Extra Space Storage (EXR) risk factors, FY2024 10-K

Risks Related to Our Stores and Operations

1. 01Adverse economic or other conditions in the markets in which we do business could negatively affect our occupancy levels and rental rates and therefore our operating results
2. 02If we are unable to promptly re-let our units or if the rates upon such re-letting are significantly lower than expected, our business and results of operations would be adversely affected
3. 03Uninsured losses, losses in excess of our insurance coverage, or increasing insurance deductibles could adversely affect our financial condition and our cash flow
4. 04Legal disputes, settlement and defense costs could have an adverse effect on our operating results
5. 05Our tenant reinsurance business is subject to significant governmental regulation, which may adversely affect our results
6. 06Environmental compliance costs and liabilities associated with operating our stores may adversely affect our results of operations
7. 07Costs associated with complying with the Americans with Disabilities Act of 1990 may result in unanticipated expenses
8. 08There is significant competition among self-storage operators and from other storage alternatives
9. 09We may not be successful in identifying and consummating suitable acquisitions that meet our criteria, which may impede our growth
10. 10We and our vendors rely on information technology, and any material failure, inadequacy, interruption or security incident affecting that technology could harm our business, results of operations and financial condition
11. 11Actual or perceived failures to comply with laws and regulations relating to data privacy and protection could adversely affect our business, results of operations, and our financial condition
12. 12Our property taxes could increase due to reassessment or property tax rate changes
13. 13State and federal regulations relating to natural disasters, public health emergencies or consumer protection could adversely affect our results of operations
14. 14Climate change may adversely affect our results of operations

Risks Related to Our Organization and Structure

1. 15Conflicts of interest could arise as a result of our relationship with our Operating Partnership
2. 16Our joint venture investments could be adversely affected by our lack of sole decision-making authority
3. 17We may record losses as a result of the bankruptcy, insolvency, or other credit failure of the borrowers under our bridge lending program or other companies in which we have invested. In that case, our revenues and results of operations may be materially and adversely impacted
4. 18Certain provisions of Maryland law and our organizational documents, including the stock ownership limit imposed by our charter, may inhibit market activity in our stock and could prevent or delay a change in control transaction
5. 19Our board of directors has the power to issue additional shares of our stock in a manner that may not be in the best interest of our stockholders
6. 20Our rights and the rights of our stockholders to take action against our directors and officers are limited

Risks Related to Our Debt Financings

1. 21Disruptions in the financial markets could affect our ability to obtain debt financing on reasonable terms and have other adverse effects on us
2. 22Required payments of principal and interest on borrowings may leave us with insufficient cash to operate our stores or to pay the distributions currently contemplated or necessary to maintain our qualification as a REIT and may expose us to the risk of default under our debt obligations
3. 23Increases in interest rates may increase our interest expense and adversely affect our cash flow and our ability to service our indebtedness and make cash distributions to our stockholders
4. 24Failure to hedge effectively against interest rate changes may adversely affect our results of operations
5. 25Our existing indebtedness contains covenants that limit our operating flexibility, and failure to comply with all covenants in our debt agreements could materially and adversely affect us
6. 26A downgrade in our credit ratings could materially adversely affect our business and financial condition and the market value of our outstanding notes

Risks Related to Qualification and Operation as a REIT

1. 27Dividends payable by REITs may be taxed at higher rates
2. 28Possible legislative or other actions affecting REITs could adversely affect our stockholders
3. 29Our failure to qualify as a REIT would have significant adverse consequences to us and the value of our stock
4. 30We will pay some taxes, reducing cash available for stockholders