Extra Space Storage Inc (EXR) Q1 2026 Earnings Call Transcript
Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500. As of September 30, 2025, the Company owned and/or operated 4,238 self-storage stores in 43 states and Washington, D.C.The Company's stores comprise approximately 2.9 million units and approximately 326.9 million square feet of rentable space operating under the Extra Space brand. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. It is the largest operator of self-storage properties in the United States.
Extra Space delivered positive core FFO growth in Q4 and 2025, highlighted by improving move-in rates and steady occupancy, while guiding for flat-to-modest revenue growth in 2026 and a mostly JV-driven acquisitions plan amid a strong, diversified growth platform.
⭐ Key Highlights
✔Positive Signals
- Improving new customer move-in rates and positive Q4 same-store revenue momentum (0.4% YoY).
- Strong external growth execution: 27 store acquisitions, 7 JV purchases, 9 JV disposals, $37m promote realized.
- Share repurchase of approximately $141 million at ~$129 per share and a continued expansion of the managed store network to 1,856.
- Stable, low-leverage balance sheet with 93% fixed-rate debt and a 4.3% average interest rate; strong liquidity with dry powder for growth.
- AI/machine learning usage ongoing in pricing and marketing with potential efficiency gains; emphasis on store managers to protect asset quality and occupancy.
✖Negative Signals
- 2026 guidance implies flat to modest revenue growth with a wide range (-0.5% to +1.5%), reflecting ongoing macro/market headwinds.
- 2026 same-store NOI guidance also ranges from -2.25% to +1.25%, highlighting potential margin challenges.
- 40 basis point drag from Los Angeles County pricing restrictions included in the outlook.
- Higher health care costs and property tax normalization impacting expense growth though mitigated by efficiency efforts.
- Acquisitions expected mainly via JV structures, which may limit on-balance-sheet accretion and grow complexity.
📊Financial Results
- Q4 2025 core FFO up 2.5% year over year.
- Full-year 2025 core FFO growth of 1.1%.
- Q4 2025 same-store revenue growth of 0.4% and same-store NOI growth of 0.1%.
- Total managed portfolio reached 1,856 stores by year-end 2025 (net adds in 2025: 281 stores; total adds 379 for the year).
- Bridge loan origination activity contributed to a portfolio near $1.5 billion by year-end 2025.
🔮Future Guidance
- 2026 same-store revenue guidance: -0.5% to +1.5% (midpoint roughly flat vs. 2025 exit).
- 2026 same-store NOI guidance: -2.25% to +1.25%.
- 2026 core FFO guidance: $8.05 to $8.35 per share, about flat at the midpoint versus 2025.
- Most 2026 acquisitions expected to occur in JV structures; bridge loan balances anticipated to remain generally flat.
💡Interesting Insights
- The company views AI both externally (SEO/marketing dynamics) and internally (pricing models, marketing spend, operations) as a material differentiator, with a dedicated platform team to vet opportunities prudently.
Detailed Analysis
AI-generated summary of Extra Space Storage Inc earnings call transcript.
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