Extra Space Storage Inc.

Previous wording

We are a fully integrated, self-administered and self-managed real estate investment trust (“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.

Current wording

We are a fully integrated, self-administered and self-managed real estate investment trust (“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 its 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

As of March 31, 2026, we owned or had ownership interests in 2,428 operating stores. Of these stores, 2,008 are wholly-owned, 12 are in consolidated joint ventures, and 408 are in unconsolidated joint ventures. In addition, we managed an additional 1,916 stores for third parties bringing the total number of stores which we own and/or manage to 4,344. These stores are located in 42 states and Washington, D.C. The clustering of assets around population centers enables us to reduce our operating costs through economies of scale. Our acquisitions have given us an increased scale in many core markets as well as a foothold in many markets where we had no previous presence.

Current wording

As of June 30, 2026, we owned or had ownership interests in 2,446 operating stores. Of these stores, 2,026 are wholly-owned, 11 are in consolidated joint ventures, and 409 are in unconsolidated joint ventures. In addition, we managed an additional 1,964 stores for third parties, bringing the total number of stores which we own and/or manage to 4,410. These stores are located in 42 states and Washington, D.C. The clustering of assets around population centers enables us to reduce our operating costs through economies of scale. Our acquisitions have given us an increased scale in many core markets as well as a foothold in many markets where we had no previous presence.

Previous wording

As of March 31, 2026, approximately 2,480,000 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. Although leases are short-term in duration, the typical tenant tends to remain at our stores for an extended period of time. For same-store properties as of March 31, 2026, the average length of stay for tenants who had vacated was approximately 16.8 months.

Current wording

As of June 30, 2026, approximately 2,580,000 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. Although leases are short-term in duration, the typical tenant tends to remain at our stores for an extended period of time. For same-store properties as of June 30, 2026, the average length of stay for tenants who had vacated was approximately 16.8 months.

Previous wording

Comparison of the three months ended March 31, 2026 and 2025

Current wording

Comparison of the three and six months ended June 30, 2026 and 2025

Previous wording

Results for the three months ended March 31, 2026 included the operations of 2,428 stores (2,008 wholly-owned, 12 in consolidated joint ventures, and 408 in joint ventures accounted for using the equity method) compared to the results for the three months ended March 31, 2025, which included the operations of 2,424 stores (1,975 wholly-owned, ten in consolidated joint ventures, and 439 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 three and six months ended June 30, 2026 included the operations of 2,446 stores (2,026 wholly-owned, 11 in consolidated joint ventures, and 409 in joint ventures accounted for using the equity method) compared to the results for the three and six months ended June 30, 2025, which included the operations of 2,430 stores (2,005 wholly-owned, 11 in consolidated joint ventures, and 414 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 revenues for the three months ended March 31, 2026 compared to the same period in the prior year was primarily the result of an increase of $22,679 associated with acquisitions completed in 2025 and acquisitions completed in the first three months of 2026. The increase in revenue resulting from these acquisitions was partially offset by a decrease in property rental revenue of $6,543 due to property dispositions over the same period. We acquired one wholly-owned store and disposed of one wholly-owned store during the three months ended March 31, 2026. 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 $11,372 due to improved operating results at our same-store properties.

Current wording

Property rental—The increase in property rental revenue for the three and six months ended June 30, 2026 compared to the same periods in the prior year was primarily the result of growth in our portfolio related to acquisitions completed in 2025 and acquisitions completed in the first six months of 2026. We acquired 18 wholly-owned stores during the six months ended June 30, 2026 and acquired 76 wholly-owned stores during the year ended December 31, 2025. These increases in revenue resulting from acquisitions were partially offset by property dispositions during the same periods. Additionally, property rental revenue increased for the three and six months ended June 30, 2026 due to improved operating results from increases in average annual rent per occupied square foot over the comparative periods.

Previous wording

Tenant reinsurance—The increase in tenant reinsurance revenue for the three months ended March 31, 2026 compared to the same period in the prior year was due primarily to an increase in the number of stores operated. We operated 4,344 stores at March 31, 2026 compared to 4,099 stores at March 31, 2025.

Current wording

Tenant reinsurance—The increase in tenant reinsurance revenue for the three and six months ended June 30, 2026 compared to the same periods in the prior year was due primarily to an increase in the number of stores operated. We operated 4,410 stores at June 30, 2026 compared to 4,179 stores at June 30, 2025.

Previous 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 three months ended March 31, 2026 compared to the same period in the prior year 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 March 31, 2026, we managed 1,916 stores for third party owners, compared to 1,675 stores as of March 31, 2025. These increases are offset by a decrease in management fees attributable to stores in unconsolidated joint ventures, where the number of stores decreased from 439 to 408 over the same period.

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 three and six months ended June 30, 2026 compared to the same periods in the prior year 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 periods last year. As of June 30, 2026, we managed 1,964 stores for third party owners, compared to 1,749 stores as of June 30, 2025. These increases are offset by a decrease in management fees attributable to stores in unconsolidated joint ventures, where the number of stores decreased from 414 to 409 over the same period.

Previous wording

Depreciation and amortization—We amortize to expense intangible assets-customer intangibles on a straight-line basis over the average period that a tenant is expected to utilize the facility (currently estimated at 18 months). Depreciation and amortization expense increased for the three months ended March 31, 2026 compared to the same period in the prior year primarily as a result of the acquisition of new stores. We acquired 76 wholly-owned stores in 2025 and one wholly-owned store during the three months ended March 31, 2026.

Current wording

Depreciation and amortization—We amortize to expense intangible assets-customer intangibles on a straight-line basis over the average period that a tenant is expected to utilize the facility (currently estimated at 18 months). Depreciation and amortization expense increased for the three and six months ended June 30, 2026 compared to the same periods in the prior year primarily as a result of the acquisition of new stores. We acquired 18 wholly-owned stores and disposed of one wholly-owned store during the six months ended June 30, 2026. We acquired 76 wholly-owned stores and disposed of 37 wholly-owned stores during the year ended December 31, 2025.

Previous wording

Gain on real estate assets held for sale and sold, net—During the three months ended March 31, 2026, we disposed of one previously held for sale store, resulting in no gain or loss. We disposed of 11 previously held for sale stores during the three months ended March 31, 2025, resulting in a gain of $39,520. This gain was partially offset by losses of $3,759 related to the sale of three land parcels and three properties listed for sale during the quarter where the estimated fair value, net of selling costs, was less than the net carrying value of the assets.

Current wording

Gain (loss) on real estate assets held for sale and sold, net—During the six months ended June 30, 2026, we disposed of one previously held for sale store, resulting in no gain or loss. We disposed of 12 previously held for sale stores during the six months ended June 30, 2025, resulting in a gain of $38,656. This gain was partially offset by losses of $3,759 related to the sale of three land parcels and three properties listed for sale during the six months ended June 30, 2025 where the estimated fair value, net of selling costs, was less than the net carrying value of the assets. The loss recorded during the three months ended June 30, 2025 related to the sale of one operating property previously listed as held for sale resulted in an additional loss of $864.

Previous wording

Interest income—Interest income represents interest earned on bridge loans, debt securities and on a note receivable from a Common Operating Partnership unit holder. The increase in interest income during the three months ended March 31, 2026 compared to the same period in the prior year was primarily the result of an increase in the amount of bridge loans outstanding. The balance of bridge loans outstanding was $1,452,159 as of March 31, 2026, compared to $1,369,089 as of March 31, 2025. 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.

Current wording

Interest income—Interest income represents interest earned on bridge loans, debt securities and on a note receivable from a common Operating Partnership unit holder. The decrease in interest income during the three and six months ended June 30, 2026 compared to the same periods in the prior year was primarily the result of a decrease in the amount of bridge loans outstanding. The balance of bridge loans outstanding was $1,445,278 as of June 30, 2026, compared to $1,542,693 as of June 30, 2025.

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 decrease for the three months ended March 31, 2026 is primarily 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 decrease 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 408 as of March 31, 2026, compared to 439 as of March 31, 2025. Dividend income represents dividends from our investments in preferred stock of Strategic Storage Trust VI, Inc. and Strategic Storage Growth Trust III, 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 decrease for the three and six months ended June 30, 2026 was primarily 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 decrease is the sale of our membership interests in both the Life Storage Spacemax LLC and the Extra Space Northern Properties VI LLC joint ventures, which occurred in July and October 2025, respectively. The number of stores in unconsolidated joint ventures in which we have ownership interests was 409 as of June 30, 2026, compared to 414 as of June 30, 2025. Dividend income represents dividends from our investments in preferred stock of Strategic Storage Trust VI, Inc. and Strategic Storage Growth Trust III, Inc.

Previous wording

Income tax expense—The increase in income tax expense for the three months ended March 31, 2026 compared to the same period in the prior year was primarily the result of an increase in book income and a decrease in permanent tax deductions related to stock awards.

Current wording

Income tax expense—The increase in income tax expense for the three and six months ended June 30, 2026 compared to the same periods in the prior year was primarily the result of an increase in book income and a decrease in permanent tax deductions related to stock awards.

Previous wording

Cash flows from operating activities for the three months ended March 31, 2026 increased 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:

Current wording

Cash flows from operating activities for the six months ended June 30, 2026 increased 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

As of March 31, 2026, we had $138,986 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 2026 and 2025, 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 June 30, 2026, we had $695,171 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 2026 and 2025, 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

We hold a BBB+/Stable rating from S&P 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 March 31, 2026, we had a total of 1,776 unencumbered stores as defined by our public bonds. Our unencumbered asset value was calculated as $30,190,854 and our total asset value was calculated as $35,820,236 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 March 31, 2026.

Current wording

We hold a BBB+/Stable rating from S&P 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 June 30, 2026, we had a total of 1,794 unencumbered stores as defined by our public bonds. Our unencumbered asset value was calculated as $31,069,882 and our total asset value was calculated as $36,807,478 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 June 30, 2026.