Portfolio

Expanding Our Footprint



Extra Space Storage Portfolio
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Growth and Acquisitions

Throughout the past year, Extra Space Storage has continued to deliver exceptional growth. We have increased our funds from operations and our national footprint. By keeping our properties fresh and relevant, we are staying ahead of the curve and true to our brand. This all adds up to a better portfolio, a better platform and better results.

Another Year of Significant Growth

We continue to grow our scale in a smart way, by adding properties that will produce value for our shareholders. In a market with limited new supply coming online, we completed approximately $531 million in accretive acquisitions through a combination of open-market and off-market transactions. In total we added 51 properties located in 12 states to add value for our shareholders. We ended 2014 with 1,088 well-located, well-built and well-maintained assets in 35 states, Washington, D.C. and Puerto Rico, up 5.7% from December 31, 2013.

$530 Million in Acquisitions
51 Properties Acquired

Our acquisitions included two new developments built to our exact specifications. After working with the developers every step of the way, we agreed to purchase the properties once they were delivered and ready to lease. These deals – which we call “certificate of occupancy” transactions – are a great way to enhance our portfolio. They let us bring in new assets in markets where demand is high, without the entitlement or construction risk of ground-up development.

We also continue to prospect and acquire from our off-market proprietary pipeline. Altogether we manage approximately 500 assets owned in joint venture relationships or by third-party owners – all of which are branded Extra Space Storage. When owners are ready to sell they turn to us first. This gives us a pipeline of potential acquisitions that we already know inside and out.

Last year we grew ManagementPlus, our third-party management platform, by 10 properties, an increase of 4% from the end of 2013. We are currently the largest management company in the self-storage industry, which offers the benefits of the Extra Space Storage brand, our scale, our marketing expertise and our proven platform.

In 2014 we were named the best third-party management company by Inside Self Storage for the third year running. This recognition speaks to the quality and consistency of the experience we deliver to our third-party owners. Our reputation has led to continued growth of our management portfolio, making Extra Space Storage the industry leader in self-storage management.

Site Redevelopment and Expansions

At Extra Space Storage, updating our assets to protect the value of our portfolio is a top priority. We are focused on redeveloping older, high-performing assets in high rent per square foot markets. By investing in these properties, we are making sure our customers know exactly what we are, who we are and where to rent the storage unit that meets their needs.

At select locations, we are also expanding our rentable square footage. In 2014 we completed 19 redevelopment projects, and over the long term we plan to invest $30 million to $40 million to redevelop between 35 and 40 properties each year. Ultimately we believe our redevelopment program will support higher rental rates and continue to deliver shareholder value in the years ahead.

Building the Extra Space Brand

One thing has become clear for self-storage operators – we are in the retail business. Like any retailer, we need to make sure customers understand why they should choose us. We are committed to being the most convenient, secure and professional storage solution around, with a reputation for customer service and units that are competitively priced.

As we continue to grow, we are more focused than ever on building the strength of the Extra Space Storage brand. With that in mind, we are beginning to renovate our retail storefronts to make them more welcoming, inviting and customer friendly. Our new store design will feature brighter, more inviting colors, contemporary furnishings and an open, informal layout.

Our goal is to enable closer interactions between the customer and manager to improve the customer experience. By standardizing the appearance and signage at our properties, we are creating a consistent brand platform from coast to coast. We expect to roll out the new look and feel in our front offices over the coming years.

Sustainability

As always, we remain committed to the sustainability of our operations. To enhance our portfolio, we continue to retrofit our properties with energy-efficient lighting and motion sensors, installing solar panels and replacing fixtures with advanced lighting technologies that use significantly less electricity. With this focus, we are reducing our carbon footprint, saving energy and controlling costs while delivering benefits for many years to come.

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