Home | 2023 Annual Report

2023: FORWARD IN EXCELLENCE

FORWARD IN EXCELLENCE view the shareholder video

My Fellow Shareholders,
We have had a busy and remarkable year at Extra Space Storage in 2023. After two years of unprecedented property level growth and active external expansion in 2021 and 2022, I told our team to expect a more normal year in 2023, as the storage sector returned to historical revenue growth rates and acquisition volume slowed. I encouraged our departments to focus on the fundamentals in each of their respective areas of the business to ensure that we had seamless execution as tailwinds from the pandemic slowed, and as headwinds from interest rates, inflation and moderating demand increased.

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HIGHLIGHTS

$15 billion

Merger with Life Storage
1,200

Stores Added
$100 Million+

Anticipated Synergies

Extra Space and Life Storage Combine to Form the Preeminent Storage Operator
A merger between Extra Space and Life Storage was approved by shareholders of both companies, and was completed on July 20, 2023. Post-merger the combined company became the largest self-storage operator in the country with over 3,700 locations and two million customers. The Extra Space team anticipates at least $100 million in underwritten annual run-rate synergies and that they would unlock additional synergies resulting from the merger.

The combination of Extra Space and Life Storage will deliver significant strategic, operational, and financial benefits including transformative scale, enhanced diversification of the portfolio, synergy opportunities, embedded growth drivers, and positive financial impact.

Learn more on our merger page.

HIGHLIGHTS

3700+

STORES
283 Million

Rentable Square Feet
94%

Average Occupancy

Extra Space is a self storage pure-play offering a product used by customers across every demographic. With locations in 42 states, facilities offer a range of storage solutions, including options like climate control, drive-up units, car/RV/boat storage, business storage, wine storage, and more. Properties range in size and location, but one thing is consistent – at Extra Space, you can expect a clean and safe facility.

The portfolio of stores is designed to decrease volatility, with no singular property worth more than 1% of the portfolio, no singular metro market providing more than 10% of the revenue, and with operations in all 50 of the largest metros in the United States. Extra Space also reduces volatility with its unique ownership structure -- 51% of properties are wholly-owned, 13% are held in joint ventures, and 36% are managed on behalf of third-party owners. This structure allows for flexibility and gives Extra Space greater economies of scale, allowing the company to better manage market concentration and to gather more data and insights.

Extra Space has a robust redevelopment program where properties are regularly evaluated to find ways to increase operating income at the store. In 2023, $86 million was invested in redevelopment. This can include expansions, rebuilding, or rebranding to improve visibility. This program keeps Extra Space properties competitive and ensures the portfolio maintains its asset quality.

HIGHLIGHTS

2.2 Million

CUSTOMERS
21,200,000+

WEB VISITS
1.2 Million

Total Rentals Through Four Unique Channels

Extra Space’s platform continues to move forward and outpace competitors in attracting potential customers, converting leads into rentals, and maximizing rental revenue. The added scale provides an even greater data set, which Extra Space leverages to make stronger decisions related to digital marketing, revenue management, customer experience, and call-center strategies and execution. Moving the Life Storage facilities onto this platform has led to improved performance in occupancy as well as rent per square foot in the legacy Life Storage properties, which is the primary driver of anticipated revenue synergies. The Extra Space technology platform keeps cybersecurity governance at the forefront of security standards.

Learn more on the platform page.

HIGHLIGHTS

3.1%

Same-Store revenue growth
12.5%

One-year Total Shareholder Return
BBB+

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Extra Space had another solid year of operational performance, with same-store revenue growth of 3.1%, despite exceptionally difficult comparables from 2022. Same-store net operating income was also solid at 2.8%. The company balance sheet grew considerably through the Life Storage merger, providing a substantially larger unencumbered asset base, at similar leverage ratios. The stronger balance sheet was recognized by S&P Global, who upgraded its rating to BBB+. Extra Space’s consistent performance allowed the company to raise the dividend 8% during 2023, and resulted in a positive total shareholder return of 12.5% for the year.

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HIGHLIGHTS

GLASSDOOR

4.3 out of 5 stars
79

employee engagement score
7,600

Employees

Extra Space aims to be the best employer in the self storage industry. The employee experience is a top priority, because company leadership believes if Extra Space has the best people, the company will have the best results. There is a focus on building a deep, diverse talent pool and investing in training, development, and career planning to build a team that will produce great results for decades to come.

Ask any employee what makes Extra Space uniquely successful, and they’ll point to the company’s culture and five company values. The Extra Space values – Integrity, Excellence, Innovation, Teamwork, and Passion – are at the center of everything the team does. The values guide the way Extra Space teams work, interact with customers, and behave in communities. The culture compass is a guide that gives direction to employees.

Extra Space has always prioritized a diverse workplace and a culture of equity and inclusion. The company has a formal diversity, equity, and inclusion committee with robust programs to maintain its place as a great employer for all. These efforts include DEI training, community social involvement like charity partnerships, a scholarship program, employee volunteer programs, and employee resource groups.

HIGHLIGHTS

1,376

Net NEw Stores
400+

Partnerships
$453

Million In Bridge Loan Approvals in 2023

Extra Space continues to prioritize growth through multiple innovative channels. Outside of the acquisition of Life Storage, Extra Space purchased 23 stores, prioritizing off market deals utilizing the partner relationships built through 45+ years in the industry. Many of these relationships are through the company’s third-party management program, which is the largest self storage management program. Third-party managed stores make up 36% of the Extra Space portfolio, and Extra Space’s reputation for excellence continues to bring in new third-party partners. Another offering Extra Space can give to its partners is bridge lending, which has originated over $1.6 billion in loans since its launch. The program is designed to provide loans to current and prospective third-party management customers on operating properties, filling a gap in the market while they lease-up and stabilize rents.

Additionally, the company continues expanding the Storage Express brand of remotely managed properties and the Bargold brand of subleased space in apartment buildings that is turned into hyper-local storage. Both these growth models are about opening new growth channels and bringing storage closer to customers. Extra Space will continue to find ways to grow innovatively and efficiently across cycles.

HIGHLIGHTS

74

GRESB Rating
$24

million in solar investment in 2023
80%

lower carbon intensity than real estate average

Extra Space’s philosophy is to build and maintain a company that can provide steady, reliable performance in an everchanging world. The team aims to be good stewards of the planet along with being good stewards of shareholders’ capital. By nature, self storage is a low consumption real estate asset, and Extra Space has worked to reduce the carbon footprint of the company each year.

Since 2012, Extra Space has been investing in solar installations on properties. With 33% of the company’s wholly-owned properties powered by the sun, Extra Space has produced enough solar power to offset the emissions of 207 million pounds of coal being burned. These solar efforts reduce energy consumption, while producing great returns, showing how sustainability can be at the intersection of what is good for the environment, the community, and shareholders. With the recent addition of the Life Storage portfolio, the company has significantly expanded the solar opportunity pipeline, and expects to have steady investment in solar for many years to come.

The team at Extra Space strives to help people reach a better tomorrow by consistently aligning actions with the company’s values. The team is dedicated to building a bright future for employees, customers, and the communities in which Extra Space operates. This is achieved through a focus on employee engagement, career development, community involvement, wellness, safety, and a steadfast commitment to Diversity, Equity, and Inclusion.

Extra Space is committed to strong corporate governance that promotes the long-term interests of its stockholders, strengthens management accountability, and helps maintain public trust in the company. You can find more information about the Extra Space Board of Directors and policies here.

Extra Space has a strong reputation for providing transparent, informative, and accessible information about the company, and in 2023, NAREIT named the company as the Large Cap Equity REIT bronze winner for the Communications and Reporting Excellence (CARE) Award. This award recognizes investor relations work, and Extra Space became the first self storage company recognized in the award’s 15-year history.

The company has a resiliency strategy to oversee climate-related risk and opportunities. Both physical and transition risks are evaluated, and the company incorporates resiliency measures into acquisition and development projects. The Nominating, Governance, and Corporate Responsibility Committee of the Extra Space Board of Directors has direct oversight over the company’s sustainability initiatives.