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Extra Space Storage Results Show Solid Rental Rate Growth


When Extra Space Storage Inc. released its Q2 numbers last week, Joe Margolis, CEO of the REIT said that 2018 continues to go as planned with solid rental rate growth in the mid-single digits as well as strong same-store occupancy of 94.2%.

“We continue to execute our strategy of consistent property operations, steady external growth and efficient capital allocation,” he said. “We are pleased with our platform’s performance in the first two quarters, and we believe we are positioned for a strong second half of 2018.”

As of June 30, 2018, the Company managed 486 stores for third-party owners. With an additional 214 stores owned and operated in joint ventures, the company had a total of 700 stores under management. The company continues to be the largest self-storage management company in the US.

Analyst firm, BMO Capital Markets reported that the company’s core operations were solid but likely decelerated a bit more sharply than expected, but that revenue growth should continue to moderate in the second half of the year as supply pressures mount.

The Salt Lake City-based company revealed that it had achieved net income attributable to common stockholders of $0.75 per diluted share, representing an 8.7% increase compared to the same period in 2017. In addition, other highlights for the three months that ended June 30, 2018 were as follows:

  • Achieved funds from operations attributable to common stockholders and unit holders (“FFO”) of $1.14 per diluted share. FFO, excluding adjustments for non-cash interest, (“Core FFO”) was $1.15 per diluted share, representing a 5.5% increase compared to the same period in 2017.
  • Increased same-store revenue by 4.1% and same-store net operating income (“NOI”) by 3.8% compared to the same period in 2017.
  • Reported same-store occupancy of 94.2% as of June 30, 2018, compared to 94.3% as of June 30, 2017.
  • Acquired three operating stores and purchased its joint venture partner’s interest in 14 operating stores for a total investment of approximately $238.6 million.
  • In conjunction with joint venture partners, acquired five operating stores, seven stores at completion of construction (a “Certificate of Occupancy store” or “C of O store”) and completed one development for a total cost of approximately $201.2 million, of which the Company invested $35.3 million.
  • Added 42 properties to the Company’s third-party management platform, resulting in 486 third-party managed stores, plus an additional 214 stores in joint ventures, for a total of 700 managed stores as of June 30, 2018.
  • Paid a quarterly dividend of $0.86 per share.