Extra Space Storage Q3 2022 Earnings Call Transcript

Quartr
Provided by Quartr
November 2, 2022

There are 11 speakers on the call.

Operator

Good day, and thank you for standing by. Welcome to the Extra Space Storage Third Quarter 2022 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised.

Operator

Please be advised that this call is being recorded. I will now turn it over to Jeff Norman, Senior Vice President of Capital Market. Please go ahead.

Speaker 1

Thank you, Hope. Welcome to Extra Space Storage's 3rd quarter 2022 earnings call. In addition to our press release, we have furnished unaudited supplemental financial information on our website. Please remember that management's prepared remarks and answers to your questions may contain forward looking statements as defined in the Private Securities Litigation Reform Act. Actual results could differ materially from those stated or implied by our forward looking statements due to risks and uncertainties associated with the company's business.

Speaker 1

These forward looking statements are qualified by the cautionary statements contained in the company's latest filings with the SEC, which we encourage our listeners to review. Forward looking statements represent management's estimates as of today, November 2, The company assumes no obligation to revise or update any forward looking statements because of the changing market conditions or other circumstances after the date of this conference call. With that, I'd like to now turn it over to Joe Margolis, Chief Executive Officer.

Speaker 2

Thanks, Jeff, and thank you everyone for joining today's call. We had another strong quarter with same store revenue growth of 15.5 percent driven by strong rental rate growth, partially offset by lower year over year occupancy. We felt expense pressure across many line items resulting in total same store expense growth of 12.6% and same store NOI growth of 16.4%. We continued to be busy on the external growth front, Adding 40 stores gross to our 3rd party management platform, closing over $100,000,000 in bridge loans In closing, a number of acquisitions, most notably the purchase of StorageXpress. We view StorageXpress But a remote storage platform.

Speaker 2

We believe this will unlock an additional growth channel for Extra Space to acquire and integrate smaller properties that lend themselves to a remotely managed model. Our strong property NOI plus our external growth efforts resulted in core FFO growth of 19.5%. Core FFO includes an add back of $0.05 per share for estimated property damage and tenant insurance claims related to Hurricane Ian. We are happy to report that All of our people remained safe during the storm. We are proud of the way our team has rallied around our employees and our customers in Southwest Florida to assist them with cleanup and restoration efforts.

Speaker 2

Core FFO in the quarter was slightly ahead of our expectations, driven by stronger than anticipated interest income and non same store NOI, partially offset by lower than expected Same store NOI. In September, we started to experience a return of seasonality, Putting some pressure on occupancy and new customer rates, which were both modestly lower than our Q3 forecast. As we evaluate our standard metrics to measure demand, we see the moderation we have typically expected in the fall that did not occur in 2021. While traffic is lower year over year, demand is in line with pre COVID levels. Fundamentals remain strong, just not as off the chart strong as they have been in the last 6 quarters.

Speaker 2

As a result, we have tightened our same store revenue, NOI and core FFO guidance ranges, Eliminating scenarios that assumed only minor seasonality on the top end of the range as well as more bearish scenarios, which we do not believe will materialize. This revision results in a $0.05 or 60 basis point decrease at the midpoint of our FFO range. We never liked the idea of having to reduce our outlook, But we are also careful to maintain perspective. Our 2022 implied same store revenue growth is the highest in the history of our company. And this is on the back of 2021, which was our 2nd highest revenue growth year.

Speaker 2

Our implied 2022 FFO growth at the midpoint is 21%. Our balance sheet is healthy. We have access to capital and our external growth platforms are positioned to grow on an asset light basis. As we contemplate future potential economic landscapes, including additional inflation and or recession, We are well positioned to continue to produce solid results due to our resilient need based asset class, Diversified portfolio and best in class team and platform. We are having a great year and we look forward to finishing strong in the Q4.

Speaker 2

I would now like to turn the time over to Scott.

Speaker 1

Thanks, Joe, and hello, everyone. We had a strong third quarter, A penny ahead of our own internal FFO projections. While same store revenue was generally in line with our expectations for the quarter, We did have higher than expected bad debt expense. The bad debt increase was primarily driven by lower collections from auctions. In other words, our customers' ability to pay for storage doesn't appear to have changed as much as an auction buyer's willingness to pay for auctioned goods.

Speaker 1

We experienced outsized year over year growth in most of our expense line items, and I think some additional detail may provide helpful context. In the Q3 of 2021, we had same store payroll expense of negative 9% And property tax growth of negative 4.5%, which drove total Q3 2021 expense growth of negative 4%. If we evaluate our Q3 expenses on a 2 year stack, average payroll expense growth was approximately 5.2%, Average property tax expense growth was 3.1 and total and average total annual same store expense grew 4.2 percent a year. Turning to the balance sheet. During the quarter, we completed an accordion transaction in our credit facility, Adding $600,000,000 of unsecured debt across 2 tranches, we capitalized the Storage Express transaction With $125,000,000 in OP units at an average price per share of $201.84 with the remainder drawn on the revolving credit facility.

Speaker 1

This resulted in a net debt to EBITDA of 4.6 times at the end of the quarter without the benefit of the additional EBITDA from Storage Express given the late quarter close. The revolver draws caused our variable rate debt to exceed our typical range of 20% to 30% of total debt at quarter end. Subsequent to the end of the quarter, we swapped $200,000,000 of our variable rate debt to reduce our floating interest rate exposure to approximately 35%. Additionally, our bridge loan balances provide a hedge against increases in variable rate debt, effectively reducing the percentage to approximately 31% of total debt. We will continue to take steps to reduce our variable rate debt further.

Speaker 1

Our commitment to the investment grade bond market has not changed, and we expect to utilize this market again once conditions normalize. As Joe mentioned, we tightened our 2022 guidance. Given the outsized growth and unique customer trends we have experienced over the Past 2 years, we've had a wider than normal guidance range throughout the year to capture all of the different scenarios that we believe were possible. As we move through the fall, the moderation has been more pronounced than we projected at the high end. However, it was also not as severe on the low end, resulting in the tightening in the tighter range.

Speaker 1

The reduction in same store NOI guidance is partially offset by higher than expected interest income due to larger bridge loan balances and higher interest rates as well as an expected later modification Date of the NexPoint preferred investment. We've also increased our forecast for management fees and other income. Interest expense estimates have increased due to debt associated with Storage Express, Other acquisitions, additional bridge loans and an increase in benchmark rates. Given our total investment activity year to date, We've increased our acquisition investment guidance to $1,650,000,000 all of which is closed or under contract. After these adjustments, we have tightened our core FFO range, which is now estimated to be between $8.30 $8.40 per share, An implied increase of approximately 21% year over year.

Speaker 1

We still anticipate With that, operator, let's open it up for questions.

Operator

Thank you. At this time, we will conduct the question and answer session. Please standby while we compile the Q and A roster. Our first question comes from Jeff Spector with Bank of America. Jeff, your line is open.

Speaker 3

Great. Thank you. Good afternoon. First question is on just some of the comments On seasonality, right? I guess, Joe, can you provide any other stats or any other details to give investors Comfort that again this is just normal seasonality, especially given you're right, your team normally forecasts really well.

Speaker 3

So clearly the market is somewhat surprised by the decrease at the top end of the guidance.

Speaker 2

Sure. Well, thank you for the compliment. We do normally take pride in our forecast. I think it's important to understand we're in an environment where customer behavior is very different. We have no history or data About how customers react coming out of a pandemic.

Speaker 2

And therefore, we gave wider than normal ranges Because we had less confidence in our ability to exactly predict how customers We perform. What we see on fundamentals though, we do see slowing In demand and rates and other metrics compared to the last 6 quarters or so. But if you look at pre pandemic numbers, Things look very strong and we're very comfortable with the state of the business.

Speaker 1

Yes, Jeff, maybe just to clarify one point. The slowing in demand is year over year. It's very clear that it is still as good as it was pre pandemic And very consistent with historical norms at this time of year in terms of searches or website calls that we're receiving at the stores And our rentals on a monthly basis.

Speaker 3

And to confirm, this is through October?

Speaker 1

So what we have in October, maybe just to give a bit of an update for October, our October numbers, our occupancy Is down about 30 bps from September, so not significantly different from the end of September and our rates have been steady through the month Of October.

Speaker 3

Thanks. And then my second question is, do you still stand by your comment that You're ending 2022 strong, which bodes well as we entered 2023. Or again, to confirm, are you seeing any Negative signpost that would change that comment.

Speaker 2

No, I think if you look at our guidance range that will give you an indication of the range of where we believe we'll end 2022, anywhere in that range is better than long term historical storage averages. So we still believe we're going to end the year strong and be set up well for 2023.

Speaker 4

Great. Thank you.

Speaker 2

Thank you, Jeff.

Operator

Please standby for our next question. Our next question comes from Michael Goldsmith with UBS. Michael, your line is open.

Speaker 5

Good afternoon. Good morning.

Speaker 6

Thanks a

Speaker 5

lot for taking our questions. From our work, your web Extra spaces and web asking rates or street rates have been down year over year through the quarter. At the same time, your occupancy rate maybe Hasn't had as much pressure as others. So clearly, the goal here is that you're looking to maximize revenue. But how do you think about managing the pieces occupancy, street rates and ECRI's?

Speaker 5

And how does your current position and Strategy allow you to maximize revenues kind of through this normal seasonality and into next year.

Speaker 2

So your statements are correct, right? We're trying to maximize revenue by using All the tools available, whether that's occupancy rate, discount, marketing expense, Days to reserve all the different levers we can do and it's done on a unit size In each store basis, not on a portfolio basis or market basis. So we're trying to maximize Revenue for whatever unit type and whatever store giving the performance and data we have on that particular Unit type in the store. When you roll all of that up together onto portfolio basis, we are certainly now favoring Occupancy at the expense of rate. So we're giving up a little bit of rate to have a little higher occupancy because we believe in the long term That will create the best long term revenue growth for the portfolio.

Speaker 5

And by create long term revenue growth, you mean Bring people in, get them into the system and get them on the ECRI program. Is that correct?

Speaker 2

Certainly, ECRI is a very important factor there and it's also Trying to attract as many longer term customers who have a longer lifetime value than a customer who's Going to come in maybe at a higher rate, but spin out after 2 or 3 months.

Speaker 5

That's helpful. And then as my follow-up question, Housing turnover has been under pressure for a number of different reasons. Did you see any impact of the housing market on your results? Were there increased interest from renters? And then does the impact of kind of Housing turnover in the housing market, does that have as much of an impact now or will that have a larger impact kind of During peak leasing season when people kind of start moving up again?

Speaker 5

Thanks.

Speaker 2

Overall, a strong housing market is beneficial to self storage And we would prefer a strong housing market than a weak housing market. That being said, there's lots of different drivers of demand For storage and we see solid demand in good and bad housing markets. And the best example of that It is during the great financial crisis where the housing market was arguably in much worse shape than it is now And we didn't see any drop in demand because we had demand from other types of transitions, other movements that made up for The slowdown in housing transitions.

Speaker 5

Thank you very much. Good luck in the Q4.

Speaker 2

Thanks, Michael.

Operator

Our next question comes from Todd Thomas with KeyBanc Capital Markets. Todd, your line is open.

Speaker 7

Hi, thank you. First, I just wanted to follow-up on the outlook And the reforecast here for the balance of the year. Can you talk about the occupancy decrease? It sounded like that fell short in the Q3 relative to what you had budgeted previously, it looked like average occupancy increased from 2Q to 3Q, Which I think is atypical seasonally. So where was the shortfall specifically?

Speaker 7

I guess what fell short of budget? And then within the quarter, when did you start experiencing some of the softness that you're starting to see?

Speaker 1

Yes, Todd, it's Scott. So I would tell you it's later in the Q3, certainly post Labor Day. July August were good for us. We were ahead of our forecast. Post Labor Day, I think what changed is I think you saw that seasonal Occupancy go back more to the norm than what we've seen in the last 2 years.

Speaker 1

And we've been saying this was a possibility for 2 years. I think it came a little quicker than we were expecting when it did come. And as a result, it impacted rates. So I think the thing that's impacted us most is The rate that we are going to charge new customers and the impact on the Q4. So not necessarily occupancy, but much more new customer rate Coming in and seeing a little bit of deceleration there in terms of our rate.

Speaker 7

Okay. And then in terms of the Sort of heightened focus on occupancy relative to rate. Is there still are you still Sort of throttling back on move in rates and increasing promotions in order to stimulate demand Or has some of that stabilized?

Speaker 1

So our promotions year over year were actually Down slightly in the Q3 and we're not using promotions right now. We've used rate more as the conversion tool and our rates in October were Flat to slightly up from where they were in September. So continues to be what we were seeing in September.

Speaker 7

Okay. That's helpful. And then if I could just ask about, Storage Express And the growth opportunity that you see by way of making acquisitions Through that platform, what's the I guess a couple of questions. What's the timeframe to begin Capitalizing on growth through new investments, is this something that you that we might expect to see you capitalize on in the near term? And then as we think about that remote storage model, how much of EXR's portfolio today do you see the potential to roll that out across?

Speaker 2

So I would say the growth opportunity, the external growth opportunity in Storage This is not in the near term. What's in the near term, I think is internal growth by getting them Getting Storage Express, I shouldn't say them, onto the extra space, pricing, ECRI, customer acquisition platform, And we think we can improve the existing assets performance. That is nearer term. Until we can do that, get them on our platforms, we won't aggressively pursue external growth. So that's more of a second stage.

Speaker 2

And I think that there's a small number Of Extra Space Stores that mostly things we run as annexes now that we may be able to improve the performance of Using the Storage Express model, what may be more interesting is the ability to look at Modest size stores within our existing footprint that we don't really look at now.

Speaker 7

Okay, great. Thank you.

Speaker 2

Sure.

Operator

Please stand by for the next question. Our next question comes from Juan Sanabria with BMO Capital Markets. Your line is open, Juan.

Speaker 8

Hi, thank you. Maybe just following up on Todd's question on Storage Express. It definitely seems like you've Talked to you in your opening remarks about the strategic opportunity to widen the opportunity set and maybe acquire assets that you otherwise wouldn't have. But to what extent, I guess, do you weigh more secondary, tertiary locations where you can remote manage them and cut Operating overhead to do so, but manage that against maybe weaker demographics That are in place for your existing portfolio?

Speaker 2

So, weaker demographics than our existing portfolio, We wouldn't expect to have similar demographics in more secondary or tertiary markets. We wouldn't expect to have the same rate growth, but we wouldn't expect to pay the same amount on a price per pound for the asset. So it's all about proper underwriting, getting compensated for the risk you're taking and Understanding. We look at our portfolio, which is about 10% in tertiary markets now. We look at the performance of primary, secondary, tertiary markets, How their CAGRs compare over rolling 10 year periods every year.

Speaker 2

And we understand that true share markets can be more volatile, But they also can provide very good returns. So I think it's about investing at the right basis, Making sure you're underwriting each deal properly, understanding that in many of those markets, you're the only REIT that we could be the only REIT that operates, which gives you Somewhat of an advantage.

Speaker 1

Well, and the other thing I would emphasize is some of these remote assets will be in our core markets. So it's not just a tertiary market strategy here. This is expanding our existing footprint in what we kind of operate today as an annex And then running those much more efficiently.

Speaker 2

And then just

Speaker 8

Any comments on supply? I mean, I would assume that you've seen delivery delays this year and maybe What's coming on next year may be coming down as well. But just a view, again, going back to Storage Express between what the pipeline looks like in some of these secondary or tertiary markets that have been Arguably some of the hottest housing markets in some cases and maybe getting outsized attention relative to history and how that risk reward Is between the primary versus secondary and tertiary from a supply perspective?

Speaker 2

Yes. So The first part of the question overall, we don't have any new information or data or view is still that Storage deliveries are moderating, not going to 0, not dropping off the cliff, but they are moderating that there are continuing headwinds in terms of Costs and interest rates and entitlement issues and the availability of debt. And that's going to be good for the industry. We have not done a we study supply in the markets that were active. We have not yet done A tertiary market supply analysis, we're just not at that stage yet.

Speaker 2

When we're Ready to start growing this platform. We'll find the right markets. We'll have our guys do all the research they always do And we'll make sure we understand all the dynamics of a market before we put our investors' dollars into that market.

Speaker 8

Great. And if I can sneak in one quick one on the 3rd quarter new customer rate, How did that trend throughout the quarter? And if you could just give us the year over year changes, so we're And just to speak on what changed and kind of at what pace throughout that Q3?

Speaker 1

So in July, we saw rates down about 7 or achieved rates, this is achieved rates for our new rentals. They were down about 7%, 8% in August and then low double digits in September. So we averaged about negative just about 10% negative in the 3rd quarter.

Speaker 8

Thanks guys.

Speaker 1

Thanks Juan.

Operator

Please standby for our next question. Our next question comes from Spencer Alwy with Green Street. Spencer, your line is open. Thank you. I just want to

Speaker 9

go back to the topic of demand for a second. So You mentioned that demand is roughly in line with pre COVID levels. But given that work from home or the decluttering cohort is a relatively new demand driver for the sector, This would seem to imply that the other more traditional demand drivers are contributing less than average. Am I thinking about that the right way?

Speaker 1

So

Speaker 2

the kind of work from home de Cluttering demand, that was more of 2020 summer 2020 into 2021 maybe Experience, we're back to more today, we're back to more traditional demand drivers for new demand.

Speaker 9

For new demand, correct. Yes. But I'm just thinking, so as we because I'm just looking at occupancy right across We're starting to see occupancy return closer to the historic average that we've seen within the REIT portfolios for some time. And that would seem to suggest that that work from home customer has decided to reclutter their house, right? So I understand that it might not be contributing to new demands, but as we think about where occupancy is trending, There's arguably a new user base, right, within your portfolio.

Speaker 9

So I'm just wondering how you guys kind of think about the different demand stools, I guess, currently?

Speaker 2

So I think you're only partially right. I think Some of those work from home folks have stopped using storage. But I think there is a cohort of them that continues to use storage And you can see that in our length of stay statistics, where during COVID, we had A real sharp increase in customers in our stores who have been with us for more than a year or more than 2 years. Lately, we've seen that decline a little bit, but we're still at above historic averages. So that is telling us that Some of those customers, just like some of every customer that comes in, some small percentage of them become that kind of permanent or quasi permanent And I think that happened during COVID as well.

Speaker 9

Yes. No, that's what I'm saying, I guess. What I'm saying is, I think we're saying the same thing. So that a portion of that new customer base, right, work from home is staying, which I think most of us would agree that that's the case, then my point is that we shouldn't see occupancy fall back to the historic average, but should be somewhat elevated. And I was just curious if you guys agree that moving forward, Occupancy would be perhaps slightly higher than your historic average because of that new cohort using your facilities.

Speaker 2

Sorry, if I misunderstood what you're saying. Good. I'm glad we're on the same page. So I think we can operate our stores at whatever occupancy we want, Right. We can adjust the other metrics to get there.

Speaker 2

But I do agree with you. I think we learned during COVID that We can maximize revenue by operating stores At incrementally higher occupancy than we have historically.

Operator

Great. Thank you, guys.

Speaker 2

Sure. Thanks.

Operator

Please standby for the next question. Our next question comes from Smedes Rose with Citi. Your line is open.

Speaker 6

Hi, thanks. I just wanted to ask you a little more and I'm sorry if maybe I misunderstood this, but in your core FFO where You added back, I think $0.05 or $0.06 associated primarily with Hurricane Ian and the uptick in tenant reinsurance Or the claims. Will you in turn get paid back for those claims? Or is that sort of add back get to your core FO, I mean, is there like basically a claim on those earnings and you won't be recouping them? I just wanted to understand that a little bit better.

Speaker 1

So $3,000,000 of that is losses from tenant reinsurance. So those are claims made by our customers that we'll be paying out. We're not getting it back. We add it back because we don't think it's part of the core number. And again, that's an estimate based on the data we had.

Speaker 1

Obviously, all those claims have not been filed. People are So kind of digging out down there. The other piece of the loss, the $3,200,000 that is for property loss and our loss number is actually Higher than that, because that is net of the estimated tenant the property insurance proceeds that we think we will receive. And again, those numbers are our best guess to date.

Speaker 7

Go ahead.

Speaker 6

I guess, I mean, why would you include the I guess, Profits from the tenant reinsurance program, but you wouldn't include the subsequent claims from that piece of business. I mean, isn't that just part of Your business? I mean, it's unusual, right? But I just I don't really get the add back for that portion.

Speaker 1

Just we didn't view it as Core, we didn't view it. We viewed it as non recurring, much more one time is the way we viewed it.

Speaker 6

Okay. And then you talked about leverage being like a little skewed just because you've capitalized the Storage Express transaction, But we don't have the earnings from it. Have you guys talked about what you expect the 1st year's contribution to be on that acquisition?

Speaker 1

We haven't publicly, we've said that it was a market cap rate that going in was going to be lower. We felt like it was stabilized Around a 6 and the 1st year obviously lower than that, but stabilizing around a 6.

Speaker 6

And is that stabilization timeframe like 2 to

Speaker 10

3 years or what's the typical?

Speaker 2

Yes, it's in between 2 3 years. It's an interesting one conceptually for me to try to understand yield, Right. Because what we're doing is taking the cost for an entire business platform, Software, people, trucks and office building, etcetera, etcetera, and saying the existing stores produce a return on all of that. Obviously, we didn't buy it for that. We bought it for strategic regions because that platform can produce what we believe is future growth for us.

Speaker 2

So that's how we came up with those numbers. I wouldn't compare it to the acquisition of a building That produces a yield where because we're really buying more than just 106, 107 buildings.

Speaker 8

Okay. Thank you.

Speaker 2

Sure. Thanks, Steve.

Operator

Please standby for the next question. Our next question comes from Samir Khanal with Evercore. Samir, your line is open.

Speaker 10

Thank you. Hey, Scott. I'm sorry if I missed this, but maybe talk about sort of changes in average length of stay that you may be seeing at this point here as we think about The ability to push rates onto the existing customers?

Speaker 1

Yes. We saw similar to what I think most storage operator And that is our average length of stay has gotten longer. If you look at our tenants in our properties today, You're 35 ish 34, 35 months in terms of customers that are in there today. If you look at the tenants That have been in our properties over 2 years. That number continues to grow.

Speaker 1

It's north of 60%. So people continue to stay longer.

Speaker 10

Okay. Got it. And just shifting to the I don't think we've talked about the transaction market, but Maybe talk about sort of unlevered IRRs and targets and how much maybe cap rates have moved, given higher interest rates? Thanks.

Speaker 2

So the transaction market has certainly changed. Cap rates are expanding as interest rates rise, which is natural. There's fewer participants. We see lots and lots of deals that are not getting closed, including us. We've Walked from over $526,000,000 of deals that we had under LOI based on what we thought new pricing should be.

Speaker 2

I don't think there's really any way to say with any precision what new Cap rates are how much cap rates have expanded. We it's very deal dependent. You need to wait for A lot of transactions are just not occurring. We need to wait and see how it shakes out, but certainly the direction is clear.

Speaker 6

Okay. Thank you.

Speaker 2

Thank you,

Operator

Please hold for our next question. Our next question comes from Ronald Kamdem with Morgan Stanley. Ronald, your line is open.

Speaker 4

Hey, just two quick ones. You talked about sort of the pricing, the achieved pricing in 3Q and so forth, which was helpful. I love to move over to sort of the ECRI. Maybe can you comment on what you guys are seeing there? Are you still pushing it as aggressively as you were historically what the tenant feedback has been?

Speaker 4

Thanks.

Speaker 2

So COVID and the restrictions the states put on Our ability to increase rents coupled with the rise in street rates Created that unusual situation of an extra large gap between what street rates were and what people were paying. And we have largely made up that gap. So we will not see while we still will see Attractive ECRI going forward, we're not going to see those outsized Increases that we experienced over the last year or so.

Speaker 4

Great. That's helpful. And then going back sorry, did I cut you off?

Speaker 2

No, not at

Speaker 4

all. Going back to the guidance, I think your opening comments, I think you talked about sort of the ranges, Bare case off the table, bulk case off the table. But just sort of wondering because it's pretty unusual for you guys to do that. What changed, right, over the past 3 months and so forth? Was there anything specific that caused the bull case to be off the table?

Speaker 4

Just Just trying to figure out what changed when you were redoing the numbers, a little bit more color there would be helpful.

Speaker 2

I think Scott referenced earlier that after Labor Day, we saw somewhat of a change in customer Behavior and a return to seasonality. In our kind of wider than normal guidance, At the top end and at the bottom end had different assumptions about where that will occur. And now that we've seen it begin to occur, we can Narrow that guidance with more comfort that we know how customers are behaving.

Operator

At this time, I would now like to turn it back to Joe Margolis, CEO, for closing remarks.

Speaker 2

Thank you, and thank you everyone for your time today and your interest in Extra Space. If I could leave you with a couple of thoughts, it's that 2022 is going to be another exceptional year. Even with slowing growth in rates And very difficult comps. Revenue growth is very strong and we expect it to be solid in 2023 as well. Storage is better positioned than most if not all asset classes to endure future inflation or whatever type of economic Slow down we face.

Speaker 2

So we are very excited and confident headed heading into.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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Earnings Conference Call
Extra Space Storage Q3 2022
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