Results

Extra Space Storage Inc.

05/01/2026 | Press release | Distributed by Public on 05/01/2026 14:26

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY LANGUAGE
The following discussion and analysis should be read in conjunction with our unaudited "Condensed Consolidated Financial Statements" and the "Notes to Condensed Consolidated Financial Statements (unaudited)" appearing elsewhere in this report and the "Consolidated Financial Statements," "Notes to Consolidated Financial Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Form 10-K for the year ended December 31, 2025. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Form 10-Q entitled "Statement on Forward-Looking Information."
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements contained elsewhere in this report, which have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). Our notes to the unaudited condensed consolidated financial statements contained elsewhere in this report and the audited financial statements contained in our Form 10-K for the year ended December 31, 2025 describe the significant accounting policies essential to our unaudited condensed consolidated financial statements. Preparation of our financial statements requires estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions that we have used are appropriate and correct based on information available at the time they were made. These estimates, judgments and assumptions can affect our reported assets and liabilities as of the date of the financial statements, as well as the reported revenues and expenses during the period presented. If there are material differences between these estimates, judgments and assumptions and actual facts, our financial statements may be affected.
In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require our judgment in its application. There are areas in which our judgment in selecting among available alternatives would not produce a materially different result, but there are some areas in which our judgment in selecting among available alternatives would produce a materially different result. See the notes to the unaudited condensed consolidated financial statements that contain additional information regarding our accounting policies and other disclosures.
OVERVIEW
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.
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.
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.
PROPERTIES
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.
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.
Our store portfolio is made up of different types of construction and building configurations. Most often sites are what we consider "hybrid" facilities, a mix of both drive-up buildings and multi-floor buildings.
The following table presents additional information regarding our net rentable square feet and the number of stores by state:
As of March 31, 2026
REIT Owned Joint Venture 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 35 2,805,797 2 150,910 21 1,471,066 58 4,427,773
Arizona 52 4,081,893 26 2,108,018 73 5,815,386 151 12,005,297
Arkansas - - - - 5 545,702 5 545,702
California 227 18,705,968 42 3,204,048 160 14,842,646 429 36,752,662
Colorado 26 1,795,485 13 936,763 43 3,204,392 82 5,936,640
Connecticut 23 1,754,555 8 713,407 21 1,466,767 52 3,934,729
Delaware - - 1 76,633 7 530,050 8 606,683
Florida 257 19,978,272 41 3,252,066 261 20,294,959 559 43,525,297
Georgia 122 9,339,733 16 1,334,461 78 6,046,866 216 16,721,060
Hawaii 16 1,055,773 - - 4 276,165 20 1,331,938
Idaho 2 131,954 - - 6 756,747 8 888,701
Illinois 108 7,876,799 9 716,722 57 4,568,538 174 13,162,059
Indiana 94 4,183,507 1 57,567 32 2,485,526 127 6,726,600
Kansas 1 50,164 2 108,646 3 237,168 6 395,978
Kentucky 14 1,044,405 1 51,631 16 1,228,540 31 2,324,576
Louisiana 10 771,638 1 88,720 16 1,186,065 27 2,046,423
Maine 5 352,407 - - 12 797,596 17 1,150,003
Maryland 45 3,619,335 8 628,411 61 4,722,655 114 8,970,401
Massachusetts 67 4,229,583 16 987,282 46 2,774,240 129 7,991,105
Michigan 11 843,388 4 308,912 18 1,402,138 33 2,554,438
Minnesota 7 586,955 8 644,929 11 832,849 26 2,064,733
Mississippi 5 419,059 - - 7 599,873 12 1,018,932
Missouri 29 2,390,473 7 507,743 31 2,378,327 67 5,276,543
Nebraska - - - - 9 735,714 9 735,714
Nevada 42 3,579,713 10 918,096 22 1,914,666 74 6,412,475
New Hampshire 17 1,286,200 - - 15 732,008 32 2,018,208
New Jersey 92 7,367,988 29 2,332,486 91 7,256,727 212 16,957,201
New Mexico 12 747,319 10 681,433 17 1,237,106 39 2,665,858
New York 83 6,031,087 23 1,962,134 97 6,692,603 203 14,685,824
North Carolina 55 4,057,478 5 396,181 68 5,416,239 128 9,869,898
Ohio 49 3,412,972 5 327,188 26 2,157,977 80 5,898,137
Oklahoma 4 269,815 - - 44 3,113,161 48 3,382,976
Oregon 8 549,724 3 243,485 5 365,756 16 1,158,965
Pennsylvania 33 2,563,021 10 787,686 71 5,395,789 114 8,746,496
Rhode Island 6 348,197 1 95,844 6 484,906 13 928,947
South Carolina 47 3,438,833 1 94,802 51 4,492,202 99 8,025,837
Tennessee 33 2,659,190 16 1,091,586 31 2,198,734 80 5,949,510
Texas 267 21,594,473 66 5,094,030 237 19,219,566 570 45,908,069
Utah 23 1,591,374 3 193,964 49 3,884,240 75 5,669,578
Virginia 74 6,082,736 9 699,609 40 2,795,432 123 9,577,777
Washington 16 1,283,259 1 77,640 21 1,650,190 38 3,011,089
Washington, DC 1 100,373 1 104,197 7 605,886 9 810,456
Wisconsin 2 187,165 9 860,856 20 1,783,026 31 2,831,047
Totals 2,020 153,168,060 408 31,838,086 1,916 150,596,189 4,344 335,602,335
(1) Includes 12 stores in consolidated joint ventures.
RESULTS OF OPERATIONS
Amounts in thousands, except store and share data
Comparison of the three months ended March 31, 2026 and 2025
Overview
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:
Revenues
The following table presents information on revenues earned for the periods indicated:
For the Three Months Ended March 31,
2026 2025 $ Change % Change
Revenues:
Property rental $ 733,213 $ 704,380 $ 28,833 4.1 %
Tenant reinsurance 89,119 84,712 4,407 5.2 %
Management fees and other income 33,695 30,905 2,790 9.0 %
Total revenues $ 856,027 $ 819,997 $ 36,030 4.4 %
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.
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.
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.
Expenses
The following table presents information on expenses for the periods indicated:
For the Three Months Ended March 31,
2026 2025 $ Change % Change
Expenses:
Property operations $ 238,303 $ 223,582 $ 14,721 6.6 %
Tenant reinsurance 17,867 17,116 751 4.4 %
General and administrative 46,509 45,974 535 1.2 %
Depreciation and amortization 185,795 180,356 5,439 3.0 %
Total expenses $ 488,474 $ 467,028 $ 21,446 4.6 %
Property operations-The increase in property operations expense during the three months ended March 31, 2026 compared to the same period in the prior year consists primarily of an increase of $9,457 related to acquisitions completed in 2025 and in the first three months of 2026. We acquired 76 wholly-owned stores in 2025 and one wholly-owned store during the three months ended March 31, 2026. Additionally, for the three months ended March 31, 2026, there was an increase of $5,243 in property operations expense at our same-store properties primarily due to an increase in repairs and maintenance, insurance, and property operating expenses.
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.
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.
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.
Other Revenues and Expenses
The following table presents information on other revenues and expenses for the periods indicated:
For the Three Months Ended March 31,
2026 2025 $ Change % Change
Gain on real estate assets held for sale and sold, net $ - $ 35,761 $ (35,761) (100.0) %
Interest expense (147,299) (142,399) (4,900) 3.4 %
Non-cash interest expense related to amortization of discount on unsecured senior notes, net (12,555) (11,313) (1,242) 11.0 %
Interest income 39,543 38,967 576 1.5 %
Equity in earnings and dividend income from unconsolidated real estate entities 15,760 19,931 (4,171) (20.9) %
Equity in earnings of unconsolidated real estate ventures - gain on sale of a joint venture interest 207 - 207 100.0 %
Income tax expense (10,789) (8,991) (1,798) 20.0 %
Total other revenues & expenses, net $ (115,133) $ (68,044) $ (47,089) 69.2 %
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.
Interest expense-The increase in interest expense during the three months ended March 31, 2026 compared to the same period in the prior year was primarily the result of higher outstanding debt. As of March 31, 2026, we had approximately $13,406,885 in total face value of debt, compared to approximately $12,809,851 as of March 31, 2025.
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 our merger with Life Storage and net premium from bond offerings, offset by the discount from assumed debt.
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.
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.
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.
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. 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 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 condensed consolidated financial statements. FFO should not be considered a replacement of net income computed in accordance with GAAP.
The computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. 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.
The following table presents the calculation of FFO for the periods indicated:
For the Three Months Ended March 31,
2026 2025
Net income attributable to common stockholders $ 240,977 $ 270,875
Adjustments:
Real estate depreciation 170,895 159,170
Amortization of intangibles 3,723 11,079
Gain on real estate assets held for sale and sold, net - (35,761)
Unconsolidated joint venture real estate depreciation and amortization 7,607 8,689
Unconsolidated joint venture gain on sale of a joint venture interest (207) -
Income allocated to Operating Partnership noncontrolling interests 11,443 14,050
Funds from operations attributable to common stockholders and unit holders $ 434,438 $ 428,102
SAME-STORE RESULTS
Our same-store pool for the periods presented consists of 1,870 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.
For the Three Months Ended March 31, Percent
2026 2025 Change
Same-store rental revenues
Net rental income $ 654,365 $ 642,993 1.8 %
Other operating income 24,244 24,556 (1.3) %
Total same-store rental revenues 678,609 667,549 1.7 %
Same-store operating expenses
Payroll and benefits 41,685 41,072 1.5 %
Marketing 14,468 14,314 1.1 %
Office expense 18,210 17,898 1.7 %
Property operating expense 24,100 22,731 6.0 %
Repairs and maintenance 16,714 15,494 7.9 %
Property taxes 77,791 77,190 0.8 %
Insurance 8,902 7,928 12.3 %
Total same-store operating expenses 201,870 196,627 2.7 %
Same-store net operating income $ 476,739 $ 470,922 1.2 %
Same-store square foot occupancy as of period end 93.0% 93.2%
Average same-store square foot occupancy 92.7% 93.1%
Properties included in same-store 1,870 1,870
The following table presents additional information for our same-store portfolio:
For the Three Months Ended March 31,
Same-store portfolio 2026 2025
Average annual rent per occupied square foot, net of discounts and bad debt $ 19.92 $ 19.55
New leases average annual rent per square foot $ 12.35 $ 12.06
Average discounts as a percentage of rental revenues 1.8 % 1.7 %
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 Three Months Ended March 31,
2026 2025
Net Income $ 252,420 $ 284,925
Adjusted to exclude:
Gain on real estate assets held for sale and sold, net - (35,761)
Equity in earnings and dividend income from unconsolidated real estate entities (15,760) (19,931)
Equity in earnings of unconsolidated real estate ventures - gain on sale of a joint venture interest (207) -
Interest expense 147,299 142,399
Non-cash interest expense related to amortization of discount on unsecured senior notes, net 12,555 11,313
Depreciation and amortization 185,795 180,356
Income tax expense 10,789 8,991
General and administrative 46,509 45,974
Management fees, other income and interest income (73,238) (69,872)
Net tenant insurance (71,252) (67,596)
Non same-store rental revenue (54,604) (36,831)
Non same-store operating expense 36,433 26,955
Total same-store net operating income $ 476,739 $ 470,922
Same-store rental revenues $ 678,609 $ 667,549
Same-store operating expenses 201,870 196,627
Same-store net operating income $ 476,739 $ 470,922
CASH FLOWS
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:
For the Three Months Ended March 31,
2026 2025
Net cash provided by operating activities $ 489,855 $ 481,404
Net cash used in investing activities (47,501) (342,038)
Net cash used in financing activities (442,129) (159,621)
Significant components of net cash flow included:
Net income $ 252,420 $ 284,925
Depreciation and amortization 185,795 180,356
Acquisition and development of real estate assets (100,888) (243,861)
Issuance of notes receivable, net of sales and principal payments 55,702 (116,241)
Net proceeds (payments) from unsecured term loans, senior notes, revolving lines of credit and commercial paper (75,013) (636,379)
Dividends paid on common stock (342,753) (344,203)
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.
We expect to generate positive cash flow from operations in 2026, and we consider projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations could cause us to increase our reliance on available funds under our existing lines of credit, curtail planned capital expenditures, or seek other additional sources of financing.
LIQUIDITY AND CAPITAL RESOURCES
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.
The following table presents information relating to our debt:
March 31, 2026
Total face value of debt $ 13,406,885
Total enterprise value ratio 31.6 %
Total fixed-rate debt and other instruments to total debt
82.5% (1)
Weighted average interest rate of total debt 4.3 %
(1) $11,066,195 total fixed-rate debt including $952,000 on which we have interest rate swaps that have been included as fixed-rate debt.
We expect to fund our short-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. In addition, we are pursuing additional sources of financing based on anticipated funding needs and growth assumptions.
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 397 days. 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 facility in an amount at least equal to the amount of commercial paper notes outstanding. At March 31, 2026, we had $850,000 in issuances outstanding under the commercial paper program.
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.
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. We evaluate, on an ongoing basis, the merits of strategic acquisitions and other relationships, which may require us to raise additional funds. We may also use Operating Partnership units as currency to fund acquisitions from self-storage owners. In addition, 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.
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 Securities and Exchange Commission (the "SEC") and a prospectus supplement and accompanying prospectus, filed with the SEC. As of March 31, 2026, no shares have been sold under the Equity Distribution Agreement, which we refer to as our "at the market" equity program.
OFF-BALANCE SHEET ARRANGEMENTS
Except as disclosed in the notes to our consolidated financial statements of our most recently filed Annual Report on Form 10-K, we do not currently have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purposes entities, which typically are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, except as disclosed in the notes to our condensed consolidated financial statements, we have not guaranteed any obligations of unconsolidated entities, nor do we have any commitments or intent to provide funding to any such entities. Accordingly, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.
SEASONALITY
The self-storage business is subject to seasonal fluctuations. A greater portion of revenues and profits is typically realized from May through September. 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.
Extra Space Storage Inc. published this content on May 01, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 01, 2026 at 20:26 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]