Advertisement
Extra Space Storage Inc., one of the leading self-storage real estate investment trusts (REITs) in the United States, announced financial results indicating steady operational performance but softer growth expectations for 2025. The company projected annual core funds from operations (FFO) between USD 8.12 and USD 8.20 per share, slightly below Wall Street's average estimate. Despite a modest decline in same-store revenue and higher operating costs, total quarterly revenue surpassed expectations. The company continues to face pricing and occupancy challenges but remains optimistic about gradual market stabilization.
Extra Space Storage Inc., based in Salt Lake City, reported its financial outlook for 2025, signaling a cautious approach amid moderate demand and pricing pressures across the self-storage sector. The company expects annual core FFO to range between USD 8.12 and USD 8.20 per share, compared to the analysts' consensus estimate of USD 8.18 per share, according to data compiled by LSEG. Following the announcement, its shares fell by about 2% in after-market trading. Advertisement
For the quarter ended September 30, total revenue stood at USD 858.5 million, surpassing analysts' expectations of USD 779.9 million. However, same-store revenue saw a slight decline to USD 673.9 million from USD 675.4 million in the corresponding period last year. The company's same-store occupancy rate held stable at 93.7%, compared with 93.6% a year earlier, showing resilience in customer retention despite a slower pace of new demand.
Chief Executive Officer Joe Margolis said that while same-store revenue remained mostly unchanged, the company observed a gradual improvement in overall market fundamentals. He added that Extra Space Storage is continuing to work on strengthening its pricing power and addressing fluctuations in occupancy trends across key markets.
Operating expenses, however, increased during the quarter, resulting in a 2.5% decline in same-store net operating income (NOI) compared with the previous year. Expense growth was reported at around 5.8%, reflecting the impact of inflation and higher property-related costs.
In terms of portfolio expansion, the REIT added 95 properties (net addition of 62) to its third-party management platform, bringing the total number of managed stores to 2,222 as of the end of September. The company's platform expansion aligns with its strategy to maintain long-term growth by partnering with independent operators.
For the upcoming year, Extra Space Storage projects same-store revenue growth in the range of -0.25% to +0.25%, same-store expense growth between 4.5% and 5.0%, and same-store NOI decline between 1.25% and 2.25%. The REIT's quarterly core FFO came in at USD 2.08 per share, matching analyst expectations.
The company also highlighted that broader self-storage industry conditions remain mixed, with competitive pricing and moderating occupancy levels affecting near-term revenue potential. However, management remains confident that disciplined cost control, stable demand in suburban markets, and continued portfolio growth could support gradual improvement over the next few quarters.
Source Reuters
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
