Group 1 - Federal Realty Trust (FRT) is highlighted as the only dividend king in the real estate sector, indicating its strong performance in maintaining and increasing dividends over time [1] - The article discusses the health of shopping centers within the real estate industry, suggesting a focus on the retail segment's resilience and potential for growth [1]

Core Viewpoint - Extra Space Storage Inc. has announced a public offering of $800 million in senior notes with a 4.950% interest rate, maturing in 2033, to support its financial operations and potential acquisitions [1][3]. Group 1: Offering Details - The public offering is priced at 99.739% of the principal amount and is expected to close around August 8, 2025, pending customary closing conditions [2][1]. - The senior notes will be fully and unconditionally guaranteed by Extra Space and certain subsidiaries [2]. Group 2: Use of Proceeds - The net proceeds from the offering will be utilized to repay outstanding amounts under lines of credit and commercial paper programs, as well as for general corporate and working capital purposes, including potential acquisitions [3]. Group 3: Company Overview - Extra Space Storage Inc. is a self-administered and self-managed real estate investment trust, a member of the S&P 500, operating 4,179 self-storage stores across 43 states and Washington, D.C., with approximately 2.9 million units and 321.5 million square feet of rentable space [6].

```markdown [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(unaudited)) The company's financial statements show an increase in total assets to **$29.4 billion** as of June 30, 2025, from **$28.8 billion** at year-end 2024, primarily driven by growth in real estate assets. For the six months ended June 30, 2025, total revenues grew to **$1.66 billion** from **$1.61 billion** year-over-year, and net income attributable to common stockholders increased to **$520.6 million** from **$399.0 million**. Net cash from operations remained stable at approximately **$1.0 billion** [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$29,368,011** | **$28,847,926** | | Real estate assets, net | $25,099,810 | $24,587,627 | | **Total Liabilities** | **$14,690,922** | **$13,988,564** | | Unsecured senior notes, net | $8,618,943 | $7,756,968 | | **Total Extra Space Storage Inc. stockholders' equity** | **$13,790,842** | **$13,947,535** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$841,618** | **$810,663** | **$1,661,615** | **$1,610,202** | | Property rental | $721,004 | $697,100 | $1,425,384 | $1,385,144 | | **Net Income** | **$262,716** | **$195,412** | **$547,641** | **$419,486** | | Net income attributable to common stockholders | $249,731 | $185,872 | $520,606 | $398,984 | | **Diluted EPS** | **$1.18** | **$0.88** | **$2.45** | **$1.88** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,025,265 | $1,010,800 | | Net cash used in investing activities | ($614,255) | ($764,767) | | Net cash used in financing activities | ($425,625) | ($269,572) | | **Net decrease in cash** | **($14,615)** | **($23,539)** | - Key investing activities in the first six months of 2025 included **$464.5 million** for real estate acquisitions and **$360.4 million** for issuing new notes receivable, partially offset by **$133.2 million** in proceeds from real estate sales and a **$200.0 million** return of investment from an unconsolidated venture[28](index=28&type=chunk) - Financing activities were dominated by significant debt turnover, with **$6.44 billion** in proceeds from new debt and **$6.97 billion** in principal payments. The company also paid **$688.1 million** in dividends to common stockholders[28](index=28&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes detail the company's structure as a self-storage REIT operating **4,179 stores** (owned and/or managed) as of June 30, 2025. Key activities include the acquisition of **45 stores** for **$697.1 million** and the sale of **12 stores** for **$133.8 million** in the first half of 2025. The company's debt portfolio totaled **$12.0 billion**, with a weighted average interest rate of **4.4%**. Segment reporting highlights two main operations: self-storage and tenant reinsurance, with self-storage operations generating **$974.2 million** in NOI for the six-month period [Note 1: Organization](index=13&type=section&id=1.%20ORGANIZATION) - Extra Space Storage Inc. is a self-administered REIT focused on owning, operating, and managing self-storage properties across the United States[32](index=32&type=chunk) - As of June 30, 2025, the company owns and/or manages a total of **4,179 stores**, comprising **2,430 stores** with direct or indirect equity interests and **1,749 stores** managed for third parties[33](index=33&type=chunk) [Note 4: Acquisitions and Dispositions](index=16&type=section&id=4.%20ACQUISITIONS%20AND%20DISPOSITIONS) Store Acquisitions Summary | Period | Number of Stores | Total Real Estate Assets Value (in thousands) | | :--- | :--- | :--- | | **Total 2025 (YTD)** | **45** | **$697,149** | | Q2 2025 | 28 | $448,928 | | Q1 2025 | 17 | $248,221 | | **Total 2024 (YTD)** | **9** | **$62,996** | - During the six months ended June 30, 2025, the company sold **12 stores** for approximately **$133.8 million**, resulting in a net gain of **$34.9 million** after accounting for losses on other asset sales[53](index=53&type=chunk) [Note 7: Earnings Per Common Share](index=18&type=section&id=7.%20EARNINGS%20PER%20COMMON%20SHARE) Earnings Per Common Share Calculation (in thousands, except per share data) | Description | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income attributable to common stockholders | $520,606 | $398,984 | | Weighted average common shares outstanding - basic | 211,895,586 | 211,433,877 | | Weighted average common shares outstanding - diluted | 211,895,586 | 220,114,016 | | **Basic EPS** | **$2.45** | **$1.88** | | **Diluted EPS** | **$2.45** | **$1.88** | [Note 10: Debt](index=22&type=section&id=10.%20DEBT) - Total term debt increased to **$12.0 billion** at June 30, 2025, from **$11.2 billion** at December 31, 2024[71](index=71&type=chunk) - As of June 30, 2025, the company's debt had a combined weighted average interest rate of **4.4%**, with **77.6%** of it being fixed-rate debt[78](index=78&type=chunk) - The company established a **$1 billion** commercial paper program in November 2024, with **$700 million** outstanding as of June 30, 2025[74](index=74&type=chunk) [Note 12: Stockholders' Equity](index=24&type=section&id=12.%20STOCKHOLDERS%27%20EQUITY) - In the first six months of 2025, the company repurchased **68,585 shares** for **$8.6 million** under its **$500 million** share repurchase program, with **$491.4 million** remaining authorized[89](index=89&type=chunk) - The company has an **$800 million** "at the market" (ATM) equity program established in April 2024, but no shares have been sold under it as of June 30, 2025[88](index=88&type=chunk) [Note 15: Segment Information](index=27&type=section&id=15.%20SEGMENT%20INFORMATION) - The company operates through two reportable segments: (1) self-storage operations and (2) tenant reinsurance. Performance is assessed by the Executive Committee based on Net Operating Income (NOI)[106](index=106&type=chunk) Segment Net Operating Income (NOI) (in thousands) | Segment | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Self-Storage Operations | $974,181 | $983,724 | | Tenant Reinsurance | $139,223 | $126,916 | | **Total Segment NOI** | **$1,113,404** | **$1,110,640** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=30&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management reports that revenue growth for the first half of 2025 was driven by acquisitions, which added **$47.6 million** in property rental revenue. However, same-store NOI decreased by **2.2%** year-over-year due to an **17.5%** increase in property taxes. The company's liquidity remains strong with **$125 million** in cash and access to credit facilities. The FFO attributable to common stockholders and unit holders was **$867.4 million** for the first six months of 2025, a slight increase from **$855.0 million** in the prior year [Properties](index=31&type=section&id=PROPERTIES) - As of June 30, 2025, the company's portfolio includes **4,179 owned and/or managed stores** across **43 states** and Washington, D.C[122](index=122&type=chunk) - The portfolio consists of **2,005 wholly-owned stores**, **11 in consolidated joint ventures**, **414 in unconsolidated joint ventures**, and **1,749 stores** managed for third parties[122](index=122&type=chunk) - The top three states by total store count are **Florida (542)**, **Texas (537)**, and **California (421)**[125](index=125&type=chunk) [Results of Operations](index=33&type=section&id=RESULTS%20OF%20OPERATIONS) Revenue Analysis for the Six Months Ended June 30 (in thousands) | Revenue Source | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Property rental | $1,425,384 | $1,385,144 | $40,240 | 2.9% | | Tenant reinsurance | $173,284 | $165,052 | $8,232 | 5.0% | | Management fees and other income | $62,947 | $60,006 | $2,941 | 4.9% | | **Total revenues** | **$1,661,615** | **$1,610,202** | **$51,413** | **3.2%** | - The **$40.2 million** increase in property rental revenue for H1 2025 was primarily due to **$47.6 million** from acquisitions, partially offset by a **$10.7 million** decrease from dispositions[127](index=127&type=chunk) Expense Analysis for the Six Months Ended June 30 (in thousands) | Expense Category | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Property operations | $451,203 | $401,420 | $49,783 | 12.4% | | General and administrative | $90,926 | $83,623 | $7,303 | 8.7% | | Depreciation and amortization | $357,622 | $391,775 | ($34,153) | (8.7)% | | **Total expenses** | **$933,812** | **$914,954** | **$18,858** | **2.1%** | [Funds From Operations (FFO)](index=35&type=section&id=FUNDS%20FROM%20OPERATIONS) FFO Reconciliation (in thousands) | Description | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income attributable to common stockholders | $520,606 | $398,984 | | Adjustments (Depreciation, Amortization, etc.) | $346,749 | $456,020 | | **FFO attributable to common stockholders and unit holders** | **$867,355** | **$855,004** | [Same-Store Results](index=36&type=section&id=SAME-STORE%20RESULTS) - The same-store pool consists of **1,829 wholly-owned, stabilized properties**[143](index=143&type=chunk) Same-Store Performance for the Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total rental revenues | $1,325,379 | $1,323,413 | 0.1% | | Total operating expenses | $383,824 | $360,981 | 6.3% | | **Net operating income (NOI)** | **$941,555** | **$962,432** | **(2.2)%** | | Square foot occupancy (period end) | 94.6% | 94.0% | 0.6% | - The increase in same-store operating expenses was driven by a **17.5%** rise in property taxes for the six-month period[144](index=144&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - As of June 30, 2025, the company had **$125.0 million** in cash and cash equivalents[149](index=149&type=chunk) Debt Profile as of June 30, 2025 | Metric | Value (USD) | | :--- | :--- | | Total face value of debt | $13,169,719,000 | | Total fixed-rate debt % | 77.6% | | Weighted average interest rate | 4.4% | - The company holds a **BBB+/Stable** rating from S&P and a **Baa2/Positive** rating from Moody's[153](index=153&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to interest rate risk, primarily through its variable-rate debt. As of June 30, 2025, approximately **$2.9 billion** of its **$13.2 billion** total debt was subject to variable rates. A hypothetical **100 basis point (1%)** change in the SOFR would impact annual earnings and cash flows by approximately **$29.4 million** - As of June 30, 2025, the company had approximately **$13.2 billion** in total debt, with **$2.9 billion** subject to variable interest rates[161](index=161&type=chunk) - A **100 basis point (1%)** increase or decrease in SOFR would change annual interest expense by approximately **$29.4 million**[161](index=161&type=chunk) [Controls and Procedures](index=41&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of June 30, 2025. There were no material changes to the internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[165](index=165&type=chunk) - No changes occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[166](index=166&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=42&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in various legal proceedings and claims arising in the ordinary course of business. Management establishes accrued liabilities for losses that are both probable and reasonably estimable, but the ultimate outcomes are inherently unpredictable - The company is subject to various legal proceedings and claims from its ordinary course of business, with outcomes that cannot be determined with certainty[167](index=167&type=chunk) [Risk Factors](index=42&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have been made to the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2024[168](index=168&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) There were no unregistered sales of equity securities during the period - None[169](index=169&type=chunk) [Exhibits](index=43&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including various agreements, indentures, and certifications by the CEO and CFO - The report includes a comprehensive list of filed exhibits, such as the Equity Distribution Agreement, merger agreements, articles of incorporation, debt indentures, and executive certifications[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) ```

Financial Data and Key Metrics Changes - Same store occupancy reached 94.6%, up 60 basis points year over year and 120 basis points sequentially from the first quarter [7] - Same store revenue growth was flat in the quarter, but there was positive year over year rate growth for new customers for the first time since March 2022 [8][11] - Core FFO guidance for the full year is maintained at $8.15 per share, with same store revenue growth anticipated between negative 0.5% and positive 1% for the full year [11][18] Business Line Data and Key Metrics Changes - The company completed one acquisition for $12 million and bought out two joint venture partners' interests in 27 properties for $326 million [9] - The bridge loan program generated $158 million in new originations, while the third-party management program added 93 stores, expanding the managed portfolio to 1,749 stores [9][10] Market Data and Key Metrics Changes - The self-storage sector continues to show resilience, with geographic diversification helping to offset softer conditions in certain regions [10] - New customer rates improved year over year by over 2% in July, indicating positive trends [22] Company Strategy and Development Direction - The company is focused on balancing pricing and occupancy to maximize revenue while pursuing strategic growth to enhance long-term shareholder value [11] - A multichannel approach combining opportunistic acquisitions and capital-light activities is being employed to create value regardless of market conditions [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while near-term revenue growth remains muted, operational discipline and investment strategy position the company well to navigate current conditions [11] - The company is optimistic about gradually improving fundamentals and expects potential acceleration in revenue growth in the second half of the year, particularly in the fourth quarter [18] Other Important Information - Same store expenses increased by 8.6%, primarily due to higher property taxes in certain states [16] - The company maintains 89% of its debt at fixed rates, with a weighted average interest rate of 4.4% and an average maturity of 4.3 years [17] Q&A Session Summary Question: Update on street rates and occupancy trends - Occupancy remained flat at 94.6% in July, with new customer rates up over 2% year over year [22] Question: Factors affecting gradual rate improvement - It takes time for positive new customer rates to flow through to revenue, with a gradual build-up expected [24] Question: Impact of LSI portfolio on same store performance - The LSI portfolio is performing as expected, with rates improving faster than Extra Space rates [37] Question: Expectations for same store revenue growth - Same store revenue growth is expected to be slightly positive in the back half of the year, with potential acceleration in the fourth quarter [44] Question: Insights on property tax expenses - Property tax increases are expected to normalize in the second half of the year [51] Question: Demand and market health - Demand is steady, and the company is capturing a disproportionate share of the market, with occupancy levels indicating a healthy market [56] Question: Future of bridge loan products - Demand for bridge loans remains strong, with no imminent paybacks expected from preferred holders [62] Question: Disposition strategy for LSI assets - The company is disposing of 22 former LSI properties to optimize the portfolio [65] Question: Market performance in NYC and Chicago - NYC saw modestly negative same store revenue, while Chicago experienced acceleration in revenue progress [71] Question: Housing market impact on storage demand - A strong housing market would be beneficial but is not necessary for recovery [75] Question: Seasonal expectations for leasing - The company expects the second half of the year to align with prior expectations, maintaining higher occupancy levels [81] Question: Customer behavior and ECRI acceptance - Existing customers are staying longer, with bad debt below 2%, indicating a healthy customer base [83] Question: Competitive dynamics in acquisition market - The company remains active in evaluating acquisition opportunities but will only pursue deals that are accretive [105]

Financial Data and Key Metrics Changes - Same store occupancy reached 94.6%, up 60 basis points year over year and 120 basis points sequentially from the first quarter [4] - Flat same store revenue growth in the quarter, with positive year over year rate growth for new customers for the first time since March 2022 [4][11] - Core FFO guidance maintained at $8.15 per share, with same store revenue growth anticipated between negative 0.5% and positive 1% for the full year [7][13] Business Line Data and Key Metrics Changes - Completed one acquisition for $12 million and bought out two joint venture partners' interests in 27 properties for $326 million [5] - Bridge loan program generated $158 million in new originations, while third-party management program added 93 stores, expanding the managed portfolio to 1,749 stores [5][6] Market Data and Key Metrics Changes - Geographic diversification continues to benefit the portfolio, with growth markets offsetting softer conditions in regions affected by new supply or emergencies [6] - New customer rates improved year over year by over 2%, indicating positive trends in July [17] Company Strategy and Development Direction - The company is focused on balancing pricing and occupancy to maximize revenue while pursuing strategic growth to enhance long-term shareholder value [8] - A multichannel approach combining opportunistic acquisitions and capital-light activities is being employed to create value regardless of market conditions [6] Management's Comments on Operating Environment and Future Outlook - Management noted that while near-term revenue growth remains muted, operational discipline and investment strategy position the company well to navigate current conditions [8] - The company is optimistic about gradually improving fundamentals and expects potential acceleration in revenue growth in the second half of the year, particularly in the fourth quarter [13][31] Other Important Information - Same store expenses increased by 8.6%, primarily due to higher property taxes in certain states [12] - The company maintains a strong balance sheet with 89% of debt at fixed rates and a weighted average interest rate of 4.4% [12] Q&A Session Summary Question: Update on street rates and occupancy trends - Occupancy remained flat at 94.6% in July, with new customer rates up over 2% year over year [17] Question: Insights on net rental rate growth - Minor headwinds in LA, but the primary driver of net decrease is the move-out activity [21] Question: Comments on gradual progress and market performance - Positive trends in customer rates are expected to compound and improve revenue in the fourth quarter [19][25] Question: Performance of the LSI portfolio - The LSI portfolio is performing as expected, with rates improving faster than Extra Space rates [27] Question: Expectations for expenses and property taxes - Anticipated deceleration in expense growth in the second half of the year [39] Question: Demand and market health - Demand is steady, with occupancy levels indicating a healthy market despite challenges from new supply [41] Question: Insights on bridge loan products and repayments - Good demand for bridge loan products, with no imminent paybacks from preferred holders [47] Question: Competitive dynamics and acquisition strategy - The company remains active in evaluating acquisition opportunities but is disciplined regarding pricing [75] Question: Markets with easing supply headwinds - Markets like Portland, Seattle, Chicago, and Denver are seeing easing supply pressures, which is expected to improve revenue [81] Question: Third-party management program performance - Strong growth in the third-party management business, with new partners contributing to expansion [85] Question: Impact of AI on customer behavior - Increased use of AI in customer inquiries, leading to higher conversion rates on the website [71] Question: Future earnings growth expectations - Improvement in rate, moderation of vacates, and expiration of state emergencies are expected to aid recovery [109]

[Q2 2025 Financial Highlights](index=1&type=section&id=Highlights%20for%20the%20three%20months%20ended%20June%2030%2C%202025) In the second quarter of 2025, Extra Space Storage reported a 34.1% increase in net income per diluted share to $1.18, but a 0.5% decrease in Core FFO per diluted share to $2.05. Same-store revenue was flat while NOI decreased by 3.1%. The company was active in acquisitions, buying out JV partners for $326.4 million, originating $157.8 million in loans, and expanding its third-party management platform Q2 2025 Key Performance Indicators (vs. Q2 2024) | Metric | Value | Change vs. Prior Year | | :--- | :--- | :--- | | Net Income per Diluted Share | $1.18 | 34.1% | | Core FFO per Diluted Share | $2.05 | (0.5%) | | Same-Store Revenue | Flat | 0.0% | | Same-Store NOI | Decrease | (3.1%) | | Ending Same-Store Occupancy | 94.6% | +60 bps | - Acquired the interest of joint venture partners in two partnerships for **$326.4 million**, gaining full ownership of 27 properties[5](index=5&type=chunk) - Originated **$157.8 million** in mortgage and mezzanine bridge loans[5](index=5&type=chunk) - Expanded the third-party management platform by a net of 74 stores, reaching a total of **2,163 managed stores**[5](index=5&type=chunk) - Paid a quarterly dividend of **$1.62 per share**[5](index=5&type=chunk) [H1 2025 Financial Highlights](index=1&type=section&id=Highlights%20for%20the%20six%20months%20ended%20June%2030%2C%202025) For the first six months of 2025, net income per diluted share rose 30.3% to $2.45, and Core FFO per diluted share increased slightly by 0.7% to $4.05. Same-store revenue grew 0.1%, while NOI declined by 2.2%. The company acquired 13 operating stores for $165.9 million and originated $211.0 million in loans during this period H1 2025 Key Performance Indicators (vs. H1 2024) | Metric | Value | Change vs. Prior Year | | :--- | :--- | :--- | | Net Income per Diluted Share | $2.45 | 30.3% | | Core FFO per Diluted Share | $4.05 | 0.7% | | Same-Store Revenue | Increase | 0.1% | | Same-Store NOI | Decrease | (2.2%) | - Acquired **13 operating stores** for a total cost of **$165.9 million**[7](index=7&type=chunk) - Originated **$211.0 million** in mortgage and mezzanine bridge loans and sold **$34.7 million**[7](index=7&type=chunk) - Added a net of **174 stores** to the third-party management platform[7](index=7&type=chunk) [CEO Commentary](index=3&type=section&id=CEO%20Commentary) CEO Joe Margolis highlighted solid second-quarter results, attributing them to historically high occupancy, stable existing customer behavior, and improving new customer rates. He noted significant activity in third-party management, bridge loans, and JV partner buyouts. The company maintained its full-year FFO and same-store guidance, citing gradually improving storage fundamentals - Performance was driven by historically high occupancy, steady existing customer behavior, and gradually improving new customer rates[6](index=6&type=chunk) - The company has maintained its annual FFO and same-store guidance at the midpoints[6](index=6&type=chunk) [Operating and Financial Review](index=4&type=section&id=Operating%20and%20Financial%20Review) This section provides a detailed review of the company's financial performance, including FFO, same-store results, investment activities, and capital structure [Funds From Operations (FFO)](index=4&type=section&id=FFO%20Per%20Share) For Q2 2025, FFO per share was $1.98, flat compared to Q2 2024. Core FFO per share was $2.05, a slight decrease from $2.06 in the prior-year period. For the six-month period, FFO per share increased to $3.91 from $3.85, and Core FFO per share rose to $4.05 from $4.02 year-over-year FFO and Core FFO Reconciliation (per diluted share) | Period | Net Income | FFO | Core FFO | | :--- | :--- | :--- | :--- | | **Q2 2025** | $1.18 | $1.98 | $2.05 | | **Q2 2024** | $0.88 | $1.98 | $2.06 | | **H1 2025** | $2.45 | $3.91 | $4.05 | | **H1 2024** | $1.88 | $3.85 | $4.02 | [Same-Store Performance](index=5&type=section&id=Operating%20Results%20and%20Same-Store%20Performance) In Q2 2025, same-store NOI decreased by 3.1% year-over-year, driven by an 8.6% increase in operating expenses, primarily a 19.2% rise in property taxes. Same-store revenue remained flat. Quarter-end occupancy for the 1,829-store pool increased to 94.6% from 94.0% in the prior year Q2 2025 Same-Store Performance vs. Q2 2024 | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $665.6 | $665.8 | 0.0% | | Operating Expenses | $191.4 | $176.3 | 8.6% | | Net Operating Income | $474.2 | $489.5 | (3.1%) | - Property taxes for the same-store pool increased **19.2% in Q2** and **17.5% in H1 2025**, mainly due to reassessments in California, Georgia, Illinois, and Texas following the Life Storage merger[11](index=11&type=chunk)[13](index=13&type=chunk) - The same-store pool was updated on January 1, 2025, to include **1,829 stores**, up from 1,071[12](index=12&type=chunk) [Investment and Management Activity](index=6&type=section&id=Investment%20and%20Property%20Management%20Activity) Through June 30, 2025, the company's total investment reached $533.7 million, including acquiring 40 wholly-owned stores for $492.3 million (which includes a $326.4 million JV buyout) and investing $41.4 million in 5 JV properties. The company originated $157.8 million in bridge loans in Q2, with an outstanding balance of $1.5 billion. As the largest US self-storage manager, it oversees 2,163 properties Investment Activity through June 30, 2025 | Investment Type | Stores | EXR Investment (million USD) | | :--- | :--- | :--- | | Wholly-Owned (Acquisitions & JV Buyouts) | 40 | $492.3 | | Joint Venture | 5 | $41.4 | | **Total EXR Investment** | **45** | **$533.7** | - In April 2025, the company was repaid its **$200.0 million** convertible preferred stock investment in SmartStop Self Storage REIT, Inc[18](index=18&type=chunk) - Outstanding bridge loan balance was approximately **$1.5 billion** at quarter-end[20](index=20&type=chunk) - As of June 30, 2025, the company managed **1,749 third-party stores** and **414 JV stores**, totaling **2,163 managed properties**[21](index=21&type=chunk) [Balance Sheet and Capital Structure](index=6&type=section&id=Balance%20Sheet) As of June 30, 2025, the company had $800.0 million available under its ATM program and repurchased $8.6 million of common stock in Q2. Total debt had a combined weighted average interest rate of 4.4% with a maturity of 4.3 years. The company maintained a strong fixed-rate debt profile, with 77.6% of total debt fixed (89.0% net of variable rate receivables) - During Q2 2025, the company repurchased **68,585 shares** for **$8.6 million** at an average price of **$125.60 per share**[23](index=23&type=chunk) - The company had **$700.0 million** in outstanding issuances under its **$1.0 billion** commercial paper program[23](index=23&type=chunk) Debt Profile as of June 30, 2025 | Metric | Value | | :--- | :--- | | Fixed-Rate Debt to Total Debt | 77.6% | | Effective Fixed-Rate Debt to Total Debt | 89.0% | | Weighted Average Interest Rate (Combined) | 4.4% | | Weighted Average Maturity | 4.3 years | [Dividends](index=7&type=section&id=Dividends) The company announced and paid a second quarter common stock dividend of $1.62 per share on June 30, 2025, to stockholders of record as of June 16, 2025 - A Q2 2025 dividend of **$1.62 per common share** was paid on June 30, 2025[25](index=25&type=chunk) [2025 Full-Year Outlook](index=8&type=section&id=Outlook) This section outlines the company's financial projections for the full year 2025, including guidance for Core FFO per share, same-store revenue, and NOI growth [2025 Guidance](index=8&type=section&id=2025%20Guidance) The company maintained its full-year 2025 guidance midpoints. The Core FFO per share range is projected to be $8.05 to $8.25. Same-store revenue growth is expected to be between -0.50% and 1.00%, with same-store NOI growth forecasted between -2.75% and 0.00%. The guidance reflects updated assumptions for interest income and expense, and equity in earnings from real estate ventures Full-Year 2025 Guidance (as of July 30, 2025) | Metric | Low | High | | :--- | :--- | :--- | | **Core FFO per share** | **$8.05** | **$8.25** | | Same-store revenue growth | (0.50)% | 1.00% | | Same-store expense growth | 4.00% | 5.00% | | **Same-store NOI growth** | **(2.75)%** | **0.00%** | | Acquisitions | $600.0M | $600.0M | | Bridge loans outstanding (avg) | $1.475B | $1.475B | - The guidance for Core FFO was slightly narrowed to **$8.05-$8.25** from the previous $8.00-$8.30, keeping the midpoint stable[26](index=26&type=chunk) - Guidance for Equity in earnings of real estate ventures was adjusted downward to **$70.5 million-$71.5 million**, reflecting the impact of JV buyouts[26](index=26&type=chunk) [Appendix](index=9&type=section&id=Appendix) This section provides supplementary information, including detailed financial statements, definitions of key non-GAAP metrics, forward-looking statements, and conference call details [Financial Statements](index=12&type=section&id=Financial%20Statements) This section contains the unaudited condensed consolidated financial statements for the periods ended June 30, 2025, including the Balance Sheets, Statement of Operations, and various reconciliations of GAAP metrics to non-GAAP measures like FFO and Same-Store NOI [Condensed Consolidated Balance Sheets](index=12&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company reported total assets of $29.37 billion, an increase from $28.85 billion at year-end 2024. Total liabilities increased to $14.69 billion from $13.99 billion over the same period, primarily due to a rise in unsecured senior notes Balance Sheet Summary (in billions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $29.37 | $28.85 | | Total Liabilities | $14.69 | $13.99 | | Total Stockholders' Equity | $13.79 | $13.95 | [Consolidated Statement of Operations](index=13&type=section&id=Consolidated%20Statement%20of%20Operations) For the three months ended June 30, 2025, total revenues were $841.6 million, up from $810.7 million in the prior-year period. Net income attributable to common stockholders increased to $249.7 million ($1.18 per share) from $185.9 million ($0.88 per share) in Q2 2024 Statement of Operations Summary - Three Months Ended June 30 | Account (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $841.6 | $810.7 | | Income from Operations | $374.0 | $304.8 | | Net Income Attributable to Common Stockholders | $249.7 | $185.9 | [Reconciliations](index=14&type=section&id=Reconciliations) This sub-section provides detailed reconciliations of GAAP Net Income to non-GAAP measures. It includes the reconciliation to Same-Store Net Operating Income for historical periods and for the full-year 2025 estimate, as well as the reconciliation of estimated GAAP EPS to estimated Core FFO per share for the full year - Provides a reconciliation of GAAP Net Income to Total Same-Store Net Operating Income for Q2 and H1 2025[40](index=40&type=chunk) - Includes a reconciliation of the estimated range for GAAP EPS to the estimated range for FFO and Core FFO per share for the full year 2025[41](index=41&type=chunk) - Details the reconciliation of estimated GAAP Net Income to estimated Same-Store NOI for the full year 2025[42](index=42&type=chunk) [Definitions](index=10&type=section&id=Definitions) This section defines key non-GAAP metrics used throughout the report. It explains the calculation and significance of Funds from Operations (FFO) and Core FFO, as well as the criteria for the company's Same-Store pool [Definition of FFO](index=10&type=section&id=Definition%20of%20FFO) FFO is defined according to NAREIT standards as net income excluding gains/losses on property sales and real estate depreciation. The company also presents Core FFO, which further adjusts for non-core items and certain costs from the Life Storage Merger, to provide what management believes is a clearer indicator of operating performance - FFO is defined per NAREIT standards, excluding gains/losses on sales of operating stores and real estate-related depreciation and amortization[32](index=32&type=chunk) - Core FFO is a company-specific metric that further excludes non-core revenues/expenses and certain non-cash costs related to the Life Storage Merger[33](index=33&type=chunk) [Definition of Same-Store](index=11&type=section&id=Definition%20of%20Same-Store) The same-store pool consists of 1,829 wholly-owned and operated stores that were stabilized by the beginning of the earliest year presented. A store is considered stabilized after being open for three years or maintaining at least 80% average occupancy for one year. This metric is intended to show performance without the effects of acquisitions or non-stabilized assets - The same-store pool includes **1,829 stores** that have been stabilized for at least three years or have held over **80% occupancy** for a year[35](index=35&type=chunk) - No assets acquired from Life Storage have been included in the same-store pool[35](index=35&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section contains a standard safe harbor statement, warning that the report includes forward-looking statements regarding outlook, acquisitions, and future performance. It cautions that actual results may differ materially due to various risks and uncertainties, such as economic conditions, competition, and interest rate changes, as detailed in the company's Form 10-K and 10-Q filings - The report contains forward-looking statements concerning plans, outlook, and future performance, which are not guarantees of future results[30](index=30&type=chunk) - Key risks include adverse economic changes, competition, failure to close pending acquisitions, interest rate fluctuations, and reliance on information technologies[30](index=30&type=chunk)[34](index=34&type=chunk) [Conference Call Information](index=9&type=section&id=Conference%20Call%20Information) The company will host a conference call to discuss these financial results on Thursday, July 31, 2025, at 1:00 p.m. Eastern Time. Details for pre-registering and accessing the live webcast are provided - A conference call is scheduled for **1:00 p.m. ET** on **July 31, 2025**, to discuss the results[28](index=28&type=chunk)

Core Viewpoint - Analysts expect Extra Space Storage (EXR) to report quarterly earnings of $2.06 per share, indicating no change from the previous year, with revenues projected at $835.79 million, reflecting a 3.1% increase year-over-year [1]. Earnings Estimates - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [2]. Key Metrics Projections - Analysts project 'Property rental' revenue to reach $716.45 million, a 2.8% increase from the prior year [4]. - 'Management and franchise fees' are expected to be $31.52 million, indicating a 5.6% year-over-year increase [4]. - 'Tenant insurance' revenue is estimated at $86.35 million, reflecting a 3.2% increase from the previous year [4]. - 'Same-store rental revenue' is projected at $531.07 million, showing a significant 26.7% increase year-over-year [5]. - 'Same-store square foot occupancy' is expected to reach 94.4%, slightly up from 94.3% in the previous year [5]. - 'Depreciation and amortization' is estimated at $178.73 million [6]. Stock Performance - Extra Space Storage shares have increased by 3.4% over the past month, compared to a 4.9% increase in the Zacks S&P 500 composite, with a Zacks Rank of 3 (Hold), indicating expected performance in line with the overall market [7].

Core Insights - Extra Space Storage (EXR) is expected to report second-quarter 2025 results on July 30, with anticipated year-over-year revenue growth and stable funds from operations (FFO) per share [1][8] Financial Performance - In the last reported quarter, EXR achieved a core FFO per share surprise of 2.04%, driven by increased revenues from higher occupancy, although high interest expenses negatively impacted results [2][5] - The Zacks Consensus Estimate for quarterly property rental revenues is $716.45 million, up from $697.1 million year-over-year, while tenant insurance revenues are projected to rise to $86.35 million from $83.71 million [4][5] - Total revenues for the second quarter are estimated to increase by 3.1% year-over-year, attributed to brand strength and acquisitions [5][8] Market Dynamics - The self-storage industry is characterized by its need-based and recession-resilient nature, with low capital expenditure requirements and high operating margins, contributing to EXR's revenue growth [3] - EXR operates in a highly fragmented market with intense competition, which affects its ability to raise rents and may impact earnings due to increased discounting [5][8] Interest Expenses and Projections - Interest expenses are projected to rise by 4.9% year-over-year in the second quarter, which is expected to weigh on FFO per share, projected to remain unchanged at $2.06 [6][8] - The company's current Earnings ESP is 0.00%, indicating uncertainty in predicting a surprise in core FFO per share for the upcoming quarter [7][9]

Company Overview - Extra Space Storage(EXR) is a member of the S&P 500 since 2015[7] - The company has 2.6 million storage units and 3,793 properties across 42 states[7] - The company has 289 million+ square feet of rentable space with 94% average occupancy in 2023[7] - The company merged with Life Storage in 2023 for $15 billion[7,11] Financial Performance & Balance Sheet - The company's net debt to EBITDA is 4.9x[7] - The company's equity market capitalization is $32.6 billion[7] - The company achieved a 336.7% 10-year total shareholder return[7] - Q1 2024 same-store revenue growth was 1.0%[7] - The company's enterprise value increased from $15.9 billion in 2017 to $46.9 billion in 2023[68] Strategic Advantages - The company has a diversified portfolio with 3,793 properties, including 1,912 wholly-owned/consolidated (51%), 472 joint venture (13%), and 1,409 managed (36%)[38] - The company estimates total 2024 synergies from the Life Storage merger to be $36 million from LSI property revenue, $16 million from tenant insurance, and $46 million from corporate overhead synergies[109]

Group 1 - The iREIT® Tracker provides comprehensive data on over 250 tickers, including quality scores, buy targets, and trim targets, focusing on various investment vehicles such as REITs, mREITs, Preferreds, BDCs, MLPs, ETFs, Builders, and Asset Managers [1] - There is a prevalent misconception in the REIT sector that issuing stock is dilutive to investors, which is frequently discussed on platforms like Seeking Alpha and social media [1] Group 2 - The investing group iREIT®+HOYA Capital, led by Brad and HOYA Capital, specializes in REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives, backed by a team of analysts with over 100 years of combined experience [2] - Brad Thomas has over 30 years of experience in real estate investing, having been involved in over $1 billion in commercial real estate transactions, and has been featured in major media outlets [3]