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].

Core Insights - Extra Space Storage (EXR) is well-positioned for growth due to its strong brand value, diversified portfolio, and the recession-resilient nature of the self-storage industry [1][5] - The company is focusing on store expansion through accretive acquisitions, which is expected to support long-term growth [1][4] - However, EXR faces challenges from lower new customer rates and increased competition due to a development boom in self-storage units [1][10] Company Performance - Over the past three months, EXR shares have increased by 1.1%, while the industry has declined by 1.4% [2] - The Zacks Consensus Estimate for EXR's 2025 funds from operations (FFO) has been revised slightly upward to $8.17 [2] Growth Strategies - EXR has expanded its branded store count from 1,029 in 2013 to 4,099 as of March 31, 2025, across 43 states and Washington, D.C. [3] - The company aims for geographical diversity and growth through acquisitions, joint ventures, and third-party management services [4][8] - A year-over-year revenue increase of 2.8% is expected for 2025 [3] Industry Characteristics - The self-storage industry is characterized by low capital expenditure requirements and high operating margins, making it resilient during economic downturns [5] - Favorable demographic changes are anticipated to contribute to a 2.7% growth in property rental revenues for 2025 [5] Financial Health - As of March 31, 2025, EXR's net debt to EBITDA ratio was 5.3X, with 83.4% of asset value being unencumbered [6] - The company is focused on improving its balance sheet by reducing secured debt and increasing unencumbered assets [6] Dividend Policy - EXR has increased its dividend six times in the past five years, with a five-year annualized growth rate of 12.61% [9] - The company is expected to maintain sustainable dividend payouts due to its robust operating platform and healthy financial position [9] Competitive Landscape - The self-storage market in the U.S. is highly fragmented, with intense competition from various operators [10] - The development boom in self-storage units has increased supply, impacting EXR's ability to raise rents and leading to price sensitivity among new customers [10][11] Debt Concerns - EXR has substantial debt of approximately $12.81 billion as of March 31, 2025, with interest expenses projected to rise by 4.6% year-over-year in 2025 [11]

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

Core Viewpoint - Extra Space Storage Inc. held its Q1 2025 earnings conference call on April 30, 2025, where management discussed financial performance and future outlook [1]. Group 1: Company Overview - The conference call was led by Jared Conley, VP of Investor Relations, and included participation from CEO Joe Margolis and CFO Scott Stubbs [1][2]. - The company provided unaudited supplemental financial information on its website alongside the earnings call [3]. Group 2: Forward-Looking Statements - Management's remarks included forward-looking statements as defined by the Private Securities Litigation Reform Act, indicating that actual results may differ due to various risks and uncertainties [3][4]. - The company emphasized that these forward-looking statements are based on estimates as of April 30, 2025, and it does not assume any obligation to revise or update them [4].

Core Insights - Extra Space Storage Inc. (EXR) reported first-quarter 2025 core funds from operations (FFO) per share of $2.00, exceeding the Zacks Consensus Estimate of $1.96, marking a 2% increase from the prior-year quarter [1] - Quarterly revenues reached $820 million, slightly below the Zacks Consensus Estimate of $823.4 million, but reflecting a year-over-year increase of 2.6% [1] Financial Performance - Same-store revenues increased by 0.3% year over year to $659.7 million, driven by a rise in net rental income, partially offset by other income [3] - Same-store operating expenses rose 4.2% year over year to $192.4 million, influenced by higher property operating expenses, repairs and maintenance, and property taxes [3] - Same-store net operating income (NOI) decreased by 1.2% year over year to $467.3 million [3] Occupancy and Interest Expenses - Same-store square-foot occupancy improved by 100 basis points year over year to 93.4% as of March 31, 2025, slightly below the estimate of 93.6% [4] - Interest expenses increased to $142.4 million from $132.9 million a year ago, surpassing the estimate of $139.7 million [4] Portfolio Activity - During the first quarter, Extra Space Storage acquired 12 operating stores for approximately $153.8 million and exchanged ownership interest in 17 properties from an existing joint venture [5] - The company added 113 stores (net increase of 100) to its third-party management platform, managing a total of 2,114 stores as of March 31, 2025 [6] Balance Sheet Position - As of March 31, 2025, Extra Space Storage had $119.6 million in cash and cash equivalents, down from $138.2 million at the end of 2024 [7] - The percentage of fixed-rate debt to total debt was 78.8%, with a combined weighted average interest rate of 4.4% and a weighted average maturity of around 4.5 years [7] Shareholder Actions - The company did not issue any shares under its at-the-market program during the first quarter and had $800 million available for issuance as of March 31, 2025 [8] - Subsequent to the quarter end, EXR repurchased 68,585 shares of common stock for $8.6 million at an average price of $125.60 per share [9] 2025 Guidance - Extra Space Storage reaffirmed its 2025 core FFO per share guidance in the range of $8.00 to $8.30, with the Zacks Consensus Estimate of $8.16 falling within this range [10] - The full-year guidance is based on an expected decline of 0.75% to 1.25% in same-store revenues and a 3.75% to 5.25% increase in same-store expenses [10]

Financial Data and Key Metrics Changes - The company reported a core FFO of $2 per share, representing a 2% year-over-year increase [5][12] - Same store occupancy ended the quarter at 93.4%, an improvement of 100 basis points from Q1 2024 [5][10] - Same store revenue growth was positive at 0.3% [5] Business Line Data and Key Metrics Changes - The company completed $153.8 million in wholly owned acquisitions, adding 12 high-quality stores to its portfolio [7] - The Management Plus platform added 113 stores gross, achieving a net addition of 100 properties, bringing the third-party managed portfolio to 1,675 stores [8] Market Data and Key Metrics Changes - Street rates improved from negative 9% in Q3 last year to negative 6% by year-end, with an average slightly negative in Q1, but flat by the end of the quarter [20][21] - Occupancy in April was reported at 93.7%, a slight increase from the end of Q1 [44] Company Strategy and Development Direction - The company maintains its 2025 guidance, citing the self-storage sector's historical resilience during economic downturns [9][10] - The diversified portfolio is positioned to optimize performance across various economic cycles [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of operational metrics, including high same store occupancy and stable delinquency rates [10] - There are concerns about interest rates and economic uncertainty, but the company remains optimistic about its growth channels [9][10] Other Important Information - The company executed two bond offerings totaling $850 million, maintaining a conservative leverage profile with almost 90% of debt at fixed rates [13][14] - The company anticipates continued pressure from property taxes and uncontrollable costs [15] Q&A Session Summary Question: What is driving the improvement in street rates? - Management noted that street rates improved from negative 9% to negative 6%, with a flat trend into April, indicating a positive outlook [20][21] Question: Why did the company not raise guidance despite strong performance? - Management stated that there has been no change in customer behavior and that their systems are set to maximize revenue without needing daily instructions [26][27] Question: Can you provide an update on the impact of former Life Storage assets? - The rebranded Life Storage stores are seeing improved rentals and occupancy, with a 10.4% increase in rentals compared to the previous period [30][31] Question: What is the expected impact of property taxes on expenses? - Management indicated that property taxes and property insurance are expected to remain high, but they are actively managing these costs [50][51] Question: How is the company approaching potential recession impacts? - Management expressed confidence in their systems to optimize performance during downturns, noting that self-storage tends to perform well even in economic challenges [116][102] Question: What is the outlook for acquisitions and joint ventures? - The company has two joint venture buyouts agreed upon, which are expected to be accretive and good uses of capital [97][98]