Extra Space Storage Inc. Announces Modifications to 2009 Dividend Distributions

Market Wire, April, 2009

Extra Space Storage Inc. (the "Company") (NYSE: EXR) announced today that its board of directors has decided, in response to continuing uncertainty in the capital markets, to modify the Company's dividend distributions for the remainder of fiscal 2009.

At this time, the Company does not expect to distribute a dividend in the second and third quarters of 2009. The Company expects to pay an estimated fourth quarter dividend of between $0.24 and $0.30 per share using a combination of approximately 10% cash and 90% common shares, as allowed by the Internal Revenue Service Revenue Procedure 2009-15, to fully distribute its 2009 net taxable income. The fourth quarter dividend, when combined with the first quarter 2009 cash dividend of $0.25 per share, previously paid on March 31, 2009, is expected to satisfy the real estate investment trust ("REIT") distribution requirements and generally allow the Company to avoid the payment of corporate income tax for such year. The Company reserves the right to change the percentage of cash payable in the fourth quarter dividend, including paying such dividend entirely in cash if determined to be in the best interest of shareholders.

The Company currently estimates its annual net taxable income for 2009 to be between $45.0 million and $50.0 million and its total annual distributions for 2009 to be between $0.27 and $0.28 per share in cash and between $0.22 and $0.27 per share in stock. The adjustment to the dividend for the remainder of 2009 will enable the Company to retain up to approximately $67.0 million of additional liquidity depending on the amount of stock issued as a dividend in lieu of cash as part of the fourth quarter dividend.

In conjunction with the dividend modifications, the Company announced that it has repurchased approximately $71.5 million principal amount of exchangeable senior notes due in 2012 for approximately $44.5 million. The repurchase will result in a one-time gain of approximately $22.5 million or approximately $0.25 per share on early extinguishment of debt for the quarter ended March 31, 2009. This gain was not previously included in the Company's earnings guidance for 2009.

Spencer F. Kirk, chairman and chief executive officer of the Company, stated: "Though our balance sheet is in a relatively solid position and we are making progress on refinancing our upcoming loan maturities, the board has decided to adopt a more conservative dividend policy to preserve liquidity. The decision was considered at length because we know how attractive EXR stock has been to many who are looking for a high current yield. At the same time, we believe it is in the best interest of our shareholders that we navigate through these unprecedented financial markets with maximum financial flexibility. Adjusting the dividend gives us an enhanced cushion if capital markets further deteriorate, and also creates the best opportunity to preserve capital for future investments should opportunities arise. Once markets stabilize and lending criteria return to historic norms, we feel that we will have significant additional borrowing capacity and financial flexibility. We believe that preservation of capital and debt reduction is the highest priority during these uncertain economic times and this decision is in the long-term best interest of our shareholders."

First Quarter Earnings Release and Conference Call

The Company will release financial results for the three months ended March 31, 2009 on Monday, May 4, 2009 after the market closes. The Company will also host a conference call at 1:00 p.m. Eastern Time on Tuesday, May 5, 2009 to discuss its financial results.

Hosting the call will be Spencer F. Kirk. Joining him will be Kent W. Christensen, executive vice president and CFO, and Karl Haas, executive vice president and COO.

The conference call will be broadcast live over the Internet and can be accessed by all interested parties through the Company's website at www.extraspace.com and then by clicking on the "investor relations" link at the bottom of the home page. To listen to the live call, please go to the website at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. A digital replay will be available on May 5, 2009 at 4:00 p.m. Eastern Time through May 19, 2009 at midnight Eastern Time. To access the replay, dial 888-286-8010 and enter passcode 45178021. International callers should dial 617-801-6888 and enter the same passcode.

Forward-Looking Statements

Certain information set forth in this release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as "believes," "estimates," "expects," "plans," "may," "will," "should," "anticipates," or "intends" or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.