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Sep 30, 2023
Extra Space Q3 2023 Earnings Report
Extra Space Storage successfully completed its transformative merger with Life Storage and smoothly integrated its stores, team, and systems onto the Extra Space Storage platform.
Key Takeaways
Extra Space Storage Inc. reported Q3 2023 results, which included the successful completion of its merger with Life Storage. The company has integrated Life Storage's operations and is on track to achieve total synergies by Q1 2024. Same-store revenue increased by 1.9%, and the company maintained strong same-store occupancy.
Net income attributable to common stockholders was $0.96 per diluted share, a 41.8% decrease year-over-year, primarily due to transition costs related to the Life Storage Merger.
FFO was $1.69 per diluted share, and Core FFO was $2.02 per diluted share, representing an 8.6% decrease compared to the same period in the prior year.
Same-store revenue increased by 1.9%, and same-store NOI increased by 0.7% compared to the same period in the prior year.
The company closed its merger with Life Storage, Inc. on July 20, 2023, in an $11.6 billion all-stock transaction.
Revenue by Segment
Forward Guidance
The company provided Core FFO estimates and annual assumptions for the year ending December 31, 2023, including the impact of the Life Storage Merger. The company estimates Core FFO to be between $8.05 and $8.20.
Positive Outlook
- Includes dilutive impact of Life Storage Merger
- Same-store pool of 914 stores
- Includes interest from bridge loans and dividends from NexPoint preferred investment
- Includes non-cash compensation
- Includes dividends from SmartStop preferred investments
Challenges Ahead
- Dilution per share from C of O and value add acquisitions: $0.23
- Same-store revenue growth: 2.75% - 3.50%
- Same-store expense growth: 4.00% - 5.00%
- Weighted average one-month SOFR: 5.02%
Historical Earnings Impact
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Avg. Return Before/After Earnings
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