Trust's peers. While the national average monthly self-storage cost dipped to $75 in early 2025 from a high of $99 in 2023, indicating price sensitivity, the overall industry is still growing robustly.

Key factors supporting the core business against substitutes include:

• Resilience to economic shifts, as storage is often a necessity during transitions.
• Longer average rental periods, averaging 20 months.
• High customer loyalty, with nearly 80% likely to use the same provider after moving.
• Urbanization pushing people into smaller living spaces.

National Storage Affiliates Trust (NSA) - Porter's Five Forces: Threat of new entrants

You're assessing the competitive landscape for National Storage Affiliates Trust (NSA) as of late 2025, and the threat from brand-new players looking to build and open facilities is definitely lower than it was a couple of years ago. This is primarily because the capital required to start a new project is significantly higher, and the financing environment remains tight. Lenders are much more cautious now, demanding higher equity contributions and stricter underwriting standards for new self-storage construction.

The pipeline for new supply has thinned out considerably, which directly limits the near-term threat of new entrants flooding the market. For instance, expected new self-storage deliveries for the entirety of 2025 are only about 20 million rentable square feet, which is a sharp drop from the 59 million rentable square feet delivered in 2024. This deceleration in new supply additions is a direct result of developers pulling back. While the outline suggests a 20% to 30% shrinkage in new development demand, we see evidence of this in the pipeline contraction: new construction starts in 2024 were down 20% year-over-year, and the prospective pipeline contracted by 25.3% year-over-year as of Q1 2025.

Honestly, high interest rates and elevated construction costs are making it financially difficult for new projects to pencil out favorably. Developers are shelling out more to fund projects, which tightens the calculation on returns significantly. This environment means that existing operators like National Storage Affiliates Trust (NSA) face fewer new rivals in the near term, which could eventually translate to higher occupancy and pricing authority for those already established.

Here's a quick look at the key financial and operational barriers that are keeping new entrants at bay:

Beyond the pure economics, geographic barriers, often manifesting as zoning and permitting hurdles in top 100 metropolitan areas, create a significant moat. Some municipalities have outright banned self-storage development. For example, in May 2025, the Chicago City Council adopted an ordinance that prohibits self-storage uses in most Business, Commercial, and Downtown zoning districts, dramatically curtailing future opportunities there. Furthermore, in dense areas like South Florida, land constraints are pushing new developments further out, such as west toward the Everglades. These local regulatory environments require deep local expertise and can add significant time and cost, acting as a major deterrent for smaller, less experienced entrants.

The current environment favors operators with strong balance sheets and access to patient capital. New entrants must contend with:

• Lenders requiring projects to cash flow even with slower lease-up times.
• Higher equity requirements for new ground-up development.
• Local government pushback on facility placement and design.
• Construction costs that make new projects financially challenging.

Finance: draft 13-week cash view by Friday.