Resiliency
Highlights
- Self storage is a low carbon emission property type
Extra Space operates with 82% less emissions than the real estate sector average
- Extra Space Storage is investing in technology
Each year we test new technologies to improve our efficiency, while continuing to invest in solar installations, lighting retrofits, HVAC improvements, sustainable roofing, and more.
- Extra Space has a large, diversified portfolio
With over 4,200 properties in 42 states, we have we have balanced exposure to the nation’s largest markets, with no material physical or financial concentration in any specific market.
- Storage is a need-based, resilient product
customer needs fuel consistent and steadily growing demand, unaffected by external factors.
Governance
Our organization’s resiliency strategy includes direct oversight of climate-related issues by the Nominating, Governance, and Corporate Responsibility Committee of our Board of Directors. Our sustainability, risk, and senior management teams report to the board quarterly.
Strategy
Physical Risk
Key examples of physical risk identified by Extra Space Storage are properties that are exposed to extreme weather events. We address these risks through construction improvements and building retrofits; for example, we add flood protection barriers in areas with hurricane risk.
We also address these risks by having a highly diversified portfolio, minimizing exposure to different region-specific risks. Additionally, we’ve obtained third-party property and casualty insurance coverage to further mitigate our financial risk. We have regular portfolio reviews where individual risk factors are analyzed and we evaluate our findings to determine if changes are needed.
Transitional Risk
A key example of transition risk to our portfolio is increased environmental regulation, which may increase the cost to develop, acquire, own and/or manage real estate in certain cities or states. Increased regulatory reporting may increase administrative costs and costs for building retrofits. Based on our low carbon emissions relative to most real estate property types, we believe our exposure to this transitional risk is lower than the majority of real estate asset classes. To address these risks, we continue to monitor consumption and emissions data and implement improvements to increase our efficiency.
Risk Management
We are consistently evaluating our process for managing climate-related risks. The financial impact of the risks evaluated is minimal due to the diversification of our portfolio, insurance coverage, and property improvements made. Our climate-related risk process is integrated into the organization’s overall risk management strategy, and the company has incorporated resiliency measures in our acquisition and development projects.
Metrics & Targets
Extra Space has set targets to reduce our GhG emissions, energy use, water use, and waste. See goals for more information. Our Risk Management Team has team goals related to climate and extreme weather events, including maintaining and updating emergency plans for our properties and evaluating those plans annually.
Percentage of Portfolio with Significant to High Risk From Extreme Weather Events
- 6.3% Flood
- 16.0% Seismic
- 0.3% Tsunami
- 18.4% Wind
- 9.0% Hail
- 46.2% Tornado
- 1.1% Wildfire
- Acquisitions
We aim to minimize physical and transitional risk in our acquisitions by evaluating those risks in our underwriting and due diligence processes. We work to ensure our portfolio is diversified without excessive exposure to any one market or to any specific risk factors that would cause higher than expected losses in the portfolio.
- Depositions
We evaluate our existing portfolio annually for disposition candidates. Our evaluations focus on operational efficiency, future growth prospects, and future climate-related physical and/or transitional risks.
- Operations
Our teams are equipped with emergency response plans and supplies and are trained to respond safely in scenarios of extreme weather events. Individual property audits are conducted, resulting in property enhancements to mitigate climate-related risks.
