Extra Space Storage Inc.

Previous wording

We are a fully integrated, self-administered and self-managed REIT, formed to own, operate, manage, acquire, develop and redevelop self-storage properties (“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. Our operating results depend materially on our ability to lease available self-storage units, to actively manage unit rental rates, and on the ability of our tenants to make required rental payments. Consequently, management spends a significant portion of their time maximizing cash flows from our diverse portfolio of stores. Revenue from our tenant reinsurance segment consists of insurance revenues from the reinsurance of risks relating to the loss of goods stored by tenants in our stores.

Current wording

We are a fully integrated, self-administered and self-managed REIT that owns, operates, manages, acquires, develops and redevelops self-storage properties (“stores”) and provides lending to owners of stores located throughout the United States. 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 stores that are wholly-owned and in consolidated joint ventures. Our operating results depend materially on our ability to lease available self-storage units, to actively manage unit rental rates, and on the ability of our tenants to make required rental payments. Consequently, management spends a significant portion of their time maximizing cash flows from our diverse portfolio of stores. Revenue from our tenant reinsurance segment consists of insurance revenues from the reinsurance of risks relating to the loss of goods stored by tenants in our stores.

Previous wording

Our stores are generally situated in highly visible locations clustered around large population centers. The clustering of our assets around these population centers enables us to reduce our operating costs through economies of scale. To maximize the performance of our stores, we employ industry-leading revenue management systems. 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.

Current wording

Our stores are generally situated in highly visible locations clustered around population centers. The clustering of our assets around these population centers enables us to reduce our operating costs through economies of scale. To maximize the performance of our stores, we employ industry-leading revenue management systems. 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 proactively manage revenues.

Previous wording

We operate in competitive markets, often where consumers have multiple stores from which to choose. Competition has impacted, and will continue to impact, our store results. We experience seasonal fluctuations in occupancy levels, with occupancy levels generally higher in the summer months due to increased moving activity. We believe that we are able to respond quickly and effectively to changes in local, regional and national economic conditions by adjusting rental rates through the combination of our revenue management team and our industry-leading technology systems. We consider a store to be in the lease-up stage after it has been issued a certificate of occupancy, but before it has achieved stabilization. We consider a store to be stabilized once it has achieved either an 80% occupancy rate for a full year measured as of January 1 of the current year, or has been open for three years prior to January 1 of the current year.

Current wording

We operate in competitive markets, often where consumers have multiple stores from which to choose. Competition has impacted, and will continue to impact, our store results. We experience seasonal fluctuations in occupancy levels, with occupancy levels generally higher in the summer months due to increased moving activity. We believe that we are able to respond quickly and effectively to changes in local, regional and national economic conditions by adjusting rental rates through the combination of our revenue management team and our industry-leading technology systems.

Previous wording

EVALUATION OF ASSET IMPAIRMENT: Long lived assets held for use are evaluated for impairment when events or circumstances indicate that there may be impairment. We review each store at least annually to determine if any such events or circumstances have occurred or exist. We focus on stores where occupancy and/or rental income have decreased by a significant amount. For these stores, we determine whether the decrease is temporary or permanent and whether the store will likely recover the lost occupancy and/or revenue in the short term. In addition, we review stores in the lease-up stage and compare actual operating results to original projections. 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.

Current wording

EVALUATION OF ASSET IMPAIRMENT: Long lived assets held for use are evaluated for impairment when events or circumstances indicate that there may be impairment. We review each store at least annually to determine if any such events or circumstances have occurred or exist. We focus on stores that do not have positive cash flow. For these stores, we determine whether the negative cash flow is temporary for lease-up stores or caused by other factors. 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, 2025.

Previous wording

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. 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.

Current wording

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. 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 of goodwill were recorded in our evaluations for any period presented herein.

Previous wording

INCOME TAXES: We have elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code. In order to maintain our qualification as a REIT, among other requirements, we are required to distribute at least 90% of our REIT taxable income to our stockholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to U.S. federal income tax with respect to that portion of our income which meets certain criteria and is distributed annually to our stockholders. We plan to continue to operate so that we meet the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. For any taxable year that we fail to qualify as a REIT and for which applicable statutory relief provisions did not apply, we would be subject to U.S. federal corporate income tax on all of our taxable income for at least that year and the ensuing four years. We could also be subject to penalties and interest, and our net income may be materially different from the amounts reported in our financial statements.

Current wording

INCOME TAXES: We have elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code. In order to maintain our qualification as a REIT, among other requirements, we are required to distribute annually at least 90% of our REIT taxable income to our stockholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to U.S. federal income tax with respect to that portion of our income which meets certain criteria and is distributed annually to our stockholders. We plan to continue to operate so that we meet the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. For any taxable year that we fail to qualify as a REIT and for which applicable statutory relief provisions did not apply, we would be subject to U.S. federal corporate income tax on all of our taxable income for at least that year and the ensuing four years. We could also be subject to penalties and interest, and our net income may be materially different from the amounts reported in our financial statements.

Previous wording

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). Material or unusual changes in the results of our operations are discussed below:

Current wording

Results for the year ended December 31, 2025 included the operations of 2,425 stores (2,007 wholly-owned, 11 in consolidated joint ventures, and 407 in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2024, which 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). Material or unusual changes in the results of our operations are discussed below:

Previous wording

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. 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. 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.

Current wording

Property rental—The increase in property rental revenue for the year ended December 31, 2025 was primarily the result of an increase of $104,706 associated with acquisitions completed in 2024 and 2025. The increase in revenue resulting from these acquisitions was partially offset by a decrease in property rental revenue of $21,728 due to property dispositions over the same period. We acquired 58 wholly-owned stores and disposed of six wholly-owned stores during the year ended December 31, 2024. We acquired 76 wholly-owned stores and disposed of 37 wholly-owned stores during the year ended December 31, 2025. In addition, property rental revenue increased by $8,755 due to improved operating results at our same-store properties.

Previous wording

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. We operated 4,011 stores at December 31, 2024, compared to 3,714 stores at December 31, 2023.

Current wording

Tenant reinsurance—The increase in tenant reinsurance revenue was due primarily to an increase in the number of stores operated. We operated 4,281 stores at December 31, 2025, compared to 4,011 stores at December 31, 2024.

Previous wording

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. The increase for the year ended December 31, 2024 was primarily due to an increase in the number of stores managed. 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.

Current wording

Management fees and other income—Management fees and other income primarily represent the fees collected for our management of stores owned by third parties and unconsolidated joint ventures and other transaction fee income. The increase for the year ended December 31, 2025 was primarily due to both an increase in the number of stores managed and an increase in the overall revenue of stores under management when compared to the same period last year. As of December 31, 2025, we managed 1,856 stores for third party owners, compared to 1,575 stores as of December 31, 2024. These increases are offset by a decrease in management fees attributable to stores in unconsolidated joint ventures, where the number of stores decreased from 460 to 407 over the same period.

Previous wording

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. 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. Additionally, property operations expense increased $23,122 at our same-store pool due to increased marketing expense, payroll, and property taxes.

Current wording

Property operations—The increase in property operations expense consists primarily of an increase of $50,721 related to acquisitions completed in 2025 and 2024. We acquired 58 wholly-owned stores in 2024 and 76 wholly-owned stores during the year ended December 31, 2025. Additionally, for the year ended December 31, 2025, there was an increase of $35,689 at our same-store properties primarily due to an increase in property taxes, payroll and benefits, marketing, and repairs and maintenance expenses.

Previous wording

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, 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.

Current wording

Tenant reinsurance—Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance and is subject to volatility due to increased claims arising when significant events occur at stores.

Previous wording

General and Administrative—General and administrative expenses primarily include all expenses not directly related to our stores, including corporate payroll, travel and professional fees. 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.

Current wording

General and administrative—General and administrative expenses primarily include all expenses not directly related to our stores, including corporate payroll, office expense, office rent, travel and professional fees. These expenses are recognized as incurred. General and administrative expense increased primarily as a result of stock compensation expense, which includes the acceleration of expense due to an executive officer’s retirement.

Previous wording

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. 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. 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.

Current wording

Loss on real estate assets held for sale and sold, net—During the year ended December 31, 2025, we recognized estimated losses of $115,830 related to properties sold or classified as held for sale given their estimated fair value, net of selling costs, was less than the carrying value of the assets. The estimated losses are offset by net gains totaling $39,520 attributed to the disposition of stores during 2025. The total net amount is shown on our consolidated statements of operations within loss on real estate assets held for sale and sold, net. As of December 31, 2024, we had 18 stores classified as held for sale. Of the 18 stores, 10 had an estimated fair value, net of selling costs, less than the carrying value of the assets. As a result, we recorded an estimated loss of $63,250. 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 loss on real estate assets held for sale and sold, net.

Previous wording

Impairment of Life Storage Trade Name—During the year ended December 31, 2024, we decided to operate all stores under a single brand. 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.

Current wording

Impairment of Life Storage trade name—During the year ended December 31, 2024, we decided to operate all our stores under a single brand. As a result of that decision, we deemed the Life Storage trade name as an intangible asset to be impaired and recognized a loss for the full value of the asset.

Previous wording

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. 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:

Current wording

Interest expense—The increase in interest expense during the year ended December 31, 2025 was primarily the result of higher outstanding debt. As of December 31, 2025, we had approximately $13,481,899 in total face value of debt, compared to approximately $12,600,661 as of December 31, 2024.

Previous wording

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.

Current wording

Non-cash interest expense related to amortization of discount on unsecured senior notes, net—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 and net premium from bond offerings, offset by the discount from assumed debt.

Previous wording

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. The balance of bridge loans was $1,244,575 as of December 31, 2024, compared to $594,727 as of December 31, 2023.

Current wording

Interest income—Interest income represents interest earned on variable interest rate bridge loans, debt securities and on notes receivable from Common Operating Partnership unit holders. The increase in interest income during the year ended December 31, 2025 was primarily the result of an increase in the amount of bridge loans outstanding. The balance of bridge loans outstanding was $1,500,151 as of December 31, 2025, compared to $1,244,575 as of December 31, 2024. The increase is also attributable to interest received on a $50,000 note receivable from a Common Operating Partnership unit holder. This note receivable originated in December 2024, bears interest at 10% per annum and matures on June 30, 2026.

Previous wording

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. 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 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. 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. Dividend income represents dividends from our investment in preferred stock of SmartStop Self Storage REIT, Inc. and Strategic Storage Trust VI, Inc.

Current wording

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. 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 increase for the year ended December 31, 2025 is primarily due to a transaction in November 2024 in which we acquired additional ownership interest in 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. This increase is offset by a decrease in equity in earnings due to the transfer and distribution of membership interests in the PR II EXR JV LLC joint venture in March 2025 and the acquisition of our partners’ membership interests in the ESS-NYFL JV LP and ESS CA-TIVS JV LP joint ventures in April 2025. Also contributing to the offset is the sale of our membership interests in both the Extra Space Northern Properties VI LLC and the Life Storage Spacemax LLC joint ventures, which occurred in October and July 2025, respectively. The number of stores in unconsolidated joint ventures in which we have ownership interests was 407 as of December 31, 2025, compared to 460 as of December 31, 2024. Dividend income represents dividends from our investment in preferred stock of SmartStop and its affiliates.

Previous wording

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. 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.

Current wording

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest—The net gain of $54,521 for the year ended December 31, 2025 is due to the sale of our membership interest in nine properties in the Extra Space Northern Properties VI LLC joint venture in October 2025, which held 10 properties. This resulted in a net gain of $45,167. We also recorded a net gain of $9,354 on the sale of our membership interest in the Life Storage Spacemax LLC joint venture in July 2025, which held six properties. During the year ended December 31, 2024, the ESS Bristol Investments LLC joint venture sold five of its eight stores to one of our unconsolidated joint ventures, and we recognized a gain of $10,324 for our pro rata share of the transaction. Additionally, we sold our membership interest in another unconsolidated joint venture to our partner and recognized a gain of $3,406 on the transaction.

Previous wording

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.

Current wording

Income tax expense—The increase in income tax expense for the year ended December 31, 2025 was primarily the result of an increase in book income and a decrease in permanent tax deductions related to stock awards.

Previous wording

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.

Current wording

The results of operations for the years ended December 31, 2024 compared to December 31, 2023 was included in our Annual Report on Form 10-K for the year ended December 31, 2024 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 SEC on February 28, 2025.

Previous wording

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. 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. (“NAREIT”) as net income computed in accordance with U.S. generally accepted accounting principles (“GAAP”), excluding gains or losses on sales of operating stores and impairment write-downs of depreciable real estate assets, plus real estate related depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance, FFO should be considered along with the reported net income and cash flows in accordance with GAAP, as presented in the consolidated financial statements. FFO should not be considered a replacement of net income computed in accordance with GAAP.

Current wording

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. 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. (“NAREIT”) as net income computed in accordance with U.S. generally accepted accounting principles (“GAAP”), excluding gains or losses on sales of operating stores and impairment write-downs of depreciable real estate assets, plus real estate related depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance, FFO should be considered along with the reported net income and cash flows in accordance with GAAP, as presented in our consolidated financial statements. FFO should not be considered a replacement of net income computed in accordance with GAAP.

Previous wording

The following table presents the calculation of FFO for the periods indicated:

Current wording

The following table presents the calculation of FFO for the years indicated:

Previous wording

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. We consider a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of 80% or more for one calendar year. We believe that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to, occupancy, rental revenue growth, operating expense growth, net operating income growth, etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments. Same-store results should not be used as a basis for future same-store performance or for the performance of our stores as a whole. The following table presents operating data for our same-store portfolio:

Current wording

Our same-store pool for the years presented consists of 1,804 stores that are wholly-owned and operated and that were stabilized by the first day of the earliest calendar year presented. We consider a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of 80% or more for one calendar year. We believe that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to, occupancy, rental revenue growth, operating expense growth, net operating income growth, etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments. Same-store results should not be used as a basis for future same-store performance or for the performance of our stores as a whole. The following table presents operating data for our same-store portfolio:

Previous wording

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:

Current wording

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 years indicated:

Previous wording

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. 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. A summary of cash flows along with significant components are as follows:

Current wording

Cash flows from operating activities for the year ended December 31, 2025 were relatively flat when compared to the same period in the prior year. 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. A summary of cash flows along with significant components are as follows:

Previous wording

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. These cash needs include operating expenses, monthly debt service payments, recurring capital expenditures, acquisitions, funding for the bridge loan program, building redevelopments and expansions, distributions to unit holders and dividends to stockholders necessary to maintain our REIT qualification.

Current wording

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. These cash needs include operating expenses, monthly debt service payments, acquisitions, funding for the bridge loan program, recurring capital expenditures, building redevelopments and expansions, distributions to unit holders and dividends to stockholders necessary to maintain our REIT qualification.

Previous wording

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. 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.

Current wording

As of December 31, 2025, we had $138,920 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. During 2025 and 2024, 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.

Previous wording

In November 2024, we established our commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes. 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. 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. 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. At December 31, 2024, we had $500 million in issuances outstanding under the commercial paper program.

Current wording

Our commercial paper program provides us the ability to issue, repay and re-issue short-term unsecured commercial paper notes. The aggregate principal amount outstanding under the program at any time cannot exceed $1,000,000, 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. 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. 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. At December 31, 2025, we had $680,000 in issuances outstanding under the commercial paper program.

Previous wording

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 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. 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.

Current wording

We hold a BBB+/Stable rating from S&P, which was upgraded from BBB/Stable in July 2023 in connection with the Life Storage Merger, and a Baa2/Stable rating from Moody’s Investors Service. 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, 2025, we had a total of 1,775 unencumbered stores as defined by our public bonds. Our unencumbered asset value was calculated as $30,247,545 and our total asset value was calculated as $35,894,312 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, 2025.

Previous wording

On April 15, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certain sales agents and forward purchasers named therein. 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. 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. 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.

Current wording

On April 15, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certain sales agents and forward purchasers named therein. 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 $800,000. 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. As of December 31, 2025, no shares have been sold under the Equity Distribution Agreement, which we refer to as our “at the market” equity program.