Utah's Most Valuable Public Company, Extra Space Storage, is Raising up to $800 Million in a Secondary Shelf Offering

An $800 million public offering may barely raise an eyebrow in the world's financial centers of New York City, London, and Singapore.

But when Utah's most valuable publicly traded company, Extra Space Storage (NASDAQ:EXR), announces plans to raise up to $800 million in a secondary offering, we at Utah Money Watch sit-up and take notice.

The details are as follows:

One week ago, Extra Space filed a Form S-3 with the U.S. Securities and Exchange Commission (containing two separate Prospectuses), wherein it announced its intent to raise up to $800 million through the sale of its common stock, as well as its ability to sell (from time to time)

• Preferred stock,
• Depositary shares,
• Warrants,
• Rights,
• Units,
• Debt securities, and
• Guarantees of debt securities.

Shown below in alphabetical order are the underwriters for this offering:

• BMO Capital Markets,
• BofA Securities,
• Citigroup,
• Jeffries,
• J.P. Morgan,
• Regions Securities,
• TD Securities,
• Truist Securities, and
• Wells Fargo Securities.

As of market close yesterday, Extra Space common stock was priced at $132.74/share, giving the firm a market valuation of nearly $29.5 billion (on over 218 million shares outstanding).

This capitalization is over four times greater than Utah's next two highest valued publicly traded firms (as of yesterday's market close):

• Draper, Utah-based HealthEquity (NASDAQ:HQY) at $6.99 billion; and
• Salt Lake City-based Zions Bancorporation (NASDAQ:ZION) at $6.1 billion.

A Quick Overview of Extra Space Storage

Since its founding in 1977 as a self-storage company, Extra Space has transformed itself into one of the leading Real Estate Investment Trusts (REITs) in the global self-storage marketplace.

The company has three primary lines of business today:

1. Self-storage units that it owns and operates;
2. Self-storage units that it manages for others; and
3. Re-insurance that it offers to clients interested in insuring their goods from damage or loss while stored.

As per its 2023 Annual Report (ended 31 December 2023) as filed with the SEC via Form 10-K, Extra Space generated over $2.5 billion in gross income for the year as follows:

• ~$2.2 billion from rental fees from storage-units it owns;
• ~$235 million from reinsurance fees; and
• ~$102 million from fees for managing storage-unit properties for third-parties.

This represented a 33% revenue increase in 2023 versus the 2022 results, with most of the gains being driven by the company's acquisition of Life Storage in 2023.

That said, the Life Storage acquisition also contributed to a 56% increase in expenses in 2023 on a Year-over-Year basis for 2022.

As of yesterday's market close, Extra Space had not reported whether it had sold any shares of common stock in connection with its planned $800 million offering.

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