Extra Space Storage Inc. Q3 FY2024 earnings call

• Hurricane Milton impact: All teammates safe, some displaced and provided shelter assistance. - Store performance: Extra Space same-store pool consistent with expectations, Life Storage same-store pool had revenue below but expenses outperformed. - External growth: Added 63 third-party managed stores gross, netting 38 stores year-to-date, anticipate ~100 additional properties by year-end. - Bridge loan program: Originated $158 million in new loans, expected average hold of $925 million. - Acquisition: Deployed $334 million in wholly-owned and joint venture acquisitions. - G&A: Lowered G&A guidance for the year.

Extra Space same-store pool: Quarter ending October occupancy was 94.3%, solid performance allows increasing the bottom end of 2024 same-store guidance. Revenue for Life Storage same-store pool came in slightly below expectations but expenses outperformed. Non same-store properties are outperforming expectations. Extra Space contributed to FFO growth, Life Storage's same-store revenue was slightly below with expenses outperforming, and now moving to a single brand with expected improvement in 2025.

• Increased midpoint of full year FFO guidance. - Raised the bottom end of Extra Space same-store revenue guidance by 75 basis points, midpoint to positive 0.125%; raised NOI guidance bottom end by 75 basis points, midpoint to negative 1.375%. - Reduced Life Storage same-store revenue guidance by 50 basis points at midpoint; revised expense guidance downward by 100 basis points at midpoint, adjusted NOI guidance to range of negative 1.5% to positive 0.5%. - Raised 2024 average outstanding bridge loan guidance and expected interest income; lowered G&A and increased tenant reinsurance guidance; updated interest expense due to higher bridge loan volume and acquisition guidance. - FFO guidance lower end raised by $0.05 per share to $8 per share, midpoint modestly increased, excluding Hurricane Milton impact.

• Hurricane Milton: Still assessing full extent of property damage and tenant insurance claims, sustained damage at several properties, 3 REIT stores closed, estimating $10 million or more in property damage and claims, major hurricane costs not contemplated in guidance. - Market conditions: Impact on storage demand, pricing power, and new supply moderation affecting performance.

Q: LSI street rate trends in quarter and October?

A: Difficult year-over-year due to not managing for whole quarter, quarter-over-quarter rates down 1%, less seasonal decline than Extra Space.

Q: Closing 6% spread on like-for-like basis?

A: Think can close gap with single brand and time, on same quality stores in same trade area.

Q: Bridge loan maturity next year?

A: Half of loans not maturing until November and December, hard to give accurate percentage now.

Q: LSI street rate trends and gap closing?

A: Quarter-over-quarter down 1%, think can close gap with single brand and time.