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Extra Space Storage (EXR) Q4 FFO Tops on Occupancy, Rate Growth
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Extra Space Storage, Inc. (EXR - Free Report) reported fourth-quarter 2021 core funds from operations (FFO) per share of $1.91, beating the Zacks Consensus Estimate of $1.86. The figure also came in 29.1% higher than the prior-year quarter’s $1.48.
Quarterly revenues were $427.4 million, up 20.9% year over year. The top line also exceeded the Zacks Consensus Estimate of $423.1 million.
The results reflect strong average occupancy and higher average rates to new and existing customers and higher late fees, partly offset by increased discounts.
Per Joe Margolis, CEO of Extra Space Storage, “We expect solid storage fundamentals again in 2022, with anticipated same-store revenue growth of 11.5% and Core FFO growth of 13.2% at the mid-points, despite very challenging 2021 comparables. We will continue to innovate and grow Extra Space accretively across all strategies."
For 2021, Extra Space Storage reported core FFO per share of $6.91, up 30.9% from $5.28 in the prior year and also beat the Zacks Consensus Estimate of $6.86. Revenues of $1.58 billion surged 16.3% year over year.
Quarter in Detail
Same-store rental revenues increased 18.3% year over year to $321.9 million in the fourth quarter. This uptick resulted from higher average occupancy, higher average rates to new and existing customers and higher late fees, partly offset by increased discounts. The same-store square-foot occupancy expanded 40 basis points (bps) year over year to 95.3% as of Dec 31, 2021.
Same-store expenses flared up 2.5% year over year to $76.1 million, reflecting increases in credit card processing fees, payroll, property taxes and insurance, partially muted by lower marketing expenses. Consequently, same-store net operating income (NOI) increased 24.2% year over year to $245.8 million.
Portfolio Activity
During the October-December period, Extra Space Storage acquired 37 operating stores and one store at the completion of construction for a total cost of roughly $699.4 million. In association with joint-venture (JV) partners, EXR acquired 28 operating stores for a total cost of about $455.5 million, of which the company invested $146.2 million.
Extra Space Storage added 69 stores (gross) to its third-party management platform. As of Dec 31, 2021, it managed 828 stores for third parties and 287 stores in JVs, with total stores under the management of 1,115.
While Extra Space Storage sold 17 stores for a total of $210.6 million, leading to a gain on real estate transactions of $76.9 million, EXR retained management of 12 of the stores.
Balance Sheet
Extra Space Storage exited 2021 with $71.1 million of cash and cash equivalents, down from $109.1 million recorded at the end of 2020. As of Dec 31, 2021, EXR's percentage of fixed-rate debt to total debt was 75.3%. The combined weighted average interest rate was 2.6%, with a weighted average maturity of around 5.5 years.
During the reported quarter, Extra Space Storage originated $187.4 million in mortgage and mezzanine bridge loans and sold $56.6 million in mortgage bridge loans.
Guidance
Extra Space Storage projects 2022 core FFO per share in the range of $7.70-$ 7.95. The Zacks Consensus Estimate for the same is pegged at $7.70.
The company’s full-year projections are backed by same-store revenue growth assumptions of 10.5-12.5%, a same-store NOI increase of 11.5-14.5% and $500 million in acquisitions.
Public Storage's (PSA - Free Report) fourth-quarter 2021 core FFO per share of $3.54 surpassed the Zacks Consensus Estimate of $3.44. The figure also increased 20.8% year over year. Results reflected an improvement in the realized annual rent per available square foot and weighted average square foot occupancy in the reported quarter. Public Storage also benefited from its expansion efforts through acquisitions, developments and extensions. Management provided an upbeat guidance for 2022 core FFO per share.
Prologis, Inc. (PLD - Free Report) reported fourth-quarter 2021 core FFO per share of $1.12, beating the Zacks Consensus Estimate of $1.10. The figure also compared favorably with the year-ago quarter’s figure of 95 cents. PLD’s results reflected low vacancies and solid increases in rental revenues. Further, this industrial REIT issued its 2022 outlook.
Boston Properties Inc.’s (BXP - Free Report) fourth-quarter 2021 FFO per share of $1.55 beat the Zacks Consensus Estimate of $1.52. The figure also compared favorably with the year-ago quarter’s tally of $1.37. The quarterly figure also exceeded the midpoint of Boston Properties’ fourth-quarter guidance by 5 cents, reflecting an improved portfolio performance. BXP also experienced strong leasing activity in the fourth quarter.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Extra Space Storage (EXR) Q4 FFO Tops on Occupancy, Rate Growth
Extra Space Storage, Inc. (EXR - Free Report) reported fourth-quarter 2021 core funds from operations (FFO) per share of $1.91, beating the Zacks Consensus Estimate of $1.86. The figure also came in 29.1% higher than the prior-year quarter’s $1.48.
Quarterly revenues were $427.4 million, up 20.9% year over year. The top line also exceeded the Zacks Consensus Estimate of $423.1 million.
The results reflect strong average occupancy and higher average rates to new and existing customers and higher late fees, partly offset by increased discounts.
Per Joe Margolis, CEO of Extra Space Storage, “We expect solid storage fundamentals again in 2022, with anticipated same-store revenue growth of 11.5% and Core FFO growth of 13.2% at the mid-points, despite very challenging 2021 comparables. We will continue to innovate and grow Extra Space accretively across all strategies."
For 2021, Extra Space Storage reported core FFO per share of $6.91, up 30.9% from $5.28 in the prior year and also beat the Zacks Consensus Estimate of $6.86. Revenues of $1.58 billion surged 16.3% year over year.
Quarter in Detail
Same-store rental revenues increased 18.3% year over year to $321.9 million in the fourth quarter. This uptick resulted from higher average occupancy, higher average rates to new and existing customers and higher late fees, partly offset by increased discounts. The same-store square-foot occupancy expanded 40 basis points (bps) year over year to 95.3% as of Dec 31, 2021.
Same-store expenses flared up 2.5% year over year to $76.1 million, reflecting increases in credit card processing fees, payroll, property taxes and insurance, partially muted by lower marketing expenses. Consequently, same-store net operating income (NOI) increased 24.2% year over year to $245.8 million.
Portfolio Activity
During the October-December period, Extra Space Storage acquired 37 operating stores and one store at the completion of construction for a total cost of roughly $699.4 million. In association with joint-venture (JV) partners, EXR acquired 28 operating stores for a total cost of about $455.5 million, of which the company invested $146.2 million.
Extra Space Storage added 69 stores (gross) to its third-party management platform. As of Dec 31, 2021, it managed 828 stores for third parties and 287 stores in JVs, with total stores under the management of 1,115.
While Extra Space Storage sold 17 stores for a total of $210.6 million, leading to a gain on real estate transactions of $76.9 million, EXR retained management of 12 of the stores.
Balance Sheet
Extra Space Storage exited 2021 with $71.1 million of cash and cash equivalents, down from $109.1 million recorded at the end of 2020. As of Dec 31, 2021, EXR's percentage of fixed-rate debt to total debt was 75.3%. The combined weighted average interest rate was 2.6%, with a weighted average maturity of around 5.5 years.
During the reported quarter, Extra Space Storage originated $187.4 million in mortgage and mezzanine bridge loans and sold $56.6 million in mortgage bridge loans.
Guidance
Extra Space Storage projects 2022 core FFO per share in the range of $7.70-$ 7.95. The Zacks Consensus Estimate for the same is pegged at $7.70.
The company’s full-year projections are backed by same-store revenue growth assumptions of 10.5-12.5%, a same-store NOI increase of 11.5-14.5% and $500 million in acquisitions.
Extra Space Storage currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Extra Space Storage Inc Price, Consensus and EPS Surprise
Extra Space Storage Inc price-consensus-eps-surprise-chart | Extra Space Storage Inc Quote
Performance of Notable REITs
Public Storage's (PSA - Free Report) fourth-quarter 2021 core FFO per share of $3.54 surpassed the Zacks Consensus Estimate of $3.44. The figure also increased 20.8% year over year. Results reflected an improvement in the realized annual rent per available square foot and weighted average square foot occupancy in the reported quarter. Public Storage also benefited from its expansion efforts through acquisitions, developments and extensions. Management provided an upbeat guidance for 2022 core FFO per share.
Prologis, Inc. (PLD - Free Report) reported fourth-quarter 2021 core FFO per share of $1.12, beating the Zacks Consensus Estimate of $1.10. The figure also compared favorably with the year-ago quarter’s figure of 95 cents. PLD’s results reflected low vacancies and solid increases in rental revenues. Further, this industrial REIT issued its 2022 outlook.
Boston Properties Inc.’s (BXP - Free Report) fourth-quarter 2021 FFO per share of $1.55 beat the Zacks Consensus Estimate of $1.52. The figure also compared favorably with the year-ago quarter’s tally of $1.37. The quarterly figure also exceeded the midpoint of Boston Properties’ fourth-quarter guidance by 5 cents, reflecting an improved portfolio performance. BXP also experienced strong leasing activity in the fourth quarter.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.