EXR KEEPS CRUSHING EXPECTATIONS, JUST STANDING ASIDE | 8.2.22 | (EXR)

Hedgeye Cartoon of the Day: The REIT Stuff

It is 8.2.22, and Active Short Medical Properties Trust (MPW) is overvalued by approximately ~$16.90/share. The company reports 2Q22 results before the market opens tomorrow, 8/3. Things we are looking for: (1) another presentation with self-contradictory slides, (2) every MPW operator doing just great, (3) property-level coverage metrics for historical quarters now lower than reported originally in the quarter for the quarter (seems to happen repeatedly and makes no sense), (4) any explanation for fronting 100% of the capital for the Steward Miami deal, (5) any deviation in the relationship between AFFO and cash from operations on the CF statement (watch this one beginning this quarter), (6) some indication on what the SEC is investigating (?), and (7) any indication as to whether MPW will file Steward's audited 2021 financials, as they are required by SEC Topic, Section 2340 to do.   

Ticker: EXR

Company: Extra Space Storage

Subsector: Self-Storage

Headline: Shorting EXR is just a great way to lose your shirt (we learned the hard way)

• EXR 2Q22 Core FFO of $2.13/share was +$0.07/share vs. both Hedgeye and Consensus. Very high quality top-line beat driven by the same store portfolio and additional acquisitions in 2Q vs. our assumptions. EXR took up its acquisition volume by +$400 million for the year, which dovetails with the transaction activity in the quarter.
• SSRev: +21.7% vs. our +19.1%, +$0.07/share
• SSExp: +9.3% vs. +8.2%, -$0.01/share; similar to other COVID beneficiaries need to watch expense ramps as the RoC on the top-line decelerates, such as payroll +20%, office expenses +19%, and property opex +16% before there is any "catch up" on a lag for property taxes. I.e., watch out for peak margins here at 77%. We had baked in -20bps of margin compression y/y for FY23 coming into the quarter.
• Combines to drive SSNOI up +26% vs. our +22.8% assumption. 
• Non-Same Store: +$0.03/share from additional deal activity in the quarter and better existing asset performance. 
• Net Interest Expense: -$0.01/share
• And then rounding after that.  
• FY23 Core FFO range revised up +2.8% at the midpoint, now at $8.30 to $8.50/share and capturing our $8.33/share coming into the quarter. 
• Bargold Acquisition: Interesting $180 million acquisition of company that leases space in apartment buildings and sublets it as storage to tenants. Want to hear more about this on the call, particularly on margins, but appears to be an interesting and relatively "asset light" business.    

Figure 1: EXR 2Q22 Earnings Variances

 

Source: Company Reports, Hedgeye   

Prior Notes:

8.1.22 - INVH MODEL UPDATE - HITTING PEAK MARGINS | 8.1.22 | (INVH)

7.31.22 - SUNDAY NIGHT REIT READ | STEWARD TRYING TO "STIFF" ITS VENDORS? | 7.31.22 | (MPW)

7.29.22 - CPT 2Q22 RESULTS IN-LINE | 7.29.22 | (CPT)

7.28.22 - EVENT REPLAY | MPW's EQUITY IS WORTHLESS | 7.28.22 | (MPW)

7.28.22 - INVH IS "STAGFLATION REIT" | 7.28.22 | (INVH 2Q22 RESULTS)

7.26.22 - HIGH QUALITY 2Q22 BEAT OUT OF EQR | 7.26.22 | (EQR)

7.26.22 - REITS DAILY BRIEF | 7.26.22 | (NXRT 2Q22 RESULTS)

7.25.22 - EVENT INVITE | MEDICAL PROPERTIES TRUST (MPW) FLASH CALL | THURSDAY, 7/28 @ 10:00AM ET

7.24.22 - SUNDAY NIGHT REIT READ | 7.24.22 | (NXRT, POSITION MONITOR CHANGES)

7.22.22 - REITS WEEKLY VALUATION HANDBOOK | 7.22.22

7.21.22 - REITS DAILY BRIEF | (MPW, REXR 2Q22 RESULTS)

7.19.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 7.19.22 | (INVH, PLD)

7.18.22 - IS MPW RUNNING AFOUL OF SEC TOPIC 2, SECTION 2340? | 7.18.22 | (MPW)

7.17.22 - SUNDAY NIGHT REIT READ | 7.17.22 | (FINANCIAL STRAIN INDEX)

7.16.22 - CORRECTION: IS MPW MANAGEMENT GETTING DESPERATE? | 7.16.22 | (MPW)

7.15.22 - REITS WEEKLY VALUATION HANDBOOK | 7.15.22

7.14.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 7.14.22 | (AVB, CTRE, IHS TCN)

7.13.22 - SELL INVITATION HOMES | 7.13.22 | (INVH)

7.10.22 - SUNDAY NIGHT REIT READ | 7.10.22 | (HR, HTA, INVH)

7.8.22 - REITS WEEKLY VALUATION HANDBOOK | 7.8.22

7.8.22 - REITS DAILY BRIEF | 7.8.22 | (INVH - TWO CITIES OPPOSE MOTION TO DISMISS, STILL MORE MPW)

7.6.22 - REITS DAILY BRIEF | 7.6.22 | (STEWARD'S LIQUIDITY & MPW'S OPTIONS)

7.3.22 - SUNDAY NIGHT REIT READ | 7.3.22 | (HR, HTA, WELL, MPW, NXRT)

7.1.22 - REITS WEEKLY VALUATION HANDBOOK | 7.1.22

6.30.22 - REITS DAILY BRIEF | 6.30.22 | (APARTMENT RENTS, MPW)

6.28.22 - REITS DAILY BRIEF | 6.28.22 | (INVH) | PLAINTIFF FILES RESPONSE

6.26.22 - SUNDAY NIGHT REIT READ | 6.26.22 | (COLD)

6.24.22 - REITS WEEKLY VALUATION HANDBOOK | 6.24.22

6.23.22 - REITS DAILY BRIEF | 6.23.22 | (PGRE)

6.22.22 - REITS DAILY BRIEF | 6.22.22 | (PGRE)

6.20.22 - REITS DAILY BRIEF | 6.20.22 | (POSITION MONITOR UPDATE)

6.17.22 - REITS DAILY BRIEF | 6.17.22 | (MPW - MORE BAD NEWS)

6.17.22 - REITS WEEKLY VALUATION HANDBOOK | 6.17.22

6.16.22 - REITS DAILY BRIEF | 6.16.22 | EXPLORING MPW'S PRIORY TRANSACTION (MPW)

6.12.22 - SUNDAY NIGHT REIT READ | 6.12.22 | (FR, PGRE, NXRT)

6.10.22 - REITS WEEKLY VALUATION HANDBOOK | 6.10.22

6.8.22 - REITS DAILY BRIEF | 6.8.22 | (NAREIT, POSITION MONITOR UPDATE)

6.6.22 - REITS DAILY BRIEF | 6.6.22 | (MPW)

6.5.22 - SUNDAY NIGHT REIT READ | 6.5.22 | (JUNE NAREIT PRESENTATIONS HITTING)

6.3.22 - REITS WEEKLY VALUATION HANDBOOK | 6.3.22

6.3.22 - REITS DAILY BRIEF | 6.3.22 | (ANOTHER ONE ON MPW)

6.2.22 - REITS DAILY BRIEF | 6.2.22 | (MPW)

6.1.22 - REITS DAILY BRIEF | 6.1.22 | (CPT TO BEST IDEA SHORT LIST)

5.30.22 - SUNDAY NIGHT REIT READ (ON MONDAY) | 5.30.22 | (UHAL, FIRST WEEKLY VALUATION HANDBOOK)

5.26.22 - UHAL F4Q22 RESULTS - BIG OOF ON DIY | 5.26.22 | (UHAL)

5.25.22 - REITS DAILY BRIEF | 5.25.22 | (MPW MUST LIVE ON ANOTHER PLANET)

5.24.22 - REITS DAILY BRIEF | 5.24.22 | (REMOVING COLD FROM BEST IDEA SHORT)

5.22.22 - SUNDAY NIGHT REIT READ | 5.22.22 | (OFC, STYLE FACTORS)

5.20.22 - REITS DAILY BRIEF | 5.20.22 | (MPW)

5.18.22 - REITS DAILY BRIEF | 5.18.22 | (POSITION MONITOR UPDATE)

5.17.22 - REITS DAILY BRIEF | 5.17.22 | (MPW)

5.16.22 - SUNDAY NIGHT REIT READ, A LITTLE LATE | 5.16.22 | (CUBE, PSA, EXR, LSI, UHAL)

5.12.22 - REITS DAILY BRIEF | 5.12.22 | (APARTMENT RENT TRACKER)

5.10.22 - RADI 1Q22 RESULTS | TIMING IMPACT DRAG; POTENTIAL DEAL ALL THAT MATTERS | 5.10.22 | (RADI)

5.8.22 - SUNDAY NIGHT REIT READ | 5.8.22 | (RADI)

5.6.22 - COLD 1Q22 RESULTS | SETTING UP ANOTHER GUIDANCE CUT? | 5.6.22 | (COLD)

5.5.22 - REITS DAILY BRIEF | 5.5.22 | (HR/HTA/WELL, LSI, NSA)

5.4.22 - REITS DAILY BRIEF | 5.4.22 | (EXR/PSA 1Q22 RESULTS)

5.3.22 - REITS DAILY BRIEF | 5.3.22 | (HR, HTA)

5.1.22 - SUNDAY NIGHT REIT READ | 5.1.22 | (AMH, MPW)

4.29.22 - MPW HEARING FOOTSTEPS? | 4.29.22 | (MPW)

4.28.22 - AVB 1Q22 RESULTS | BIG BEAT DIDN'T HAPPEN, BUT FY22 OUTLOOK RAISED | 4.28.22 | (AVB)

4.27.22 - INVH 1Q22 RESULTS | ROC ROLLING OVER EVERYWHERE | 4.27.22 | (INVH, AMH)

4.26.22 - EQR 1Q22 RESULTS | DISAPPOINTING QUARTER | 4.26.22 | (EQR)

4.26.22 - REITS DAILY BRIEF | 4.26.22 | (AVB 1Q22 PREVIEW)

4.25.22 - REITS DAILY BRIEF | 4.25.22 | (EQR 1Q22 PREVIEW)

4.24.22 - SUNDAY NIGHT REIT READ | 4.24.22 | (AMH, INVH, TCN)

4.22.22 - EVENT REPLAY: MPW BEST IDEA SHORT BLACK BOOK (MPW)

4.21.22 - REITS DAILY BRIEF - LATE EDITION | 4.21.22 | (MPW)

4.19.22 - REITS DAILY BRIEF | 4.19.22 | (PLD 1Q22 RESULTS)

4.17.22 - SUNDAY NIGHT REIT READ | 4.17.22 | (MPW)

4.13.22 - REITS DAILY BRIEF | 4.13.22 | (OFFICE UTILIZATION)

4.12.22 - EVENT INVITE | MEDICAL PROPERTIES TRUST (MPW) BLACK BOOK | THURSDAY, 4/21 @ 10:00AM ET

4.10.22 - SUNDAY NIGHT REIT READ | 4.10.22 | (MACRO STYLE FACTORS)

4.8.22 - REITS DAILY BRIEF | 4.8.22 | (PLD)

4.7.22 - REITS DAILY BRIEF | 4.7.22 | (OFFICE UTILIZATION, PGRE)

4.5.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 4.5.22 | (AMH, MAA, MPW)

4.3.22 - SUNDAY NIGHT REIT READ | 4.3.22 | (CXW)

4.1.22 - REITS DAILY BRIEF | 4.1.22 | (CPT, INVH)

3.31.22 - REITS DAILY BRIEF | 3.31.22 | (APARTMENT RENT TRACKER)

3.30.22 - REITS DAILY BRIEF | SELF-STORAGE ASSUMPTIONS | 3.30.22 | (CUBE, EXR, LSI, NSA, PSA)

3.27.22 - SUNDAY NIGHT REIT READ | 3.27.22 | (CXW, INVH, ONL, WE)

3.22.22 - REITS DAILY BRIEF | PGRE REJECTS MONARCH OFFER | 3.22.22 | (PGRE)

3.20.22 - SUNDAY NIGHT REIT READ | 3.20.22 | (INVH)

3.18.22 - REITS DAILY BRIEF | COLD REMAINS TOP SHORT IDEA | 3.18.22 | (COLD)

3.16.22 - REITS DAILY BRIEF | SFR ASSUMPTIONS SHEET | 3.16.22 | (AMH, INVH)

3.15.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.15.22 | (SUI)

3.13.22 - SUNDAY NIGHT REIT READ | 3.13.22 | (INVH)

3.11.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.11.22 | (WE)

3.9.22 - REITS DAILY BRIEF | 3.9.22 | (OFFICE UTILIZATION)

3.8.22 - REITS DAILY BRIEF | 3.8.22 | (APARTMENT RENT TRACKER, AMH, INVH, TCN, ILPT)

3.6.22 - SUNDAY NIGHT REIT READ | 3.6.22 | (WE)

3.4.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.4.22 | (WE)

3.4.22 - REITS DAILY BRIEF | 3.4.22 | (RADI MODEL UPDATE)

3.1.22 - REITS DAILY BRIEF | 3.1.22 | (WE)

3.1.22 - FOLLOWING UP W/ ADDITIONAL THOUGHTS ON HR | 2.28.22 | (HR, HTA)

2.28.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.28.22 | (HR, HTA)

2.27.22 - SUNDAY NIGHT REIT READ | 2.27.22 | (HR, HTA)

2.26.22 - UPDATE FOLLOWING MONARCH BID | POSITION MONITOR UPDATE | 2.26.22 | (PGRE)

2.24.22 - REITS DAILY BRIEF | 2.24.22 | (COLD 4Q21 RESULTS)

2.24.22 - UPDATE ON INVH COURT CASE | 2.24.22 | (INVH)

2.24.22 - REITS DAILY BRIEF | 2.24.22 | (PGRE)

2.23.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.23.22 | (INVH, COLD)

2.20.22 - SUNDAY NIGHT REIT READ (A LITTLE EARLY FOR FUN!) | 2.20.22 | (INVH SHORT)

2.17.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.17.22 | (INVH)

2.16.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.16.22 | (UHAL)

2.15.22 - INVH 4Q21 RESULTS | JUST NOT ENOUGH | 2.15.22 | (INVH)

2.13.22 - SUNDAY NIGHT REIT READ - SUPER BOWL EDITION | 2.13.22 | (UHAL)

2.11.22 - REITS DAILY BRIEF | 2.11.22 | (OFC 4Q21 RESULTS)

2.10.22 - REITS DAILY BRIEF | 2.10.22 | (REXR 4Q21 FOLLOW-UP)

2.9.22 - REXR'S FY22 OUTLOOK DISAPPOINTING | 2.9.22 | (REXR)

2.9.22 - REITS DAILY BRIEF | 2.9.22 | (EGP)

2.8.22 - REITS DAILY BRIEF | 2.8.22 | (REXR, APARTMENT RENT TRACKER)

2.6.22 - SUNDAY NIGHT REIT READ | 2.6.22 | (RADI)

2.4.22 - EVENT REPLAY | RADIUS GLOBAL INFRASRUCTURE (RADI) BLACK BOOK

2.2.22 - AVB FY22 GUIDANCE CONSERVATIVE | 2.2.22 | (AVB)

2.1.22 - EQR 4Q21 EARNINGS BEAT | 2.1.22 | (EQR)

1.31.22 - POSITION MONITOR UPDATE | 1.31.22 | (O, NNN, WY, CUBE, LSI)

1.30.22 - SUNDAY NIGHT REIT READ | 1.30.22 (AVB, EQR, WE)

1.27.22 - EVENT INVITE | RADIUS GLOBAL INFRASRUCTURE (RADI) BLACK BOOK | FRIDAY, 2/4 @ 10:00AM ET

1.27.22 - REITS DAILY BRIEF | 1.27.22 | (OFC)

1.26.22: REITS DAILY BRIEF PART II | 1.26.22 | (RADI)

1.26.22 - REITS DAILY BRIEF | 1.26.22 | (COLD)

1.25.22 - REITS DAILY BRIEF | 1.25.22 | (APARTMENTS, OFFICE UTILIZATION)

1.25.22 - Will $MSTR Be Forced To Sell Their Bitcoin? (Bonus)

1.23.22 - SUNDAY NIGHT REIT READ | 1.23.22

1.22.22 - REITS DAILY BRIEF | 1.21.22 | (COLD)

1.21.22 - REITS DAILY BRIEF | 1.19.22 | (AMH, WE)

1.19.22 - REITS DAILY BRIEF | 1.19.22 | (PLD, COLD)

1.17.22 - MONDAY NIGHT HOLIDAY REIT READ | 1.17.22 (RADI, PLD)

1.12.22 - REITS DAILY BRIEF | 1.12.22 | (APARTMENT RENT TRACKER)

1.11.22 - REITS DAILY BRIEF | 1.11.22 | (POSITION MONITOR UPDATE)

1.10.22 - REITS DAILY BRIEF | 1.10.22 | (WE, REXR)

1.9.22 - SUNDAY NIGHT REIT READ | 1.9.22

1.6.22 - REITS DAILY BRIEF | 1.6.22 | (PSA, POSITION MONITOR)

1.5.22 - ESRT <--> PGRE: A WIN-WIN ALL AROUND? | 1.5.22 | (ESRT, PGRE)

1.4.22 - REITS DAILY BRIEF | 1.4.22 | (PGRE)

1.3.22 - REITS DAILY BRIEF | 1.3.22 | (POSITION MONITOR UPDATE, PGRE)

12.29.21 - REITS DAILY BRIEF | 12.29.21 | (Position Monitor, TCN, DLR, EQIX, ELS, SUI)

12.23.21 - REITS DAILY BRIEF | 12.23.21 | (AVB, CPT, EQR, MAA)

12.21.21 - REITS DAILY BRIEF | 12.21.21 | (BRG, U.S. OFFICE UTILIZATION)

12.19.21 - SUNDAY NIGHT REIT READ | 12.19.21 | (PSA)

12.17.21 - REITS DAILY BRIEF | 12.17.21 | (Storage, Manhattan Office)

12.16.21 - REITS DAILY BRIEF | 12.16.21 | (FR)

12.15.21 - EVENT REPLAY | FIRESIDE CHAT W/ WEWORK CEO SANDEEP MATHRANI

12.14.21 - REITS DAILY BRIEF | 12.14.21 | (U.S. OFFICE UTILIZATION)

12.12.21 - SUNDAY NIGHT REIT READ | 12.12.21 | (WE)

12.11.21 - EVENT REMINDER | FIRESIDE CHAT W/ WEWORK CEO SANDEEP MATHRANI

12.10.21 - REITS DAILY BRIEF | 12.10.21 | (ESRT)

12.8.21 - REITS DAILY BRIEF | 12.8.21 | (APARTMENT RENT TRACKER, U.S. OFFICE UTILIZATION)

12.7.21 - REITS DAILY BRIEF | 12.7.21 | (SLG)

12.6.21 - REITS DAILY BRIEF | 12.6.21 | (WE NOVEMBER OPERATIONS UPDATE)

12.5.21 - SUNDAY NIGHT REIT READ | 12.5.21 | (PGRE, EGP, PLYM, MAA, CPT, O, EPR)

12.2.21 - REITS DAILY BRIEF | 12.2.21 | (WE)

12.1.21 - IGNORE CNBC RE: WEWORK RESTATEMENT | 12.1.21 | (WE)

12.1.21 - REITS DAILY BRIEF | 12.1.21 | (U.S. OFFICE UTILIZATION, WE)

11.30.21 - REITS DAILY BRIEF | 11.30.21 | (AMH)

11.28.21 - SUNDAY NIGHT REIT READ | 11.28.21 | (COLD)

11.23.21 - REITS DAILY BRIEF | 11.23.21 | (U.S. OFFICE UTILIZATION, WE)

11.21.21 - SUNDAY NIGHT REIT READ | 11.21.21 | (WE)

11.19.21 - REITS DAILY BRIEF | 11.19.21 | (CUBE)

11.17.21 - REITS DAILY BRIEF | 11.17.21 | (STYLE FACTOR WORK)

11.16.21 - REITS DAILY BRIEF | 11.16.21 | (U.S. OFFICE UTILIZATION)

11.15.21 - CUBE ANNOUNCES STABILIZED ACQUISITION | 11.15.21

11.15.21 - REITS DAILY BRIEF | 11.15.21 | (WE, ILPT)

11.14.21 - SUNDAY NIGHT REIT READ | 11.14.21 | (CUBE, EXR, LSI, NSA)

11.11.21 - REITS DAILY BRIEF | 11.11.21 | (LSI, NYC CBD OFFICE)

11.10.21 - REITS DAILY BRIEF | 11.10.21 | (UHAL, CONE, COR, NSA, PSA)

11.9.21 - REITS DAILY BRIEF | 11.9.21 | (U.S. OFFICE UTILIZATION, SFR)

11.7.21 - SUNDAY NIGHT REIT READ | 11.7.21 | (APARTMENT RENTAL RATE TRACKER, POSITION MONITOR UPDATE)

11.4.21 - REIT RECAP | 11.4.21 | AMH 3Q21 RESULTS

11.4.21 - REIT RECAP | 11.4.21 | CUBE 3Q21 RESULTS

11.4.21 - REITS DAILY BRIEF | 11.4.21 | (COLD, IRM, EARNINGS SURPRISE MONITOR)

11.3.21 - REITS DAILY BRIEF | 11.2.21 | (LSI, POSITION MONITOR UPDATE)

11.2.21 - REITS DAILY BRIEF | 11.2.21 | (PSA, U.S. OFFICE UTILIZATION)

11.1.21 - REIT RECAP | 11.1.21 | PSA 3Q21 RESULTS

10.31.21 - SUNDAY NIGHT REIT READ | 10.31.21 | (3Q21 EARNINGS SURPRISES, POSITION MONITOR)

10.28.21 - REIT RECAP | 10.28.21 | CPT 3Q21 RESULTS

10.28.21 - REITS DAILY BRIEF | 10.28.21 | (EXR)

10.28.21 - REIT RECAP | 10/28/21 | INVH 3Q21 RESULTS

10.28.21 - REIT RECAP | 10/27/21 | AVB 3Q21 RESULTS

10.27.21 - REITS DAILY BRIEF | 10.27.21 | (3Q21 Earnings, AVB, EXR, Office)

10.26.21 - REIT RECAP | 10/26/21 | EXR 3Q21 RESULTS

10.26.21 - REITS DAILY BRIEF | 10.26.21 | (EQR, REXR)

10.25.21 - SUNDAY NIGHT REIT READ | 10.24.21 | (POSITION MONITOR)

10.21.21. - REIT RECAP | 10/21/21 | REXR 3Q21 RESULTS

10.20.21 - REITS DAILY BRIEF | 10.20.21 | (EGP, PLYM, REXR, ILPT)

10.19.21 - VIDEO | American Homes 4 Rent (AMH) Thesis

10.19.21 - REITS DAILY BRIEF | 10.19.21 | (COLD, SLG, VNO, AMH, U.S. Office Utilization)

10.18.21 - REITS DAILY BRIEF | 10.18.21 | (PLD)

10.17.21 - SUNDAY NIGHT REIT READ | 10.17.21 | (PLD, POSITION MONITOR)

10.15.21 - REIT RECAP | 10/15/21 | PLD 3Q21 RESULTS

10.13.21 - REITS DAILY BRIEF | 10.13.21 | (PLD)

10.10.21 - SUNDAY NIGHT REIT READ | 10.10.21 | (POSITION MONITOR UPDATE)

10.8.21 - BLACK BOOK ROUND-UP | AMERCO (UHAL)

10.7.21 - BEST IDEA ROUND-UP | AMERICOLD REALTY TRUST (COLD)

Please e-mail with any questions.

Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs