Extra Space Storage, Inc. EXR has achieved a significant milestone by surpassing 4,000 stores nationwide. The company's continued expansion underscores its leadership in the self-storage sector and its ability to grow through strategic acquisitions, partnerships, and third-party management services.

This self-storage operator in the United States now operates 4,011 stores across 42 states and Washington, D.C., reaching 98 of the 100 largest metropolitan markets in the country. This notable growth trajectory has more than doubled the company's store count since 2021. In 2024 alone, Extra Space Storage added 297 stores to its operating platform, reflecting a consistent and aggressive expansion strategy.

According to Joe Margolis, CEO of Extra Space Storage, "This achievement is a testament to the company's steady growth and the resiliency of the self-storage sector." EXR’s ability to scale its operations highlights the increasing demand for self-storage solutions and its competitive edge in the industry.

Extra Space Storage has executed a multi-pronged approach to expansion through wholly-owned properties, joint ventures, and its third-party management platform. Of the 4,011 stores, 49% are wholly-owned properties, 12% are owned through joint venture partnerships, and 39% are managed on behalf of independent owners.

This diversified growth strategy allows the company to optimize its market position while mitigating risk. The acquisition of Life Storage, Inc. in July 2023, in an all-stock transaction, helped Extra Space Storage emerge as the largest self-storage operator in the United States based on the number of locations.

EXR’s 2024 Acquisition Activity and Future Investments

Extra Space Storage remains committed to strategic investments and acquisitions to fuel its growth. In 2024, the company acquired 55 operating stores and three Certificate of Occupancy (“C of O”) stores for a total cost of $581 million. In association with the JV partners, it acquired five operating stores, one C of O store, completed seven developments as well as enhanced its ownership stake in two existing JVs to 49.0% for a net investment of $360.3 million. These transactions demonstrate Extra Space Storage’s strategy of expanding its footprint through both direct acquisitions and joint venture investments.

Looking ahead, as of Dec. 31, 2024, Extra Space Storage was under agreement to acquire or develop 10 additional stores for $118.1 million in 2025. Eight of these stores, totaling $97.9 million, have already closed or completed in early 2025, with the remaining two stores, involving $20.25 million of investments, expected to be completed later in the year.

Beyond traditional acquisitions, Extra Space Storage is diversifying its investment approach by leveraging preferred equity investments and a bridge loan program. These initiatives provide additional avenues for capital deployment and revenue generation, positioning the company for sustained financial health and operational flexibility.

Final Thoughts on Extra Space Storage

Extra Space Storage’s ability to expand at an unprecedented pace highlights the resilience and demand within the self-storage sector. With more than 4,000 locations and a solid pipeline of acquisitions and investments, the company is well-positioned for continued success. 

However, Extra Space Storage is not free of challenges and faces a tough operating environment. Particularly, the company continues to see new customer price sensitivity and, therefore, is likely to face headwinds from lower new customer rates in the near term. As such, the reacceleration in revenue growth is expected to be challenging until the company regains pricing power with new customers.

Over the past year, shares of EXR have gained 7.3%, outperforming its industry’s growth of 5.6%. Extra Space Storage currently carries a Zacks Rank #3 (Hold).

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Other Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Gladstone Land LAND and Sabra Healthcare REIT SBRA, each carrying a Zacks Rank of #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Gladstone’s 2025 FFO per share is pegged at 54 cents, which indicates year-over-year growth of 14.9%.

The Zacks Consensus Estimate for Sabra’s full-year FFO per share is $1.49, which indicates an increase of 3.5% from the year-ago period.

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

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This article originally published on Zacks Investment Research (zacks.com).

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