CEO LETTER
Dear Fellow Shareholders,
In August 2024, Extra Space Storage celebrated twenty years since our Company’s initial public offering. At IPO, we had just over one hundred properties; we have since grown a highly diversified portfolio of over 4,000 properties in 42 states and the District of Columbia. In these twenty years, we have achieved many milestones, including:
- Acquiring Storage USA, SmartStop, and Life Storage,
- Growing our industry-leading third-party management and bridge lending programs,
- Gaining inclusion in the S&P 500 index,
- Earning investment grade ratings by S&P and Moody’s,
- Receiving recognition from many different organizations for being one of the best places to work, environmental stewardship, and values and culture, and
- Developing and refining industry-leading proprietary pricing, management, and operational technology and systems.
These and other successes have led to our proudest accomplishment, a 20-year total return for our shareholders of 2,437%. Our performance ranks first among our storage peers over this period and third among all publicly traded REITs.
2024 was marked by continued consolidation of the storage industry. Demand normalized, and much of the abundant supply of new properties that were delivered during the COVID demand boom has been absorbed. Despite the headwinds of normalizing demand and new supply, our team and systems delivered positive revenue growth in both our legacy Extra Space and our newly acquired Life Storage same-store pools, and we were the only storage company with positive FFO growth in the year. Although modest by historical levels, our performance led our publicly traded storage peers in revenue, net operating income, and FFO growth.
We also deployed significant capital in 2024, which will benefit our shareholders in the years to come. In a challenging environment for acquisition opportunities, we invested on our own and with joint venture partners over $900 million, frequently using creative structures to produce accretive transactions.
Our third-party management program expanded by 238 net new properties in 2024, as owners sought the operational excellence provided by our platform, teams, and systems. 2024 was our largest single growth year in third-party management outside of the Life Storage merger and further expands our fastest growing and most profitable management program in the industry, which now totals over 1,500 managed properties. Furthermore, our bridge loan program has been highly successful, and we have now originated more than $2.4 billion in loans cumulatively.
Additionally, we rebranded all Life Storage locations to Extra Space, shifting to a single, unified brand. This decision came after a nearly yearlong evaluation, where the strength of the Extra Space brand outweighed any potential benefits to having multiple brands. It was a clear indication of our brand value, and we look forward to the marketing advantages this will bring to our Company.
We remain committed to innovating and improving the way we operate our business. Our company, and our industry, have come a long way in the past few decades, and there are still so many exciting opportunities ahead of us. Through all the growth, we have maintained our company culture and values that have led our success, and we are focused on upholding integrity with shareholders, partners, customers, and team members. We are proud of what we have built as a company, and we look forward to continuing to build our legacy for years to come.
JOSEPH D. MARGOLIS,
CHIEF EXECUTIVE OFFICER