Extra Space Q2 2026 Earnings Call

THE SELF STORAGE REPORT — EARNINGS CALL TRANSCRIPT Company: Extra Space Storage Inc. (NYSE: EXR) Call: Q2 2026 Earnings Call Recorded: July 2026 Video: https://www.youtube.com/watch?v=r5DZGE_Hbbs Extra Space participants: Jared Conley (VP, Investor Relations) · Joe Margolis (Chief Executive Officer) · Noah Springer (President) · Jeff Norman (Chief Financial Officer) Analysts on the call: Michael Goldsmith (UBS) · Michael Griffin (Evercore) · Todd Thomas (KeyBank Capital Markets) · Brendan Lynch (Barclays) · Ronald Kamdem (Morgan Stanley) · Samir Kanal (Bank of America) · Jack Armstrong (Wells Fargo) · Nick Joseph and Eric Wolf (Citi) · Brad Heffern (RBC) · Victor Fadiv (Scotiabank) · Michael Muller (JP Morgan) · Juan Sanabria (Bank of Montreal) · Spencer Glimcher (Green Street) · Omotayo Okasanya (Deutsche Bank) · Ravi Vaidya (Mizuho) Key figures: Core FFO $2.15 per share, +4.9% year over year · Same-store revenue +2.4% · Same-store NOI +3.5% · Quarter-end occupancy 94.2% · 18 stores acquired for $91 million · $141 million of bridge loans originated, ~$1.5 billion outstanding · 67 managed stores added, 48 net; 1,964 managed stores at quarter end; 4,400+ stores on platform · $550 million bond priced at 4.9% · FY2026 core FFO guidance raised to $8.25–$8.40 · Same-store revenue guidance raised 100 bps to 1%–2% · Same-store NOI guidance raised 200 bps to +0.5%–2.5% · New York City claim settled for $1.7 million Note on sources: the source captions contained NO speaker labels — the raw file is a single unbroken block. Attribution below is reconstructed. Where the transcript itself names the speaker ("Sure, Michael. This is Joe.", "Hi, it's Jeff."), or where the subject is unmistakably one executive's remit (Noah Springer on acquisitions, bridge loans and third-party management; Jeff Norman on guidance and expenses), attribution is treated as certain. Answers that could plausibly belong to either Joe Margolis or Jeff Norman are marked [attribution inferred]. Numbers spelled out by the transcription have been converted to numerals; wording is otherwise preserved as transcribed, including apparent transcription errors in analyst names. ————————————————————————————— Operator: …conference over to Jared Conley, VP of Investor Relations. Jared, please go ahead. Jared Conley: Thank you, Connor. Welcome to Extra Space Storage's second quarter of 2026 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. These forward-looking statements are qualified by the cautionary statements contained in the company's latest filing with the SEC, which we encourage our listeners to review. Forward-looking statements represent management's estimates as of today, July. The company assumes no obligation to revise or update any forward-looking statements because of changing market conditions or other circumstances after the date of this conference call. I would like to now turn the call over to Joe Margolis, Chief Executive Officer. Joe Margolis: Thank you, Jared, and thank you, everyone, for joining today's call. In addition to our CFO, Jeff Norman, I am joined today by our President, Noah Springer. I am pleased to report a strong second quarter for Extra Space Storage. We delivered core FFO per share of $2.15, representing 4.9% year-over-year growth — a result that reflects both the quality of our platform and the improving operating environment. Our same-store revenue grew by 2.4% in the second quarter, exceeding our internal projections and accelerating from the first quarter. Occupancy ended the quarter at 94.2% as our systems effectively balanced rate and occupancy to optimize revenue across the portfolio. The pricing power we have been building over the past several quarters is now clearly flowing through our results. And with same-store expenses declining modestly year over year, same-store NOI also accelerated, demonstrating the leverage in our operating model. We are seeing broad-based improvement across many of our markets, supported by steady customer demand, strong retention of existing customers, and gradually moderating new supply. While new customers still exhibit some price sensitivity, we continue to capture a disproportionate share of the market due to our best-in-class digital marketing, pricing and operating systems. The rate gains we established throughout 2025 and into 2026 are now embedded in our revenue base, and we're encouraged by the momentum heading into the second half of the year. Our company — built around operational depth, cutting-edge technology, financial flexibility, and diversified growth channels — is well positioned to continue to outperform the industry. With that, I'll turn it over to our President, Noah Springer, to discuss our external growth initiatives. Noah Springer: Thank you, Joe. Our external growth platform continued to perform well across multiple channels in the second quarter. In the acquisition market, we were both disciplined and active. We closed 18 stores for $91 million, almost all of which were off-market transactions. Our scale, reputation and long-standing relationships give us broad access to deal flow, and we're seeing many opportunities. That said, asset pricing remains elevated, and we're maintaining our underwriting standards and staying disciplined, with a focus on long-term accretion rather than chasing volume. We have significant growth capital to be opportunistic, and we will continue to use our balance sheet and joint venture structures as part of our external growth strategy. We take pride in being strong capital allocators, and we will remain focused on opportunities that enhance portfolio quality and generate accretive returns for our shareholders. Our bridge loan program had another strong quarter. We originated $141 million in new loans and ended the quarter with approximately $1.5 billion in outstanding balances. The bridge loan program creates value on multiple levels. This program generates attractive interest income in addition to earning management fees and tenant insurance. Finally, the program creates a natural pipeline for future acquisitions as we continue to consolidate our fragmented industry. Third-party management also delivers similar benefits. We added 67 stores during the quarter, with net growth of 48 stores, bringing our year-to-date net growth to 108 stores and our total managed portfolio to 1,964 stores at quarter end. The steady demand for our management reflects what owners experience firsthand. Our platform consistently drives superior property performance through operational expertise, sophisticated revenue management, and technology infrastructure that scales across more than 4,400 stores. Now, I'll turn it over to our CFO, Jeff Norman. Jeff Norman: Thank you, Joe and Noah. Our FFO growth of 4.9% exceeded our internal forecasts and was driven primarily by store-level performance. Year over year, same-store revenue growth accelerated 70 basis points from the first quarter, to 2.4%. Same-store NOI accelerated 230 basis points, increasing 3.5% year over year. Same-store expenses decreased modestly year over year, with all major categories at or better than our internal expectations. Our discipline translated directly into accelerated NOI growth. Our ancillary businesses also contributed to our FFO outperformance. Net tenant insurance income exceeded our forecast due to stronger penetration and lower claims volume. Interest income was also ahead of estimates due to modestly higher interest rates and higher-than-modeled loan retention. Our low-leverage balance sheet remained strong with significant access to capital. At the end of June, we priced a $550 million bond offering at 4.9%, which settled the first week of July. Proceeds from the offering were used to pay off our first bond maturity on July 1. Today we have roughly $2 billion available on our revolving lines of credit, net of amounts held available as a backstop for our commercial paper program, which gives us significant flexibility to move quickly on investment opportunities. Shifting to guidance — last night we raised our full-year 2026 FFO output. Our core FFO is now expected in the range of $8.25 to $8.40 per share. We raised same-store revenue growth guidance 100 basis points, to a range of 1% to 2%. We also raised our same-store NOI guidance 200 basis points, to a range of positive 0.5% to 2.5%. We refined our Los Angeles price restriction assumption, and our updated guidance reflects approximately 20 to 30 basis points of headwind for the full year, compared to our initial estimate of 40 basis points. In summary, we are having a solid summer leasing season. Same-store NOI and core FFO are both ahead of expectations. Our balance sheet is strong and prepared for additional future growth, and we continue to benefit from having the strongest team, portfolio, and platform in the industry, which all have contributed to our results. With that, operator, please open the line for questions. Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, again, please press star one to raise your hand. To withdraw your question, press star one again. We also ask that you pick up your handset when asking a question to allow for optimum sound quality. And if you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. All right, your first question is from the line of Michael Goldsmith with UBS. Michael Goldsmith (UBS): Good afternoon. Thanks a lot for taking my question. The same-store revenue growth in the first half of 2% is equal to the high end of your updated 2026 guidance, implying a deceleration in the back half. So one, what would drive a deceleration in the back half? And then two, did you change any of your assumptions for the back half outside of updating for LA? Thanks. Jeff Norman [attribution inferred]: Yeah, thanks, Mike. You're spot on that, depending on where you are in the range — the high end, it implies that same-store revenue growth is similar to that of what we experienced in the first half of the year, and that at the low end of the range it implies some deceleration. And a couple of factors play into that. The first is, as we move deeper into the year we do experience more difficult comps, so we're mindful of that. And second, while we haven't seen any change in customer health — be it existing customers or new customers, that are all performing consistently as they have been throughout the year — we're not unaware of the headlines and some of the macro risks related to the customer out there. We read a lot about consumer confidence being low, about there being pressure from inflation and other macro forces. And we feel like those risks are appropriate to factor into the range. All of that said, we factored those into our original range and didn't feel those specifically in the first two quarters. And so far, really not felt them in July. July was quite similar to June. So to the extent that those don't materialize, it presents an opportunity with the guidance, but we think the prudence is reasonable given those macro factors. Michael Goldsmith (UBS): Got it. Thanks for that. And then, since you brought it up, can you give us an update of what you're seeing so far in July? And it sounds like it's been pretty similar to June, but I would love to get your thoughts on the metrics. Thanks. Joe Margolis: Sure, Michael. This is Joe. July was a good month for us. You know, just as a comparison, in June we were slightly ahead in rate year over year, but we were slightly behind in occupancy. And in July, the system flipped that. We're now slightly ahead in occupancy and slightly behind in rate. And this is a great example, I think, of our systems using different levers to optimize performance over the long term. And the net result of that is, you know, so far through however many days, we are slightly ahead of our budget in July. So we're having a good month. Michael Goldsmith (UBS): Thank you very much. Good luck in the back half. Joe Margolis: Thank you. Operator: The next question is from Michael Griffin with Evercore. Your line is open. Please go ahead. Michael Griffin (Evercore): Great, thanks. John, I know you touched on this a little bit in your prepared remarks, but I'm just curious if you can expand on the customer demand side of the equation. Has top of funnel improved at all? Has the pie expanded? Are you still just sort of competing against the same customer base? You know, as you look at this inflection and acceleration in same-store fundamentals, is it mostly driven by a moderating supply picture, or is there anything from sort of organic customer demand that you're seeing that gets you incrementally more positive? Joe Margolis: Yeah, our view is that customer demand is steady. You know, we haven't seen any pickup in the housing market. We don't see any indications through our various channels that there's more customers out there. But our systems are able to not only capture more than our share of customers — we've had the highest occupancy at the highest rates in the industry for many, many, many quarters and years now — but we're also capturing better-quality customers through some of our channel pricing and other strategies. So I think the short answer is: demand is steady, performance is improving because of the continued reduction in supply, and our systems are optimizing what's available in the market. Michael Griffin (Evercore): Thanks, Joe. That's certainly some helpful context. Maybe one next for Noah on the transaction market. Can you just give us a sense of, you know, whether it was the deals you closed this quarter — sort of how we should think about those on either a cap rate or an unlevered IRR basis? And then, you know, talk a little bit about the competition that you're seeing, the interest from private capital, just as it relates to kind of institutional self-storage quality product. Thank you. Noah Springer: Sure, Griff. Thanks for the question. You know, what we're seeing is the market out there continues to be a little expensive. And where cap rates are coming in on the broker deals tends to push us towards our proprietary pipelines that we have. So we continue to close deals that are relationship deals, that are managed deals, and that are joint ventures and bridge loans. We tend to go to those because as those deals come up and they're ready for us to harvest, they end up being great deals for us and for our partners — kind of the whole idea of all of those pipelines that we have. Quite a few of the stores — in fact, the majority of the stores that we closed this quarter — were from a relationship deal that we had. And we're happy with that, and happy with the accretion that we got from those stores. And we'll continue to look towards that, as the market tends to be a little more expensive than we want to do on the brokerage side. Michael Griffin (Evercore): Great. That's it for me. Thanks for the time. Noah Springer: Thanks, Chris. Operator: The next question is from Todd Thomas with KeyBank Capital Markets. Your line is open. Please go ahead. Todd Thomas (KeyBank Capital Markets): Yeah. Hi. Thanks. I wanted to ask — so, Joe, you talked about the July trends, you know, and mentioned that the comps get a bit more difficult in the second half. Do you see potential for move-in rent to move ahead year over year again in the back half of the year? And you sort of mentioned the combination of the slightly higher occupancy and the slightly lower move-in rents in July. The combination of that, you're still tracking ahead of plan — but is that an environment, longer term, in which revenue growth can continue to improve generally from these levels? Joe Margolis [attribution inferred]: Sure, there's a lot of factors that can lead to revenue growth. I mean, as you point out, rate and occupancy are two of the most important ones, but there's others — such as ECRI, unit mix optimization, other tools we have — to have positive revenue growth. Todd Thomas (KeyBank Capital Markets): Okay. And then I wanted to also ask about the New York City settlement. Just curious if there are any implications or any additional considerations from that suit, or is that in the rearview mirror at this point? And then can you also comment separately on the licensing and registration requirements for operators in New York City? Curious to get your view around the impact that has on the industry — whether you think it could ultimately, um, you know, sort of strengthen the competitive positioning for some larger, well-capitalized players, or, you know, whether that's sort of a net negative potentially. Just curious to get your thoughts on that. Joe Margolis: Sure. So, just to set the table on what we're talking about: there was a claim made against us by New York City based on 117 complaints they got over three years. We had 130,000 customers over those three years. And we continue to vigorously dispute those claims. We do not agree with them at all. But that being said, we were faced with the choice of entering a lengthy litigation process in New York City, or settling this case for $1.7 million and putting it behind us. And we felt the best thing for our shareholders was to take out the uncertainty and put this behind us. So we have settled the case. There's no repercussions or reverberations that we see or have felt elsewhere in the country or in New York. This matter is now behind us. With respect to the second part of your question — all self-storage operators in New York City will be required to have a license on, I think, August 24 of this year. We are prepared to file the papers, pay the very modest fee, and get licensed. And in connection with that license, there will be a series of requirements of how you have to operate. We — the industry — are still waiting to see the final list of requirements that will come with that. And I guess all I could say is: one, they'll apply to everyone, so it'll be an even playing field. And two, we will comply with the law. Todd Thomas (KeyBank Capital Markets): Okay. All right. Thank you. Joe Margolis: Sure. Thanks, Todd. Operator: The next question is from Brendan Lynch with Barclays. Your line is open. Please go ahead. Brendan Lynch (Barclays): Great. Thanks for taking the questions. Jeff, I just wanted to follow up on your commentary about macro risks and consumer confidence. Sounds like you're being a little bit conservative in guidance because of the potential for those risks to emerge. So the question is: in the past, when we have had situations where the macro environment did deteriorate or consumer confidence starts to wane, how quickly did you see that in actual customer behavior, and how quickly did it impact the same-store NOI results? Jeff Norman: Good question, Brandon, and I hate to give you a mushy answer, but it depends. As we've looked at different types of economic stress in different types of cycles, they haven't all performed the same. But in general, we've seen demand hold pretty steady — and in some cases even accelerate — through some of those types of environments, because life transitions give rise to storage, and sometimes economic strain can cause more life transitions. So from a demand standpoint, it's generally been steady to even accelerated. On the other hand, you may also deal with vacates, and we have not seen elevated vacate activity in our stores. In fact, our length of stay continues to elongate — as we think of our in-place customers on a year-over-year basis, it's about 1.5 months longer than it was last year. So we haven't seen it yet, but as you see all these headlines out there, as you look at what the consumer is facing, we certainly think it's a reasonable risk to be mindful of. But to your point, we have not felt it in our customer behavior year to date. And so if that continues to be the case, then that assumption would potentially prove conservative. Brendan Lynch (Barclays): Great, thanks. That's helpful. And maybe just to follow up on that — in terms of length of stay, that's certainly an improvement. I think we've seen some other improvements in customer quality in terms of churn and lower bad debt, higher occupancy in the off season. How much further do you think you can go in terms of improving the average customer's behavior in the portfolio, and kind of just maintaining that customer relationship for a longer time to benefit from their stay in your facilities? Joe Margolis [attribution inferred]: Yeah, that's a very good question, but also a hard one to answer. I don't know if we have, like, a goal for length of stay or any of these other metrics. But our scale and the amount of data we have allows us to continually test ways to optimize performance. How do we get a better customer? How do we keep them longer? Just all kinds of different metrics. So I can say with confidence, we continually try to improve across all of these metrics. We have been improving. We have a good track record. But I don't know how far we have to go. Brendan Lynch (Barclays): Okay, very good. Thank you. Operator: Your next question is from Ronald Kamdem from Morgan Stanley. Your line is open. Please go ahead. Ronald Kamdem (Morgan Stanley): Hey, just two quick ones. Just starting on the expense side — you know, really, it looks like outside of property taxes, most of the line items were down, driving that sort of negative growth. Just thinking sort of long term about what more opportunities you have on the expense saving side — and is there a scenario where expense growth can be lower than inflation? Jeff Norman: Yeah, thanks for the question, Ron. We're really pleased with what we've seen on the expense side this year, and how we've been able to continue to leverage our scale to become more efficient. And I know you'd mentioned long term — I'll start with the year. As you look at the run rates we've had year to date in the first half and what we're guiding to for the full year, it implies that we stay in those sub-inflationary ranges, which we view as a real positive, especially in the face of some of the less controllable line items like property taxes, as you mentioned. Long term — while we won't guide or forecast into future years — I think that advantage, that scale advantage and the efficiencies that it drives, will continue to be an operational advantage for Extra Space. So I anticipate that we can continue to leverage those opportunities. One specific one maybe that I'll call out is on the insurance expense line item: we have a mid-year renewal, which we've completed, that was very favorable. It was only applicable for the month of June within the second quarter, and you can see the positive impact that that negative year-over-year change in our premiums had. And that will continue to flow through the rest of this year and into 2027. So several reasons to be optimistic on the expense side looking forward. Ronald Kamdem (Morgan Stanley): Great. And then my second question was just on — back to the external growth. Obviously the acquisition guidance went up. I guess I'd just love to hear what you're seeing in the market in terms of cap rates, in terms of expected IRRs and so forth. And I think historically you've talked about just pricing really not making a lot of sense for you guys to be really sort of aggressive and so forth. Just curious if that's still the thought and how you guys go about it. Thanks. Noah Springer: We're looking at our underwriting disciplines and continue to stay very disciplined in that. While asset pricing remains elevated — when we say that, I would say in anywhere from A to C markets, you're probably somewhere from the high 4s to the high 5s if you want to look between those markets. So where we look at that, we're going to continue to harvest deals from our proprietary pipelines where it makes sense for us, and we continue to have deals that are accretive to us over our cost of capital. Ronald Kamdem (Morgan Stanley): Thanks so much. Noah Springer: Thanks, Ron. Operator: The next question is from Samir Kanal from Bank of America. Your line is open. Please go ahead. Samir Kanal (Bank of America): Good afternoon, Jeff. Sorry if I missed this, but on the move-in rates — I know you excluded LA, but just curious, where would that have been if LA was included? And just to confirm, does that have much of a benefit for you in 3Q? Jeff Norman: Thanks for the question, Samir. We recognize that that number is one that is viewed not only to model our actual performance, but as a proxy for overall new customer health for our portfolio and across the industry. To include LA County, which is artificially regulated, doesn't make a lot of sense from our perspective, because you're going to be comparing apples and oranges a little bit — especially as you think back to your comp period last year, when those restrictions were in place. So I won't provide a full portfolio number, but I can tell you that internally we think of it the same way. We are not using that data. We're focused on it sans Los Angeles County, because that's really the best proxy for what we're seeing across the portfolio. Samir Kanal (Bank of America): Okay. And then I guess, Joe — certainly positive comments around the supply side of things. Maybe elaborate kind of, you know, which markets are seeing less supply, given that demand is steady here. Thanks. Joe Margolis: I think you're seeing lower supply in almost all markets now. That doesn't mean that there's not still stores being delivered — and in that micro market, right, when we talk about self-storage markets, we're talking about very, very small areas. You know, that's bad for that market and negative. But when we talk about MSAs and large markets, I think you're seeing a decline in deliveries in almost all MSAs. Operator: The next question is from Jack Armstrong with Wells Fargo. Your line is open. Please go ahead. Jack Armstrong (Wells Fargo): Hey, good afternoon. Thanks for taking the question. Can you characterize your ability to push ECRIs into the back half, particularly following a couple of quarters of lower return and extended length of stay? Joe Margolis: You're a little garbled in the question. It might be a systems problem. Do you mind repeating the question? Jack Armstrong (Wells Fargo): Yeah, sorry — and hopefully this is a little clearer. Can you characterize your ability to push ECRIs in the back half? Joe Margolis [attribution inferred]: I think the question is about ECRI — pushing ECRIs in the back half of the year. So we take a longer view on ECRIs and don't try to maximize in any one quarter or two quarters, because customers are extraordinarily sticky. And when we test different ECRI levels, it's really hard to — we don't see increased move-outs even with increasing ECRI. But that being fair, we need to have a long-term, fair, sustainable program. And that's what we seek, instead of maximizing ECRI. Jack Armstrong (Wells Fargo): Okay. That's helpful. Thank you. And then how should we be thinking about the growth in the bridge loan business going forward? You know, is $1.5 billion where you're comfortable keeping that book, or do you plan to grow further from here? Noah Springer: Yeah, the $1.5 billion, I think, is a good number for us. I think we'll continue to see it there. If we want to flex up or down, we can always sell the A's or hold the A's a little bit longer. But where we are currently, I think that's a good spot for us. Jack Armstrong (Wells Fargo): Okay. Helpful. Thank you. Operator: Thank you. Next question is from the line of Eric Wolf with Citi. Your line is open. Please go ahead. Nick Joseph (Citi): Thanks. It's Nick Joseph here with Eric. In the release, Joe, in your quote you mentioned that you're never satisfied. I was wondering if there's any meaning or anything you're trying to convey with that quote — kind of on the go-forward, in terms of any changes, either technology or M&A, or kind of broader thoughts on the business to keep driving the results. Joe Margolis: Yeah, thanks for the question. I think what's important to understand about Extra Space is we're constantly trying to sharpen our tools. We're constantly innovating. We're using our data and technology to test. And it's really a lot of small gains — we're getting a little bit better at this, a little bit better at that. I'm not in any way announcing a brand-new Extra Space or any big changes, but certainly want to give the impression that we're never satisfied with our systems and our technology stack and our processes, and we're always trying to get a little bit better. And I think it shows up in the results. Eric Wolf (Citi): Thanks for that. This is Eric. A bit of a specific question, but you know, you talked in the beginning about the acceleration you saw in the first half on same-store revenue — obviously got into the deceleration in the back half. But I guess, given the boost from LA, is it not possible that we see a third quarter sort of acceleration from the second quarter? And maybe if you could just share, for the back half of the year, how much LA should boost same-store revenue growth just in the back half? Jeff Norman [attribution inferred]: So at the beginning of the year, we estimated that the restrictions in LA, if they were in place for a full year, would provide a 40 basis point headwind. So right around mid-year they were lifted, but we don't get the whole benefit from that, you know, exactly on the day they're lifted. So now we're estimating it's a 20 to 30 basis point headwind as opposed to a 40 basis point headwind. So some help, but not very significant. Eric Wolf (Citi): Okay. And so I guess the other part really was just on third quarter. Like, I know everyone always tries to set up things to be outperformed, but is there a sort of a path — like either an occupancy or ECRIs — everyone just pays attention to move-in rates, where sort of it seems same-store revenue could accelerate in the third quarter. Is that just sort of an unlikely thing to happen? Jeff Norman: Yeah. Good question, Eric. And I appreciate the way you asked that. I think there is perhaps too much focus singularly on new customer rate as the only driver of revenue. And as we've talked about on the call, there's multiple other levers. In short, there's always an opportunity to continue to accelerate revenue. We haven't necessarily guided to that, but it is certainly possible. Eric Wolf (Citi): Okay. Thank you. Operator: Thank you. The next question is from Brad Heffern with RBC. Your line is open. Please go ahead. Brad Heffern (RBC): Yeah, thanks, everybody. You talked in the past about how the last few peak seasons have been sort of truncated, and the explanation has generally been the lack of housing mobility. I'm curious — did you see any difference in the shape of the curve, or the strength of the peak, this year? Jeff Norman: Good question, Brad. And no, I would say no different than what we've seen the last couple of years in a row, and very much in line with our expectations. We guided to, modeled and assumed that we would have no material catalyst from a demand standpoint through the summer leasing season. And I think it's played out in line with that expectation. Brad Heffern (RBC): Okay, got it. And then on the recent move-in rates and occupancy — it sounds like the combination has been pretty flat in June and July. I think the traditional wisdom is that you see the same-store revenue converge with move-in rates on maybe a 12- or 18-month lag. I'm wondering, do you think, like, this increase that we've seen into the mid-2s on same-store revenue is just because you had those high move-in rates last year, and that it's more inclined to go back to flat just based on where the leading-edge move-in rates are? Or am I thinking about that wrong? I know there's tons of things that affect revenue besides move-in rates, but just all else being equal. Joe Margolis [attribution inferred]: I think your thesis is correct that if you look at new customer rates in prior periods, they roll into the rent roll, and that gives you a sense for future revenue growth. But it is only one component. And as we spoke earlier on this call, there's other components that could provide positive revenue growth in future periods, even if you have several periods of flat rate growth. Brad Heffern (RBC): Okay. Appreciate the thoughts. Thanks. Joe Margolis: Sure. Operator: The next question is from Victor Fadiv from Scotiabank. Your line is open. Please go ahead. Victor Fadiv (Scotiabank): Thanks. Yeah, I wanted to follow up on this move-out trend, because it appears that the low housing mobility environment is actually becoming a benefit rather than a headwind — this customer stickiness, longer length of stay and muted move-outs more than offsetting weaker move-in activity. So how sustainable do you believe this dynamic is, and what specific actions are you taking to maintain these strong retention levels, particularly given that some of your peers are having lower occupancy levels, so they may be more inclined to compete aggressively on price? Joe Margolis: So I agree with your point that the reduction in moving customers — from a peak of low 60s to about 55% now — has largely been replaced by customers who tell us they're storing because they lack space for their goods. And the expected length of stay of those customers is at least twice as long as the moving customers. So that is the benefit of the downturn in the moving, of the slowness in the housing market. And the second part of the question — what are we doing? Well, you need to provide an excellent customer experience at the store. Our customer satisfaction rates are in the low 90%s. An important part of that is having a manager there to make sure the store is clean, and have a relationship with the tenant and address their concerns. And when the tenant gets a rate increase notice, our store managers and call center agents are empowered, within certain bounds, to address any concerns a customer has. And we end up with about 16% of our customers who get rate increases getting some level of relief and staying in the store through that. So that helps us retain customers. And I'm going to repeat myself: I think it all falls under providing a good experience for the customer and making them want to stay and not seek elsewhere. Most of our customers — or 76% of our customers — when they leave, it's because they don't need storage anymore. And it's really hard to save those customers if they don't need the product anymore. But the other ones we can focus on providing a good experience to. Victor Fadiv (Scotiabank): Makes sense. And then the second question — so which markets actually contributed most to the Q2 outperformance versus your initial expectations heading into 2026? Jeff Norman: Yeah, Victor, sorry for what will sound like a vague answer. It really was across the board. We saw general outperformance. And some of the stronger markets in terms of total same-store revenue growth also had the strongest outperformance. So as you think of some of the Midwest markets, D.C., Boston, Chicago, Richmond, Virginia, San Diego, California — across the board, we had a number of markets outperform. Victor Fadiv (Scotiabank): Thank you. Jeff Norman: Thanks, Victor. Operator: The next question is from Michael Muller of JP Morgan. Your line is now open. Please go ahead. Michael Muller (JP Morgan): Yeah, hi. Thanks. Yes, Joe, given your comments about not focusing just on move-in rates, do you think you have the mathematical ability to kind of get back to a 3% same-store revenue number without a substantial lift in street rates, in a flat occupancy world? Joe Margolis: To get to 3% without improvement in occupancy or rate, I think would be difficult. Michael Muller (JP Morgan): Okay. Do you have a sense as to, I guess, how much of a lift we need to see in street rates to kind of get you back to that level? Joe Margolis: I think there's a lot of variables, and to say — to plug in one piece of the formula is difficult without knowing what the others are. Michael Muller (JP Morgan): Okay, thank you. Joe Margolis: So I feel like I've given you an unsatisfactory answer. We believe if supply continues to decrease and we don't have any significant change in customers — the risks of which Jeff outlined — we think we can get back to kind of historical levels of revenue growth between 3% and 4%. I don't know the time period. Our guidance doesn't suggest it's going to happen this year, but we're certainly in the recovery stage of the storage cycle, and I would expect that's where we end up. Operator: The next question is from Juan Sanabria of Bank of Montreal. Your line is open. Please go ahead. Juan Sanabria (Bank of Montreal): Hi. Good afternoon or good morning. Just a question with regards to kind of the slope of same-store revenue expected in the second half. Should we be thinking, with an eye towards the exit run rate or how you'd start — in that the growth in same-store revenues is getting smaller because of the comps? Or that's not necessarily how we should be thinking about it? Any comments on the slope or the exit run rate would be extremely helpful. Thank you. Jeff Norman: Yeah, and apologize for being repetitive, Juan. It will depend where you are within the range, right? If at the high end of the range, you would imply a flat slope heading into 2027. At the bottom end of the range, it would imply some deceleration into next year. And if we outperform our range altogether, that would imply acceleration into 2027. So we will stick to 2026 for now and let you all forecast 2027 and beyond. But we agree that the slope heading into it will largely impact performance in 2027. Juan Sanabria (Bank of Montreal): I guess another way to ask it — are the comps tougher in the fourth quarter than the third quarter because of move-in rates last year? Just if you could remind us on how we should think about that. Jeff Norman: Yes, the comps do become more difficult, whether it's thinking of new customer move-in rate or even just revenue altogether. We started to accelerate revenue beginning in the fourth quarter last year. So yes, the comp does become more difficult. Juan Sanabria (Bank of Montreal): Okay, great. And then just my final question. Have you guys leaned on ECRIs — either cadence or percent increases — in any noticeable or material way? Have ECRIs grown this year in the contribution to same-store revenue versus last year, versus initial guidance or expectations? Joe Margolis [attribution inferred]: No. Absent, you know, some testing we're doing, there's been no change in our ECRI policy. Jeff Norman: Yeah, and Juan, you know, this is getting really on the margins, but the only one that I'd point out is, with our original guide assuming full-year restrictions in Los Angeles County — with that being lifted, on the margins, you know, a little better in the back half of the year. Juan Sanabria (Bank of Montreal): Got it. Thank you. Jeff Norman: Thanks, Juan. Operator: The next question is from Spencer Glimcher of Green Street. Your line is now open. Please go ahead. Spencer Glimcher (Green Street): Thank you. Just one on the regulation front for me. How dependent is EXR's revenue management system on consumer-specific data versus broader market-level inputs? And how concerned are you, if at all, that additional legislation regarding surveillance pricing might impede rate algorithms? Joe Margolis [attribution inferred]: Yeah, not concerned. You know, our algorithms are focused on historical data we have for how a certain market and store performs — vacates, rentals, demand at different times of the year — and not any individual customer data or observations. Spencer Glimcher (Green Street): Okay, that's very helpful. That's it for me. Thanks, guys. Joe Margolis: Thanks. Operator: The next question is from Omotayo Okasanya of Deutsche Bank. Your line is now open. Please go ahead. Omotayo Okasanya (Deutsche Bank): Hi, yes. Good morning out there. Congrats on a solid quarter. In terms of just this recovery story that I think we're all kind of looking forward to — curious if you could share any thoughts of, you know, July, you know, beginning of 3Q, and some of the operating trends you're seeing. You know, whether you're still kind of seeing occupancy holding up, whether you're still kind of seeing improvement in street rates. Just any comments you can at least just make to kind of the start of the third quarter. Jeff Norman: Hi, it's Jeff. As we mentioned earlier in the call, it looks a lot like June from a performance standpoint. I think Joe outlined a little bit that we've swapped a little bit of occupancy for a little bit of rate on the margin. And so far, with a few days left in the month, we're on pace to modestly outperform our revenue expectations. So it continues to be favorable in July and looks a lot like the second quarter. Omotayo Okasanya (Deutsche Bank): Gotcha. On the third-party asset management side — again, increasing store count for you guys, slightly reduced guidance for management fees. Is anything changing there? Is the economics of the third-party asset management changing for new contracts? Just curious, any thoughts there? Noah Springer: Yeah, thanks, Teo. No big change at all. In fact, with this business there's ups and downs where portfolios sell and portfolios come in. Beginning of July there was a portfolio that sold — not concerning to us. We continue to add properties. We're over 100 properties net so far this year. And, you know, the benefit of this program is that there's a lot of owners, and the owners have less than two stores on average per owner. And so most of the time, if anybody adds or leaves, it's onesies and twosies that we add or that disappear. But there was one that we had go beginning of July, and we'll continue to add and continue to feel very strong about the program. No material change whatsoever. Omotayo Okasanya (Deutsche Bank): Thank you. Operator: The next question is from Ravi Vaidya from Mizuho. Your line is now open. Please go ahead. Ravi Vaidya (Mizuho): Hi there. Thanks for taking my question. Hope you all are doing well. Can you describe the operational inflection and momentum that you're seeing in some of your Sun Belt markets? How have the street rates been trending? And where do you think same-store revenue for these markets could increase to, absent a substantial demand recovery relative to the rest of the portfolio? Thank you. Joe Margolis: So we are seeing improvement in some Sun Belt markets. Austin, Dallas, Miami all turned positive in new customer move-in rates on a year-over-year basis — all improving markets, but not all markets. Houston, Tampa, still Phoenix — still difficult markets for us. But that's not at all surprising. We don't expect the Sun Belt all to act the same. We don't expect markets within the Sun Belt all to act the same. And it is one of the reasons that our portfolio is designed to be broadly diversified across mostly primary and secondary growth markets — because we know markets don't act the same at the same time, and the more diversification we can get, the more we smooth out our return series. Jeff Norman: And Ravi, if I could just add a thought there. I think that's one thing that makes us even more excited about our performance this year in general, relative to the market. We're a little overweight the Sun Belt, and despite the drag from those markets that haven't had a stronger performance, we've still had pretty significant same-store revenue acceleration. And at some point those markets will continue to flip and accelerate, and I think give another leg to that growth. Ravi Vaidya (Mizuho): Thank you so much. Jeff Norman: Thanks, Ravi. Operator: There are no further questions at this time. I will now turn the call back to Joe Margolis, CEO, for closing remarks. Joe Margolis: Great. Thank you, everyone, for your interest in our company. Our team is happy to report very solid results and the ability to raise guidance. These results stem from success across all aspects of the platform. Our stores are outperforming expectations. Our expense control is very positive, both at the store level and at the G&A level. And we're getting solid contributions from our ancillary businesses. So we're encouraged on where we are in the cycle, and confident that we have the machine to optimize results going forward. Thank you, and look forward to talking to you next quarter. Operator: This concludes today's call. Thank you for attending. You may now disconnect. — END OF TRANSCRIPT —