Extra Space Storage forecasts annual FFO below estimates on tepid demand

Feb 19 (Reuters) - Extra Space Storage EXR.N on Thursday forecast full-year funds from operations below Wall Street estimates, as the real estate investment trust grapples with softening demand for its self-storage stores due to rising competition in key markets.

The Salt Lake City, Utah-based company's occupancy continues to fall as demand softens in a weak macro environment and new market entrants add to industry oversupply.

The company's annual same-store occupancy in 2025 fell to 92.6% from 93.3% last year.

At the same time, inflation is slowing new customer growth, while higher operating costs and increased discounting are further pressuring margins.

The REIT expects annual adjusted FFO between $8.05 and $8.35 per share, the midpoint of which comes a cent below $8.21 per share in 2025.

Analysts estimate per-share adjusted FFO of $8.29 for the year, according to data compiled by LSEG.

The company posted fourth-quarter adjusted FFO of $2.08 per share, compared with analysts' estimates of $2.04.

For the quarter ended December 31, total same-store revenues rose marginally from a year ago to $664.2 million.