Extra Space Storage (EXR) Boosts Portfolio With Storage Express

As part of its efforts to boost the national portfolio and the operating platform, Extra Space Storage Inc. EXR has completed the acquisition of Storage Express for roughly $590 million. The move resulted in the addition of 107 remotely operated stores across Indiana, Ohio, Illinois and Kentucky to EXR’s portfolio.  

Specifically, the acquisition involved all Storage Express assets, including trademarks, contracts, licenses, intellectual property and 14 future development sites.

Furthermore, Extra Space Storage acquired a storage software operating platform named E-Tracker. This software operating platform supports Storage Express locations along with Bargold Storage Systems, LLC, which was acquired by EXR in June 2022.

EXR also announced the appointment of Jefferson Shreve, the founder and owner of Storage Express, to the board, effective immediately.

This transaction, which was funded partly by the issuance of $125 million in operating partnership units, with the balance in cash drawn from its credit facilities, offers scope to Extra Space Storage to add smaller, remotely managed stores to both its new and existing markets through acquisitions and third-party management.

Extra Space Storage significantly expanded its business in recent years, growing its branded-store count from 910 in 2012 to 2,177 as of Jun 30, 2022, in 41 states and Washington D.C. Also, the total stores managed for third-party owners increased from 181 to 864 during the same period.

Along with acquisitions, the company is making strategic investments through other channels in the storage sector, including preferred equity investments and bridge loan programs.

These efforts have helped this Salt Lake City, UT-based self-storage REIT emerge as the second-largest self-storage owner and/or operator and largest self-storage management company in the United States. Extra Space Storage gained an increased scale in several core markets through these acquisitions and fortified its presence in several new markets.

With a focus on primary and secondary markets, the company remains well-poised to capitalize on favorable trends.

Shares of this Zacks Rank #2 (Buy) company have outperformed its industry in the past three months. The company’s shares have rallied 15.5%, while the industry has risen 3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Image Source: Zacks Investment Research

Other Stocks to Consider

Some other key picks from the REIT sector include Prologis PLD and Terreno Realty Corporation TRNO.

Prologis carries a Zacks Rank of 2 at present. Prologis’ long-term growth rate is projected at 9.0%. The Zacks Consensus Estimate for PLD’s 2022 funds from operations (FFO) per share has been revised marginally upward in the past two months to $5.17.

The Zacks Consensus Estimate for Terreno Realty’s 2022 FFO per share has moved marginally upward in the past month to $1.93. TRNO presently carries a Zacks Rank of 2.

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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