SALT LAKE CITY - Extra Space Storage Inc. (NYSE: NYSE:EXR), a prominent self-storage facility owner and operator in the United States, revealed on Wednesday that its operating partnership, Extra Space Storage LP, has initiated a commercial paper note program in the U.S. The program allows the issuing of unsecured commercial paper notes up to a total of $1 billion at any given time.
The notes, which will be offered in the U.S. commercial paper market, are set to be on par with the operating partnership's existing unsecured senior debt and will be fully backed by Extra Space Storage Inc. Funds raised from the notes are intended for general corporate purposes.
Extra Space Storage Inc. anticipates that the new note program will be more cost-effective compared to its current $2.0 billion revolving credit facility, which will serve as a financial safety net for the repayment of the newly issued notes.
The notes under this program will not be registered under the Securities Act of 1933, as amended, and will be available only through certain exemptions from registration requirements. This announcement does not constitute an offer to sell or a solicitation of an offer to buy the notes.
Extra Space Storage Inc., based in Salt Lake City, operates as a fully integrated, self-administered, and self-managed real estate investment trust. As of September 30, 2024, the company managed 3,862 self-storage properties, which include around 2.7 million units and nearly 296 million square feet of rentable storage space under the Extra Space brand. The company is recognized as the largest operator of self-storage properties in the U.S., providing a variety of storage solutions, including spaces for boats, RVs, and businesses.
This financial move is based on a press release statement from Extra Space Storage Inc. and has not been independently verified. The release of this information serves to inform investors and the public about the company's latest financial endeavor.
In other recent news, Extra Space Storage showcased a strong third quarter in 2024, despite facing substantial challenges. The company reported a rise in the midpoint of full-year funds from operations (FFO) guidance, driven by solid store performance and growth initiatives. In the wake of Hurricane Milton, which caused over $10 million in damages, the firm experienced an uptick in rental activity in the affected regions.
Extra Space Storage also added 63 third-party managed stores in Q3, bringing the year-to-date total to 124. Despite revenue shortfalls in the Life Storage (NYSE:LSI) same-store pool, cost savings helped offset these declines, leading to a revision of the same-store net operating income (NOI) guidance. The company has been active in acquisitions, deploying $334 million year-to-date, and remains hopeful about future growth and operational efficiencies.
In terms of future expectations, management raised the FFO guidance due to positive occupancy trends and external loan growth. The company also anticipates $100 million in synergies from its merger with Life Storage Inc., focusing on management, bridge loans, and procurement efficiencies. These are recent developments that underline the resilience and strategic growth of Extra Space Storage.
InvestingPro Insights
Extra Space Storage Inc.'s recent initiative to launch a commercial paper note program aligns with its strong financial position and market leadership in the self-storage industry. According to InvestingPro data, the company boasts a substantial market capitalization of $36.46 billion, underscoring its significant presence in the Specialized REITs sector.
The company's financial health is further evidenced by its robust revenue growth, with a 42.8% increase in the last twelve months as of Q3 2024. This growth trajectory supports Extra Space Storage's ability to undertake new financial initiatives like the commercial paper program, which aims to provide more cost-effective financing compared to its existing credit facility.
InvestingPro Tips highlight Extra Space Storage's commitment to shareholder value, noting that the company has raised its dividend for 14 consecutive years. This consistent dividend growth, coupled with a current dividend yield of 3.92%, may appeal to income-focused investors. The company's strong dividend history is complemented by its profitability, as analysts predict the company will remain profitable this year.
While the new commercial paper program demonstrates Extra Space Storage's proactive approach to optimizing its capital structure, investors should also consider that the company is trading at a relatively high P/E ratio of 43.15. This valuation metric suggests that the market has high expectations for the company's future performance.
For those interested in a deeper analysis, InvestingPro offers additional insights with 8 more tips available for Extra Space Storage, providing a comprehensive view of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.