ceo letter

FOLLOWING THROUGH ON:

During the year, we concentrated on strong execution of initiatives that strengthen our operating platform, including: delivering a new website, enhancing pricing strategies, improving search engine optimization, further decentralizing our call center, and more. We smoothly integrated and implemented these new products and processes into our operations. We focused on evolving operating fundamentals in a quickly shifting economic landscape. Our efforts yielded exceptionally high occupancy throughout the year, as well as strong rate growth in the portfolio, driving our record same-store performance.

Team Extra Space also followed through on the challenge to grow and further diversify our portfolio. We acquired 153 stores, at a total investment of $1.6 billion. We added 163 stores (gross) and 59 stores (net) to our third-party management program, the largest in the storage sector. We also continued to build our bridge loan business, originating $574.0 million in loans in 2022, and over $1 billion in loan activity over the last four years. In addition to solid growth through these traditional growth channels, we made two strategic acquisitions of companies, Storage Express and Bargold. We believe these strategic acquisitions open new growth channels to enhance the future expansion of the Extra Space Storage portfolio and platform. These acquisitions also accelerate our understanding and abilities with respect to remotely managed storage, which will help optimize operations in our existing stores and expand our growth options.

In addition to strong financial results for our shareholders, we continued to demonstrate our commitment to building a sustainable company. Our efforts were recognized, and once again we received NAREIT’s Leader in the Light Award for the third consecutive year, the only storage company to have earned this honor.

While I am proud of our 2022 results, following through isn’t an event or a one-time accomplishment. It is a process, and it is a mindset. Team Extra Space’s culture is to finish what we start, and to execute on our strategy with excellence. We have seen the pandemic tailwinds for self-storage subside, and concerns regarding inflation and recession continue to build. While we are not exempt from the impacts of these external factors, our need-based sector, geographically diverse portfolio, and unique ownership strategy allow us to operate and grow efficiently, even in these difficult cycles.

We continue to strengthen our balance sheet, diversify our sources of capital, and maintain and build a talented, diverse team. We will continue to work hard to deliver on the results our shareholders have come to expect from Extra Space Storage - the highest returning publicly traded REIT in the U.S. over the last 10 years. We will continue innovating. We will continue growing. We will continue focusing on the fundamentals and following through.

Warmest Regards,

Joe Margolis
Chief Executive Officer