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1. Company Snapshot

1.a. Company Description

Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500.As of September 30, 2020, the Company owned and/or operated 1,906 self-storage stores in 40 states, Washington, D.C. and Puerto Rico.The Company's stores comprise approximately 1.4 million units and approximately 147.5 million square feet of rentable space.


The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage.The Company is the second largest owner and/or operator of self-storage stores in the United States and is the largest self-storage management company in the United States.

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1.b. Last Insights on EXR

Extra Space Storage's recent performance was negatively impacted by rising expenses, slowing rent growth, and macroeconomic uncertainty. The company's Q3 earnings revealed a 14.3% decrease in net income attributable to common stockholders, primarily due to a loss related to assets held for sale and sold. Rising competition and discounting pressures its margins and FFO. Despite a strong national footprint, the company faces headwinds from increasing supply and pricing pressure. Its dividend growth has stalled, but a 4.6% dividend yield remains attractive.

1.c. Company Highlights

2. Extra Space Storage's Q3 2025 Earnings: A Strong Performance

Extra Space Storage Inc. reported a Core FFO of $2.08 per share for Q3 2025, meeting internal expectations and slightly beating analyst estimates of $2.06. The company's same-store occupancy averaged 94.1% during the quarter, a 30 basis point improvement year-over-year. Same-store revenue prior to other income was flat, while new customer rate growth was over 3% year-over-year net of discounts. The company's financial performance was strong, with the actual EPS coming in at $2.08, relative to estimates at $2.06.

Publication Date: Nov -01

📋 Highlights
  • Core FFO Performance:: Q3 Core FFO of $2.08/share met internal targets, with full-year guidance raised to $8.12–$8.20/share.
  • Occupancy and Rate Growth:: Same-store occupancy reached 93.7% (avg. 94.1%), up 30 bps YoY, with new customer rate growth exceeding 3% net of discounts.
  • Strategic Acquisition:: $244M purchase of 24 properties in Utah/Arizona/Nevada projected to yield 4.5% leverage in Year 1 and mid-7% by Year 3, funded by disposition of 25 lower-rent assets.
  • Discounting Impact:: Strategic discounts reduced customer rate growth by 300 bps but aim to maximize long-term revenue, with net/gross growth expected to accelerate.
  • Portfolio Optimization:: Disposition of 25 assets (Florida/Gulf Coast) and 150 bps+ NOI improvement through operational efficiencies in acquired properties.

Operational Highlights

The company's operational performance was marked by a few key areas. Same-store occupancy was 93.7% at quarter-end, and the company continued to see rates accelerate. The company views marketing and R&M expenses as investments, making them as needed to drive long-term returns. As the company noted, "we solve for long-term revenue, not occupancy or rate specifically."

Acquisition and Disposition Strategy

The company completed a $244 million purchase of a 24-property portfolio in Utah, Arizona, and Nevada, which will be primarily capitalized by the disposition of 25 assets. The acquisition is expected to drive growth, with a leverage yield of about 4.5% in year 1 and getting to the mid-7s by the end of or into year 3. The company's acquisition strategy remains focused on creating accretive deals through relationships with joint venture partners.

Valuation and Growth Prospects

With a P/E Ratio of 29.69 and an EV/EBITDA of 18.92, the company's valuation metrics indicate a premium valuation. However, the company's growth prospects are encouraging, with analysts estimating revenue growth at 3.9% next year. The company's ROE is 6.9%, and the Dividend Yield is 4.85%, making it an attractive investment opportunity for income investors.

Bridge Lending Program

The Bridge Loan Program had a busy year last year, with $880 million in originations, and $330 million through the first three quarters of this year. The pricing of loans on their books averages 7.6% for A notes and 11.3% for mezzanine notes. A lower rate environment may affect growth, but the company sees countercyclicality between the acquisition market and the bridge lending business.

Outlook

The company remains positive about the future, citing improving rate trends, decreasing supply, and growing ancillary businesses. They are encouraged about 2026 and expect better performance. The company's guidance for full-year Core FFO was raised to a range of $8.12-$8.20 per share, and the same-store revenue forecast was adjusted to a range of negative 25 basis points to positive 25 basis points growth for the full year.

3. NewsRoom

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Only 3 REITs For The Next 10 Years

Dec -01

Source: seekingalpha.com

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Doves Take The Wheel

Nov -30

Source: seekingalpha.com

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Is it Wise to Retain Extra Space Storage Stock in Your Portfolio Now?

Nov -26

Source: zacks.com

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The Best Dividend Stocks to Buy and Hold Forever

Nov -24

Source: fool.com

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A Fed Divided

Nov -23

Source: seekingalpha.com

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Extra Space Storage Inc. Announces 4th Quarter 2025 Dividend

Nov -20

Source: prnewswire.com

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Trump's 50-Year Mortgage Idea Could Be A Big Gift To REITs

Nov -20

Source: seekingalpha.com

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Hawks In The House

Nov -16

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.20%)

6. Segments

Property Rental

Expected Growth: 4.0%

Growth in line with economy and population, slightly below global hypothesis due to operational constraints and market saturation.

Unallocated Management Fees and Other Income

Expected Growth: 5.0%

Potential for faster growth through expanding management services, leveraging expertise and network.

Tenant Reinsurance

Expected Growth: 4.5%

Growing with tenant numbers and insurance product expansion, slightly above core rental business.

Unallocated Equity in Earnings and Dividend Income from Unconsolidated Real Estate Entities

Expected Growth: 3.5%

Conservative growth due to dependence on external entities' performance and policies.

Unallocated Equity in Earnings of Unconsolidated Real Estate Ventures - Gain on Sale of Real Estate Assets and Purchase of Joint Venture Partner's Interest

Expected Growth: 2.0%

Conservative estimate due to variability and less predictability.

7. Detailed Products

Self Storage Units

Rentable storage spaces of various sizes to store personal or business items

Climate-Controlled Storage

Temperature-regulated storage units to protect sensitive items from extreme temperatures

Drive-Up Storage

Ground-level storage units with drive-up access for easy loading and unloading

RV and Boat Storage

Secure outdoor storage for recreational vehicles and boats

Business Storage Solutions

Customized storage solutions for businesses, including inventory management and logistics support

Moving and Packing Supplies

Retail sales of moving boxes, packing materials, and other supplies

Storage Insurance

Optional insurance coverage for stored items against damage or loss

8. Extra Space Storage Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Extra Space Storage Inc. has a low threat of substitutes due to the lack of alternative storage options for customers.

Bargaining Power Of Customers

Customers have some bargaining power due to the presence of competitors, but Extra Space Storage Inc.'s strong brand and wide network of locations mitigate this power.

Bargaining Power Of Suppliers

Suppliers have limited bargaining power due to the company's large scale and ability to negotiate favorable terms.

Threat Of New Entrants

The threat of new entrants is moderate due to the capital requirements and regulatory hurdles involved in entering the self-storage industry.

Intensity Of Rivalry

The self-storage industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.45%
Debt Cost 3.95%
Equity Weight 56.55%
Equity Cost 7.77%
WACC 6.11%
Leverage 76.84%

11. Quality Control: Extra Space Storage Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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VICI Properties

A-Score: 7.6/10

Value: 5.0

Growth: 7.7

Quality: 8.1

Yield: 10.0

Momentum: 5.0

Volatility: 10.0

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Global Self Storage

A-Score: 6.7/10

Value: 4.3

Growth: 4.3

Quality: 7.0

Yield: 10.0

Momentum: 5.5

Volatility: 9.0

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Innovative Industrial Properties

A-Score: 6.1/10

Value: 6.6

Growth: 6.3

Quality: 8.4

Yield: 10.0

Momentum: 0.5

Volatility: 4.7

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Public Storage

A-Score: 5.9/10

Value: 2.1

Growth: 5.8

Quality: 7.3

Yield: 8.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

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Prologis

A-Score: 5.7/10

Value: 1.9

Growth: 6.7

Quality: 6.7

Yield: 6.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Extra Space Storage

A-Score: 5.6/10

Value: 2.9

Growth: 6.0

Quality: 6.3

Yield: 8.0

Momentum: 2.0

Volatility: 8.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

129.56$

Current Price

129.56$

Potential

-0.00%

Expected Cash-Flows