This case study was published in the 2023 REIT Industry ESG Report, which details the REIT and publicly traded real estate industry's environmental, social, and governance (ESG) performance and features 20 case studies showcasing REIT leadership and ESG innovation from a variety of sectors. The report serves as a practical tool for shareholders and stakeholders to assess the scale and impact of the REIT industry's ESG commitments and initiatives. Applicable footnotes and/or citations for this case study are available in the full report.
Extra Space Storage’s energy initiatives support environmental goals and reduce operating expenses. For over a decade the REIT has been expanding efforts to generate low-cost renewable energy onsite and making energy efficiency improvements.
Extra Space piloted its onsite solar energy program in 2010, and while the environmental benefits were clear, before expanding the program, the REIT wanted to understand if and how the financial benefits could be realized. The company’s solar strategy started with capitalizing on regulatory incentives, rolling out its installations in states with lucrative tax incentives and available credits. The program later expanded to include properties in states with higher electricity prices, lowering energy expenses with onsite generated renewable solar energy.
Today, the REIT has onsite solar on over half of its wholly owned properties, and its Real Estate Committee analyzes the solar potential as part of due diligence for acquisitions in its pipeline. Extra Space currently completes about 75 solar installation projects per year, spending an average of $20 million annually. Advancements in solar energy technology have allowed Extra Space to add solar capacity to properties where it was not financially feasible a decade ago. Extra Space has plans to expand its community solar projects in New Jersey and New Mexico, which provide support to low- and middle- income communities by making electricity more affordable, contributing to positive environmental and social outcomes.
In addition to renewables, Extra Space focuses on energy efficiency. The REIT is actively upgrading HVAC systems to meet higher efficiency standards and to reduce usage of harmful refrigerants. Other projects include installing LED lighting, replacing existing roofs with reflective single ply roofing, and converting older, inefficient buildings like department stores into storage facilities.
To monitor, measure, and report on its environmental footprint and the impact of its energy initiatives, Extra Space is focused on improving its energy reporting processes. The REIT has recently hired a team member dedicated to collecting and analyzing utility data from numerous utility companies and building out internal quality control processes. The REIT has also engaged a third party to assist with aggregating utility data.
The REIT believes that investments in onsite solar energy generation, energy efficiency, and environmental performance reporting are beneficial for many of its stakeholders – including shareholders, communities, employees, and the environment.
Extra Space Storage Inc. is a fully integrated, self-administered, and self-managed REIT. The company is the second largest owner and/or operator of self-storage properties in the U.S. and is the largest self-storage management company in the U.S.