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Extra Space Storage has raised its full-year 2026 funds from operations (FFO) forecast after reporting improved pricing for its self-storage units and better cost management during the second quarter. The real estate investment trust (REIT) benefited from a slowdown in new storage supply, which helped strengthen pricing across its portfolio. Along with higher rental income, the company also reduced operating expenses and lowered its full-year expense growth guidance. Quarterly core FFO exceeded analysts' expectations, reflecting improved operating performance and a favourable market environment.
Extra Space Storage has increased its full-year 2026 funds from operations (FFO) guidance following stronger pricing for its self-storage units and improved cost controls during the second quarter, according to a Reuters report.
The self-storage real estate investment trust (REIT) has been benefiting from a slowdown in new supply and a moderation in available storage units across the market. The tighter supply conditions have helped operators regain pricing power, allowing them to improve rental rates while maintaining occupancy.
During the second quarter, the company's net rental income increased 2.5% compared with the same period last year. At the same time, same-store operating expenses declined 0.5% year-on-year, reflecting continued efforts to manage costs across its existing portfolio.
Based on the improved performance, Extra Space Storage has revised its annual core FFO guidance to between USD 8.25 and USD 8.40 per share, compared with its earlier forecast of USD 8.05 to USD 8.35 per share.
The midpoint of the revised guidance is above analysts' average estimate of USD 8.28 per share, according to data compiled by LSEG.
The company also lowered its outlook for 2026 same-store expense growth to 1% to 2%, compared with its previous expectation of 2% to 3.5%, indicating that operating costs are expected to remain under better control than initially projected.
For the quarter ended in late June, Extra Space Storage reported core FFO of USD 2.15 per share, exceeding analysts' average estimate of USD 2.07 per share.
The revised outlook comes as the US self-storage sector continues to recover from a period of elevated new development. With fewer new facilities entering the market, existing operators have been able to strengthen pricing and improve operating performance, supporting earnings growth across the sector.
Source Reuters
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