exr-20220331
false2022Q1000128949012/31P6M00012894902022-01-012022-03-3100012894902022-05-02xbrli:shares00012894902022-03-31iso4217:USD00012894902021-12-31iso4217:USDxbrli:shares00012894902021-01-012021-03-310001289490exr:PreferredOperatingPartnershipMember2020-12-310001289490exr:CommonOperatingPartnershipMember2020-12-310001289490exr:NonControllingInterestOtherMember2020-12-310001289490us-gaap:CommonStockMember2020-12-310001289490us-gaap:AdditionalPaidInCapitalMember2020-12-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001289490us-gaap:RetainedEarningsMember2020-12-3100012894902020-12-310001289490us-gaap:CommonStockMember2021-01-012021-03-310001289490us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001289490exr:RedemptionOfUnitsForCommonStockMemberexr:CommonOperatingPartnershipMember2021-01-012021-03-310001289490exr:RedemptionOfUnitsForCommonStockMemberus-gaap:CommonStockMember2021-01-012021-03-310001289490exr:RedemptionOfUnitsForCommonStockMemberus-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001289490exr:RedemptionOfUnitsForCommonStockMember2021-01-012021-03-310001289490exr:NonControllingInterestOtherMember2021-01-012021-03-310001289490exr:PreferredOperatingPartnershipMember2021-01-012021-03-310001289490exr:CommonOperatingPartnershipMember2021-01-012021-03-310001289490us-gaap:RetainedEarningsMember2021-01-012021-03-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001289490exr:PreferredOperatingPartnershipMember2021-03-310001289490exr:CommonOperatingPartnershipMember2021-03-310001289490exr:NonControllingInterestOtherMember2021-03-310001289490us-gaap:CommonStockMember2021-03-310001289490us-gaap:AdditionalPaidInCapitalMember2021-03-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001289490us-gaap:RetainedEarningsMember2021-03-3100012894902021-03-310001289490exr:PreferredOperatingPartnershipMember2021-12-310001289490exr:CommonOperatingPartnershipMember2021-12-310001289490exr:NonControllingInterestOtherMember2021-12-310001289490us-gaap:CommonStockMember2021-12-310001289490us-gaap:AdditionalPaidInCapitalMember2021-12-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001289490us-gaap:RetainedEarningsMember2021-12-310001289490us-gaap:CommonStockMember2022-01-012022-03-310001289490us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001289490exr:CommonOperatingPartnershipMemberexr:RedemptionOfUnitsForCashMember2022-01-012022-03-310001289490exr:RedemptionOfUnitsForCashMemberus-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001289490exr:RedemptionOfUnitsForCashMember2022-01-012022-03-310001289490exr:SeriesBUnitsMemberexr:PreferredOperatingPartnershipMemberexr:RedemptionOfUnitsForCashMember2022-01-012022-03-310001289490exr:SeriesBUnitsMemberexr:RedemptionOfUnitsForCashMember2022-01-012022-03-310001289490exr:PreferredOperatingPartnershipMember2022-01-012022-03-310001289490exr:CommonOperatingPartnershipMember2022-01-012022-03-310001289490us-gaap:RetainedEarningsMember2022-01-012022-03-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001289490exr:PreferredOperatingPartnershipMember2022-03-310001289490exr:CommonOperatingPartnershipMember2022-03-310001289490exr:NonControllingInterestOtherMember2022-03-310001289490us-gaap:CommonStockMember2022-03-310001289490us-gaap:AdditionalPaidInCapitalMember2022-03-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001289490us-gaap:RetainedEarningsMember2022-03-31exr:storeexr:state0001289490us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-03-310001289490us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-03-310001289490us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-03-310001289490us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001289490us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-03-310001289490us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001289490us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001289490us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001289490us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001289490exr:SeriesBUnitsMember2022-01-012022-03-310001289490exr:SeriesBUnitsMember2021-01-012021-03-310001289490exr:SeriesDUnitsMember2022-01-012022-03-310001289490exr:SeriesDUnitsMember2021-01-012021-03-310001289490exr:SeriesAUnitsMember2022-03-310001289490exr:SeriesAUnitsMember2022-01-012022-03-310001289490exr:SeriesAUnitsMember2021-01-012021-03-310001289490exr:PRISASelfStorageLLCMember2022-03-31exr:propertyxbrli:pure0001289490exr:PRISASelfStorageLLCMember2021-12-310001289490exr:StoragePortfolioIIJVLLCMember2022-03-310001289490exr:StoragePortfolioIIJVLLCMember2021-12-310001289490exr:StoragePortfolioIVJVLLCMember2022-03-310001289490exr:StoragePortfolioIVJVLLCMember2021-12-310001289490exr:StoragePortfolioILLCMember2022-03-310001289490exr:StoragePortfolioILLCMember2021-12-310001289490exr:PRIIEXRJVLLCMember2022-03-310001289490exr:PRIIEXRJVLLCMember2021-12-310001289490exr:ESSCATIVSJVLPMember2022-03-310001289490exr:ESSCATIVSJVLPMember2021-12-310001289490exr:VRSSelfStorageLLCMember2022-03-310001289490exr:VRSSelfStorageLLCMember2021-12-310001289490exr:ESSNYFLJVLPMember2022-03-310001289490exr:ESSNYFLJVLPMember2021-12-310001289490exr:ExtraSpaceNorthernPropertiesSixLLCMember2022-03-310001289490exr:ExtraSpaceNorthernPropertiesSixLLCMember2021-12-310001289490exr:AlanJathooJVLLCMember2022-03-310001289490exr:AlanJathooJVLLCMember2021-12-310001289490exr:ESSBristolInvestmentsLLCMember2022-03-310001289490exr:ESSBristolInvestmentsLLCMember2021-12-310001289490exr:PREXRSelfStorageLLCMember2022-03-310001289490exr:PREXRSelfStorageLLCMember2021-12-310001289490exr:StoragePortfolioIIIJVLLCMember2022-03-310001289490exr:StoragePortfolioIIIJVLLCMember2021-12-310001289490exr:OtherMinorityOwnedPropertiesMember2022-03-310001289490srt:MinimumMemberexr:OtherMinorityOwnedPropertiesMember2022-03-310001289490srt:MaximumMemberexr:OtherMinorityOwnedPropertiesMember2022-03-310001289490exr:OtherMinorityOwnedPropertiesMember2021-12-310001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2022-03-310001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2021-12-310001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2022-01-012022-03-310001289490exr:JCAPSeriesAPreferredStockMember2022-03-310001289490exr:JCAPSeriesAPreferredStockMember2021-12-310001289490exr:JCAPSeriesBPreferredStockMember2022-03-310001289490exr:JCAPSeriesBPreferredStockMember2021-12-310001289490us-gaap:BridgeLoanMember2022-03-310001289490us-gaap:BridgeLoanMember2021-12-310001289490us-gaap:NotesReceivableMember2022-03-310001289490us-gaap:NotesReceivableMember2021-12-3100012894902020-11-012020-11-300001289490exr:JCAPSeriesAPreferredStockMember2020-11-300001289490exr:JCAPSeriesAPreferredStockMember2020-11-012020-11-300001289490exr:JCAPSeriesBPreferredStockMember2020-11-300001289490exr:JCAPSeriesBPreferredStockMember2020-11-012020-11-3000012894902020-11-30exr:extension_option0001289490us-gaap:NotesReceivableMember2020-07-012020-07-310001289490us-gaap:NotesReceivableMember2020-07-3100012894902020-07-310001289490us-gaap:NotesReceivableMember2022-02-012022-02-280001289490us-gaap:BridgeLoanMember2022-01-012022-03-310001289490us-gaap:SeniorNotesMemberexr:SeniorNotesDue2031Member2021-05-310001289490us-gaap:SeniorNotesMemberexr:SeniorNotesDue2032Member2021-09-300001289490us-gaap:SeniorNotesMemberexr:SeniorNotesDue2029Member2022-03-310001289490us-gaap:SeniorNotesMember2022-01-012022-03-310001289490us-gaap:NotesPayableToBanksMemberexr:SecuredLoanWithBankMember2022-03-310001289490us-gaap:NotesPayableToBanksMemberexr:SecuredLoanWithBankMember2021-12-310001289490us-gaap:NotesPayableToBanksMembersrt:MinimumMemberexr:SecuredLoanWithBankMember2022-03-310001289490us-gaap:NotesPayableToBanksMembersrt:MaximumMemberexr:SecuredLoanWithBankMember2022-03-310001289490us-gaap:NotesPayableToBanksMemberexr:UnsecuredLoanWithBankMember2022-03-310001289490us-gaap:NotesPayableToBanksMemberexr:UnsecuredLoanWithBankMember2021-12-310001289490us-gaap:NotesPayableToBanksMembersrt:MinimumMemberexr:UnsecuredLoanWithBankMember2022-03-310001289490us-gaap:NotesPayableToBanksMembersrt:MaximumMemberexr:UnsecuredLoanWithBankMember2022-03-310001289490us-gaap:NotesPayableToBanksMember2022-03-310001289490us-gaap:NotesPayableToBanksMember2021-12-310001289490us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-03-310001289490exr:Tranche1TermLoanFacilityMemberus-gaap:LineOfCreditMember2022-03-310001289490exr:Tranche2TermLoanFacilityMemberus-gaap:LineOfCreditMember2022-03-310001289490exr:Tranche3TermLoanFacilityMemberus-gaap:LineOfCreditMember2022-03-310001289490exr:Tranche4TermLoanFacilityMemberus-gaap:LineOfCreditMember2022-03-310001289490exr:Tranche5TermLoanFacilityMemberus-gaap:LineOfCreditMember2022-03-310001289490us-gaap:LineOfCreditMember2022-03-310001289490us-gaap:LineOfCreditMember2022-01-012022-03-310001289490us-gaap:BaseRateMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001289490us-gaap:FederalFundsEffectiveSwapRateMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001289490us-gaap:LineOfCreditMemberus-gaap:EurodollarMember2022-01-012022-03-310001289490srt:MinimumMemberexr:SpecifiedInvestmentGradeRatingAndElectsToUseAlternativeRatesMemberus-gaap:LineOfCreditMemberus-gaap:EurodollarMember2022-01-012022-03-310001289490srt:MaximumMemberexr:SpecifiedInvestmentGradeRatingAndElectsToUseAlternativeRatesMemberus-gaap:LineOfCreditMemberus-gaap:EurodollarMember2022-01-012022-03-310001289490us-gaap:BaseRateMembersrt:MinimumMemberexr:SpecifiedInvestmentGradeRatingAndElectsToUseAlternativeRatesMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001289490us-gaap:BaseRateMembersrt:MaximumMemberexr:SpecifiedInvestmentGradeRatingAndElectsToUseAlternativeRatesMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001289490exr:FirstCreditLineMember2022-03-310001289490us-gaap:LondonInterbankOfferedRateLIBORMemberexr:FirstCreditLineMember2022-01-012022-03-310001289490exr:SecondCreditLineMember2022-03-310001289490us-gaap:LondonInterbankOfferedRateLIBORMemberexr:SecondCreditLineMember2022-01-012022-03-310001289490exr:LinesOfCreditMember2022-03-310001289490exr:SecondCreditLineMember2022-01-012022-03-31exr:derivative0001289490us-gaap:OtherAssetsMember2022-03-310001289490us-gaap:OtherAssetsMember2021-12-310001289490us-gaap:OtherLiabilitiesMember2022-03-310001289490us-gaap:OtherLiabilitiesMember2021-12-310001289490us-gaap:InterestRateSwapMember2022-01-012022-03-310001289490us-gaap:InterestRateSwapMember2021-01-012021-03-3100012894902022-01-072022-01-070001289490exr:AtTheMarketEquityDistributionAgreementMember2021-08-092021-08-0900012894902021-08-092021-08-09exr:sales_agent0001289490exr:AtTheMarketEquityDistributionAgreementMember2021-01-012021-08-0800012894902021-03-232021-03-2300012894902021-03-2300012894902020-10-150001289490exr:SeriesAUnitsMember2021-12-310001289490exr:SeriesBUnitsMember2022-03-310001289490exr:SeriesBUnitsMember2021-12-310001289490exr:SeriesDUnitsMember2022-03-310001289490exr:SeriesDUnitsMember2021-12-310001289490exr:SeriesAUnitsMember2014-10-310001289490exr:SeriesAUnitsMember2007-06-012007-06-300001289490exr:SeriesAUnitsMember2007-06-300001289490exr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMemberexr:SeriesAUnitsMember2014-10-012014-10-310001289490exr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMemberexr:SeriesAUnitsMember2007-06-250001289490exr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMemberexr:SeriesAUnitsMember2017-04-182017-04-180001289490exr:SeriesBUnitsMember2014-12-310001289490exr:SeriesBUnitsMember2013-01-012014-12-310001289490exr:SeriesBUnitsMember2022-02-152022-02-150001289490srt:MinimumMemberexr:SeriesDUnitsMember2022-01-012022-03-310001289490srt:MaximumMemberexr:SeriesDUnitsMember2022-01-012022-03-310001289490exr:SeriesDUnitsMember2021-01-012021-12-310001289490exr:CommonOperatingPartnershipMember2022-03-31exr:joint_venture0001289490exr:NonControllingInterestOtherMember2022-03-31exr:segment0001289490us-gaap:OperatingSegmentsMemberexr:SelfStorageOperationsMember2022-01-012022-03-310001289490us-gaap:OperatingSegmentsMemberexr:SelfStorageOperationsMember2021-01-012021-03-310001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2022-01-012022-03-310001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2021-01-012021-03-310001289490us-gaap:OperatingSegmentsMember2022-01-012022-03-310001289490us-gaap:OperatingSegmentsMember2021-01-012021-03-310001289490exr:CommitmentToAcquireRetailSpaceMember2022-03-310001289490exr:CommitmentToAcquireRetailSpaceExpectedToCloseInCurrentFiscalYearMember2022-03-310001289490exr:CommitmentToAcquireRetailSpaceExpectedToCloseInNextFiscalYearMember2022-03-310001289490exr:CommitmentToAcquireRetailSpaceWithJointVenturePartnersMember2022-03-310001289490exr:CommitmentToAcquireRetailSpaceWithJointVenturePartnersExpectedToCloseInCurrentFiscalYearMember2022-03-310001289490exr:CommitmentToAcquireRetailSpaceWithJointVenturePartnersExpectedToCloseInNextFiscalYearMember2022-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission File Number: 001-32269

EXTRA SPACE STORAGE INC.
(Exact name of registrant as specified in its charter) 
Maryland 20-1076777
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)

2795 East Cottonwood Parkway, Suite 300
Salt Lake City, Utah 84121
(Address of principal executive offices)

Registrant’s telephone number, including area code: (801365-4600

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934
Title of each classTrading symbolName of each exchange on which registered
Common Stock, $0.01 par valueEXRNew York Stock Exchange

 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company

1


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  

The number of shares outstanding of the registrant’s common stock, par value $0.01 per share, as of May 2, 2022, was 134,279,862.
2

Table of Contents
EXTRA SPACE STORAGE INC.

TABLE OF CONTENTS
 

3


STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information presented in this report contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as “believes,” “expects,” “estimates,” “may,” “will,” “should,” “anticipates” or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.

All forward-looking statements, including without limitation, management’s examination of historical operating trends and estimates of future earnings, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management’s expectations, beliefs and projections will result or be achieved. All forward-looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward-looking statements which may be made to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this report. Any forward-looking statements should be considered in light of the risks referenced in “Part II. Item 1A. Risk Factors” below and in “Part I. Item 1A. Risk Factors” included in our most recent Annual Report on Form 10-K. Such factors include, but are not limited to:
 
adverse changes in general economic conditions, the real estate industry and the markets in which we operate;
failure to close pending acquisitions and developments on expected terms, or at all;
the effect of competition from new and existing stores or other storage alternatives, which could cause rents and occupancy rates to decline;
potential liability for uninsured losses and environmental contamination;
the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing real estate investment trusts (“REITs”), tenant reinsurance and other aspects of our business, which could adversely affect our results;
disruptions in credit and financial markets and resulting difficulties in raising capital or obtaining credit at reasonable rates or at all, which could impede our ability to grow;
impacts from the COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases, including reduced demand for self-storage space and ancillary products and services such as tenant reinsurance, and potential decreases in occupancy and rental rates and staffing levels, which could adversely affect our results;
our reliance on information technologies, which are vulnerable to, among other things, attack from computer viruses and malware, hacking, cyberattacks and other unauthorized access or misuse, any of which could adversely affect our business and results;
increased interest rates;
reductions in asset valuations and related impairment charges;
our lack of sole decision-making authority with respect to our joint venture investments;
the effect of recent or future changes to U.S. tax laws;
the failure to maintain our REIT status for U.S. federal income tax purposes; and
economic uncertainty due to the impact of natural disasters, war or terrorism, which could adversely affect our business plan.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our securities.

4


We disclaim any duty or obligation to update or revise any forward-looking statements set forth in this report to reflect new information, future events or otherwise.
5


PART I.     FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Extra Space Storage Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share data)
 
March 31, 2022December 31, 2021
(unaudited)
Assets:
Real estate assets, net$8,940,724 $8,834,649 
Real estate assets - operating lease right-of-use assets236,961 227,949 
Investments in unconsolidated real estate entities475,291 457,326 
Investments in debt securities and notes receivable694,107 719,187 
Cash and cash equivalents65,978 71,126 
Restricted cash6,688 5,068 
Other assets, net172,001 159,172 
Total assets $10,591,750 $10,474,477 
Liabilities, Noncontrolling Interests and Equity:
Notes payable, net$1,293,563 $1,320,755 
Unsecured term loans, net1,742,459 1,741,926 
Unsecured senior notes, net2,756,644 2,360,066 
Revolving lines of credit220,000 535,000 
Operating lease liabilities242,842 233,356 
Cash distributions in unconsolidated real estate ventures64,506 63,582 
Accounts payable and accrued expenses136,856 142,285 
Other liabilities256,716 291,531 
Total liabilities 6,713,586 6,688,501 
Commitments and contingencies
Noncontrolling Interests and Equity:
Extra Space Storage Inc. stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued or outstanding
  
Common stock, $0.01 par value, 500,000,000 shares authorized, 134,251,076 and 133,922,305 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively
1,343 1,339 
Additional paid-in capital3,329,608 3,285,948 
Accumulated other comprehensive income (loss)6,457 (42,546)
Accumulated deficit(127,193)(128,245)
Total Extra Space Storage Inc. stockholders' equity3,210,215 3,116,496 
Noncontrolling interest represented by Preferred Operating Partnership units, net 256,051 259,110 
Noncontrolling interests in Operating Partnership, net and other noncontrolling interests411,898 410,370 
Total noncontrolling interests and equity3,878,164 3,785,976 
Total liabilities, noncontrolling interests and equity$10,591,750 $10,474,477 

See accompanying notes to unaudited condensed consolidated financial statements.
6


Extra Space Storage Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except share data)
(unaudited)
 For the Three Months Ended March 31,
 20222021
Revenues:
Property rental$379,808 $303,593 
Tenant reinsurance43,797 39,619 
Management fees and other income19,957 15,645 
Total revenues443,562 358,857 
Expenses:
Property operations103,542 92,367 
Tenant reinsurance 7,042 7,161 
General and administrative29,762 23,540 
Depreciation and amortization67,906 58,599 
Total expenses208,252 181,667 
Gain on real estate transactions 63,883 
Income from operations235,310 241,073 
Interest expense(42,538)(40,695)
Interest income18,989 12,304 
Income before equity in earnings and dividend income from unconsolidated real estate ventures and income tax expense211,761 212,682 
Equity in earnings and dividend income from unconsolidated real estate entities9,097 6,956 
Income tax expense(3,141)(4,137)
Net income217,717 215,501 
Net income allocated to Preferred Operating Partnership noncontrolling interests(4,333)(3,680)
Net income allocated to Operating Partnership and other noncontrolling interests(9,805)(8,823)
Net income attributable to common stockholders$203,579 $202,998 
Earnings per common share
Basic $1.52 $1.54 
Diluted $1.51 $1.53 
Weighted average number of shares
Basic134,180,175 132,007,556 
Diluted141,581,862 139,676,548 
Cash dividends paid per common share$1.50 $1.00 

See accompanying notes to unaudited condensed consolidated financial statements.
7

Extra Space Storage Inc.
Condensed Consolidated Statements of Comprehensive Income
(amounts in thousands)
(unaudited)
 For the Three Months Ended March 31,
 20222021
Net income$217,717 $215,501 
Other comprehensive income:
   Change in fair value of interest rate swaps51,649 23,013 
Total comprehensive income269,366 238,514 
   Less: comprehensive income attributable to noncontrolling interests16,784 13,603 
Comprehensive income attributable to common stockholders$252,582 $224,911 


See accompanying notes to unaudited condensed consolidated financial statements.
8

Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)


Noncontrolling InterestExtra Space Storage Inc. Stockholders' Equity
Preferred Operating PartnershipOperating PartnershipOtherSharesPar ValueAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Noncontrolling Interests and Equity
Balances at December 31, 2020$172,052 $215,892 $401 131,357,961 $1,314 $3,000,458 $(99,093)$(354,900)$2,936,124 
Issuance of common stock upon the exercise of options— — — 56,722 — 4,254 — — 4,254 
Issuance of common stock in connection with share based compensation— — — 89,793 — 3,652 — — 3,652 
Restricted stock grants cancelled— — — (2,499)— — — — — 
Issuance of common stock, net of offering costs— — — 2,185,685 22 273,698 — — 273,720 
Redemption of Operating Partnership units for stock— (193)— 5,000 — 193 — —  
Noncontrolling interest in consolidated joint venture— — (50)— — — — — (50)
Net income (loss)3,680 8,828 (5)— — — — 202,998 215,501 
Other comprehensive income144 956 — — — — 21,913 — 23,013 
Distributions to Operating Partnership units held by noncontrolling interests(3,224)(5,801)— — — — — — (9,025)
Dividends paid on common stock at $1.00 per share
— — — — — — — (132,540)(132,540)
Balances at March 31, 2021$172,652 $219,682 $346 133,692,662 $1,336 $3,282,255 $(77,180)$(284,442)$3,314,649 
9

Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)

Noncontrolling InterestExtra Space Storage Inc. Stockholders' Equity
Preferred Operating PartnershipOperating PartnershipOtherSharesPar ValueAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Noncontrolling Interests and Equity
Balances at December 31, 2021$259,110 $410,053 $317 133,922,305 $1,339 $3,285,948 $(42,546)$(128,245)$3,785,976 
Issuance of common stock in connection with share based compensation— — — 142,784 — 4,542 — — 4,542 
Restricted stock grants cancelled— — — (779)— — — — — 
Redemption of Operating Partnership units for cash— (829)— — — (1,843)— — (2,672)
Redemption of Preferred B Units in the Operating Partnership for cash(3,375)— — — — — — — (3,375)
Issuance of common stock in conjunction with acquisitions— — — 186,766 4 40,961 — — 40,965 
Net income4,333 9,805 — — — — 203,579 217,717 
Other comprehensive income313 2,333 — — — — 49,003 — 51,649 
Distributions to Operating Partnership units held by noncontrolling interests(4,330)(9,781)— — — — — — (14,111)
Dividends paid on common stock at $1.50 per share
— — — — — — — (202,527)(202,527)
Balances at March 31, 2022$256,051 $411,581 $317 134,251,076 $1,343 $3,329,608 $6,457 $(127,193)$3,878,164 

See accompanying notes to unaudited condensed consolidated financial statements.
10


Extra Space Storage Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)

 For the Three Months Ended March 31,
 20222021
Cash flows from operating activities:
Net income$217,717 $215,501 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization67,906 58,599 
Amortization of deferred financing costs1,984 2,286 
Non-cash lease expense474 487 
Compensation expense related to stock-based awards4,542 3,652 
Accrual of interest income added to principal of debt securities and notes receivable(9,951)(8,533)
Gain on real estate transactions (63,883)
Distributions from unconsolidated real estate ventures in excess of earnings2,795 1,863 
Changes in operating assets and liabilities:
Other assets(6,209)(2,737)
Accounts payable and accrued expenses(7,665)(2,691)
Other liabilities15,872 (664)
Net cash provided by operating activities287,465 203,880 
Cash flows from investing activities:
Acquisition of real estate assets(195,805)(161,752)
Development and redevelopment of real estate assets(14,716)(14,086)
Proceeds from sale of real estate assets and investments in real estate ventures 132,733 
Investment in unconsolidated real estate entities(4,321)(250)
Return of investment in unconsolidated real estate ventures342 31,169 
Issuance and purchase of notes receivable(134,408)(25,772)
Principal payments received from notes receivable195,803  
Proceeds from sale of notes receivable39,718 81,250 
Purchase of equipment and fixtures(7,985)(697)
Net cash provided by (used in) investing activities(121,372)42,595 
Cash flows from financing activities:
Proceeds from the sale of common stock, net of offering costs 273,720 
Proceeds from notes payable and revolving lines of credit889,829 1,747,000 
Principal payments on notes payable and revolving lines of credit(1,230,924)(2,193,409)
Proceeds from issuance of public bonds, net400,000  
Deferred financing costs(5,842)(1,689)
Net proceeds from exercise of stock options 4,254 
Redemption of Operating Partnership units held by noncontrolling interests(2,672) 
Redemption of Preferred B Units for cash(3,375) 
Contributions from noncontrolling interests  
Dividends paid on common stock(202,527)(132,540)
Distributions to noncontrolling interests(14,110)(9,025)
Net cash used in financing activities(169,621)(311,689)
Net decrease in cash, cash equivalents, and restricted cash(3,528)(65,214)
Cash, cash equivalents, and restricted cash, beginning of the period76,194 128,009 
Cash, cash equivalents, and restricted cash, end of the period$72,666 $62,795 
Supplemental schedule of cash flow information
Interest paid$43,197 $44,887 
Income taxes paid703 1,047 
Supplemental schedule of noncash investing and financing activities:
11


Extra Space Storage Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
 For the Three Months Ended March 31,
 20222021
Redemption of Operating Partnership units held by noncontrolling interests for common stock
Noncontrolling interests in Operating Partnership$ $(4,005)
Common stock and paid-in capital 4,005 
Acquisition and establishment of operating lease right of use assets and lease liabilities
Real estate assets - operating lease right-of-use assets$1,440 $2,369 
Operating lease liabilities(1,440)(2,369)
Acquisitions of real estate assets
Real estate assets, net$40,492 $41,491 
Value of Operating Partnership and Preferred Operating Partnership units issued(40,965) 
Investment in unconsolidated real estate ventures747  
Net liabilities assumed(274) 
Finance lease liability (41,491)
Accrued construction costs and capital expenditures
Acquisition of real estate assets$2,236 $1,723 
Accounts payable and accrued expenses(2,236)(1,723)
Redemption of Preferred Operating Partnership units for common stock
Preferred Operating Partnership units$ $(2,724)
Additional paid-in capital 2,724 
Establishment of finance lease assets and lease liabilities
Real estate assets, net$ $40,993 
Other liabilities (40,993)
Investment in unconsolidated real estate ventures received on sale of stores to joint venture
Investment in unconsolidated real estate ventures$ $33,878 
Real estate assets (33,878)

See accompanying notes to unaudited condensed consolidated financial statements.

12


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Amounts in thousands, except store and share data, unless otherwise stated


 
1.    ORGANIZATION
Extra Space Storage Inc. (the “Company”) is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”), formed as a Maryland corporation on April 30, 2004, to own, operate, manage, acquire, develop and redevelop self-storage properties ("stores") located throughout the United States. The Company was formed to continue the business of Extra Space Storage LLC and its subsidiaries, which had engaged in the self-storage business since 1977. The Company’s interest in its stores is held through its operating partnership, Extra Space Storage LP (the “Operating Partnership”), which was formed on May 5, 2004. The Company’s primary assets are general partner and limited partner interests in the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company invests in stores by acquiring wholly-owned stores or by acquiring an equity interest in real estate entities. At March 31, 2022, the Company had direct and indirect equity interests in 1,283 stores. In addition, the Company managed 847 stores for third parties, bringing the total number of stores which it owns and/or manages to 2,130. These stores are located in 41 states and Washington, D.C. The Company also offers tenant reinsurance at its owned and managed stores that insures the value of goods in the storage units.
2.    BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of the Company are presented on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they may not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022. The condensed consolidated balance sheet as of December 31, 2021 has been derived from the Company’s audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission.

Recently Issued Accounting Standards

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance that provides transition relief for reference rate reform, including optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions that reference LIBOR or a reference rate that is expected to be discontinued as a result of reference rate reform if certain criteria are met. ASU 2020-04 is effective upon issuance, and the provisions generally can be applied prospectively as of January 1, 2020 through December 31, 2024. The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. The Company also elected to apply additional expedients related to contract modifications, changes in critical terms, and updates to the designated hedged risks as qualifying changes are made to applicable debt and derivative contracts. Application of these expedients preserves the presentation of derivatives and debt contracts consistent with past presentation. In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope", which refines the scope of Topic 848 and clarifies some of its guidance. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

13


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Amounts in thousands, except store and share data, unless otherwise stated
3.    FAIR VALUE DISCLOSURES

Derivative Financial Instruments
Currently, the Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate forward curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. In conjunction with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of March 31, 2022, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy.

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall. 
Fair Value Measurements at Reporting Date Using
DescriptionQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Other assets - Cash flow hedge swap agreements$ $13,981 $ 
Other liabilities - Cash flow hedge swap agreements$ $2,189 $ 

The Company did not have any significant assets or liabilities that are re-measured on a recurring basis using significant unobservable inputs as of March 31, 2022 or December 31, 2021.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Long-lived assets held for use are evaluated for impairment when events or circumstances indicate there may be impairment. The Company reviews each store at least annually to determine if any such events or circumstances have occurred or exist. The Company focuses on stores where occupancy and/or rental income have decreased by a significant amount. For these stores, the Company determines whether the decrease is temporary or permanent, and whether the store will likely recover the lost occupancy and/or revenue in the short term. In addition, the Company reviews stores in the lease-up stage and compares actual operating results to original projections.

When the Company determines that an event that may indicate impairment has occurred, the Company compares the carrying value of the related long-lived assets to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the assets exceeds the undiscounted future net operating cash flows attributable to the assets. The impairment loss recognized equals the excess of net carrying value over the related fair value of the assets.

14


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Amounts in thousands, except store and share data, unless otherwise stated
When real estate assets are identified by management as held for sale, the Company discontinues depreciating the assets and estimates the fair value of the assets, net of selling costs. If the estimated fair value, net of selling costs, of the assets that have been identified as held for sale is less than the net carrying value of the assets, the Company would recognize an impairment loss on the assets held for sale. The operations of assets held for sale or sold during the period is presented as part of normal operations for all periods presented. As of March 31, 2022, the Company had two operating stores classified as held for sale which are included in real estate assets, net.

The Company assesses annually whether there are any indicators that the value of the Company’s investments in unconsolidated real estate ventures may be impaired annually and when events or circumstances indicate that there may be impairment. An investment is impaired if management’s estimate of the fair value of the investment is less than its carrying value. To the extent impairment has occurred, and is considered to be other than temporary, the loss is measured as the excess of the carrying amount of the investment over the fair value of the investment.

In connection with the Company’s acquisition of stores, the purchase price is allocated to the tangible and intangible assets and liabilities acquired based on their relative fair values, which are estimated using significant unobservable inputs. The value of the tangible assets, consisting of land and buildings, is determined as if vacant. Intangible assets, which represent the value of existing tenant relationships, are recorded at their fair values based on the avoided cost to replace the current leases. The Company measures the value of tenant relationships based on the rent lost due to the amount of time required to replace existing customers, which is based on the Company’s historical experience with turnover in its stores. Any debt assumed as part of an acquisition is recorded at fair value based on current interest rates compared to contractual rates. Acquisition-related transaction costs are capitalized as part of the purchase price.

Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, restricted cash, receivables, other financial instruments included in other assets, accounts payable and accrued expenses, variable-rate notes payable, lines of credit and other liabilities reflected in the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021 approximate fair value. Restricted cash is comprised of funds deposited with financial institutions located throughout the United States primarily relating to earnest money deposits on potential acquisitions.

The fair values of the Company’s notes receivable from Preferred and Common Operating Partnership unit holders and other fixed rate notes receivable were based on the discounted estimated future cash flows of the notes (categorized within Level 3 of the fair value hierarchy); the discount rate used approximated the current market rate for loans with similar maturities and credit quality. The fair values of the Company’s fixed-rate notes payable were estimated using the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximated current market rates for loans, or groups of loans, with similar maturities and credit quality.

The fair values of the Company’s fixed-rate assets and liabilities were as follows for the periods indicated:
March 31, 2022December 31, 2021
Fair
Value
Carrying
Value
Fair
Value
Carrying
Value
Notes receivable from Preferred and Common Operating Partnership unit holders$98,054 $101,900 $101,824 $101,900 
Fixed rate notes receivable$1,248 $1,251 $105,954 $104,251 
Fixed rate debt$4,780,095 $4,860,356 $4,643,072 $4,506,435 

15


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Amounts in thousands, except store and share data, unless otherwise stated
4.     REAL ESTATE ASSETS
The components of real estate assets are summarized as follows:
March 31, 2022December 31, 2021
Land$2,186,751 $2,151,319 
Buildings, improvements and other intangibles8,347,651 8,227,094 
Right of use asset - finance lease114,668 117,718 
Intangible assets - tenant relationships135,535 134,577 
Intangible lease rights12,443 12,443 
10,797,048 10,643,151 
Less: accumulated depreciation and amortization(1,929,716)(1,867,750)
Net operating real estate assets8,867,332 8,775,401 
Real estate under development/redevelopment73,392 59,248 
Real estate assets, net$8,940,724 $8,834,649 
Real estate assets held for sale included in real estate assets, net$23,742 $8,436 
As of March 31, 2022, the Company had two stores classified as held for sale. The estimated fair value less selling costs of these assets is greater than the carrying value of the assets, and therefore no loss has been recorded related to these assets. Assets held for sale are included in the self-storage operations segment of the Company’s segment information.
5.    EARNINGS PER COMMON SHARE

Basic earnings per common share is computed using the two-class method by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. All outstanding unvested restricted stock awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common stockholders; accordingly, they are considered participating securities that are included in the two-class method. Diluted earnings per common share measures the performance of the Company over the reporting period while giving effect to all potential common shares that were dilutive and outstanding during the period. The denominator includes the weighted average number of basic shares and the number of additional common shares that would have been outstanding if the potential common shares that were dilutive had been issued, and is calculated using either the two-class, treasury stock or as if-converted method, whichever is most dilutive. Potential common shares are securities (such as options, convertible debt, Series A Participating Redeemable Preferred Units (“Series A Units”), Series B Redeemable Preferred Units (“Series B Units”), Series D Redeemable Preferred Units (“Series D Units” and, together with the Series A Units and Series B Units, the “Preferred OP Units”) and common Operating Partnership units (“OP Units”)) that do not have a current right to participate in earnings of the Company but could do so in the future by virtue of their option, redemption or conversion right.

In computing the dilutive effect of convertible securities, net income is adjusted to add back any changes in earnings in the period associated with the convertible security. The numerator also is adjusted for the effects of any other non-discretionary changes in income or loss that would result from the assumed conversion of those potential common shares. In computing diluted earnings per common share, only potential common shares that are dilutive (i.e. those that reduce earnings per common share) are included. For the three months ended March 31, 2022 and 2021, there were no anti-dilutive options.

16


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Amounts in thousands, except store and share data, unless otherwise stated
For the purposes of computing the diluted impact of the potential exchange of the Preferred Operating Partnership units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the intent and ability to settle the redemption in shares, the Company divided the total value of the Preferred Operating Partnership units by the average share price for the period presented. The average share price for the three months ended March 31, 2022 and 2021 was $198.83 and $121.07, respectively.

The following table presents the number of Preferred Operating Partnership units, and the potential common shares, that were excluded from the computation of earnings per share as their effect would have been anti-dilutive.
For the Three Months Ended March 31,
20222021
Equivalent Shares (if converted)Equivalent Shares (if converted)
Series B Units182,974 337,839 
Series D Units1,033,222  
1,216,196 337,839 

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series A Units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the positive intent and ability to settle at least $101,700 of the instrument in cash (or net settle a portion of the Series A Units against the related outstanding note receivable), only the amount of the instrument in excess of $101,700 is considered in the calculation of shares contingently issuable for the purposes of computing diluted earnings per share as allowed by ASC 260-10-45-46. Accordingly, the number of shares included in the computation for diluted earnings per share related to the Series A Units is equal to the number of Series A Units outstanding, with no additional shares included related to the fixed $101,700 amount.

The computation of earnings per common share is as follows for the periods presented:

For the Three Months Ended March 31,
20222021
Net income attributable to common stockholders$203,579 $202,998 
Earnings and dividends allocated to participating securities(286)(312)
Earnings for basic computations203,293 202,686 
Income allocated to noncontrolling interest - Preferred Operating Partnership Units and Operating Partnership Units11,693 11,894 
Fixed component of income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units)(572)(572)
Net income for diluted computations$214,414 $214,008 
Weighted average common shares outstanding:
Average number of common shares outstanding - basic 134,180,175 132,007,556 
OP Units6,520,781 5,800,729 
Series A Units875,480 875,480 
Series D Units 969,374 
Shares related to dilutive stock options5,426 23,409 
Average number of common shares outstanding - diluted141,581,862 139,676,548 
Earnings per common share
Basic$1.52 $1.54 
Diluted$1.51 $1.53 

17


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Amounts in thousands, except store and share data, unless otherwise stated
6.    STORE ACQUISITIONS

Store Acquisitions

The following table shows the Company’s acquisitions of stores for the three months ended March 31, 2022 and 2021. The table excludes purchases of raw land and improvements made to existing assets. All acquisitions are considered asset acquisitions under ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business."
Consideration PaidTotal
QuarterNumber of StoresCash PaidInvestments in Real Estate VenturesNet Liabilities/ (Assets) AssumedValue of OP Units IssuedReal estate assets
Q1 202214$185,910 $747 $274 $40,965 $227,896 
Q1 20219148,940  2,944  151,884 

7.    INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES
Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures represent the Company's interest in preferred stock of SmartStop Self Storage REIT, Inc. ("SmartStop") and the Company's noncontrolling interest in real estate joint ventures that own stores. The Company accounts for its investment in SmartStop preferred stock, which does not have a readily determinable fair value, at the transaction price less impairment, if any. The Company accounts for its investments in joint ventures using the equity method of accounting. The Company initially records these investments at cost and subsequently adjusts for cash contributions, distributions and net equity in income or loss, which is allocated in accordance with the provisions of the applicable partnership or joint venture agreement.
In these joint ventures, the Company and the joint venture partner generally receive a preferred return on their invested capital. To the extent that cash or profits in excess of these preferred returns are generated through operations or capital transactions, the Company would receive a higher percentage of the excess cash or profits than its equity interest.

The Company separately reports investments with net equity less than zero in cash distributions in unconsolidated real estate ventures in the condensed consolidated balance sheets. The net equity of certain joint ventures is less than zero because distributions have exceeded the Company's investment in and share of income from these joint ventures. This is generally the result of financing distributions, capital events or operating distributions that are usually greater than net income, as net income includes non-cash charges for depreciation and amortization while distributions do not.
18


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Amounts in thousands, except store and share data, unless otherwise stated
Net investments in unconsolidated real estate ventures and cash distributions in unconsolidated real estate ventures consist of the following:
 Number of StoresEquity Ownership %
Excess Profit % (1)
March 31,December 31,
 20222021
PRISA Self Storage LLC 854%4%$8,746 $8,792 
Storage Portfolio II JV LLC 3610%30%(6,336)(6,116)
Storage Portfolio IV JV LLC2910%30%44,156 40,174 
Storage Portfolio I LLC 2434%49%(40,447)(40,168)
PR II EXR JV LLC1825%25%70,131 70,403 
ESS-CA TIVS JV LP1655%60%32,582 32,288 
VRS Self Storage, LLC 1645%54%(14,619)(14,269)
ESS-NYFL JV LP1116%24%11,746 11,796 
Extra Space Northern Properties Six LLC1010%35%(3,104)(3,029)
Alan Jathoo JV LLC910%10%7,556 7,621 
ESS Bristol Investments LLC810%30%2,204 2,628 
PR EXR Self Storage, LLC 525%40%59,172 59,393 
Storage Portfolio III JV LLC510%30%5,562 5,596 
Other minority owned stores16
20-50%
20-50%
33,436 18,635 
SmartStop Self Storage REIT, Inc. Preferred Stock (2)
n/an/an/a200,000 200,000 
Net Investments in and Cash distributions in unconsolidated real estate entities288$410,785 $393,744 
(1) Includes pro-rata equity ownership share and maximum potential promoted interest.
(2) The Company invested in shares of convertible preferred stock of SmartStop. The dividend rate for the preferred shares is 6.25% per annum, subject to increase after five years. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing of SmartStop. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company's condensed consolidated statements of operations.
During the three months ended March 31, 2022, the Company contributed a total of $4,321 of cash to its joint ventures, including its pro-rata portion of the purchase price of two operating stores.
8.    INVESTMENTS IN DEBT SECURITIES AND NOTES RECEIVABLE
Investments in debt securities and notes receivable consists of the Company's investment in mandatorily redeemable preferred stock of Jernigan Capital, Inc. ("JCAP") in connection with JCAP's acquisition by affiliates of NexPoint Advisors, L.P. ("NexPoint Investment") and receivables due to the Company under its bridge loan program. Information about these balances is as follows:
March 31, 2022December 31, 2021
Debt securities - NexPoint Series A Preferred Stock$200,000 $200,000 
Debt securities - NexPoint Series B Preferred Stock100,000 100,000 
Notes Receivable-Bridge Loans348,185 279,042 
Notes Receivable-Senior Mezzanine Loan, net 102,079 
Dividends Receivable 45,922 38,066 
$694,107 $719,187 
19


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Amounts in thousands, except store and share data, unless otherwise stated
In November 2020, the Company invested $300,000 in the preferred stock of JCAP in connection with the acquisition of JCAP by affiliates of NexPoint Advisors, L.P. This investment consists of 200,000 Series A Preferred Shares valued at a total of $200,000, and 100,000 Series B Preferred Shares valued at a total of $100,000. The JCAP preferred stock is mandatorily redeemable after five years, with two one-year extension options. NexPoint may redeem the Preferred Shares at any time, subject to certain prepayment penalties. The Company accounts for the JCAP preferred stock as a held to maturity debt security at amortized cost. The Series A Preferred Shares and the Series B Preferred Shares have initial dividend rates of 10.0% and 12.0%, respectively. If the investment is not retired after five years, the preferred dividends increase annually.

In July 2020, the Company purchased a senior mezzanine note receivable with a principal amount of $103,000. This note receivable bore interest at 5.5%, matured in December 2023 and was collateralized through an equity interest in which it or its subsidiaries wholly own 62 storage facilities. The Company paid cash of $101,142 for the loan receivable and accounted for the discount at amortized cost. The discount was being amortized over the term of the loan receivable. In February 2022, a junior mezzanine lender exercised its right to buy the Company’s position for the full principal balance plus interest due, as a result of which the Company sold this note for a total of $103,315 in cash. The remaining unamortized discount was recognized in the quarter as interest income.

The Company provides bridge loan financing to third-party self-storage operators. These notes receivable consist of mortgage loans receivable, collateralized by self-storage properties. These notes receivable typically have a term of three years with two one-year extensions, and have variable interest rates. The Company intends to sell the majority of the mortgage receivables. During the three months ended March 31, 2022 the Company sold a total principal amount of $39,718 of its mortgage bridge loans receivable to third parties for a total of $39,718 in cash and closed on $134,408 in new mortgage bridge loans.
9.    DEBT
In May 2021, the Operating Partnership executed its initial public bond issuance by selling $450.0 million principal amount of 2.550% Senior Notes due 2031 (the "Notes Due 2031"). Interest on the Notes Due 2031 is paid semi-annually in arrears on June 1 and December 1 of each year. The Notes Due 2031 will mature on June 1, 2031, and the Operating Partnership may redeem the Notes Due 2031 at its option and sole discretion at any time prior to March 31, 2031 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
In September 2021, the Operating Partnership executed a public bond issuance by selling $600.0 million principal amount of 2.350% Senior Notes due 2032 (the "Notes Due 2032"). Interest on the Notes Due 2032 is paid semi-annually in arrears on March 15 and September 15 of each year. The Notes Due 2032 will mature on March 15, 2032, and the Operating Partnership may redeem the Notes Due 2032 at its option and sole discretion at any time prior to March 15, 2032 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
In March 2022, the Operating Partnership executed a public bond issuance by selling $400.0 million principal amount of 3.900% Senior Notes due 2029 (the "Notes Due 2029"). Interest on the Notes Due 2029 is paid semi-annually in arrears on April 1 and October 1 of each year. The Notes Due 2029 will mature on April 1, 2029, and the Operating Partnership may redeem the Notes Due 2029 at its option and sole discretion at any time prior to April 1, 2029 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
The Operating Partner may redeem the Notes Due 2029, the Notes Due 2031 and/or the Notes Due 2032 in whole at any time or in part from time to time, at the Operating Partnership’s option and sole discretion, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) a make-whole premium calculated in accordance with the indenture governing the notes, plus, in each case, accrued and unpaid interest thereon to, but not including, the applicable redemption date. Notwithstanding the foregoing, on or after the date three months prior to the maturity date of the applicable notes, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date.
Certain events are considered events of default, which may result in the accelerated maturity of the Notes Due 2029, the Notes Due 2031 and/or the Notes Due 2032, including, among other things, a default for 30 days in the payment of any
20


EXTRA SPACE STORAGE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Amounts in thousands, except store and share data, unless otherwise stated
installment of interest under the notes or a default in the payment of the principal amount or redemption price due with respect to the notes, when the same become due and payable.
The Notes Due 2029, the Notes Due 2031 and the Notes Due 2032 are unsecured, and are fully and unconditionally guaranteed by the Company, ESS Holdings Business Trust I, and ESS Holdings Business Trust II (the "Guarantors," and together with the Operating Partnership, the "Obligated Group"), on a joint and several basis. The guarantee of the Notes Due 2031 and the Notes Due 2032 will be a senior unsecured obligation of each Guarantor. The Guarantors have no material operations separate from the operation of the Operating Partnership and no material assets, other than their respective investments directly or indirectly in the Operating Partnership, and therefore the assets, liabilities, and results of operations of the Obligated Group are not materially different than those reported in the Company's financial statements.
The components of term debt are summarized as follows:
Term DebtMarch 31, 2022December 31, 2021Fixed Rate
Variable Rate (2)
Maturity Dates
Secured fixed-rate (1)
$929,980 $930,830 
2.46% - 4.50%
October 2022 - February 2030
Secured variable-rate (1)
368,038 392,679 
1.29% - 1.95%
October 2022 - September 2030
Unsecured fixed-rate3,930,376 3,575,000 
1.40% - 4.39%
February 2024 - March 2032
Unsecured variable-rate594,624 550,000 1.40%February 2024 - October 2026
Total5,823,018 5,448,509 
Less: Unamortized debt issuance costs(30,352)(