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SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS 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 nine months ended September 30, 2024, the Company did not sell any common shares through the ATM program. As of September 30, 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 nine months ended September 30, 2024, the Company repurchased 7,400,322 common shares for approximately $275.2 million, including commissions and fees.
Series A Preferred Shares
The Series A Preferred Shares rank senior to the Company's common shares with respect to rights and rights upon its liquidation, dissolution or winding up. Dividends on the Series A Preferred Shares, which are payable quarterly in arrears, are cumulative from the date of original issuance in the amount of $1.50 per share each year. The Series A Preferred Shares became redeemable by the Company in October 2022 for a cash redemption price of $25.00 per share, plus accrued but unpaid dividends. The increase in Series A Preferred Shares outstanding from December 31, 2023 to September 30, 2024, was due to the issuance of 6,665 Series A Preferred Shares upon the redemption of an equivalent number of 6.000% Series A-1 Cumulative Redeemable Preferred Units ("Series A-1 preferred units").
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 preferred units, OP units and LTIP units at such prices and on such other terms as it determines in its sole discretion.
As of September 30, 2024 and December 31, 2023, units reflecting noncontrolling interests consisted of the following:
September 30, 2024December 31, 2023
Series A-1 preferred units1,205,675 1,212,340 
OP units52,301,412 37,635,683 
Subordinated performance units— 7,991,271 
LTIP units870,732 785,932 
DownREIT units
DownREIT OP units5,769,214 2,120,491 
DownREIT subordinated performance units— 4,133,474 
Total60,147,033 53,879,191 
Series A-1 Preferred Units
The Series A-1 preferred units rank senior to OP 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. The decrease in Series A-1 preferred units outstanding from December 31, 2023 to September 30, 2024, was due to the redemption of 6,665 Series A-1 preferred units for an equivalent number of Series A Preferred Shares.
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 September 30, 2024 was due to (i) 14,376,264 OP units issued upon the conversion of 7,772,693 subordinated performance units due to the internalization of the PRO structure, (ii) the issuance of 1,548,866 OP units in connection with the purchase of the PROs' intangible assets, (iii) 43,556 OP units issued upon the voluntary conversion of 23,690 subordinated performance units, and (iv) the conversion of 92,174 LTIP units into an equivalent number of OP units, partially offset by the redemption of 1,326,914 OP units for an equal number of common shares, 40,200 OP units that were exchanged for DownREIT OP units and the redemption of 28,017 OP units for cash.
The increase in DownREIT OP units outstanding from December 31, 2023 to September 30, 2024 was due to 3,608,523 DownREIT OP units issued upon the conversion of 4,133,474 DownREIT subordinated performance units due to the internalization of the PRO structure and 40,200 DownREIT OP units that were issued in exchange for OP units.
Subordinated Performance Units and DownREIT Subordinated Performance Units
Effective July 1, 2024, in connection with the internalization of the PRO structure, all 11,906,167 outstanding subordinated performance units (including all DownREIT subordinated performance units) were converted into an aggregate of 17,984,787 OP units and DownREIT OP units. Each subordinated performance unit and DownREIT subordinated performance unit was converted into the number of OP units and DownREIT OP units determined by dividing the average cash available for distribution (CAD) per unit on the series subordinated performance units over the one-year period ending December 31, 2023, by 110% of the CAD per unit on the OP units determined over the same period.
The decrease in subordinated performance units outstanding from December 31, 2023 to September 30, 2024 was due to (i) the conversion of 7,772,693 subordinated performance units into 14,376,264 OP units due to the internalization of the PRO structure, (ii) the voluntary conversion of 23,690 subordinated performance units into 43,556 OP units (iii) and the redemption of 194,888 subordinated performance units for cash.
The decrease in DownREIT subordinated performance units outstanding from December 31, 2023 to September 30, 2024 was due to the conversion of 4,133,474 DownREIT subordinated performance units into 3,608,523 DownREIT OP units due to the internalization of the PRO structure.
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 September 30, 2024 was due to issuance of 176,974 compensatory LTIP units to employees and trustees, net of forfeitures, partially offset by the conversion of 92,174 LTIP units into an equivalent number of OP units.