Our geographically diversified footprint included 1,647 stores spread across 39 states at the end of 2018. Our diversification reduces individual market volatility and produces steady portfolio returns. We have exposure to many primary and secondary markets, with minimal concentration in any geographic area. Investment in Extra Space allows investors to benefit from consistent cash flow produced by a top portfolio in a need-based sector. Our portfolio is built to last.

Our ownership structure provides further diversification, and the ability to optimize capital allocation. With properties that are wholly-owned, joint-venture owned or managed on behalf of third parties, we have access to multiple types of capital during different stages of a real estate cycle. Our flexible structure positions Extra Space Storage for steady growth regardless of market conditions.

The growth of our portfolio through accretive acquisitions, partner buyouts, new joint ventures and the expansion of our third-party management program were key contributors to our growth in 2018. Expansions, rebranding and other redevelopment initiatives further refreshed the portfolio, reduced its effective age and help keep it competitive in our geographically diverse markets.

Acquisitions

The acquisition environment continues to be very competitive, and we are committed to transact only at levels that are beneficial for our shareholders. In 2018, most of our success came from completing off-market transactions with existing joint venture partners, third party management partners and other relationships we have fostered in the industry. 84% of our 2018 acquisitions were off-market transactions. In multiple instances, we realized additional benefit from promoted interests in joint ventures, improving the yields in certain acquisitions. We acquired 67 properties at a gross purchase price of $900 million, of which Extra Space invested $580 million.

We continue to add newly constructed properties through our Certificate of Occupancy program. In 2018, we acquired 23 newly constructed purpose-built stores 18 of which we purchased in a joint venture. The addition of these new assets provides many of the benefits of new development without accepting entitlement and construction risk. These new stores improve the average age of our properties, strengthen our presence in key markets, improve our portfolio demographics and provide an attractive long-term return.

When seeking acquisition opportunities, we focus on long-term value creation and the ability of our newly acquired properties to further round out and improve our diversified portfolio. We continue to increase our presence in markets where we lack scale, and gain exposure to additional markets.

Joint Ventures

Joint ventures have produced and will continue to produce an outsized return on dollars invested. In addition to our participation in the NOI growth of these stores, they provide management fees, tenant reinsurance income and promoted return opportunities. These returns are enhanced, since we receive additional income without full investment in the real estate.

Joint ventures also provide us with additional capital to pursue transactions. Certain ventures allow us to invest in new developments on a programmatic basis, without accepting entitlement or construction risk. We currently have a number of joint ventures where our ownership varies from minority to majority positions, in which we are gaining a promoted return.

Third Party Management

Extra Space Storage has the largest third-party management program in the country. This year we added our 500th property and ended the year with 536 properties under management. In 2018, we added 153 properties to the platform, many of which were new, purpose-built stores. We have a large pipeline of stores for 2019 and believe this will continue to be a capital light growth driver in the future.

However, our goal isn’t to add properties just for growth’s sake. Property management provides additional income and enables us to take advantage of significant economies of scale, additional data and off-market acquisition opportunities, as more owners seek to align themselves with the top operator in storage.

Redevelopment

We have a robust redevelopment program in place to enhance NOI at existing properties by increasing net rentable square feet (NRSF) and optimizing unit mix.

In 2018, we created ~1,000 new units at existing stores through expansion projects or by reconfiguring the existing unit mix. Redevelopment also improves our average portfolio age by making upgrades to properties that reduce their effective age and keeps stores relevant in high-rent per square foot markets. Part of our redevelopment program involves improving the consistency of the Extra Space Storage brand throughout the portfolio. We focus on using our office space, signage and colors to ensure customers know we are Extra Space Storage and where to transact business. We rebranded 125 stores in 2018.