Extra Space Storage (EXR) risk factors, FY2025 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. 03There is significant competition among self-storage operators and from other storage alternatives
4. 04Our property taxes could increase due to reassessment or property tax rate changes
5. 05State and federal regulations relating to natural disasters, public health emergencies or consumer protection could adversely affect our results of operations
6. 06Uninsured losses, losses in excess of our insurance coverage, or increasing insurance deductibles could adversely affect our financial condition and our cash flow
7. 07Our tenant reinsurance business is subject to significant governmental regulation, which may adversely affect our results
8. 08We 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 condition21% rewritten
9. 09Actual 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 condition57% rewritten
10. 10information; and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalfNew
11. 11The use of, or inability to take advantage of the benefits of, artificial intelligence by us presents risks and challenges that may adversely impact our business and operating results or may adversely impact the demand for storage with the CompanyNew
12. 12We may not be successful in identifying and consummating suitable acquisitions that meet our criteria, which may impede our growth
13. 13Legal disputes, settlement and defense costs could have an adverse effect on our operating results
14. 14Climate change may adversely affect our results of operations
15. 15Environmental compliance costs and liabilities associated with operating our stores may adversely affect our results of operations
16. 16Costs associated with complying with the ADA may result in unanticipated expenses

Risks Related to Qualification and Operation as a REIT

1. 17Our failure to qualify as a REIT would have significant adverse consequences to us and the value of our stock
2. 18Possible legislative or other actions affecting REITs could adversely affect our stockholders
3. 19Dividends payable by REITs may be taxed at higher rates
4. 20We will pay some taxes, reducing cash available for stockholders

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. 22A downgrade in our credit ratings could materially adversely affect our business and financial condition and the market value of our outstanding notes
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 stockholders52% rewritten
4. 24Failure to hedge effectively against interest rate changes may adversely affect our results of operations
5. 25Required 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
6. 26Our 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

Risks Related to Our Organization and Structure

1. 27Our unconsolidated joint venture investments could be adversely affected by our lack of sole decision-making authority
2. 28We 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 impacted20% rewritten
3. 29Conflicts of interest could arise as a result of our relationship with our Operating Partnership
4. 30Certain 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. 31Our 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. 32Our rights and the rights of our stockholders to take action against our directors and officers are limited