Extra Space Storage Inc.

Consumer Services
Written By Candy Cowan

Extra Space Storage is a real estate investment trust that invests in fully integrated, self-administered, and self-managed self-storage facilities.  

The Company owns and/or operates over 2,000 self-storage properties, which comprise approximately 1.5 million units and approximately 164 million square feet of rentable storage space offering customers conveniently located and secure storage units across the country, including boat storage, RV storage, and business storage.

The Company is the second largest owner and/or operator of self-storage properties in the United States and is the largest self-storage management company in the United States.

Employees: 4,600+

Revenue:$1.924B for FY2022

HQ Location: Salt Lake City, Utah, U.S.

What they do:

  • The company invests in stores by acquiring wholly-owned stores or by acquiring an equity interest in real estate entities.

  • The company also offers tenant reinsurance at its owned and managed stores that insures the value of goods in the storage units.

  • The company rents storage units, including climate-controlled units, drive-up units, lockers, boat storage, RV storage, and business storage.

  • Their customer’s journey is shown below:

Their mission:

Extra Space Storage’s mission is sustainable growth, based on six basic company goals:

  • Maximize customer satisfaction

  • Provide an excellent product and service

  • Develop and maintain mutually beneficial business relationships

  • Increase shareholder value

  • Grow the business

  • Make Extra Space Storage a great place to work

Business Goals:

Things to know right now

  • Storage Express Acquisition

    Extra Space Storage has acquired Storage Express the largest remotely managed storage platform in the industry. Storage Express has 107 stores in Indiana, Illinois, Ohio, and Kentucky. The transaction included 14 future development projects and sites.

    The acquisition was a strategic transaction that Extra Space Storage believes unlocks another future growth channel in the remotely managed storage category.

  • They modified the term of their $300 million preferred investment in NexPoint, trading yields for longer duration and additional managed properties.

  • Leader in the Light Award

    Extra space storage received NAREIT's highest ESG and sustainability honor for real estate companies. They were recognized as a REIT that delivers strong financial results and has also created a sustainable portfolio and company that is positioned to continue providing results for the long haul.

Business Segment:

The Company has two reportable segments:

  • Self-storage operations

    The self-storage operations activities include rental operations of wholly-owned stores. The Company's consolidated revenues equal total segment revenues plus property management fees and other income.

  • Tenant reinsurance.

    Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the stores operated by the Company.

Their Competitors:

  • Public Storage

  • Life Storage

  • Cubesmart

Their financial calendar

Q1: February-April - Earnings 3rd May 2023

Q2: May-July - Earnings 2 August 2023

Q3: August-October - Earnings 1 November 2023

Q4: November-January - Around 23rd February 2024

Next Earnings Report:

Around 3rd May 2023

Positives from the last earnings report Q4FY22:

  • Increased same-store revenue by 11.8% and same-store net operating income (“NOI”) by 13.4% compared to the same period in the prior year.

  • Reported same-store occupancy of 94.2% as of December 31, 2022, compared to 95.3% as of December 31, 2021.

  • Acquired six operating stores, for a total cost of approximately $146.9 million.

  • In conjunction with joint venture partners, acquired four operating stores and completed one development for a total cost of approximately $82.1 million, of which the Company invested $22.9 million.

  • Added 46 stores (one store net) to the Company's third-party management platform. As of December 31, 2022, the Company managed 887 stores for third parties and 318 stores in unconsolidated joint ventures, for a total of 1,205 managed stores.

Challenges from the last earnings report Q4FY22:

  • Achieved net income attributable to common stockholders of $1.52 per diluted share, representing a 24.0% decrease compared to the same period in the prior year (which prior period included a $76.9 million, or $0.54/share, gain on real estate transactions).

Highlights for Fiscal Year 2022:

  • Achieved net income attributable to common stockholders of $6.41 per diluted share, representing a 3.6% increase compared to the same period in the prior year (which prior period included a $140.8 million, or $1.00/share, gain on real estate transactions).

  • Achieved FFO of $8.38 per diluted share. Core FFO was $8.44 per diluted share, representing a 22.1% increase compared to the same period in the prior year.

  • Increased same-store revenue by 17.4% and same-store net NOI by 20.3% compared to the same period in the prior year.

  • Acquired 145 operating stores, six stores at the completion of construction (a “Certificate of Occupancy store” or “C of O store”) and completed two developments for a total cost of approximately $1.4 billion.

  • In conjunction with joint venture partners, acquired 33 operating stores and completed one development for a total cost of approximately $666.9 million, of which the Company invested $110.5 million.

  • Originated $574.0 million in mortgage and mezzanine bridge loans and sold $228.7 million in mortgage bridge loans.

  • • Added 163 stores (59 stores net) to the Company's third-party management platform.

Risks to the business:

  • Adverse changes in general economic conditions, the real estate industry, and the markets in which they operate

  • Failure to close pending acquisitions and developments on expected terms, or at all

  • The effect of competition from new and existing stores or other storage alternatives, which could cause rents and occupancy rates to decline

  • Potential liability for uninsured losses and environmental contamination

  • 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 their business, which could adversely affect their results

  • Their ability to recover losses under their insurance policies

  • Disruptions in credit and financial markets and resulting difficulties in raising capital or obtaining credit at reasonable rates or at all, could impede their ability to grow

  • Impacts from the COVID-19 pandemic or the future outbreak of other 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 their results

  • Their reliance on information technologies, which are vulnerable to, among other things, attacks from computer viruses and malware, hacking, cyberattacks, and other unauthorized access or misuse, any of which could adversely affect their business and results

  • Increases in interest rates

  • Reductions in asset valuations and related impairment charges

  • Their lack of sole decision-making authority with respect to their joint venture investments

  • The effect of recent or future changes to U.S. tax laws

  • The failure to maintain their REIT status for U.S. federal income tax purposes

  • The economic uncertainty due to the impact of natural disasters, war, or terrorism, which could adversely affect their business plans.

Candy Cowan
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