Extra Space Storage(US:EXR) Yahoo Finance·2026-02-21 13:56Core Viewpoint - Extra Space Storage Inc. (NYSE:EXR) is recognized as one of the best real estate stocks to buy according to hedge funds, despite recent caution from Wells Fargo regarding the storage REIT sector [1][9]. Financial Performance - In Q4 2025, Extra Space reported core FFO growth of 2.5% for the quarter and 1.1% for the full year, indicating a slight improvement in operating conditions [3]. - Same-store revenue returned to growth, increasing by 0.4% during the quarter, supported by stronger revenue trends [3]. Market Conditions - CEO Joseph Margolis noted that 16 of the company's top 20 markets experienced year-over-year gains in move-in rates, suggesting improving customer demand [3]. - Wells Fargo expressed caution about the storage REIT sector, highlighting that stocks had already risen about 9% year-to-date due to optimism related to housing trends, but warned that 2026 outlooks might fall slightly below expectations [2]. Capital Allocation and Growth Strategy - The company repurchased approximately $141 million of its own shares, acquired 27 operating properties for $305 million, and issued $80 million in bridge loans, demonstrating a disciplined approach to capital allocation [4]. - The broad external growth platform of Extra Space is positioned to create opportunities across various channels, enhancing its competitive edge [4]. Cost Management - CFO Jeff Norman reported that same-store operating costs increased by only 1.1%, reflecting improved cost control measures [5]. - Property taxes decreased by 3.4%, and property operating expenses, including utilities, fell by more than 5%, contributing to overall cost management [5]. Marketing and Revenue Momentum - Increased marketing spending, although partially offsetting savings from cost control, has driven stronger move-in activity and supported revenue momentum heading into 2026 [6].