EXR 10-K & 10-Q changes, risk factors and insider trading
Extra Space Storage Inc. · NYSE · Real Estate Investment Trusts · CIK 1289490 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The use of, or inability to take advantage of the benefits of, artificial intelligence by us presents risks and challenges that may adversely impact our business and operating results or may adversely impact the demand for storage with the Company.”
New heading “Costs associated with complying with the ADA may result in unanticipated expenses.”
New heading “Our unconsolidated joint venture investments could be adversely affected by our lack of sole decision-making authority.”
Removed heading “Costs associated with complying with the Americans with Disabilities Act of 1990 may result in unanticipated expenses.”
Removed heading “Our joint venture investments could be adversely affected by our lack of sole decision-making authority.”
Largest changes
“From time to time, we, and certain of our service providers, are subject to cyberattacks and security incidents. While to date, we do not believe that we have experienced any significant system failure, accident or security breach, this risk has generally increased as the number, intensity and sophistication of such breaches and attempted breaches from around the world have increased. …”see in full comparison
“From time to time, we, and certain of our service providers, are subject to cyberattacks and security incidents. While to date, we do not believe that we have experienced any significant system failure, accident or security breach, this risk has generally increased as the number, intensity and sophistication of such breaches and attempted breaches from around the world have increased. …”see in full comparison
“We rely on information technology networks and systems, including the Internet, to process, transmit and store confidential information, and to manage or support a variety of business processes, including financial transactions and records, intellectual property, proprietary business information, and personal information of our employees, contractors and customers, such as tenant and lease data (collectively, “Confidential Information”). …”see in full comparison
“We rely on information technology networks and systems, including the Internet, to process, transmit and store confidential information, and to manage or support a variety of business processes, including financial transactions and records, intellectual property, proprietary business information, and personal information of our employees, contractors and customers, such as tenant and lease data (collectively, “Confidential Information”). …”see in full comparison
“The use of, or inability to take advantage of the benefits of, artificial intelligence by us presents risks and challenges that may adversely impact our business and operating results or may adversely impact the demand for storage with the Company.”see in full comparison
“Uncertainty around the safety and security of new and emerging AI applications may require additional investment in the development of proprietary datasets, machine learning models and systems to test for security, accuracy, bias and other variables, which are often complex, may be costly and could impact our operating results. Cybersecurity threat actors may also utilize AI tools to automate and enhance cybersecurity attacks against us and could lead to data breaches, loss of confidential or sensitive information, and financial or reputational harm.”see in full comparison
Full comparison: every changed paragraph (32)
Our performance is subject to risks associated with real estate investments. We are a real estate company that derives our income from the operation of our stores. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and results of operations. There are a number of factors that may adversely affect the income that our stores generate, including the following:
Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change. Therefore, the amount of property taxes we are required to pay could increase substantially from the property taxes we currently pay or have paid in the past, including on a retroactive basis. If our property taxes we pay increase, our cash flow would be adversely impacted, and our ability to pay any expected dividends to our stockholders and unit holders could be adversely affected.
The impact of natural disasters, public health emergencies and any government responses to such emergencies, or regulations passed in an attempt to protect consumers could lead to lower demand for storage facilities, lower rental rates, inability to raise rents, reduced late fee collection and impaired ability to hold auctions resulting in higher accounts receivable and bad debt. Although the self-storage industry has historically been resilient to ordinary market downturns, the impact of natural disasters, public health emergencies and related regulations, including those that limit our ability to raise rents, could materially and adversely affect our results of operations and will largely depend on future developments, which are highly uncertain and cannot be predicted.
We rely on information technology networks and systems, including the Internet, to process, transmit and store confidential information, and to manage or support a variety of business processes, including financial transactions and records, intellectual property, proprietary business information, and personal information of our employees, contractors and customers, such as tenant and lease data (collectively, “Confidential Information”). We also rely on third-party vendors for information technology and services, including commercially available systems, software, tools and monitoring to provide security for the processing, transmission and storage of Confidential Information. Our information technology systems and those of our third-party service providers, strategic partners and other contractors or consultants are vulnerable to attack and damage or interruption from computer viruses and malware (e.g. ransomware), software or hardware errors, misconfigurations, bugs or other vulnerabilities, malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, and sophisticated nation-state and nation-state-supported actors. Additionally, any integration of artificial intelligence in our or any third party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges. Furthermore, remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks. Although we have taken steps to protect the security of our information technology systems and Confidential Information, it is possible that our cybersecurity risk management program and processes, including our policies, safety and security measures, will not be fully implemented, complied with or able to prevent such systems’ improper functioning or damage, or the improper accessing or disclosure of Confidential Information, from such security breaches, disruptions, and shutdowns. The costs associated with the investigation, remediation and potential notification of such breaches to counter-parties and data subjects could be material.
From time to time, we, and certain of our service providers, are subject to cyberattacks and security incidents. While to date, we do not believe that we have experienced any significant system failure, accident or security breach, this risk has generally increased as the number, intensity and sophistication of such breaches and attempted breaches from around the world have increased. Furthermore, because the technologies used to obtain unauthorized access to, or to sabotage or disrupt, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using sophisticated tools and techniques (including artificial intelligence) that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. Any failure to maintain the proper functioning, confidentiality, integrity and availability of our or our third-party service providers’ information technology systems or our Confidential Information could interrupt our operations, damage our reputation, divert significant management attention and resources to remedy any damages that result, subject us to liability and claims (including class actions) or regulatory investigations and enforcement actions, which could result in, among other things, fines and penalties, and have a material adverse effect on our business, financial condition and results of operations. Further, our insurance coverage may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.
The use of, or inability to take advantage of the benefits of, artificial intelligence by us presents risks and challenges that may adversely impact our business and operating results or may adversely impact the demand for storage with the Company.
We have begun and may continue to use artificial intelligence and machine learning (collectively, “AI”) tools in our operations. We use AI in assessing marketing decisions and operating our stores. However, there can be no assurance that we will realize the desired or anticipated benefits, or any benefits, and we may fail to properly implement such technology. While AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, bias, infringement or misappropriation of intellectual property. The use of AI tools may introduce errors or inadequacies that are not easily detectable, including deficiencies, inaccuracies, or biases in the data used for AI training, or in the content, analyses, or recommendations generated by AI applications. Additionally, if our peers use AI tools to optimize operations and we fail to utilize AI tools in a comparable manner, we may be competitively disadvantaged.
New laws and regulations are being adopted, and existing laws and regulations may be interpreted, in ways that could affect our business operations and the way in which we use AI. Our ongoing efforts to comply with privacy and data protection laws, as well as initiatives to comply with new legal regulations relating to privacy, data protection and AI, impose significant costs and challenges that are likely to increase over time. Additionally, this complex and rapidly evolving landscape around AI may expose us to claims, inquiries, demands and proceedings by private parties and global regulatory authorities and subject us to legal liability as well as reputational harm.
Uncertainty around the safety and security of new and emerging AI applications may require additional investment in the development of proprietary datasets, machine learning models and systems to test for security, accuracy, bias and other variables, which are often complex, may be costly and could impact our operating results. Cybersecurity threat actors may also utilize AI tools to automate and enhance cybersecurity attacks against us and could lead to data breaches, loss of confidential or sensitive information, and financial or reputational harm.
These outcomes could impair our ability to compete effectively, damage our reputation, result in the loss of valuable property or information and adversely affect our business, financial condition, and results of operations.
Costs associated with complying with the Americans with Disabilities Act of 1990 may result in unanticipated expenses.
We rely on information technology networks and systems, including the Internet, to process, transmit and store confidential information, and to manage or support a variety of business processes, including financial transactions and records, intellectual property, proprietary business information, and personal information of our employees, contractors and customers, such as tenant and lease data (collectively, “Confidential Information”). We also rely on third-party vendors for information technology and services, including commercially available systems, software, tools and monitoring to provide security for the processing, transmission and storage of Confidential Information. Our information technology systems and those of our third-party service providers, strategic partners and other contractors or consultants are vulnerable to attack and damage or interruption from computer viruses and malware (e.g. ransomware), misconfigurations, bugs or other vulnerabilities, malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, and sophisticated nation-state and nation-state-supported actors. Although we have taken steps to protect the security of our information technology systems and Confidential Information, it is possible that our cybersecurity risk management program and processes, including our policies, safety and security measures, will not be fully implemented, complied with or able to prevent such systems’ improper functioning or damage, or the improper accessing or disclosure of Confidential Information, from such security breaches, disruptions, and shutdowns. The costs associated with the investigation, remediation and potential notification of such breaches to counter-parties and data subjects could be material.
From time to time, we, and certain of our service providers, are subject to cyberattacks and security incidents. While to date, we do not believe that we have experienced any significant system failure, accident or security breach, this risk has generally increased as the number, intensity and sophistication of such breaches and attempted breaches from around the world have increased. Furthermore, because the technologies used to obtain unauthorized access to, or to sabotage or disrupt, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. Any failure to maintain the proper functioning, confidentiality, security and availability of our or our third-party service providers' information technology systems or our Confidential Information could interrupt our operations, damage our reputation, divert significant management attention and resources to remedy any damages that result, subject us to liability and claims or regulatory investigations and enforcement actions, which could result in, among other things, fines and penalties, and have a material adverse effect on our business, financial condition and results of operations. Further, our insurance coverage may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.
Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change. Therefore, the amount of property taxes we are required to pay could increase substantially from the property taxes we currently pay or have paid in the past, including on a retroactive basis. If our property taxes we pay increase, our cash flow would be adversely impacted, and our ability to pay any expected dividends to our stockholders and unitholders could be adversely affected.
The impact of natural disasters, public health emergencies and any government responses to such emergencies, or regulations passed in an attempt to protect consumers could lower demand for storage facilities, lead to lower rental rates, inability to raise rents, reduced late fee collection and impaired ability to hold auctions resulting in higher accounts receivable and bad debt. Although the self-storage industry has historically been resilient to ordinary market downturns, the impact of natural disasters, public health emergencies and related regulations including those that limit our ability to raise rents could materially and adversely affect our results of operations and will largely depend on future developments, which are highly uncertain and cannot be predicted.
Costs associated with complying with the ADA may result in unanticipated expenses.
Risks Related to Our OrganizationQualification and StructureOperation as a REIT
Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited judicial and administrative interpretations. The complexity of these provisions and of the applicable Treasury regulations that have been promulgated under the Internal Revenue Code is greater in the case of a REIT that, like us, holds its assets through a partnership. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets, the sources of our gross income and the owners of our stock. Our ability to satisfy the asset tests depends upon our analysis of the fair market value of our assets, some of which are not susceptible to precise determination, and for which we will not obtain independent appraisals. Our ability to satisfy the income tests depends on the sources and amounts of our gross income, which we may not be able to control. Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, and we will be subject to U.S. federal corporate income tax to the extent we distribute for any year less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including net capital gains.
Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations. The maximum U.S. federal income tax rate for qualified dividends paid by domestic non-REIT corporations to U.S. stockholders that are individuals, trust or estates is generally 20%. Dividends paid by REITs to such stockholders are generally not eligible for that rate, but under current tax law, such stockholders may deduct up to 20% of ordinary dividends (i.e., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT. Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends. This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of stock of REITs, including our stock. In addition, the relative attractiveness of real estate in general may be adversely affected by the favorable tax treatment given to corporate dividends, which could negatively affect the value of our stores.
Our joint venture investments could be adversely affected by our lack of sole decision-making authority.
As of December 31, 2024, we held interests in 469 operating stores through joint ventures. Some of these arrangements could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers' financial conditions and disputes between us and our co-venturers. We expect to continue our joint venture strategy by entering into additional joint ventures for the purpose of developing new stores and acquiring existing stores. In such event, we would not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity. The decision-making authority regarding the stores we currently hold through joint ventures is either vested exclusively with our joint venture partners, is subject to a majority vote of the joint venture partners or is equally shared by us and the joint venture partners. In addition, investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions. Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or joint venture. Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and efforts on our business. Consequently, actions by or disputes with partners or co-venturers might result in subjecting stores owned by the partnership or joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers, which could harm our financial condition.
As of December 31, 2024, the total outstanding balance under investments in debt securities and notes receivable was $1.6 billion, including $1.2 billion outstanding under our bridge loan program. Further, as of December 31, 2024, the total outstanding balance of our investments in unconsolidated real estate entities, net of cash distributions, was $1.3 billion, of which $350 million was invested in the preferred stock of entities affiliated with SmartStop. Although we conduct due diligence and aim to carefully evaluate the risks associated with these debt and other investments, we could incur losses from our lending and investing decisions, which includes subjective and complex judgments and forecasts of economic conditions and how these economic predictions might impair the ability of our borrowers and unconsolidated real estate entities to operate their business and/or make all required payments. For example, volatility of the capital and credit markets, increased interest rates, lower demand for storage and general economic conditions may adversely affect the solvency, creditworthiness or operations of our borrowers and entities in which we have invested. If our forecasts prove incorrect, or if any of our borrowers and unconsolidated real estate entities fail to perform as expected, we may incur losses from these investments which could have a material adverse effect on our operating revenue and results of operations.
Uncertainty in the credit and financial markets may negatively impact our ability to access additional debt financing or to refinance existing debt maturities on favorable terms (or at all), which may negatively affect our ability to make acquisitions and fund development projects. Credit and financial markets can be volatile and may be impacted by diminished liquidity and credit availability, rising interest and inflation rates, declines in economic growth and uncertainty about economic stability as well as geopolitical events such as the ongoing conflict between Russia and Ukraine, Israel and Hamas, and Israel and Iran, terrorism, civil unrest and acts of war. A downturn in the credit and financial markets may cause us to seek alternative sources of potentially less attractive financing and may require us to adjust our business plan accordingly. In addition, these factors may make it more difficult for us to sell stores or may adversely affect the price we receive for stores that we do sell, as prospective buyers may experience increased costs of debt financing or difficulties in obtaining debt financing.
As of December 31, 2025, we had approximately $13.5 billion of debt outstanding, of which approximately $2.4 billion or 17.9% was subject to variable interest rates (excluding debt with interest rate swaps). This variable rate debt had a weighted average interest rate of approximately 4.8% per annum. Increases in interest rates on this variable rate debt would increase our interest expense, which could harm our cash flow and our ability to pay cash distributions.
As of December 31, 2024,2025, we had approximately $12.6$13.5 billion of outstanding indebtedness. We may incur additional debt in connection with future acquisitions and development. We may borrow under our revolving lines of credit and commercial paper program or borrow new funds to finance these future stores. Additionally, we do not anticipate that our internally generated cash flow will be adequate to repay our existing indebtedness upon maturity and, therefore, we expect to repay our indebtedness through refinancings and equity and/or debt offerings. Further, we may need to borrow funds in order to make cash distributions to maintain our qualification as a REIT or to make our expected distributions. To qualify as a REIT, we generally must distribute to our stockholders annually at least 90% of our REIT taxable income each year,income, determined without regard to the dividends paid deduction and excluding net capital gains, and we are subject to U.S. federal corporate income tax to the extent that we distribute for any year less than 100% of our REIT taxable income each year,income, determined without regard to the deduction for dividends paid and including net capital gains.
As of December 31, 2024, we had approximately $12.6 billion of debt outstanding, of which approximately $3.0 billion or 24.2% was subject to variable interest rates (excluding debt with interest rate swaps). This variable rate debt had a weighted average interest rate of approximately 5.4% per annum. Increases in interest rates on this variable rate debt would increase our interest expense, which could harm our cash flow and our ability to pay cash distributions.
Risks Related to QualificationOur Organization and Operation as a REITStructure
Our unconsolidated joint venture investments could be adversely affected by our lack of sole decision-making authority.
As of December 31, 2025, we held interests in 407 operating stores through unconsolidated joint ventures. Some of these arrangements could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial conditions and disputes between us and our co-venturers. We expect to continue our joint venture strategy by entering into additional joint ventures for the purpose of developing new stores and acquiring existing stores. In such event, we would not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity. The decision-making authority regarding the stores we currently hold through joint ventures is either vested exclusively with our joint venture partners, is subject to a majority vote of the joint venture partners or is equally shared by us and the joint venture partners. In addition, investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions. Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or joint venture. Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and efforts on our business. Consequently, actions by or disputes with partners or co-venturers might result in subjecting stores owned by the partnership or joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers, which could harm our financial condition.
As of December 31, 2025, the total outstanding balance under investments in debt securities and notes receivable was $1.8 billion, including $1.5 billion outstanding under our bridge loan program. Further, as of December 31, 2025, the total outstanding balance of our investments in unconsolidated real estate entities, net of cash distributions, was $993 million, of which $250 million was invested in the preferred stock of entities affiliated with SmartStop. Although we conduct due diligence and aim to carefully evaluate the risks associated with these debt and other investments, we could incur losses from our lending and investing decisions, which includes subjective and complex judgments and forecasts of economic conditions and how these economic predictions might impair the ability of our borrowers and unconsolidated real estate entities to operate their business and/or make all required payments. For example, volatility of the capital and credit markets, increased interest rates, lower demand for storage and general economic conditions may adversely affect the solvency, creditworthiness or operations of our borrowers and entities in which we have invested. If our forecasts prove incorrect, or if any of our borrowers and unconsolidated real estate entities fail to perform as expected, we may incur losses from these investments which could have a material adverse effect on our operating revenue and results of operations.
Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations. The maximum U.S. federal income tax rate for qualified dividends paid by domestic non-REIT corporations to U.S. stockholders that are individuals, trust or estates is generally 20%. Dividends paid by REITs to such stockholders are generally not eligible for that rate, but under current tax law, such stockholders may deduct up to 20% of ordinary dividends (i.e., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning before January 1, 2026. Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends. This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of stock of REITs, including our stock. In addition, the relative attractiveness of real estate in general may be adversely affected by the favorable tax treatment given to corporate dividends, which could negatively affect the value of our stores.
Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited judicial and administrative interpretations. The complexity of these provisions and of the applicable Treasury regulations that have been promulgated under the Internal Revenue Code is greater in the case of a REIT that, like us, holds its assets through a partnership. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets, the sources of our gross income and the owners of our stock. Our ability to satisfy the asset tests depends upon our analysis of the fair market value of our assets, some of which are not susceptible to precise determination, and for which we will not obtain independent appraisals. Our ability to satisfy the income tests depends on the sources and amounts of our gross income, which we may not be able to control. Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, and we will be subject to U.S. federal corporate income tax to the extent we distribute less than 100% of our REIT taxable income, without regard to the dividends paid deduction and including net capital gains.
Management's Discussion & Analysis (MD&A)
New heading “Amounts in thousands, except store and share data”
New heading “Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024”
Removed heading “Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022”
Largest changes
“In January 2021, we received a Baa2 rating from Moody's Investors Service, and in July 2019, we obtained a BBB/Stable rating from S&P which was upgraded to BBB+/Stable in July 2023 in connection with the Life Storage Merger. We intend to manage our balance sheet to maintain these ratings. Certain of our real estate assets are pledged as collateral for our debt. As of December 31, 2024, we had a total of 1,745 unencumbered stores as defined by our public bonds. …”see in full comparison
“We hold a BBB+/Stable rating from S&P, which was upgraded from BBB/Stable in July 2023 in connection with the Life Storage Merger, and a Baa2/Stable rating from Moody’s Investors Service. We intend to manage our balance sheet to maintain these ratings. Certain of our real estate assets are pledged as collateral for our debt. As of December 31, 2025, we had a total of 1,775 unencumbered stores as defined by our public bonds. …”see in full comparison
“Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024”see in full comparison
“Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022”see in full comparison
“In November 2024, we established our commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes. The aggregate principal amount outstanding under the program at any time cannot exceed $1.0 billion, and the net proceeds of the commercial paper notes are expected to be used for general corporate purposes. The maturities of the notes generally range from overnight to three months, with a maximum of up to 13 months. …”see in full comparison
Full comparison: every changed paragraph (45)
We are a fully integrated, self-administered and self-managed REIT,REIT formedthat toowns, own,operates, operate,manages, manage,acquires, acquire, developdevelops and redevelopredevelops self-storage properties (“stores”). and provides lending to owners of stores located throughout the United States. We derive substantially all of our revenues from our two segments: self-storage operations and tenant reinsurance. Primary sources of revenue for our self-storage operations segment include rents received from tenants under leases at eachstores ofthat ourare wholly-owned stores.and in consolidated joint ventures. Our operating results depend materially on our ability to lease available self-storage units, to actively manage unit rental rates, and on the ability of our tenants to make required rental payments. Consequently, management spends a significant portion of their time maximizing cash flows from our diverse portfolio of stores. Revenue from our tenant reinsurance segment consists of insurance revenues from the reinsurance of risks relating to the loss of goods stored by tenants in our stores.
Our stores are generally situated in highly visible locations clustered around large population centers. The clustering of our assets around these population centers enables us to reduce our operating costs through economies of scale. To maximize the performance of our stores, we employ industry-leading revenue management systems. Developed by our management team, these systems enable us to analyze, set and adjust rental rates daily across our portfolio in order to respond to changing market conditions. We believe our systems and processes allow us to more pro-activelyproactively manage revenues.
We operate in competitive markets, often where consumers have multiple stores from which to choose. Competition has impacted, and will continue to impact, our store results. We experience seasonal fluctuations in occupancy levels, with occupancy levels generally higher in the summer months due to increased moving activity. We believe that we are able to respond quickly and effectively to changes in local, regional and national economic conditions by adjusting rental rates through the combination of our revenue management team and our industry-leading technology systems. We consider a store to be in the lease-up stage after it has been issued a certificate of occupancy, but before it has achieved stabilization. We consider a store to be stabilized once it has achieved either an 80% occupancy rate for a full year measured as of January 1 of the current year, or has been open for three years prior to January 1 of the current year.
EVALUATION OF ASSET IMPAIRMENT: Long lived assets held for use are evaluated for impairment when events or circumstances indicate that there may be impairment. We review each store at least annually to determine if any such events or circumstances have occurred or exist. We focus on stores wherethat occupancydo and/or rental incomenot have decreasedpositive bycash a significant amount.flow. For these stores, we determine whether the decreasenegative cash flow is temporary orfor permanent and whether the store will likely recover the lost occupancy and/or revenue in the short term. In addition, we reviewlease-up stores inor thecaused lease-upby stageother and compare actual operating results to original projections.factors. We may not have identified all material facts and circumstances that affect impairment of our stores. No material impairments were recorded in the year ended December 31, 2024.2025.
We evaluate goodwill for impairment at least annually and whenever events, circumstances, and other related factors indicate that fair value of the related reporting unit may be less than the carrying value. If the fair value of the reporting unit is determined to exceed the aggregate carrying amount, no impairment charge is recorded. Otherwise, an impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value. No impairments of goodwill were recorded in our evaluations for any period presented herein.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: We hold a number of derivative instruments which we use to hedge our exposure to variability in expected future cash flows, mainly related to our interest rates on variable interest debt. We do not use derivatives for trading or speculative purposes. We assess our derivatives both at inception and on an ongoing quarterly basis for whether the derivatives used in hedging transactions are effective. The rules and interpretations relating to the accounting for derivatives are complex. Failure to apply this guidance correctly may require us to recognize all changes in fair value of the hedged derivative in earnings, which may materially impact our results.
INCOME TAXES: We have elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code. In order to maintain our qualification as a REIT, among other requirements, we are required to distribute annually at least 90% of our REIT taxable income to our stockholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to U.S. federal income tax with respect to that portion of our income which meets certain criteria and is distributed annually to our stockholders. We plan to continue to operate so that we meet the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. For any taxable year that we fail to qualify as a REIT and for which applicable statutory relief provisions did not apply, we would be subject to U.S. federal corporate income tax on all of our taxable income for at least that year and the ensuing four years. We could also be subject to penalties and interest, and our net income may be materially different from the amounts reported in our financial statements.
Amounts in thousands, except store and share data
Results for the year ended December 31, 20242025 included the operations of 2,425 stores (2,007 wholly-owned, 11 in consolidated joint ventures, and 407 in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2024, which included the operations of 2,436 stores (1,967 wholly-owned, nine in consolidated joint ventures, and 460 in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2023, which included the operations of 2,377 stores (1,903 wholly-owned, two in consolidated joint ventures, and 472 in joint ventures accounted for using the equity method). Material or unusual changes in the results of our operations are discussed below:
Property Rentalrental—The increase in property rental revenue for the year ended December 31, 20242025 was primarily the result of an increase of $570,407$104,706 associated with our merger with Life Storage on July 20, 2023, (the “Life Storage Merger” or “Merger”) and other acquisitions completed in 20232024 and 2024.2025. WeThe acquired 757 wholly-owned storesincrease in therevenue Mergerresulting andfrom anthese additionalacquisitions 14was storespartially duringoffset by a decrease in property rental revenue of $21,728 due to property dispositions over the yearsame ended December 31, 2023.period. We acquired 58 wholly-owned stores and disposed of six wholly-owned stores during the year ended December 31, 2024. TheWe increaseacquired is76 alsowholly-owned attributedstores toand disposed of 37 wholly-owned stores during the Lifeyear Storageended storesDecember being31, on our platform for a full 12 months in 2024 in comparison with five months in 2023.2025. In addition to the increase attributable to the Merger,addition, property rental revenue increased by $5,440$8,755 due to improved operating results at our same-store pool and increased by $4,892 as a result of increases in occupancy at our lease-up stores.properties.
Tenant Reinsurancereinsurance—The increase in tenant reinsurance revenue was due primarily to an increase in the number of stores operated, as well as the Life Storage stores being on our platform for a full 12 months in 2024 in comparison with five months in 2023.operated. We operated 4,281 stores at December 31, 2025, compared to 4,011 stores at December 31, 2024, compared to 3,714 stores at December 31, 2023.2024.
Management Feesfees and Otherother Incomeincome—Management fees and other income primarily represent the fees collected for our management of stores owned by third parties and unconsolidated joint ventures and other transaction fee income. The increase for the year ended December 31, 20242025 was primarily due to both an increase in the number of stores managed.managed and an increase in the overall revenue of stores under management when compared to the same period last year. As of December 31, 2024,2025, we managed 2,0441,856 stores for third partiesparty and unconsolidated joint ventures,owners, compared to 1,8111,575 stores as of December 31, 2023.2024. These increases are offset by a decrease in management fees attributable to stores in unconsolidated joint ventures, where the number of stores decreased from 460 to 407 over the same period.
Property Operationsoperations—The increase in property operations expense consists primarily of an increase of $186,294$50,721 associatedrelated with the Life Storage Merger and otherto acquisitions completed in 20232025 and 2024. We acquired 75758 wholly-owned stores in the merger2024 and an76 additional 14wholly-owned stores during the year ended December 31, 2023.2025. WeAdditionally, acquired 58 stores duringfor the year ended December 31, 2024.2025, Thethere was an increase isof also attributed to the Life Storage stores being on our platform for a full 12 months in 2024 in comparison with five months in 2023. Additionally, property operations expense increased $23,122$35,689 at our same-store poolproperties primarily due to increasedan marketingincrease expense,in payroll,property taxes, payroll and propertybenefits, taxes.marketing, and repairs and maintenance expenses.
Tenant Reinsurancereinsurance—Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance. The increase in tenant reinsurance expenseand foris thesubject yearto ended December 31, 2024 wasvolatility due primarily to theincreased increaseclaims inarising totalwhen numbersignificant ofevents stores operated compared to the prior year. We operated 4,011 storesoccur at December 31, 2024, compared to 3,714 stores at December 31, 2023.stores.
Life Storage Merger Transition Costs—Represents the costs that were incurred as part of the Life Storage Merger primarily consisting of severance paid as part of employment agreements with certain employees and officers of Life Storage.
General and Administrativeadministrative—General and administrative expenses primarily include all expenses not directly related to our stores, including corporate payroll, office expense, office rent, travel and professional fees. These expenses are recognized as incurred. Our overall General and Administrativeadministrative expense has increased primarily as a result of ourstock increasedcompensation sizeexpense, throughwhich acquisitions,includes businessthe combinationsacceleration andof growthexpense throughdue ourto jointan ventureexecutive partnersofficer’s and managed portfolio. No other material trends in specific travel or other expenses were observed.retirement.
Depreciation and amortization—We amortize to expense intangible assets-customer intangibles on a straight-line basis over the average period that a tenant is expected to utilize the facility (currently estimated at 18 months). Depreciation and amortization expense decreased for the year ended December 31, 2025, primarily due to the customer intangibles associated with our merger with Life Storage being fully expensed in January 2025.
Depreciation and Amortization—Depreciation and amortization expense increased primarily as a result of the acquisition of new stores. We acquired 58 wholly-owned stores during the year ended December 31, 2024. We acquired 757 wholly-owned stores in the Life Storage Merger and an additional 14 wholly-owned stores during the year ended December 31, 2023.
Other IncomeRevenues and Expenses
Loss on Realreal Estateestate Assetsassets Heldheld for Salesale and Sold,sold, Netnet—During the year ended December 31, 2025, we recognized estimated losses of $115,830 related to properties sold or classified as held for sale given their estimated fair value, net of selling costs, was less than the carrying value of the assets. The estimated losses are offset by net gains totaling $39,520 attributed to the disposition of stores during 2025. The total net amount is shown on our consolidated statements of operations within loss on real estate assets held for sale and sold, net. As of December 31, 2024, we had 18 stores classified as held for sale. Of the 18 stores, 10 had an estimated fair value, net of selling costs, which was less than the carrying value of the asset.assets. As a result, we recorded an estimated loss of $63,250. On our consolidated statements of operations, this amount is shown net of the sale of a propertyproperty, which generated a gain of $37,344 within gain (loss) on real estate assets held for sale and sold, net.
Impairment of Life Storage Tradetrade Namename—During the year ended December 31, 2024, we decided to operate all our stores under a single brand. As a result of that decision, we deemed the Life Storage trade name as an intangible asset to be impaired and recognized a loss for the full value of the asset.
Interest Expenseexpense—The increase in interest expense during the year ended December 31, 20242025 was primarily the result of higher outstanding debtdebt. comparedAs toof theDecember same31, period2025, we had approximately $13,481,899 in the prior year. Information on the total face value of debtdebt, andcompared theto weightedapproximately average$12,600,661 interestas rate for the years endedof December 31, 2024 and December 31, 2023 is set forth in the following table:2024.
Non-cash Interestinterest Expenseexpense Relatedrelated to Amortizationamortization of Discountdiscount on Lifeunsecured Storagesenior Unsecurednotes, Senior Notesnet—Represents the amortization of the discount assigned to the fair value of the Life Storage unsecured senior notes assumed as part of the Life Storage Merger.Merger and net premium from bond offerings, offset by the discount from assumed debt.
Interest Incomeincome—Interest income represents interest earned on variable interest rate bridge loans, debt securities and on notes receivable from common and preferredCommon Operating Partnership unit holders. The increase in interest income during the year ended December 31, 20242025 was primarily the result of an increase in the amount of bridge loans outstanding. The balance of bridge loans outstanding was $1,500,151 as of December 31, 2025, compared to $1,244,575 as of December 31, 2024,2024. comparedThe increase is also attributable to $594,727interest asreceived ofon a $50,000 note receivable from a Common Operating Partnership unit holder. This note receivable originated in December 31,2024, 2023.bears interest at 10% per annum and matures on June 30, 2026.
Equity in Earningsearnings and Dividenddividend Incomeincome from Unconsolidatedunconsolidated Realreal Estateestate Entitiesentities—Equity in earnings of unconsolidated real estate entities represents the income earned through our ownership interests in unconsolidated joint ventures. In these joint ventures, we and our joint venture partners generally receive a preferred return on our invested capital. To the extent that cash or profits in excess of these preferred returns are generated, we receive a higher percentage of the excess cash or profits. The increase comparedfor the year ended December 31, 2025 is primarily due to 2023a is mainly attributed to the Life Storage stores being on our platform for 12 months in 2024 in comparison with five months in 2023. Additionally,transaction in November 2024 in which we acquired additional ownership interest in the HF1 Sovran HHF Storage Holdings LLC and HF2 Sovran HHF Storage Holdings II LLC from our partner in the unconsolidated joint ventures. The transaction increased our equity ownership percentages from 20% and 15%, respectively, to 49% in each unconsolidated joint venture. This increase is offset by a decrease in equity in earnings due to the transfer and distribution of membership interests in the PR II EXR JV LLC joint venture in March 2025 and the acquisition of our partners’ membership interests in the ESS-NYFL JV LP and ESS CA-TIVS JV LP joint ventures in April 2025. Also contributing to the offset is the sale of our membership interests in both the Extra Space Northern Properties VI LLC and the Life Storage Spacemax LLC joint ventures, which occurred in October and July 2025, respectively. The number of stores in unconsolidated joint ventures in which we have ownership interests was 407 as of December 31, 2025, compared to 460 as of December 31, 2024. Dividend income represents dividends from our investment in preferred stock of SmartStop Self Storage REIT, Inc. and Strategicits Storage Trust VI, Inc.affiliates.
Equity in Earningsearnings of Unconsolidatedunconsolidated Realreal Estateestate Venturesventures - Gaingain on Salesale of Realreal Estateestate Assetsassets and Salesale of a Jointjoint Ventureventure Interestinterest—InThe Augustnet gain of $54,521 for the year ended December 31, 2025 is due to the sale of our membership interest in nine properties in the Extra Space Northern Properties VI LLC joint venture in October 2025, which held 10 properties. This resulted in a net gain of $45,167. We also recorded a net gain of $9,354 on the sale of our membership interest in the Life Storage Spacemax LLC joint venture in July 2025, which held six properties. During the year ended December 31, 2024, the ESS Bristol Investments LLC joint venture sold five of its eight stores to anotherone of our unconsolidated joint venture,ventures, and we recognized a gain of $10,324 for our pro rata share of the transaction. In September 2024,Additionally, we sold our membership interest in the Alan Jathoo JV LLCanother unconsolidated joint venture, which held nine stores,venture to our partner and recognized a gain of $3,406 on the transaction.
Income Taxtax Expenseexpense—The increase in income tax expense for the year ended December 31, 20242025 was primarily the result of aan fullincrease year of TRSin book income for Life Storage stores, compared to a partial year in 2023, as well asand a decrease in permanent tax deductions related to stock awards.
The results of operations for the years ended December 31, 20232024 compared to December 31, 20222023 was included in our Annual Report on Form 10-K for the year ended December 31, 20232024 on page 23, under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed with the Securities and Exchange Commission (the “SEC”) on February 29,28, 2024.2025.
Funds from operations (“FFO”) provides relevant and meaningful information about our operating performance that is necessary, along with net income and cash flows, for an understanding of our operating results. We believe FFO is a meaningful disclosure as a supplement to net earnings. Net earnings assume that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The values of real estate assets fluctuate due to market conditions, and we believe FFO more accurately reflects the value of our real estate assets. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income computed in accordance with U.S. generally accepted accounting principles (“GAAP”), excluding gains or losses on sales of operating stores and impairment write-downs of depreciable real estate assets, plus real estate related depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance, FFO should be considered along with the reported net income and cash flows in accordance with GAAP, as presented in theour consolidated financial statements. FFO should not be considered a replacement of net income computed in accordance with GAAP.
The following table presents the calculation of FFO for the periodsyears indicated:
Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024
Our same-store pool for the years presented consists of 1,804 stores that are wholly-owned and operated and that were stabilized by the first day of the earliest calendar year presented. We consider a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of 80% or more for one calendar year. We believe that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to, occupancy, rental revenue growth, operating expense growth, net operating income growth, etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments. Same-store results should not be used as a basis for future same-store performance or for the performance of our stores as a whole. The following table presents operating data for our same-store portfolio:
The following table presents a reconciliation of same-store net operating income to net income as presented on our consolidated statements of operations for the years indicated:
Our same-store pool for the periods presented consists of 1,071 stores that are wholly-owned and operated and that were stabilized by the first day of the earliest calendar year presented. We consider a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of 80% or more for one calendar year. We believe that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to, occupancy, rental revenue growth, operating expense growth, net operating income growth, etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments. Same-store results should not be used as a basis for future same-store performance or for the performance of our stores as a whole. The following table presents operating data for our same-store portfolio:
The following table presents a reconciliation of same-store net operating income to net income as presented on our consolidated statements of operations for the periods indicated:
Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022
Cash flows from operating activities increasedfor asthe expectedyear dueended December 31, 2025 were relatively flat when compared to our continued growth in revenues and through the increasesame period in the numberprior of properties we own and operate.year. Cash flows used in investing activities relate primarily to our acquisition and development of new stores, sales of stores, investments in unconsolidated real estate entities, and notes receivable from bridge loans and fluctuate depending on our actions in those areas. Cash flows from financing activities depend primarily on our debt and equity financing activities. A summary of cash flows along with significant components are as follows:
We believe that cash flows generated by operations, along with our existing cash and cash equivalents, the availability of funds under our existing lines of credit, and our access to capital markets will be sufficient to meet all of our reasonably anticipated cash needs during the next twelve months. These cash needs include operating expenses, monthly debt service payments, recurring capital expenditures, acquisitions, funding for the bridge loan program, recurring capital expenditures, building redevelopments and expansions, distributions to unit holders and dividends to stockholders necessary to maintain our REIT qualification.
As of December 31, 2025, we had $138,920 available in cash and cash equivalents. Our cash and cash equivalents are held in accounts managed by third party financial institutions and consist of invested cash and cash in our operating accounts. During 2025 and 2024, we experienced no loss or lack of access to our cash and cash equivalents; however, there can be no assurance that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets.
In November 2024, we established our commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes. The aggregate principal amount outstanding under the program at any time cannot exceed $1.0 billion, and the net proceeds of the commercial paper notes are expected to be used for general corporate purposes. The maturities of the notes generally range from overnight to three months, with a maximum of up to 13 months. The commercial paper notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis. At any point in time, we expect to maintain available commitments under our Credit Facilities in an amount at least equal to the amount of commercial paper notes outstanding. At December 31, 2024, we had $500 million in issuances outstanding under the commercial paper program.
In January 2021, we received a Baa2 rating from Moody's Investors Service, and in July 2019, we obtained a BBB/Stable rating from S&P which was upgraded to BBB+/Stable in July 2023 in connection with the Life Storage Merger. We intend to manage our balance sheet to maintain these ratings. Certain of our real estate assets are pledged as collateral for our debt. As of December 31, 2024, we had a total of 1,745 unencumbered stores as defined by our public bonds. Our unencumbered asset value was calculated as $29,846,899 and our total asset value was calculated as $35,767,585 according to the calculations as defined by our public bonds. We are subject to certain restrictive covenants relating to our outstanding debt. We were in compliance with all financial covenants at December 31, 2024.
As of December 31, 2024, we had $138,222 available in cash and cash equivalents. Our cash and cash equivalents are held in accounts managed by third party financial institutions and consist of invested cash and cash in our operating accounts. During 2024 and 2023, we experienced no loss or lack of access to our cash and cash equivalents; however, there can be no assurance that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets.
Our commercial paper program provides us the ability to issue, repay and re-issue short-term unsecured commercial paper notes. The aggregate principal amount outstanding under the program at any time cannot exceed $1,000,000, and the net proceeds of the commercial paper notes are expected to be used for general corporate purposes. The maturities of the notes generally range from overnight to three months, with a maximum of up to 13 months. The commercial paper notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis. At any point in time, we expect to maintain available commitments under our Credit Facilities in an amount at least equal to the amount of commercial paper notes outstanding. At December 31, 2025, we had $680,000 in issuances outstanding under the commercial paper program.
We hold a BBB+/Stable rating from S&P, which was upgraded from BBB/Stable in July 2023 in connection with the Life Storage Merger, and a Baa2/Stable rating from Moody’s Investors Service. We intend to manage our balance sheet to maintain these ratings. Certain of our real estate assets are pledged as collateral for our debt. As of December 31, 2025, we had a total of 1,775 unencumbered stores as defined by our public bonds. Our unencumbered asset value was calculated as $30,247,545 and our total asset value was calculated as $35,894,312 according to the calculations as defined by our public bonds. We are subject to certain restrictive covenants relating to our outstanding debt. We were in compliance with all financial covenants at December 31, 2025.
On April 15, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certain sales agents and forward purchasers named therein. Under the terms of the Equity Distribution Agreement, we may issue and sell, and the forward purchasers may sell, from time to time through or to the sales agents, shares of our common stock having an aggregate offering price of up to $800 million.$800,000. The shares of common stock will be offered pursuant to our effective registration statement on Form S-3 (Registration Statement No. 333-278690) previously filed with and declared effective by the SEC and a prospectus supplement and accompanying prospectus, filed with the SEC. As of December 31, 2024,2025, no shares hadhave been sold under the Equity Distribution Agreement, which we refer to as our “at the market” equity program.
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition and results of operations. There have been no material changes to the risk factors described in the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2025. The risks described in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and results of operations.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
Property rental—The increase in property rentalsee in full comparisonrevenuesrevenue for the three and six months endedMarchJune31,30, 2026 compared to the sameperiodperiods in the prior year was primarily the result ofangrowthincreaseinofour$22,679portfolioassociatedrelatedwithto acquisitions completed in 2025 and acquisitions completed in the firstthreesix months of 2026.The increase in revenue resulting from these acquisitions was partially offset by a decrease in property rental revenue of $6,543 due to property dispositions over the same period.We acquiredone18 wholly-ownedstore and disposed of one wholly-owned storestores during thethreesix months endedMarchJune31,30,2026.2026Weand acquired 76wholly-owned stores and disposed of 37wholly-owned stores during the year ended December 31, 2025.InTheseaddition,increases in revenue resulting from acquisitions were partially offset by property dispositions during the same periods. Additionally, property rental revenue increasedbyfor$11,372the three and six months ended June 30, 2026 due to improved operating resultsatfromourincreasessame-storeinproperties.average annual rent per occupied square foot over the comparative periods.
“Property operations—The increase in property operations expense during the three months ended March 31, 2026 compared to the same period in the prior year consists primarily of an increase of $9,457 related to acquisitions completed in 2025 and in the first three months of 2026. We acquired 76 wholly-owned stores in 2025 and one wholly-owned store during the three months ended March 31, 2026. …”see in full comparison
“Property operations—The increase in property operations expense during the three and six months ended June 30, 2026 compared to the same periods in the prior year was due to growth in our portfolio related to acquisitions completed in 2025 and in the first six months of 2026. The increase in expense resulting from acquisitions was partially offset by expense control across our portfolio in most expense categories over the same periods with the exception of property taxes and insurance.”see in full comparison
Interest income—Interest income represents interest earned on bridge loans, debt securities and on a note receivable from asee in full comparisonCommoncommon Operating Partnership unit holder. Theincreasedecrease in interest income during the three and six months endedMarchJune31,30, 2026 compared to the sameperiodperiods in the prior year was primarily the result ofanaincreasedecrease in the amount of bridge loans outstanding. The balance of bridge loans outstanding was$1,452,159$1,445,278 as ofMarchJune31,30, 2026, compared to$1,369,089$1,542,693 as ofMarch 31, 2025. The increase is also attributable to interest received on a $50,000 note receivable from a Common Operating Partnership unit holder. This note receivable originated in December 2024, bears interest at 10% per annum and matures onJune 30,2026.2025.
“Interest expense—Represents the cost of our financing activities and primarily consists of interest incurred on borrowings under our commercial paper program, revolving lines of credit, senior notes and secured and unsecured term loans. Interest expense also includes commitment fees, letter of credit fees, and the amortization of financing costs associated with these arrangements.”see in full comparison
Gain (loss) on real estate assets held for sale and sold, net— During thesee in full comparisonthreesix months endedMarchJune31,30, 2026, we disposed of one previously held for sale store, resulting in no gain or loss. We disposed of1112 previously held for sale stores during thethreesix months endedMarchJune31,30, 2025, resulting in a gain of$39,520.$38,656. This gain was partially offset by losses of $3,759 related to the sale of three land parcels and three properties listed for sale during thequartersix months ended June 30, 2025 where the estimated fair value, net of selling costs, was less than the net carrying value of the assets. The loss recorded during the three months ended June 30, 2025 related to the sale of one operating property previously listed as held for sale resulted in an additional loss of $864.
Full comparison: every changed paragraph (22)
We are a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) that owns, operates, manages, acquires, develops and redevelops self-storage properties (“stores”) and provides lending to owners of stores located throughout the United States. We derive substantially all of our revenues from our two segments: self-storage operations and tenant reinsurance. Primary sources of revenue for our self-storage operations segment include rents received from tenants under leases at stores that are wholly-owned and in consolidated joint ventures. Our operating results depend materially on our ability to lease available self-storage units, to actively manage unit rental rates, and on the ability of our tenants to make required rental payments. Consequently, management spends a significant portion of theirits time maximizing cash flows from our diverse portfolio of stores. Revenue from our tenant reinsurance segment consists of insurance revenues from the reinsurance of risks relating to the loss of goods stored by tenants in our stores.
As of MarchJune 31,30, 2026, we owned or had ownership interests in 2,4282,446 operating stores. Of these stores, 2,0082,026 are wholly-owned, 1211 are in consolidated joint ventures, and 408409 are in unconsolidated joint ventures. In addition, we managed an additional 1,9161,964 stores for third partiesparties, bringing the total number of stores which we own and/or manage to 4,344.4,410. These stores are located in 42 states and Washington, D.C. The clustering of assets around population centers enables us to reduce our operating costs through economies of scale. Our acquisitions have given us an increased scale in many core markets as well as a foothold in many markets where we had no previous presence.
As of MarchJune 31,30, 2026, approximately 2,480,0002,580,000 tenants were leasing storage units at the operating stores that we own and/or manage, primarily on a month-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit. Existing tenants generally receive rate increases at least annually, for which no direct correlation has been drawn to our vacancy trends. Although leases are short-term in duration, the typical tenant tends to remain at our stores for an extended period of time. For same-store properties as of MarchJune 31,30, 2026, the average length of stay for tenants who had vacated was approximately 16.8 months.
Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025
Results for the three and six months ended MarchJune 31,30, 2026 included the operations of 2,4282,446 stores (2,0082,026 wholly-owned, 1211 in consolidated joint ventures, and 408409 in joint ventures accounted for using the equity method) compared to the results for the three and six months ended MarchJune 31,30, 2025, which included the operations of 2,4242,430 stores (1,9752,005 wholly-owned, ten11 in consolidated joint ventures, and 439414 in joint ventures accounted for using the equity method). Material or unusual changes in the results of our operations are discussed below:
Property rental—The increase in property rental revenuesrevenue for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in the prior year was primarily the result of angrowth increasein ofour $22,679portfolio associatedrelated withto acquisitions completed in 2025 and acquisitions completed in the first threesix months of 2026. The increase in revenue resulting from these acquisitions was partially offset by a decrease in property rental revenue of $6,543 due to property dispositions over the same period. We acquired one18 wholly-owned store and disposed of one wholly-owned storestores during the threesix months ended MarchJune 31,30, 2026.2026 Weand acquired 76 wholly-owned stores and disposed of 37 wholly-owned stores during the year ended December 31, 2025. InThese addition,increases in revenue resulting from acquisitions were partially offset by property dispositions during the same periods. Additionally, property rental revenue increased byfor $11,372the three and six months ended June 30, 2026 due to improved operating results atfrom ourincreases same-storein properties.average annual rent per occupied square foot over the comparative periods.
Tenant reinsurance—The increase in tenant reinsurance revenue for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in the prior year was due primarily to an increase in the number of stores operated. We operated 4,3444,410 stores at MarchJune 31,30, 2026 compared to 4,0994,179 stores at MarchJune 31,30, 2025.
Management fees and other income—Management fees and other income primarily represent the fees collected for our management of stores owned by third parties and unconsolidated joint ventures and other transaction fee income. The increase for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in the prior year was primarily due to both an increase in the number of stores managed and an increase in the overall revenue of stores under management when compared to the same periodperiods last year. As of MarchJune 31,30, 2026, we managed 1,9161,964 stores for third party owners, compared to 1,6751,749 stores as of MarchJune 31,30, 2025. These increases are offset by a decrease in management fees attributable to stores in unconsolidated joint ventures, where the number of stores decreased from 439414 to 408409 over the same period.
Property operations—The increase in property operations expense during the three and six months ended June 30, 2026 compared to the same periods in the prior year was due to growth in our portfolio related to acquisitions completed in 2025 and in the first six months of 2026. The increase in expense resulting from acquisitions was partially offset by expense control across our portfolio in most expense categories over the same periods with the exception of property taxes and insurance.
Property operations—The increase in property operations expense during the three months ended March 31, 2026 compared to the same period in the prior year consists primarily of an increase of $9,457 related to acquisitions completed in 2025 and in the first three months of 2026. We acquired 76 wholly-owned stores in 2025 and one wholly-owned store during the three months ended March 31, 2026. Additionally, for the three months ended March 31, 2026, there was an increase of $5,243 in property operations expense at our same-store properties primarily due to an increase in repairs and maintenance, insurance, and property operating expenses.
Depreciation and amortization—We amortize to expense intangible assets-customer intangibles on a straight-line basis over the average period that a tenant is expected to utilize the facility (currently estimated at 18 months). Depreciation and amortization expense increased for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in the prior year primarily as a result of the acquisition of new stores. We acquired 7618 wholly-owned stores inand 2025disposed andof one wholly-owned store during the threesix months ended MarchJune 30, 2026. We acquired 76 wholly-owned stores and disposed of 37 wholly-owned stores during the year ended December 31, 2026.2025.
Gain (loss) on real estate assets held for sale and sold, net— During the threesix months ended MarchJune 31,30, 2026, we disposed of one previously held for sale store, resulting in no gain or loss. We disposed of 1112 previously held for sale stores during the threesix months ended MarchJune 31,30, 2025, resulting in a gain of $39,520.$38,656. This gain was partially offset by losses of $3,759 related to the sale of three land parcels and three properties listed for sale during the quartersix months ended June 30, 2025 where the estimated fair value, net of selling costs, was less than the net carrying value of the assets. The loss recorded during the three months ended June 30, 2025 related to the sale of one operating property previously listed as held for sale resulted in an additional loss of $864.
Interest expense—Represents the cost of our financing activities and primarily consists of interest incurred on borrowings under our commercial paper program, revolving lines of credit, senior notes and secured and unsecured term loans. Interest expense also includes commitment fees, letter of credit fees, and the amortization of financing costs associated with these arrangements.
Interest expense—The increase in interest expense during the three months ended March 31, 2026 compared to the same period in the prior year was primarily the result of higher outstanding debt. As of March 31, 2026, we had approximately $13,406,885 in total face value of debt, compared to approximately $12,809,851 as of March 31, 2025.
Interest income—Interest income represents interest earned on bridge loans, debt securities and on a note receivable from a Commoncommon Operating Partnership unit holder. The increasedecrease in interest income during the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in the prior year was primarily the result of ana increasedecrease in the amount of bridge loans outstanding. The balance of bridge loans outstanding was $1,452,159$1,445,278 as of MarchJune 31,30, 2026, compared to $1,369,089$1,542,693 as of March 31, 2025. The increase is also attributable to interest received on a $50,000 note receivable from a Common Operating Partnership unit holder. This note receivable originated in December 2024, bears interest at 10% per annum and matures on June 30, 2026.2025.
Equity in earnings and dividend income from unconsolidated real estate entities—Equity in earnings of unconsolidated real estate entities represents the income earned through our ownership interests in unconsolidated joint ventures. In these joint ventures, we and our joint venture partners generally receive a preferred return on our invested capital. To the extent that cash or profits in excess of these preferred returns are generated, we receive a higher percentage of the excess cash or profits. The decrease for the three and six months ended MarchJune 31,30, 2026 iswas primarily due to the transfer and distribution of membership interests in the PR II EXR JV LLC joint venture in March 2025 and the acquisition of our partners’ membership interests in the ESS-NYFL JV LP and ESS CA-TIVS JV LP joint ventures in April 2025. Also contributing to the decrease is the sale of our membership interests in both the Life Storage Spacemax LLC and the Extra Space Northern Properties VI LLC and the Life Storage Spacemax LLC joint ventures, which occurred in OctoberJuly and JulyOctober 2025, respectively. The number of stores in unconsolidated joint ventures in which we have ownership interests was 408409 as of MarchJune 31,30, 2026, compared to 439414 as of MarchJune 31,30, 2025. Dividend income represents dividends from our investments in preferred stock of Strategic Storage Trust VI, Inc. and Strategic Storage Growth Trust III, Inc.
Income tax expense—The increase in income tax expense for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in the prior year was primarily the result of an increase in book income and a decrease in permanent tax deductions related to stock awards.
Cash flows from operating activities for the threesix months ended MarchJune 31,30, 2026 increased when compared to the same period in the prior year. Cash flows used in investing activities relate primarily to our acquisition and development of new stores, sales of stores, investments in unconsolidated real estate entities, and notes receivable from bridge loans and fluctuate depending on our actions in those areas. Cash flows from financing activities depend primarily on our debt and equity financing activities. A summary of cash flows along with significant components are as follows:
As of MarchJune 31,30, 2026, we had $138,986$695,171 available in cash and cash equivalents. Our cash and cash equivalents are held in accounts managed by third party financial institutions and consist of invested cash and cash in our operating accounts. During 2026 and 2025, we experienced no loss or lack of access to our cash and cash equivalents; however, there can be no assurance that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets.
Our commercial paper program provides us the ability to issue, repay and re-issue short-term unsecured commercial paper notes. The aggregate principal amount outstanding under the program at any time cannot exceed $1,000,000, and the net proceeds of the commercial paper notes are expected to be used for general corporate purposes. The maturities of the notes generally range from overnight to three months, with a maximum of up to 397 days. The commercial paper notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis. At any point in time, we expect to maintain available commitments under our credit facility in an amount at least equal to the amount of commercial paper notes outstanding. At MarchJune 31,30, 2026, we had $850,000 in issuances outstanding under the commercial paper program.
We hold a BBB+/Stable rating from S&P and a Baa2/Stable rating from Moody’s Investors Service. We intend to manage our balance sheet to maintain these ratings. Certain of our real estate assets are pledged as collateral for our debt. As of MarchJune 31,30, 2026, we had a total of 1,7761,794 unencumbered stores as defined by our public bonds. Our unencumbered asset value was calculated as $30,190,854$31,069,882 and our total asset value was calculated as $35,820,236$36,807,478 according to the calculations as defined by our public bonds. We are subject to certain restrictive covenants relating to our outstanding debt. We were in compliance with all financial covenants at MarchJune 31,30, 2026.
On April 15, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certain sales agents and forward purchasers named therein. Under the terms of the Equity Distribution Agreement, we may issue and sell, and the forward purchasers may sell, from time to time through or to the sales agents, shares of our common stock having an aggregate offering price of up to $800,000. The shares of common stock will be offered pursuant to our effective registration statement on Form S-3 (Registration Statement No. 333-278690) previously filed with and declared effective by the Securities and Exchange Commission (the “SEC”) and a prospectus supplement and accompanying prospectus, filed with the SEC. As of MarchJune 31,30, 2026, no shares have been sold under the Equity Distribution Agreement, which we refer to as our “at the market” equity program.
EXR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 1 trade date, 3,300 shares, about $495.0K). Net open-market shares: -3,300 (purchases minus sales); net value about -$495.0K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-04 | Margolis Joseph D |
Gift | 13,503 | — | — |
| 2026-08-04 | Margolis Joseph D |
Gift | 13,503 | — | — |
| 2026-07-01 | Dickens Zachary T |
Shares withheld for tax | 164 | $147.29 | $24.2K |
| 2026-07-01 | Springer William N |
Shares withheld for tax | 138 | $147.29 | $20.3K |
| 2026-07-01 | Norman Jeffrey Jay |
Shares withheld for tax | 735 | $147.29 | $108.3K |
| 2026-06-11 | Mcneal Gwyn Goodson |
Open-market sale | 3,300 | $150.00 | $495.0K |
| 2026-05-14 | Woolley Kenneth M. |
Grant/award | 1,407 | $142.19 | $200.1K |
| 2026-05-14 | Pittman Raymond J |
Grant/award | 1,407 | $142.19 | $200.1K |
| 2026-05-14 | Maggelet Crystal Call |
Grant/award | 1,407 | $142.19 | $200.1K |
| 2026-05-14 | Harnett Sue |
Grant/award | 1,407 | $142.19 | $200.1K |
| 2026-05-14 | Bonner Joseph J |
Grant/award | 1,407 | $142.19 | $200.1K |
| 2026-05-14 | Vander Ploeg Julia |
Grant/award | 1,407 | $142.19 | $200.1K |
| 2026-05-14 | Saffire Joseph |
Grant/award | 1,407 | $142.19 | $200.1K |
| 2026-05-14 | Barberio Mark G |
Grant/award | 1,407 | $142.19 | $200.1K |
| 2026-05-14 | Crittenden Gary L |
Grant/award | 1,407 | $142.19 | $200.1K |
Well-known investors holding EXR (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| First Eagle Investment Management | 2026-06-30 | 3,876,997 | $563.3M | 0.94% | Added 1% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 1,583,903 | $230.1M | 0.13% | Added 44% |
| Millennium Management (Israel Englander) | 2026-06-30 | 1,415,100 | $205.6M | 0.14% | New position |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 630,727 | $91.6M | 0.14% | New position |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 486,377 | $70.6M | 0.02% | Added 10% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 92,956 | $13.5M | 0.03% | Reduced 28% |
| D. E. Shaw & Co. | 2026-06-30 | 69,602 | $10.1M | 0.01% | New position |
| Davis Selected Advisers (Chris Davis) | 2026-06-30 | 27,535 | $4.0M | 0.02% | Reduced 2% |
| Bridgewater Associates | 2026-06-30 | 4,608 | $604.2K | — | Sold out |