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Extra Space Storage Inc. (EXR)

CIK: 0001289490. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-02-20.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1289490. Latest filing source: 0001289490-26-000011.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue3,377,542,000USD20252026-02-20
Net income973,999,000USD20252026-02-20
Assets29,264,046,000USD20252026-02-20

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-20. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001289490.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Metric2016201720182019202020212022202320242025
Revenue991,875,0001,105,009,0001,196,604,0001,308,454,0001,356,212,0001,577,362,0001,924,170,0002,560,244,0003,256,902,0003,377,542,000
Net income366,127,000479,013,000415,289,000419,967,000481,779,000827,649,000860,688,000803,198,000854,681,000973,999,000
Operating income458,303,000654,394,000619,703,000634,958,000666,140,000975,953,0001,050,402,0001,170,141,0001,323,360,0001,412,691,000
Diluted EPS2.913.763.273.243.716.196.414.744.034.59
Assets7,091,446,0007,460,953,0007,847,978,0008,532,377,0009,395,848,00010,474,477,00012,167,458,00027,456,262,00028,847,926,00029,264,046,000
Liabilities4,495,280,0004,737,146,0005,062,556,0005,610,683,0006,459,724,0006,688,501,0008,089,184,00012,042,313,00013,988,564,00014,940,010,000
Stockholders' equity2,244,892,0002,350,751,0002,413,724,0002,539,961,0002,547,779,0003,116,496,0003,259,597,00014,390,921,00013,947,535,00013,433,166,000
Cash and cash equivalents43,858,00055,683,00057,496,00065,746,000109,124,00071,126,00092,868,00099,062,000138,222,000138,920,000
Net margin36.91%43.35%34.71%32.10%35.52%52.47%44.73%31.37%26.24%28.84%
Operating margin46.21%59.22%51.79%48.53%49.12%61.87%54.59%45.70%40.63%41.83%

Financial Charts

Macro Cross-References

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-20. Report date: 2025-12-31.

Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report. 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-K entitled “Statements Regarding Forward-Looking Information.” Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section in this Form 10-K entitled “Risk Factors.” Dollar amounts are in thousands, except share and per share data, unless otherwise stated.

OVERVIEW

22

We are a fully integrated, self-administered and self-managed 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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and assumptions, including those that impact our most critical accounting policies. We base our estimates and assumptions on historical experience and on various other factors that we believe are reasonable under the circumstances. A summary of significant accounting policies is also provided in the notes to our consolidated financial statements (see note 2 to our consolidated financial statements). Actual results may differ from these estimates. We believe the following are our most critical accounting policies and estimates:

CONSOLIDATION: Arrangements that are not controlled through voting or similar rights are accounted for as variable interest entities (“VIEs”). An enterprise is required to consolidate a VIE if it is the primary beneficiary of the VIE.

Under certain circumstances when we enter into arrangements for the formation of joint ventures, a VIE may be created.  The primary factors that require the most judgment in determining whether the joint venture is a VIE are whether the decisions that most significantly impact the entity’s economic performance were controlled by the equity holders as a group and whether the joint venture has sufficient equity to finance its activities without additional subordinated support.

If the joint venture is determined to be a VIE, we perform a qualitative analysis, including considering which party, if any, has the power to direct the activities most significant to the economic performance of each VIE and whether that party has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If we are determined to be the primary beneficiary of the VIE, the assets, liabilities and operations of the VIE are consolidated within our financial statements. Otherwise, our investment is generally accounted for under the equity method. Our ability to correctly assess the influence or control over an entity affects the presentation of the investment in our consolidated financial statements.

REAL ESTATE ASSETS: We account for the acquisition of stores, including by merger and other acquisitions of real estate, in accordance with ASC 805-10, “Business Combinations.” We use our judgment to determine if assets acquired meet the definition of a business or if the acquisition should be considered an asset acquisition. We must make significant assumptions and estimates in determining the fair value of the tangible and intangible assets and liabilities acquired and consideration transferred. These fair value estimates are sensitive to price of land per square foot and current replacement cost estimates, including adjustments for the age, class, height, square footage, condition, location, and turnkey factor. These assumptions and estimates require judgment, and therefore others could come to materially different conclusions as to the estimated fair values, which could result in differences in depreciation and amortization expense, gains and losses on the sale of real estate assets, and real estate and intangible asset values.

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EVALUATION OF ASSET IMPAIRMENT: Long lived assets held for use are evaluated for impairment when events or circumstances indicate that there may be impairment. We review each store at least annually to determine if any such events or circumstances have occurred or exist. We focus on stores that do not have positive cash flow. For these stores, we determine whether the negative cash flow is temporary for lease-up stores or caused by other factors. We may not have identified all material facts and circumstances that affect impairment of our stores. No material impairments were recorded in the year ended December 31, 2025.

We evaluate goodwill for impairment at least annually and whenever events, circumstances, and other related factors indicate that fair value of the related reporting unit may be less than the carrying value. If the fair value of the reporting unit is determined to exceed the aggregate carrying amount, no impairment charge is recorded. Otherwise, an impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value. No impairments of goodwill were recorded in our evaluations for any period presented herein.

INCOME TAXES: We have elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code. In order to maintain our qualification as a REIT, among other requirements, we are required to distribute annually at least 90% of our REIT taxable income to our stockholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to U.S. federal income tax with respect to that portion of our income which meets certain criteria and is distributed annually to our stockholders. We plan to continue to operate so that we meet the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. For any taxable year that we fail to qualify as a REIT and for which applicable statutory relief provisions did not apply, we would be subject to U.S. federal corporate income tax on all of our taxable income for at least that year and the ensuing four years. We could also be subject to penalties and interest, and our net income may be materially different from the amounts reported in our financial statements.

We have elected to treat certain corporate subsidiaries, including Extra Space Management, Inc., as a TRS. In general, a TRS may perform additional services for tenants and generally may engage in any real estate or non-real estate related business. A TRS is subject to U.S. federal corporate income tax and may also be subject to state and local income taxes. Interest and penalties relating to uncertain tax positions will be recognized in income tax expense when incurred. If tax authorities determine that amounts paid by any of our TRSs to us are not reasonable compared to similar arrangements among unrelated parties, we could be subject to a penalty tax on the excess payments.

RECENT ACCOUNTING PRONOUNCEMENTS

For a discussion of recent accounting pronouncements affecting our business, see Item 8, “Financial Statements and Supplementary Data–Recently Issued Accounting Standards.”

RESULTS OF OPERATIONS

Amounts in thousands, except store and share data

Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024

Overview

Results for the year ended December 31, 2025 included the operations of 2,425 stores (2,007 wholly-owned, 11 in consolidated joint ventures, and 407 in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2024, which included the operations of 2,436 stores (1,967 wholly-owned, nine in consolidated joint ventures, and 460 in joint ventures accounted for using the equity method). Material or unusual changes in the results of our operations are discussed below:

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Revenues

The following table presents information on revenues earned for the years indicated:

For the Year Ended December 31,

2025

2024

$ Change

% Change

Property rental

$

2,895,190 

$

2,803,252 

$

91,938 

3.3 

%

Tenant reinsurance

352,876 

332,795 

20,081 

6.0 

%

Management fees and other income

129,476 

120,855 

8,621 

7.1 

%

Total revenues

$

3,377,542 

$

3,256,902 

$

120,640 

3.7 

%

Property rental—The increase in property rental revenue for the year ended December 31, 2025 was primarily the result of an increase of $104,706 associated with acquisitions completed in 2024 and 2025. The increase in revenue resulting from these acquisitions was partially offset by a decrease in property rental revenue of $21,728 due to property dispositions over the same period. We acquired 58 wholly-owned stores and disposed of six wholly-owned stores during the year ended December 31, 2024. 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 $8,755 due to improved operating results at our same-store properties.

Tenant reinsurance—The increase in tenant reinsurance revenue was due primarily to an increase in the number of stores operated. We operated 4,281 stores at December 31, 2025, compared to 4,011 stores at December 31, 2024.

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 year ended December 31, 2025 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 December 31, 2025, we managed 1,856 stores for third party owners, compared to 1,575 stores as of December 31, 2024. These increases are offset by a decrease in management fees attributable to stores in unconsolidated joint ventures, where the number of stores decreased from 460 to 407 over the same period.

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Expenses

The following table presents information on expenses for the years indicated:

For the Year Ended December 31,

2025

2024

$ Change

% Change

Property operations

$

918,148 

$

831,566 

$

86,582 

10.4 

%

Tenant reinsurance

68,873 

73,886 

(5,013)

(6.8)

%

General and administrative

186,343 

167,398 

18,945 

11.3 

%

Depreciation and amortization

715,177 

783,023 

(67,846)

(8.7)

%

Total expenses

$

1,888,541 

$

1,855,873 

$

32,668 

1.8 

%

Property operations—The increase in property operations expense consists primarily of an increase of $50,721 related to acquisitions completed in 2025 and 2024. We acquired 58 wholly-owned stores in 2024 and 76 wholly-owned stores during the year ended December 31, 2025. Additionally, for the year ended December 31, 2025, there was an increase of $35,689 at our same-store properties primarily due to an increase in property taxes, payroll and benefits, marketing, and repairs and maintenance 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. General and administrative expense increased primarily as a result of stock compensation expense, which includes the acceleration of expense due to an executive officer’s retirement.

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 decreased for the year ended December 31, 2025, primarily due to the customer intangibles associated with our merger with Life Storage being fully expensed in January 2025.

Other Revenues and Expenses

The following table presents information on other revenues and expenses for the years indicated:

For the Year Ended December 31,

2025

2024

$ Change

% Change

Loss on real estate assets held for sale and sold, net

$

(76,310)

$

(25,906)

$

(50,404)

194.6 

%

Impairment of Life Storage trade name

— 

(51,763)

51,763 

(100.0)

%

Interest expense

(587,613)

(551,354)

(36,259)

6.6 

%

Non-cash interest expense related to amortization of discount on unsecured senior notes, net

(47,519)

(43,720)

(3,799)

8.7 

%

Interest income

163,202 

124,422 

38,780 

31.2 

%

Equity in earnings and dividend income from unconsolidated real estate entities

68,815 

67,272 

1,543 

2.3 

%

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest

54,521 

13,730 

40,791 

297.1 

%

Income tax expense

(41,559)

(33,478)

(8,081)

24.1 

%

Total other revenues & expenses, net

$

(466,463)

$

(500,797)

$

34,334 

(6.9)

%

Loss on real estate assets held for sale and sold, net—During the year ended December 31, 2025, we recognized estimated losses of $115,830 related to properties sold or classified as held for sale given their estimated fair value, net of selling costs, was less than the carrying value of the assets. The estimated losses are offset by net gains totaling $39,520 attributed to the disposition of stores during 2025. The total net amount is shown on our consolidated statements of operations within loss on real estate assets held for sale and sold, net. As of December 31, 2024, we had 18 stores classified as held for sale. Of the 18 stores, 10 had an estimated fair value, net of selling costs, less than the carrying value of the assets. As a result,

26

we recorded an estimated loss of $63,250. On our consolidated statements of operations, this amount is shown net of the sale of a property, which generated a gain of $37,344 within loss on real estate assets held for sale and sold, net.

Impairment of Life Storage trade name—During the year ended December 31, 2024, we decided to operate all our stores under a single brand. As a result of that decision, we deemed the Life Storage trade name as an intangible asset to be impaired and recognized a loss for the full value of the asset.

Interest expense—The increase in interest expense during the year ended December 31, 2025 was primarily the result of higher outstanding debt. As of December 31, 2025, we had approximately $13,481,899 in total face value of debt, compared to approximately $12,600,661 as of December 31, 2024.

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 the Life Storage Merger and net premium from bond offerings, offset by the discount from assumed debt.

Interest income—Interest income represents interest earned on variable interest rate bridge loans, debt securities and on notes receivable from Common Operating Partnership unit holders. The increase in interest income during the year ended December 31, 2025 was primarily the result of an increase in the amount of bridge loans outstanding. The balance of bridge loans outstanding was $1,500,151 as of December 31, 2025, compared to $1,244,575 as of December 31, 2024. 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 increase for the year ended December 31, 2025 is primarily due to a transaction in November 2024 in which we acquired additional ownership interest in HF1 Sovran HHF Storage Holdings LLC and HF2 Sovran HHF Storage Holdings II LLC from our partner in the unconsolidated joint ventures. The transaction increased our equity ownership percentages from 20% and 15%, respectively, to 49% in each unconsolidated joint venture. This increase is offset by a decrease in equity in earnings 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 offset 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 407 as of December 31, 2025, compared to 460 as of December 31, 2024. Dividend income represents dividends from our investment in preferred stock of SmartStop and its affiliates.

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest—The net gain of $54,521 for the year ended December 31, 2025 is due to the sale of our membership interest in nine properties in the Extra Space Northern Properties VI LLC joint venture in October 2025, which held 10 properties. This resulted in a net gain of $45,167. We also recorded a net gain of $9,354 on the sale of our membership interest in the Life Storage Spacemax LLC joint venture in July 2025, which held six properties. During the year ended December 31, 2024, the ESS Bristol Investments LLC joint venture sold five of its eight stores to one of our unconsolidated joint ventures, and we recognized a gain of $10,324 for our pro rata share of the transaction. Additionally, we sold our membership interest in another unconsolidated joint venture to our partner and recognized a gain of $3,406 on the transaction.

Income tax expense—The increase in income tax expense for the year ended December 31, 2025 was primarily the result of an increase in book income and a decrease in permanent tax deductions related to stock awards.

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

The results of operations for the years ended December 31, 2024 compared to December 31, 2023 was included in our Annual Report on Form 10-K for the year ended December 31, 2024 on page 23, under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed with the SEC on February 28, 2025.

FUNDS FROM OPERATIONS

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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 U.S. generally accepted accounting principles (“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 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 years indicated:

For the Year Ended December 31,

2025

2024

2023

Net income attributable to common stockholders

$

973,999 

$

854,681 

$

803,198 

Adjustments:

Real estate depreciation

655,452 

618,189 

418,149 

Amortization of intangibles

20,316 

113,886 

59,295 

Loss on real estate assets held for sale and sold, net

76,310 

25,906 

— 

Unconsolidated joint venture real estate depreciation and amortization

32,748 

32,678 

24,400 

Unconsolidated joint venture gain on sale of real estate assets

(54,521)

(13,730)

— 

Distributions paid on Series A Preferred Operating Partnership units

— 

— 

(159)

Income allocated to Operating Partnership noncontrolling interests

48,539 

45,551 

47,255 

Funds from operations attributable to common stockholders and unit holders

$

1,752,843 

$

1,677,161 

$

1,352,138 

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SAME-STORE RESULTS

Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024

Our same-store pool for the years presented consists of 1,804 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 Year Ended December 31,

Percent

2025

2024

Change

Same-store rental revenues

Net rental income

$

2,549,537 

$

2,540,782 

0.3%

Other operating income

99,277 

104,752 

(5.2)%

Total same-store rental revenues

2,648,814 

2,645,534 

0.1%

Same-store operating expenses

Payroll and benefits

164,241 

158,699 

3.5%

Marketing

63,166 

60,059 

5.2%

Office expense

80,381 

80,565 

(0.2)%

Property operating expense

69,649 

69,108 

0.8%

Repairs and maintenance

55,391 

51,742 

7.1%

Property taxes

298,563 

277,569 

7.6%

Insurance

32,626 

30,586 

6.7%

Total same-store operating expenses

764,017 

728,328 

4.9%

Same-store net operating income

$

1,884,797 

$

1,917,206 

(1.7)%

Same-store square foot occupancy as of year end

92.6 

%

93.3 

%

Properties included in same-store

1,804 

1,804 

The following table presents additional information for our same-store portfolio:

For the Year Ended December 31,

Same-store portfolio

2025

2024

Average annual rent per occupied square foot, net of discounts and bad debt

$

19.91 

$

19.99 

New leases average annual rent per square foot

$

13.16 

$

12.60 

Average discounts as a percentage of rental revenues

2.1 

%

1.9 

%

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The following table presents a reconciliation of same-store net operating income to net income as presented on our consolidated statements of operations for the years indicated:

For the Year Ended December 31,

2025

2024

Net Income

$

1,022,538 

$

900,232 

Adjusted to exclude:

Loss on real estate assets held for sale and sold, net

76,310 

25,906 

Equity in earnings and dividend income from unconsolidated real estate entities

(68,815)

(67,272)

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest

(54,521)

(13,730)

Interest expense

587,613 

551,354 

Non-cash interest expense related to amortization of discount on unsecured senior notes, net

47,519 

43,720 

Depreciation and amortization

715,177 

783,023 

Income tax expense

41,559 

33,478 

General and administrative

186,343 

167,398 

Impairment of Life Storage trade name

— 

51,763 

Management fees, other income and interest income

(292,678)

(245,277)

Net tenant insurance

(284,003)

(258,909)

Non same-store rental revenue

(246,376)

(157,718)

Non same-store operating expense

154,131 

103,238 

Total same-store net operating income

$

1,884,797 

$

1,917,206 

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

The same-store results for the years ended December 31, 2024 compared to December 31, 2023 was included in our Annual Report on Form 10-K for the year ended December 31, 2024 on page 27, under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed with the SEC on February 28, 2025.

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CASH FLOWS

Cash flows from operating activities for the year ended December 31, 2025 were relatively flat 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 Year Ended December 31,

2025

2024

2023

Net cash provided by operating activities

$

1,850,193 

$

1,887,430 

$

1,402,474 

Net cash used in investing activities

(814,213)

(1,646,920)

(1,818,256)

Net cash (used in) provided by financing activities

(1,036,103)

(202,290)

423,130 

Significant components of net cash flow included:

Net income

$

1,022,538 

$

900,232 

$

850,453 

Depreciation and amortization

715,177 

783,023 

506,053 

Acquisition and development of real estate assets

(1,069,292)

(779,153)

(420,892)

Life Storage Merger, net of cash acquired

— 

— 

(1,182,411)

Proceeds from sale of real estate assets

368,183 

124,928 

2,132 

Investment in unconsolidated real estate entities

(127,105)

(301,917)

(180,279)

Return of investment in unconsolidated real estate ventures

291,312 

15,413 

— 

Issuance of notes receivable, net of sales and principal payments

(256,172)

(635,677)

(20,812)

Net proceeds (payments) from unsecured term loans, senior notes, revolving lines of credit and commercial paper

(1,065,497)

(38,511)

24,019 

Proceeds from issuance of public bonds, net

1,650,000 

1,300,000 

1,550,000 

Repurchase of common stock

(149,548)

— 

— 

Dividends paid on common stock

(1,374,298)

(1,375,003)

(1,046,341)

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, 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.

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LIQUIDITY AND CAPITAL RESOURCES

Financing Strategy

We will continue to employ leverage in our capital structure in amounts reviewed from time to time by our board of directors. Although our board of directors has not adopted a policy which limits the total amount of indebtedness that we may incur, we will consider a number of factors in evaluating our level of indebtedness from time to time, as well as the amount of such indebtedness that will be either fixed or variable rate. In making financing decisions, we will consider factors including but not limited to the following:

•the interest rate of the proposed financing;

•the extent to which the financing impacts flexibility in managing our stores;

•prepayment penalties and restrictions on refinancing;

•the purchase price of stores acquired with debt financing;

•long-term objectives with respect to the financing;

•target investment returns;

•the ability of particular stores, and our company as a whole, to generate cash flow sufficient to cover expected debt service payments;

•overall level of consolidated indebtedness;

•timing of debt maturities;

•provisions that require recourse and cross-collateralization; and

•corporate credit ratios including fixed charge coverage ratio and max secured/unsecured indebtedness.

Our indebtedness may be recourse, non-recourse, cross-collateralized, cross-defaulted, secured or unsecured. In addition, we may invest in stores subject to existing loans collateralized by mortgages or similar liens, or we may refinance stores acquired on a leveraged basis. We may use the proceeds from any borrowings to refinance existing indebtedness, to refinance investments, including the redevelopment of existing stores, for general working capital or to purchase additional interests in partnerships or joint ventures or for other purposes when we believe it is advisable.

As of December 31, 2025, we had $138,920 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 2025 and 2024, 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:

December 31, 2025

December 31, 2024

Total face value of debt

$

13,481,899

$

12,600,661

Total enterprise value ratio

31.9 

%

28.4 

%

Total fixed-rate debt and other instruments to total debt

82.1% (1)

75.8% (2)

Weighted average interest rate of total debt

4.3 

%

4.4 

%

Weighted average interest rate for fixed rate debt

4.2 

%

4.1 

%

Weighted average interest rate for variable rate debt

4.8 

%

5.4 

%

(1) $11,066,557 total fixed-rate debt including $952,000 on which we have interest rate swaps that have been included as fixed-rate debt.

(2) $9,555,406 total fixed-rate debt including $1,381,834 on which we have interest rate swaps that have been included as fixed-rate debt.

We expect to fund our short-term and long-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.

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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 13 months. 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 Facilities in an amount at least equal to the amount of commercial paper notes outstanding. At December 31, 2025, we had $680,000 in issuances outstanding under the commercial paper program.

We hold a BBB+/Stable rating from S&P, which was upgraded from BBB/Stable in July 2023 in connection with the Life Storage Merger, 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 December 31, 2025, we had a total of 1,775 unencumbered stores as defined by our public bonds. Our unencumbered asset value was calculated as $30,247,545 and our total asset value was calculated as $35,894,312 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 December 31, 2025.

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 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. In addition, 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 who desire tax-deferral in their exiting transactions.

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 SEC and a prospectus supplement and accompanying prospectus, filed with the SEC. As of December 31, 2025, no shares have been sold under the Equity Distribution Agreement, which we refer to as our “at the market” equity program.

CONTRACTUAL OBLIGATIONS

For more information on our contractual obligations related to real estate acquisitions, refer to our commitments and contingencies footnote in the notes to the consolidated financial statements in Item 8 of this Form 10-K.

SEASONALITY

The self-storage business has been 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.

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