Extra Space Storage Inc. EXR reported fourth-quarter 2024 core funds from operations (FFO) per share of $2.03, beating the Zacks Consensus Estimate by a penny. The figure increased 0.5% from the prior-year quarter.

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The results reflect higher revenues due to growth in occupancy. Lower same-store net operating income (NOI) during the quarter was a spoilsport.

Quarterly revenues of $821.9 million missed the Zacks Consensus Estimate of $831.5 million. However, the top line increased 3% year over year.

Per Joe Margolis, CEO of Extra Space Storage, “The outsized growth in our third-party management, bridge loan and insurance businesses, as well as our ability to find creative and off-market investment opportunities, continue to provide an avenue of growth in an otherwise tough operating environment, and contribute to Core FFO per share growth modestly ahead of our projections.”

For full-year 2024, core FFO per share was $8.12, up 0.2% from the prior-year tally and surpassed the Zacks Consensus Estimate of $8.10. Moreover, revenues grew 27.2% to $3.26 billion.

Extra Space Storage Inc Price, Consensus and EPS Surprise

Extra Space Storage Inc price-consensus-eps-surprise-chart | Extra Space Storage Inc Quote

EXR’s Fourth Quarter in Detail

Same-store revenues decreased 0.4% year over year to $415.9 million in the fourth quarter. This downtick resulted from a fall in both net rental income and other income.

Same-store operating expenses rose 9.5% year over year to $110.5 million, reflecting an increase in marketing, payroll and benefits, property operating expenses, repairs and maintenance, and property taxes.

Same-store NOI decreased 3.5% year over year to $305.4 million.

The same-store square-foot occupancy expanded 120 basis points year over year to 93.7% as of Dec. 31, 2024. Our estimate was pegged at 93.2%.

EXR’s Portfolio Activity

During the October-December quarter, Extra Space Storage acquired 38 operating stores for around $359.7 million.

The company increased its ownership stake in two existing joint venture (JV) partnerships to 49% for $251.2 million.

Extra Space Storage added 130 stores (114 stores net) to its third-party management platform. As of Dec. 31, 2024, it managed 1,575 stores for third parties and 460 stores in unconsolidated JVs, with a total store count of 2,035 under management.

EXR’s Balance Sheet Position

Extra Space Storage exited the fourth quarter with $138.2 million of cash and cash equivalents, up from $88.9 million recorded as of Sept. 30, 2024.

As of Dec. 31, 2024, EXR's percentage of fixed-rate debt to total debt was 75.8%. The combined weighted average interest rate was 4.4%, with a weighted average maturity of around 4.4 years.

In the fourth quarter, the company did not issue any shares under its at-the-market program and has $800 million available for issuance as of Dec. 31, 2024. Also, it did not repurchase any shares of common stock and had the authorization to buy up to an additional $500 million under the plan as of Dec. 31, 2024.

2025 Guidance by EXR

Extra Space Storage provided its initial 2025 outlook.

It expects core FFO per share between $8.00 and $8.30, which is lower than the Zacks Consensus Estimate of $8.34.

The full-year guidance is based on the assumption of negative 0.75% to 1.25% growth in same-store revenues and a 3.75-5.25% increase in same-store expenses. Same-store NOI is projected within negative 3.00% to 0.25% growth.

EXR’s Zacks Rank

Extra Space Storage currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

$Public Storage(PSA-N)$ PSA reported a fourth-quarter 2024 core FFO per share of $4.21, missing the Zacks Consensus Estimate of $4.23. However, the figure increased marginally year over year.

Results reflected lower same-store revenues year over year due to a decline in occupancy. However, a decent increase in realized annual rent per occupied square foot positively impacted the performance. PSA also benefited from its expansion efforts through acquisitions, developments and extensions.

Lamar Advertising Company LAMR reported fourth-quarter 2024 AFFO per share of $2.21, meeting the Zacks Consensus Estimate. The figure also compared favorably with the prior-year quarter's tally of $2.10.

LAMR’s results reflected year-over-year growth in the top line. However, higher direct advertising and general and administrative expenses during the quarter acted as a dampener.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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