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]

Core Insights - Extra Space Storage Inc. (EXR) has experienced a share price increase of 15.5% over the past three months, outperforming its industry average of 10.3% and its peers like Public Storage (PSA) and National Storage Affiliates Trust (NSA) [1][8] - The company has demonstrated strong fundamentals, with a solid long-term outlook, but current valuations and macroeconomic uncertainties suggest a "Hold" stance may be prudent [2][18] - Extra Space Storage has increased its dividend six times in the past five years, with a five-year annualized dividend growth rate of 12.61% [3] Financial Performance - In Q1 2025, EXR reported core funds from operations (FFO) per share of $2.00, exceeding the Zacks Consensus Estimate of $1.96, and reflecting a 2% increase from the prior year [4][8] - Same-store occupancy was reported at 93.4%, indicating strong operational performance [4][8] Strategic Growth - The company acquired 12 operating stores for $153.8 million in Q1 2025 and added 113 stores to its third-party management platform [5] - EXR's focus on improving its balance sheet includes reducing secured debt and increasing the size of its unencumbered asset pool, with 78.8% of total debt being fixed-rate as of March 31, 2025 [6][9] Market Dynamics - Demand for self-storage is supported by lifestyle changes such as downsizing and remote work, contributing to strong occupancy rates [6] - The self-storage asset class is characterized by low capital expenditure requirements and high operating margins, making it resilient during economic downturns [6] Valuation Concerns - Despite solid fundamentals, EXR's stock is trading at a forward price-to-FFO multiple of approximately 18.38X, which is higher than its industry peers [12][13] - The stock's valuation has become stretched after its recent performance, leading to caution for new investors [12][18] Revenue Growth Challenges - The company anticipates challenges in revenue growth due to new customer price sensitivity, projecting negative growth in same-store revenues for the full year 2025 [16] - Same-store net operating income (NOI) is expected to range from negative 3.00% to 0.25% growth [16] Investment Outlook - Extra Space Storage is viewed as a sector leader with strong cash flows and an attractive dividend, but the recent rally has priced in much of the near-term upside [17][18] - Investors are advised to maintain their positions while monitoring upcoming earnings and macroeconomic developments, with new investors potentially waiting for a pullback before entering [18]

I am initiating coverage on Extra Space Storage Inc. ( EXR ) with a Buy rating. This article caters to value-driven, income-oriented investors and those interested in REITs. As the largest self-storage REIT, this is my favorite option amongst peers likeI am currently a recent graduate from the Villanova School of Business in the class of 2025. I was a double major in Finance and Real Estate. I have been investing in stocks since a young age, and it’s something I am incredibly passionate about as well as res ...

Core Viewpoint - Extra Space Storage Inc. is set to release its financial results for the three and six months ending June 30, 2025, on July 30, 2025, after market close, followed by a conference call on July 31, 2025, at 1:00 p.m. Eastern Time to discuss these results [1][2]. Company Overview - Extra Space Storage Inc. is a fully integrated, self-administered, and self-managed real estate investment trust (REIT) and a member of the S&P 500 [7]. - As of March 31, 2025, the company owned and/or operated 4,099 self-storage properties, comprising approximately 2.8 million units and about 315.0 million square feet of rentable storage space [7]. - The company is the largest operator of self-storage properties in the United States, offering a wide selection of conveniently located and secure storage units, including options for boat storage, RV storage, and business storage [7]. Conference Call Details - The conference call will include a review of operating performance, discussion of recent events, and a question-and-answer period limited to registered financial analysts [2]. - A live webcast of the conference call will be available on the company's investor relations page, and participants can pre-register to receive a special dial-in number and PIN [3][4]. - A replay of the conference call will be accessible on the investor relations website starting July 31, 2025, at 5:00 p.m. ET, remaining available for one year [5]. Earnings Report Availability - The full text of the earnings report and supplemental data will be available on the company's investor relations website immediately following the earnings release on July 30, 2025 [6].

Key Takeaways EXR is expanding via acquisitions, joint ventures and third-party management to fuel long-term growth. A diversified portfolio and solid financials help EXR leverage the industry's recession-resilient nature. High supply and customer price sensitivity are limiting EXR's pricing power and pressuring revenue growth.Extra Space Storage (EXR) is well-positioned to gain from its high brand value, geographically diversified portfolio and the self-storage industry’s need-based and recession-resilie ...

Investment Ratings - Cold Storage REITs: Lineage Inc. (LINE, Buy) [5] - Industrial REITs: Prologis Inc. (PLD, Neutral) [16] - Industrial REITs: Terreno Realty Corp (TRNO, Buy) [31] - Self Storage REITs: Extra Space Storage Inc. (EXR, Buy) [44] - Self Storage REITs: Public Storage Inc. (PSA, Buy) [54] - Retail REITs: Brixmor Property Group (BRX, Buy) [63] - Retail REITs: Phillips Edison & Co (PECO, Buy) [74] Core Insights - The report highlights a mixed outlook across various REIT sectors, with some companies like LINE, TRNO, EXR, PSA, BRX, and PECO receiving "Buy" ratings, while PLD is rated "Neutral" [5][16][31][44][54][63][74] - Economic occupancy for LINE decreased by 290 basis points sequentially and 260 basis points year-over-year in Q1 2025, indicating potential challenges in maintaining occupancy levels [5] - Prologis Inc. is focusing on the implications of tariff policies on global supply chains, which may disrupt tenant activities and leasing demand [16] - Terreno Realty Corp is observing a shift in leasing dynamics post-tariff announcements, with domestic customers becoming more active compared to those operating across borders [31] - Extra Space Storage Inc. is prioritizing occupancy over rent in the current environment, reflecting a strategic shift in response to market conditions [44] - Public Storage Inc. is experiencing a significant impact from regional events, such as fires in Los Angeles, which account for 15% of its NOI [54] - Brixmor Property Group is seeing a steady increase in billed occupancy, which has risen by an average of 100 basis points over the last four years [63] Summary by Sections Cold Storage REITs - Lineage Inc. (LINE) reported a decline in economic occupancy and revenue per occupied pallet, with management expressing confidence in maintaining AFFO/share and EBITDA guidance for 2025 [5][6][7] Industrial REITs - Prologis Inc. (PLD) is navigating the complexities of global supply chains and tariff impacts, with expectations for occupancy and rent growth improvements in the second half of 2025 [16][20] - Terreno Realty Corp (TRNO) is adapting to changes in leasing activity and tenant retention amid tariff uncertainties, focusing on domestic customer engagement [31][36] Self Storage REITs - Extra Space Storage Inc. (EXR) is adjusting its strategy to prioritize occupancy over rent, with a focus on counter-cyclical demand drivers [44][46] - Public Storage Inc. (PSA) is managing its rent versus occupancy strategy while facing challenges from regional disruptions [54][56] Retail REITs - Brixmor Property Group (BRX) is experiencing a positive trend in occupancy and leasing spreads, with a focus on tenant credit and market dynamics [63][66] - Phillips Edison & Co (PECO) is observing volatility in the market due to tariff updates, impacting leasing velocity and transaction activity [74]

Core Viewpoint - Extra Space Storage Inc. (NYSE: EXR) is recommended as a Buy for income investors interested in real estate investment trusts (REITs) due to its status as the largest self-storage REIT in the U.S. and its consistent outperformance compared to peers in total return over time [1]. Group 1 - Extra Space Storage Inc. is recognized as the largest self-storage REIT in the United States [1]. - The company consistently outperforms its peers in terms of total return, making it a favored choice among investors [1].

Group 1 - Extra Space Storage (NYSE: EXR) has experienced mixed performance over the past year amid a downturn in the self-storage business, which may be nearing an end [1] - The company has over fifteen years of experience making contrarian bets based on macro views and stock-specific turnaround stories to achieve outsized returns with a favorable risk/reward profile [1]

Company Overview - Extra Space Storage Inc. is a fully integrated, self-administered and self-managed real estate investment trust, and a member of the S&P 500 [2] - As of March 31, 2025, the company owned and/or operated 4,099 self-storage properties, comprising approximately 2.8 million units and about 315.0 million square feet of rentable storage space [2] - The company is the largest operator of self-storage properties in the United States, offering a wide selection of conveniently located and secure storage units, including boat storage, RV storage, and business storage [2] Dividend Announcement - The company's board of directors declared a second quarter 2025 dividend of $1.62 per share on the common stock [1] - The dividend is payable on June 30, 2025, to stockholders of record at the close of business on June 16, 2025 [1]

PART I. FINANCIAL INFORMATION [Financial Statements (unaudited)](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(unaudited)) Unaudited condensed consolidated financial statements for Q1 2025 and 2024 provide a snapshot of the company's financial position, performance, and cash movements Balance Sheet Highlights | | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | $28,993,918 | $28,847,926 | | **Total Liabilities** | $14,215,415 | $13,988,564 | | **Total Equity** | $14,778,503 | $14,859,362 | Income Statement Highlights | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Revenues** | $819,997 | $799,539 | | **Net Income** | $284,925 | $224,074 | | **Net Income Attributable to Common Stockholders** | $270,875 | $213,112 | | **Diluted EPS** | $1.28 | $1.01 | Cash Flow Statement Highlights | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $481,404 | $465,556 | | **Net Cash Used in Investing Activities** | ($342,038) | ($282,071) | | **Net Cash Used in Financing Activities** | ($159,621) | ($233,182) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Detailed explanations supporting financial statement figures are provided, covering organization, accounting policies, acquisitions, debt, and segment information [Organization](index=12&type=section&id=1.%20ORGANIZATION) Extra Space Storage Inc. is a self-managed REIT operating **4,099 self-storage stores** across **43 states** and Washington, D.C. - The company is a fully integrated, self-administered and self-managed REIT focused on self-storage properties throughout the United States[30](index=30&type=chunk) - As of March 31, 2025, the company had equity interests in **2,424 stores** and managed an additional **1,675 stores** for third parties, totaling **4,099 stores** under its platform[31](index=31&type=chunk) [Acquisitions and Dispositions](index=15&type=section&id=4.%20ACQUISITIONS%20AND%20DISPOSITIONS) In Q1 2025, the company acquired **17 stores** for **$248.2 million** and disposed of **11 stores** for **$124.9 million**, yielding a **$35.8 million** net gain Store Acquisition Summary | Period | Number of Stores Acquired | Total Real Estate Assets (in thousands) | | :--- | :--- | :--- | | Q1 2025 | 17 | $248,221 | | Q1 2024 | 6 | $35,255 | - In Q1 2025, the company disposed of **11 stores** for approximately **$124.9 million**, recognizing a net gain of **$39.5 million**, which was offset by **$3.8 million** in losses on other assets, for a net gain of **$35.8 million**[50](index=50&type=chunk) [Debt](index=21&type=section&id=10.%20DEBT) As of March 31, 2025, total term debt was **$11.8 billion**, with **78.8%** fixed-rate and a **4.4%** weighted average interest rate Debt Composition | Debt Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Secured notes payable | $1,001,851 | $1,013,661 | | Unsecured term loans | $1,955,000 | $2,200,000 | | Unsecured senior notes | $8,875,000 | $8,025,000 | | **Total Term Debt** | **$11,831,851** | **$11,238,661** | - As of March 31, 2025, the company's percentage of fixed-rate debt to total debt was **78.8%**, and the combined weighted average interest rate was **4.4%**[74](index=74&type=chunk) - The company had **$580 million** in issuances outstanding under its **$1 billion** commercial paper program as of March 31, 2025[70](index=70&type=chunk) [Segment Information](index=26&type=section&id=15.%20SEGMENT%20INFORMATION) The company operates Self-Storage Operations and Tenant Reinsurance segments, generating **$480.8 million** and **$67.6 million** in Q1 2025 NOI respectively - The company's business is comprised of two reportable segments: (1) self-storage operations and (2) tenant reinsurance. The Chief Operating Decision Maker (CODM) uses Net Operating Income (NOI) to assess segment performance[102](index=102&type=chunk) Segment Performance (Q1 2025) | Segment (Q1 2025, in thousands) | Revenues | Net Operating Income (NOI) | | :--- | :--- | :--- | | Self-Storage Operations | $704,380 | $480,798 | | Tenant Reinsurance | $84,712 | $67,596 | | **Total Segment** | **$789,092** | **$548,394** | [Subsequent Events](index=28&type=section&id=17.%20SUBSEQUENT%20EVENTS) On April 30, 2025, the company acquired **27 properties** from two joint ventures for **$153.2 million** cash and **$258.0 million** assumed debt - On April 30, 2025, the company acquired its partners' equity interests in two joint ventures, gaining full ownership of **27 properties** for **$153.2 million** in cash and the assumption of **$258.0 million** in debt[112](index=112&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=29&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q1 2025 results, highlighting a **2.6%** revenue increase, **1.2%** same-store NOI decrease, and strong liquidity with a BBB+ credit rating [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q1 2025 total revenues increased **2.6%** to **$820.0 million** due to acquisitions, with total expenses rising **0.7%** to **$467.0 million** Revenue Performance | Revenue Type | Q1 2025 (in thousands) | Q1 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Property rental | $704,380 | $688,044 | 2.4% | | Tenant reinsurance | $84,712 | $81,347 | 4.1% | | **Total revenues** | **$819,997** | **$799,539** | **2.6%** | Expense Performance | Expense Type | Q1 2025 (in thousands) | Q1 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Property operations | $223,582 | $204,518 | 9.3% | | Depreciation and amortization | $180,356 | $196,966 | (8.4)% | | **Total expenses** | **$467,028** | **$463,711** | **0.7%** | [Funds from Operations (FFO)](index=34&type=section&id=Funds%20from%20Operations) FFO attributable to common stockholders and unit holders increased to **$428.1 million** in Q1 2025 from **$415.6 million** in Q1 2024 Funds from Operations Reconciliation | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net income attributable to common stockholders | $270,875 | $213,112 | | Adjustments (Depreciation, Amortization, etc.) | $157,227 | $102,458 | | **FFO attributable to common stockholders and unit holders** | **$428,102** | **$415,570** | [Same-Store Results](index=35&type=section&id=Same-Store%20Results) Same-store NOI decreased **1.2%** in Q1 2025 due to **4.2%** higher operating expenses, despite **0.3%** revenue growth and **93.4%** occupancy Same-Store Performance Metrics | Same-Store Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Rental Revenues | $659,736 | $657,523 | 0.3% | | Total Operating Expenses | $192,427 | $184,637 | 4.2% | | **Net Operating Income** | **$467,309** | **$472,886** | **(1.2)%** | | Square Foot Occupancy (End of Period) | 93.4% | 92.4% | +1.0% | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had **$119.6 million** cash, **$12.8 billion** total debt (**78.8%** fixed-rate), and strong BBB+/Baa2 credit ratings - The company holds a **BBB+/Stable** rating from S&P and a **Baa2** rating from Moody's Investors Service[153](index=153&type=chunk) Key Liquidity and Debt Metrics | Metric (as of March 31, 2025) | Value | | :--- | :--- | | Total face value of debt | $12,809,851,000 | | % Fixed-rate debt | 78.8% | | Weighted average interest rate | 4.4% | [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risk is interest rate risk, with **$2.7 billion** in variable-rate debt; a **100 basis point** SOFR change impacts annual earnings by **$27.1 million** - As of March 31, 2025, the company had approximately **$12.8 billion** in total debt, with about **$2.7 billion** subject to variable interest rates[160](index=160&type=chunk) - A **100 basis point** increase or decrease in SOFR would result in an approximate **$27.1 million** annual change in interest expense, earnings, and cash flows[160](index=160&type=chunk) [Controls and Procedures](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by the report[164](index=164&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[165](index=165&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=40&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in various ordinary course legal proceedings, with no expected material adverse effect on financial results - The company is subject to various claims and complaints arising in the ordinary course of business, but the outcomes are inherently unpredictable[166](index=166&type=chunk) [Risk Factors](index=40&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes occurred to risk factors previously disclosed in the company's Annual Report on Form 10-K for December 31, 2024 - No material changes have occurred to the risk factors described in the company's Annual Report on Form 10-K for the year ended December 31, 2024[167](index=167&type=chunk) [Other Information](index=40&type=section&id=ITEM%205.%20OTHER%20INFORMATION) On February 28, 2025, CEO Joseph D. Margolis adopted a Rule 10b5-1(c) trading plan for the potential sale of up to **30,000 shares** - On February 28, 2025, CEO Joseph D. Margolis adopted a trading arrangement under Rule 10b5-1(c) for the sale of up to **30,000 shares** of common stock between July 1, 2025, and April 3, 2026[171](index=171&type=chunk) [Exhibits](index=41&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including agreements, corporate documents, debt instruments, and certifications