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Extra Space Storage

Extra Space StorageEXREarnings & Financial Report

NYSE · Real Estate · Self-Storage REITs

Extra Space Storage Inc. is an American real estate investment trust headquartered in Cottonwood Heights, Utah that invests in self storage facilities. The company rents storage units, including climate controlled units, drive-up units, lockers, boat storage, RV storage and business storage under the brands Extra Space Storage, Life Storage, and Storage Express. As of March 28, 2024 the company owned and/or operated 3,714 locations in 43 states, and Washington, D.C. comprising approximately 2.

What changed in Extra Space Storage's 10-K — 2023 vs 2024

Top changes in Extra Space Storage's 2024 10-K

165 paragraphs added · 164 removed · 134 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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We proactively redevelop properties to add units or modify existing unit mix to better meet the demand in a given market and to maximize revenue. We also redevelop properties to extend their useful life, increase visual appeal, enhance security and to improve brand consistency across the portfolio.
We proactively redevelop properties to add units or modify existing unit mix to better meet the demand in a given market and to maximize revenue. We also redevelop properties to extend their useful life, increase visual appeal, enhance security and improve brand consistency across the portfolio.
We manage the day-to-day operations of the stores owned in these joint ventures and have the right to participate in major decisions relating to sales of stores or financings by the applicable joint venture, but do not control the joint ventures.
We manage the day-to-day operations of the stores owned in these joint ventures and have the right to participate in major decisions relating to sales of stores or financings by the applicable joint venture, but we do not control the joint ventures.
Our collection and processing of personal information may be subject to various data privacy and security laws, which govern the collection, use, disclosure of personal information and are constantly evolving, may conflict with each other to complicate compliance efforts and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
Our collection and processing of personal information may be subject to various data privacy and security laws, which govern the collection, use, and disclosure of personal information and are constantly evolving, may conflict with each other to complicate compliance efforts and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
Changes in any of these laws or regulations, as well as changes in laws, such as the Comprehensive Environmental Response and Compensation Liability Act, which increase the potential liability for environmental conditions or circumstances existing or created by tenants or others on stores, or laws affecting development, construction, operation, limitations on rent increases due to state of emergency or similar orders, upkeep, safety and taxation may result in significant unanticipated expenditures, loss of stores or other impairments to operations, which would adversely affect our financial position, results of operations or cash flows.
Changes in any of these laws or regulations, as well as changes in laws, such as the Comprehensive Environmental Response and Compensation Liability Act, which increases the potential liability for environmental conditions or circumstances existing or created by tenants or others on stores, or laws affecting development, construction, operation, limitations on rent increases due to state of emergency or similar orders, upkeep, safety and taxation may result in significant unanticipated expenditures, loss of stores or other impairments to operations, which would adversely affect our financial position, results of operations or cash flows.
These investments benefit us by providing dividend income, increasing our management business, and creating additional potential future acquisition opportunities through relationships with the companies in which we invest. Operating Segments We operate in two distinct segments: (1) self-storage operations; and (2) tenant reinsurance. Our self-storage operations activities include rental operations of wholly-owned stores.
These investments benefit us by providing dividend income, creating additional potential future acquisition opportunities through relationships with the companies in which we invest, or increasing our management business. Operating Segments We operate in two distinct segments: (1) self-storage operations; and (2) tenant reinsurance. Our self-storage operations activities include rental operations of wholly-owned stores.
The mix of residential tenants using a store is determined by a store’s local demographics and often includes people who are experiencing life changes such as downsizing their living space or others who are not yet settled into a permanent residence. Items that tenants place in self-storage are typically furniture, household items and appliances.
The mix of residential tenants using a store is determined by a store’s local demographics and often includes people who are experiencing life changes such as downsizing their living space or others who are not yet settled into a permanent residence. Items that tenants place in self-storage may include furniture, household items and appliances.
A wholly-owned, consolidated subsidiary fully reinsures such policies and thereby assumes all risk of losses under these policies and receives reinsurance premiums substantially equal to the premiums collected from our tenants, from the non-affiliated insurance company. As of December 31, 2023, we managed 1,337 stores for third party owners.
A wholly-owned, consolidated subsidiary fully reinsures such policies and thereby assumes all risk of losses under these policies and receives reinsurance premiums, substantially equal to the premiums collected from our tenants, from the non-affiliated insurance company. As of December 31, 2024, we managed 1,575 stores for third party owners.
In 2023, we invested in training and development for our employees, which included leadership training, communication training, individual development plans, site manager training and mentorship programs.
In 2024, we invested in training and development for our employees, which included leadership training, communication training, individual development plans, site manager training and mentorship programs.
We plan to finance future acquisitions, store development and our bridge loan program through a diverse capital optimization strategy which includes but is not limited to: cash generated from operations, borrowings under our revolving lines of credit (the "Credit Lines"), secured and unsecured financing, equity offerings, joint ventures and the sale of stores.
We plan to finance future acquisitions, store development and re-development, capital expenditures and our bridge loan program through a diverse capital optimization strategy which includes, but is not limited to, the following: cash generated from operations, borrowings under our revolving lines of credit (the “Credit Lines”), commercial paper, secured and unsecured financing, equity offerings, joint ventures and the sale of stores.
We believe that if we focus on attracting, developing, and retaining diverse top talent at all levels of the organization, our employees will take care of our customers and drive growth for our shareholders. As of December 31, 2023, we had 7,618 employees and believe our relationship with our employees is good.
We believe that if we focus on attracting, developing, and retaining diverse top talent at all levels of the organization, our employees will take care of our customers and drive growth for our shareholders. As of December 31, 2024, we had 8,012 employees and believe our relationship with our employees is good.
We sell stock under the ATM program from time to time to raise capital when we believe conditions are advantageous. During the year ended December 31, 2023, we didn't issue or sell any shares of common stock.
We sell stock under the ATM program from time to time to raise capital when we believe conditions are advantageous. During the year ended December 31, 2024, we did not issue or sell any shares of common stock.
We believe that our emphasis on training and development, employee safety, employee health and well-being, and a commitment to diversity, equity and inclusion leads to an increase in employee productivity and positions us to attract and retain top diverse talent.
We believe that our emphasis on training and development, employee safety, employee health and well-being, and a commitment to our values leads to an increase in employee engagement and positions us to attract and retain top diverse talent.
We also provide employees access to a network of childcare and elder care providers. Training and Development In order to attract and retain diverse top talent, we believe strongly that development is a continuous journey throughout the employee's career. We provide formal development programs which are available to employees who are ready for an intense structured experience.
Training and Development In order to attract and retain diverse top talent, we believe strongly that development is a continuous journey throughout the employee's career. We provide formal development programs which are available to employees who are ready for an intense structured experience.
For the year ended December 31, 2023, we did not sell any stores. For the year ended December 31, 2022, we sold two stores for $38.7 million. Industry & Competition We are the largest self-storage operator in the United States. Our three primary competitors who are public self-storage REITs are CubeSmart, National Storage Affiliates and Public Storage.
For the year ended December 31, 2024, we sold six stores for $102.5 million. For the year ended December 31, 2023, we did not sell any stores. Industry & Competition We are the largest self-storage operator in the United States. Our three primary competitors who are public self-storage REITs are CubeSmart, National Storage Affiliates and Public Storage.
We generally originate mortgage loans and mezzanine loans, with the intent to sell a portion of the mortgage loans to third parties, while retaining our interests in the mezzanine loans. As of December 31, 2023, the total balance of bridge loans receivable was $594.7 million. 5 We have made investments in preferred stock of other self-storage companies.
We generally originate mortgage loans and mezzanine loans with the option to sell a portion of the mortgage loans to third parties, while retaining our interests in the mezzanine loans. As of December 31, 2024, the total balance of bridge loans receivable was $1.2 billion. 5 We have made investments in preferred stock of other self-storage companies.
Our employees are not represented by a collective bargaining agreement. In 2023, we invited our employees to participate in an employee satisfaction survey and achieved an overall satisfaction score of 79% with over 95% of our employees participating in our survey.
Our employees are not represented by a collective bargaining agreement. In 2024, we invited our employees to participate in an employee satisfaction survey and achieved an overall satisfaction score of 75% with 94% of our employees participating in our survey.
Stores offer month-to-month rental of storage space for personal or business use. As of December 31, 2023, we owned and/or operated 3,714 stores in 42 states, and Washington, D.C., comprising approximately 283 million square feet of net rentable space in approximately 2.6 million units.
Stores offer month-to-month rental of storage space for personal or business use. As of December 31, 2024, we owned and/or operated 4,011 stores in 42 states, and Washington, D.C., comprising approximately 308.4 million square feet of net rentable space in approximately 2.8 million units.
As of December 31, 2023, our Credit Lines had available capacity of $2.1 billion, of which $1,458 million was undrawn. 6 Secured and Unsecured Debt - We primarily use public bonds, unsecured private placement bonds and unsecured bank term loans to finance store acquisitions and development efforts.
As of December 31, 2024, our commercial paper program had available capacity of $1.0 billion, of which $500 million was undrawn. Secured and Unsecured Debt - We primarily use public bonds, unsecured private placement bonds and unsecured bank term loans to finance store acquisitions and development efforts.
We will continue to utilize a combination of secured and unsecured financing for future store acquisitions and development. As of December 31, 2023, we had $1.3 billion of secured notes payable and $9.4 billion of unsecured notes payable outstanding. Equity - We have an active "at the market" ("ATM") program for selling stock.
We will continue to utilize a combination of secured and unsecured financing for future store acquisitions and development. As of December 31, 2024, we had $1.0 billion of secured notes payable and $10.2 billion of unsecured notes payable outstanding. Equity - We have an active “at the market” (“ATM”) program for selling stock.
We expect that this trend will continue as we continue to acquire Certificate of Occupancy stores. Financing of Our Long-Term Growth Strategies As a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders. Consequently, we require access to additional sources of capital to fund our growth.
Financing of Our Long-Term Growth Strategies As a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders. Consequently, we require access to additional sources of capital to fund our growth. We expect to maintain a flexible approach to financing growth.
In addition, we believe our status as an UPREIT enables flexibility when structuring deals. We remain a disciplined buyer and only execute acquisitions that we believe will strengthen our portfolio and increase stockholder value. In addition to the pursuit of operating stores, from time to time we develop stores from the ground up and provide the construction capital.
In addition, we believe our status as an UPREIT enables flexibility when structuring deals. We remain a disciplined buyer and only execute acquisitions that we believe will strengthen our portfolio and increase stockholder value.
Our size allows us greater ability than the majority of our competitors to implement more dynamic online marketing programs, which we believe will attract more customers to our stores at a lower net cost. We continually analyze our portfolio to look for long-term value-enhancing opportunities.
We have implemented one of the most dynamic online marketing programs in the industry, which we believe will attract more customers to our stores at a lower net cost compared with our competitors. We continually analyze our portfolio to look for long-term value-enhancing opportunities.
Our joint venture partners typically provide most of the equity capital required for the acquisition of stores owned in these joint ventures. Most joint venture agreements include buy-sell rights, as well as rights of first offer in connection with the sale of stores by the joint venture.
Most joint venture agreements include buy-sell rights, as well as rights of first offer in connection with the sale of stores by the joint venture.
Regulation Generally, stores are subject to various laws, ordinances and regulations, including regulations relating to lien sale rights and procedures and the Americans with Disabilities Act of 1990.
Competitive bidding practices have been commonplace between both public and private entities, and this will likely continue. Regulation Generally, stores are subject to various laws, ordinances and regulations, including regulations relating to lien sale rights and procedures and the Americans with Disabilities Act of 1990.
Common Operating Partnership units receive distributions equal to the dividends on common stock, while Preferred Operating Partnership units receive distributions at various negotiated rates. We may issue additional units in the future when circumstances are favorable. Joint Ventures - As of December 31, 2023, we owned 474 of our stores through unconsolidated joint ventures with third parties.
Common Operating Partnership units receive distributions equal to the dividends on common stock, while Preferred Operating Partnership units receive distributions at various negotiated rates. We may issue additional units in the future when circumstances are favorable. During the year ended December 31, 2024, we issued 623,621 Operating Partnership units.
We offer individualized counseling to our employees to assist them with their journey towards better health and financial wellness. We also offer other health-oriented benefits such as smoking cessation programs and a fitness program that allows for reimbursements to employees for expenses incurred relating to fit-friendly activities, sports or exercise equipment.
We also offer other health-oriented benefits such as a fitness program that allows for reimbursements to employees for expenses incurred relating to fit-friendly activities, sports or exercise equipment. We also provide employees access to a network of childcare and elder care providers.
We are typically able to acquire these assets at a lower price than a stabilized store, and expect greater long term returns on these stores on average. However, in the short term, these acquisitions cause dilution to our earnings during the two-to-four year period required to lease up the Certificate of Occupancy stores.
However, in the short term, these acquisitions cause dilution to our earnings during the two-to-four year period required to lease up the Certificate of Occupancy stores. We expect that this trend will continue as we continue to acquire Certificate of Occupancy stores.
Our field employees received an aver age of 22 ho urs of training and each new hire received an average of 82 hours of training in 2023. 8 Diversity, Equity and Inclusion We value diversity, equity and inclusion and undertake a wide spectrum of initiatives to attract and retain a diverse workforce.
Our field employees received an aver age of 17 ho urs of training and each new hire received an average of 82 hours of training in 2024. 8 Inclusion and Values • We are committed to fostering an inclusive culture and living our core values of integrity, teamwork, excellence, passion and innovation.
We also purchase stores at the completion of construction from third party developers, who build to our specifications. These stores purchased at completion of construction (a "Certificate of Occupancy store"), create additional long-term value for our stockholders.
These stores purchased at completion of construction (a “Certificate of Occupancy store”) create additional long-term value for our stockholders. We are typically able to acquire these assets at a lower price than a stabilized store, and we expect greater long term returns on these stores on average.
During 2023, we expanded participation in our employee resource groups that provide our employees a space to build community by celebrating their culture, providing mentoring opportunities and developing educational content for Extra Space.
In 2024 , we continued to expand participation in our employee resource groups, which provide employees with opportunities to build connections, celebrate culture, access mentoring, and engage in educational initiatives that strengthen our workplace community. • Inclusion is central to our values and culture at Extra Space.
The self-storage industry is a mature industry with average occupancies that are typically at or above 90%. According to the Self-Storage Almanac (the “Almanac”), the national average physical occupancy rate was 92.8% of net rentable square feet in 2017, compared to an average physical occupancy rate of 91.6% in 2023. Our average occupancy for wholly-owned stores for 2023 was 92.0%.
The self-storage industry is a mature industry with average occupancies that are typically at or above 90%. Our average occupancy for our same-store pool for 2024 was 93.9%. 7 The self-storage industry is characterized by fragmented ownership, where the largest companies in the industry own a fraction of the operating stores.
Compensation, Health and Well Being We offer competitive health benefits and encourage our employees to participate in employee health and wellness programs. Over 56% of our employees who are enrolled in our health plan participate in these programs, which are designed to improve employees' overall health.
Compensation, Health and Well Being We offer competitive health benefits and encourage our employees to participate in employee health and wellness programs. We offer our employees a health concierge service that helps them navigate their healthcare, from finding providers, comparing costs and resolving complex claims issues.
Removed
We expect to maintain a flexible approach to financing growth.
Added
In addition to the pursuit of operating stores, from time to time we develop stores from the ground up, frequently in a joint venture with a developer, and provide the construction capital. We also purchase stores at the completion of construction from third party developers, who build to our specifications.
Removed
The industry is also characterized by fragmented ownership. According to the Almanac, as of the end of 2023, the top ten self-storage companies in the United States operated approximately 26.1% of the total U.S. stores, and the top 50 self-storage 7 companies operated approximately 32.9% of the total U.S. stores.
Added
As of December 31, 2024, our Credit Lines had available capacity of $2.1 billion, of which $1.3 billion was undrawn. 6 Commercial Paper - We have a commercial paper program which we use as short-term financing until we obtain longer-term financing through either debt or equity.
Removed
We believe this fragmentation will contribute to continued consolidation at some level in the future. We believe that we are well positioned to compete for acquisitions. We have encountered competition when we have sought to acquire existing operating stores, especially for brokered portfolios. Competitive bidding practices have been commonplace between both public and private entities, and this will likely continue.
Added
Joint Ventures - As of December 31, 2024, we owned 460 of our stores through unconsolidated joint ventures with third parties. Our joint venture partners typically provide most of the equity capital required for the acquisition of stores owned in these joint ventures.
Removed
We will continue to implement and pursue diversity, equity and inclusion initiatives and tracking that allow us to attract and retain diverse top talent, improve employee engagement, increase innovation and customer insight and enhance the quality of our decision making. Newsweek recently recognized us as one of America's Greatest Workplaces for Diversity 2024.
Added
The remainder of the industry is characterized by numerous small, local operators. The scarcity of capital available to small operators for acquisitions and expansions, internet marketing, call centers, and the potential for savings through economies of scale are factors that are leading to consolidation in the industry.
Removed
Our employee population is approximately 49% female and approximately 44% have self-identified as people of color: Black or African American (18%), Hispanic or Latino (18%), Asian (2.4%), of two or more races (4.2%), Native American (0.7%), and Pacific Islander (0.5%).
Added
We believe that, as a result of this trend, significant growth opportunities exist for operators with proven management systems and sufficient capital resources to grow through acquisitions and/or third-party management platforms. We believe that we are well positioned to compete for acquisitions. We have encountered competition when we have sought to acquire existing operating stores, especially for brokered portfolios.
Added
We believe that excellence and innovation stem from diverse perspectives, integrity is upheld through equitable practices, and optimal teamwork thrives in an inclusive environment. We strive to ensure every employee feels engaged and empowered to bring their whole selves to work, fueling their passion and commitment to our shared goals.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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The costs associated with the investigation, remediation and potential notification of such breaches to counter-parties and data subjects could be material. We and certain of our service providers are, from time to time, subject to cyberattacks and security incidents.
The costs associated with the investigation, remediation and potential notification of such breaches to counter-parties and data subjects could be material. From time to time, we, and certain of our service providers, are subject to cyberattacks and security incidents.
If we fail to qualify as a REIT or lose our qualification as a REIT at any time, we will face serious tax consequences that would substantially reduce the funds available for distribution for each of the years involved because: • we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal corporate income tax on our taxable income; • we also could be subject to a U.S. federal alternative minimum income tax and possibly increased state and local taxes; and • unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following a year during which we were disqualified.
If we fail to qualify as a REIT or lose our qualification as a REIT at any time, we will face serious tax consequences that would substantially reduce the funds available for distribution for each of the years involved because of the following: • we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal corporate income tax on our taxable income; • we also could be subject to a U.S. federal alternative minimum income tax and possibly increased state and local taxes; and • unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following a year during which we were disqualified.
Therefore, our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: • our cash flow may be insufficient to meet our required principal and interest payments; • we may be unable to borrow additional funds as needed or on favorable terms, including to make acquisitions or to continue to make distributions required to maintain our qualification as a REIT; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • because a portion of our debt bears interest at variable rates, an increase in interest rates could materially increase our interest expense; • we may be forced to dispose of one or more of our stores, possibly on disadvantageous terms; • after debt service, the amount available for cash distributions to our stockholders is reduced; • we may experience increased vulnerability to economic and industry downturns, reducing our ability to respond to changing business and economic conditions; • we may default on our obligations and the lenders or mortgagees may foreclose on our stores that secure their loans and receive an assignment of rents and leases and/or enforce our guarantees; • we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; and • our default under any one of our mortgage loans with cross-default or cross-collateralization provisions could result in a default on other indebtedness or result in the foreclosures of other stores.
Therefore, our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: • our cash flow may be insufficient to meet our required principal and interest payments; • we may be unable to borrow additional funds as needed or on favorable terms, including to make acquisitions or to continue to make distributions required to maintain our qualification as a REIT; 14 • we may be unable to refinance our indebtedness at maturity, or the refinancing terms may be less favorable than the terms of our original indebtedness; • because a portion of our debt bears interest at variable rates, an increase in interest rates could materially increase our interest expense; • we may be forced to dispose of one or more of our stores, possibly on disadvantageous terms; • after debt service, the amount available for cash distributions to our stockholders is reduced; • we may experience increased vulnerability to economic and industry downturns, reducing our ability to respond to changing business and economic conditions; • we may default on our obligations, and the lenders or mortgagees may foreclose on our stores that secure their loans and receive an assignment of rents and leases and/or enforce our guarantees; • we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; and • our default under any one of our mortgage loans with cross-default or cross-collateralization provisions could result in a default on other indebtedness or result in the foreclosures of other stores.
Any failure to maintain the proper functioning, confidentiality, security and availability of our or our third-party service providers' information technology systems or our Confidential Information could interrupt our 11 operations, damage our reputation, divert significant management attention and resources to remedy any damages that result, subject us to liability and claims or regulatory investigations and enforcement actions, which could result in, among other things, fines and penalties, and have a material adverse effect on our business, financial condition and results of operations.
Any failure to maintain the proper functioning, confidentiality, security and availability of our or our third-party service providers' information technology systems or our Confidential Information could interrupt our operations, damage our reputation, divert significant management attention and resources to remedy any damages that result, subject us to liability and claims or regulatory investigations and enforcement actions, which could result in, among other things, fines and penalties, and have a material adverse effect on our business, financial condition and results of operations.
Further, the impact of climate change may increase the cost of, or make 12 unavailable, property insurance or other hazard insurance on terms we find acceptable or necessary to adequately protect our properties. Risks Related to Our Organization and Structure Conflicts of interest could arise as a result of our relationship with our Operating Partnership.
Further, the impact of climate change may increase the cost of, or make unavailable, property insurance or other hazard insurance on terms we find acceptable or necessary to adequately protect our properties. Risks Related to Our Organization and Structure Conflicts of interest could arise as a result of our relationship with our Operating Partnership.
We, jointly with certain corporate subsidiaries, including Extra Space Management, Inc., elected to treat each such subsidiary as a taxable REIT subsidiary of our Company for U.S. federal income tax purposes. A TRS is subject to U.S. federal corporate income tax, and may also be subject to state and local taxes, on its taxable income.
We, jointly with certain corporate subsidiaries, including Extra Space Management, Inc., elected to treat each such subsidiary as a taxable REIT subsidiary (a “TRS”) of our Company for U.S. federal income tax purposes. A TRS is subject to U.S. federal corporate income tax, and may also be subject to state and local taxes, on its taxable income.
This, in turn, could 15 cause our other debt, including the notes and our revolving credit facility, to become due and payable as a result of cross-default or cross-acceleration provisions contained in the agreements governing the other debt and permit certain of our lenders to foreclose on our assets, if any, that secure this debt.
This, in turn, could cause our other debt, including the notes and our revolving credit facility, to become due and payable as a result of cross-default or cross-acceleration provisions contained in the agreements governing the other debt and permit certain of our lenders to foreclose on our assets, if any, that secure this debt.
Settling any such liabilities could negatively impact our operating results and cash available for distribution to stockholders, and could also adversely affect our ability to sell, lease, operate or encumber affected properties. Our tenant reinsurance business is subject to significant governmental regulation, which may adversely affect our results. Our tenant reinsurance business is subject to significant governmental regulation.
Settling any such liabilities could negatively impact our 9 operating results and cash available for distribution to stockholders and could also adversely affect our ability to sell, lease, operate or encumber affected properties. Our tenant reinsurance business is subject to significant governmental regulation, which may adversely affect our results. Our tenant reinsurance business is subject to significant governmental regulation.
If any of the credit rating agencies that have rated the outstanding notes or other debt securities of the operating partnership downgrades or lowers its credit rating, or if any credit rating agency indicates that it has placed any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise indicates that its outlook for that rating is negative, it could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations (including payments on the outstanding notes) and to make dividends and other distributions to our security holders and could also have the material adverse effect on the market value of the outstanding notes.
If any credit rating agency that has rated the outstanding notes or other debt securities of the Operating Partnership downgrades or lowers its credit rating, or if any credit rating agency indicates that it has 15 placed any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise indicates that its outlook for that rating is negative, it could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations (including payments on the outstanding notes) and to make dividends and other distributions to our security holders and could also have the material adverse effect on the market value of the outstanding notes.
To the extent that we are, or any of our TRSs is, required to pay U.S. federal, state or local taxes, we will have less cash available for distribution to stockholders. Item 1B. Unresolved Staff Comments None.
To the extent that we are, or any of our TRSs are, required to pay U.S. federal, state or local taxes, we will have less cash available for distribution to stockholders. Item 1B. Unresolved Staff Comments None.
In addition, if we fail to qualify as a REIT, we will not be required to make distributions to stockholders, and all distributions to stockholders will be subject to tax as regular corporate dividends to the extent of our current and accumulated 16 earnings and profits.
In addition, if we fail to qualify as a REIT, we will not be required to make distributions to stockholders, and all distributions to stockholders will be subject to tax as regular corporate dividends to the extent of our current and accumulated earnings and profits.
Additionally, we do not anticipate that our internally generated cash flow will be adequate to repay our existing indebtedness upon maturity and, therefore, we expect to repay our indebtedness through refinancings and equity 14 and/or debt offerings.
Additionally, we do not anticipate that our internally generated cash flow will be adequate to repay our existing indebtedness upon maturity and, therefore, we expect to repay our indebtedness through refinancings and equity and/or debt offerings.
In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets, the sources of our gross income and the owners of our stock.
In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets, the sources of our gross income and the owners 16 of our stock.
The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service ("IRS") and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could adversely affect our investors or us in ways we cannot predict.
The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”) and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could adversely affect our investors or us in ways we cannot predict.
We rely on information technology networks and systems, including the Internet, to process, transmit and store confidential information, and to manage or support a variety of business processes, including financial transactions and records, intellectual property, proprietary business information, and personal information of our employees, contractors and customers, such as tenant and lease data (collectively, "Confidential Information").
We rely on information technology networks and systems, including the Internet, to process, transmit and store confidential information, and to manage or support a variety of business processes, including financial transactions and records, intellectual property, proprietary business information, and personal information of our employees, contractors and customers, such as tenant and lease data (collectively, “Confidential Information”).
In addition, lower than expected rental rates upon re-letting could adversely affect our revenues and impede our growth. Uninsured losses or losses in excess of our insurance coverage could adversely affect our financial condition and our cash flow.
In addition, lower than expected rental rates upon re-letting could adversely affect our revenues and impede our growth. Uninsured losses, losses in excess of our insurance coverage, or increasing insurance deductibles could adversely affect our financial condition and our cash flow.
In addition, we will be subject to a 100% penalty tax on certain amounts if the economic arrangements among our tenants, our TRS and us are not comparable to similar arrangements among unrelated parties.
In addition, we will be subject to a 100% penalty tax on certain amounts if the economic arrangements among our tenants, our TRSs and us are not comparable to similar arrangements among unrelated parties.
Our joint venture investments could be adversely affected by our lack of sole decision-making authority. As of December 31, 2023, we held interests in 474 operating stores through joint ventures. Some of these arrangements could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers' financial conditions and disputes between us and our co-venturers.
Our joint venture investments could be adversely affected by our lack of sole decision-making authority. As of December 31, 2024, we held interests in 469 operating stores through joint ventures. Some of these arrangements could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers' financial conditions and disputes between us and our co-venturers.
Required payments of principal and interest on borrowings may leave us with insufficient cash to operate our stores or to pay the distributions currently contemplated or necessary to maintain our qualification as a REIT and may expose us to the risk of default under our debt obligations. As of December 31, 2023, we had approximately $11.3 billion of outstanding indebtedness.
Required payments of principal and interest on borrowings may leave us with insufficient cash to operate our stores or to pay the distributions currently contemplated or necessary to maintain our qualification as a REIT and may expose us to the risk of default under our debt obligations. As of December 31, 2024, we had approximately $12.6 billion of outstanding indebtedness.
If we are required to utilize our Credit Lines for purposes other than acquisition activity, this will reduce the amount available for acquisitions and could slow our growth.
If we are required to utilize our revolving lines of credit and commercial paper for purposes other than acquisition activity, this will reduce the amount available for acquisitions and could slow our growth.
Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business, financial condition and results of operations.
Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business, financial condition and results of operations. 11 Our property taxes could increase due to reassessment or property tax rate changes.
We may incur additional debt in connection with future acquisitions and development. We may borrow under our Credit Lines or borrow new funds to finance these future stores.
We may incur additional debt in connection with future acquisitions and development. We may borrow under our revolving lines of credit and commercial paper program or borrow new funds to finance these future stores.
Our ability to acquire stores on favorable terms and successfully integrate and operate them may be constrained by the following significant risks: • competition from local investors and other real estate investors with significant capital, including other publicly-traded REITs and institutional investment funds; • competition from other potential acquirers may significantly increase the purchase price which could reduce our profitability; • the inability to achieve satisfactory completion of due diligence investigations and other customary closing conditions; and • we may acquire stores subject to liabilities without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination, claims by persons dealing with the former owners of the stores and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the stores.
Our ability to acquire stores on favorable terms and successfully integrate and operate them may be constrained by the following significant risks: • competition from local investors and other real estate investors with significant capital, including other publicly-traded REITs and institutional investment funds; • competition from other potential acquirers may significantly increase the purchase price which could reduce our profitability; • the inability to achieve satisfactory completion of due diligence investigations and other customary closing conditions; and • we may acquire stores subject to liabilities without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination, claims by persons dealing with the former owners of the stores and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the stores. 10 We and our vendors rely on information technology, and any material failure, inadequacy, interruption or security incident affecting that technology could harm our business, results of operations and financial condition.
Legal disputes, settlement and defense costs could have an adverse effect on our operating results. 9 From time to time we have to make monetary settlements or defend actions or arbitration (including class actions) to resolve tenant, employment-related or other claims and disputes.
As a result, our operating results may be adversely affected. Legal disputes, settlement and defense costs could have an adverse effect on our operating results. From time to time we have to make monetary settlements or defend actions or arbitration (including class actions) to resolve tenant, employment-related or other claims and disputes.
As of December 31, 2023, we had approximately $11.3 billion of debt outstanding, of which approximately $3.0 billion, or 26.6% was subject to variable interest rates (excluding debt with interest rate swaps). This variable rate debt had a weighted average interest rate of approximately 6.6% per annum.
As of December 31, 2024, we had approximately $12.6 billion of debt outstanding, of which approximately $3.0 billion or 24.2% was subject to variable interest rates (excluding debt with interest rate swaps). This variable rate debt had a weighted average interest rate of approximately 5.4% per annum.
In addition, our Operating Partnership is required to indemnify us, our affiliates and each of our respective trustees, officers, directors, employees and agents to the fullest extent permitted by applicable law against any and all losses, claims, damages, liabilities (whether joint or several), expenses (including, without limitation, attorneys’ fees and other legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Operating Partnership, provided that our Operating Partnership will not indemnify for (1) willful misconduct or a knowing violation of the law, (2) any transaction for which such person received an improper personal benefit in violation or breach of any provision of the partnership agreement, or (3) in the case of a criminal proceeding, the person had reasonable cause to believe the act or omission was unlawful.
In addition, our Operating Partnership is required to indemnify us, our affiliates and each of our respective trustees, officers, directors, employees and agents to the fullest extent permitted by applicable law against any and all losses, claims, damages, liabilities (whether joint or several), expenses (including, without limitation, attorneys’ fees and other legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Operating Partnership, provided that our Operating Partnership will not indemnify for (1) willful misconduct or a knowing violation of the law, (2) any transaction for which such person received an improper personal benefit in violation or breach of any provision of the partnership agreement, or (3) in the case of a criminal proceeding, the person had reasonable cause to believe the act or omission was unlawful. 12 The provisions of Delaware law that allow the common law fiduciary duties of a general partner to be modified by a partnership agreement have not been resolved in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties that would be in effect under common law were it not for the partnership agreement.
In addition, if any such loss is insured, we may be required to pay significant amounts on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss, or the amount of the loss may exceed our coverage for the loss. As a result, our operating results may be adversely affected.
In addition, if any such loss is insured, we may be required to pay significant amounts on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss, or the amount of the loss may exceed our coverage for the loss. Also, insurance deductibles may continue increasing.
Therefore, the amount of property taxes we are required to pay could increase substantially from the property taxes we currently pay or have paid in the past, including on a retroactive basis.
Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change. Therefore, the amount of property taxes we are required to pay could increase substantially from the property taxes we currently pay or have paid in the past, including on a retroactive basis.
Woolley, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing; to Spencer F. Kirk, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing; and to certain designated investment entities as defined in our charter.
Woolley, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing; to Spencer F.
If our property taxes we pay increase, our cash flow would be adversely impacted, and our ability to pay any expected dividends to our stockholders and unitholders could be adversely affected. Public health emergencies, and measures intended to prevent the spread of a public health emergency, could adversely affect our results of operations.
If our property taxes we pay increase, our cash flow would be adversely impacted, and our ability to pay any expected dividends to our stockholders and unitholders could be adversely affected. State and federal regulations relating to natural disasters, public health emergencies or consumer protection could adversely affect our results of operations.
In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers, which could harm our financial condition. 13 Certain provisions of Maryland law and our organizational documents, including the stock ownership limit imposed by our charter, may inhibit market activity in our stock and could prevent or delay a change in control transaction.
Certain provisions of Maryland law and our organizational documents, including the stock ownership limit imposed by our charter, may inhibit market activity in our stock and could prevent or delay a change in control transaction.
If one or more of our stores is not in compliance with the ADA or other legislation, then we would be required to incur additional costs to bring the facility into compliance. We face continuing risks and costs in connection with integrating the Life Storage business following our business combination with Life Storage, Inc.
If one or more of our stores is not in compliance with the ADA or other legislation, then we would be required to incur additional costs to bring the facility into compliance. There is significant competition among self-storage operators and from other storage alternatives.
Although the self-storage industry has historically been resilient to ordinary market downturns, the impact of pandemics, epidemics or public health emergencies on the U.S. and world economies generally, and on our future results in particular, could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted.
Although the self-storage industry has historically been resilient to ordinary market downturns, the impact of natural disasters, public health emergencies and related regulations including those that limit our ability to raise rents could materially and adversely affect our results of operations and will largely depend on future developments, which are highly uncertain and cannot be predicted.
Our board of directors has the power to issue additional shares of our stock in a manner that may not be in the best interest of our stockholders.
Kirk, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing; and to certain designated investment entities as defined in our charter. 13 Our board of directors has the power to issue additional shares of our stock in a manner that may not be in the best interest of our stockholders.
The impact of a public health emergency, and measures to prevent the spread of a virus or the underlying causes of a health crisis, could lower demand for storage facilities due to, among other things, stay-at home orders and other restrictions which may lead to lower rental rates, reduced late fee collection and impaired ability to hold auctions resulting in higher accounts receivable and bad debt.
The impact of natural disasters, public health emergencies and any government responses to such emergencies, or regulations passed in an attempt to protect consumers could lower demand for storage facilities, lead to lower rental rates, inability to raise rents, reduced late fee collection and impaired ability to hold auctions resulting in higher accounts receivable and bad debt.
Removed
(“Life Storage”) in July 2023, and we may not be able to successfully realize the synergies and other benefits of the acquisition or do so within the anticipated time frame. The acquisition of Life Storage involves the combination of two companies that previously operated as independent public companies and their respective operating partnerships.
Added
In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers, which could harm our financial condition. We may record losses as a result of the bankruptcy, insolvency, or other credit failure of the borrowers under our bridge lending program or other companies in which we have invested.
Removed
Although we believe the combined company has benefited from the elimination of duplicative costs associated with supporting a public company platform, we have devoted, and will continue to devote, significant management attention and resources to integrating the operations of Extra Space and Life Storage.
Added
In that case, our revenues and results of operations may be materially and adversely impacted. As of December 31, 2024, the total outstanding balance under investments in debt securities and notes receivable was $1.6 billion, including $1.2 billion outstanding under our bridge loan program.
Removed
Although much of Life Storage’s business is integrated, we may encounter costs and difficulties in the continuing integration process include the following: • the inability to fully combine the operations of Life Storage into our business, including the integration of employees, customer records and maintaining cybersecurity protections, in a manner that permits us to achieve the cost savings anticipated to result from the transaction; • the inability to dispose of former Life Storage assets or operations that we may desire to dispose of; • the difficulties of operating separate brands and the costs of potentially rebranding Life Storage stores over an extended period of time; • the complexities associated with managing the combined businesses out of different locations and integrating personnel from the two companies; • the failure to retain key employees of either of the two companies; • potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Life Storage business; and • performance shortfalls as a result of the diversion of management’s attention caused by completing the Life Storage transaction and integrating the companies’ operations.
Added
Further, as of December 31, 2024, the total outstanding balance of our investments in unconsolidated real estate entities, net of cash distributions, was $1.3 billion, of which $350 million was invested in the preferred stock of entities affiliated with SmartStop.
Removed
For all these reasons, it is possible that the continuing integration process could result in the distraction of our management and ongoing business or inconsistencies in our operations, services, standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, vendors and employees or to achieve the anticipated benefits of the Life Storage transaction, or could otherwise adversely affect our business and financial results. 10 There is significant competition among self-storage operators and from other storage alternatives.
Added
Although we conduct due diligence and aim to carefully evaluate the risks associated with these debt and other investments, we could incur losses from our lending and investing decisions, which includes subjective and complex judgments and forecasts of economic conditions and how these economic predictions might impair the ability of our borrowers and unconsolidated real estate entities to operate their business and/or make all required payments.
Removed
We and our vendors rely on information technology, and any material failure, inadequacy, interruption or security incident affecting that technology could harm our business, results of operations and financial condition.
Added
For example, volatility of the capital and credit markets, increased interest rates, lower demand for storage and general economic conditions may adversely affect the solvency, creditworthiness or operations of our borrowers and entities in which we have invested.
Removed
Our property taxes could increase due to reassessment or property tax rate changes. Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change.
Added
If our forecasts prove incorrect, or if any of our borrowers and unconsolidated real estate entities fail to perform as expected, we may incur losses from these investments which could have a material adverse effect on our operating revenue and results of operations.
Removed
We face risks related to public health emergencies, such as epidemics and pandemics that could materially and adversely impact our results of operations in the future.
Removed
In addition, a public health emergency could cause general economic and market disruptions which could impair our ability to expand our business, raise capital and adversely affect the value of our securities.
Removed
The provisions of Delaware law that allow the common law fiduciary duties of a general partner to be modified by a partnership agreement have not been resolved in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties that would be in effect under common law were it not for the partnership agreement.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+0 added−2 removed8 unchanged
These actions are tailored to the specifics of the breach and may involve tasks such as rebuilding systems or hosts, replacing compromised files with clean versions, verifying the integrity of affected files or data, enhancing network surveillance or logging to detect future attacks, adjusting administrative account privileges, fortifying network security like firewall configurations, and providing additional training to 18 employees.
These actions are tailored to the specifics of the breach and may involve tasks such as rebuilding systems or hosts, replacing compromised files with clean versions, verifying the integrity of affected files or data, enhancing network surveillance or logging to detect future attacks, adjusting administrative account privileges, fortifying network security like firewall configurations, and providing additional training to employees.
Our cybersecurity risk management program includes: • third party risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • end-user testing to assess the effectiveness of our security measures; • cybersecurity awareness training of our employees, incident response personnel, and senior management, including mandatory computer-based training, phishing awareness campaigns, and internal communications; • a cybersecurity IRP that includes procedures designed for identifying, analyzing, containing, remedying and otherwise responding to cybersecurity incidents; • testing of our incident response readiness through Disaster Recovery and Business Continuity Plan exercises; and • a third-party risk management process for service providers, suppliers, and vendors who have access to our critical systems and information.
Our cybersecurity risk management program includes the following: • third party risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; 17 • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • end-user testing to assess the effectiveness of our security measures; • cybersecurity awareness training of our employees, incident response personnel, and senior management, including mandatory computer-based training, phishing awareness campaigns, and internal communications; • a cybersecurity IRP that includes procedures designed for identifying, analyzing, containing, remedying and otherwise responding to cybersecurity incidents; • testing of our incident response readiness through Disaster Recovery and Business Continuity Plan exercises; and • a third-party risk management process for service providers, suppliers, and vendors who have access to our critical systems and information.
Our 17 cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Upon spotting a potential cybersecurity breach, including those involving third-party cyber events, the Company’s designated incident response team outlined in the IRP adheres to the policy's protocols to investigate the suspected incident.
Upon spotting a potential cybersecurity breach, including those involving third-party cyber events, our designated incident response team outlined in the IRP adheres to the policy's protocols to investigate the suspected incident.
For more information, see the section titled "Risk Factor-Risks Related to Our Stores and Operations-We and our vendors rely on information technology, and any material failure, inadequacy, interruption or security incident affecting that technology could harm our business, results of operations and financial condition." Our management team, including our Senior Vice President of Information Systems and Vice President of Information Security and Compliance, is responsible for assessing and managing our material risks from cybersecurity threats.
For more information, see the section titled “Risk Factors–Risks Related to Our Stores and Operations–We and our vendors rely on information technology, and any material failure, inadequacy, interruption or security incident affecting that technology could harm our business, results of operations and financial condition.” Our management team, including our Senior Vice President of Information Systems and Vice President of Information Security and Compliance, is responsible for assessing and managing our material risks from cybersecurity threats.
The Company is able to identify cybersecurity breaches through various channels, including but not limited to automated event detection alerts, reports from employees, notifications from external entities such as third-party IT service providers, and proactive threat investigations in collaboration with our external partners.
We are able to identify cybersecurity breaches through various channels, including but not limited to automated event detection alerts, reports from employees, notifications from external entities such as third-party IT service providers, and proactive threat investigations in collaboration with our external partners.
Item 1C. Cybersecurity The Company has a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information, which includes a cybersecurity Incident Response Plan ("IRP").
Item 1C. Cybersecurity We have a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information, which includes a cybersecurity Incident Response Plan (“IRP”).
Board members receive presentations on cybersecurity topics from our Senior Vice President of Information Systems as well as our Vice President of Information Security and Compliance, internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies.
Board members receive presentations on cybersecurity topics from our Senior Vice President of Information Systems as well as our Vice President of Information Security and Compliance, internal security staff or external experts as part of the Board’s 18 continuing education on topics that impact public companies. The Audit Committee oversees required disclosures in the event of a cybersecurity breach.
These protocols also encompass a framework for evaluating our regulatory reporting obligations to entities such as the SEC in the aftermath of a cybersecurity incident. Board Oversight of Cybersecurity Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
These protocols also encompass a framework for evaluating our regulatory reporting obligations to entities such as the SEC in the aftermath of a cybersecurity incident. Board Oversight of Cybersecurity Our Board considers cybersecurity risk as part of its risk oversight function and oversees management’s implementation of our cybersecurity risk management program.
Currently, five members of our board, including all four members of our Audit Committee, have cybersecurity experience from their principal occupation, other professional experience or third-party director education courses on cybersecurity, including cyber risk governance, and data privacy and security issues and trends.
As part of our board refreshment efforts in recent years, we have added directors with information technology governance skills. Currently, five members of our Board have cybersecurity experience from their principal occupation, other professional experience or third-party director education courses on cybersecurity, including cyber risk governance, and data privacy and security issues and trends.
The Audit Committee oversees management’s implementation of our cybersecurity risk management program. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
In addition, management updates the Board, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Board receives briefings from management on our cyber risk management program on a quarterly basis.
Removed
The full Board also receives briefings from management on our cyber risk management program on a quarterly basis.
Removed
As part of our board refreshment efforts in recent years, we have added directors with information technology governance skills.

Item 2. Properties

Properties — owned and leased real estate

5 edited+1 added−3 removed2 unchanged
As of December 31, 2023, approximately 2,100,000 tenants were leasing storage units at the operating stores that we own and/or manage, primarily on a month-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit. Existing tenants generally receive rate increases at least annually, for which no direct correlation has been drawn to our vacancy trends.
As of December 31, 2024, approximately 2,300,000 tenants were leasing storage units at the operating stores that we own and/or manage, primarily on a month-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit. Existing tenants generally receive rate increases at least annually, for which no direct correlation has been drawn to our vacancy trends.
See Note 5 in the Notes to the Condensed Consolidated Financial Statements. 19
See Note 5 in the notes to the consolidated financial statements. 19
Item 2. Properties As of December 31, 2023, we owned or had ownership interests in 2,377 operating stores. Of these stores, 1,903 are wholly-owned, two are in consolidated joint ventures, and 472 are in unconsolidated joint ventures. In addition, we managed 1,337 stores for third parties bringing the total number of stores which we own and/or manage to 3,714.
Item 2. Properties As of December 31, 2024, we owned or had ownership interests in 2,436 operating stores. Of these stores, 1,967 are wholly-owned, nine are in consolidated joint ventures, and 460 are in unconsolidated joint ventures. In addition, we managed 1,575 stores for third parties, bringing the total number of stores which we own and/or manage to 4,011.
Most often sites are what we consider “hybrid” facilities, a mix of both drive-up buildings and multi-floor buildings. We have a number of multi-floor buildings with elevator access only, and a number of facilities featuring ground-floor access only.
Most often sites are what we consider “hybrid” facilities, a mix of both drive-up buildings and multi-floor buildings.
Although leases are short-term in duration, the typical tenant tends to remain at our stores for an extended period of time. For stores that were stabilized as of December 31, 2023, the average length of stay was approximately 17.4 months.
Although leases are short-term in duration, the typical tenant tends to remain at our stores for an extended period of time. For same-stores as of December 31, 2024, the average length of stay for tenants who had vacated was approximately 17.5 months. Our store portfolio is made up of different types of construction and building configurations.
Removed
The average annual rent per square foot for our existing customers at stabilized stores, net of discounts and bad debt, was $21.25 for the year ended December 31, 2023, compared to $20.50 for the year ended December 31, 2022.
Added
The following table presents additional information regarding net rentable square feet and the number of stores by state: As of December 31, 2024 REIT Owned JV Owned Managed Total Location Property Count (1) Net Rentable Square Feet Property Count Net Rentable Square Feet Property Count Net Rentable Square Feet Property Count Net Rentable Square Feet Alabama 38 2,987,221 2 150,969 16 1,084,695 56 4,222,895 Arizona 49 3,771,769 25 2,027,537 55 4,529,430 129 10,328,736 California 219 17,983,242 50 3,712,358 138 12,960,557 407 34,656,157 Colorado 27 1,890,657 13 937,299 34 2,526,528 74 5,354,484 Connecticut 23 1,756,585 8 713,802 17 1,204,561 48 3,674,948 Delaware — — 2 143,640 4 307,406 6 451,046 Florida 256 19,360,722 53 4,438,210 205 16,056,994 514 39,855,926 Georgia 120 9,222,783 24 2,000,134 62 4,839,995 206 16,062,912 Hawaii 14 940,588 — — 4 266,115 18 1,206,703 Idaho 2 131,834 — — 4 361,562 6 493,396 Illinois 104 7,413,941 12 938,687 60 4,776,772 176 13,129,400 Indiana 92 4,042,289 1 57,520 27 2,053,840 120 6,153,649 Iowa — — — — 1 86,899 1 86,899 Kansas 1 50,214 2 108,721 3 237,095 6 396,030 Kentucky 15 1,093,826 1 51,641 15 1,190,501 31 2,335,968 Louisiana 10 771,278 — — 17 1,254,605 27 2,025,883 Maine 5 354,587 — — 11 720,771 16 1,075,358 Maryland 44 3,509,382 11 898,791 54 4,007,263 109 8,415,436 Massachusetts 65 4,141,967 16 985,007 42 2,623,578 123 7,750,552 Michigan 11 849,219 4 309,047 12 980,912 27 2,139,178 Minnesota 7 587,957 8 646,123 12 842,308 27 2,076,388 Mississippi 7 561,979 — — 6 531,198 13 1,093,177 Missouri 29 2,392,972 7 507,934 25 1,922,055 61 4,822,961 Nebraska — — — — 5 445,475 5 445,475 Nevada 33 2,941,784 9 836,425 17 1,635,004 59 5,413,213 New Hampshire 17 1,283,090 2 84,165 13 647,645 32 2,014,900 New Jersey 90 7,120,589 33 2,624,984 73 5,572,247 196 15,317,820 New Mexico 12 760,554 10 681,178 15 1,083,026 37 2,524,758 New York 80 5,741,538 28 2,317,882 97 6,909,859 205 14,969,279 North Carolina 54 3,915,513 6 476,894 42 3,404,025 102 7,796,432 Ohio 50 3,434,502 5 327,067 21 1,690,019 76 5,451,588 Oklahoma 4 269,753 — — 35 2,477,175 39 2,746,928 Oregon 8 549,877 2 166,658 7 479,867 17 1,196,402 Pennsylvania 31 2,400,533 12 940,991 60 4,450,801 103 7,792,325 Rhode Island 6 350,492 1 95,844 7 535,208 14 981,544 South Carolina 46 3,381,830 5 308,968 39 3,328,941 90 7,019,739 Tennessee 31 2,513,825 16 1,092,321 30 2,075,933 77 5,682,079 Texas 274 22,071,842 71 5,498,389 166 13,740,460 511 41,310,691 Utah 10 733,548 — — 46 3,726,944 56 4,460,492 Virginia 73 5,948,330 10 758,592 39 2,745,603 122 9,452,525 Washington 16 1,281,053 1 77,435 17 1,376,362 34 2,734,850 Washington, DC 1 100,203 1 104,206 6 534,367 8 738,776 Wisconsin 2 175,990 9 881,703 16 1,447,954 27 2,505,647 Totals 1,976 148,789,858 460 35,901,122 1,575 123,672,555 4,011 308,363,545 (1) Includes nine consolidated joint ventures and excludes approximately 18,500 units related to Bargold Storage Systems, LLC (“Bargold”).
Removed
Average annual rent per square foot for new leases was $16.19 for the year ended December 31, 2023, compared to $18.32 for the year ended December 31, 2022. The average discounts, as a percentage of rental revenues, during these periods were 2.5% and 3.0%, respectively. Our store portfolio is made up of different types of construction and building configurations.
Removed
The following table presents additional information regarding net rentable square feet and the number of stores by state: As of December 31, 2023 REIT Owned JV Owned Managed Total Location Property Count (1) Net Rentable Square Feet Property Count Net Rentable Square Feet Property Count Net Rentable Square Feet Property Count Net Rentable Square Feet Alabama 37 2,913,201 2 150,859 12 757,497 51 3,821,557 Arizona 46 3,431,613 26 2,091,172 43 3,513,713 115 9,036,498 California 218 17,876,246 50 3,715,231 126 11,806,094 394 33,397,571 Colorado 27 1,890,949 13 937,765 32 2,338,587 72 5,167,301 Connecticut 23 1,754,071 8 714,457 14 948,070 45 3,416,598 Delaware — — 2 143,640 3 228,651 5 372,291 Florida 245 18,448,238 56 4,653,439 164 12,618,124 465 35,719,801 Georgia 119 9,050,883 23 1,892,103 49 3,686,856 191 14,629,842 Hawaii 14 942,069 — — 3 159,569 17 1,101,638 Idaho 2 131,569 — — 2 201,847 4 333,416 Illinois 105 7,534,278 12 940,032 44 3,311,178 161 11,785,488 Indiana 91 3,935,511 1 57,777 25 1,790,294 117 5,783,582 Iowa — — — — 2 175,614 2 175,614 Kansas 1 50,219 2 108,921 5 416,764 8 575,904 Kentucky 15 1,065,563 1 51,800 15 1,179,886 31 2,297,249 Louisiana 10 771,538 — — 25 1,777,779 35 2,549,317 Maine 5 353,767 — — 12 750,918 17 1,104,685 Maryland 44 3,473,618 11 899,878 47 3,381,481 102 7,754,977 Massachusetts 64 4,059,829 16 984,594 36 2,388,706 116 7,433,129 Michigan 8 673,399 4 309,052 15 1,186,708 27 2,169,159 Minnesota 8 709,829 8 646,659 14 1,009,746 30 2,366,234 Mississippi 7 560,879 — — 10 736,463 17 1,297,342 Missouri 28 2,240,243 7 509,322 20 1,583,234 55 4,332,799 Nebraska — — — — 4 371,900 4 371,900 Nevada 33 2,907,229 9 840,819 11 1,059,569 53 4,807,617 New Hampshire 17 1,274,725 2 84,165 20 871,125 39 2,230,015 New Jersey 88 7,033,287 33 2,610,319 55 4,290,839 176 13,934,445 New Mexico 11 714,415 10 681,770 15 1,084,218 36 2,480,403 New York 79 5,693,262 28 2,316,671 84 5,883,153 191 13,893,086 North Carolina 52 3,732,706 8 620,612 37 2,666,196 97 7,019,514 Ohio 50 3,357,288 5 325,617 22 1,661,267 77 5,344,172 Oklahoma 4 268,833 — — 20 1,493,518 24 1,762,351 Oregon 8 550,155 2 166,638 7 467,124 17 1,183,917 Pennsylvania 31 2,359,752 12 966,346 51 3,741,143 94 7,067,241 Rhode Island 6 351,451 1 95,844 6 473,601 13 920,896 South Carolina 40 2,977,927 11 708,382 39 3,198,894 90 6,885,203 Tennessee 29 2,410,329 16 1,091,936 24 1,719,250 69 5,221,515 Texas 241 19,927,466 71 5,456,117 122 10,409,683 434 35,793,266 Utah 10 733,895 — — 31 2,512,983 41 3,246,878 Virginia 73 5,956,916 10 759,116 34 2,367,593 117 9,083,625 Washington 14 1,090,894 2 199,770 16 1,262,293 32 2,552,957 Washington, DC 1 100,203 1 104,189 6 538,309 8 742,701 Wisconsin 1 97,938 9 883,232 15 1,245,006 25 2,226,176 Totals 1,905 143,406,183 472 36,718,244 1,337 103,265,443 3,714 283,389,870 (1) Includes two consolidated joint ventures and excludes approximately 17,900 units related to Bargold Storage Systems, LLC ("Bargold").

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Issuer Purchases of Equity Securities In November 2023, our board of directors authorized a three-year share repurchase program allowing the repurchase of shares with an aggregate value up to $500.0 million. During the year ended December 31, 2023, no shares were repurchased.
Issuer Purchases of Equity Securities In November 2023, our board of directors authorized a three-year share repurchase program allowing the repurchase of shares with an aggregate value up to $500.0 million. During the year ended December 31, 2024, no shares were repurchased.
As of December 31, 2023, we had remaining authorization to repurchase shares with an aggregate value up to $500.0 million. Unregistered Sales of Equity Securities All unregistered sales of equity securities during the year ended December 31, 2023 have previously been disclosed in filings with the SEC. Item 6. Selected Financial Data Not required. 20
As of December 31, 2024, we had remaining authorization to repurchase shares with an aggregate value up to $500.0 million. Unregistered Sales of Equity Securities All unregistered sales of equity securities during the year ended December 31, 2024 have previously been disclosed in filings with the SEC. Item 6. Selected Financial Data Not required. 20
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded under the symbol “EXR” on the New York Stock Exchange ("NYSE") since our IPO on August 17, 2004. On February 22, 2024, the closing price of our common stock as reported by the NYSE was $141.39.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded under the symbol “EXR” on the New York Stock Exchange (“NYSE”) since our IPO on August 17, 2004. On February 21, 2025, the closing price of our common stock as reported by the NYSE was $155.95.
At February 22, 2024, we had 833 holders of record of our common stock. Certain shares of the Company are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
At February 21, 2025, we had 910 holders of record of our common stock. Certain of our shares are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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For a discussion of such risk factors, see the section in this Form 10-K entitled “Risk Factors.” Dollar amounts in thousands, except share and per share data, unless otherwise stated. OVERVIEW We are a fully integrated, self-administered and self-managed REIT, formed to own, operate, manage, acquire, develop and redevelop self-storage properties (“stores”).
For a discussion of such risk factors, see the section in this Form 10-K entitled “Risk Factors.” Dollar amounts are in thousands, except share and per share data, unless otherwise stated. OVERVIEW We are a fully integrated, self-administered and self-managed REIT, formed to own, operate, manage, acquire, develop and redevelop self-storage properties (“stores”).
Our indebtedness may be recourse, non-recourse, cross-collateralized, cross-defaulted, secured or unsecured. In addition, we may invest in stores subject to existing loans collateralized by mortgages or similar liens, or may refinance stores acquired on a leveraged basis.
Our indebtedness may be recourse, non-recourse, cross-collateralized, cross-defaulted, secured or unsecured. In addition, we may invest in stores subject to existing loans collateralized by mortgages or similar liens, or we may refinance stores acquired on a leveraged basis.
In making financing decisions, we will consider factors including but not limited to: • the interest rate of the proposed financing; • the extent to which the financing impacts flexibility in managing our stores; • prepayment penalties and restrictions on refinancing; • the purchase price of stores acquired with debt financing; • long-term objectives with respect to the financing; • target investment returns; • the ability of particular stores, and our company as a whole, to generate cash flow sufficient to cover expected debt service payments; • overall level of consolidated indebtedness; • timing of debt maturities; • provisions that require recourse and cross-collateralization; and • corporate credit ratios including fixed charge coverage ratio and max secured/unsecured indebtedness.
In making financing decisions, we will consider factors including but not limited to the following: • the interest rate of the proposed financing; • the extent to which the financing impacts flexibility in managing our stores; • prepayment penalties and restrictions on refinancing; • the purchase price of stores acquired with debt financing; • long-term objectives with respect to the financing; • target investment returns; • the ability of particular stores, and our company as a whole, to generate cash flow sufficient to cover expected debt service payments; • overall level of consolidated indebtedness; • timing of debt maturities; • provisions that require recourse and cross-collateralization; and • corporate credit ratios including fixed charge coverage ratio and max secured/unsecured indebtedness.
REAL ESTATE ASSETS: We account for the acquisition of stores, including by merger and other acquisitions of real estate, in accordance with ASC 805-10, " Business Combinations." We use our judgment to determine if assets acquired meet the definition of a business or if the acquisition should be considered an asset acquisition.
REAL ESTATE ASSETS: We account for the acquisition of stores, including by merger and other acquisitions of real estate, in accordance with ASC 805-10, “ Business Combinations. ” We use our judgment to determine if assets acquired meet the definition of a business or if the acquisition should be considered an asset acquisition.
We may from time to time seek to repurchase our outstanding debt, shares of common stock or other securities in open market 30 purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
We may from time to time seek to repurchase our outstanding debt, shares of common stock or other securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
Historically, our highest level of occupancy has been at the end of July, while our lowest level of occupancy has been in late February and early March. Results for any quarter may not be indicative of the results that may be achieved for the full fiscal year.
Historically, our highest level of occupancy has been at the end of July, while our lowest level of occupancy has been in late February and early March. Results for any quarter may not be indicative of the results that may be achieved for the full fiscal year. 31
We derive substantially all of our revenues from our two segments: storage operations and tenant reinsurance. Primary sources of revenue for our storage operations segment include rents received from tenants under leases at each of our wholly-owned stores.
We derive substantially all of our revenues from our two segments: self-storage operations and tenant reinsurance. Primary sources of revenue for our self-storage operations segment include rents received from tenants under leases at each of our wholly-owned stores.
We may not have identified all material facts and circumstances that affect impairment of our stores. No material impairments were recorded in the year ended December 31, 2023. We evaluate goodwill for impairment at least annually and whenever events, circumstances, and other related factors indicate that fair value of the related reporting unit may be less than the carrying value.
We may not have identified all material facts and circumstances that affect impairment of our stores. No material impairments were recorded in the year ended December 31, 2024. We evaluate goodwill for impairment at least annually and whenever events, circumstances, and other related factors indicate that fair value of the related reporting unit may be less than the carrying value.
In addition, we are pursuing additional sources of financing based on anticipated funding needs. Our liquidity needs consist primarily of operating expenses, monthly debt service payments, recurring capital expenditures, distributions to unit holders and dividends to stockholders necessary to maintain our REIT qualification.
In addition, we are pursuing additional sources of financing based on anticipated funding needs and growth assumptions. Our liquidity needs consist primarily of operating expenses, monthly debt service payments, recurring capital expenditures, distributions to unit holders and dividends to stockholders necessary to maintain our REIT qualification.
These expenses are recognized as incurred. Our overall expense has increased primarily as a result of our increased size through acquisitions, business combinations and growth through our joint venture partners and managed portfolio. No other material trends in specific travel or other expenses were observed.
These expenses are recognized as incurred. Our overall General and Administrative expense has increased primarily as a result of our increased size through acquisitions, business combinations and growth through our joint venture partners and managed portfolio. No other material trends in specific travel or other expenses were observed.
We expect to fund our short-term and long-term liquidity requirements, including operating expenses, recurring capital expenditures, dividends to stockholders, distributions to holders of Operating Partnership units and interest on our outstanding indebtedness, out of our operating cash flow, cash on hand and borrowings under our revolving lines of credit.
We expect to fund our short-term and long-term liquidity requirements, including operating expenses, recurring capital expenditures, dividends to stockholders, distributions to holders of Operating Partnership units and interest on our outstanding indebtedness, out of our operating cash flow, cash on hand and borrowings under our revolving lines of credit and commercial paper.
Cash flows used in investing activities relate primarily to our acquisitions and development of new stores, sales of stores, investments in unconsolidated real estate entities and notes receivable from bridge loans, and fluctuate depending on our actions in those areas. Cash flows from financing activities depend primarily on our debt and equity financing activities.
Cash flows used in investing activities relate primarily to our acquisition and development of new stores, sales of stores, investments in unconsolidated real estate entities, and notes receivable from bridge loans and fluctuate depending on our actions in those areas. Cash flows from financing activities depend primarily on our debt and equity financing activities.
During 2023 and 2022, we experienced no loss or lack of access to our cash or cash equivalents; however, there can be no assurance that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets.
During 2024 and 2023, we experienced no loss or lack of access to our cash and cash equivalents; however, there can be no assurance that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets.
Developed by our management team, these systems enable us to analyze, set and adjust rental rates in real time across our portfolio in order to respond to changing market conditions. We believe our systems and processes allow us to more pro-actively manage revenues. We operate in competitive markets, often where consumers have multiple stores from which to choose.
Developed by our management team, these systems enable us to analyze, set and adjust rental rates daily across our portfolio in order to respond to changing market conditions. We believe our systems and processes allow us to more pro-actively manage revenues. We operate in competitive markets, often where consumers have multiple stores from which to choose.
The increase for the year ended December 31, 2023 was primarily due to an increase in the number of stores managed.
The increase for the year ended December 31, 2024 was primarily due to an increase in the number of stores managed.
We operated 3,714 stores at December 31, 2023, compared to 2,338 stores at December 31, 2022. Management Fees and Other Income —Management fees and other income represent the fees collected for our management of stores owned by third parties and unconsolidated joint ventures and other transaction fee income.
We operated 4,011 stores at December 31, 2024, compared to 3,714 stores at December 31, 2023. Management Fees and Other Income —Management fees and other income represent the fees collected for our management of stores owned by third parties and unconsolidated joint ventures and other transaction fee income.
RECENT ACCOUNTING PRONOUNCEMENTS For a discussion of recent accounting pronouncements affecting our business, see Item 8, “Financial Statements and Supplementary Data–Recently Issued Accounting Standards.” 22 RESULTS OF OPERATIONS Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 Overview Results for the year ended December 31, 2023 included the operations of 2,377 stores (1,903 wholly-owned, two in a consolidated joint venture, and 472 in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2022, which included the operations of 1,451 stores (1,132 wholly-owned, one in a consolidated joint venture, and 318 in joint ventures accounted for using the equity method).
RECENT ACCOUNTING PRONOUNCEMENTS For a discussion of recent accounting pronouncements affecting our business, see Item 8, “Financial Statements and Supplementary Data–Recently Issued Accounting Standards.” 22 RESULTS OF OPERATIONS Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 Overview Results for the year ended December 31, 2024 included the operations of 2,436 stores (1,967 wholly-owned, nine in consolidated joint ventures, and 460 in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2023, which included the operations of 2,377 stores (1,903 wholly-owned, two in consolidated joint ventures, and 472 in joint ventures accounted for using the equity method).
No impairments were recorded in our evaluations for any period presented herein. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: We hold a number of derivative instruments which we use to hedge our exposure to variability in expected future cash flows, mainly related to our interest rates on variable interest debt. We do not use derivatives for trading or speculative purposes.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: We hold a number of derivative instruments which we use to hedge our exposure to variability in expected future cash flows, mainly related to our interest rates on variable interest debt. We do not use derivatives for trading or speculative purposes.
Information on the total face value of debt and the average interest rate for the years ended December 31, 2023 and December 31, 2022 is set forth in the following table: For the Year Ended December 31, 2023 2022 Total face value of debt $ 11,346,105 $ 7,364,424 Average interest rate 4.6 % 4.1 % Non-cash Interest Expense Related to Amortization of Discount on Life Storage Unsecured Senior Notes— Represents the amortization of the discount recorded to present the fair value of the Life Storage unsecured senior notes assumed as part of the Life Storage Merger.
Information on the total face value of debt and the weighted average interest rate for the years ended December 31, 2024 and December 31, 2023 is set forth in the following table: For the Year Ended December 31, 2024 2023 Total face value of debt $ 12,600,661 $ 11,346,105 Weighted average interest rate 4.4 % 4.6 % Non-cash Interest Expense Related to Amortization of Discount on Life Storage Unsecured Senior Notes— Represents the amortization of the discount assigned to the fair value of the Life Storage unsecured senior notes assumed as part of the Life Storage Merger.
We may use the proceeds from any borrowings to refinance existing indebtedness, to refinance investments, including the redevelopment of existing stores, for general working capital or to purchase additional interests in partnerships or joint ventures or for other purposes when we believe it is advisable. As of December 31, 2023, we had $99,062 available in cash and cash equivalents.
We may use the proceeds from any borrowings to refinance existing indebtedness, to refinance investments, including the redevelopment of existing stores, for general working capital or to purchase additional interests in partnerships or joint ventures or for other purposes when we believe it is advisable.
We believe FFO is a meaningful disclosure as a supplement to net earnings. Net earnings assume that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The values of real estate assets fluctuate due to market conditions and we believe FFO more accurately reflects the value of our real estate assets.
Net earnings assume that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The values of real estate assets fluctuate due to market conditions, and we believe FFO more accurately reflects the value of our real estate assets. FFO is defined by the National Association of Real Estate Investment Trusts, Inc.
Depreciation and Amortization —Depreciation and amortization expense increased primarily as a result of the acquisition of new stores. We acquired 757 wholly-owned stores in the Life Storage Merger and an additional 14 wholly-owned stores during the year ended December 31, 2023.
Depreciation and Amortization —Depreciation and amortization expense increased primarily as a result of the acquisition of new stores. We acquired 58 wholly-owned stores during the year ended December 31, 2024.
Our cash and cash equivalents are held in accounts managed by third party financial institutions and consist of invested cash and cash in our operating accounts.
As of December 31, 2024, we had $138,222 available in cash and cash equivalents. Our cash and cash equivalents are held in accounts managed by third party financial institutions and consist of invested cash and cash in our operating accounts.
Tenant Reinsurance —Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance. The increase in tenant reinsurance expense for the year ended December 31, 2023 was due primarily to the increase in total number of stores operated compared to the prior year.
The increase in tenant reinsurance expense for the year ended December 31, 2024 was due primarily to the increase in total number of stores operated compared to the prior year. We operated 4,011 stores at December 31, 2024, compared to 3,714 stores at December 31, 2023.
To the extent that cash or profits in excess of these preferred returns are generated, we receive a higher percentage of the excess cash or profits, as applicable.
In these joint ventures, we and our joint venture partners generally receive a preferred return on our invested capital. To the extent that cash or profits in excess of these preferred returns are generated, we receive a higher percentage of the excess cash or profits.
The following table presents the calculation of FFO for the periods indicated: For the Year Ended December 31, 2023 2022 2021 Net income attributable to common stockholders $ 803,198 $ 860,688 $ 827,649 Adjustments: Real estate depreciation 418,149 263,923 229,133 Amortization of intangibles 59,295 13,623 4,420 Gain on real estate transactions — (14,249) (140,760) Unconsolidated joint venture real estate depreciation and amortization 24,400 16,644 11,954 Unconsolidated joint venture gain on sale of real estate assets and purchase of partner's interest — — (6,251) Distributions paid on Series A Preferred Operating Partnership units (159) (2,288) (2,288) Income allocated to Operating Partnership noncontrolling interests 47,255 60,468 50,109 Funds from operations attributable to common stockholders and unit holders $ 1,352,138 $ 1,198,809 $ 973,966 26 SAME-STORE RESULTS Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 Our same-store pool for the periods presented consists of 913 stores that are wholly-owned and operated and that were stabilized by the first day of the earliest calendar year presented.
FFO does not represent cash generated from operating activities determined in accordance with GAAP and should not be considered as an alternative to net income as an indication of our performance, as an alternative to net cash flow from operating activities, as a measure of our liquidity, or as an indicator of our ability to make cash distributions. 26 The following table presents the calculation of FFO for the periods indicated: For the Year Ended December 31, 2024 2023 2022 Net income attributable to common stockholders $ 854,681 $ 803,198 $ 860,688 Adjustments: Real estate depreciation 618,189 418,149 263,923 Amortization of intangibles 113,886 59,295 13,623 (Gain) loss on real estate assets held for sale and sold, net 25,906 — (14,249) Unconsolidated joint venture real estate depreciation and amortization 32,678 24,400 16,644 Unconsolidated joint venture gain on sale of real estate assets (13,730) — — Distributions paid on Series A Preferred Operating Partnership units — (159) (2,288) Income allocated to Operating Partnership noncontrolling interests 45,551 47,255 60,468 Funds from operations attributable to common stockholders and unit holders $ 1,677,161 $ 1,352,138 $ 1,198,809 SAME-STORE RESULTS Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 Our same-store pool for the periods presented consists of 1,071 stores that are wholly-owned and operated and that were stabilized by the first day of the earliest calendar year presented.
In January 2021, we received a Baa2 rating from Moody's Investors Service and in July 2019, we obtained a BBB/Stable rating from S&P which was upgraded to BBB+/Stable in July 2023 in connection with the Life Storage Merger. We intend to manage our balance sheet to preserve such ratings.
At December 31, 2024, we had $500 million in issuances outstanding under the commercial paper program. 30 In January 2021, we received a Baa2 rating from Moody's Investors Service, and in July 2019, we obtained a BBB/Stable rating from S&P which was upgraded to BBB+/Stable in July 2023 in connection with the Life Storage Merger.
If the fair value of the reporting unit is determined to exceed the aggregate carrying amount, no impairment charge is recorded. Otherwise, an impairment charge is recorded to the extent the carrying amount of the goodwill exceeds the amount that would be allocated to goodwill if the reporting unit were acquired for estimated fair value.
If the fair value of the reporting unit is determined to exceed the aggregate carrying amount, no impairment charge is recorded. Otherwise, an impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value. No impairments were recorded in our evaluations for any period presented herein.
Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021 The results of operations for the years ended December 31, 2022 compared to December 31, 2021 was included in our Annual Report on Form 10-K for the year ended December 31, 2022 on page 21, under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed with the SEC on February 28, 2022. 25 FUNDS FROM OPERATIONS Funds from operations ("FFO") provides relevant and meaningful information about our operating performance that is necessary, along with net income and cash flows, for an understanding of our operating results.
Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 The results of operations for the years ended December 31, 2023 compared to December 31, 2022 was included in our Annual Report on Form 10-K for the year ended December 31, 2023 on page 23, under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed with the Securities and Exchange Commission (the “SEC”) on February 29, 2024.
In addition to the increase attributable to the Merger, property rental revenues increased by $46,712 due to operating results at our stabilized stores and increased by $7,523 as a result of increases in occupancy at our lease-up stores. Tenant Reinsurance —The increase in tenant reinsurance revenues was due primarily to an increase in the number of stores operated.
In addition to the increase attributable to the Merger, property rental revenue increased by $5,440 due to operating results at our same-store pool and increased by $4,892 as a result of increases in occupancy at our lease-up stores.
As of December 31, 2023, we managed 1,811 stores for third parties and joint ventures compared to 1,206 stores as of December 31, 2022. 23 Expenses The following table presents information on expenses for the years indicated: For the Year Ended December 31, 2023 2022 $ Change % Change Property operations $ 612,036 $ 435,342 $ 176,694 40.6 % Tenant reinsurance 58,874 33,560 25,314 75.4 % Transaction costs — 1,548 (1,548) (100.0) Life Storage Merger transition costs 66,732 — 66,732 — % General and administrative 146,408 129,251 17,157 13.3 % Depreciation and amortization 506,053 288,316 217,737 75.5 % Total expenses $ 1,390,103 $ 888,017 $ 502,086 56.5 % Property Operations —The increase in property operations expense consists primarily of an increase of $153,712 associated with the Life Storage Merger and other acquisitions completed in 2023.
As of December 31, 2024, we managed 2,044 stores for third parties and unconsolidated joint ventures, compared to 1,811 stores as of December 31, 2023. 23 Expenses The following table presents information on expenses for the years indicated: For the Year Ended December 31, 2024 2023 $ Change % Change Property operations $ 831,566 $ 612,036 $ 219,530 35.9 % Tenant reinsurance 73,886 58,874 15,012 25.5 % Life Storage Merger transition costs — 66,732 (66,732) (100.0) % General and administrative 167,398 146,408 20,990 14.3 % Depreciation and amortization 783,023 506,053 276,970 54.7 % Total expenses $ 1,855,873 $ 1,390,103 $ 465,770 33.5 % Property Operations —The increase in property operations expense consists primarily of an increase of $186,294 associated with the Life Storage Merger and other acquisitions completed in 2023 and 2024.
Revenues The following table presents information on revenues earned for the years indicated: For the Year Ended December 31, 2023 2022 $ Change % Change Property rental $ 2,222,578 $ 1,654,735 $ 567,843 34.3 % Tenant reinsurance 235,680 185,531 50,149 27.0 % Management fees and other income 101,986 83,904 18,082 21.6 % Total revenues $ 2,560,244 $ 1,924,170 $ 636,074 33.1 % Property Rental— The increase in property rental revenues for the year ended December 31, 2023 was primarily the result of an increase of $507,054 associated with our merger with Life Storage on July 20, 2023, (the "Life Storage Merger" or "Merger") and other acquisitions completed in 2023.
Material or unusual changes in the results of our operations are discussed below: Revenues The following table presents information on revenues earned for the years indicated: For the Year Ended December 31, 2024 2023 $ Change % Change Property rental $ 2,803,252 $ 2,222,578 $ 580,674 26.1 % Tenant reinsurance 332,795 235,680 97,115 41.2 % Management fees and other income 120,855 101,986 18,869 18.5 % Total revenues $ 3,256,902 $ 2,560,244 $ 696,658 27.2 % Property Rental— The increase in property rental revenue for the year ended December 31, 2024 was primarily the result of an increase of $570,407 associated with our merger with Life Storage on July 20, 2023, (the “Life Storage Merger” or “Merger”) and other acquisitions completed in 2023 and 2024.
A summary of cash flows along with significant components are as follows: For the Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 1,402,474 $ 1,238,139 $ 952,436 Net cash used in investing activities (1,818,256) (1,648,459) (837,540) Net cash provided by (used in) financing activities 423,130 431,861 (166,711) Significant components of net cash flow included: Net income $ 850,453 $ 921,156 $ 877,758 Depreciation and amortization 506,053 288,316 241,879 Acquisition, development and redevelopment of stores (420,892) (1,353,510) (1,289,524) Life Storage Merger, net of cash acquired (1,182,411) — — Cash paid for business combination — (157,302) — Gain on real estate transactions — (14,249) (140,760) Investment in unconsolidated real estate entities (180,279) (118,963) (54,602) Issuance and purchase of notes receivable (330,499) (529,245) (317,482) Proceeds from sale of notes receivable 167,495 210,048 172,002 Principal payments received from notes receivable 142,192 283,636 51,463 Proceeds from the sale of common stock, net of offering costs — — 273,189 Proceeds from sale of real estate assets and investments in real estate ventures 2,132 39,367 572,728 Net proceeds from our debt financing and repayment activities 1,574,019 1,376,411 206,691 Repurchase of common stock — (63,008) — Proceeds from issuance of public bonds, net — — — Dividends paid on common stock (1,046,341) (805,311) (600,994) We believe that cash flows generated by operations, along with our existing cash and cash equivalents, the availability of funds under our existing lines of credit, and our access to capital markets will be sufficient to meet all of our reasonably anticipated cash needs during the next twelve months.
A summary of cash flows along with significant components are as follows: For the Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 1,887,430 $ 1,402,474 $ 1,238,139 Net cash used in investing activities (1,646,920) (1,818,256) (1,648,459) Net cash (used in) provided by financing activities (202,290) 423,130 431,861 Significant components of net cash flow included: Net income $ 900,232 $ 850,453 $ 921,156 Depreciation and amortization 783,023 506,053 288,316 Acquisition and development of real estate assets (779,153) (420,892) (1,353,510) Life Storage Merger, net of cash acquired — (1,182,411) — Impairment of Life Storage trade name 51,763 — — Investment in unconsolidated real estate entities (301,917) (180,279) (118,963) Issuance of notes receivable, net of sales and principal payments (635,677) (20,812) (35,561) Proceeds from unsecured term loans, senior notes, revolving lines of credit and commercial paper 8,685,933 7,113,003 5,188,011 Principal payments on unsecured term loans, senior notes, revolving lines of credit and commercial paper (8,724,444) (7,088,984) (4,207,700) Proceeds from issuance of public bonds, net 1,300,000 1,550,000 396,100 Dividends paid on common stock (1,375,003) (1,046,341) (805,311) We believe that cash flows generated by operations, along with our existing cash and cash equivalents, the availability of funds under our existing lines of credit, and our access to capital markets will be sufficient to meet all of our reasonably anticipated cash needs during the next twelve months.
We acquired 153 stores during the year ended December 31, 2022. 24 Other Income and Expenses The following table presents information on other revenues and expenses for the years indicated: For the Year Ended December 31, 2023 2022 $ Change % Change Gain on real estate transactions $ — $ 14,249 $ (14,249) (100.0) % Interest expense (419,035) (219,171) (199,864) 91.2 % Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes (18,786) — (18,786) 100.0 % Interest income 84,857 69,422 15,435 22.2 % Equity in earnings and dividend income from unconsolidated real estate entities 54,835 41,428 13,407 32.4 % Income tax expense (21,559) (20,925) (634) 3.0 % Total other expense, net $ (319,688) $ (114,997) $ (204,691) 178.0 % Gain on Real Estate Transactions — During the year ended, December 31, 2022, we sold two stores.
We acquired 757 wholly-owned stores in the Life Storage Merger and an additional 14 wholly-owned stores during the year ended December 31, 2023. 24 Other Income and Expenses The following table presents information on other revenues and expenses for the years indicated: For the Year Ended December 31, 2024 2023 $ Change % Change Loss on real estate assets held for sale and sold, net $ (25,906) $ — $ (25,906) 100.0 % Impairment of Life Storage trade name (51,763) — (51,763) 100.0 % Interest expense (551,354) (419,035) (132,319) 31.6 % Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes (43,720) (18,786) (24,934) 132.7 % Interest income 124,422 84,857 39,565 46.6 % Equity in earnings and dividend income from unconsolidated real estate entities 67,272 54,835 12,437 22.7 % Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest 13,730 — 13,730 100.0 % Income tax expense (33,478) (21,559) (11,919) 55.3 % Total other expense, net $ (500,797) $ (319,688) $ (181,109) 56.7 % Loss on Real Estate Assets Held for Sale and Sold, Net— During the year ended December 31, 2024, we had 18 stores classified as held for sale.
We are subject to certain restrictive covenants relating to our outstanding debt. We were in compliance with all financial covenants at December 31, 2023.
Our unencumbered asset value was calculated as $29,846,899 and our total asset value was calculated as $35,767,585 according to the calculations as defined by our public bonds. We are subject to certain restrictive covenants relating to our outstanding debt. We were in compliance with all financial covenants at December 31, 2024.
Certain of our real estate assets are pledged as collateral for our debt. We have a total of 1671 unencumbered stores as defined by our public bonds. Our unencumbered asset value is calculated as $31,869,102 and our total asset value is calculated as $37,529,884 according to the calculations as defined by our public bonds.
We intend to manage our balance sheet to maintain these ratings. Certain of our real estate assets are pledged as collateral for our debt. As of December 31, 2024, we had a total of 1,745 unencumbered stores as defined by our public bonds.
We acquired 757 wholly-owned stores in the Merger and an additional 14 stores during the year ended December 31, 2023. We acquired 153 stores during the year ended December 31, 2022.
We acquired 757 wholly-owned stores in the Merger and an additional 14 stores during the year ended December 31, 2023. We acquired 58 stores during the year ended December 31, 2024. The increase is also attributed to the Life Storage stores being on our platform for a full 12 months in 2024 in comparison with five months in 2023.
The same-store expense growth rate for the year ended December 31, 2023 is amplified by negative expense growth in the 2022 comparable period. 27 The following table presents a reconciliation of same-store net operating income to net income as presented on our condensed consolidated statements of operations for the periods indicated: For the Year Ended December 31, 2023 2022 Net Income $ 850,453 $ 921,156 Adjusted to exclude: Gain on real estate transactions — (14,249) Equity in earnings and dividend income from unconsolidated real estate entities (54,835) (41,428) Interest expense 419,035 219,171 Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes 18,786 — Depreciation and amortization 506,053 288,316 Income tax expense 21,559 20,925 Transaction costs — 1,548 Life Storage Merger transition costs 66,732 — General and administrative 146,408 129,251 Management fees, other income and interest income (186,843) (153,326) Net tenant insurance (176,806) (151,971) Non same-store rental revenue (660,292) (139,370) Non same-store operating expense 235,870 73,772 Total same-store net operating income $ 1,186,120 $ 1,153,795 Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021 The same-store results for the years ended December 31, 2022 compared to December 31, 2021 was included in our Annual Report on Form 10-K for the year ended December 31, 2022 on page 20, under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed with the SEC on February 28, 2023. 28 CASH FLOWS Cash flows from operating activities increased as expected due to our continued growth in revenues and through the increase in the number of properties we own and operate.
The following table presents operating data for our same-store portfolio: For the Year Ended December 31, Percent 2024 2023 Change Same-store rental revenues Net rental income $ 1,601,455 $ 1,596,015 0.3% Other operating income $ 64,300 $ 65,689 (2.1)% Total same-store rental revenues $ 1,665,755 $ 1,661,704 0.2% Same-store operating expenses Payroll and benefits $ 95,696 $ 91,329 4.8% Marketing $ 34,038 $ 30,237 12.6% Office expense $ 51,606 $ 51,655 (0.1)% Property operating expense $ 37,646 $ 38,491 (2.2)% Repairs and maintenance $ 27,934 $ 26,469 5.5% Property taxes $ 165,617 $ 152,028 8.9% Insurance $ 19,512 $ 18,718 4.2% Total same-store operating expenses $ 432,049 $ 408,927 5.7% Same-store net operating income $ 1,233,706 $ 1,252,777 (1.5)% 27 Same-store square foot occupancy as of year end 93.7 % 92.5 % Properties included in same-store 1,071 1,071 The following table presents additional information for our same-store portfolio: For the Year Ended December 31, Same-store portfolio 2024 2023 Average annual rent per occupied square foot, net of discounts and bad debt $ 21.68 $ 21.83 New leases average annual rent per square foot $ 14.49 $ 16.18 Average discounts as a percentage of rental revenues 2.1 % 2.4 % The following table presents a reconciliation of same-store net operating income to net income as presented on our consolidated statements of operations for the periods indicated: For the Year Ended December 31, 2024 2023 Net Income $ 900,232 $ 850,453 Adjusted to exclude: Loss on real estate assets held for sale and sold, net 25,906 — Equity in earnings and dividend income from unconsolidated real estate entities (67,272) (54,835) Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest (13,730) — Interest expense 551,354 419,035 Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes 43,720 18,786 Depreciation and amortization 783,023 506,053 Income tax expense 33,478 21,559 Life Storage Merger transition costs — 66,732 General and administrative 167,398 146,408 Impairment of Life Storage trade name 51,763 — Management fees, other income and interest income (245,277) (186,843) Net tenant insurance (258,909) (176,806) Non same-store rental revenue (1,137,497) (560,874) Non same-store operating expense 399,517 203,109 Total same-store net operating income $ 1,233,706 $ 1,252,777 Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 The same-store results for the years ended December 31, 2023 compared to December 31, 2022 was included in our Annual Report on Form 10-K for the year ended December 31, 2023 on page 27, under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed with the SEC on February 29, 2024. 28 CASH FLOWS Cash flows from operating activities increased as expected due to our continued growth in revenues and through the increase in the number of properties we own and operate.
As of December 31, 2023, the ratio of total fixed-rate debt and other instruments to total debt was 73.4% (including $1,448,566 on which we have interest rate swaps that have been included as fixed-rate debt).
The following table presents information relating to our debt: December 31, 2024 December 31, 2023 Total face value of debt $ 12,600,661 $ 11,346,105 Total enterprise value ratio 28.4 % 24.2 % Total fixed-rate debt and other instruments to total debt 75.8% (1) 73.4% (2) Weighted average interest rate of total debt 4.4 % 4.6 % Weighted average interest rate for fixed rate debt 4.1 % 3.9 % Weighted average interest rate for variable rate debt 5.4 % 6.6 % (1) $9,555,406 total fixed-rate debt including $1,381,834 on which we have interest rate swaps that have been included as fixed-rate debt.
Interest Income— Interest income represents interest earned on bridge loans and debt securities, income earned on notes receivable from common and preferred Operating Partnership unit holders and amounts earned on cash and cash equivalents deposited with financial institutions.
Interest Income— Interest income represents interest earned on variable interest rate bridge loans, debt securities and on notes receivable from common and preferred Operating Partnership unit holders. The increase in interest income during the year ended December 31, 2024 was primarily the result of an increase in the amount of bridge loans outstanding.
We recognized a total gain of $14,249 related to the sale of these assets. Interest Expense— The increase in interest expense during the year ended December 31, 2023 was the result of higher overall debt and a higher average interest rate when compared to the same period in the prior year.
As a result of that decision, we deemed the Life Storage trade name intangible asset to be impaired and recognized a loss for the full value of the asset. Interest Expense— The increase in interest expense during the year ended December 31, 2024 was primarily the result of higher outstanding debt compared to the same period in the prior year.
Equity in Earnings and Dividend Income from Unconsolidated Real Estate Entities— Equity in earnings of unconsolidated real estate ventures represents the income earned through our ownership interests in unconsolidated real estate ventures. In joint ventures, we and our joint venture partners generally receive a preferred return on our invested capital.
The balance of bridge loans was $1,244,575 as of December 31, 2024, compared to $594,727 as of December 31, 2023. 25 Equity in Earnings and Dividend Income from Unconsolidated Real Estate Entities— Equity in earnings of unconsolidated real estate entities represents the income earned through our ownership interests in unconsolidated joint ventures.
We added a total of 154 stores to new and existing joint ventures (145 stores from the Life Storage Merger) during the year ended December 31, 2023 resulting in higher earnings when compared to the prior year. Dividend income represents dividends from our investment in preferred stock of SmartStop Self Storage REIT, Inc. and Strategic Storage Trust VI, Inc.
Dividend income represents dividends from our investment in preferred stock of SmartStop Self Storage REIT, Inc. and Strategic Storage Trust VI, Inc.
Income Tax Expense— For the year ended December 31, 2023 , the increase in income tax expense was the result of an increase in income earned by our TRS when compared to the same period in the prior year.
Income Tax Expense— The increase in income tax expense for the year ended December 31, 2024 was primarily the result of a full year of TRS book income for Life Storage stores, compared to a partial year in 2023, as well as a decrease in permanent tax deductions related to stock awards.
Removed
Material or unusual changes in the results of our operations are discussed below.
Added
Tenant Reinsurance —The increase in tenant reinsurance revenue was due primarily to an increase in the number of stores operated, as well as the Life Storage stores being on our platform for a full 12 months in 2024 in comparison with five months in 2023.
Removed
We acquired 757 wholly-owned stores in the merger and an additional 14 stores during the year ended December 31, 2023. We acquired 153 stores during the year ended December 31, 2022. Additionally, property operations expense increased $22,097 at stabilized stores due to increased marketing expense, credit card processing fees and insurance.
Added
We acquired 757 wholly-owned stores in the merger and an additional 14 stores during the year ended December 31, 2023. We acquired 58 stores during the year ended December 31, 2024. The increase is also attributed to the Life Storage stores being on our platform for a full 12 months in 2024 in comparison with five months in 2023.
Removed
We operated 3,714 stores at December 31, 2023, compared to 2,338 stores at December 31, 2022. Transaction Costs —This represents the costs that were incurred as part of the acquisition of Bargold.
Added
Additionally, property operations expense increased $23,122 at our same-store pool due to increased marketing expense, payroll, and property taxes. Tenant Reinsurance —Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance.
Removed
The total principal balance of bridge loans receivable as of December 31, 2023 was $594,727, compared to $491,879 as of December 31, 2022. The increase in interest income during the year ended December 31, 2023 was primarily the result of the higher bridge loan balances along with higher interest rates.
Added
Of the 18 stores, 10 had an estimated fair value, net of selling costs, which was less than the carrying value of the asset. As a result, we recorded an estimated loss of $63,250.
Removed
FFO is defined by the National Association of Real Estate Investment Trusts, Inc.
Added
On our consolidated statements of operations, this amount is shown net of the sale of a property which generated a gain of $37,344 within gain (loss) on real estate assets held for sale and sold, net. Impairment of Life Storage Trade Name— During the year ended December 31, 2024, we decided to operate all stores under a single brand.
Removed
FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income as an indication of our performance, as an alternative to net cash flow from operating activities as a measure of our liquidity, or as an indicator of our ability to make cash distributions.
Added
The increase compared to 2023 is mainly attributed to the Life Storage stores being on our platform for 12 months in 2024 in comparison with five months in 2023.
Removed
The following table presents operating data for our same-store portfolio: For the Year Ended December 31, Percent 2023 2022 Change Same-store rental revenues $ 1,562,286 $ 1,515,365 3.1% Same-store operating expenses $ 376,166 $ 361,570 4.0% Same-store net operating income $ 1,186,120 $ 1,153,795 2.8% Same-store square foot occupancy as of year end 93.0 % 94.1 % Properties included in same-store 913 913 Same-store revenues for the year ended December 31, 2023 increased compared to the same periods in 2022 due to higher average rates to existing customers and higher other operating income partially offset by lower occupancy.
Added
Additionally, in November 2024 we acquired additional ownership interest in the HF1 Sovran HHF Storage Holdings LLC and HF2 Sovran HHF Storage Holdings II LLC from our partner in the unconsolidated joint ventures. The transaction increased our equity ownership percentages from 20% and 15%, respectively, to 49% in each unconsolidated joint venture.
Removed
Same-store expenses increased for the year ended December 31, 2023 compared to the year ended 2022 due to increases in payroll, credit card processing fees, utilities, property taxes and insurance.
Added
Equity in Earnings of Unconsolidated Real Estate Ventures - Gain on Sale of Real Estate Assets and Sale of a Joint Venture Interest— In August 2024, the ESS Bristol Investments LLC joint venture sold five of its eight stores to another unconsolidated joint venture, and we recognized a gain of $10,324 for our pro rata share of the transaction.
Removed
As of December 31, 2023, we had $11,346,105 face value of debt, resulting in a debt to total enterprise value ratio of 24.2%. As of December 31, 2022, we had $7,364,424 face value of debt, resulting in a debt to total enterprise value ratio of 25.8%.
Added
In September 2024, we sold our membership interest in the Alan Jathoo JV LLC unconsolidated joint venture, which held nine stores, to our partner and recognized a gain of $3,406 on the transaction.
Removed
As of December 31, 2022, the ratio of total fixed-rate debt and other instruments to total debt was 64.7% (including $1,837,714 on which we have interest rate swaps that have been included as fixed-rate debt). The weighted average interest rate of total debt at December 31, 2023 and 2022 was 4.6% and 4.1%, respectively.
Added
FUNDS FROM OPERATIONS Funds from operations (“FFO”) provides relevant and meaningful information about our operating performance that is necessary, along with net income and cash flows, for an understanding of our operating results. We believe FFO is a meaningful disclosure as a supplement to net earnings.
Removed
As of December 31, 2023, the weighted average interest rate for all fixed rate debt was 3.9%, and the weighted average interest rate on all variable rate debt was 6.6%. As of December 31, 2022, the weighted average interest rate for all fixed rate debt was 3.4%, and the weighted average interest rate on all variable rate debt was 5.5%.
Added
(2) $8,322,953 total fixed-rate debt including $1,448,566 on which we have interest rate swaps that have been included as fixed-rate debt. In November 2024, we established our commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes.
Added
The aggregate principal amount outstanding under the program at any time cannot exceed $1.0 billion, and the net proceeds of the commercial paper notes are expected to be used for general corporate purposes. The maturities of the notes generally range from overnight to three months, with a maximum of up to 13 months.
Added
The commercial paper notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis.
Added
At any point in time, we expect to maintain available commitments under our Credit Facilities in an amount at least equal to the amount of commercial paper notes outstanding.
Added
On April 15, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certain sales agents and forward purchasers named therein.
Added
Under the terms of the Equity Distribution Agreement, we may issue and sell, and the forward purchasers may sell, from time to time through or to the sales agents, shares of our common stock having an aggregate offering price of up to $800 million.
Added
The shares of common stock will be offered pursuant to our effective registration statement on Form S-3 (Registration Statement No. 333-278690) previously filed with and declared effective by the SEC and a prospectus supplement and accompanying prospectus, filed with the SEC.
Added
As of December 31, 2024, no shares had been sold under the Equity Distribution Agreement, which we refer to as our “at the market” equity program.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed4 unchanged
If benchmark index rates were to increase or decrease by 100 basis points, the increase or decrease in interest expense on the variable rate debt would increase or decrease future earnings and cash flows by approximately $30,232 annually. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments.
If benchmark index rates were to increase or decrease by 100 basis points, the increase or decrease in interest expense on the variable-rate debt would increase or decrease future earnings and cash flows by approximately $30,453 annually. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments.
Interest rate swaps involve the exchange of fixed-rate and variable-rate interest payments between two parties based on a contractual underlying notional amount, but do not involve the exchange of the underlying notional amounts. See our Derivatives footnote in our Notes to consolidated financial statements in Item 8 for additional information about our use of derivative contracts. 31
Interest rate swaps involve the exchange of fixed-rate and variable-rate interest payments between two parties based on a contractual underlying notional amount but do not involve the exchange of the underlying notional amount. See our Derivatives footnote in our Notes to consolidated financial statements in Item 8 for additional information about our use of derivative contracts. 32
As of December 31, 2023, we had approximately $11,346,105 in total face value debt, of which approximately $3,023,152 was subject to variable interest rates (excluding debt with interest rate swaps).
As of December 31, 2024, we had approximately $12,600,661 in total face value of debt, of which approximately $3,045,255 was subject to variable interest rates (excluding debt with interest rate swaps).

Other EXR 10-K year-over-year comparisons