In 2025, we delivered positive FFO per share growth and maintained positive same-store revenue growth despite facing the headwinds of a difficult supply cycle - a testament to our operational resilience and the strength of our diversified portfolio. As new supply moderated throughout the year, we regained pricing power with new customers for the first time in three years. New customer growth rates improved every month from May through December, while maintaining sector-leading occupancy. Our marketing effectiveness and revenue management platform allowed us to capture a greater share of available demand and demonstrated that as competitive pressure from new supply eases, we are able to push rates and drive revenue more quickly than the industry as a whole.

EXISTING CUSTOMER BEHAVIOR ALSO REMAINED STRONG IN 2025

We have experienced low levels of vacates and bad debt, while being able to improve existing customer rental rates. These are not temporary wins. They are evidence that our customer service and revenue management platform, refined over years and enhanced with machine learning, is converting improving market conditions into tangible performance.

As we enter 2026, I am increasingly confident in our company's long-term growth potential. After navigating three difficult years of elevated new supply and challenging fundamentals, we saw tangible improvements throughout 2025, and the momentum is building. New supply is declining across many of our markets, our operating metrics are strengthening, and the strategic investments we have made in our platform, portfolio, and team are delivering results that reinforce our confidence in the year ahead.

Demand for self storage remains resilient, triggered by life events and space needs that persist across all economic cycles. Utilization rates and average lengths of stay are rising, which are both positive long-term indicators. Self storage adoption spans multiple generations, from Baby Boomers downsizing their homes to members of Gen Z navigating frequent moves. The industry's long-term fundamentals remain durable and are improving into 2026.

WE HAVE THE LARGEST AND MOST DIVERSE PORTFOLIO IN THE INDUSTRY

This provides Extra Space with a data and scale advantage. We leverage our data in our digital marketing infrastructure to efficiently drive customers to our website, call center, and stores, while our revenue management systems use data from millions of rental transactions to continuously evolve to optimize conversion. Using sophisticated data-driven pricing and promotions, we are capturing maximum value from every customer interaction. We are thoughtfully integrating AI and machine learning where it delivers tangible benefits, whether enhancing operational efficiency, sharpening execution, or elevating the customer experience. These are not experiments but data-driven decisions based on years of testing that position us as the sector's strongest operator.

OUR BALANCE SHEET REMAINS A COMPETITIVE ADVANTAGE

We actively manage and extend our maturities, optimize interest costs, and preserve access to diverse capital sources. In 2025, we strengthened our financial position and lowered our interest cost by establishing a commercial paper program and increasing the capacity of our credit facility to $3 billion, providing us with enhanced flexibility and funding capacity. We maintained strong liquidity and broad capital access, ensuring we have the resources to pursue growth opportunities and weather cycles. This fortress-like positioning equips us to act decisively as conditions evolve.

Our flexible balance sheet enabled us to pursue growth through diverse and strategic external channels. We executed $879 million in accretive acquisitions. We also entered, exited, and restructured joint ventures, which generated $51 million in backend promotes. Additionally, we deployed $409 million of capital into bridge loan investments. Our disciplined capital allocation decisions enhanced our portfolio quality and return profile. Our third-party management platform delivered exceptional industry leading growth, adding 281 stores that generate fee income and reinforce our brand presence. With over 4,200 stores now operating under the Extra Space Storage brand across 43 states plus Washington D.C. and nearly all major metros, our scale and diversification provide stability and minimize concentration risk.

Our strong execution is possible due to the depth and quality of talent across Extra Space Storage. Our executive team brings deep tenure and a proven track record, while our focus on attracting, developing, and retaining diverse talent ensures we are building tomorrow's leaders today. Succession planning is embedded at all senior levels. We have created a true career destination, and our people deliver exceptional service and performance that sets us apart.

Extra Space Storage has thrived across cycles, through booms and downturns, supply waves and supply droughts, rising and falling interest rates and cap rates. Our disciplined yet opportunistic approach to capital allocation has consistently driven value creation. The landscape evolves constantly, but our ability to perform at the top of the sector endures. As we look ahead, we are optimistic: the operational momentum we built in 2025, combined with declining new supply and our platform's proven strengths, positions us to unlock sustained growth and lasting shareholder value.

Sincerely,

Joseph Margolis
Chief Executive Officer

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Extra Space Storage's culture of innovation is evident not only in our technology leadership but also in our strategic and forward-thinking approach to growth and capital allocation. In 2025, we leveraged our diversified platform to deploy capital across multiple channels, including acquisitions, joint ventures, third-party management, bridge lending, and preferred equity investments, each offering distinct risk-return profiles. This flexible, multi-faceted strategy allows us to adapt to market conditions while consistently generating attractive risk-adjusted returns across different tiers of the capital stack. It also allows us to build relationships with key industry participants, which create future investment opportunities.

Our bridge loan program serves as a strategic capital deployment tool that strengthens partnerships while generating compelling returns. By providing flexible financing to management partners on properties at any occupancy level, we unlock new potential in existing relationships and attract new partners to our platform. The program has proven highly effective as an acquisition funnel. Nearly 25% of financed properties have transitioned to Extra Space ownership. Our co-lending partnership structure allows us to maintain disciplined balance sheet management while maximizing risk-adjusted returns across the portfolio.

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This diversified investment approach positions Extra Space Storage to perform across all business cycles and market environments. By maintaining multiple growth levers with varying risk-return characteristics, we can shift capital allocation as conditions evolve while sustaining growth momentum. Our flexible platform ensures we remain well-positioned to capitalize on opportunities and deliver consistent long-term value to shareholders regardless of market dynamics.

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With over 2.9 million units across the country, we are continuously acquiring new customers. In fact, every month we attract and execute leases with approximately 140,000 new customers, giving us a deep set of data and a comprehensive understanding of customer behavior. The landscape of marketing evolves rapidly in the digital era, and we're equipped to unlock what's possible at each turn. To do so, we employ the sector's most experienced team, and we partner with industry-leading external resources to maintain an agile infrastructure that adapts to constant change. Through sophisticated digital marketing strategies powered by AI and advanced analytics, we identify high-quality prospects, drive them to our stores, and convert these leads into rentals at high conversion rates. Our expertise in search engine optimization, pay-per-click advertising, social media marketing, programmatic advertising, and brand management all help drive customers to our website, our call center, and ultimately to our properties.

We have consistently been one of the most innovative players in the digital marketing space and we continue to leverage cutting-edge technology and strategic partnerships with leading platforms. Once a customer starts investigating Extra Space as a storage solution, they're presented with a consistent and frictionless customer experience that allows them to quickly resolve their storage need. We interact with customers however they want to, whether online, by phone, or in person, providing a seamless experience across all our channels. Our customer communication makes interactions with Extra Space positive and reaffirming of their choice to store with us.

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Our geographically diversified footprint includes approximately 4,200 stores spread across 43 states. Our diversification reduces individual market volatility and produces steady portfolio returns. We maintain exposure to numerous primary and secondary markets, with minimal concentration in any geographic area. Investment in Extra Space allows investors to benefit from consistent cash flow produced by a leading portfolio in a need-based sector. Our portfolio is positioned to unlock long-term value.

Our ownership structure provides further diversification and the ability to optimize capital allocation. With properties that are wholly-owned, joint-venture owned, or managed on behalf of third parties, we have access to multiple types of capital during different stages of a real estate cycle. Our flexible structure positions Extra Space Storage for steady growth regardless of market conditions.

The growth of our portfolio through strategic acquisitions, partner buyouts, joint ventures, our bridge loan program, and the expansion of our third-party management platform continued to be key contributors to our success in 2025. Technology investments, property enhancements, and redevelopment initiatives further modernize the portfolio, reduce its effective age and help keep it competitive across our geographically diverse markets.

Extra Space Storage Operated Stores

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We navigated a challenging environment in 2025, maintaining core funds from operations per share (Core FFO) growth above the sector average. Our long-term Core FFO growth remains best-in-class among storage peers and among the highest of any U.S. REIT, demonstrating the resilience of our strategy and driving a 20-year total shareholder return of 1,780%, the highest in the storage sector, and the 2nd highest in the public REIT sector.

Despite market headwinds, we executed our core strategy with discipline and delivered solid same-store performance with industry leading average occupancy of 94.0% and positive same-store revenue and Core FFO growth, reflecting the stability of our need-based real estate sector.

In 2025, we drove growth through multiple channels, completing approximately $900 million in acquisitions, adding 281 net new stores to our third-party management platform, and originating over $400 million in new bridge loans. We also completed a $1.7 billion in unsecured bond offerings and expanded our credit facility, enhancing capacity while optimizing our cost of capital. Our appropriately levered balance sheet provides the financial flexibility and multiple capital sources needed to support operations and fuel continued growth across all our business lines.

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At Extra Space Storage, our success starts with our people, from our more than 8,000 employees who serve customers every day to our experienced leadership team that has built a culture of continuity and excellence. We believe that when we invest in our team members and create an environment where they can thrive, we unlock our potential to deliver exceptional experiences for our customers. This commitment to our people has earned us recognition as one of the nation's best places to work.

Our five core values: Integrity, Excellence, Innovation, Teamwork, and Passion guide how we serve our customers, support our employees, and operate our business every day. By attracting and retaining dedicated team members who embody these values, we create storage solutions and customer experiences that set us apart.

Management Bios

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We are committed to building a sustainable company that delivers long-term value. We actively seek opportunities to invest in initiatives that benefit the environment, strengthen the communities where we operate, and create shareholder value. Our dedication to sustainability has produced measurable results: 47% of our properties are now equipped with solar energy systems, and in 2025 alone, we invested $30 million in new solar projects, significantly expanding our clean energy footprint while reducing operational costs and our environmental impact. By continuing to pursue opportunities at the intersection of environmental responsibility, community engagement, and financial performance, we are building a more resilient and valuable company for years to come.

Learn more and see our annual sustainability report.

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