10-Q

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 September 30, 2021

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: (801) 365-4600

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	EXR	New 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 November 1, 2021, was 133,891,804.

2

EXTRA SPACE STORAGE INC.

TABLE OF CONTENTS

 

STATEMENT ON FORWARD-LOOKING INFORMATION	4
PART I. FINANCIAL INFORMATION	5
ITEM 1. FINANCIAL STATEMENTS (unaudited)	5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	13
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	29
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	40
ITEM 4. CONTROLS AND PROCEDURES	41
PART II. OTHER INFORMATION	42
ITEM 1. LEGAL PROCEEDINGS	42
ITEM 1A. RISK FACTORS	42
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	42
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	42
ITEM 4. MINE SAFETY DISCLOSURES	42
ITEM 5. OTHER INFORMATION	42
ITEM 6. EXHIBITS	43
SIGNATURES	44

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;

•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.

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.

4

PART I.     FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Extra Space Storage Inc.

Condensed Consolidated Balance Sheets

(amounts in thousands, except share data)

 

	September 30, 2021		December 31, 2020
	(unaudited)
Assets:
Real estate assets, net	$	8,272,671	$	7,893,802
Real estate assets - operating lease right-of-use assets	229,184		252,172
Investments in unconsolidated real estate entities	373,765		397,444
Investments in debt securities and notes receivable	606,115		593,810
Cash and cash equivalents	65,565		109,124
Restricted cash	15,717		18,885
Other assets, net	145,342		130,611
Total assets	$	9,708,359	$	9,395,848
Liabilities, Noncontrolling Interests and Equity:
Notes payable, net	$	5,409,828	$	4,797,303
Revolving lines of credit	174,000		949,000
Operating lease liabilities	234,118		263,485
Cash distributions in unconsolidated real estate ventures	63,196		47,126
Accounts payable and accrued expenses	164,674		130,012
Other liabilities	279,668		272,798
Total liabilities	6,325,484		6,459,724
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, 133,819,163 and 131,357,961 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	1,338		1,314
Additional paid-in capital	3,283,848		3,000,458
Accumulated other comprehensive loss	(64,155)		(99,093)
Accumulated deficit	(229,269)		(354,900)
Total Extra Space Storage Inc. stockholders' equity	2,991,762		2,547,779
Noncontrolling interest represented by Preferred Operating Partnership units, net	170,248		172,052
Noncontrolling interests in Operating Partnership, net and other noncontrolling interests	220,865		216,293
Total noncontrolling interests and equity	3,382,875		2,936,124
Total liabilities, noncontrolling interests and equity	$	9,708,359	$	9,395,848

See accompanying notes to unaudited condensed consolidated financial statements.

5

Extra Space Storage Inc.

Condensed Consolidated Statements of Operations

(amounts in thousands, except share data)

(unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Property rental	$	351,355	$	290,423	$	976,448	$	856,438
Tenant reinsurance	44,258		39,294		126,211		107,985
Management fees and other income	16,879		13,307		47,320		38,299
Total revenues	412,492		343,024		1,149,979		1,002,722
Expenses:
Property operations	92,794		92,322		274,316		271,659
Tenant reinsurance	7,509		7,189		21,405		20,725
General and administrative	24,395		23,894		74,276		72,242
Depreciation and amortization	61,516		56,412		179,685		167,705
Total expenses	186,214		179,817		549,682		532,331
Gain on real estate transactions	—		—		63,883		—
Income from operations	226,278		163,207		664,180		470,391
Interest expense	(39,670)		(42,213)		(120,605)		(127,610)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	—		(1,233)		—		(3,675)
Interest income	11,729		3,145		36,871		6,488
Income before equity in earnings and dividend income from unconsolidated real estate ventures and income tax expense	198,337		122,906		580,446		345,594
Equity in earnings and dividend income from unconsolidated real estate entities	8,255		5,605		23,533		15,692
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		—
Income tax expense	(6,772)		(4,657)		(16,330)		(10,013)
Net income	199,820		123,854		593,900		351,273
Net income allocated to Preferred Operating Partnership noncontrolling interests	(3,529)		(3,248)		(10,647)		(9,498)
Net income allocated to Operating Partnership and other noncontrolling interests	(8,015)		(5,973)		(24,031)		(16,052)
Net income attributable to common stockholders	$	188,276	$	114,633	$	559,222	$	325,723
Earnings per common share
Basic	$	1.41	$	0.89	$	4.19	$	2.52
Diluted	$	1.40	$	0.88	$	4.19	$	2.50
Weighted average number of shares
Basic	133,809,750		128,862,341		133,197,903		129,044,954
Diluted	140,425,269		129,871,096		139,854,881		130,066,121
Cash dividends paid per common share	$	1.25	$	0.90	$	3.25	$	2.70

See accompanying notes to unaudited condensed consolidated financial statements.

6

Extra Space Storage Inc.

Condensed Consolidated Statements of Comprehensive Income

(amounts in thousands)

(unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	199,820	$	123,854	$	593,900	$	351,273
Other comprehensive income (loss):
Change in fair value of interest rate swaps	8,055		11,181		36,685		(83,791)
Total comprehensive income	207,875		135,035		630,585		267,482
Less: comprehensive income attributable to noncontrolling interests	11,924		9,854		36,425		21,501
Comprehensive income attributable to common stockholders	$	195,951	$	125,181	$	594,160	$	245,981

See accompanying notes to unaudited condensed consolidated financial statements.

7

Extra Space Storage Inc.

Condensed Consolidated Statement of Noncontrolling Interests and Equity

(amounts in thousands, except share data)

(unaudited)

	Noncontrolling Interests						Extra Space Storage Inc. Stockholders' Equity
	Preferred Operating Partnership		Operating Partnership		Other		Shares	Par Value		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Noncontrolling Interests and Equity
Balances at December 31, 2019	$	175,948	$	205,419	$	366	129,534,407	$	1,295	$	2,868,681	$	(28,966)	$	(301,049)	$	2,921,694
Issuance of common stock upon the exercise of options	—		—		—		77,400	1		943		—		—		944
Issuance of common stock in connection with share based compensation	—		—		—		73,602	1		2,979		—		—		2,980
Restricted stock grants cancelled	—		—		—		(1,767)	—		—		—		—		—
Buyback of common stock, net of offering costs	—		—		—		(653,597)	(7)		—		—		(52,197)		(52,204)
Redemption of Operating Partnership units for stock	—		(330)		—		8,862	—		330		—		—		—
Net income (loss)	3,112		4,877		(6)		—	—		—		—		108,179		116,162
Other comprehensive loss	(563)		(3,807)		—		—	—		—		(84,874)		—		(89,244)
Distributions to Operating Partnership units held by noncontrolling interests	(3,178)		(5,327)		—		—	—		—		—		—		(8,505)
Dividends paid on common stock at $0.90 per share	—		—		—		—	—		—		—		(117,197)		(117,197)
Balances at March 31, 2020	$	175,319	$	200,832	$	360	129,038,907	$	1,290	$	2,872,933	$	(113,840)	$	(362,264)	$	2,774,630
Issuance of common stock upon the exercise of options	—		—		—		13,610	—		726		—		—		726
Issuance of common stock in connection with share based compensation	—		—		—		60,032	1		4,883		—		—		4,884
Restricted stock grants cancelled	—		—		—		(889)	—		—		—		—		—
Buyback of common stock, net of offering costs	—		—		—		(172,600)	(1)		—		—		(15,614)		(15,615)
Redemption of Operating Partnership units for stock	—		(3,675)		—		100,000	1		3,674		—		—		—
Redemption of Preferred D Units in the Operating Partnership for Stock	(2,724)		—		—		30,495	—		2,724		—		—		—
Noncontrolling interest in consolidated joint venture	—		—		68		—	—		—		—		—		68
Net income (loss)	3,139		5,216		(9)		—	—		—		—		102,911		111,257
Other comprehensive loss	(41)		(271)		—		—	—		—		(5,416)		—		(5,728)
Distributions to Operating Partnership units held by noncontrolling interests	(3,151)		(5,235)		—		—	—		—		—		—		(8,386)
Dividends paid on common stock at $0.90 per share	—		—		—		—	—		—		—		(116,318)		(116,318)
Balances at June 30, 2020	$	172,542	$	196,867	$	419	129,069,555	$	1,291	$	2,884,940	$	(119,256)	$	(391,285)	$	2,745,518
Issuance of common stock upon the exercise of options	—		—		—		18,605	—		1,200		—		—		1,200
Issuance of common stock in connection with share based compensation	—		—		—		8,289	—		3,452		—		—		3,452
Restricted stock grants cancelled	—		—		—		(949)	—		—		—		—		—

8

Extra Space Storage Inc.

Condensed Consolidated Statement of Noncontrolling Interests and Equity

(amounts in thousands, except share data)

(unaudited)

	Noncontrolling Interests						Extra Space Storage Inc. Stockholders' Equity
	Preferred Operating Partnership		Operating Partnership		Other		Shares	Par Value		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Noncontrolling Interests and Equity
Buyback of common stock, net of offering costs	—		—		—		(600)	—		—		—		(54)		(54)
Repayment of receivable with Preferred operating units pledged as collateral on loan	—		8,226		—		—	—		—		—		—		8,226
Redemption of Preferred B Units in the Operating Partnership for cash	(1,000)		—		—		—	—		—		—		—		(1,000)
Net income (loss)	3,248		5,986		(13)		—	—		—		—		114,633		123,854
Other comprehensive income	83		550		—		—	—		—		10,548		—		11,181
Distributions to Operating Partnership units held by noncontrolling interests	(3,135)		(5,235)		—		—	—		—		—		—		(8,370)
Dividends paid on common stock at $0.90 per share	—		—		—		—	—		—		—		(116,185)		(116,185)
Balances at September 30, 2020	$	171,738	$	206,394	$	406	129,094,900	$	1,291	$	2,889,592	$	(108,708)	$	(392,891)	$	2,767,822

	Noncontrolling Interest							Extra Space Storage Inc. Stockholders' Equity
		Preferred Operating Partnership		Operating Partnership		Other		Shares	Par Value		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total 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 income		144		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

9

Extra Space Storage Inc.

Condensed Consolidated Statement of Noncontrolling Interests and Equity

(amounts in thousands, except share data)

(unaudited)

	Noncontrolling Interest							Extra Space Storage Inc. Stockholders' Equity
		Preferred Operating Partnership		Operating Partnership		Other		Shares	Par Value		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Noncontrolling Interests and Equity
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 income		3,438		7,190		3		—	—		—		—		167,948		178,579
Other comprehensive income		35		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
Issuance of common stock upon the exercise of options		—		—		—		5,600	—		318		—		—		318
Issuance of common stock in connection with share based compensation		—		—		—		10,913	—		4,012		—		—		4,012
Restricted stock grants cancelled		—		—		—		(4,582)	—		—		—		—		—
Offering costs associated with previous stock issuance		—		—		—		—	—		(151)		—		—		(151)
Redemption of Operating Partnership units for stock		—		(34)		—		858	—		34		—		—		—
Redemption of Preferred B Units in the Operating Partnership for stock		(2,834)		—		—		15,265	1		2,833		—		—		—
Purchase of remaining equity interest in existing consolidated joint venture		—		—		—		—	—		(12,050)		—		—		(12,050)
Noncontrolling interest in consolidated joint venture		—		—		(225)		—	—		—		—		—		(225)
Net income		3,529		8,015				—	—		—		—		188,276		199,820
Other comprehensive income		50		330		—		—	—		—		7,675		—		8,055
Distributions to Operating Partnership units held by noncontrolling interests		(3,399)		(7,186)		—		—	—		—		—		—		(10,585)
Dividends paid on common stock at $1.25 per share		—		—		—		—	—		—		—		(167,274)		(167,274)
Balances at September 30, 2021		$	170,248	$	220,591	$	274	133,819,163	$	1,338	$	3,283,848	$	(64,155)	$	(229,269)	$	3,382,875

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 Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income	$	593,900	$	351,273
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	179,685		167,705
Amortization of deferred financing costs	6,656		7,356
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	—		3,675
Non-cash lease expense	1,396		799
Compensation expense related to stock-based awards	12,647		11,316
Accrual of interest income added to principal of debt securities and notes receivable	(25,871)		—
Gain on real estate transactions	(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 earnings	4,640		5,097
Changes in operating assets and liabilities:
Other assets	(10,612)		(17,977)
Accounts payable and accrued expenses	33,907		41,780
Other liabilities	3,054		12,243
Net cash provided by operating activities	729,268		583,267
Cash flows from investing activities:
Acquisition of real estate assets	(589,382)		(151,244)
Development and redevelopment of real estate assets	(42,719)		(46,112)
Proceeds from sale of real estate assets and investments in real estate ventures	196,241		234
Investment in unconsolidated real estate entities	(20,834)		(13,937)
Return of investment in unconsolidated real estate ventures	31,534		371
Issuance and purchase of notes receivable	(143,270)		(149,750)
Principal payments received from notes receivable	36,874		—
Proceeds from sale of notes receivable	116,822		—
Purchase of equipment and fixtures	(3,058)		(3,407)
Net cash used in investing activities	(417,792)		(363,845)
Cash flows from financing activities:
Proceeds from the sale of common stock, net of offering costs	273,358		—
Proceeds from notes payable and revolving lines of credit	3,323,000		1,419,000
Principal payments on notes payable and revolving lines of credit	(4,526,549)		(1,192,750)
Proceeds from issuance of public bonds, net	1,040,349		—
Deferred financing costs	(10,698)		(3,161)
Net proceeds from exercise of stock options	4,572		2,870
Repurchase of common stock	—		(67,873)
Redemption of Operating Partnership units held by noncontrolling interests	(472)		(1,000)
Proceeds from principal payments on note receivable collateralized by OP Units	411		—
Proceeds from principal payments on note receivable collateralized by Preferred OP Units	—		8,226
Contributions from noncontrolling interests	—		68
Dividends paid on common stock	(433,591)		(349,700)
Distributions to noncontrolling interests	(28,584)		(25,261)
Net cash used in financing activities	(358,204)		(209,581)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(46,728)		9,841
Cash, cash equivalents, and restricted cash, beginning of the period	128,009		70,733
Cash, cash equivalents, and restricted cash, end of the period	$	81,281	$	80,574

11

Extra Space Storage Inc.

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

(unaudited)

	For the Nine Months Ended September 30,
	2021		2020
Supplemental schedule of cash flow information
Interest paid	$	116,937	$	119,977
Income taxes paid	21,365		5,181
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	$	(2,412)	$	(4,005)
Common stock and paid-in capital	2,412		4,005
Establishment of operating lease right of use assets and lease liabilities
Real estate assets - operating lease right-of-use assets	$	2,911	$	6,779
Operating lease liabilities	(2,911)		(6,779)
Acquisitions of real estate assets
Real estate assets, net	$	2,228	$	(13,833)
Investment in unconsolidated real estate ventures	(2,673)		—
Finance lease liability	445		13,833
Accrued construction costs and capital expenditures
Acquisition of real estate assets	$	756	$	676
Accounts payable and accrued expenses	(756)		(676)
Redemption of Preferred Operating Partnership units for common stock
Preferred Operating Partnership units	$	(2,834)	$	(2,724)
Additional paid-in capital	2,834		2,724
Establishment of finance lease assets and lease liabilities
Real estate assets, net	$	41,438	$	8,605
Other liabilities	(41,438)		(8,605)
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 September 30, 2021, the Company had direct and indirect equity interests in 1,227 stores. In addition, the Company managed 827 stores for third parties, bringing the total number of stores which it owns and/or manages to 2,054. 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 nine months ended September 30, 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021. The condensed consolidated balance sheet as of December 31, 2020 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, 2020, 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)." ASU 2020-04 and subsequent amendments contain practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur through December 31, 2022. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)." ASU 2020-06 simplifies the accounting for convertible instruments and contracts in an entity's own equity, and amended related earnings per share guidance. The guidance in ASU 2020-06 becomes effective for fiscal years beginning after December 15, 2021. Early adoption is permitted no earlier than the fiscal years beginning after December 15, 2020. The guidance may be adopted on a modified or fully retrospective basis. The Company is currently assessing the impact of the adoption of ASU 2020-06 on its consolidated financial statements.

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 September 30, 2021, 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 September 30, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall. 

	Fair Value Measurements at Reporting Date Using
Description	Quoted 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	$	—	$	—	$	—
Other liabilities - Cash flow hedge swap agreements	$	—	$	61,421	$	—

The Company did not have any significant assets or liabilities that are re-measured on a recurring basis using significant unobservable inputs as of September 30, 2021 or December 31, 2020.

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 September 30, 2021, the Company had 16 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.

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 September 30, 2021 and December 31, 2020 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:

	September 30, 2021				December 31, 2020
	Fair Value		Carrying Value		Fair Value		Carrying Value
Notes receivable from Preferred and Common Operating Partnership unit holders	$	100,815	$	101,900	$	102,333	$	102,311
Fixed rate notes receivable	$	107,176	$	104,251	$	114,145	$	104,000
Fixed rate notes payable	$	4,575,824	$	4,512,030	$	3,816,530	$	3,637,220

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.    EARNINGS PER COMMON SHARE

Basic earnings per common share is computed using the two-class method by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. All outstanding unvested restricted stock awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common stockholders; accordingly, they are considered participating securities that are included in the two-class method. Diluted earnings per common share measures the performance of the Company over the reporting period while giving effect to all potential common shares that were dilutive and outstanding during the period. The denominator includes the weighted average number of basic shares and the number of additional common shares that would have been outstanding if the potential common shares that were dilutive had been issued, and is calculated using either the two-class, treasury stock or as if-converted method, whichever is most dilutive. Potential common shares are securities (such as options, convertible debt, Series A Participating Redeemable Preferred Units (“Series A Units”), Series B Redeemable Preferred Units (“Series B Units”), Series D Redeemable Preferred Units (“Series D Units” and, together with the Series A Units and Series B Units, the “Preferred OP Units”) and common Operating Partnership units (“OP Units”)) that do not have a current right to participate in earnings of the Company but could do so in the future by virtue of their option, redemption or conversion right.

In computing the dilutive effect of convertible securities, net income is adjusted to add back any changes in earnings in the period associated with the convertible security. The numerator also is adjusted for the effects of any other non-discretionary changes in income or loss that would result from the assumed conversion of those potential common shares. In computing diluted earnings per common share, only potential common shares that are dilutive (i.e. those that reduce earnings per common share) are included. For the three and nine months ended September 30, 2021 and 2020, there were no anti-dilutive options.

For the purposes of computing the diluted impact of the potential exchange of the Preferred Operating Partnership units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the intent and ability to settle the redemption in shares, the Company divided the total value of the Preferred Operating Partnership units by the average share price for the period presented. The average share price for the three months ended September 30, 2021 and 2020 was $176.78 and $103.36, respectively.

The following table presents the number of Preferred Operating Partnership units, and the potential common shares, that were excluded from the computation of earnings per share as their effect would have been anti-dilutive.

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2021	2020	2021	2020
	Equivalent Shares (if converted)	Equivalent Shares (if converted)	Equivalent Shares (if converted)	Equivalent Shares (if converted)
Common OP Units	—	5,815,916	—	5,870,459
Series A Units (Variable Only)	—	875,480	—	875,480
Series B Units	225,972	400,668	271,132	416,796
Series D Units	663,888	1,135,469	784,139	1,187,083
	889,860	8,227,533	1,055,271	8,349,818

As of September 30, 2021, the Operating Partnership had no exchangeable senior notes issued or outstanding. The Operating Partnership had $575,000 of its 3.125% Exchangeable Senior Notes due 2035 (the “2015 Notes”) issued and outstanding as of September 30, 2020. In October and November 2020, a portion of the 2015 Notes were exchanged for cash and shares of the Company’s common stock and the remaining 2015 Notes were redeemed for cash. The 2015 Notes could potentially have had a dilutive impact on the Company’s earnings per share calculations. The 2015 Notes were exchangeable by holders into shares of the Company’s common stock under certain circumstances per the terms of the indenture governing the 2015 Notes. The Company had irrevocably agreed to pay only cash for the accreted principal amount of the 2015 Notes relative to its exchange obligations, but retained the right to satisfy the exchange obligation in excess of the accreted principal amount in cash and/or common stock.

Although the Company had retained the right to satisfy the exchange obligation in excess of the accreted principal amount of the 2015 Notes in cash and/or common stock, Accounting Standards Codification (“ASC”) 260, “Earnings per Share,” requires an assumption that shares would be used to pay the exchange obligation in excess of the accreted principal amount, and requires

16

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

that those shares be included in the Company’s calculation of weighted average common shares outstanding for the diluted earnings per share computation. For the three and nine months ended September 30, 2021 and 2020, zero and 761,975 shares, respectively, related to the 2015 Notes were included in the computation for diluted earnings per share.

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series A Units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the positive intent and ability to settle at least $101,700 of the instrument in cash (or net settle a portion of the Series A Units against the related outstanding note receivable), only the amount of the instrument in excess of $101,700 is considered in the calculation of shares contingently issuable for the purposes of computing diluted earnings per share as allowed by ASC 260-10-45-46. Accordingly, the number of shares included in the computation for diluted earnings per share related to the Series A Units is equal to the number of Series A Units outstanding, with no additional shares included related to the fixed $101,700 amount.

The computation of earnings per common share is as follows for the periods presented:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Net income attributable to common stockholders	$	188,276	$	114,633	$	559,222	$	325,723
Earnings and dividends allocated to participating securities	(260)		(177)		(800)		(513)
Earnings for basic computations	188,016		114,456		558,422		325,210
Earnings and dividends allocated to participating securities	—		177		—		513
Income allocated to noncontrolling interest - Preferred Operating Partnership Units and Operating Partnership Units	9,810		—		29,395		—
Fixed component of income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units)	(572)		—		(1,716)		—
Net income for diluted computations	$	197,254	$	114,633	$	586,101	$	325,723
Weighted average common shares outstanding:
Average number of common shares outstanding - basic	133,809,750		128,862,341		133,197,903		129,044,954
OP Units	5,733,936		—		5,767,132		—
Series A Units	875,480		—		875,480		—
Unvested restricted stock awards included for treasury stock method	—		214,909		—		212,311
Shares related to exchangeable senior notes and dilutive stock options	6,103		793,846		14,366		808,856
Average number of common shares outstanding - diluted	140,425,269		129,871,096		139,854,881		130,066,121
Earnings per common share
Basic	$	1.41	$	0.89	$	4.19	$	2.52
Diluted	$	1.40	$	0.88	$	4.19	$	2.50

17

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

5.    STORE ACQUISITIONS AND DISPOSITIONS

Store Acquisitions

The following table shows the Company’s acquisitions of stores for the three and nine months ended September 30, 2021 and 2020. The table excludes purchases of raw land and improvements made to existing assets. All acquisitions are considered asset acquisitions under ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business."

			Consideration Paid												Total
Quarter	Number of Stores		Total		Cash Paid		Loan Assumed		Finance Lease Liability		Investments in Real Estate Ventures		Net Liabilities/ (Assets) Assumed		Real estate assets
Q3 2021	12	(1)	$	186,689	$	185,497	$	—	$	445	$	—	$	747	$	186,689
Q2 2021	15	(2)	193,783		190,729		—		—		2,673		381		193,783
Q1 2021	9		151,884		148,940		—		—		—		2,944		151,884
	36		$	532,356	$	525,166	$	—	$	445	$	2,673	$	4,072	$	532,356
Q3 2020	8	(3)	$	101,731	$	86,996	$	—	$	13,833	$	—	$	902	$	101,731
Q2 2020	—		—		—		—		—		—		—		—
Q1 2020	2		19,399		19,354		—		—		—		45		19,399
	10		$	121,130	$	106,350	$	—	$	13,833	$	—	$	947	$	121,130

(1) Store acquisitions during the three months ended September 30, 2021 include the acquisition of one store that was subject to a finance land lease. The right-of-use asset associated with this lease is included in real estate assets above.

(2) Store acquisitions during the three months ended June 30, 2021 include the acquisition of two stores previously held in joint ventures where the Company held a noncontrolling interest. The Company purchased its partners' equity interests in these joint ventures, and the properties owned by the joint ventures became wholly owned by the Company. No gain or loss was recognized as a result of these acquisitions.

(3) Store acquisitions during the three months ended September 30, 2020 include the acquisition of two stores that were subject to finance land leases. The right-of-use assets associated with these leases are included in real estate assets above.

Store Dispositions

On March 1, 2021, the Company sold 16 stores that had been classified as held for sale to a newly established unconsolidated joint venture. The Company received cash of $132,759 and maintained a 55% interest in the new joint venture valued at $33,878. The Company recognized a gain of $64,804 related to the sale of these properties.

6.    INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures represent the Company's interest in preferred stock of SmartStop Self Storage REIT, Inc. ("SmartStop") and the Company's noncontrolling interest in real estate joint ventures that own stores. The Company accounts for its investment in SmartStop preferred stock, which does not have a readily determinable fair value, at the transaction price less impairment, if any. The Company accounts for its investments in joint ventures using the equity method of accounting. The Company initially records these investments at cost and subsequently adjusts for cash contributions, distributions and net equity in income or loss, which is allocated in accordance with the provisions of the applicable partnership or joint venture agreement.

In these joint ventures, the Company and the joint venture partner generally receive a preferred return on their invested capital. To the extent that cash or profits in excess of these preferred returns are generated through operations or capital transactions, the Company would receive a higher percentage of the excess cash or profits than its equity interest.

18

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

The Company separately reports investments with net equity less than zero in cash distributions in unconsolidated real estate ventures in the condensed consolidated balance sheets. The net equity of certain joint ventures is less than zero because distributions have exceeded the Company's investment in and share of income from these joint ventures. This is generally the result of financing distributions, capital events or operating distributions that are usually greater than net income, as net income includes non-cash charges for depreciation and amortization while distributions do not.

Net investments in unconsolidated real estate ventures and cash distributions in unconsolidated real estate ventures consist of the following:

	Number of Stores	Equity Ownership %	Excess Profit % (1)	September 30,		December 31,
				2021		2020
PR EXR Self Storage, LLC	5	25%	40%	$	59,633	$	60,092
WICNN JV LLC (2)	—	10%	35%	—		36,032
ESS-CA TIVS JV LP (3)	16	55%	60%	33,543		—
GFN JV, LLC (2)	—	10%	30%	—		18,397
ESS-NYFL JV LP	11	16%	24%	11,959		12,211
PRISA Self Storage LLC	85	4%	4%	8,694		8,815
Alan Jathoo JV LLC	9	10%	10%	7,651		7,780
Storage Portfolio IV JV LLC	15	10%	30%	20,528		—
Storage Portfolio III JV LLC	5	10%	30%	5,613		5,726
ESS Bristol Investments LLC	8	10%	30%	2,715		2,810
Extra Space Northern Properties Six LLC	10	10%	35%	(2,855)		(2,541)
Storage Portfolio II JV LLC	36	10%	30%	(5,954)		(5,441)
VRS Self Storage, LLC	16	45%	54%	(14,570)		17,186
Storage Portfolio I LLC	24	34%	49%	(39,817)		(39,144)
Other minority owned stores	17	10-50%	19-50%	23,429		28,395
SmartStop Self Storage REIT, Inc. Preferred Stock (4)	n/a	n/a	n/a	200,000		200,000
Net Investments in and Cash distributions in unconsolidated real estate entities	257			$	310,569	$	350,318

(1) Includes pro-rata equity ownership share and maximum potential promoted interest.

(2) In June 2021, the WICNN JV LLC and GFN JV, LLC joint ventures sold all 17 of the stores owned by the joint ventures to a third party. Subsequent to the sales, these joint ventures were dissolved. As a result of these transactions, the Company recorded a gain of $5,739, which is included in Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest in the Company's condensed consolidated statements of operations.

(3) The Company sold 16 operating stores to this newly formed joint venture in March 2021. The Company received cash of $132,759 and an interest in the new joint venture valued at $33,878. This joint venture is unconsolidated and the Company accounts for its investment under the equity method of accounting as the Company does not have voting control but does exercise significant influence over the joint venture.

(4) The Company invested in shares of convertible preferred stock of SmartStop. The dividend rate for the preferred shares is 6.25% per annum, subject to increase after five years. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing of SmartStop. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company's condensed consolidated statements of operations.

During the nine months ended September 30, 2021, the Company contributed a total of $20,834 of cash to its joint ventures, including its pro-rata portion of the purchase price of 15 operating stores and other capital contributions related to cash flow requirements for lease up stores.

19

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

In June 2021, the Company sold its interest in two unconsolidated joint ventures to its joint venture partner. The Company received proceeds of $1,888 in cash, and recorded a gain of $525 which is included in Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest in the Company's condensed consolidated statements of operations. The Company also purchased its joint venture partners' interests in two unconsolidated joint ventures.

7.     INVESTMENTS IN DEBT SECURITIES AND NOTES RECEIVABLE

Investments in debt securities and notes receivable consists of the Company's investment in mandatorily redeemable preferred stock of Jernigan Capital, Inc. ("JCAP") in connection with JCAP's acquisition by affiliates of NexPoint Advisors, L.P. ("NexPoint Investment") and receivables due to the Company under its bridge loan program. Information about these balances is as follows:

	September 30, 2021		December 31, 2020
Debt securities - NexPoint Series A Preferred Stock	$	200,000	$	200,000
Debt securities - NexPoint Series B Preferred Stock	100,000		100,000
Notes Receivable-Bridge Loans	174,215		187,368
Notes Receivable-Senior Mezzanine Loan, net	101,955		101,553
Dividends Receivable	29,945		4,889
	$	606,115	$	593,810

In November 2020, the Company invested $300,000 in the preferred stock of JCAP in connection with the acquisition of JCAP by affiliates of NexPoint Advisors, L.P. This investment consists of 200,000 Series A Preferred Shares valued at a total of $200,000, and 100,000 Series B Preferred Shares valued at a total of $100,000. The JCAP preferred stock is mandatorily redeemable after five years, with two one-year extension options. NexPoint may redeem the Preferred Shares at any time, subject to certain prepayment penalties. The Company accounts for the JCAP preferred stock as a held to maturity debt security at amortized cost. The Series A Preferred Shares and the Series B Preferred Shares have initial dividend rates of 10.0% and 12.0%, respectively. If the investment is not retired after five years, the preferred dividends increase annually.

In July 2020, the Company purchased a senior mezzanine note receivable with a principal amount of $103,000. This note receivable bears interest at 5.5%, matures in December 2023 and is collateralized through an equity interest in which it or its subsidiaries wholly own 62 storage facilities. The Company paid cash of $101,142 for the loan receivable and accounts for the discount at amortized cost. The discount is being amortized over the term of the loan receivable.

The Company provides bridge loan financing to third-party self-storage operators. These notes receivable consist of primary mortgage and mezzanine loans receivable, collateralized by self-storage properties. These notes receivable typically have a term of three years with two one-year extensions, and have variable interest rates. The Company intends to sell the majority of the mortgage receivables and keep the mezzanine receivables to maturity. During the nine months ended September 30, 2021 the Company sold a total principal amount of $117,336 of its mortgage bridge loans receivable to third parties for a total of $116,822 in cash and closed on $143,270 in new mortgage and mezzanine bridge loans.

20

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

8.     NOTES PAYABLE, NET

In May 2021, the Operating Partnership executed its initial public bond issuance by selling $450.0 million principal amount of 2.550% Senior Notes due 2031 (the "Notes Due 2031"). Interest on the Notes Due 2031 is paid semi-annually in arrears on June 1 and December 1 of each year. The Notes Due 2031 will mature on June 1, 2031, and the Operating Partnership may redeem the Notes Due 2031 at its option and sole discretion at any time prior to March 31, 2031 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.

In September 2021, the Operating Partnership executed a public bond issuance by selling $600.0 million principal amount of 2.350% Senior Notes due 2032 (the "Notes Due 2032"). Interest on the Notes Due 2032 is paid semi-annually in arrears on March 15 and September 15 of each year. The Notes Due 2032 will mature on March 15, 2032, and the Operating Partnership may redeem the Notes Due 2032 at its option and sole discretion at any time prior to March 15, 2032 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.

The Notes Due 2031 and the Notes Due 2032 are unsecured, and are fully and unconditionally guaranteed by the Company, ESS Holdings Business Trust I, and ESS Holdings Business Trust II (the "Guarantors," and together with the Operating Partnership, the "Obligated Group"), on a joint and several basis. The guarantee of the Notes Due 2031 and the Notes Due 2032 will be a senior unsecured obligation of each Guarantor. The Guarantors have no material operations separate from the operation of the Operating Partnership and no material assets, other than their respective investments directly or indirectly in the Operating Partnership, and therefore the assets, liabilities, and results of operations of the Obligated Group are not materially different than those reported in the Company's financial statements.

9.    DERIVATIVES

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and by using derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposure that arises from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (“OCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. A portion of these changes is excluded from accumulated other comprehensive income as it is allocated to noncontrolling interests. During the three and nine months ended September 30, 2021 and 2020, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. In the coming 12 months, the Company estimates that $35,685 will be reclassified and increase interest expense.

The Company held 20 derivative financial instruments which had a total combined notional amount of $1,986,266 as of September 30, 2021.

21

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Fair Values of Derivative Instruments

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the condensed consolidated balance sheets:

	Asset / Liability Derivatives
Derivatives designated as hedging instruments:	September 30, 2021		December 31, 2020
Other assets	$	—	$	—
Other liabilities	$	61,421	$	98,325

Effect of Derivative Instruments

The table below presents the effect of the Company’s derivative financial instruments on the condensed consolidated statements of operations for the periods presented. No tax effect has been presented as the derivative instruments are held by the Company:

	Gain (loss) recognized in OCI For the Three Months Ended September 30,				Location of amounts reclassified from OCI into income	Gain (loss) reclassified from OCI For the Three Months Ended September 30,
Type	2021		2020			2021		2020
Swap Agreements	$	(736)	$	1,525	Interest expense	$	(8,794)	$	(9,666)

	Gain (loss) recognized in OCI For the Nine Months Ended September 30,				Location of amounts reclassified from OCI into income	Gain (loss) reclassified from OCI For the Nine Months Ended September 30,
Type	2021		2020			2021		2020
Swap Agreements	$	10,316	$	(101,535)	Interest expense	$	(26,386)	$	(17,868)

Credit-risk-related Contingent Features

The Company has agreements with some of its derivative counterparties that contain provisions pursuant to which the Company could be declared in default of its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender.

The Company also has an agreement with some of its derivative counterparties that incorporates the loan covenant provisions of the Company’s indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

As of September 30, 2021, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $63,272. As of September 30, 2021, the Company had not posted any collateral related to these agreements. If the Company had breached any of these provisions as of September 30, 2021, it could have been required to cash settle its obligations under the agreements at their termination value of $63,272, including accrued interest.

22

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

10.    EXCHANGEABLE SENIOR NOTES

In September 2015, the Operating Partnership issued $575,000 of its 3.125% Exchangeable Senior Notes due 2035. Costs incurred to issue the 2015 Notes were approximately $11,992, consisting primarily of a 2.0% underwriting fee. These costs were amortized as an adjustment to interest expense over five years, which represented the estimated term based on the first available redemption date, and are included in exchangeable senior notes, net, in the condensed consolidated balance sheets. Prior to the full redemption of the 2015 Notes in November 2020 as described below, the 2015 Notes were general unsecured senior obligations of the Operating Partnership and were fully guaranteed by the Company. Interest was payable on April 1 and October 1 of each year beginning April 1, 2016, until the maturity date of October 1, 2035. The 2015 Notes bore interest at 3.125% per annum and contained an exchange settlement feature, which provided that the 2015 Notes could have been, under certain circumstances, exchangeable for cash (for the principal amount of the 2015 Notes) and, with respect to any excess exchange value, for cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s option.

GAAP requires entities with convertible debt instruments that may be settled entirely or partially in cash upon conversion to separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s economic interest cost. The Company therefore accounted for the liability and equity components of the 2015 Notes separately. The equity components are included in paid-in capital in stockholders’ equity in the condensed consolidated balance sheets, and the value of the equity components are treated as original issue discount for purposes of accounting for the debt components. The discounts were amortized as interest expense over the remaining period of the debt through its first redemption date of October 1, 2020. The effective interest rate on the liability components of the 2015 Notes was 4.0%, which approximated the market rate of interest of similar debt without exchange features (i.e. nonconvertible debt) at the time of issuance.

The amount of interest cost recognized relating to the contractual interest rate and the amortization of the discount on the liability component of the 2015 Notes were as follows for the periods indicated:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Contractual interest	$	—	$	4,492	$	—	$	8,984
Amortization of discount	—		1,233		—		3,675
Total interest expense recognized	$	—	$	5,725	$	—	$	12,659

On October 1, 2020, the holders of $71,513 principal amount of the 2015 Notes exchanged their notes. The Company paid cash of $71,513 for the principal amount and issued 124,819 shares of common stock with a value of $13,495 for the exchange value in excess of the principal amount. On November 2, 2020, the holders of an additional $503,432 principal amount of the 2015 Notes exchanged their notes and the Company redeemed the remaining $55 of outstanding principal amount of the 2015 Notes. The Company paid cash of $503,487 for the principal amount and issued 1,198,962 shares of common stock with a value of $138,900 for the exchange value in excess of the principal amount.

11.    STOCKHOLDERS’ EQUITY

On August 9, 2021, the Company filed its $800,000 "at the market" equity program with the Securities and Exchange Commission using a shelf registration statement on Form S-3, and entered into separate equity distribution agreements with ten sales agents. No shares have been sold under the current "at the market" equity program. From January 1, 2021, through August 8, 2021, the Company sold 585,685 shares of common stock under its prior "at the market" equity program resulting in net proceeds of $66,786.

On March 23, 2021, the Company sold 1,600,000 shares of its common stock in a registered offering structured as a bought deal at a price of $129.13 per share resulting in net proceeds of $206,573.

On October 15, 2020, the Company's board of directors authorized a new share repurchase program allowing for the repurchase of shares with an aggregate value up to $400,000. No shares were repurchased during the nine months ended September 30, 2021.

23

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

12.    NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS

Classification of Noncontrolling Interests

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the Operating Partnership’s preferred units and classifies the noncontrolling interest represented by such preferred units as stockholders’ equity in the accompanying condensed consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the condensed consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.

At September 30, 2021 and December 31, 2020, the noncontrolling interests represented by the Preferred OP Units qualified for classification as permanent equity on the Company's condensed consolidated balance sheets. The partnership agreement of the Operating Partnership (as amended, the "Partnership Agreement") provides for the designation and issuance of the OP Units. As of September 30, 2021 and December 31, 2020, noncontrolling interests in Preferred OP Units were presented net of notes receivable from Preferred OP Unit holders of $100,000 as more fully described below. The balances for each of the specific Preferred OP Units as presented in the Statement of Noncontrolling Interests and Equity as of the periods indicated is as follows:

	September 30, 2021		December 31, 2020
Series A Units	$	14,818	$	13,788
Series B Units	38,068		40,902
Series D Units	117,362		117,362
	$	170,248	$	172,052

Series A Participating Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series A Units. The Series A Units have priority over all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series A Units were issued in June 2007. Series A Units in the amount of $101,700 bear a fixed priority return of 2.3% and originally had a fixed liquidation value of $115,000. The remaining balance participates in distributions with, and has a liquidation value equal to that of the OP Units. The Series A Units are redeemable at the option of the holder, which redemption obligation may be satisfied, at the Company’s option, in cash or shares of its common stock. As a result of the redemption of 114,500 Series A Units in October 2014, the remaining fixed liquidation value was reduced to $101,700, which represents 875,480 Series A Units.

On June 25, 2007, the Operating Partnership loaned the holder of the Series A Units $100,000. The loan bears interest at 2.1%. The loan is secured by the borrower’s Series A Units. No future redemption of Series A Units can be made unless the loan secured by the Series A Units is also repaid. The Series A Units are shown on the balance sheet net of the $100,000 loan because the borrower under the loan receivable is also the holder of the Series A Units.

24

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Series B Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series B Units. The Series B Units rank junior to the Series A Units, on parity with the Series C Units and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series B Units were issued in 2013 and 2014. The Series B Units have a liquidation value of $25.00 per unit for a fixed liquidation value of $38,068 which represents 1,522,727 Series B Units. Holders of the Series B Units receive distributions at an annual rate of 6.0%. These distributions are cumulative. The Series B Units became redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock.

On August 31, 2021, 113,360 Series B Units were redeemed for 15,265 shares of common stock.

Series C Convertible Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series C Units. The Series C Units ranked junior to the Series A Units, on parity with the Series B Units and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series C Units were issued in 2013 and 2014 and had a liquidation value of $42.10 per unit. The Series C Units became redeemable at the option of the holder one year from the date of issuance, which redemption obligation could be satisfied at the Company’s option in cash or shares of its common stock. The Series C Units were convertible into OP Units at the option of the holder at a rate of 0.9145 OP Units per Series C Unit converted. This conversion option expired upon the fifth anniversary of the date of issuance.

In December 2014, the Operating Partnership loaned certain holders of the Series C Units $20,230. The loan receivable, which was collateralized by the Series C Units, bears interest at 5.0% per annum and matures on December 15, 2024. The Series C Units were shown on the balance sheet net of the loan balance because the borrower under the loan receivable was also the holder of the Series C Units.

On December 1, 2018, certain holders of the Series C Units converted their Series C Units into OP Units, with a total of 407,996 Series C Units being converted into a total of 373,113 OP Units. On April 25, 2019, the remaining 296,020 Series C Units were converted into 270,709 OP Units. The remaining outstanding balance of the loan receivable of $1,900 is shown as a reduction of the noncontrolling interests related to the OP Units as of September 30, 2021 and December 31, 2020. See footnote 13 for further discussion of noncontrolling interests.

Series D Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series D Units. The Series D Units rank junior to the Series A Units, on parity with the Series B Units and Series C Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series D Units have been issued at various times from 2014 to 2019. The Series D Units have a liquidation value of $25.00 per unit, for a fixed liquidation value of $117,362, which represents 4,694,485 Series D Units. Holders of the Series D Units receive distributions at an annual rate between 3.0% and 5.0%. These distributions are cumulative. The Series D Units become redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock. In addition, certain of the Series D Units are exchangeable for OP Units at the option of the holder until the tenth anniversary of the date of issuance, with the number of OP Units to be issued equal to $25.00 per Series D Unit, divided by the value of a share of common stock as of the exchange date.

25

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

13.    NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP AND OTHER NONCONTROLLING INTERESTS

Noncontrolling Interest in Operating Partnership

The Company’s interest in its stores is held through the Operating Partnership. Between its general partner and limited partner interests, the Company held a 94.7% ownership interest in the Operating Partnership as of September 30, 2021. The remaining ownership interests in the Operating Partnership (including Preferred OP Units) of 5.3% are held by certain former owners of assets acquired by the Operating Partnership. As of September 30, 2021 and December 31, 2020, the noncontrolling interests in the Operating Partnership are shown on the balance sheet net of notes receivable of $1,900 and $2,311, respectively, because the borrowers under the loan receivable are also holders of OP Units (Note 12). This loan receivable bears interest at 5.0% per annum and matures on December 15, 2024.

The noncontrolling interest in the Operating Partnership represents OP Units that are not owned by the Company. OP Units are redeemable at the option of the holder, which redemption may be satisfied at the Company's option in cash, based upon the fair market value of an equivalent number of shares of the Company’s common stock (based on the ten-day average trading price) at the time of the redemption, or shares of the Company's common stock on a one-for-one basis, subject to anti-dilution adjustments provided in the Partnership Agreement. As of September 30, 2021, the ten-day average closing price of the Company's common stock was $174.98 and there were 5,733,498 OP Units outstanding. Assuming that all of the OP Unit holders exercised their right to redeem all of their OP Units on September 30, 2021 and the Company elected to pay the OP Unit holders cash, the Company would have paid $1,003,247 in cash consideration to redeem the units.

OP Unit activity is summarized as follows for the periods presented:

	For the Nine Months Ended September 30,
	2021		2020
OP Units redeemed for common stock	64,287		108,862
OP Units redeemed for cash	3,000		—
Cash paid for OP Units redeemed	$	472	$	—

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations, and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the OP Units and classifies the noncontrolling interest represented by the OP Units as stockholders’ equity in the accompanying condensed consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the condensed consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.

Other Noncontrolling Interests

Other noncontrolling interests represent the ownership interests of third parties in two consolidated joint ventures as of September 30, 2021. One joint venture owns four operating stores and the other owns one property that is under development. The voting interests of the third-party owners are between 10.0% and 20.0%.

On August 25, 2021, the Company purchased for $12,215 in cash the remaining third party ownership interest in a previously consolidated joint venture that owned two operating stores.

26

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

14.    SEGMENT INFORMATION

The Company’s segment disclosures present the measure used by the chief operating decision makers ("CODMs") for purposes of assessing each segment’s performance. The Company’s CODMs are comprised of several members of its executive management team who use net operating income ("NOI") to assess the performance of the business for the Company’s reportable operating segments. NOI for the Company's self-storage operations represents total property revenue less direct property operating expenses. NOI for the Company's tenant reinsurance segment represents tenant reinsurance revenues less tenant reinsurance expense.

The Company has two reportable segments: (1) self-storage operations and (2) tenant reinsurance. The self-storage operations activities include rental operations of wholly-owned stores. The Company's consolidated revenues equal total segment revenues plus property management fees and other income. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the stores operated by the Company. Excluded from segment revenues and net operating income is property management fees and other income.

For all periods presented, substantially all of the Company's real estate assets, intangible assets, other assets, and accrued and other liabilities are associated with the self-storage operations segment. Financial information for the Company’s business segments is set forth below:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Self-Storage Operations	$	351,355	$	290,423	$	976,448	$	856,438
Tenant Reinsurance	44,258		39,294		126,211		107,985
Total segment revenues	$	395,613	$	329,717	$	1,102,659	$	964,423
Operating expenses:
Self-Storage Operations	$	92,794	$	92,322	$	274,316	$	271,659
Tenant Reinsurance	7,509		7,189		21,405		20,725
Total segment operating expenses	$	100,303	$	99,511	$	295,721	$	292,384
Net operating income:
Self-Storage Operations	$	258,561	$	198,101	$	702,132	$	584,779
Tenant Reinsurance	36,749		32,105		104,806		87,260
Total segment net operating income:	$	295,310	$	230,206	$	806,938	$	672,039
Other components of net income:
Management fees and other income	$	16,879	$	13,307	$	47,320	$	38,299
General and administrative expense	(24,395)		(23,894)		(74,276)		(72,242)
Depreciation and amortization expense	(61,516)		(56,412)		(179,685)		(167,705)
Gain on real estate transactions	—		—		63,883		—
Interest expense	(39,670)		(42,213)		(120,605)		(127,610)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	—		(1,233)		—		(3,675)
Interest income	11,729		3,145		36,871		6,488
Equity in earnings and dividend income from unconsolidated real estate entities	8,255		5,605		23,533		15,692
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		—
Income tax expense	(6,772)		(4,657)		(16,330)		(10,013)
Net income	$	199,820	$	123,854	$	593,900	$	351,273

27

EXTRA SPACE STORAGE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Amounts in thousands, except store and share data, unless otherwise stated

15.    COMMITMENTS AND CONTINGENCIES

As of September 30, 2021, the Company was involved in various legal proceedings and was subject to various claims and complaints arising in the ordinary course of business. Because litigation is inherently unpredictable, the outcome of these matters cannot presently be determined with any degree of certainty. In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. The Company could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period, notwithstanding the fact that the Company is currently vigorously defending any legal proceedings against it.

As of September 30, 2021, the Company was under agreement to acquire 15 stores at a total purchase price of $221,850. Fourteen stores are scheduled to close in 2021 and one store is scheduled to close in 2022. Additionally, the Company is under agreement to acquire 11 stores with joint venture partners, for a total investment of $23,775. Ten stores are scheduled to close in 2021 and one store scheduled to close in 2022.

Although there can be no assurance, the Company is not aware of any material environmental liability, for which it believes it will be ultimately responsible, that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s stores, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to its stores could result in future material environmental liabilities.

28

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Amounts in thousands, except store and share data

CAUTIONARY LANGUAGE

The following discussion and analysis should be read in conjunction with our unaudited “Condensed Consolidated Financial Statements” and the “Notes to Condensed Consolidated Financial Statements (unaudited)” appearing elsewhere in this report and the “Consolidated Financial Statements,” “Notes to Consolidated Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Form 10-K for the year ended December 31, 2020. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Form 10-Q entitled “Statement on Forward-Looking Information.”

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements contained elsewhere in this report, which have been prepared in accordance with GAAP. Our notes to the unaudited condensed consolidated financial statements contained elsewhere in this report and the audited financial statements contained in our Form 10-K for the year ended December 31, 2020 describe the significant accounting policies essential to our unaudited condensed consolidated financial statements. Preparation of our financial statements requires estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions that we have used are appropriate and correct based on information available at the time they were made. These estimates, judgments and assumptions can affect our reported assets and liabilities as of the date of the financial statements, as well as the reported revenues and expenses during the period presented. If there are material differences between these estimates, judgments and assumptions and actual facts, our financial statements may be affected.

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require our judgment in its application. There are areas in which our judgment in selecting among available alternatives would not produce a materially different result, but there are some areas in which our judgment in selecting among available alternatives would produce a materially different result. See the notes to the unaudited condensed consolidated financial statements that contain additional information regarding our accounting policies and other disclosures.

OVERVIEW

We are a fully integrated, self-administered and self-managed real estate investment trust (“REIT”), formed to own, operate, manage, acquire, develop and redevelop self-storage properties (“stores”). We derive substantially all of our revenues from our two segments: storage operations and tenant reinsurance. Primary sources of revenue for our storage operations segment include rents received from tenants under leases at each of our wholly-owned stores. Our operating results depend materially on our ability to lease available self-storage units, to actively manage unit rental rates, and on the ability of our tenants to make required rental payments. Consequently, management spends a significant portion of their time maximizing cash flows from our diverse portfolio of stores. Revenue from our tenant reinsurance segment consists of insurance revenues from the reinsurance of risks relating to the loss of goods stored by tenants in our stores.

Our stores are generally situated in highly visible locations clustered around large population centers. These areas enjoy above average population growth and income levels. The clustering of our assets around these population centers enables us to reduce our operating costs through economies of scale. To maximize the performance of our stores, we employ industry-leading revenue management systems. Developed internally, these systems enable us to analyze, set and adjust rental rates in real time across our portfolio in order to respond to changing market conditions. We believe our systems and processes allow us to more pro-actively manage revenues.

We operate in competitive markets, often where consumers have multiple stores from which to choose. Competition has impacted, and will continue to impact, our store results. We experience seasonal fluctuations in occupancy levels, with occupancy levels generally higher in the summer months due to increased moving activity. We believe that we are able to

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respond quickly and effectively to changes in local, regional and national economic conditions by adjusting rental rates through the combination of our revenue management team and our proprietary pricing systems. We consider a store to be in the lease-up stage after it has been issued a certificate of occupancy, but before it has achieved stabilization. We consider a store to be stabilized once it has achieved either an 80% occupancy rate for a full year measured as of January 1 of the current year, or has been open for three years prior to January 1 of the current year.

COVID-19 UPDATE

The United States and other countries around the world continue to be impacted by the COVID-19 pandemic, which has created considerable instability and disruption in the U.S. and world economies. Governmental authorities in impacted regions have taken various actions in an effort to slow the spread of COVID-19, including issuance of varying forms of states of emergency orders. In response to these evolving orders and the COVID-19 pandemic, we have implemented a wide range of practices to protect and support our employees and customers. Such measures include instituting “work from home” measures at our corporate offices and call center, instituting a contactless rental process that allows our on-site employees to continue to rent storage units without physical interaction, and providing personal protective equipment to on-site employees providing essential functions so that hygiene and “social distancing” standards can be effectively managed and applied. Although we have started to see certain governmental restrictions lifted and certain work practices return to normal, our customers may continue to be impacted by the COVID-19 pandemic and related governmental responses, including through unemployment, which may impact their ability to pay rent or renew their leases. With the lifting of many governmental restrictions, we have seen record occupancy in our stores. However, given the uncertainty resulting from the pandemic, our business may be impacted by the COVID-19 pandemic including additional governmental restrictions.

PROPERTIES

As of September 30, 2021, we owned or had ownership interests in 1,227 operating stores. Of these stores, 966 are wholly-owned, four are in consolidated joint ventures, and 257 are in unconsolidated joint ventures. In addition, we managed an additional 827 stores for third parties bringing the total number of stores which we own and/or manage to 2,054. These stores are located in 41 states and Washington, D.C. The majority of our stores are clustered around large population centers. The clustering of assets around these population centers enables us to reduce our operating costs through economies of scale. Our acquisitions have given us an increased scale in many core markets as well as a foothold in many markets where we had no previous presence.

As of September 30, 2021, approximately 1,255,000 tenants were leasing storage units at the operating stores that we own and/or manage, primarily on a month-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit. Existing tenants generally receive rate increases at least annually, for which no direct correlation has been drawn to our vacancy trends. Although leases are short-term in duration, the typical tenant tends to remain at our stores for an extended period of time. For stores that were stabilized as of September 30, 2021, the average length of stay was approximately 15.3 months.

The average annual rent per square foot for our existing customers at stabilized stores, net of discounts and bad debt, was $18.44 for the three months ended September 30, 2021, compared to $15.74 for the three months ended September 30, 2020. Average annual rent per square foot for new leases was $20.93 for the three months ended September 30, 2021, compared to $14.98 for the three months ended September 30, 2020. The average discounts, as a percentage of rental revenues, at all stabilized properties during these periods were 3.5% and 3.6%, respectively.

Our store portfolio is made up of different types of construction and building configurations. Most often sites are what we consider “hybrid” stores, a mix of drive-up and multi-floor buildings. We have a number of multi-floor buildings with elevator access only, and a number of stores featuring ground-floor access only.

The following table presents additional information regarding net rentable square feet and the number of stores by state.

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	September 30, 2021
	REIT Owned		Joint Venture Owned		Managed		Total
Location	Property Count(1)	Net Rentable Square Feet	Property Count	Net Rentable Square Feet	Property Count	Net Rentable Square Feet	Property Count	Net Rentable Square Feet
Alabama	10	687,136	1	75,711	7	594,615	18	1,357,462
Arizona	23	1,623,510	8	555,218	20	1,696,436	51	3,875,164
California	163	12,614,908	47	3,437,282	75	7,276,333	285	23,328,523
Colorado	17	1,152,016	2	186,269	28	2,089,630	47	3,427,915
Connecticut	7	531,281	6	489,593	8	546,567	21	1,567,441
Delaware	—	—	1	76,645	2	138,479	3	215,124
Florida	100	7,695,779	30	2,605,765	116	9,235,966	246	19,537,510
Georgia	68	5,260,553	6	504,497	23	1,762,346	97	7,527,396
Hawaii	13	863,683	—	—	3	159,388	16	1,023,071
Idaho	—	—	—	—	2	131,564	2	131,564
Illinois	36	2,741,044	9	674,913	34	2,487,912	79	5,903,869
Indiana	16	968,130	1	58,166	16	1,110,913	33	2,137,209
Kansas	1	50,209	2	108,720	6	466,550	9	625,479
Kentucky	11	931,320	1	51,148	8	678,166	20	1,660,634
Louisiana	2	164,314	—	—	10	767,998	12	932,312
Maine	—	—	—	—	8	578,436	8	578,436
Maryland	33	2,762,038	8	552,679	39	2,870,406	80	6,185,123
Massachusetts	46	2,969,030	10	640,744	19	1,156,949	75	4,766,723
Michigan	7	567,499	4	309,086	5	420,218	16	1,296,803
Minnesota	6	508,992	4	305,901	15	1,157,927	25	1,972,820
Mississippi	4	306,624	—	—	—	—	4	306,624
Missouri	5	332,830	2	119,275	12	806,248	19	1,258,353
Nebraska	—	—	—	—	3	278,061	3	278,061
Nevada	14	1,040,122	4	473,751	7	709,158	25	2,223,031
New Hampshire	2	135,840	2	84,533	4	313,072	8	533,445
New Jersey	61	4,902,753	16	1,141,997	32	2,514,015	109	8,558,765
New Mexico	11	716,934	10	677,584	11	840,512	32	2,235,030
New York	28	2,030,765	17	1,461,866	29	1,810,415	74	5,303,046
North Carolina	20	1,505,748	4	298,567	22	1,682,402	46	3,486,717
Ohio	17	1,314,364	5	325,163	6	501,156	28	2,140,683
Oklahoma	—	—	—	—	19	1,544,041	19	1,544,041
Oregon	8	552,076	1	65,245	10	727,927	19	1,345,248
Pennsylvania	21	1,537,546	7	522,254	31	2,264,916	59	4,324,716
Rhode Island	2	134,902	—	—	5	422,880	7	557,782
South Carolina	23	1,812,165	8	537,279	23	1,916,251	54	4,265,695
Tennessee	21	1,776,735	12	810,716	12	826,786	45	3,414,237
Texas	107	9,156,647	18	1,423,604	74	6,046,620	199	16,626,871
Utah	10	698,777	—	—	25	1,933,490	35	2,632,267
Virginia	47	3,787,653	10	768,178	32	2,294,075	89	6,849,906
Washington	9	683,817	—	—	13	1,041,435	22	1,725,252
Washington, DC	1	100,039	1	103,732	6	530,474	8	734,245
Wisconsin	—	—	—	—	7	592,624	7	592,624
Totals	970	74,617,779	257	19,446,081	827	64,923,357	2,054	158,987,217

(1)    Includes four consolidated joint venture stores.

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RESULTS OF OPERATIONS

Comparison of the three and nine months ended September 30, 2021 and 2020

Overview

Results for the three and nine months ended September 30, 2021 included the operations of 1,227 stores (966 wholly-owned, four in consolidated joint ventures, and 257 in joint ventures accounted for using the equity method) compared to the results for the three and nine months ended September 30, 2020, which included the operations of 1,188 stores (935 wholly-owned, six in consolidated joint ventures, and 247 in joint ventures accounted for using the equity method).

Revenues

The following table presents information on revenues earned for the periods indicated:

 

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Revenues:
Property rental	$	351,355	$	290,423	$	60,932	21.0	%	$	976,448	$	856,438	$	120,010	14.0	%
Tenant reinsurance	44,258		39,294		4,964		12.6	%	126,211		107,985		18,226		16.9	%
Management fees and other income	16,879		13,307		3,572		26.8	%	47,320		38,299		9,021		23.6	%
Total revenues	$	412,492	$	343,024	$	69,468	20.3	%	$	1,149,979	$	1,002,722	$	147,257	14.7	%

Property Rental—The increase in property rental revenues for the three and nine months ended September 30, 2021 was primarily the result of an increase of $49,960 and $96,888, respectively, related to higher occupancy and increased rental rates at our stabilized stores. An additional increase of $12,700 and $27,713, respectively, was attributable to store acquisitions completed in 2021 and 2020. We acquired 36 wholly-owned stores during the nine months ended September 30, 2021 and a total of 23 stores during the year ended December 31, 2020. This was partially offset by selling 16 wholly-owned stores into an unconsolidated joint venture in March 2021 and four wholly-owned stores to a third-party owner in December, 2020.

Tenant Reinsurance—The increase in our tenant reinsurance revenues was due primarily to an increase in the number of stores operated and higher occupancy. We operated 2,054 stores at September 30, 2021 compared to 1,906 stores at September 30, 2020.

Management Fees and Other Income—Management fees and other income primarily represent the fees collected for our management of stores owned by third parties and unconsolidated joint ventures and other transaction fee income. The increase for the three and nine months ended September 30, 2021 was primarily due to an increase in the number of stores managed and other transaction fee income. As of September 30, 2021, we managed 1,088 stores for joint ventures and third parties, compared to 971 stores as of September 30, 2020.

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Expenses

The following table presents information on expenses for the periods indicated:

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Expenses:
Property operations	$	92,794	$	92,322	$	472	0.5	%	$	274,316	$	271,659	$	2,657	1.0	%
Tenant reinsurance	7,509		7,189		320		4.5	%	21,405		20,725		680		3.3	%
General and administrative	24,395		23,894		501		2.1	%	74,276		72,242		2,034		2.8	%
Depreciation and amortization	61,516		56,412		5,104		9.0	%	179,685		167,705		11,980		7.1	%
Total expenses	$	186,214	$	179,817	$	6,397	3.6	%	$	549,682	$	532,331	$	17,351	3.3	%

Property Operations—The increase in property operations expense during the three and nine months ended September 30, 2021 was due primarily to an increase of $4,177 and $10,149, respectively, attributable to store acquisitions completed in 2021 and 2020. We acquired 36 wholly-owned stores during the nine months ended September 30, 2021 and a total of 23 stores during the year ended December 31, 2020. The increase was also due to additional credit card processing fees, repairs and maintenance expense and insurance expense. The property operations increase was offset for the three and nine months ended September 30, 2021 by decreases of $2,250 and $4,323, respectively, which primarily were from payroll, marketing expenses, and property taxes at stabilized stores and by decreases of $1,580 and $3,899, respectively, due to stores sold in 2021 and 2020.

Tenant Reinsurance—Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance. We operated 2,054 stores at September 30, 2021 compared to 1,906 stores at September 30, 2020.

General and Administrative—General and administrative expenses primarily include all expenses not directly related to our stores, including corporate payroll, office expense, office rent, travel and professional fees. We did not observe any material trends in specific travel or other expenses apart from the increase due to the management of additional stores. However, payroll has continued to increase throughout the year as we have seen wages nationwide grow faster than inflation.

Depreciation and Amortization—Depreciation and amortization expense increased as a result of the acquisition of new stores. We acquired 36 wholly-owned stores during the nine months ended September 30, 2021 and a total of 23 stores during the year ended December 31, 2020.

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Other Revenues and Expenses

The following table presents information about other revenues and expenses for the periods indicated:

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Gain on real estate transactions	$	—	$	—	$	—	—	%	$	63,883	$	—	$	63,883	(100.0)	%
Interest expense	(39,670)		(42,213)		2,543		(6.0)	%	(120,605)		(127,610)		7,005		(5.5)	%
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	—		(1,233)		1,233		(100.0)	%	—		(3,675)		3,675		(100.0)	%
Interest income	11,729		3,145		8,584		272.9	%	36,871		6,488		30,383		468.3	%
Equity in earnings and dividend income from unconsolidated real estate entities	8,255		5,605		2,650		47.3	%	23,533		15,692		7,841		50.0	%
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		100.0	%
Income tax expense	(6,772)		(4,657)		(2,115)		45.4	%	(16,330)		(10,013)		(6,317)		63.1	%
Total other revenues & expenses, net	$	(26,458)	$	(39,353)	$	12,895	(32.8)	%	$	(6,397)	$	(119,118)	$	112,721	(94.6)	%

Gain on Real Estate Transactions—During the nine months ended September 30, 2021, we sold 16 stores to a newly established unconsolidated joint venture. We recognized a total gain of $64,804 related to this transaction. This gain was partially offset by losses related to the sale of notes receivable and solar assets.

Interest Expense—The decrease in interest expense during the nine months ended September 30, 2021 was primarily the result of a lower weighted average interest rate compared to the same period in the prior year.

Non-cash Interest Expense Related to Amortization of Discount on Equity Component of Exchangeable Senior Notes—Represents the amortization of the discounts related to the equity components of the exchangeable senior notes issued by our Operating Partnership. The 2015 Notes had an effective interest rate of 4.0% relative to the carrying amount of the liability. The exchangeable senior notes were paid off in full during October and November 2020.

Interest Income—Interest income represents interest earned on bridge loans, notes receivable and debt securities and income earned on notes receivable from Common and Preferred Operating Partnership unit holders. The increase in interest income during the three and nine months ended September 30, 2021 was primarily the result of interest earned on these loans as well as interest earned from a senior mezzanine note receivable with a principal amount of $103,000, which was purchased in July 2020, and our investment in preferred stock of JCAP, which was purchased in November 2020 for $300,000. The interest related to this investment accrues quarterly. A portion of the interest accrued will be paid out each quarter beginning on the first anniversary of the issuance date, with the remainder to be received upon maturity.

Equity in Earnings and Dividend Income from Unconsolidated Real Estate Entities—Equity in earnings of unconsolidated real estate entities represents the income earned through our ownership interests in unconsolidated joint ventures. In these joint ventures, we and our joint venture partners generally receive a preferred return on our invested capital. To the extent that cash or profits in excess of these preferred returns are generated, we receive a higher percentage of the excess cash or profits. Dividend income represents dividends from our investment in preferred stock of SmartStop, which was purchased in October 2019 for $150,000 with another $50,000 invested in October 2020. The increase for the three and nine months ended September 30, 2021 related primarily to the dividend income from the additional SmartStop preferred stock purchased in October 2020.

Equity in Earnings of Unconsolidated Real Estate Ventures - Gain on Sale of Real Estate Assets and Purchase of Joint Venture Partner's Interest - In June 2021, the Company sold its interest in two unconsolidated joint ventures to its joint venture partner. The Company received proceeds of $1,888 in cash, and recorded a gain of $525. Also in June 2021, the

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WICNN JV LLC and GFN JV, LLC joint ventures sold all 17 of the stores owned by the joint ventures to a third party. Subsequent to the sales, these joint ventures were dissolved. As a result of these transactions, the Company recorded a gain of $5,739.

Income Tax Expense—For the three and nine months ended September 30, 2021, the increase in income tax expense was the result of an increase in income earned by our taxable REIT subsidiary when compared to the same period in the prior year.

FUNDS FROM OPERATIONS

Funds from operations (“FFO”) provides relevant and meaningful information about our operating performance that is necessary, along with net income and cash flows, for an understanding of our operating results. We believe FFO is a meaningful disclosure as a supplement to net earnings. Net earnings assume that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The values of real estate assets fluctuate due to market conditions and we believe FFO more accurately reflects the value of our real estate assets. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income computed in accordance with GAAP, excluding gains or losses on sales of operating stores and impairment write downs of depreciable real estate assets, plus real estate related depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance, FFO should be considered along with the reported net income and cash flows in accordance with GAAP, as presented in our condensed consolidated financial statements. FFO should not be considered a replacement of net income computed in accordance with GAAP.

The computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income as an indication of our performance, as an alternative to net cash flow from operating activities, as a measure of our liquidity, or as an indicator of our ability to make cash distributions.

The following table presents the calculation of FFO for the periods indicated:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Net income attributable to common stockholders	$	188,276	$	114,633	$	559,222	$	325,723
Adjustments:
Real estate depreciation	58,177		53,909		170,462		160,202
Amortization of intangibles	1,262		247		2,963		1,402
Gain on real estate transactions	—		—		(63,883)		—
Unconsolidated joint venture real estate depreciation and amortization	3,051		2,279		8,635		6,667
Unconsolidated joint venture gain on sale of real estate assets and purchase of partner's interest	—		—		(6,251)		—
Distributions paid on Series A Preferred Operating Partnership units	(572)		(572)		(1,716)		(1,716)
Income allocated to Operating Partnership noncontrolling interests	11,544		9,221		34,678		25,550
Funds from operations attributable to common stockholders and unit holders	$	261,738	$	179,717	$	704,110	$	517,828

SAME-STORE RESULTS

Our same-store pool for the periods presented consists of 860 stores that are wholly-owned and operated and that were stabilized by the first day of the earliest calendar year presented. We consider a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of 80% or more for one calendar year. We believe that by providing

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same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to: occupancy, rental revenue growth, operating expense growth, net operating income growth, etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments.  Same-store results should not be used as a basis for future same-store performance or for the performance of our stores as a whole. The following table presents operating data for our same-store portfolio.

	For the Three Months Ended September 30,				Percent		For the Nine Months Ended September 30,				Percent
	2021		2020		Change		2021		2020		Change
Same-store rental revenues	$	318,448	$	268,889	18.4	%	$	892,100	$	795,207	12.2	%
Same-store operating expenses	75,909		79,090		(4.0)	%	228,691		233,699		(2.1)	%
Same-store net operating income	$	242,539	$	189,799	27.8	%	$	663,409	$	561,508	18.1	%
Same-store square foot occupancy as of quarter end	96.7%		95.8%				96.7%		95.8%
Properties included in same-store	860		860				860		860

Same-store revenues for the three and nine months ended September 30, 2021 increased due to higher average occupancy, higher average rates to new and existing customers, higher late fees and lower bad debt, partially offset by higher discounts.

Same-store expenses were lower for the three months ended September 30, 2021 due to decreases in payroll, marketing expense and property taxes, partially offset by credit card processing fees, repairs and maintenance expense and insurance expense.

Same-store expenses were also lower for the nine months ended September 30, 2021 due to decreases in payroll and marketing expense, partially offset by increases in property taxes, credit card processing fees, repairs and maintenance expense and insurance expense.

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The following table presents a reconciliation of same-store net operating income to net income as presented on our condensed consolidated statements of operations for the periods indicated:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Net Income	$	199,820	$	123,854	$	593,900	$	351,273
Adjusted to exclude:
Gain on real estate transactions	—		—		(63,883)		—
Equity in earnings and dividend income from unconsolidated real estate entities	(8,255)		(5,605)		(23,533)		(15,692)
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)		—
Interest expense	39,670		43,446		120,605		131,285
Depreciation and amortization	61,516		56,412		179,685		167,705
Income tax expense	6,772		4,657		16,330		10,013
General and administrative	24,395		23,894		74,276		72,242
Management fees, other income and interest income	(28,608)		(16,452)		(84,191)		(44,787)
Net tenant insurance	(36,749)		(32,105)		(104,806)		(87,260)
Non-same store rental revenue	(32,907)		(21,534)		(84,348)		(61,231)
Non-same store operating expense	16,885		13,232		45,625		37,960
Total same-store net operating income	$	242,539	$	189,799	$	663,409	$	561,508
Same-store rental revenues	$	318,448	$	268,889	$	892,100	$	795,207
Same-store operating expenses	75,909		79,090		228,691		233,699
Same-store net operating income	$	242,539	$	189,799	$	663,409	$	561,508

CASH FLOWS

Cash flows from operating activities for the nine months ended September 30, 2021 increased when compared to the same period in the prior year as a result of our continued total revenue growth. This growth was due to an increase in the number of stores we own and operate and higher average occupancy at our stores. Cash flows used in investing activities relates primarily to our acquisition and development of REIT and joint venture assets, as well as activity on our bridge loan program. Cash flows from financing activities depend primarily on our debt and equity financing activities. A summary of cash flows along with significant components are as follows:

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	For the Nine Months Ended September 30,
	2021		2020
Net cash provided by operating activities	$	729,268	$	583,267
Net cash used in investing activities	(417,792)		(363,845)
Net cash used in financing activities	(358,204)		(209,581)
Significant components of net cash flow included:
Net income	$	593,900	$	351,273
Depreciation and amortization	179,685		167,705
Gain on real estate transactions	(63,883)		—
Acquisition and development of real estate assets	(632,101)		(197,356)
Proceeds from sale of real estate assets and investments in real estate ventures	196,241		234
Issuance and purchase of notes receivable	(143,270)		(149,750)
Proceeds from sale of notes receivable	116,822		—
Proceeds from the sale of common stock, net of offering costs	273,358		—
Proceeds from notes payable and revolving lines of credit	3,323,000		1,419,000
Principal payments on notes payable and revolving lines of credit	(4,526,549)		(1,192,750)
Proceeds from issuance of public bonds, net	1,040,349		—
Dividends paid on common stock	(433,591)		(349,700)

We believe that cash flows generated by operations, along with our existing cash and cash equivalents, the availability of funds under our existing lines of credit, and our access to capital markets will be sufficient to meet all of our reasonably anticipated cash needs during the next 12 months. These cash needs include operating expenses, monthly debt service payments, recurring capital expenditures, acquisitions, redevelopments and expansions, distributions to unit holders and dividends to stockholders necessary to maintain our REIT qualification.

We expect to generate positive cash flow from operations in 2021, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations could cause us to increase our reliance on available funds under our existing lines of credit, curtail planned capital expenditures, or seek other additional sources of financing.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2021, we had $65,565 available in cash and cash equivalents. Our cash and cash equivalents are held in accounts managed by third party financial institutions and consist of invested cash and cash in our operating accounts. During 2021 and 2020, we experienced no loss or lack of access to our cash or cash equivalents; however, there can be no assurance that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets.

As of September 30, 2021, we had $5,614,222 face value of debt, resulting in a debt to total enterprise value ratio of 19.1%. As of September 30, 2021, the ratio of total fixed-rate debt and other instruments to total debt was 80.4% ($4,512,030 total fixed-rate debt including $1,986,266 on which we have interest rate swaps that have been included as fixed-rate debt). The weighted average interest rate of the total of fixed- and variable-rate debt at September 30, 2021 was 2.8%. Certain of our real estate assets are pledged as collateral for our debt. We are subject to certain restrictive covenants relating to our outstanding debt. We were in compliance with all financial covenants at September 30, 2021.

We expect to fund our short-term liquidity requirements, including operating expenses, recurring capital expenditures, dividends to stockholders, distributions to holders of Operating Partnership units and interest on our outstanding indebtedness, out of our operating cash flow, cash on hand and borrowings under our revolving lines of credit. In addition, we are pursuing additional sources of financing based on anticipated funding needs and growth assumptions.

38

We currently hold a BBB/Stable rating from S&P and a Baa2 rating from Moody's Investors Service. We intend to manage our balance sheet to maintain these ratings.

The following table presents our secured and unsecured debt:

	September 30, 2021		Weighted Average Rate
Secured Fixed-rate debt:	$	937,030	3.3%
Secured Variable-rate debt:	587,192		1.5%
Unsecured Fixed-rate debt:	3,575,000		3.1%
Unsecured Variable-rate debt:	515,000		1.5%
Total Face Value Debt	$	5,614,222	2.8%

The following table summarizes the schedule of maturities for our face value of debt including available extensions as of September 30, 2021:

Year	Unsecured		Secured		Total		Weighted Average Rate
2021	$	—	$	—	$	—
2022	—		293,648		293,648		2.9%
2023	—		134,666		134,666		0.5%
2024	425,000		218,722		643,722		2.5%
2025	245,000		677,459		922,459		2.3%
2026	645,000		125,000		770,000		4.3%
2027	700,000		13,058		713,058		3.3%
2028	300,000		53,418		353,418		4.0%
2029	300,000		—		300,000		3.5%
2030	425,000		8,251		433,251		3.5%
2031	450,000				450,000		2.6%
2032	600,000		—		600,000		2.4%
Total	$	4,090,000	$	1,524,222	$	5,614,222	2.8	%

Unencumbered stores as defined by our revolving credit facility are as follows:

	September 30, 2021
Total Unencumbered Stores	701
Total Unencumbered Asset Value (1)	$	12,131,905
Total Asset Value (2)	$	17,432,073

(1)    Total unencumbered asset value as calculated per our Revolving Credit Facility.

(2)    Total asset value as calculated per our Revolving Credit Facility.

Our liquidity needs consist primarily of operating expenses, monthly debt service payments, recurring capital expenditures, dividends to stockholders and distributions to unit holders necessary to maintain our REIT qualification. We may from time to time seek to repurchase our outstanding debt, shares of common stock or other securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In addition, we evaluate, on an ongoing basis, the merits of strategic

39

acquisitions and other relationships, which may require us to raise additional funds. We may also use Operating Partnership units as currency to fund acquisitions from self-storage owners.

The COVID-19 pandemic has had negative impacts on capital markets and may continue to do so or such negative impacts could intensify. Based upon the current availability of our credit facility and our credit rating, we do not expect such capital market dislocations to have a material impact upon our ability to satisfy obligations and maturities or our growth plans during the year. However, there can be no assurance of the impact on our future plans if these negative trends were to persist for a long period of time or intensify.

OFF-BALANCE SHEET ARRANGEMENTS

Except as disclosed in the notes to our consolidated financial statements of our most recently filed Annual Report on Form 10-K, we do not currently have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purposes entities, which typically are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, except as disclosed in the notes to our condensed consolidated financial statements, we have not guaranteed any obligations of unconsolidated entities, nor do we have any commitments or intent to provide funding to any such entities. Accordingly, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

SEASONALITY

The self-storage business is subject to seasonal fluctuations. A greater portion of revenues and profits are realized from May through September. Historically, our highest level of occupancy has been at the end of July, while our lowest level of occupancy has been in late February and early March. Results for any quarter may not be indicative of the results that may be achieved for the full fiscal year.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

Market risk refers to the risk of loss from adverse changes in market prices and interest rates. Our future income, cash flows and fair values of financial instruments are dependent upon prevailing market interest rates.

Interest Rate Risk

Interest rate risk is highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control.

As of September 30, 2021, we had approximately $5.6 billion in total face value of debt, of which approximately $1.1 billion was subject to variable interest rates (excluding debt with interest rate swaps). If LIBOR were to increase or decrease by 100 basis points, the increase or decrease in interest expense on the variable-rate debt would increase or decrease future earnings and cash flows by approximately $11.0 million annually.

Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.

40

ITEM 4.    CONTROLS AND PROCEDURES

(1)Disclosure Controls and Procedures

We maintain disclosure controls and procedures to ensure that information required to be disclosed in the reports we file pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rule 13a-15(e) of the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide a reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We have a disclosure committee that is responsible for considering the materiality of information and determining our disclosure obligations on a timely basis. The disclosure committee meets quarterly and reports directly to our Chief Executive Officer and Chief Financial Officer.

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

(2)Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) that occurred during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.     OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

We are involved in various legal proceedings and are subject to various claims and complaints arising in the ordinary course of business. Because litigation is inherently unpredictable, the outcome of these matters cannot presently be determined with any degree of certainty. In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. We could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on our results of operations in any particular period, notwithstanding the fact that we are currently vigorously defending any legal proceedings against us.

ITEM 1A.    RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, which could materially affect our business, financial condition and results of operations. There have been no material changes to the risk factors described in the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2020. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and results of operations.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5.    OTHER INFORMATION

None.

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ITEM 6.    EXHIBITS

4.1    Indenture, dated as of May 11, 2021, among Extra Space Storage LP, as issuer, Extra Space Storage Inc., ESS Holdings Business Trust I and ESS Holdings Business Trust II, as guarantors, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to the Current Report on Form 8-K filed May 11, 2021).

4.2    First Supplemental Indenture, dated as of May 11, 2021, among Extra Space Storage LP, as issuer, Extra Space Storage Inc., ESS Holdings Business Trust I and ESS Holdings Business Trust II, as guarantors, and Wells Fargo Bank, National Association, as trustee, including the form of the Notes and the Guarantee (incorporated by reference to the Current Report on Form 8-K filed May 11, 2021).

4.3    Second Supplemental Indenture, dated as of September 22, 2021, among Extra Space Storage LP, as issuer, Extra Space Storage Inc., ESS Holdings Business Trust I and ESS Holdings Business Trust II, as guarantors, and Wells Fargo Bank, National Association, as trustee, including the form of the Notes and the Guarantee (incorporated by references to the Current report on Form 8-K filed September 22, 2021).

22.1    Issuer and Guarantors of Guaranteed Securities

31.1     Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2     Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1     Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101     The following materials from Extra Space Storage Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, are formatted in XBRL (eXtensible Business Reporting Language): (1) the Condensed Consolidated Balance Sheets, (2) the Condensed Consolidated Statements of Operations, (3) the Condensed Consolidated Statements of Comprehensive Income (4) the Condensed Consolidated Statement of Noncontrolling Interests and Equity, (5) the Condensed Consolidated Statements of Cash Flows and (6) notes to these financial statements.

104    Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

43

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	EXTRA SPACE STORAGE INC.
	Registrant
Date: November 3, 2021	/s/ Joseph D. Margolis
	Joseph D. Margolis
	Chief Executive Officer (Principal Executive Officer)
Date: November 3, 2021	/s/ P. Scott Stubbs
	P. Scott Stubbs
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

44

EX-22.1

Exhibit 22.1

Issuer and Guarantors of Guaranteed Securities

The following entities are included in the Obligated Group, as defined in the Quarterly Report on Form 10-Q of Extra Space Storage Inc. to which this document is being filed as an exhibit, for the 2.550% Senior Notes due 2031 and the 2.350% Senior Notes due 2032 (collectively, the "Notes"). The guarantors have fully and unconditionally guaranteed the Notes on a joint and several basis.

Name of Issuer or Guarantor	Reported as Issuer or Guarantor	State of Incorporation or Organization
Extra Space Storage LP	Issuer	Delaware
Extra Space Storage Inc.	Parent Guarantor	Maryland
ESS Holdings Business Trust I	Subsidiary Guarantor	Massachusetts
ESS Holdings Business Trust II	Subsidiary Guarantor	Massachusetts

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Joseph D. Margolis, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Extra Space Storage Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2021	By:	/s/ Joseph D. Margolis
	Name:	Joseph D. Margolis
	Title:	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, P. Scott Stubbs, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Extra Space Storage Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2021	By:	/s/ P. Scott Stubbs
	Name:	P. Scott Stubbs
	Title:	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to

18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned, the Chief Executive Officer of Extra Space Storage Inc. (the “Company”), hereby certifies to his knowledge on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (the “Form 10-Q”), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Joseph D. Margolis
Name:	Joseph D. Margolis
Title:	Chief Executive Officer
Date:	November 3, 2021

The undersigned, the Chief Financial Officer of Extra Space Storage Inc. (the “Company”), hereby certifies to his knowledge on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (the “Form 10-Q”), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ P. Scott Stubbs
Name:	P. Scott Stubbs
Title:	Executive Vice President and Chief Financial Officer
Date:	November 3, 2021

XML

Cover - shares	9 Months Ended
	Sep. 30, 2021	Nov. 01, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-32269
Entity Registrant Name	EXTRA SPACE STORAGE INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-1076777
Entity Address, Address Line One	2795 East Cottonwood Parkway, Suite 300
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84121
City Area Code	801
Local Phone Number	365-4600
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	EXR
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		133,891,804
Amendment Flag	false
Entity Central Index Key	0001289490
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Assets:
Real estate assets, net	$ 8,272,671	$ 7,893,802
Real estate assets - operating lease right-of-use assets	229,184	252,172
Investments in unconsolidated real estate entities	373,765	397,444
Investments in debt securities and notes receivable	606,115	593,810
Cash and cash equivalents	65,565	109,124
Restricted cash	15,717	18,885
Other assets, net	145,342	130,611
Total assets	9,708,359	9,395,848
Liabilities, Noncontrolling Interests and Equity:
Notes payable, net	5,409,828	4,797,303
Revolving lines of credit	174,000	949,000
Operating lease liabilities	234,118	263,485
Cash distributions in unconsolidated real estate ventures	63,196	47,126
Accounts payable and accrued expenses	164,674	130,012
Other liabilities	279,668	272,798
Total liabilities	6,325,484	6,459,724
Commitments and contingencies
Extra Space Storage Inc. stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued or outstanding	0	0
Common stock, $0.01 par value, 500,000,000 shares authorized, 133,819,163 and 131,357,961 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	1,338	1,314
Additional paid-in capital	3,283,848	3,000,458
Accumulated other comprehensive loss	(64,155)	(99,093)
Accumulated deficit	(229,269)	(354,900)
Total Extra Space Storage Inc. stockholders' equity	2,991,762	2,547,779
Noncontrolling interest represented by Preferred Operating Partnership units, net	170,248	172,052
Noncontrolling interests in Operating Partnership, net and other noncontrolling interests	220,865	216,293
Total noncontrolling interests and equity	3,382,875	2,936,124
Total liabilities, noncontrolling interests and equity	$ 9,708,359	$ 9,395,848

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value (dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	50,000,000	50,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	133,819,163	131,357,961
Common stock, outstanding (in shares)	133,819,163	131,357,961

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenues:
Property rental	$ 351,355	$ 290,423	$ 976,448	$ 856,438
Tenant reinsurance	44,258	39,294	126,211	107,985
Management fees and other income	16,879	13,307	47,320	38,299
Total revenues	412,492	343,024	1,149,979	1,002,722
Expenses:
Property operations	92,794	92,322	274,316	271,659
Tenant reinsurance	7,509	7,189	21,405	20,725
General and administrative	24,395	23,894	74,276	72,242
Depreciation and amortization	61,516	56,412	179,685	167,705
Total expenses	186,214	179,817	549,682	532,331
Gain on real estate transactions	0	0	63,883	0
Income from operations	226,278	163,207	664,180	470,391
Interest expense	(39,670)	(42,213)	(120,605)	(127,610)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	0	(1,233)	0	(3,675)
Interest income	11,729	3,145	36,871	6,488
Income before equity in earnings and dividend income from unconsolidated real estate ventures and income tax expense	198,337	122,906	580,446	345,594
Equity in earnings and dividend income from unconsolidated real estate entities	8,255	5,605	23,533	15,692
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest	0	0	6,251	0
Income tax expense	(6,772)	(4,657)	(16,330)	(10,013)
Net income	199,820	123,854	593,900	351,273
Net income allocated to Preferred Operating Partnership noncontrolling interests	(3,529)	(3,248)	(10,647)	(9,498)
Net income allocated to Operating Partnership and other noncontrolling interests	(8,015)	(5,973)	(24,031)	(16,052)
Net income attributable to common stockholders	$ 188,276	$ 114,633	$ 559,222	$ 325,723
Earnings per common share
Basic (in dollars per share)	$ 1.41	$ 0.89	$ 4.19	$ 2.52
Diluted (in dollars per share)	$ 1.40	$ 0.88	$ 4.19	$ 2.50
Weighted average number of shares
Basic (in shares)	133,809,750	128,862,341	133,197,903	129,044,954
Diluted (in shares)	140,425,269	129,871,096	139,854,881	130,066,121
Cash dividends paid per common share (in dollars per share)	$ 1.25	$ 0.90	$ 3.25	$ 2.70

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 199,820	$ 123,854	$ 593,900	$ 351,273
Other comprehensive income (loss):
Change in fair value of interest rate swaps	8,055	11,181	36,685	(83,791)
Total comprehensive income	207,875	135,035	630,585	267,482
Less: comprehensive income attributable to noncontrolling interests	11,924	9,854	36,425	21,501
Comprehensive income attributable to common stockholders	$ 195,951	$ 125,181	$ 594,160	$ 245,981

XML

Condensed Consolidated Statement of Noncontrolling Interests and Equity - USD ($) $ in Thousands	Total	Redemption of Operating Partnership units for cash	Noncontrolling Interest - Preferred Operating Partnership	Noncontrolling Interest - Preferred Operating Partnership Redemption of Operating Partnership units for stock	Noncontrolling Interest - Preferred Operating Partnership Redemption of Operating Partnership units for cash	Noncontrolling Interest - Operating Partnership	Noncontrolling Interest - Operating Partnership Redemption of Operating Partnership units for stock	Noncontrolling Interest - Operating Partnership Redemption of Operating Partnership units for cash	Noncontrolling Interest - Other	Common Stock	Common Stock Redemption of Operating Partnership units for stock	Additional Paid-in Capital	Additional Paid-in Capital Redemption of Operating Partnership units for stock	Additional Paid-in Capital Redemption of Operating Partnership units for cash	Accumulated Other Comprehensive Loss	Accumulated Deficit
Balance, beginning of period at Dec. 31, 2019	$ 2,921,694		$ 175,948			$ 205,419			$ 366	$ 1,295		$ 2,868,681			$ (28,966)	$ (301,049)
Balance, beginning of period (in shares) at Dec. 31, 2019										129,534,407
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon the exercise of options (in shares)										77,400
Issuance of common stock upon the exercise of options	944									$ 1		943
Issuance of common stock in connection with share based compensation (in shares)										73,602
Issuance of common stock in connection with share based compensation	2,980									$ 1		2,979
Restricted stock grants cancelled (in shares)										(1,767)
Buyback of common stock, net of offering costs (in shares)										(653,597)
Buyback of common stock, net of offering costs	(52,204)									$ (7)						(52,197)
Redemption of Operating Partnership units							$ (330)						$ 330
Redemption of Operating Partnership units (in shares)											8,862
Net income (loss)	116,162		3,112			4,877			(6)							108,179
Other comprehensive income (loss)	(89,244)		(563)			(3,807)									(84,874)
Distributions to Operating Partnership units held by noncontrolling interests	(8,505)		(3,178)			(5,327)
Dividends paid on common stock	(117,197)															(117,197)
Balance, end of period at Mar. 31, 2020	2,774,630		175,319			200,832			360	$ 1,290		2,872,933			(113,840)	(362,264)
Balance, end of period (in shares) at Mar. 31, 2020										129,038,907
Balance, beginning of period at Dec. 31, 2019	2,921,694		175,948			205,419			366	$ 1,295		2,868,681			(28,966)	(301,049)
Balance, beginning of period (in shares) at Dec. 31, 2019										129,534,407
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	351,273
Balance, end of period at Sep. 30, 2020	2,767,822		171,738			206,394			406	$ 1,291		2,889,592			(108,708)	(392,891)
Balance, end of period (in shares) at Sep. 30, 2020										129,094,900
Balance, beginning of period at Mar. 31, 2020	2,774,630		175,319			200,832			360	$ 1,290		2,872,933			(113,840)	(362,264)
Balance, beginning of period (in shares) at Mar. 31, 2020										129,038,907
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon the exercise of options (in shares)										13,610
Issuance of common stock upon the exercise of options	726											726
Issuance of common stock in connection with share based compensation (in shares)										60,032
Issuance of common stock in connection with share based compensation	4,884									$ 1		4,883
Restricted stock grants cancelled (in shares)										(889)
Buyback of common stock, net of offering costs (in shares)										(172,600)
Buyback of common stock, net of offering costs	(15,615)									$ (1)						(15,614)
Redemption of Operating Partnership units							(3,675)				$ 1		3,674
Redemption of Operating Partnership units (in shares)											100,000
Redemption of Preferred Units				$ (2,724)									2,724
Redemption of Preferred Units (in shares)											30,495
Noncontrolling interest in consolidated joint venture	68								68
Net income (loss)	111,257		3,139			5,216			(9)							102,911
Other comprehensive income (loss)	(5,728)		(41)			(271)									(5,416)
Distributions to Operating Partnership units held by noncontrolling interests	(8,386)		(3,151)			(5,235)
Dividends paid on common stock	(116,318)															(116,318)
Balance, end of period at Jun. 30, 2020	2,745,518		172,542			196,867			419	$ 1,291		2,884,940			(119,256)	(391,285)
Balance, end of period (in shares) at Jun. 30, 2020										129,069,555
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon the exercise of options (in shares)										18,605
Issuance of common stock upon the exercise of options	1,200											1,200
Issuance of common stock in connection with share based compensation (in shares)										8,289
Issuance of common stock in connection with share based compensation	3,452											3,452
Restricted stock grants cancelled (in shares)										(949)
Buyback of common stock, net of offering costs (in shares)										(600)
Buyback of common stock, net of offering costs	(54)															(54)
Repayment of receivable with Operating Partnership units pledged as collateral	8,226					8,226
Redemption of Preferred Units		$ (1,000)			$ (1,000)
Net income (loss)	123,854		3,248			5,986			(13)							114,633
Other comprehensive income (loss)	11,181		83			550									10,548
Distributions to Operating Partnership units held by noncontrolling interests	(8,370)		(3,135)			(5,235)
Dividends paid on common stock	(116,185)															(116,185)
Balance, end of period at Sep. 30, 2020	2,767,822		171,738			206,394			406	$ 1,291		2,889,592			(108,708)	(392,891)
Balance, end of period (in shares) at Sep. 30, 2020										129,094,900
Balance, beginning of period at Dec. 31, 2020	$ 2,936,124		172,052			215,892			401	$ 1,314		3,000,458			(99,093)	(354,900)
Balance, beginning of period (in shares) at Dec. 31, 2020	131,357,961									131,357,961
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon the exercise of options (in shares)										56,722
Issuance of common stock upon the exercise of options	$ 4,254											4,254
Issuance of common stock in connection with share based compensation (in shares)										89,793
Issuance of common stock in connection with share based compensation	3,652											3,652
Restricted stock grants cancelled (in shares)										(2,499)
Issuance of common stock, net of offering costs	273,720									$ 22		273,698
Issuance of common stock, net of offering costs (in shares)										2,185,685
Redemption of Operating Partnership units							(193)						193
Redemption of Operating Partnership units (in shares)											5,000
Noncontrolling interest in consolidated joint venture	(50)								(50)
Net income (loss)	215,501		3,680			8,828			(5)							202,998
Other comprehensive income (loss)	23,013		144			956									21,913
Distributions to Operating Partnership units held by noncontrolling interests	(9,025)		(3,224)			(5,801)
Dividends paid on common stock	(132,540)															(132,540)
Balance, end of period at Mar. 31, 2021	3,314,649		172,652			219,682			346	$ 1,336		3,282,255			(77,180)	(284,442)
Balance, end of period (in shares) at Mar. 31, 2021										133,692,662
Balance, beginning of period at Dec. 31, 2020	$ 2,936,124		172,052			215,892			401	$ 1,314		3,000,458			(99,093)	(354,900)
Balance, beginning of period (in shares) at Dec. 31, 2020	131,357,961									131,357,961
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Buyback of common stock, net of offering costs (in shares)	0
Net income (loss)	$ 593,900
Balance, end of period at Sep. 30, 2021	$ 3,382,875		170,248			220,591			274	$ 1,338		3,283,848			(64,155)	(229,269)
Balance, end of period (in shares) at Sep. 30, 2021	133,819,163									133,819,163
Balance, beginning of period at Mar. 31, 2021	$ 3,314,649		172,652			219,682			346	$ 1,336		3,282,255			(77,180)	(284,442)
Balance, beginning of period (in shares) at Mar. 31, 2021										133,692,662
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in connection with share based compensation (in shares)										44,990
Issuance of common stock in connection with share based compensation	4,983											4,983
Restricted stock grants cancelled (in shares)										(4,972)
Offering costs associated with previous stock issuance	(211)											(211)
Repayment of receivable with Operating Partnership units pledged as collateral	411					411
Redemption of Operating Partnership units		$ (472)					(2,185)	$ (113)			$ 1		2,184	$ (359)
Redemption of Operating Partnership units (in shares)											58,429
Noncontrolling interest in consolidated joint venture	150								150
Net income (loss)	178,579		3,438			7,190			3							167,948
Other comprehensive income (loss)	5,617		35			232									5,350
Distributions to Operating Partnership units held by noncontrolling interests	(8,974)		(3,223)			(5,751)
Dividends paid on common stock	(133,777)															(133,777)
Balance, end of period at Jun. 30, 2021	3,360,955		172,902			219,466			499	$ 1,337		3,288,852			(71,830)	(250,271)
Balance, end of period (in shares) at Jun. 30, 2021										133,791,109
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon the exercise of options (in shares)										5,600
Issuance of common stock upon the exercise of options	318											318
Issuance of common stock in connection with share based compensation (in shares)										10,913
Issuance of common stock in connection with share based compensation	4,012											4,012
Restricted stock grants cancelled (in shares)										(4,582)
Offering costs associated with previous stock issuance	(151)											(151)
Redemption of Operating Partnership units							$ (34)						34
Redemption of Operating Partnership units (in shares)											858
Redemption of Preferred Units				$ (2,834)							$ 1		$ 2,833
Redemption of Preferred Units (in shares)											15,265
Purchase of remaining equity interest in existing consolidated joint venture	(12,050)											(12,050)
Noncontrolling interest in consolidated joint venture	(225)								(225)
Net income (loss)	199,820		3,529			8,015										188,276
Other comprehensive income (loss)	8,055		50			330									7,675
Distributions to Operating Partnership units held by noncontrolling interests	(10,585)		(3,399)			(7,186)
Dividends paid on common stock	(167,274)															(167,274)
Balance, end of period at Sep. 30, 2021	$ 3,382,875		$ 170,248			$ 220,591			$ 274	$ 1,338		$ 3,283,848			$ (64,155)	$ (229,269)
Balance, end of period (in shares) at Sep. 30, 2021	133,819,163									133,819,163

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Condensed Consolidated Statement of Noncontrolling Interests and Equity (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020
Statement of Stockholders' Equity [Abstract]
Dividends paid on common stock (in dollars per share)	$ 1.25	$ 1.00	$ 1.00	$ 0.90	$ 0.90	$ 0.90

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net income	$ 593,900	$ 351,273
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	179,685	167,705
Amortization of deferred financing costs	6,656	7,356
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	0	3,675
Non-cash lease expense	1,396	799
Compensation expense related to stock-based awards	12,647	11,316
Accrual of interest income added to principal of debt securities and notes receivable	(25,871)	0
Gain on real estate transactions	(63,883)	0
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)	0
Distributions from unconsolidated real estate ventures in excess of earnings	4,640	5,097
Changes in operating assets and liabilities:
Other assets	(10,612)	(17,977)
Accounts payable and accrued expenses	33,907	41,780
Other liabilities	3,054	12,243
Net cash provided by operating activities	729,268	583,267
Cash flows from investing activities:
Acquisition of real estate assets	(589,382)	(151,244)
Development and redevelopment of real estate assets	(42,719)	(46,112)
Proceeds from sale of real estate assets and investments in real estate ventures	196,241	234
Investment in unconsolidated real estate entities	(20,834)	(13,937)
Return of investment in unconsolidated real estate ventures	31,534	371
Issuance and purchase of notes receivable	(143,270)	(149,750)
Principal payments received from notes receivable	36,874	0
Proceeds from sale of notes receivable	116,822	0
Purchase of equipment and fixtures	(3,058)	(3,407)
Net cash used in investing activities	(417,792)	(363,845)
Cash flows from financing activities:
Proceeds from the sale of common stock, net of offering costs	273,358	0
Proceeds from notes payable and revolving lines of credit	3,323,000	1,419,000
Principal payments on notes payable and revolving lines of credit	(4,526,549)	(1,192,750)
Proceeds from issuance of public bonds, net	1,040,349	0
Deferred financing costs	(10,698)	(3,161)
Net proceeds from exercise of stock options	4,572	2,870
Repurchase of common stock	0	(67,873)
Redemption of Operating Partnership units held by noncontrolling interests	(472)	(1,000)
Proceeds from principal payments on note receivable collateralized by OP Units	411	0
Proceeds from principal payments on note receivable collateralized by Preferred OP Units	0	8,226
Contributions from noncontrolling interests	0	68
Dividends paid on common stock	(433,591)	(349,700)
Distributions to noncontrolling interests	(28,584)	(25,261)
Net cash used in financing activities	(358,204)	(209,581)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(46,728)	9,841
Cash, cash equivalents, and restricted cash, beginning of the period	128,009	70,733
Cash, cash equivalents, and restricted cash, end of the period	81,281	80,574
Supplemental schedule of cash flow information
Interest paid	116,937	119,977
Income taxes paid	21,365	5,181
Redemption of Operating Partnership units held by noncontrolling interests for common stock
Noncontrolling interests in Operating Partnership	(2,412)	(4,005)
Common stock and paid-in capital	2,412	4,005
Establishment of operating lease right of use assets and lease liabilities
Real estate assets - operating lease right-of-use assets	2,911	6,779
Operating lease liabilities	(2,911)	(6,779)
Acquisitions of real estate assets
Real estate assets, net	2,228	(13,833)
Investment in unconsolidated real estate ventures	(2,673)	0
Finance lease liability	445	13,833
Accrued construction costs and capital expenditures
Acquisition of real estate assets	756	676
Accounts payable and accrued expenses	(756)	(676)
Redemption of Preferred Operating Partnership units for common stock
Preferred Operating Partnership units	(2,834)	(2,724)
Additional paid-in capital	2,834	2,724
Establishment of finance lease assets and lease liabilities
Real estate assets, net	41,438	8,605
Other liabilities	(41,438)	(8,605)
Investment in unconsolidated real estate ventures received on sale of stores to joint venture
Investment in unconsolidated real estate ventures	33,878	0
Real estate assets	$ (33,878)	$ 0

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Organization

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

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 September 30, 2021, the Company had direct and indirect equity interests in 1,227 stores. In addition, the Company managed 827 stores for third parties, bringing the total number of stores which it owns and/or manages to 2,054. 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.

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Basis of Presentation

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

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 nine months ended September 30, 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021. The condensed consolidated balance sheet as of December 31, 2020 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, 2020, 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)." ASU 2020-04 and subsequent amendments contain practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur through December 31, 2022. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)." ASU 2020-06 simplifies the accounting for convertible instruments and contracts in an entity's own equity, and amended related earnings per share guidance. The guidance in ASU 2020-06 becomes effective for fiscal years beginning after December 15, 2021. Early adoption is permitted no earlier than the fiscal years beginning after December 15, 2020. The guidance may be adopted on a modified or fully retrospective basis. The Company is currently assessing the impact of the adoption of ASU 2020-06 on its consolidated financial statements.

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Fair Value Disclosures

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Disclosures

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 September 30, 2021, 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 September 30, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall. 

	Fair Value Measurements at Reporting Date Using
Description	Quoted 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	$	—	$	—	$	—
Other liabilities - Cash flow hedge swap agreements	$	—	$	61,421	$	—

The Company did not have any significant assets or liabilities that are re-measured on a recurring basis using significant unobservable inputs as of September 30, 2021 or December 31, 2020.

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.

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 September 30, 2021, the Company had 16 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.

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 September 30, 2021 and December 31, 2020 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:

	September 30, 2021				December 31, 2020
	Fair Value		Carrying Value		Fair Value		Carrying Value
Notes receivable from Preferred and Common Operating Partnership unit holders	$	100,815	$	101,900	$	102,333	$	102,311
Fixed rate notes receivable	$	107,176	$	104,251	$	114,145	$	104,000
Fixed rate notes payable	$	4,575,824	$	4,512,030	$	3,816,530	$	3,637,220

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Common Share

EARNINGS PER COMMON SHARE

Basic earnings per common share is computed using the two-class method by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. All outstanding unvested restricted stock awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common stockholders; accordingly, they are considered participating securities that are included in the two-class method. Diluted earnings per common share measures the performance of the Company over the reporting period while giving effect to all potential common shares that were dilutive and outstanding during the period. The denominator includes the weighted average number of basic shares and the number of additional common shares that would have been outstanding if the potential common shares that were dilutive had been issued, and is calculated using either the two-class, treasury stock or as if-converted method, whichever is most dilutive. Potential common shares are securities (such as options, convertible debt, Series A Participating Redeemable Preferred Units (“Series A Units”), Series B Redeemable Preferred Units (“Series B Units”), Series D Redeemable Preferred Units (“Series D Units” and, together with the Series A Units and Series B Units, the “Preferred OP Units”) and common Operating Partnership units (“OP Units”)) that do not have a current right to participate in earnings of the Company but could do so in the future by virtue of their option, redemption or conversion right.

In computing the dilutive effect of convertible securities, net income is adjusted to add back any changes in earnings in the period associated with the convertible security. The numerator also is adjusted for the effects of any other non-discretionary changes in income or loss that would result from the assumed conversion of those potential common shares. In computing diluted earnings per common share, only potential common shares that are dilutive (i.e. those that reduce earnings per common share) are included. For the three and nine months ended September 30, 2021 and 2020, there were no anti-dilutive options.

For the purposes of computing the diluted impact of the potential exchange of the Preferred Operating Partnership units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the intent and ability to settle the redemption in shares, the Company divided the total value of the Preferred Operating Partnership units by the average share price for the period presented. The average share price for the three months ended September 30, 2021 and 2020 was $176.78 and $103.36, respectively.

The following table presents the number of Preferred Operating Partnership units, and the potential common shares, that were excluded from the computation of earnings per share as their effect would have been anti-dilutive.

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2021	2020	2021	2020
	Equivalent Shares (if converted)	Equivalent Shares (if converted)	Equivalent Shares (if converted)	Equivalent Shares (if converted)
Common OP Units	—	5,815,916	—	5,870,459
Series A Units (Variable Only)	—	875,480	—	875,480
Series B Units	225,972	400,668	271,132	416,796
Series D Units	663,888	1,135,469	784,139	1,187,083
	889,860	8,227,533	1,055,271	8,349,818

As of September 30, 2021, the Operating Partnership had no exchangeable senior notes issued or outstanding. The Operating Partnership had $575,000 of its 3.125% Exchangeable Senior Notes due 2035 (the “2015 Notes”) issued and outstanding as of September 30, 2020. In October and November 2020, a portion of the 2015 Notes were exchanged for cash and shares of the Company’s common stock and the remaining 2015 Notes were redeemed for cash. The 2015 Notes could potentially have had a dilutive impact on the Company’s earnings per share calculations. The 2015 Notes were exchangeable by holders into shares of the Company’s common stock under certain circumstances per the terms of the indenture governing the 2015 Notes. The Company had irrevocably agreed to pay only cash for the accreted principal amount of the 2015 Notes relative to its exchange obligations, but retained the right to satisfy the exchange obligation in excess of the accreted principal amount in cash and/or common stock.

Although the Company had retained the right to satisfy the exchange obligation in excess of the accreted principal amount of the 2015 Notes in cash and/or common stock, Accounting Standards Codification (“ASC”) 260, “Earnings per Share,” requires an assumption that shares would be used to pay the exchange obligation in excess of the accreted principal amount, and requires

that those shares be included in the Company’s calculation of weighted average common shares outstanding for the diluted earnings per share computation. For the three and nine months ended September 30, 2021 and 2020, zero and 761,975 shares, respectively, related to the 2015 Notes were included in the computation for diluted earnings per share.

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series A Units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the positive intent and ability to settle at least $101,700 of the instrument in cash (or net settle a portion of the Series A Units against the related outstanding note receivable), only the amount of the instrument in excess of $101,700 is considered in the calculation of shares contingently issuable for the purposes of computing diluted earnings per share as allowed by ASC 260-10-45-46. Accordingly, the number of shares included in the computation for diluted earnings per share related to the Series A Units is equal to the number of Series A Units outstanding, with no additional shares included related to the fixed $101,700 amount.

The computation of earnings per common share is as follows for the periods presented:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Net income attributable to common stockholders	$	188,276	$	114,633	$	559,222	$	325,723
Earnings and dividends allocated to participating securities	(260)		(177)		(800)		(513)
Earnings for basic computations	188,016		114,456		558,422		325,210
Earnings and dividends allocated to participating securities	—		177		—		513
Income allocated to noncontrolling interest - Preferred Operating Partnership Units and Operating Partnership Units	9,810		—		29,395		—
Fixed component of income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units)	(572)		—		(1,716)		—
Net income for diluted computations	$	197,254	$	114,633	$	586,101	$	325,723
Weighted average common shares outstanding:
Average number of common shares outstanding - basic	133,809,750		128,862,341		133,197,903		129,044,954
OP Units	5,733,936		—		5,767,132		—
Series A Units	875,480		—		875,480		—
Unvested restricted stock awards included for treasury stock method	—		214,909		—		212,311
Shares related to exchangeable senior notes and dilutive stock options	6,103		793,846		14,366		808,856
Average number of common shares outstanding - diluted	140,425,269		129,871,096		139,854,881		130,066,121
Earnings per common share
Basic	$	1.41	$	0.89	$	4.19	$	2.52
Diluted	$	1.40	$	0.88	$	4.19	$	2.50

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Store Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2021

Real Estate [Abstract]

Store Acquisitions and Dispositions

STORE ACQUISITIONS AND DISPOSITIONS

Store Acquisitions

The following table shows the Company’s acquisitions of stores for the three and nine months ended September 30, 2021 and 2020. The table excludes purchases of raw land and improvements made to existing assets. All acquisitions are considered asset acquisitions under ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business."

			Consideration Paid												Total
Quarter	Number of Stores		Total		Cash Paid		Loan Assumed		Finance Lease Liability		Investments in Real Estate Ventures		Net Liabilities/ (Assets) Assumed		Real estate assets
Q3 2021	12	(1)	$	186,689	$	185,497	$	—	$	445	$	—	$	747	$	186,689
Q2 2021	15	(2)	193,783		190,729		—		—		2,673		381		193,783
Q1 2021	9		151,884		148,940		—		—		—		2,944		151,884
	36		$	532,356	$	525,166	$	—	$	445	$	2,673	$	4,072	$	532,356
Q3 2020	8	(3)	$	101,731	$	86,996	$	—	$	13,833	$	—	$	902	$	101,731
Q2 2020	—		—		—		—		—		—		—		—
Q1 2020	2		19,399		19,354		—		—		—		45		19,399
	10		$	121,130	$	106,350	$	—	$	13,833	$	—	$	947	$	121,130

(1) Store acquisitions during the three months ended September 30, 2021 include the acquisition of one store that was subject to a finance land lease. The right-of-use asset associated with this lease is included in real estate assets above.

(2) Store acquisitions during the three months ended June 30, 2021 include the acquisition of two stores previously held in joint ventures where the Company held a noncontrolling interest. The Company purchased its partners' equity interests in these joint ventures, and the properties owned by the joint ventures became wholly owned by the Company. No gain or loss was recognized as a result of these acquisitions.

(3) Store acquisitions during the three months ended September 30, 2020 include the acquisition of two stores that were subject to finance land leases. The right-of-use assets associated with these leases are included in real estate assets above.

Store Dispositions

On March 1, 2021, the Company sold 16 stores that had been classified as held for sale to a newly established unconsolidated joint venture. The Company received cash of $132,759 and maintained a 55% interest in the new joint venture valued at $33,878. The Company recognized a gain of $64,804 related to the sale of these properties.

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Investments in Unconsolidated Real Estate Entities

9 Months Ended

Sep. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Real Estate Entities

INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures represent the Company's interest in preferred stock of SmartStop Self Storage REIT, Inc. ("SmartStop") and the Company's noncontrolling interest in real estate joint ventures that own stores. The Company accounts for its investment in SmartStop preferred stock, which does not have a readily determinable fair value, at the transaction price less impairment, if any. The Company accounts for its investments in joint ventures using the equity method of accounting. The Company initially records these investments at cost and subsequently adjusts for cash contributions, distributions and net equity in income or loss, which is allocated in accordance with the provisions of the applicable partnership or joint venture agreement.

In these joint ventures, the Company and the joint venture partner generally receive a preferred return on their invested capital. To the extent that cash or profits in excess of these preferred returns are generated through operations or capital transactions, the Company would receive a higher percentage of the excess cash or profits than its equity interest.

The Company separately reports investments with net equity less than zero in cash distributions in unconsolidated real estate ventures in the condensed consolidated balance sheets. The net equity of certain joint ventures is less than zero because distributions have exceeded the Company's investment in and share of income from these joint ventures. This is generally the result of financing distributions, capital events or operating distributions that are usually greater than net income, as net income includes non-cash charges for depreciation and amortization while distributions do not.

Net investments in unconsolidated real estate ventures and cash distributions in unconsolidated real estate ventures consist of the following:

	Number of Stores	Equity Ownership %	Excess Profit % (1)	September 30,		December 31,
				2021		2020
PR EXR Self Storage, LLC	5	25%	40%	$	59,633	$	60,092
WICNN JV LLC (2)	—	10%	35%	—		36,032
ESS-CA TIVS JV LP (3)	16	55%	60%	33,543		—
GFN JV, LLC (2)	—	10%	30%	—		18,397
ESS-NYFL JV LP	11	16%	24%	11,959		12,211
PRISA Self Storage LLC	85	4%	4%	8,694		8,815
Alan Jathoo JV LLC	9	10%	10%	7,651		7,780
Storage Portfolio IV JV LLC	15	10%	30%	20,528		—
Storage Portfolio III JV LLC	5	10%	30%	5,613		5,726
ESS Bristol Investments LLC	8	10%	30%	2,715		2,810
Extra Space Northern Properties Six LLC	10	10%	35%	(2,855)		(2,541)
Storage Portfolio II JV LLC	36	10%	30%	(5,954)		(5,441)
VRS Self Storage, LLC	16	45%	54%	(14,570)		17,186
Storage Portfolio I LLC	24	34%	49%	(39,817)		(39,144)
Other minority owned stores	17	10-50%	19-50%	23,429		28,395
SmartStop Self Storage REIT, Inc. Preferred Stock (4)	n/a	n/a	n/a	200,000		200,000
Net Investments in and Cash distributions in unconsolidated real estate entities	257			$	310,569	$	350,318

(1) Includes pro-rata equity ownership share and maximum potential promoted interest.

(2) In June 2021, the WICNN JV LLC and GFN JV, LLC joint ventures sold all 17 of the stores owned by the joint ventures to a third party. Subsequent to the sales, these joint ventures were dissolved. As a result of these transactions, the Company recorded a gain of $5,739, which is included in Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest in the Company's condensed consolidated statements of operations.

(3) The Company sold 16 operating stores to this newly formed joint venture in March 2021. The Company received cash of $132,759 and an interest in the new joint venture valued at $33,878. This joint venture is unconsolidated and the Company accounts for its investment under the equity method of accounting as the Company does not have voting control but does exercise significant influence over the joint venture.

(4) The Company invested in shares of convertible preferred stock of SmartStop. The dividend rate for the preferred shares is 6.25% per annum, subject to increase after five years. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing of SmartStop. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company's condensed consolidated statements of operations.

During the nine months ended September 30, 2021, the Company contributed a total of $20,834 of cash to its joint ventures, including its pro-rata portion of the purchase price of 15 operating stores and other capital contributions related to cash flow requirements for lease up stores.

In June 2021, the Company sold its interest in two unconsolidated joint ventures to its joint venture partner. The Company received proceeds of $1,888 in cash, and recorded a gain of $525 which is included in Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest in the Company's condensed consolidated statements of operations. The Company also purchased its joint venture partners' interests in two unconsolidated joint ventures.

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Investments in Debt Securities and Notes Receivable

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investments in Debt Securities and Notes Receivable

INVESTMENTS IN DEBT SECURITIES AND NOTES RECEIVABLE

Investments in debt securities and notes receivable consists of the Company's investment in mandatorily redeemable preferred stock of Jernigan Capital, Inc. ("JCAP") in connection with JCAP's acquisition by affiliates of NexPoint Advisors, L.P. ("NexPoint Investment") and receivables due to the Company under its bridge loan program. Information about these balances is as follows:

	September 30, 2021		December 31, 2020
Debt securities - NexPoint Series A Preferred Stock	$	200,000	$	200,000
Debt securities - NexPoint Series B Preferred Stock	100,000		100,000
Notes Receivable-Bridge Loans	174,215		187,368
Notes Receivable-Senior Mezzanine Loan, net	101,955		101,553
Dividends Receivable	29,945		4,889
	$	606,115	$	593,810

In November 2020, the Company invested $300,000 in the preferred stock of JCAP in connection with the acquisition of JCAP by affiliates of NexPoint Advisors, L.P. This investment consists of 200,000 Series A Preferred Shares valued at a total of $200,000, and 100,000 Series B Preferred Shares valued at a total of $100,000. The JCAP preferred stock is mandatorily redeemable after five years, with two one-year extension options. NexPoint may redeem the Preferred Shares at any time, subject to certain prepayment penalties. The Company accounts for the JCAP preferred stock as a held to maturity debt security at amortized cost. The Series A Preferred Shares and the Series B Preferred Shares have initial dividend rates of 10.0% and 12.0%, respectively. If the investment is not retired after five years, the preferred dividends increase annually.

In July 2020, the Company purchased a senior mezzanine note receivable with a principal amount of $103,000. This note receivable bears interest at 5.5%, matures in December 2023 and is collateralized through an equity interest in which it or its subsidiaries wholly own 62 storage facilities. The Company paid cash of $101,142 for the loan receivable and accounts for the discount at amortized cost. The discount is being amortized over the term of the loan receivable.

The Company provides bridge loan financing to third-party self-storage operators. These notes receivable consist of primary mortgage and mezzanine loans receivable, collateralized by self-storage properties. These notes receivable typically have a term of three years with two one-year extensions, and have variable interest rates. The Company intends to sell the majority of the mortgage receivables and keep the mezzanine receivables to maturity. During the nine months ended September 30, 2021 the Company sold a total principal amount of $117,336 of its mortgage bridge loans receivable to third parties for a total of $116,822 in cash and closed on $143,270 in new mortgage and mezzanine bridge loans.

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Notes Payable, Net

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Notes Payable, Net

NOTES PAYABLE, NET

In May 2021, the Operating Partnership executed its initial public bond issuance by selling $450.0 million principal amount of 2.550% Senior Notes due 2031 (the "Notes Due 2031"). Interest on the Notes Due 2031 is paid semi-annually in arrears on June 1 and December 1 of each year. The Notes Due 2031 will mature on June 1, 2031, and the Operating Partnership may redeem the Notes Due 2031 at its option and sole discretion at any time prior to March 31, 2031 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.

In September 2021, the Operating Partnership executed a public bond issuance by selling $600.0 million principal amount of 2.350% Senior Notes due 2032 (the "Notes Due 2032"). Interest on the Notes Due 2032 is paid semi-annually in arrears on March 15 and September 15 of each year. The Notes Due 2032 will mature on March 15, 2032, and the Operating Partnership may redeem the Notes Due 2032 at its option and sole discretion at any time prior to March 15, 2032 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.

The Notes Due 2031 and the Notes Due 2032 are unsecured, and are fully and unconditionally guaranteed by the Company, ESS Holdings Business Trust I, and ESS Holdings Business Trust II (the "Guarantors," and together with the Operating Partnership, the "Obligated Group"), on a joint and several basis. The guarantee of the Notes Due 2031 and the Notes Due 2032 will be a senior unsecured obligation of each Guarantor. The Guarantors have no material operations separate from the operation of the Operating Partnership and no material assets, other than their respective investments directly or indirectly in the Operating Partnership, and therefore the assets, liabilities, and results of operations of the Obligated Group are not materially different than those reported in the Company's financial statements.

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Derivatives

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

DERIVATIVES

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and by using derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposure that arises from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (“OCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. A portion of these changes is excluded from accumulated other comprehensive income as it is allocated to noncontrolling interests. During the three and nine months ended September 30, 2021 and 2020, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. In the coming 12 months, the Company estimates that $35,685 will be reclassified and increase interest expense.

The Company held 20 derivative financial instruments which had a total combined notional amount of $1,986,266 as of September 30, 2021.

Fair Values of Derivative Instruments

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the condensed consolidated balance sheets:

	Asset / Liability Derivatives
Derivatives designated as hedging instruments:	September 30, 2021		December 31, 2020
Other assets	$	—	$	—
Other liabilities	$	61,421	$	98,325

Effect of Derivative Instruments

The table below presents the effect of the Company’s derivative financial instruments on the condensed consolidated statements of operations for the periods presented. No tax effect has been presented as the derivative instruments are held by the Company:

	Gain (loss) recognized in OCI For the Three Months Ended September 30,				Location of amounts reclassified from OCI into income	Gain (loss) reclassified from OCI For the Three Months Ended September 30,
Type	2021		2020			2021		2020
Swap Agreements	$	(736)	$	1,525	Interest expense	$	(8,794)	$	(9,666)

	Gain (loss) recognized in OCI For the Nine Months Ended September 30,				Location of amounts reclassified from OCI into income	Gain (loss) reclassified from OCI For the Nine Months Ended September 30,
Type	2021		2020			2021		2020
Swap Agreements	$	10,316	$	(101,535)	Interest expense	$	(26,386)	$	(17,868)

Credit-risk-related Contingent Features

The Company has agreements with some of its derivative counterparties that contain provisions pursuant to which the Company could be declared in default of its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender.

The Company also has an agreement with some of its derivative counterparties that incorporates the loan covenant provisions of the Company’s indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

As of September 30, 2021, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $63,272. As of September 30, 2021, the Company had not posted any collateral related to these agreements. If the Company had breached any of these provisions as of September 30, 2021, it could have been required to cash settle its obligations under the agreements at their termination value of $63,272, including accrued interest.

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Exchangeable Senior Notes

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Exchangeable Senior Notes

EXCHANGEABLE SENIOR NOTES

In September 2015, the Operating Partnership issued $575,000 of its 3.125% Exchangeable Senior Notes due 2035. Costs incurred to issue the 2015 Notes were approximately $11,992, consisting primarily of a 2.0% underwriting fee. These costs were amortized as an adjustment to interest expense over five years, which represented the estimated term based on the first available redemption date, and are included in exchangeable senior notes, net, in the condensed consolidated balance sheets. Prior to the full redemption of the 2015 Notes in November 2020 as described below, the 2015 Notes were general unsecured senior obligations of the Operating Partnership and were fully guaranteed by the Company. Interest was payable on April 1 and October 1 of each year beginning April 1, 2016, until the maturity date of October 1, 2035. The 2015 Notes bore interest at 3.125% per annum and contained an exchange settlement feature, which provided that the 2015 Notes could have been, under certain circumstances, exchangeable for cash (for the principal amount of the 2015 Notes) and, with respect to any excess exchange value, for cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s option.

GAAP requires entities with convertible debt instruments that may be settled entirely or partially in cash upon conversion to separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s economic interest cost. The Company therefore accounted for the liability and equity components of the 2015 Notes separately. The equity components are included in paid-in capital in stockholders’ equity in the condensed consolidated balance sheets, and the value of the equity components are treated as original issue discount for purposes of accounting for the debt components. The discounts were amortized as interest expense over the remaining period of the debt through its first redemption date of October 1, 2020. The effective interest rate on the liability components of the 2015 Notes was 4.0%, which approximated the market rate of interest of similar debt without exchange features (i.e. nonconvertible debt) at the time of issuance.

The amount of interest cost recognized relating to the contractual interest rate and the amortization of the discount on the liability component of the 2015 Notes were as follows for the periods indicated:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Contractual interest	$	—	$	4,492	$	—	$	8,984
Amortization of discount	—		1,233		—		3,675
Total interest expense recognized	$	—	$	5,725	$	—	$	12,659

On October 1, 2020, the holders of $71,513 principal amount of the 2015 Notes exchanged their notes. The Company paid cash of $71,513 for the principal amount and issued 124,819 shares of common stock with a value of $13,495 for the exchange value in excess of the principal amount. On November 2, 2020, the holders of an additional $503,432 principal amount of the 2015 Notes exchanged their notes and the Company redeemed the remaining $55 of outstanding principal amount of the 2015 Notes. The Company paid cash of $503,487 for the principal amount and issued 1,198,962 shares of common stock with a value of $138,900 for the exchange value in excess of the principal amount.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Stockholders' Equity Note [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

On August 9, 2021, the Company filed its $800,000 "at the market" equity program with the Securities and Exchange Commission using a shelf registration statement on Form S-3, and entered into separate equity distribution agreements with ten sales agents. No shares have been sold under the current "at the market" equity program. From January 1, 2021, through August 8, 2021, the Company sold 585,685 shares of common stock under its prior "at the market" equity program resulting in net proceeds of $66,786.

On March 23, 2021, the Company sold 1,600,000 shares of its common stock in a registered offering structured as a bought deal at a price of $129.13 per share resulting in net proceeds of $206,573.

On October 15, 2020, the Company's board of directors authorized a new share repurchase program allowing for the repurchase of shares with an aggregate value up to $400,000. No shares were repurchased during the nine months ended September 30, 2021.

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Noncontrolling Interest Represented by Preferred Operating Partnership Units

9 Months Ended

Sep. 30, 2021

Noncontrolling Interest [Abstract]

Noncontrolling Interest Represented by Preferred Operating Partnership Units

NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS

Classification of Noncontrolling Interests

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the Operating Partnership’s preferred units and classifies the noncontrolling interest represented by such preferred units as stockholders’ equity in the accompanying condensed consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the condensed consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.

At September 30, 2021 and December 31, 2020, the noncontrolling interests represented by the Preferred OP Units qualified for classification as permanent equity on the Company's condensed consolidated balance sheets. The partnership agreement of the Operating Partnership (as amended, the "Partnership Agreement") provides for the designation and issuance of the OP Units. As of September 30, 2021 and December 31, 2020, noncontrolling interests in Preferred OP Units were presented net of notes receivable from Preferred OP Unit holders of $100,000 as more fully described below. The balances for each of the specific Preferred OP Units as presented in the Statement of Noncontrolling Interests and Equity as of the periods indicated is as follows:

	September 30, 2021		December 31, 2020
Series A Units	$	14,818	$	13,788
Series B Units	38,068		40,902
Series D Units	117,362		117,362
	$	170,248	$	172,052

Series A Participating Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series A Units. The Series A Units have priority over all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series A Units were issued in June 2007. Series A Units in the amount of $101,700 bear a fixed priority return of 2.3% and originally had a fixed liquidation value of $115,000. The remaining balance participates in distributions with, and has a liquidation value equal to that of the OP Units. The Series A Units are redeemable at the option of the holder, which redemption obligation may be satisfied, at the Company’s option, in cash or shares of its common stock. As a result of the redemption of 114,500 Series A Units in October 2014, the remaining fixed liquidation value was reduced to $101,700, which represents 875,480 Series A Units.

On June 25, 2007, the Operating Partnership loaned the holder of the Series A Units $100,000. The loan bears interest at 2.1%. The loan is secured by the borrower’s Series A Units. No future redemption of Series A Units can be made unless the loan secured by the Series A Units is also repaid. The Series A Units are shown on the balance sheet net of the $100,000 loan because the borrower under the loan receivable is also the holder of the Series A Units.

Series B Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series B Units. The Series B Units rank junior to the Series A Units, on parity with the Series C Units and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series B Units were issued in 2013 and 2014. The Series B Units have a liquidation value of $25.00 per unit for a fixed liquidation value of $38,068 which represents 1,522,727 Series B Units. Holders of the Series B Units receive distributions at an annual rate of 6.0%. These distributions are cumulative. The Series B Units became redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock.

On August 31, 2021, 113,360 Series B Units were redeemed for 15,265 shares of common stock.

Series C Convertible Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series C Units. The Series C Units ranked junior to the Series A Units, on parity with the Series B Units and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series C Units were issued in 2013 and 2014 and had a liquidation value of $42.10 per unit. The Series C Units became redeemable at the option of the holder one year from the date of issuance, which redemption obligation could be satisfied at the Company’s option in cash or shares of its common stock. The Series C Units were convertible into OP Units at the option of the holder at a rate of 0.9145 OP Units per Series C Unit converted. This conversion option expired upon the fifth anniversary of the date of issuance.

In December 2014, the Operating Partnership loaned certain holders of the Series C Units $20,230. The loan receivable, which was collateralized by the Series C Units, bears interest at 5.0% per annum and matures on December 15, 2024. The Series C Units were shown on the balance sheet net of the loan balance because the borrower under the loan receivable was also the holder of the Series C Units.

On December 1, 2018, certain holders of the Series C Units converted their Series C Units into OP Units, with a total of 407,996 Series C Units being converted into a total of 373,113 OP Units. On April 25, 2019, the remaining 296,020 Series C Units were converted into 270,709 OP Units. The remaining outstanding balance of the loan receivable of $1,900 is shown as a reduction of the noncontrolling interests related to the OP Units as of September 30, 2021 and December 31, 2020. See footnote 13 for further discussion of noncontrolling interests.

Series D Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series D Units. The Series D Units rank junior to the Series A Units, on parity with the Series B Units and Series C Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series D Units have been issued at various times from 2014 to 2019. The Series D Units have a liquidation value of $25.00 per unit, for a fixed liquidation value of $117,362, which represents 4,694,485 Series D Units. Holders of the Series D Units receive distributions at an annual rate between 3.0% and 5.0%. These distributions are cumulative. The Series D Units become redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock. In addition, certain of the Series D Units are exchangeable for OP Units at the option of the holder until the tenth anniversary of the date of issuance, with the number of OP Units to be issued equal to $25.00 per Series D Unit, divided by the value of a share of common stock as of the exchange date.

NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP AND OTHER NONCONTROLLING INTERESTS

Noncontrolling Interest in Operating Partnership

The Company’s interest in its stores is held through the Operating Partnership. Between its general partner and limited partner interests, the Company held a 94.7% ownership interest in the Operating Partnership as of September 30, 2021. The remaining ownership interests in the Operating Partnership (including Preferred OP Units) of 5.3% are held by certain former owners of assets acquired by the Operating Partnership. As of September 30, 2021 and December 31, 2020, the noncontrolling interests in the Operating Partnership are shown on the balance sheet net of notes receivable of $1,900 and $2,311, respectively, because the borrowers under the loan receivable are also holders of OP Units (Note 12). This loan receivable bears interest at 5.0% per annum and matures on December 15, 2024.

The noncontrolling interest in the Operating Partnership represents OP Units that are not owned by the Company. OP Units are redeemable at the option of the holder, which redemption may be satisfied at the Company's option in cash, based upon the fair market value of an equivalent number of shares of the Company’s common stock (based on the ten-day average trading price) at the time of the redemption, or shares of the Company's common stock on a one-for-one basis, subject to anti-dilution adjustments provided in the Partnership Agreement. As of September 30, 2021, the ten-day average closing price of the Company's common stock was $174.98 and there were 5,733,498 OP Units outstanding. Assuming that all of the OP Unit holders exercised their right to redeem all of their OP Units on September 30, 2021 and the Company elected to pay the OP Unit holders cash, the Company would have paid $1,003,247 in cash consideration to redeem the units.

OP Unit activity is summarized as follows for the periods presented:

	For the Nine Months Ended September 30,
	2021		2020
OP Units redeemed for common stock	64,287		108,862
OP Units redeemed for cash	3,000		—
Cash paid for OP Units redeemed	$	472	$	—

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations, and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the OP Units and classifies the noncontrolling interest represented by the OP Units as stockholders’ equity in the accompanying condensed consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the condensed consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.

Other Noncontrolling Interests

Other noncontrolling interests represent the ownership interests of third parties in two consolidated joint ventures as of September 30, 2021. One joint venture owns four operating stores and the other owns one property that is under development. The voting interests of the third-party owners are between 10.0% and 20.0%.

On August 25, 2021, the Company purchased for $12,215 in cash the remaining third party ownership interest in a previously consolidated joint venture that owned two operating stores.

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Noncontrolling Interest in Operating Partnership and Other Noncontrolling Interests

9 Months Ended

Sep. 30, 2021

Noncontrolling Interest [Abstract]

Noncontrolling Interest in Operating Partnership and Other Noncontrolling Interests

NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS

Classification of Noncontrolling Interests

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the Operating Partnership’s preferred units and classifies the noncontrolling interest represented by such preferred units as stockholders’ equity in the accompanying condensed consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the condensed consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.

At September 30, 2021 and December 31, 2020, the noncontrolling interests represented by the Preferred OP Units qualified for classification as permanent equity on the Company's condensed consolidated balance sheets. The partnership agreement of the Operating Partnership (as amended, the "Partnership Agreement") provides for the designation and issuance of the OP Units. As of September 30, 2021 and December 31, 2020, noncontrolling interests in Preferred OP Units were presented net of notes receivable from Preferred OP Unit holders of $100,000 as more fully described below. The balances for each of the specific Preferred OP Units as presented in the Statement of Noncontrolling Interests and Equity as of the periods indicated is as follows:

	September 30, 2021		December 31, 2020
Series A Units	$	14,818	$	13,788
Series B Units	38,068		40,902
Series D Units	117,362		117,362
	$	170,248	$	172,052

Series A Participating Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series A Units. The Series A Units have priority over all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series A Units were issued in June 2007. Series A Units in the amount of $101,700 bear a fixed priority return of 2.3% and originally had a fixed liquidation value of $115,000. The remaining balance participates in distributions with, and has a liquidation value equal to that of the OP Units. The Series A Units are redeemable at the option of the holder, which redemption obligation may be satisfied, at the Company’s option, in cash or shares of its common stock. As a result of the redemption of 114,500 Series A Units in October 2014, the remaining fixed liquidation value was reduced to $101,700, which represents 875,480 Series A Units.

On June 25, 2007, the Operating Partnership loaned the holder of the Series A Units $100,000. The loan bears interest at 2.1%. The loan is secured by the borrower’s Series A Units. No future redemption of Series A Units can be made unless the loan secured by the Series A Units is also repaid. The Series A Units are shown on the balance sheet net of the $100,000 loan because the borrower under the loan receivable is also the holder of the Series A Units.

Series B Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series B Units. The Series B Units rank junior to the Series A Units, on parity with the Series C Units and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series B Units were issued in 2013 and 2014. The Series B Units have a liquidation value of $25.00 per unit for a fixed liquidation value of $38,068 which represents 1,522,727 Series B Units. Holders of the Series B Units receive distributions at an annual rate of 6.0%. These distributions are cumulative. The Series B Units became redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock.

On August 31, 2021, 113,360 Series B Units were redeemed for 15,265 shares of common stock.

Series C Convertible Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series C Units. The Series C Units ranked junior to the Series A Units, on parity with the Series B Units and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series C Units were issued in 2013 and 2014 and had a liquidation value of $42.10 per unit. The Series C Units became redeemable at the option of the holder one year from the date of issuance, which redemption obligation could be satisfied at the Company’s option in cash or shares of its common stock. The Series C Units were convertible into OP Units at the option of the holder at a rate of 0.9145 OP Units per Series C Unit converted. This conversion option expired upon the fifth anniversary of the date of issuance.

In December 2014, the Operating Partnership loaned certain holders of the Series C Units $20,230. The loan receivable, which was collateralized by the Series C Units, bears interest at 5.0% per annum and matures on December 15, 2024. The Series C Units were shown on the balance sheet net of the loan balance because the borrower under the loan receivable was also the holder of the Series C Units.

On December 1, 2018, certain holders of the Series C Units converted their Series C Units into OP Units, with a total of 407,996 Series C Units being converted into a total of 373,113 OP Units. On April 25, 2019, the remaining 296,020 Series C Units were converted into 270,709 OP Units. The remaining outstanding balance of the loan receivable of $1,900 is shown as a reduction of the noncontrolling interests related to the OP Units as of September 30, 2021 and December 31, 2020. See footnote 13 for further discussion of noncontrolling interests.

Series D Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series D Units. The Series D Units rank junior to the Series A Units, on parity with the Series B Units and Series C Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series D Units have been issued at various times from 2014 to 2019. The Series D Units have a liquidation value of $25.00 per unit, for a fixed liquidation value of $117,362, which represents 4,694,485 Series D Units. Holders of the Series D Units receive distributions at an annual rate between 3.0% and 5.0%. These distributions are cumulative. The Series D Units become redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock. In addition, certain of the Series D Units are exchangeable for OP Units at the option of the holder until the tenth anniversary of the date of issuance, with the number of OP Units to be issued equal to $25.00 per Series D Unit, divided by the value of a share of common stock as of the exchange date.

NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP AND OTHER NONCONTROLLING INTERESTS

Noncontrolling Interest in Operating Partnership

The Company’s interest in its stores is held through the Operating Partnership. Between its general partner and limited partner interests, the Company held a 94.7% ownership interest in the Operating Partnership as of September 30, 2021. The remaining ownership interests in the Operating Partnership (including Preferred OP Units) of 5.3% are held by certain former owners of assets acquired by the Operating Partnership. As of September 30, 2021 and December 31, 2020, the noncontrolling interests in the Operating Partnership are shown on the balance sheet net of notes receivable of $1,900 and $2,311, respectively, because the borrowers under the loan receivable are also holders of OP Units (Note 12). This loan receivable bears interest at 5.0% per annum and matures on December 15, 2024.

The noncontrolling interest in the Operating Partnership represents OP Units that are not owned by the Company. OP Units are redeemable at the option of the holder, which redemption may be satisfied at the Company's option in cash, based upon the fair market value of an equivalent number of shares of the Company’s common stock (based on the ten-day average trading price) at the time of the redemption, or shares of the Company's common stock on a one-for-one basis, subject to anti-dilution adjustments provided in the Partnership Agreement. As of September 30, 2021, the ten-day average closing price of the Company's common stock was $174.98 and there were 5,733,498 OP Units outstanding. Assuming that all of the OP Unit holders exercised their right to redeem all of their OP Units on September 30, 2021 and the Company elected to pay the OP Unit holders cash, the Company would have paid $1,003,247 in cash consideration to redeem the units.

OP Unit activity is summarized as follows for the periods presented:

	For the Nine Months Ended September 30,
	2021		2020
OP Units redeemed for common stock	64,287		108,862
OP Units redeemed for cash	3,000		—
Cash paid for OP Units redeemed	$	472	$	—

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations, and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the OP Units and classifies the noncontrolling interest represented by the OP Units as stockholders’ equity in the accompanying condensed consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the condensed consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.

Other Noncontrolling Interests

Other noncontrolling interests represent the ownership interests of third parties in two consolidated joint ventures as of September 30, 2021. One joint venture owns four operating stores and the other owns one property that is under development. The voting interests of the third-party owners are between 10.0% and 20.0%.

On August 25, 2021, the Company purchased for $12,215 in cash the remaining third party ownership interest in a previously consolidated joint venture that owned two operating stores.

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Segment Information

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company’s segment disclosures present the measure used by the chief operating decision makers ("CODMs") for purposes of assessing each segment’s performance. The Company’s CODMs are comprised of several members of its executive management team who use net operating income ("NOI") to assess the performance of the business for the Company’s reportable operating segments. NOI for the Company's self-storage operations represents total property revenue less direct property operating expenses. NOI for the Company's tenant reinsurance segment represents tenant reinsurance revenues less tenant reinsurance expense.

The Company has two reportable segments: (1) self-storage operations and (2) tenant reinsurance. The self-storage operations activities include rental operations of wholly-owned stores. The Company's consolidated revenues equal total segment revenues plus property management fees and other income. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the stores operated by the Company. Excluded from segment revenues and net operating income is property management fees and other income.

For all periods presented, substantially all of the Company's real estate assets, intangible assets, other assets, and accrued and other liabilities are associated with the self-storage operations segment. Financial information for the Company’s business segments is set forth below:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Self-Storage Operations	$	351,355	$	290,423	$	976,448	$	856,438
Tenant Reinsurance	44,258		39,294		126,211		107,985
Total segment revenues	$	395,613	$	329,717	$	1,102,659	$	964,423
Operating expenses:
Self-Storage Operations	$	92,794	$	92,322	$	274,316	$	271,659
Tenant Reinsurance	7,509		7,189		21,405		20,725
Total segment operating expenses	$	100,303	$	99,511	$	295,721	$	292,384
Net operating income:
Self-Storage Operations	$	258,561	$	198,101	$	702,132	$	584,779
Tenant Reinsurance	36,749		32,105		104,806		87,260
Total segment net operating income:	$	295,310	$	230,206	$	806,938	$	672,039
Other components of net income:
Management fees and other income	$	16,879	$	13,307	$	47,320	$	38,299
General and administrative expense	(24,395)		(23,894)		(74,276)		(72,242)
Depreciation and amortization expense	(61,516)		(56,412)		(179,685)		(167,705)
Gain on real estate transactions	—		—		63,883		—
Interest expense	(39,670)		(42,213)		(120,605)		(127,610)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	—		(1,233)		—		(3,675)
Interest income	11,729		3,145		36,871		6,488
Equity in earnings and dividend income from unconsolidated real estate entities	8,255		5,605		23,533		15,692
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		—
Income tax expense	(6,772)		(4,657)		(16,330)		(10,013)
Net income	$	199,820	$	123,854	$	593,900	$	351,273

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

As of September 30, 2021, the Company was involved in various legal proceedings and was subject to various claims and complaints arising in the ordinary course of business. Because litigation is inherently unpredictable, the outcome of these matters cannot presently be determined with any degree of certainty. In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. The Company could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period, notwithstanding the fact that the Company is currently vigorously defending any legal proceedings against it.

As of September 30, 2021, the Company was under agreement to acquire 15 stores at a total purchase price of $221,850. Fourteen stores are scheduled to close in 2021 and one store is scheduled to close in 2022. Additionally, the Company is under agreement to acquire 11 stores with joint venture partners, for a total investment of $23,775. Ten stores are scheduled to close in 2021 and one store scheduled to close in 2022.

Although there can be no assurance, the Company is not aware of any material environmental liability, for which it believes it will be ultimately responsible, that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s stores, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to its stores could result in future material environmental liabilities.

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

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 nine months ended September 30, 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021. The condensed consolidated balance sheet as of December 31, 2020 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, 2020, as filed with the Securities and Exchange Commission.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, "Reference Rate Reform (Topic 848)." ASU 2020-04 and subsequent amendments contain practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur through December 31, 2022. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)." ASU 2020-06 simplifies the accounting for convertible instruments and contracts in an entity's own equity, and amended related earnings per share guidance. The guidance in ASU 2020-06 becomes effective for fiscal years beginning after December 15, 2021. Early adoption is permitted no earlier than the fiscal years beginning after December 15, 2020. The guidance may be adopted on a modified or fully retrospective basis. The Company is currently assessing the impact of the adoption of ASU 2020-06 on its consolidated financial statements.

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Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall. 

	Fair Value Measurements at Reporting Date Using
Description	Quoted 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	$	—	$	—	$	—
Other liabilities - Cash flow hedge swap agreements	$	—	$	61,421	$	—

Schedule of Fair Value of Financial Instruments

The fair values of the Company’s fixed-rate assets and liabilities were as follows for the periods indicated:

	September 30, 2021				December 31, 2020
	Fair Value		Carrying Value		Fair Value		Carrying Value
Notes receivable from Preferred and Common Operating Partnership unit holders	$	100,815	$	101,900	$	102,333	$	102,311
Fixed rate notes receivable	$	107,176	$	104,251	$	114,145	$	104,000
Fixed rate notes payable	$	4,575,824	$	4,512,030	$	3,816,530	$	3,637,220

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Schedule of Antidilutive Shares Excluded from Computation of Earnings Per Share

The following table presents the number of Preferred Operating Partnership units, and the potential common shares, that were excluded from the computation of earnings per share as their effect would have been anti-dilutive.

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2021	2020	2021	2020
	Equivalent Shares (if converted)	Equivalent Shares (if converted)	Equivalent Shares (if converted)	Equivalent Shares (if converted)
Common OP Units	—	5,815,916	—	5,870,459
Series A Units (Variable Only)	—	875,480	—	875,480
Series B Units	225,972	400,668	271,132	416,796
Series D Units	663,888	1,135,469	784,139	1,187,083
	889,860	8,227,533	1,055,271	8,349,818

Schedule of Computation of Earnings Per Common Share

The computation of earnings per common share is as follows for the periods presented:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Net income attributable to common stockholders	$	188,276	$	114,633	$	559,222	$	325,723
Earnings and dividends allocated to participating securities	(260)		(177)		(800)		(513)
Earnings for basic computations	188,016		114,456		558,422		325,210
Earnings and dividends allocated to participating securities	—		177		—		513
Income allocated to noncontrolling interest - Preferred Operating Partnership Units and Operating Partnership Units	9,810		—		29,395		—
Fixed component of income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units)	(572)		—		(1,716)		—
Net income for diluted computations	$	197,254	$	114,633	$	586,101	$	325,723
Weighted average common shares outstanding:
Average number of common shares outstanding - basic	133,809,750		128,862,341		133,197,903		129,044,954
OP Units	5,733,936		—		5,767,132		—
Series A Units	875,480		—		875,480		—
Unvested restricted stock awards included for treasury stock method	—		214,909		—		212,311
Shares related to exchangeable senior notes and dilutive stock options	6,103		793,846		14,366		808,856
Average number of common shares outstanding - diluted	140,425,269		129,871,096		139,854,881		130,066,121
Earnings per common share
Basic	$	1.41	$	0.89	$	4.19	$	2.52
Diluted	$	1.40	$	0.88	$	4.19	$	2.50

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Store Acquisitions and Dispositions (Tables)

9 Months Ended

Sep. 30, 2021

Real Estate [Abstract]

Schedule of Operating Properties Acquired

The following table shows the Company’s acquisitions of stores for the three and nine months ended September 30, 2021 and 2020. The table excludes purchases of raw land and improvements made to existing assets. All acquisitions are considered asset acquisitions under ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business."

			Consideration Paid												Total
Quarter	Number of Stores		Total		Cash Paid		Loan Assumed		Finance Lease Liability		Investments in Real Estate Ventures		Net Liabilities/ (Assets) Assumed		Real estate assets
Q3 2021	12	(1)	$	186,689	$	185,497	$	—	$	445	$	—	$	747	$	186,689
Q2 2021	15	(2)	193,783		190,729		—		—		2,673		381		193,783
Q1 2021	9		151,884		148,940		—		—		—		2,944		151,884
	36		$	532,356	$	525,166	$	—	$	445	$	2,673	$	4,072	$	532,356
Q3 2020	8	(3)	$	101,731	$	86,996	$	—	$	13,833	$	—	$	902	$	101,731
Q2 2020	—		—		—		—		—		—		—		—
Q1 2020	2		19,399		19,354		—		—		—		45		19,399
	10		$	121,130	$	106,350	$	—	$	13,833	$	—	$	947	$	121,130

(1) Store acquisitions during the three months ended September 30, 2021 include the acquisition of one store that was subject to a finance land lease. The right-of-use asset associated with this lease is included in real estate assets above.

(2) Store acquisitions during the three months ended June 30, 2021 include the acquisition of two stores previously held in joint ventures where the Company held a noncontrolling interest. The Company purchased its partners' equity interests in these joint ventures, and the properties owned by the joint ventures became wholly owned by the Company. No gain or loss was recognized as a result of these acquisitions.

(3) Store acquisitions during the three months ended September 30, 2020 include the acquisition of two stores that were subject to finance land leases. The right-of-use assets associated with these leases are included in real estate assets above.

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Investments in Unconsolidated Real Estate Entities (Tables)

9 Months Ended

Sep. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

Schedule of investments in unconsolidated real estate ventures

Net investments in unconsolidated real estate ventures and cash distributions in unconsolidated real estate ventures consist of the following:

	Number of Stores	Equity Ownership %	Excess Profit % (1)	September 30,		December 31,
				2021		2020
PR EXR Self Storage, LLC	5	25%	40%	$	59,633	$	60,092
WICNN JV LLC (2)	—	10%	35%	—		36,032
ESS-CA TIVS JV LP (3)	16	55%	60%	33,543		—
GFN JV, LLC (2)	—	10%	30%	—		18,397
ESS-NYFL JV LP	11	16%	24%	11,959		12,211
PRISA Self Storage LLC	85	4%	4%	8,694		8,815
Alan Jathoo JV LLC	9	10%	10%	7,651		7,780
Storage Portfolio IV JV LLC	15	10%	30%	20,528		—
Storage Portfolio III JV LLC	5	10%	30%	5,613		5,726
ESS Bristol Investments LLC	8	10%	30%	2,715		2,810
Extra Space Northern Properties Six LLC	10	10%	35%	(2,855)		(2,541)
Storage Portfolio II JV LLC	36	10%	30%	(5,954)		(5,441)
VRS Self Storage, LLC	16	45%	54%	(14,570)		17,186
Storage Portfolio I LLC	24	34%	49%	(39,817)		(39,144)
Other minority owned stores	17	10-50%	19-50%	23,429		28,395
SmartStop Self Storage REIT, Inc. Preferred Stock (4)	n/a	n/a	n/a	200,000		200,000
Net Investments in and Cash distributions in unconsolidated real estate entities	257			$	310,569	$	350,318

(1) Includes pro-rata equity ownership share and maximum potential promoted interest.

(2) In June 2021, the WICNN JV LLC and GFN JV, LLC joint ventures sold all 17 of the stores owned by the joint ventures to a third party. Subsequent to the sales, these joint ventures were dissolved. As a result of these transactions, the Company recorded a gain of $5,739, which is included in Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest in the Company's condensed consolidated statements of operations.

(3) The Company sold 16 operating stores to this newly formed joint venture in March 2021. The Company received cash of $132,759 and an interest in the new joint venture valued at $33,878. This joint venture is unconsolidated and the Company accounts for its investment under the equity method of accounting as the Company does not have voting control but does exercise significant influence over the joint venture.

(4) The Company invested in shares of convertible preferred stock of SmartStop. The dividend rate for the preferred shares is 6.25% per annum, subject to increase after five years. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing of SmartStop. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company's condensed consolidated statements of operations.

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Investments in Debt Securities and Notes Receivable (Tables)

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investments in Debt Securities and Bridge Loans Receivable

Information about these balances is as follows:

	September 30, 2021		December 31, 2020
Debt securities - NexPoint Series A Preferred Stock	$	200,000	$	200,000
Debt securities - NexPoint Series B Preferred Stock	100,000		100,000
Notes Receivable-Bridge Loans	174,215		187,368
Notes Receivable-Senior Mezzanine Loan, net	101,955		101,553
Dividends Receivable	29,945		4,889
	$	606,115	$	593,810

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Derivatives (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of balance sheet classification and fair value of entity's derivative financial instruments

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the condensed consolidated balance sheets:

	Asset / Liability Derivatives
Derivatives designated as hedging instruments:	September 30, 2021		December 31, 2020
Other assets	$	—	$	—
Other liabilities	$	61,421	$	98,325

Schedule of information relating to gain (loss) recognized on swap agreements

The table below presents the effect of the Company’s derivative financial instruments on the condensed consolidated statements of operations for the periods presented. No tax effect has been presented as the derivative instruments are held by the Company:

	Gain (loss) recognized in OCI For the Three Months Ended September 30,				Location of amounts reclassified from OCI into income	Gain (loss) reclassified from OCI For the Three Months Ended September 30,
Type	2021		2020			2021		2020
Swap Agreements	$	(736)	$	1,525	Interest expense	$	(8,794)	$	(9,666)

	Gain (loss) recognized in OCI For the Nine Months Ended September 30,				Location of amounts reclassified from OCI into income	Gain (loss) reclassified from OCI For the Nine Months Ended September 30,
Type	2021		2020			2021		2020
Swap Agreements	$	10,316	$	(101,535)	Interest expense	$	(26,386)	$	(17,868)

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Exchangeable Senior Notes (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Summary of amount of interest cost recognized relating to contractual interest rates and amortization of discounts on liability components of notes

The amount of interest cost recognized relating to the contractual interest rate and the amortization of the discount on the liability component of the 2015 Notes were as follows for the periods indicated:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Contractual interest	$	—	$	4,492	$	—	$	8,984
Amortization of discount	—		1,233		—		3,675
Total interest expense recognized	$	—	$	5,725	$	—	$	12,659

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Noncontrolling Interest (Tables)

9 Months Ended

Sep. 30, 2021

Noncontrolling Interest [Abstract]

Balances of OP Units

The balances for each of the specific Preferred OP Units as presented in the Statement of Noncontrolling Interests and Equity as of the periods indicated is as follows:

	September 30, 2021		December 31, 2020
Series A Units	$	14,818	$	13,788
Series B Units	38,068		40,902
Series D Units	117,362		117,362
	$	170,248	$	172,052

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Noncontrolling Interest in Operating Partnership and Other Noncontrolling Interests (Tables)

9 Months Ended

Sep. 30, 2021

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interest

OP Unit activity is summarized as follows for the periods presented:

	For the Nine Months Ended September 30,
	2021		2020
OP Units redeemed for common stock	64,287		108,862
OP Units redeemed for cash	3,000		—
Cash paid for OP Units redeemed	$	472	$	—

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Schedule of Financial Information of Business Segments

Financial information for the Company’s business segments is set forth below:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Self-Storage Operations	$	351,355	$	290,423	$	976,448	$	856,438
Tenant Reinsurance	44,258		39,294		126,211		107,985
Total segment revenues	$	395,613	$	329,717	$	1,102,659	$	964,423
Operating expenses:
Self-Storage Operations	$	92,794	$	92,322	$	274,316	$	271,659
Tenant Reinsurance	7,509		7,189		21,405		20,725
Total segment operating expenses	$	100,303	$	99,511	$	295,721	$	292,384
Net operating income:
Self-Storage Operations	$	258,561	$	198,101	$	702,132	$	584,779
Tenant Reinsurance	36,749		32,105		104,806		87,260
Total segment net operating income:	$	295,310	$	230,206	$	806,938	$	672,039
Other components of net income:
Management fees and other income	$	16,879	$	13,307	$	47,320	$	38,299
General and administrative expense	(24,395)		(23,894)		(74,276)		(72,242)
Depreciation and amortization expense	(61,516)		(56,412)		(179,685)		(167,705)
Gain on real estate transactions	—		—		63,883		—
Interest expense	(39,670)		(42,213)		(120,605)		(127,610)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	—		(1,233)		—		(3,675)
Interest income	11,729		3,145		36,871		6,488
Equity in earnings and dividend income from unconsolidated real estate entities	8,255		5,605		23,533		15,692
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		—
Income tax expense	(6,772)		(4,657)		(16,330)		(10,013)
Net income	$	199,820	$	123,854	$	593,900	$	351,273

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Organization (Detail)	Sep. 30, 2021 store state
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating storage facilities in which the entity has equity interests (in stores)	1,227
Number of stores owned by franchisees and third parties	827
Number of operating stores owned and/or managed	2,054
Number of states in which operating storage facilities are located | state	41

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Fair Value Disclosures - Assets and Liabilities on a Recurring Basis (Detail) - Recurring Basis $ in Thousands	Sep. 30, 2021 USD ($)
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other assets - Cash flow hedge swap agreements	$ 0
Other liabilities - Cash flow hedge swap agreements	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other assets - Cash flow hedge swap agreements	0
Other liabilities - Cash flow hedge swap agreements	61,421
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other assets - Cash flow hedge swap agreements	0
Other liabilities - Cash flow hedge swap agreements	$ 0

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Fair Value Disclosures - Additional Information (Detail)	Sep. 30, 2021 store
Fair Value Disclosures [Abstract]
Number of operating stores held-for-sale	16

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Fair Value Disclosures - Schedule of Financial Instruments (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fair Value
Fair Value of Financial Instruments [Line Items]
Notes receivable from Preferred and Common Operating Partnership unit holders	$ 100,815	$ 102,333
Fixed rate notes receivable	107,176	114,145
Fixed rate notes payable	4,575,824	3,816,530
Carrying Value
Fair Value of Financial Instruments [Line Items]
Notes receivable from Preferred and Common Operating Partnership unit holders	101,900	102,311
Fixed rate notes receivable	104,251	104,000
Fixed rate notes payable	$ 4,512,030	$ 3,637,220

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Earnings Per Common Share - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per common share (in shares)	889,860	8,227,533	1,055,271	8,349,818
Average share price (in dollars per share)	$ 176.78	$ 103.36
Exchangeable Senior Notes 3.125% due 2035 (the 2015 Notes)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Principal amount of notes issued		$ 575,000,000		$ 575,000,000	$ 575,000,000
Debt stated interest rate		3.125%		3.125%	3.125%
Shares related to the Notes included in the computation for diluted earnings per share (in shares)	0	761,975	0	761,975
Series A Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Exchangeable preferred operating partnership units settled in cash, minimum	$ 101,700,000		$ 101,700,000
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per common share (in shares)	0	0	0	0

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Earnings Per Common Share - Antidilutive Shares (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per common share (in shares)	889,860	8,227,533	1,055,271	8,349,818
Common OP Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per common share (in shares)	0	5,815,916	0	5,870,459
Series A Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per common share (in shares)	0	875,480	0	875,480
Series B Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per common share (in shares)	225,972	400,668	271,132	416,796
Series D Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per common share (in shares)	663,888	1,135,469	784,139	1,187,083

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Earnings Per Common Share - Schedule of Computation (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income attributable to common stockholders	$ 188,276	$ 114,633	$ 559,222	$ 325,723
Earnings and dividends allocated to participating securities	(260)	(177)	(800)	(513)
Earnings for basic computations	188,016	114,456	558,422	325,210
Earnings and dividends allocated to participating securities	0	177	0	513
Income allocated to noncontrolling interest - Preferred Operating Partnership Units and Operating Partnership Units	9,810	0	29,395	0
Fixed component of income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units)	(572)	0	(1,716)	0
Net income for diluted computations	$ 197,254	$ 114,633	$ 586,101	$ 325,723
Weighted average common shares outstanding:
Average number of common shares outstanding - basic (in shares)	133,809,750	128,862,341	133,197,903	129,044,954
OP Units (in shares)	5,733,936	0	5,767,132	0
Unvested restricted stock awards included for treasury stock method (in shares)	0	214,909	0	212,311
Shares related to exchangeable senior notes and dilutive stock options (in shares)	6,103	793,846	14,366	808,856
Average number of common shares outstanding - diluted (in shares)	140,425,269	129,871,096	139,854,881	130,066,121
Earnings per common share
Basic (in dollars per share)	$ 1.41	$ 0.89	$ 4.19	$ 2.52
Diluted (in dollars per share)	$ 1.40	$ 0.88	$ 4.19	$ 2.50
Series A Units
Weighted average common shares outstanding:
Preferred Units (in shares)	875,480	0	875,480	0

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Store Acquisitions and Dispositions (Detail) $ in Thousands		3 Months Ended						9 Months Ended
	Mar. 01, 2021 USD ($) store	Sep. 30, 2021 USD ($) store	Jun. 30, 2021 USD ($) store	Mar. 31, 2021 USD ($) store	Sep. 30, 2020 USD ($) store	Jun. 30, 2020 USD ($) store	Mar. 31, 2020 USD ($) store	Sep. 30, 2021 USD ($) store	Sep. 30, 2020 USD ($) store
Real Estate [Abstract]
Number of Stores | store		12	15	9	8	0	2	36	10
Total Consideration Paid		$ 186,689	$ 193,783	$ 151,884	$ 101,731	$ 0	$ 19,399	$ 532,356	$ 121,130
Cash Paid		185,497	190,729	148,940	86,996	0	19,354	525,166	106,350
Loan Assumed		0	0	0	0	0	0	0	0
Finance Lease Liability		445	0	0	13,833	0	0	445	13,833
Investments in Real Estate Ventures		0	2,673	0	0	0	0	2,673	0
Net Liabilities/ (Assets) Assumed		$ 747	$ 381	$ 2,944	$ 902	$ 0	$ 45	$ 4,072	$ 947
Number of stores acquired, subject to finance land leases | store		1			2
Number of stores acquired, previously held in joint ventures | store			2
Number of stores sold | store	16
Proceeds from sale of real estate assets and investments in real estate ventures	$ 132,759
Equity Ownership %	55.00%
Real estate exchanged for interest in joint venture	$ 33,878
Gain on sale	$ 64,804

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Investments in Unconsolidated Real Estate Entities (Details) $ in Thousands		1 Months Ended	9 Months Ended
	Mar. 01, 2021 USD ($) store	Jun. 30, 2021 USD ($) store joint_venture	Sep. 30, 2021 USD ($) store	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			257
Equity Ownership %	55.00%
Investment balance			$ 310,569		$ 350,318
Gain on sale of joint ventures		$ 525
Number of stores sold | store	16
Proceeds from sale of real estate assets and investments in real estate ventures	$ 132,759
Real estate exchanged for interest in joint venture	$ 33,878
Amount invested			$ 20,834	$ 13,937
Number of joint venture stores purchased | store			15
Number of joint ventures sold | joint_venture		2
Proceeds from sale of joint ventures		$ 1,888
Number of joint ventures purchased | joint_venture		2
Minimum
Schedule of Equity Method Investments [Line Items]
Equity Ownership %			10.00%
Excess Profit %			19.00%
Maximum
Schedule of Equity Method Investments [Line Items]
Equity Ownership %			50.00%
Excess Profit %			50.00%
PR EXR Self Storage, LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			5
Equity Ownership %			25.00%
Excess Profit %			40.00%
Investment balance			$ 59,633		60,092
WICNN JV LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			0
Equity Ownership %			10.00%
Excess Profit %			35.00%
Investment balance			$ 0		36,032
ESS-CA TIVS JV LP
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			16
Equity Ownership %			55.00%
Excess Profit %			60.00%
Investment balance			$ 33,543		0
GFN JV, LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			0
Equity Ownership %			10.00%
Excess Profit %			30.00%
Investment balance			$ 0		18,397
ESS-NYFL JV LP
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			11
Equity Ownership %			16.00%
Excess Profit %			24.00%
Investment balance			$ 11,959		12,211
PRISA Self Storage LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			85
Equity Ownership %			4.00%
Excess Profit %			4.00%
Investment balance			$ 8,694		8,815
Alan Jathoo JV LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			9
Equity Ownership %			10.00%
Excess Profit %			10.00%
Investment balance			$ 7,651		7,780
Storage Portfolio IV JV LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			15
Equity Ownership %			10.00%
Excess Profit %			30.00%
Investment balance			$ 20,528		0
Storage Portfolio III JV LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			5
Equity Ownership %			10.00%
Excess Profit %			30.00%
Investment balance			$ 5,613		5,726
ESS Bristol Investments LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			8
Equity Ownership %			10.00%
Excess Profit %			30.00%
Investment balance			$ 2,715		2,810
Extra Space Northern Properties Six LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			10
Equity Ownership %			10.00%
Excess Profit %			35.00%
Investment balance			$ (2,855)		(2,541)
Storage Portfolio II JV LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			36
Equity Ownership %			10.00%
Excess Profit %			30.00%
Investment balance			$ (5,954)		(5,441)
VRS Self Storage, LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			16
Equity Ownership %			45.00%
Excess Profit %			54.00%
Investment balance			$ (14,570)		17,186
Storage Portfolio I LLC
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			24
Equity Ownership %			34.00%
Excess Profit %			49.00%
Investment balance			$ (39,817)		(39,144)
Other minority owned stores
Schedule of Equity Method Investments [Line Items]
Number of Stores | store			17
Investment balance			$ 23,429		28,395
SmartStop Self Storage REIT, Inc. Preferred Stock
Schedule of Equity Method Investments [Line Items]
Investment balance			$ 200,000		$ 200,000
Investment, preferred dividend rate			6.25%
Period after which preferred stock dividend is subject to increase			5 years
Investment redemption restriction period			5 years
WICNN JV LLC and GFN JV, LLC
Schedule of Equity Method Investments [Line Items]
Number of joint venture stores sold | store		17
Gain on sale of joint ventures		$ 5,739

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Investments in Debt Securities and Notes Receivable - Schedule (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Schedule of Held-to-maturity Securities [Line Items]
Dividends Receivable	$ 29,945	$ 4,889
Investments in debt securities and notes receivable	606,115	593,810
Notes Receivable-Bridge Loans
Schedule of Held-to-maturity Securities [Line Items]
Notes receivable	174,215	187,368
Notes Receivable-Senior Mezzanine Loan
Schedule of Held-to-maturity Securities [Line Items]
Notes receivable	101,955	101,553
JCAP Series A Preferred Stock
Schedule of Held-to-maturity Securities [Line Items]
Debt securities	200,000	200,000
JCAP Series B Preferred Stock
Schedule of Held-to-maturity Securities [Line Items]
Debt securities	$ 100,000	$ 100,000

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Investments in Debt Securities and Notes Receivable - Additional Information (Details) $ in Thousands	1 Months Ended		9 Months Ended
	Nov. 30, 2020 USD ($) extension_option shares	Jul. 31, 2020 USD ($) facility	Sep. 30, 2021 USD ($) extension_option	Sep. 30, 2020 USD ($)
Schedule of Held-to-maturity Securities [Line Items]
Investment in debt securities	$ 300,000
Debt securities, term	5 years
Debt securities, extension option | extension_option	2
Debt securities, extension term	1 year
Debt securities, period after which preferred dividends increase annually	5 years
Payments for issuance/purchase of notes receivable			$ 143,270	$ 149,750
Bridge loans, extension option | extension_option			2
Bridge loans, extension term			1 year
Proceeds from sale of notes receivable			$ 116,822	$ 0
Notes Receivable-Senior Mezzanine Loan
Schedule of Held-to-maturity Securities [Line Items]
Purchase of note receivable		$ 103,000
Note receivable interest rate		5.50%
Collateral, number of facilities | facility		62
Payments for issuance/purchase of notes receivable		$ 101,142
Notes Receivable-Bridge Loans
Schedule of Held-to-maturity Securities [Line Items]
Bridge loans, original maturities			3 years
Principal amount of notes sold			$ 117,336
Proceeds from sale of notes receivable			$ 116,822
JCAP Series A Preferred Stock
Schedule of Held-to-maturity Securities [Line Items]
Investment in debt securities	$ 200,000
Investment in debt securities (in shares) | shares	200,000
Debt securities, dividend rate	10.00%
JCAP Series B Preferred Stock
Schedule of Held-to-maturity Securities [Line Items]
Investment in debt securities	$ 100,000
Investment in debt securities (in shares) | shares	100,000
Debt securities, dividend rate	12.00%

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Notes Payable, Net (Details) - Senior Notes - USD ($)	Sep. 30, 2021	May 31, 2021
Senior Notes Due 2031
Debt Instrument [Line Items]
Principal amount of notes issued		$ 450,000,000
Debt stated interest rate		2.55%
Senior Notes Due 2032
Debt Instrument [Line Items]
Principal amount of notes issued	$ 600,000,000
Debt stated interest rate	2.35%

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Derivatives - Additional Information (Detail) $ in Thousands	Sep. 30, 2021 USD ($) derivative
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Estimated amount of unrealized gains (losses) expected to be reclassified as interest expense in next fiscal year	$ 35,685
Number of derivative financial instruments | derivative	20
Combined notional amount	$ 1,986,266
Fair value - net liability position	63,272
Contingent cash settlement value	$ 63,272

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Derivatives - Schedule of Balance Sheet Classification and Fair Value of Instruments (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Other assets
Derivative [Line Items]
Other assets - Cash flow hedge swap agreements	$ 0	$ 0
Other liabilities
Derivative [Line Items]
Derivative liability, fair value	$ 61,421	$ 98,325

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Derivatives - Gain (Loss) Recognized on Swap Agreements (Detail) - Swap Agreements - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative [Line Items]
Gain (loss) recognized in OCI	$ (736)	$ 1,525	$ 10,316	$ (101,535)
Gain (loss) reclassified from OCI	$ (8,794)	$ (9,666)	$ (26,386)	$ (17,868)

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Exchangeable Senior Notes - Additional Information (Detail) - USD ($)			1 Months Ended
	Nov. 02, 2020	Oct. 01, 2020	Sep. 30, 2015	Sep. 30, 2020
Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Repurchase of exchangeable senior notes		$ 71,513,000
Repurchase of exchangeable senior notes with common stock (in shares)		124,819
Repurchase of exchangeable senior notes with common stock		$ 13,495,000
Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Repurchase of exchangeable senior notes	$ 503,487,000
Repurchase of exchangeable senior notes with common stock (in shares)	1,198,962
Repurchase of exchangeable senior notes with common stock	$ 138,900,000
Principal amount exchanged	503,432,000
Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Repurchase of exchangeable senior notes	$ 55,000
Exchangeable Senior Notes 3.125% due 2035 (the 2015 Notes)
Debt Instrument [Line Items]
Principal amount of notes issued			$ 575,000,000	$ 575,000,000
Debt stated interest rate			3.125%	3.125%
Related debt issuance costs			$ 11,992,000
Underwriting fee percentage			2.00%
Amortization period			5 years
Effective interest rate on the liability component			4.00%

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Exchangeable Senior Notes - Summary of Amount of Interest Cost Recognized Relating to Contractual Interest Rates and Amortization of Discounts on Liability Components of Notes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Debt Disclosure [Abstract]
Contractual interest	$ 0	$ 4,492	$ 0	$ 8,984
Amortization of discount	0	1,233	0	3,675
Total interest expense recognized	$ 0	$ 5,725	$ 0	$ 12,659

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Stockholders' Equity (Detail)			9 Months Ended
	Aug. 09, 2021 USD ($) sales_agent	Mar. 23, 2021 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) shares	Oct. 15, 2020 USD ($)
Class of Stock [Line Items]
Number of sales agents | sales_agent	10
Shares issued (in shares) | shares		1,600,000
Net proceeds		$ 206,573,000
Average sales price (in dollars per share) | $ / shares		$ 129.13
Share repurchase program, authorized amount				$ 400,000,000
Repurchase of common stock (in shares) | shares			0
At the Market Equity Distribution Agreement
Class of Stock [Line Items]
Aggregate offering price of common shares	$ 800,000,000
Shares issued (in shares) | shares			585,685
Net proceeds			$ 66,786,000

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Noncontrolling Interest Represented by Preferred Operating Partnership Units - Additional Information (Details) $ / shares in Units, $ in Thousands					1 Months Ended			3 Months Ended		9 Months Ended	24 Months Ended
	Aug. 31, 2021 shares	Apr. 25, 2019 shares	Dec. 01, 2018 shares	Jun. 25, 2007 USD ($)	Dec. 31, 2014 USD ($) $ / shares	Oct. 31, 2014 USD ($) shares	Jun. 30, 2007 USD ($)	Sep. 30, 2021 USD ($) $ / shares shares	Jun. 30, 2020 shares	Sep. 30, 2021 USD ($) $ / shares shares	Dec. 31, 2014 $ / shares	Dec. 31, 2020 USD ($)
Noncontrolling Interest [Line Items]
Loans and notes to affiliates | $								$ 100,000		$ 100,000		$ 100,000
Preferred units outstanding (in shares)								5,733,498		5,733,498
Note receivable interest rate					5.00%
Loan to affiliates | $					$ 20,230
Series A Units
Noncontrolling Interest [Line Items]
Fixed priority return on preferred OP units, amount | $							$ 101,700
Fixed priority return on preferred OP units, stated return rate							2.30%
Fixed priority return on preferred OP units, liquidation value | $						$ 101,700	$ 115,000
Preferred units outstanding (in shares)						875,480
Series B Units
Noncontrolling Interest [Line Items]
Preferred units outstanding (in shares)								1,522,727		1,522,727
Liquidation value (in dollars per share) | $ / shares								$ 25.00		$ 25.00
Fixed liquidation value | $								$ 38,068		$ 38,068
Annual rate of return percentage										6.00%
Shares converted (in shares)	113,360
Series C Units
Noncontrolling Interest [Line Items]
Liquidation value (in dollars per share) | $ / shares					$ 42.10						$ 42.10
Shares converted (in shares)		296,020	407,996
Period from date of issuance after which preferred OP units will become redeemable at the option of the holder											1 year
Preferred OP units conversion ratio											0.9145
Series D Units
Noncontrolling Interest [Line Items]
Preferred units outstanding (in shares)								4,694,485		4,694,485
Liquidation value (in dollars per share) | $ / shares								$ 25.00		$ 25.00
Fixed liquidation value | $								$ 117,362		$ 117,362
Series D Units | Minimum
Noncontrolling Interest [Line Items]
Annual rate of return percentage										3.00%
Series D Units | Maximum
Noncontrolling Interest [Line Items]
Annual rate of return percentage										5.00%
Operating Partnership Holders of A Units | Series A Units
Noncontrolling Interest [Line Items]
Loans and notes to affiliates | $				$ 100,000
Maximum number of preferred OP units converted prior to the maturity date of the loan (in shares)						114,500
Note receivable interest rate				2.10%
Noncontrolling Interest - Operating Partnership
Noncontrolling Interest [Line Items]
Issuance of units upon conversion (in shares)		270,709	373,113
Loan receivable, reduction of noncontrolling interests | $								$ 1,900		$ 1,900		$ 2,311
Common Stock | Redemption of Operating Partnership units for stock
Noncontrolling Interest [Line Items]
Redemption of Preferred Units (in shares)	15,265							15,265	30,495

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Noncontrolling Interest Represented by Preferred Operating Partnership Units - Balances of OP Units (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Noncontrolling Interest [Line Items]
Preferred OP Units	$ 170,248	$ 172,052
Series A Units
Noncontrolling Interest [Line Items]
Preferred OP Units	14,818	13,788
Series B Units
Noncontrolling Interest [Line Items]
Preferred OP Units	38,068	40,902
Series D Units
Noncontrolling Interest [Line Items]
Preferred OP Units	$ 117,362	$ 117,362

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Noncontrolling Interest in Operating Partnership and Other Noncontrolling Interests - Additional Information (Details) $ / shares in Units, $ in Thousands		1 Months Ended	9 Months Ended
	Aug. 25, 2021 USD ($) property	Dec. 31, 2014	Sep. 30, 2021 USD ($) property joint_venture $ / shares shares	Dec. 31, 2020 USD ($)
Noncontrolling Interest [Line Items]
Note receivable interest rate		5.00%
Period used as a denomination to determine the average closing price of common stock			10 days
Ten day average closing stock price (in dollars per share) | $ / shares			$ 174.98
Preferred units outstanding (in shares) | shares			5,733,498
Consideration to be paid on redemption of common OP units | $			$ 1,003,247
Subsidiaries
Noncontrolling Interest [Line Items]
Number of operating stores owned | property	2
Purchase of remaining third party ownership interest | $	$ 12,215
Noncontrolling Interest - Operating Partnership
Noncontrolling Interest [Line Items]
Loan receivable, reduction of noncontrolling interests | $			$ 1,900	$ 2,311
Common Stock
Noncontrolling Interest [Line Items]
OP units conversion ratio			1
Noncontrolling Interest - Operating Partnership
Noncontrolling Interest [Line Items]
Ownership interest held			94.70%
Ownership interest held by joint venture partner			5.30%
Other noncontrolling interests
Noncontrolling Interest [Line Items]
Number of consolidated joint ventures | joint_venture			2
Other noncontrolling interests | Minimum
Noncontrolling Interest [Line Items]
Ownership interest held by joint venture partner			10.00%
Other noncontrolling interests | Maximum
Noncontrolling Interest [Line Items]
Ownership interest held by joint venture partner			20.00%
Joint Venture 1 | Other noncontrolling interests
Noncontrolling Interest [Line Items]
Number of operating stores owned | property			4
Joint Venture 2 | Other noncontrolling interests
Noncontrolling Interest [Line Items]
Number of operating stores owned | property			1

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Noncontrolling Interest in Operating Partnership and Other Noncontrolling Interests - Schedule of OP Unit Activity (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Noncontrolling Interest [Abstract]
OP Units redeemed for common stock (in units)	64,287	108,862
OP Units redeemed for cash (in units)	3,000	0
Cash paid for OP Units redeemed	$ 472	$ 0

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Segment Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2021 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Segment Information - Schedule of Financial Information (Detail) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment Reporting Information [Line Items]
Revenues:	$ 412,492			$ 343,024			$ 1,149,979	$ 1,002,722
Operating expenses:	186,214			179,817			549,682	532,331
Net operating income:	226,278			163,207			664,180	470,391
Management fees and other income	16,879			13,307			47,320	38,299
General and administrative expense	(24,395)			(23,894)			(74,276)	(72,242)
Depreciation and amortization expense	(61,516)			(56,412)			(179,685)	(167,705)
Gain on real estate transactions	0			0			63,883	0
Interest expense	(39,670)			(42,213)			(120,605)	(127,610)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes	0			(1,233)			0	(3,675)
Interest income	11,729			3,145			36,871	6,488
Equity in earnings and dividend income from unconsolidated real estate entities	8,255			5,605			23,533	15,692
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest	0			0			6,251	0
Income tax expense	(6,772)			(4,657)			(16,330)	(10,013)
Net income	199,820	$ 178,579	$ 215,501	123,854	$ 111,257	$ 116,162	593,900	351,273
Operating Segments
Segment Reporting Information [Line Items]
Revenues:	395,613			329,717			1,102,659	964,423
Operating expenses:	100,303			99,511			295,721	292,384
Net operating income:	295,310			230,206			806,938	672,039
Self-Storage Operations | Operating Segments
Segment Reporting Information [Line Items]
Revenues:	351,355			290,423			976,448	856,438
Operating expenses:	92,794			92,322			274,316	271,659
Net operating income:	258,561			198,101			702,132	584,779
Tenant Reinsurance | Operating Segments
Segment Reporting Information [Line Items]
Revenues:	44,258			39,294			126,211	107,985
Operating expenses:	7,509			7,189			21,405	20,725
Net operating income:	$ 36,749			$ 32,105			$ 104,806	$ 87,260

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Commitments and Contingencies (Detail) $ in Thousands	Sep. 30, 2021 USD ($) store
Commitment to acquire stores
Other Commitments [Line Items]
Number of real estate properties to be acquired	15
Purchase price | $	$ 221,850
Commitment to acquire stores, scheduled to close in 2021
Other Commitments [Line Items]
Number of real estate properties to be acquired	14
Commitment to acquire stores, scheduled to close in 2022
Other Commitments [Line Items]
Number of real estate properties to be acquired	1
Commitment to acquire stores with joint venture partners
Other Commitments [Line Items]
Number of real estate properties to be acquired	11
Purchase price | $	$ 23,775
Commitment to acquire stores with joint venture partners, scheduled to close in 2021
Other Commitments [Line Items]
Number of real estate properties to be acquired	10
Commitment to acquire stores with joint venture partners, scheduled to close in 2022
Other Commitments [Line Items]
Number of real estate properties to be acquired	1