Extra Space Storage Inc. Reports 2025 First Quarter Results

SALT LAKE CITY, April 29, 2025 /PRNewswire/ -- Extra Space Storage Inc. (NYSE: EXR) (the "Company"), a leading owner and operator of self-storage facilities in the United States and a constituent of the S&P 500, announced operating results for the three months ended March 31, 2025.

Highlights for the three months ended March 31, 2025:

• Achieved net income attributable to common stockholders of $1.28 per diluted share, representing a 26.7% increase compared to the same period in the prior year.
• Achieved funds from operations attributable to common stockholders and unit holders ("FFO") of $1.93 per diluted share. FFO, excluding adjustments ("Core FFO"), was $2.00 per diluted share, representing a 2.0% increase compared to the same period in the prior year.
• Same-store revenue increased by 0.3% and same-store net operating income ("NOI") decreased by (1.2)% compared to the same period in the prior year.
• Reported ending same-store occupancy of 93.4% as of March 31, 2025, compared to 92.4% as of March 31, 2024.
• Acquired 12 operating stores for a total cost of approximately $153.8 million. Acquired six additional properties by exchanging ownership interest in 17 properties from an existing joint venture.
• In conjunction with joint venture partners, acquired two operating stores and completed the development of one store for a total cost of approximately $38.3 million, of which the Company invested $24.5 million.
• Originated $53.2 million in mortgage and mezzanine bridge loans and sold $27.7 million in mortgage bridge loans.
• Added 113 stores (100 stores net) to the Company's third-party management platform. As of March 31, 2025, the Company managed 1,675 stores for third parties and 439 stores in unconsolidated joint ventures, for a total of 2,114 managed stores.
• Paid a quarterly dividend of $1.62 per share.

Joe Margolis, CEO of Extra Space Storage Inc., stated: "We had a solid first quarter, beating same store revenue expectations, maintaining historically high occupancy, and continuing to grow our capital light ancillary businesses.  This led to FFO growth above our internal projections.  Despite this level of performance, the recent economic uncertainty has caused us to maintain our same-store guidance.  While the current environment is volatile and may lead to difficult economic times, our team, strategy, and systems have proven the ability to produce stable cash flow returns in similar conditions."

FFO Per Share:

The following table (unaudited) outlines the Company's FFO and Core FFO for the three months ended March 31, 2025 and 2024.  The table also provides a reconciliation to GAAP net income attributable to common stockholders and earnings per diluted share for each period presented (amounts shown in thousands, except share and per share data):

 

Operating Results and Same-Store Performance:

The following table (unaudited) outlines the Company's same-store performance for the three months ended March 31, 2025 and 2024 (amounts shown in thousands, except store count data)¹:

 

Details related to the same-store performance of stores by metropolitan statistical area ("MSA") for the three months ended March 31, 2025 and 2024 are provided in the supplemental financial information published on the Company's Investor Relations website at https://ir.extraspace.com/.

Investment and Property Management Activity:

The following table (unaudited) outlines the Company's acquisitions and developments that are closed, completed or under agreement (dollars in thousands). 

 

The projected developments and acquisitions under agreement described above are subject to customary closing conditions and no assurance can be provided that these developments and acquisitions will be completed on the terms described, or at all.

Other Investment Activity:

During the three months ended March 31, 2025, the Company invested $100.0 million in shares of convertible preferred stock of Strategic Storage Growth Trust III, Inc. ("SSGT").  The dividend rate for the convertible preferred stock is 8.85% per annum, and is subject to increase beginning in 2030. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing of SSGT.

Subsequent to quarter end the Company was repaid its $200.0 million convertible preferred stock investment in SmartStop Self Storage REIT, Inc. which had a dividend rate of 7.0% per annum. SmartStop Self Storage REIT, Inc. executed an initial public offering in April of 2025 and repaid the investment as part of the offering.

During the quarter, the Company exchanged its 25% ownership interest in 17 properties for its partner's 75% ownership interest in six properties in an existing joint venture formed in 2021.  The Company now owns 100% of the six properties and its former partner now owns 100% of the 17 properties which the Company continues to manage.  There are no remaining properties in this joint venture and these six properties are excluded from the table above.

Property Sales:

During the three months ended March 31, 2025, the Company sold 11 operating properties and three parcels of land resulting in a net gain of $35.8 million. 

Bridge Loans:

During the three months ended March 31, 2025, the Company originated $53.2 million in bridge loans and sold bridge loans totaling $27.7 million.   Outstanding balances of the Company's bridge loans were approximately $1.4 billion at the end of the quarter. The Company has an additional $192.7 million in bridge loans that have closed subsequent to quarter end or are under agreement to close in 2025 and 2026.  Additional details related to the Company's loan activity and balances held are included in the supplemental financial information published on the Company's Investor Relations website at https://ir.extraspace.com/.

Property Management:

As of March 31, 2025, the Company managed 1,675 stores for third-party owners and 439 stores owned in unconsolidated joint ventures, for a total of 2,114 stores under management.  The Company is the largest self-storage management company in the United States.

Balance Sheet:

During the three months ended March 31, 2025, the Company did not issue any shares on its ATM program, and as of March 31, 2025, the Company had $800.0 million available for issuance. Likewise, the Company did not repurchase any shares of common stock using its stock repurchase program during the quarter, and as of March 31, 2025, the Company had authorization to purchase up to $500.0 million under the program. 

Subsequent to quarter end,  the Company repurchased 68,585 shares of common stock for $8.6 million at an average price of $125.60 per share.

In January 2025, the Company re-opened an existing issuance of 5.50% senior unsecured notes due 2030 and issued an additional $350.0 million at a premium of 101.51% with an effective offer rate of 5.17%. The Company used the net proceeds to repay a $245.0 million unsecured note that matured in January 2025. In March 2025, the Company completed a public bond offering issuing $500.0 million aggregate principal amount of 5.4% senior unsecured notes due 2035.

As of March 31, 2025, the Company's commercial paper program had total capacity of $1.0 billion, with $580.0 million in outstanding issuances.

As of March 31, 2025, the Company's percentage of fixed-rate debt to total debt was 78.8%. Net of the impact of variable rate receivables, the effective fixed-rate debt to total debt was 89.5%.  The weighted average interest rates of the Company's fixed and variable-rate debt were 4.2% and 5.3%, respectively. The combined weighted average interest rate was 4.4% with a weighted average maturity of approximately 4.5 years.

Dividends:

On March 31, 2025, the Company paid a first quarter common stock dividend of $1.62 per share to stockholders of record at the close of business on March 14, 2025.

Outlook:

The following table outlines the Company's current and prior quarter Core FFO estimates and assumptions for the year ending December 31, 2025¹.

 

FFO estimates for the year are fully diluted for an estimated average number of shares and OP units outstanding during the year. The Company's estimates are forward-looking and based on management's view of current and future market conditions. The Company's actual results may differ materially from these estimates.

Supplemental Financial Information:

Supplemental unaudited financial information regarding the Company's performance can be found on the Company's website at www.extraspace.com. Under the "Company Info" navigation menu on the home page, click on "Investor Relations," then under the "Financials" navigation menu click on "Quarterly Results." This supplemental information provides additional detail on items that include store occupancy and financial performance by portfolio and market, debt maturity schedules and performance of lease-up assets.

Conference Call:

The Company will host a conference call at 1:00 p.m. Eastern Time on Wednesday, April 30, 2025, to discuss its financial results. Telephone participants may avoid any delays in joining the conference call by pre-registering for the call using the following link to receive a special dial-in number and PIN:https://emportal.ink/3DPDVBn

A live webcast of the call will also be available on the Company's investor relations website at https://ir.extraspace.com. To listen to the live webcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.

A replay of the call will be available for 30 days on the investor relations section of the Company's website beginning at 5:00 p.m. Eastern Time on April 30, 2025. 

Forward-Looking Statements:

Certain information set forth in this release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements include statements concerning the benefits of store acquisitions, developments, market conditions, our outlook and estimates for the year and other statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, the competitive landscape, the impact of broader economic trends on the storage industry, our plans or intentions relating to acquisitions and developments, and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as "believes," "estimates," "expects," "may," "will," "should," "anticipates," or "intends," or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this release. Any forward-looking statements should be considered in light of the risks referenced in the "Risk Factors" section included in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Such factors include, but are not limited to:

• adverse changes in general economic conditions, the real estate industry and the markets in which we operate;
• potential liability for uninsured losses and environmental contamination;
• our ability to recover losses under our insurance policies;
• the impact of the regulatory environment as well as national, state and local laws and regulations, including, without limitation, those governing real estate investment trusts ("REITs"), tenant reinsurance and other aspects of our business, which could adversely affect our results;
• the effect of competition from new and existing stores or other storage alternatives, including increased or unanticipated competition for our properties, which could cause rents and occupancy rates to decline;
• failure to close pending acquisitions and developments on expected terms, or at all;
• risks associated with acquisitions, dispositions and development of properties, including increased development costs due to additional regulatory requirements related to climate change and other factors;
• reductions in asset valuations and related impairment charges;
• our reliance on information technologies, which are vulnerable to, among other things, attack from computer viruses and malware, hacking, cyberattacks and other unauthorized access or misuse, any of which could adversely affect our business and results;
• impacts from any outbreak of highly infectious or contagious diseases, including reduced demand for self-storage space and ancillary products and services such as tenant reinsurance, and potential decreases in occupancy and rental rates and staffing levels, which could adversely affect our results;
• economic uncertainty due to the impact of natural disasters, war or terrorism, which could adversely affect our business plan;
• our lack of sole decision-making authority with respect to our joint venture investments;
• disruptions in credit and financial markets and resulting difficulties in raising capital or obtaining credit at reasonable rates or at all, which could impede our ability to grow;
• availability of financing and capital, the levels of debt that we maintain and our credit ratings;
• changes in global financial markets and increases in interest rates;
• the effect of recent or future changes to U.S. tax laws; and
• the failure to maintain our REIT status for U.S. federal income tax purposes.

All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management's expectations, beliefs and projections will result or be achieved. All forward-looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward-looking statements which may be made to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

Definition of FFO:

FFO provides relevant and meaningful information about the Company's operating performance that is necessary, along with net income and cash flows, for an understanding of the Company's operating results. The Company believes FFO is a meaningful disclosure as a supplement to net income. Net income assumes that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The values of real estate assets fluctuate due to market conditions and the Company believes FFO more accurately reflects the value of the Company's real estate assets. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT") as net income computed in accordance with U.S. generally accepted accounting principles ("GAAP"), excluding gains or losses on sales of operating stores and impairment write downs of depreciable real estate assets, plus depreciation and amortization related to real estate and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. The Company believes that to further understand the Company's performance, FFO should be considered along with the reported net income and cash flows in accordance with GAAP, as presented in the Company's consolidated financial statements. FFO should not be considered a replacement of net income computed in accordance with GAAP.

For informational purposes, the Company also presents Core FFO.  Core FFO excludes revenues and expenses not core to our operations and transaction costs.  It also includes certain costs associated with the Life Storage Merger including transition costs, non-cash interest related to the amortization of discount on unsecured senior notes, amortization of other intangibles, net of tax benefit, and impairment of Life Storage trade name.  Although the Company's calculation of Core FFO differs from NAREIT's definition of FFO and may not be comparable to that of other REITs and real estate companies, the Company believes it provides a meaningful supplemental measure of operating performance. The Company believes that by excluding revenues and expenses not core to our operations and non-cash interest charges, stockholders and potential investors are presented with an indicator of our operating performance that more closely achieves the objectives of the real estate industry in presenting FFO. Core FFO by the Company should not be considered a replacement of the NAREIT definition of FFO. The computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income as an indication of the Company's performance, as an alternative to net cash flow from operating activities as a measure of liquidity, or as an indicator of the Company's ability to make cash distributions.

Definition of Same-Store:

The Company's same-store pool for the periods presented consists of 1,829 stores that are wholly-owned and operated and that were stabilized by the first day of the earliest calendar year presented.  The Company considers a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of 80.0% or more for one calendar year. The Company believes that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to occupancy, rental revenue (growth), operating expenses (growth), net operating income (growth), etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments.  Same-store results should not be used as a basis for future same-store performance or for the performance of the Company's stores as a whole. No modification has been made to the same-store pool to include any assets acquired from Life Storage.

About Extra Space Storage Inc.:

Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500. As of March 31, 2025, the Company owned and/or operated 4,099 self-storage stores in 43 states and Washington, D.C. The Company's stores comprise approximately 2.8 million units and approximately 315.0 million square feet of rentable space operating under the Extra Space brand. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. It is the largest operator of self-storage properties in the United States.

 

  

 

 

 

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SOURCE Extra Space Storage, Inc.