Financial Data and Key Metrics Changes - The company reported same-store revenue growth of 0.8% for the fourth quarter, with core FFO at $2.02 per share and full-year core FFO at $8.10 per share [24][26] - The occupancy rate for the Extra Space same-store pool is currently at 93.1%, showing improvement from a negative delta of 110 basis points at the end of the previous year [43][44] - The company expects same-store revenue guidance for the EXR pool to range from negative 2% to positive 0.5% for 2024, with expense growth projected at 4% to 5.5% [12][31] Business Line Data and Key Metrics Changes - Legacy Life Storage (LSI) same-store revenue growth was reported at 1.8%, an acceleration of 80 basis points over the previous quarter [6] - The occupancy gap between LSI and Extra Space locations has narrowed from 350 basis points to approximately 200 basis points [25][26] - The company anticipates stronger property-level growth for the legacy LSI same-store pool, with revenue growth expected between 2% and 4.5% [32] Market Data and Key Metrics Changes - New supply in the market is moderating, with the company noting substantial headwinds to future new development [8] - The company is seeing positive signs in rental velocity and occupancy levels, although new customer rates remain under pressure [26][57] - The New York-New Jersey market is being negatively impacted by Northern New Jersey, while other areas like Los Angeles are performing well [82][124] Company Strategy and Development Direction - The company is focused on optimizing the performance of the recently acquired Life Storage assets while maximizing the performance of legacy Extra Space locations [24] - A robust joint venture program and strong third-party management pipelines are expected to drive capital-light growth activities [8][11] - The company aims to achieve $39 million in G&A synergies for 2024, an increase from the original forecast of $23 million [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in holding strong occupancy and maintaining current revenue levels, but noted challenges in driving revenue growth until pricing power is regained with new customers [26][57] - The long-term outlook for the storage sector remains positive, with the company emphasizing the durability of the asset class [27] - Management does not expect significant improvements in street rates for 2024, indicating a cautious approach to revenue guidance [159] Other Important Information - The company completed a $600 million bond offering in the fourth quarter and another $600 million in the first quarter of 2024, using proceeds to pay off a $1 billion variable rate bridge loan [11] - The company has migrated Life Storage customers to its tenant insurance program, expecting to achieve $16 million in synergies from this initiative [10] Q&A Session Summary Question: Can you provide color on new move-in rates and their impact on revenue guidance? - Management indicated that guidance is revenue-based and new move-in rates are one component among various factors influencing revenue assumptions [15][16] Question: What is the outlook on interest rates and their impact on guidance? - Management acknowledged that the SOFR curve driving interest expense appears aggressive, and they provided insights on their outlook for rates and refinancing activity [17][36] Question: How effective has the strategy of increasing occupancy while cutting street rates been? - Management confirmed that customer acceptance of ECRIs has remained stable, indicating that the strategy is valid and working [61] Question: What are the expectations for same-store revenue growth between EXR and LSI portfolios? - Management noted differences in occupancy and move-in rates, with LSI properties showing improvement but still lagging behind EXR [66] Question: How does the company view the dual brand strategy and its operational costs? - Management believes the dual brand strategy is beneficial for digital presence and rental growth, despite some incremental operating costs [128][139]

Part I [Business](index=5&type=section&id=Item%201.%20Business) Extra Space Storage Inc. is the largest self-storage operator in the United States, structured as a self-administered REIT - The company is a fully integrated, self-administered and self-managed real estate investment trust (REIT) and conducts substantially all of its business through an umbrella partnership REIT (UPREIT) structure[16](index=16&type=chunk)[17](index=17&type=chunk) Portfolio Overview as of December 31, 2023 | Metric | Value | | :--- | :--- | | Total Stores Owned/Operated | 3,714 | | States of Operation | 42 states and Washington, D.C. | | Net Rentable Space | ~283 million sq. ft. | | Total Units | ~2.6 million | | Managed Stores for Third Parties | 1,337 | - The company operates two distinct segments: self-storage operations (rental of wholly-owned stores) and tenant reinsurance (reinsurance of risks for tenants' stored goods)[26](index=26&type=chunk) - Key growth strategies include maximizing store performance via technology, acquiring multi-store portfolios and single stores, and utilizing a diverse capital optimization strategy for financing[27](index=27&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk) - As of **December 31, 2023**, the company had **7,618 employees**. The workforce is approximately **49% female** and **44% self-identified as people of color**[49](index=49&type=chunk)[53](index=53&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces various risks including Life Storage merger integration, competition, cybersecurity, and substantial debt - The company faces risks from the integration of the Life Storage business, including difficulties in combining operations, retaining key employees, and achieving anticipated cost savings[64](index=64&type=chunk)[65](index=65&type=chunk) - Significant competition from existing and new self-storage facilities could negatively impact occupancy levels and rental rates[66](index=66&type=chunk) - The company relies heavily on information technology and is vulnerable to cybersecurity incidents, which could harm business operations and financial condition. Compliance with evolving data privacy laws also presents a risk[68](index=68&type=chunk)[72](index=72&type=chunk) - As of **December 31, 2023**, the company had approximately **$11.3 billion** of outstanding indebtedness. This high level of debt could leave insufficient cash for operations or distributions and exposes the company to default risk[88](index=88&type=chunk) - Failure to maintain qualification as a REIT would result in significant adverse tax consequences, including being subject to U.S. federal corporate income tax and being unable to deduct distributions to stockholders[99](index=99&type=chunk) [Unresolved Staff Comments](index=18&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[105](index=105&type=chunk) [Cybersecurity](index=18&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program, based on CIS V8, is managed by a dedicated team and overseen by the Audit Committee - The cybersecurity program is designed and assessed based on the **Center for Internet Security Critical Security Controls Version 8 (CIS V8)**[108](index=108&type=chunk) - Management, including the **Senior Vice President of Information Systems** and **Vice President of Information Security and Compliance**, is responsible for assessing and managing cybersecurity threats[109](index=109&type=chunk) - The Board of Directors' **Audit Committee** has been delegated oversight of cybersecurity and other information technology risks, and it reports to the full Board on its activities[115](index=115&type=chunk)[116](index=116&type=chunk) [Properties](index=20&type=section&id=Item%202.%20Properties) As of December 31, 2023, Extra Space Storage owned or managed 3,714 stores across 42 states and D.C. Property Portfolio Breakdown (as of Dec 31, 2023) | Ownership Type | Number of Stores | | :--- | :--- | | Wholly-Owned | 1,903 | | Unconsolidated Joint Ventures | 472 | | Managed for Third Parties | 1,337 | | **Total** | **3,714** | Stabilized Store Rental Metrics | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Avg. Annual Rent per sq. ft. (Existing Customers) | $21.25 | $20.50 | | Avg. Annual Rent per sq. ft. (New Leases) | $16.19 | $18.32 | - The company's largest presence by total store count is in **Florida (465)**, **Texas (434)**, and **California (394)**[122](index=122&type=chunk) [Legal Proceedings](index=22&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not expect them to materially affect its financial condition or results of operations - The company is involved in various legal proceedings arising in the ordinary course of business, but management does not expect them to have a material adverse effect on financial results[123](index=123&type=chunk) [Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[124](index=124&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, and a $500 million share repurchase program was authorized in November 2023 - The company's common stock trades on the **NYSE** under the symbol "**EXR**"[126](index=126&type=chunk) - A three-year, **$500.0 million** share repurchase program was authorized in **November 2023**. No shares were repurchased in 2023, leaving the full authorization available[129](index=129&type=chunk) [Selected Financial Data](index=22&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not required for the current reporting period - Not required[131](index=131&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details the company's financial performance, significantly impacted by the Life Storage merger, showing revenue and FFO growth [Results of Operations (2023 vs. 2022)](index=25&type=section&id=Results%20of%20Operations) For the year ended December 31, 2023, total revenues increased by 33.1% to $2.56 billion, while total expenses rose 56.5% due to the Life Storage merger and related costs Revenues Comparison (in thousands) | Revenue Category | 2023 | 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Property rental | $2,222,578 | $1,654,735 | $567,843 | 34.3% | | Tenant reinsurance | $235,680 | $185,531 | $50,149 | 27.0% | | Management fees and other | $101,986 | $83,904 | $18,082 | 21.6% | | **Total revenues** | **$2,560,244** | **$1,924,170** | **$636,074** | **33.1%** | Expenses Comparison (in thousands) | Expense Category | 2023 | 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Property operations | $612,036 | $435,342 | $176,694 | 40.6% | | Life Storage Merger transition costs | $66,732 | $0 | $66,732 | —% | | Depreciation and amortization | $506,053 | $288,316 | $217,737 | 75.5% | | **Total expenses** | **$1,390,103** | **$888,017** | **$502,086** | **56.5%** | - Interest expense increased significantly due to higher total debt (**$11.3B** in 2023 vs. **$7.4B** in 2022) and a higher average interest rate (**4.6%** in 2023 vs. **4.1%** in 2022)[159](index=159&type=chunk) [Funds From Operations (FFO)](index=28&type=section&id=Funds%20From%20Operations) Funds from Operations (FFO) attributable to common stockholders and unit holders increased in 2023, reflecting expanded operations post-acquisitions FFO Attributable to Common Stockholders and Unit Holders (in thousands) | Year | FFO | | :--- | :--- | | 2023 | $1,352,138 | | 2022 | $1,198,809 | | 2021 | $973,966 | [Same-Store Results](index=29&type=section&id=Same-Store%20Results) Same-store net operating income increased by 2.8% in 2023, driven by higher rental revenues despite increased expenses and lower occupancy Same-Store Operating Results (913 properties) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Same-store rental revenues | $1,562,286 | $1,515,365 | 3.1% | | Same-store operating expenses | $376,166 | $361,570 | 4.0% | | Same-store net operating income | $1,186,120 | $1,153,795 | 2.8% | | Same-store square foot occupancy (year-end) | 93.0% | 94.1% | (1.1)% | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a flexible financing strategy with $11.3 billion in total debt and investment-grade credit ratings, sufficient for near-term liquidity needs Debt Profile Comparison | Metric | Dec 31, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Debt (face value) | $11,346,105 | $7,364,424 | | Debt to Total Enterprise Value | 24.2% | 25.8% | | Weighted Average Interest Rate | 4.6% | 4.1% | - The company holds investment-grade credit ratings: **Baa2 from Moody's** and **BBB+/Stable from S&P**, which was upgraded in **July 2023** in connection with the Life Storage Merger[182](index=182&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with approximately $3.0 billion of variable-rate debt, impacting annual earnings by $30.2 million per 100-basis-point change - As of **December 31, 2023**, approximately **$3.0 billion** of the company's **$11.3 billion** total debt was subject to variable interest rates[190](index=190&type=chunk) - A hypothetical **100 basis point (1%)** increase or decrease in interest rates would change annual interest expense by approximately **$30.2 million**[190](index=190&type=chunk) [Financial Statements and Supplementary Data](index=34&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for the fiscal years ended December 31, 2023, 2022, and 2021, reflecting the significant impact of the Life Storage merger [Consolidated Balance Sheets](index=37&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $27.5 billion and liabilities to $12.0 billion as of December 31, 2023, primarily due to the Life Storage merger Key Balance Sheet Data (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Real estate assets, net | $24,555,873 | $9,997,978 | | Total assets | $27,456,262 | $12,167,458 | | Total liabilities | $12,042,313 | $8,089,184 | | Total stockholders' equity | $14,390,921 | $3,259,597 | [Consolidated Statements of Operations](index=38&type=section&id=Consolidated%20Statements%20of%20Operations) For the year ended December 31, 2023, total revenues increased to $2.56 billion, but net income and diluted EPS decreased due to merger-related costs and higher expenses Key Income Statement Data (in thousands, except per share data) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Total revenues | $2,560,244 | $1,924,170 | | Income from operations | $1,170,141 | $1,050,402 | | Net income attributable to common stockholders | $803,198 | $860,688 | | Diluted EPS | $4.74 | $6.41 | [Note 5. Property Acquisitions and Dispositions](index=54&type=section&id=Note%205.%20Property%20Acquisitions%20and%20Dispositions) This note details the $12.85 billion Life Storage merger on July 20, 2023, accounted for as an asset acquisition, and other significant acquisitions - On **July 20, 2023**, the company closed its merger with Life Storage for total consideration of **$12.85 billion**, acquiring **757 wholly-owned stores** and one consolidated joint venture store[285](index=285&type=chunk)[286](index=286&type=chunk) Life Storage Merger - Fair Value of Net Assets Acquired (in thousands) | Account | Value | | :--- | :--- | | Real estate assets | $14,587,735 | | Equity investment in joint venture partnerships | $325,250 | | Unsecured senior notes (assumed) | ($2,106,866) | | **Fair value of net assets acquired** | **$12,850,127** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=79&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[406](index=406&type=chunk) [Controls and Procedures](index=79&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with an unqualified auditor's report - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of **December 31, 2023**[409](index=409&type=chunk) - Based on an evaluation using the **COSO framework**, management concluded that the company's internal control over financial reporting was effective as of **December 31, 2023**[410](index=410&type=chunk) - The independent registered public accounting firm, **Ernst & Young LLP**, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[413](index=413&type=chunk) [Other Information](index=80&type=section&id=Item%209B.%20Other%20Information) This section discloses the termination of CEO Joseph D. Margolis's Rule 10b5-1 trading arrangement on December 18, 2023 - On **December 18, 2023**, CEO **Joseph D. Margolis** terminated a **Rule 10b5-1** trading plan[422](index=422&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=80&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - None[423](index=423&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=81&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[425](index=425&type=chunk) [Executive Compensation](index=81&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[428](index=428&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=81&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the company's definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[429](index=429&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=81&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships and director independence is incorporated by reference from the company's definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[430](index=430&type=chunk) [Principal Accounting Fees and Services](index=81&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[431](index=431&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=82&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with or incorporated by reference into the Annual Report on Form 10-K - This section contains a list of all financial statements, schedules, and exhibits filed with or incorporated by reference into the Annual Report on Form 10-K[434](index=434&type=chunk) [Form 10-K Summary](index=85&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary provided - None[438](index=438&type=chunk)

Extra Space Storage (EXR) reported $797.77 million in revenue for the quarter ended December 2023, representing a year-over-year increase of 57.4%. EPS of $2.02 for the same period compares to $1.52 a year ago.The reported revenue represents a surprise of +3.13% over the Zacks Consensus Estimate of $773.59 million. With the consensus EPS estimate being $2.03, the EPS surprise was -0.49%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare t ...

Extra Space Storage (EXR) came out with quarterly funds from operations (FFO) of $2.02 per share, missing the Zacks Consensus Estimate of $2.03 per share. This compares to FFO of $2.09 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of -0.49%. A quarter ago, it was expected that this self-storage facility real estate investment trust would post FFO of $2.03 per share when it actually produced FFO of $2.02, delivering a surprise of -0. ...

Financial Performance - Achieved net income attributable to common stockholders of $1.02 per diluted share, a 32.9% decrease year-over-year, primarily due to $30.6 million in transition costs related to the Life Storage Merger[5] - Funds from operations (FFO) attributable to common stockholders was $1.89 per diluted share, with Core FFO at $2.02 per diluted share, representing a 3.3% decrease compared to the same period last year[5] - Total revenues for Q4 2023 reached $797.774 million, a 57.3% increase from $506.718 million in Q4 2022[35] - Net income attributable to common stockholders for Q4 2023 was $216.134 million, compared to $204.260 million in Q4 2022, reflecting a 5.4% increase[35] - Same-store net operating income for the year ended December 31, 2023, was $1,186.120 million, up from $1,153.795 million in 2022, indicating a growth of 2.8%[36] - The company expects fully diluted earnings per share for the year ending December 31, 2024, to range between $3.84 and $4.14[37] Revenue and Occupancy - Same-store revenue increased by 0.8%, while same-store net operating income (NOI) decreased by 0.1% year-over-year[5] - Ending same-store occupancy was reported at 93.0% as of December 31, 2023, down from 94.1% a year earlier[5] - Same-store property revenues for Q4 2023 were $391,753,000, a 0.8% increase from $388,629,000 in Q4 2022; for the year, revenues were $1,562,286,000, up 3.1% from $1,515,365,000[11] - Estimated same-store rental revenues for 2024 are projected to be between $1,640.500 million and $1,683.000 million[38] Costs and Expenses - Total expenses for Q4 2023 were $464.306 million, a significant increase from $237.148 million in Q4 2022, primarily due to higher property operations and depreciation costs[35] - The company reported interest expense of $129.665 million for Q4 2023, compared to $72.922 million in Q4 2022, marking an increase of 77.5%[35] - The company incurred $66.732 million in transition costs related to the Life Storage Merger for the year ended December 31, 2023[35] Mergers and Acquisitions - The company closed its merger with Life Storage, Inc. in an $11.6 billion all-stock transaction, adding over 1,200 stores to its platform[7] - The company reported a total cost of approximately $147.1 million for the acquisition of seven operating stores and seven Certificate of Occupancy stores[7] - The company emphasizes the importance of Funds From Operations (FFO) as a key performance metric, which excludes gains or losses on sales of operating stores and impairment write-downs[28] - Core FFO is presented to exclude non-core revenues and expenses, including certain costs associated with the Life Storage Merger[29] Management and Operations - Added 225 stores (189 stores net) to the third-party management platform, totaling 1,809 managed stores as of December 31, 2023[7] - The company managed a total of 1,809 stores as of December 31, 2023, including 1,337 stores for third-party owners and 472 stores in unconsolidated joint ventures[17] - The company originated $329.6 million in mortgage and mezzanine bridge loans and sold $181.0 million in mortgage bridge loans during the year[7] - The company originated $129.2 million in bridge loans during Q4 2023, with outstanding balances of approximately $594.7 million at quarter end[16] Financial Position - Total assets increased to $27,456,262,000 in 2023 from $12,167,458,000 in 2022, reflecting a growth of approximately 126%[34] - Real estate assets, net, rose to $24,555,873,000 in 2023, compared to $9,997,978,000 in 2022, indicating a growth of about 145%[34] - The company reported total liabilities of $12,042,313,000 in 2023, up from $8,089,184,000 in 2022, which is an increase of approximately 49%[34] - The company's additional paid-in capital surged to $14,750,388,000 in 2023 from $3,345,332,000 in 2022, marking an increase of around 341%[34] - The company’s accumulated deficit increased to $(379,015,000) in 2023 from $(135,872,000) in 2022[34] Future Outlook - Anticipates stronger revenue growth from Life Storage assets in 2024, despite expected headwinds from lower new customer rates[6] - The company expects Core FFO for 2024 to range between $7.85 and $8.15 per share, with same-store revenue growth projected between -2.00% and 0.50%[22] - The company anticipates net tenant reinsurance income between $248 million and $251 million for 2024[22] Debt and Financing - The percentage of fixed-rate debt to total debt was 73.4% as of December 31, 2023, with an effective fixed-rate debt ratio of 78.6% after accounting for variable rate receivables[20] - The company completed a public bond offering of $600.0 million in Q4 2023, with a weighted average interest rate of 4.6% and a maturity of approximately 4.8 years[18][20] - The company has $800.0 million available for issuance under its ATM program and $500.0 million authorized for stock repurchases as of December 31, 2023[19] Risks - The company faces risks including adverse changes in economic conditions and the potential failure to realize expected benefits from the Life Storage Merger[30] - The company’s same-store pool consists of 913 stores that are wholly-owned and stabilized, providing a clearer view of operating performance[31]

Extra Space Storage (EXR) , a leading self-storage real estate investment trust (REIT) in the United States, is set to release its fourth-quarter and full-year 2023 results on Feb 27 after market close. The company has been steadily expanding its footprint and diversifying its operations. As the market anticipates the earnings announcement, this article provides an in-depth preview of EXR’s expected performance in the fourth quarter of 2023, considering overall industry trends, EXR's growth strategy and rec ...

Investors are always looking for stocks that are poised to beat at earnings season and Extra Space Storage Inc. (EXR) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.That is because Extra Space Storage is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is ...

Wall Street analysts forecast that Extra Space Storage (EXR) will report quarterly earnings of $2.03 per share in its upcoming release, pointing to a year-over-year decline of 2.9%. It is anticipated that revenues will amount to $773.59 million, exhibiting an increase of 52.7% compared to the year-ago quarter.The consensus EPS estimate for the quarter has been revised 7.2% lower over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their ...

MarsBarsAsk most successful people whether their path was a straight line, and most will probably remark to the contrary. While their end result is apparently great, their road to success can be windy and filled with ups and downs. The same can be said with stocks too, as not every company is immune to downturns and resets, whether it's of their own making or not. However, so long as the company makes sound decisions and the long term growth potential is there, downturns can actually be great times to p ...

Financial Data and Key Metrics Changes - The company reported a core FFO of $2.02, which was in line with internal forecasts despite a modest miss in same-store NOI due to higher-than-expected property tax increases [4][5] - The annual core FFO guidance for 2023 was tightened to a range of $8.05 to $8.20 per share, maintaining the previous midpoint [8][19] - Same-store revenue increased by 1.9%, slightly ahead of expectations, driven by high average occupancy of 94.4% [15][35] Business Line Data and Key Metrics Changes - The integration of Life Storage properties is on track, with the company adding 49 new stores gross in the third quarter, totaling 151 year-to-date outside of the merger [16][5] - The same-store expense guidance was updated to a range of 4% to 5% for the full year, reflecting higher property taxes and insurance premiums [7][4] Market Data and Key Metrics Changes - Occupancy for Extra Space ended October at 93.9%, a 1% gap from the previous year, while Life Storage occupancy was at 90.8%, showing a slight narrowing of the gap [61][62] - New customer rates were down an average of 11.8% year-over-year in the third quarter, with a slight improvement noted in October [35][66] Company Strategy and Development Direction - The merger with Life Storage is expected to provide greater diversification, stability, and operational efficiencies, enhancing future growth opportunities [15][3] - The company is focused on capital-light external growth channels and has achieved a G&A synergy run rate of $23 million, with expectations to exceed the $100 million synergy target [5][31] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the economic environment, including wars, interest rates, and consumer health, but remains confident in the storage sector's resilience [5][34] - The company anticipates that new customer rates will improve, and existing customer performance remains strong, setting a positive outlook for 2024 [66][85] Other Important Information - S&P Global upgraded the company's credit rating to BBB+, which is expected to drive future interest expense savings [19] - The company has seen a moderation in new supply, with expectations for deliveries in 2023 to be similar to 2022, influenced by rising construction costs and interest rates [100] Q&A Session All Questions and Answers Question: How is the Life Storage portfolio responding to the Extra Space strategy? - The response is market-specific, with no significant impact observed [24] Question: Can you characterize pricing power today versus six months ago? - Pricing power for both new and existing customers remains strong, with no significant changes noted [25] Question: What is the current occupancy status? - Extra Space's occupancy is at 93.9%, while Life Storage is at 90.8% [61] Question: How do you expect the balance sheet and variable rate debt to evolve? - The company plans to reduce variable rate debt over the next 1 to 2 years [27] Question: What are the expectations for the Sunbelt markets into next year? - Job growth remains a key indicator, and while revenue growth may slow, the markets are still healthy [85] Question: How is the integration of the Life Storage properties progressing? - The integration is on track, with significant synergies expected to be realized [37] Question: What is the outlook for new supply in the storage sector? - New supply is expected to moderate due to various economic headwinds [100]