Bolstered by high occupancy and rental rates, Extra Space Storage is bumping up its financial expectations for 2021.
The Salt Lake City, UT-based self-storage REIT anticipates same-store revenue will rise 10% to 11% this year compared with last year, and same-store NOI will jump by 13.5% to 15.5%. Meanwhile, Extra Space expects same-store operating expenses to stay flat or rise just 1%.
That’s a significant improvement from the 2021 forecast issued in February. At that point, Extra Space predicted same-store revenue growth of 4.25% to 5.5% this year, same-store NOI growth of 4.25% to 6.2% and same-store expense growth of 3.5% to 4.5%.
Extra Space based its rosier forecast on solid numbers for occupancy and rental rates, as well as lower labor and marketing expenses. The REIT’s same-store occupancy rate stood at 97% as of June 30, compared with 94.2% at the same time in 2020.
“Obviously, we’re having a fantastic year,” CEO Joseph Margolis told Wall Street analysts July 28 during the company’s second-quarter earnings call.
Highlights of Extra Space’s second-quarter results include:
- Same-store revenue climbed 13.6%.
- Same-store NOI soared 20.2%.
- Same-store operating expenses declined 2.3%.
- Among major metro markets, same-store revenue shot up the most in Las Vegas, NV (24.5%), Denver, CO (23.8%) and Chicago, IL (20.6%).
- Among major metro markets, Denver, CO racked up the greatest growth in same-store NOI (49.3%).
- Among major metro markets, Norfolk-Virginia Beach-Newport News, VA, posted the highest average same-store occupancy rate (94.1%).
- 15 wholly owned facilities were acquired for a total cost of $184 million.
- Five facilities were acquired in tandem with joint venture partners for a total of $68.7 million. Extra Space contributed $6.9 million of that amount.
- 39 facilities were added to the company’s third-party management program.
adowney