Extra Space Storage Inc. has begun an immediate wind-down of its development program. As a result of the decision, the company expects to incur one-time charges in respect to development projects that not currently under construction of between $19 million and $23 million in the second quarter of 2009, and severance costs of between $1 million and $2 million. It also expects to spend between $50 million and $55 million on the completion of 18 remaining development properties. Construction of these sites is estimated to be complete by the third quarter of 2010.
"Due to the scarcity of reasonably-priced financing for our development projects in the current market and our need to preserve capital, it is prudent and in the best interest of our shareholders that we discontinue our development program at this time,” said Spencer F. Kirk, chairman and CEO.
Headquartered in Salt Lake City, Extra Space Storage is a real estate investment trust that owns or operates 698 self-storage properties in 33 states and Washington, D.C. The company's properties comprise more than 51 million square feet of rentable space.