exr-20220630
false2022Q2000128949012/31P6M00012894902022-01-012022-06-3000012894902022-08-01xbrli:shares00012894902022-06-30iso4217:USD00012894902021-12-31iso4217:USDxbrli:shares00012894902022-04-012022-06-3000012894902021-04-012021-06-3000012894902021-01-012021-06-300001289490exr: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:AdditionalPaidInCapitalMember2021-01-012021-03-3100012894902021-01-012021-03-310001289490exr:RedemptionOfUnitsForCommonStockMemberexr:CommonOperatingPartnershipMember2021-01-012021-03-310001289490us-gaap:CommonStockMemberexr:RedemptionOfUnitsForCommonStockMember2021-01-012021-03-310001289490exr: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:RetainedEarningsMember2021-03-3100012894902021-03-310001289490us-gaap:CommonStockMember2021-04-012021-06-300001289490us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001289490exr:RedemptionOfUnitsForCommonStockMemberexr:CommonOperatingPartnershipMember2021-04-012021-06-300001289490us-gaap:CommonStockMemberexr:RedemptionOfUnitsForCommonStockMember2021-04-012021-06-300001289490exr:RedemptionOfUnitsForCommonStockMemberus-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001289490exr:RedemptionOfUnitsForCashMemberexr:CommonOperatingPartnershipMember2021-04-012021-06-300001289490us-gaap:AdditionalPaidInCapitalMemberexr:RedemptionOfUnitsForCashMember2021-04-012021-06-300001289490exr:RedemptionOfUnitsForCashMember2021-04-012021-06-300001289490exr:CommonOperatingPartnershipMember2021-04-012021-06-300001289490exr:NonControllingInterestOtherMember2021-04-012021-06-300001289490exr:PreferredOperatingPartnershipMember2021-04-012021-06-300001289490us-gaap:RetainedEarningsMember2021-04-012021-06-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001289490exr:PreferredOperatingPartnershipMember2021-06-300001289490exr:CommonOperatingPartnershipMember2021-06-300001289490exr:NonControllingInterestOtherMember2021-06-300001289490us-gaap:CommonStockMember2021-06-300001289490us-gaap:AdditionalPaidInCapitalMember2021-06-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001289490us-gaap:RetainedEarningsMember2021-06-3000012894902021-06-300001289490exr: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:AdditionalPaidInCapitalMember2022-01-012022-03-3100012894902022-01-012022-03-310001289490exr:RedemptionOfUnitsForCashMemberexr:CommonOperatingPartnershipMember2022-01-012022-03-310001289490us-gaap:AdditionalPaidInCapitalMemberexr:RedemptionOfUnitsForCashMember2022-01-012022-03-310001289490exr: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:RetainedEarningsMember2022-03-3100012894902022-03-310001289490us-gaap:CommonStockMember2022-04-012022-06-300001289490us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001289490exr:RedemptionOfUnitsForCashMemberexr:CommonOperatingPartnershipMember2022-04-012022-06-300001289490us-gaap:AdditionalPaidInCapitalMemberexr:RedemptionOfUnitsForCashMember2022-04-012022-06-300001289490exr:RedemptionOfUnitsForCashMember2022-04-012022-06-300001289490exr:SeriesBUnitsMemberexr:PreferredOperatingPartnershipMemberexr:RedemptionOfUnitsForCashMember2022-04-012022-06-300001289490exr:SeriesBUnitsMemberexr:RedemptionOfUnitsForCashMember2022-04-012022-06-300001289490exr:CommonOperatingPartnershipMember2022-04-012022-06-300001289490exr:SeriesDUnitsMemberexr:PreferredOperatingPartnershipMember2022-04-012022-06-300001289490exr:SeriesDUnitsMember2022-04-012022-06-300001289490us-gaap:RetainedEarningsMember2022-04-012022-06-300001289490exr:PreferredOperatingPartnershipMember2022-04-012022-06-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001289490exr:PreferredOperatingPartnershipMember2022-06-300001289490exr:CommonOperatingPartnershipMember2022-06-300001289490exr:NonControllingInterestOtherMember2022-06-300001289490us-gaap:CommonStockMember2022-06-300001289490us-gaap:AdditionalPaidInCapitalMember2022-06-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001289490us-gaap:RetainedEarningsMember2022-06-300001289490exr:PreferredOPUnitsMember2022-01-012022-06-300001289490exr:PreferredOPUnitsMember2021-01-012021-06-300001289490exr:CommonOPUnitsMember2022-01-012022-06-300001289490exr:CommonOPUnitsMember2021-01-012021-06-30exr:storeexr:state0001289490us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-06-300001289490us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001289490us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001289490us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-06-300001289490us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-06-300001289490us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001289490us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001289490exr:SeriesBUnitsMember2022-04-012022-06-300001289490exr:SeriesBUnitsMember2021-04-012021-06-300001289490exr:SeriesBUnitsMember2022-01-012022-06-300001289490exr:SeriesBUnitsMember2021-01-012021-06-300001289490exr:SeriesDUnitsMember2021-04-012021-06-300001289490exr:SeriesDUnitsMember2022-01-012022-06-300001289490exr:SeriesDUnitsMember2021-01-012021-06-300001289490exr:SeriesAUnitsMember2022-06-300001289490exr:SeriesAUnitsMember2022-04-012022-06-300001289490exr:SeriesAUnitsMember2021-04-012021-06-300001289490exr:SeriesAUnitsMember2022-01-012022-06-300001289490exr:SeriesAUnitsMember2021-01-012021-06-300001289490exr:BargoldMember2022-06-012022-06-010001289490exr:BargoldMember2022-06-01exr:storage_unitxbrli:pure0001289490exr:SeriesDUnitsMemberexr:BargoldMember2022-06-012022-06-010001289490exr:BargoldMemberexr:CommonOPUnitsMember2022-06-012022-06-010001289490exr:BargoldMember2022-06-010001289490exr:BargoldMemberus-gaap:DevelopedTechnologyRightsMember2022-06-010001289490exr:BargoldMemberus-gaap:TrademarksMember2022-06-010001289490us-gaap:CustomerRelationshipsMemberexr:BargoldMember2022-06-010001289490exr:BargoldMember2022-01-012022-06-3000012894902021-01-012021-12-310001289490exr:PRISASelfStorageLLCMember2022-06-30exr:property0001289490exr:PRISASelfStorageLLCMember2021-12-310001289490exr:StoragePortfolioIIJVLLCMember2022-06-300001289490exr:StoragePortfolioIIJVLLCMember2021-12-310001289490exr:StoragePortfolioIVJVLLCMember2022-06-300001289490exr:StoragePortfolioIVJVLLCMember2021-12-310001289490exr:StoragePortfolioILLCMember2022-06-300001289490exr:StoragePortfolioILLCMember2021-12-310001289490exr:PRIIEXRJVLLCMember2022-06-300001289490exr:PRIIEXRJVLLCMember2021-12-310001289490exr:ESSCATIVSJVLPMember2022-06-300001289490exr:ESSCATIVSJVLPMember2021-12-310001289490exr:VRSSelfStorageLLCMember2022-06-300001289490exr:VRSSelfStorageLLCMember2021-12-310001289490exr:ESSNYFLJVLPMember2022-06-300001289490exr:ESSNYFLJVLPMember2021-12-310001289490exr:ExtraSpaceNorthernPropertiesSixLLCMember2022-06-300001289490exr:ExtraSpaceNorthernPropertiesSixLLCMember2021-12-310001289490exr:AlanJathooJVLLCMember2022-06-300001289490exr:AlanJathooJVLLCMember2021-12-310001289490exr:ESSBristolInvestmentsLLCMember2022-06-300001289490exr:ESSBristolInvestmentsLLCMember2021-12-310001289490exr:ACPFEXRJVLLCMember2022-06-300001289490exr:ACPFEXRJVLLCMember2021-12-310001289490exr:PREXRSelfStorageLLCMember2022-06-300001289490exr:PREXRSelfStorageLLCMember2021-12-310001289490exr:StoragePortfolioIIIJVLLCMember2022-06-300001289490exr:StoragePortfolioIIIJVLLCMember2021-12-310001289490exr:OtherMinorityOwnedPropertiesMember2022-06-300001289490exr:OtherMinorityOwnedPropertiesMembersrt:MinimumMember2022-06-300001289490exr:OtherMinorityOwnedPropertiesMembersrt:MaximumMember2022-06-300001289490exr:OtherMinorityOwnedPropertiesMember2021-12-310001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2022-06-300001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2021-12-310001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2022-01-012022-06-300001289490exr:JCAPSeriesAPreferredStockMember2022-06-300001289490exr:JCAPSeriesAPreferredStockMember2021-12-310001289490exr:JCAPSeriesBPreferredStockMember2022-06-300001289490exr:JCAPSeriesBPreferredStockMember2021-12-310001289490us-gaap:BridgeLoanMember2022-06-300001289490us-gaap:BridgeLoanMember2021-12-310001289490us-gaap:NotesReceivableMember2022-06-300001289490us-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:BridgeLoanMember2022-01-012022-06-300001289490exr:SeniorNotesDue2031Memberus-gaap:SeniorNotesMember2021-05-310001289490exr:SeniorNotesDue2032Memberus-gaap:SeniorNotesMember2021-09-300001289490exr:SeniorNotesDue2029Memberus-gaap:SeniorNotesMember2022-03-310001289490us-gaap:SeniorNotesMember2022-01-012022-06-300001289490us-gaap:NotesPayableToBanksMemberexr:SecuredLoanWithBankMember2022-06-300001289490us-gaap:NotesPayableToBanksMemberexr:SecuredLoanWithBankMember2021-12-310001289490us-gaap:NotesPayableToBanksMemberexr:SecuredLoanWithBankMembersrt:MinimumMember2022-06-300001289490us-gaap:NotesPayableToBanksMemberexr:SecuredLoanWithBankMembersrt:MaximumMember2022-06-300001289490us-gaap:NotesPayableToBanksMemberexr:UnsecuredLoanWithBankMember2022-06-300001289490us-gaap:NotesPayableToBanksMemberexr:UnsecuredLoanWithBankMember2021-12-310001289490us-gaap:NotesPayableToBanksMemberexr:UnsecuredLoanWithBankMembersrt:MinimumMember2022-06-300001289490us-gaap:NotesPayableToBanksMemberexr:UnsecuredLoanWithBankMembersrt:MaximumMember2022-06-300001289490us-gaap:NotesPayableToBanksMember2022-06-300001289490us-gaap:NotesPayableToBanksMember2021-12-310001289490us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-06-300001289490us-gaap:LineOfCreditMemberexr:Tranche1TermLoanFacilityMember2022-06-300001289490exr:Tranche2TermLoanFacilityMemberus-gaap:LineOfCreditMember2022-06-300001289490us-gaap:LineOfCreditMemberexr:Tranche3TermLoanFacilityMember2022-06-300001289490exr:Tranche4TermLoanFacilityMemberus-gaap:LineOfCreditMember2022-06-300001289490us-gaap:LineOfCreditMemberexr:Tranche5TermLoanFacilityMember2022-06-300001289490us-gaap:LineOfCreditMember2022-06-300001289490us-gaap:LineOfCreditMember2022-01-012022-06-300001289490us-gaap:BaseRateMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001289490us-gaap:FederalFundsEffectiveSwapRateMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001289490us-gaap:LineOfCreditMemberus-gaap:EurodollarMember2022-01-012022-06-300001289490exr:SpecifiedInvestmentGradeRatingAndElectsToUseAlternativeRatesMemberus-gaap:LineOfCreditMemberus-gaap:EurodollarMembersrt:MinimumMember2022-01-012022-06-300001289490exr:SpecifiedInvestmentGradeRatingAndElectsToUseAlternativeRatesMemberus-gaap:LineOfCreditMembersrt:MaximumMemberus-gaap:EurodollarMember2022-01-012022-06-300001289490exr:SpecifiedInvestmentGradeRatingAndElectsToUseAlternativeRatesMemberus-gaap:BaseRateMemberus-gaap:LineOfCreditMembersrt:MinimumMember2022-01-012022-06-300001289490exr:SpecifiedInvestmentGradeRatingAndElectsToUseAlternativeRatesMemberus-gaap:BaseRateMemberus-gaap:LineOfCreditMembersrt:MaximumMember2022-01-012022-06-300001289490us-gaap:LineOfCreditMemberus-gaap:SubsequentEventMemberexr:UnsecuredDebtTrancheOneMember2022-07-290001289490us-gaap:LineOfCreditMemberus-gaap:SubsequentEventMemberexr:UnsecuredDebtTrancheTwoMember2022-07-290001289490exr:SecuredOvernightFinancingRateMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMemberexr:UnsecuredDebtTrancheOneMember2022-07-292022-07-290001289490exr:SecuredOvernightFinancingRateMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMemberexr:UnsecuredDebtTrancheTwoMember2022-07-292022-07-290001289490exr:FirstCreditLineMember2022-06-300001289490us-gaap:LondonInterbankOfferedRateLIBORMemberexr:FirstCreditLineMember2022-01-012022-06-300001289490exr:SecondCreditLineMember2022-06-300001289490us-gaap:LondonInterbankOfferedRateLIBORMemberexr:SecondCreditLineMember2022-01-012022-06-300001289490exr:LinesOfCreditMember2022-06-300001289490exr:SecondCreditLineMember2022-01-012022-06-30exr:derivative0001289490us-gaap:OtherAssetsMember2022-06-300001289490us-gaap:OtherAssetsMember2021-12-310001289490us-gaap:OtherLiabilitiesMember2022-06-300001289490us-gaap:OtherLiabilitiesMember2021-12-310001289490us-gaap:InterestRateSwapMember2022-04-012022-06-300001289490us-gaap:InterestRateSwapMember2021-04-012021-06-300001289490us-gaap:InterestRateSwapMember2022-01-012022-06-300001289490us-gaap:InterestRateSwapMember2021-01-012021-06-3000012894902022-01-072022-01-070001289490exr: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:SeriesBUnitsMember2022-06-300001289490exr:SeriesBUnitsMember2021-12-310001289490exr:SeriesDUnitsMember2022-06-300001289490exr:SeriesDUnitsMember2021-12-310001289490exr:SeriesAUnitsMember2007-06-300001289490exr:SeriesAUnitsMember2007-06-012007-06-300001289490exr:SeriesAUnitsMemberexr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMember2014-10-012014-10-310001289490exr:SeriesAUnitsMember2014-10-310001289490exr:SeriesAUnitsMemberexr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMember2007-06-250001289490exr:SeriesAUnitsMemberexr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMember2007-06-252007-06-250001289490exr:SeriesBUnitsMember2014-12-310001289490exr:SeriesBUnitsMember2013-01-012014-12-310001289490exr:SeriesBUnitsMember2022-05-102022-05-100001289490exr:SeriesDUnitsMembersrt:MinimumMember2022-01-012022-06-300001289490srt:MaximumMemberexr:SeriesDUnitsMember2022-01-012022-06-300001289490exr:SeriesDUnitsMember2022-06-012022-06-010001289490exr:CommonOperatingPartnershipMember2022-06-300001289490us-gaap:CommonStockMember2022-01-012022-06-300001289490exr:NonControllingInterestOtherMember2022-06-30exr:segment0001289490us-gaap:OperatingSegmentsMemberexr:SelfStorageOperationsMember2022-04-012022-06-300001289490us-gaap:OperatingSegmentsMemberexr:SelfStorageOperationsMember2021-04-012021-06-300001289490us-gaap:OperatingSegmentsMemberexr:SelfStorageOperationsMember2022-01-012022-06-300001289490us-gaap:OperatingSegmentsMemberexr:SelfStorageOperationsMember2021-01-012021-06-300001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2022-04-012022-06-300001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2021-04-012021-06-300001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2022-01-012022-06-300001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2021-01-012021-06-300001289490us-gaap:OperatingSegmentsMember2022-04-012022-06-300001289490us-gaap:OperatingSegmentsMember2021-04-012021-06-300001289490us-gaap:OperatingSegmentsMember2022-01-012022-06-300001289490us-gaap:OperatingSegmentsMember2021-01-012021-06-300001289490exr:CommitmentToAcquireRetailSpaceMember2022-06-300001289490exr:CommitmentToAcquireRetailSpaceExpectedToCloseInCurrentFiscalYearMember2022-06-300001289490exr:CommitmentToAcquireRetailSpaceExpectedToCloseInNextFiscalYearMember2022-06-300001289490exr:CommitmentToAcquireRetailSpaceWithJointVenturePartnersMember2022-06-300001289490exr:CommitmentToAcquireRetailSpaceWithJointVenturePartnersExpectedToCloseInCurrentFiscalYearMember2022-06-300001289490exr:CommitmentToAcquireRetailSpaceWithJointVenturePartnersExpectedToCloseInNextFiscalYearMember2022-06-30

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 June 30, 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 August 1, 2022, was 133,912,036.
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)
 
June 30, 2022December 31, 2021
(unaudited)
Assets:
Real estate assets, net$9,135,464 $8,834,649 
Real estate assets - operating lease right-of-use assets232,045 227,949 
Investments in unconsolidated real estate entities544,771 457,326 
Investments in debt securities and notes receivable702,354 719,187 
Cash and cash equivalents58,729 71,126 
Restricted cash11,437 5,068 
Other assets, net353,967 159,172 
Total assets $11,038,767 $10,474,477 
Liabilities, Noncontrolling Interests and Equity:
Notes payable, net$1,288,487 $1,320,755 
Unsecured term loans, net1,742,995 1,741,926 
Unsecured senior notes, net2,757,158 2,360,066 
Revolving lines of credit599,000 535,000 
Operating lease liabilities238,392 233,356 
Cash distributions in unconsolidated real estate ventures65,377 63,582 
Accounts payable and accrued expenses171,918 142,285 
Other liabilities282,200 291,531 
Total liabilities 7,145,527 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, 133,900,184 and 133,922,305 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
1,339 1,339 
Additional paid-in capital3,334,317 3,285,948 
Accumulated other comprehensive income (loss)25,555 (42,546)
Accumulated deficit(159,091)(128,245)
Total Extra Space Storage Inc. stockholders' equity3,202,120 3,116,496 
Noncontrolling interest represented by Preferred Operating Partnership units, net 261,231 259,110 
Noncontrolling interests in Operating Partnership, net and other noncontrolling interests429,889 410,370 
Total noncontrolling interests and equity3,893,240 3,785,976 
Total liabilities, noncontrolling interests and equity$11,038,767 $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 June 30,For the Six Months Ended June 30,
 2022202120222021
Revenues:
Property rental$408,044 $321,500 $787,852 $625,093 
Tenant reinsurance46,427 42,334 90,224 81,953 
Management fees and other income20,517 14,796 40,474 30,441 
Total revenues474,988 378,630 918,550 737,487 
Expenses:
Property operations104,252 89,155 207,794 181,522 
Tenant reinsurance 7,537 6,735 14,579 13,896 
Transaction related costs 1,465  1,465  
General and administrative31,251 26,341 61,013 49,881 
Depreciation and amortization69,067 59,570 136,973 118,169 
Total expenses213,572 181,801 421,824 363,468 
Gain on real estate transactions14,249  14,249 63,883 
Income from operations275,665 196,829 510,975 437,902 
Interest expense(47,466)(40,240)(90,004)(80,935)
Interest income15,060 12,838 34,049 25,142 
Income before equity in earnings and dividend income from unconsolidated real estate ventures and income tax expense243,259 169,427 455,020 382,109 
Equity in earnings and dividend income from unconsolidated real estate entities10,190 8,322 19,287 15,278 
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest 6,251  6,251 
Income tax expense(5,615)(5,421)(8,756)(9,558)
Net income247,834 178,579 465,551 394,080 
Net income allocated to Preferred Operating Partnership noncontrolling interests(4,491)(3,438)(8,824)(7,118)
Net income allocated to Operating Partnership and other noncontrolling interests(11,213)(7,193)(21,018)(16,016)
Net income attributable to common stockholders$232,130 $167,948 $435,709 $370,946 
Earnings per common share
Basic $1.73 $1.25 $3.24 $2.79 
Diluted $1.73 $1.25 $3.24 $2.79 
Weighted average number of shares
Basic134,192,540 133,756,610 134,186,426 132,886,933 
Diluted142,737,909 140,407,195 141,600,206 140,428,558 
Cash dividends paid per common share$1.50 $1.00 $3.00 $2.00 

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 June 30,For the Six Months Ended June 30,
 2022202120222021
Net income$247,834 $178,579 $465,551 $394,080 
Other comprehensive income:
   Change in fair value of interest rate swaps20,113 5,617 71,762 28,630 
Total comprehensive income267,947 184,196 537,313 422,710 
   Less: comprehensive income attributable to noncontrolling interests16,719 10,898 33,503 24,501 
Comprehensive income attributable to common stockholders$251,228 $173,298 $503,810 $398,209 


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 
Issuance of common stock upon the exercise of options— — — — — — — — — 
Issuance of common stock in connection with share based compensation— — — 44,990 — 4,983 — — 4,983 
Restricted stock grants cancelled— — — (4,972)— — — — — 
Offering costs associated with previous stock issuance— — — — — (211)— — (211)
Redemption of Operating Partnership units for stock— (2,185)— 58,429 1 2,184 — — — 
Redemption of Operating Partnership units for cash— (113)— — — (359)— — (472)
Repayment of receivable with Operating Partnership units pledged as collateral— 411 — — — — — — 411 
Noncontrolling interest in consolidated joint venture— — 150 — — — — — 150 
Net income3,438 7,190 3 — — — — 167,948 178,579 
Other comprehensive income35 232 — — — — 5,350 — 5,617 
Distributions to Operating Partnership units held by noncontrolling interests(3,223)(5,751)— — — — — — (8,974)
Dividends paid on common stock at $1.00 per share
— — — — — — — (133,777)(133,777)
Balances at June 30, 2021$172,902 $219,466 $499 133,791,109 $1,337 $3,288,852 $(71,830)$(250,271)$3,360,955 
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 
Issuance of common stock in connection with share based compensation— — — 38,016 — 5,245 — — 5,245 
Restricted stock grants cancelled— — — (7,122)— — — — — 
Redemption of Operating Partnership units for cash— (296)— — — (536)— — (832)
Redemption of Preferred B Units in the Operating Partnership for cash(1,125)— — — — — — — (1,125)
Issuance of Operating Partnership units in conjunction with business combinations— 16,000 — — — — — — 16,000 
Issuance of Preferred D units in the Operating Partnership in conjunction with business combinations6,000 — — — — — — — 6,000 
Buyback of common stock, net of offering costs— — — (381,786)(4)— — (63,004)(63,008)
Net income4,491 11,213 — — — — 232,130 247,834 
Other comprehensive income120 895 — — — — 19,098 — 20,113 
Distributions to Operating Partnership units held by noncontrolling interests(4,306)(9,821)— — — — — — (14,127)
Dividends paid on common stock at $1.50 per share
— — — — — — — (201,024)(201,024)
Balances at June 30, 2022$261,231 $429,572 $317 133,900,184 $1,339 $3,334,317 $25,555 $(159,091)$3,893,240 

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 Six Months Ended June 30,
 20222021
Cash flows from operating activities:
Net income$465,551 $394,080 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization136,973 118,169 
Amortization of deferred financing costs3,933 4,869 
Non-cash lease expense939 945 
Compensation expense related to stock-based awards9,787 8,635 
Accrual of interest income added to principal of debt securities and notes receivable(19,235)(17,312)
Gain on real estate transactions(14,249)(63,883)
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest (6,251)
Distributions from unconsolidated real estate ventures in excess of earnings6,204 3,026 
Changes in operating assets and liabilities:
Other assets15,789 5,519 
Accounts payable and accrued expenses28,646 19,063 
Other liabilities6,049 (3,172)
Net cash provided by operating activities640,387 463,688 
Cash flows from investing activities:
Acquisition of real estate assets(438,287)(375,209)
Cash paid for business combination(157,301) 
Development and redevelopment of real estate assets(29,256)(25,782)
Proceeds from sale of real estate assets and investments in real estate ventures39,367 194,205 
Investment in unconsolidated real estate entities(76,339)(7,174)
Return of investment in unconsolidated real estate ventures342 31,534 
Issuance and purchase of notes receivable(204,930)(68,523)
Principal payments received from notes receivable223,773 20,426 
Proceeds from sale of notes receivable82,115 87,298 
Purchase of equipment and fixtures(9,512)(2,077)
Net cash used in investing activities(570,028)(145,302)
Cash flows from financing activities:
Proceeds from the sale of common stock, net of offering costs 273,509 
Proceeds from notes payable and revolving lines of credit1,948,657 2,372,000 
Principal payments on notes payable and revolving lines of credit(1,915,531)(3,193,025)
Proceeds from issuance of public bonds, net400,000 446,396 
Deferred financing costs(6,713)(5,403)
Net proceeds from exercise of stock options 4,254 
Repurchase of common stock(63,008) 
Redemption of Operating Partnership units held by noncontrolling interests(3,504)(472)
Redemption of Preferred B Units for cash(4,500) 
Proceeds from principal payments on note receivable collateralized by OP Units 411 
Dividends paid on common stock(403,551)(266,317)
Distributions to noncontrolling interests(28,237)(17,999)
Net cash used in financing activities(76,387)(386,646)
Net decrease in cash, cash equivalents, and restricted cash(6,028)(68,260)
Cash, cash equivalents, and restricted cash, beginning of the period76,194 128,009 
Cash, cash equivalents, and restricted cash, end of the period$70,166 $59,749 
11


Extra Space Storage Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
 For the Six Months Ended June 30,
 20222021
Supplemental schedule of cash flow information
Interest paid$82,381 $76,289 
Income taxes paid9,116 16,749 
Supplemental schedule of noncash investing and financing activities:
Redemption of Operating Partnership units held by noncontrolling interests for common stock
Noncontrolling interests in Operating Partnership$ $(2,378)
Common stock and paid-in capital 2,378 
Acquisition and establishment of operating lease right of use assets and lease liabilities
Real estate assets - operating lease right-of-use assets$1,689 $2,493 
Operating lease liabilities(1,689)(2,493)
Acquisitions of real estate assets
Real estate assets, net$48,535 $43,666 
Value of equity issued(40,965) 
Investment in unconsolidated real estate ventures(747)(2,673)
Finance lease liability(6,823)(40,993)
Accrued construction costs and capital expenditures
Acquisition of real estate assets$987 $1,016 
Accounts payable and accrued expenses(987)(1,016)
Issuance of OP and Preferred OP units in conjunction with business combinations
Preferred OP Units issued$(6,000)$ 
OP Units Issued(16,000) 
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 June 30, 2022, the Company had direct and indirect equity interests in 1,313 stores. In addition, the Company managed 864 stores for third parties, bringing the total number of stores which it owns and/or manages to 2,177. 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 and six months ended June 30, 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. The Company has begun transitioning debt over to SOFR as part of the reference rate reform.

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 June 30, 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 June 30, 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$ $31,336 $ 
Other liabilities - Cash flow hedge swap agreements$ $ $ 

The Company did not have any significant assets or liabilities that are re-measured on a recurring basis using significant unobservable inputs as of June 30, 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 June 30, 2022, the Company had no 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. For acquisitions that meet the definition of a business, the Company estimates the fair value of the identifiable assets and liabilities of the acquired entity on the acquisition date. We measure goodwill as the excess of consideration transferred over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. Acquisition-related expenses arising from the transaction are expensed as incurred. The Company includes the results of operations of the businesses that it acquires beginning on the acquisition date.

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 June 30, 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:
June 30, 2022December 31, 2021
Fair
Value
Carrying
Value
Fair
Value
Carrying
Value
Notes receivable from Preferred and Common Operating Partnership unit holders$97,212 $101,900 $101,824 $101,900 
Fixed rate notes receivable$4,265 $4,298 $105,954 $104,251 
Fixed rate debt$4,516,854 $4,799,288 $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:
June 30, 2022December 31, 2021
Land$2,223,174