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Extra Space Storage Inc. EXR reported first-quarter 2025 core funds from operations (FFO) per share of $2.00, beating the Zacks Consensus Estimate of $1.96. The figure increased 2% from the prior-year quarter.

Results reflect a year-over-year rise in revenues due to growth in occupancy. However, high interest expenses during the quarter were a spoilsport.

Quarterly revenues of $820 million missed the Zacks Consensus Estimate of $823.4 million. However, the top line increased 2.6% year over year.

Per Joe Margolis, CEO of Extra Space Storage, “We had a solid first quarter, beating same-store revenue expectations, maintaining historically high occupancy, and continuing to grow our capital-light ancillary businesses. This led to FFO growth above our internal projections. Despite this level of performance, the recent economic uncertainty has caused us to maintain our same-store guidance. While the current environment is volatile and may lead to difficult economic times, our team, strategy, and systems have proven the ability to produce stable cash flow returns in similar conditions.”

EXR’s First Quarter in Detail

Same-store revenues increased 0.3% year over year to $659.7 million. This uptick resulted from a rise in net rental income, partly offset by other income.

Same-store operating expenses rose 4.2% year over year to $192.4 million, reflecting an increase in property operating expenses, repairs and maintenance, and property taxes.

Same-store net operating income (NOI) decreased 1.2% year over year to $467.3 million.

The same-store square-foot occupancy expanded 100 basis points year over year to 93.4% as of March 31, 2025. Our estimate was pegged at 93.6%.

Interest expenses flared up to $142.4 million from $132.9 million a year ago. Our estimate was $139.7 million.

EXR’s Portfolio Activity

During the January-March quarter, Extra Space Storage acquired 12 operating stores for around $153.8 million. It also acquired six additional properties by exchanging ownership interest in 17 properties from an existing joint venture (JV).

With JV partners, the company acquired two operating stores and completed the development of one store for approximately $38.3 million, of which the company invested $24.5 million.

Extra Space Storage added 113 stores (100 stores net) to its third-party management platform. As of March 31, 2025, it managed 1,675 stores for third parties and 439 stores in unconsolidated JVs, with a total store count of 2,114 under management.

EXR’s Balance Sheet Position

Extra Space Storage exited the first quarter with $119.6 million of cash and cash equivalents, down from $138.2 million recorded as of Dec. 31, 2024.