Public Storage

Core FFO in 2Q was $4.17 per share, down year over year and sequentially because of higher financing costs and G&A. Same-store revenue declined 0.6% and same-store NOI declined 2.2%, both ahead of internal expectations. Occupancy was 92.5%, up 0.2% year over year, and average move-in rents were +1.6%. Expense growth was 4.4% in the quarter. For 2026, management raised same-store revenue guidance to -0.2% at the midpoint and same-store NOI guidance to -1.1% at the midpoint; core FFO guidance was raised to $16.75-$17.05 per share, with the midpoint up $0.22 per share. Management also said LA County is now a -50 basis point same-store revenue headwind this year, improved from the prior -80 basis point assumption. The PS Canada/NSA financing mix is now expected to be about $0.02 per share positive to 2026 core FFO versus prior neutral assumptions.

Tom Boyle framed the quarter as the start of Public Storage’s new PS 4.0 era, emphasizing greater urgency, stronger execution, and more building blocks for future per-share growth. He highlighted the NSA closing as a major milestone, called Public Storage Canada a strategic entry into an underpenetrated market, and pointed to improving PSNext operating indicators and a strengthening Own It culture. His tone was optimistic and forward-looking, with repeated emphasis that the company is setting up stronger growth in the second half and over the next several years.

Joe Fisher said the quarter’s softer same-store results were offset by improving fundamentals, including positive 1.6% move-in rents, 92.5% occupancy, and reduced churn. He raised 2026 guidance across key metrics, citing better new move-in rates, occupancy, interest expense, and non-same-store/ancillary contributions, while noting a slightly higher G&A outlook. He also detailed a very active capital and liquidity profile: about $12 billion of capital markets activity year to date, $5.9 billion of debt activity announced during and after the quarter, $3.8 billion of available liquidity at quarter-end, roughly $600 million of annual free cash flow, net debt to EBITDA of 2.9x, and net debt plus preferred equity to EBITDA of 4.2x.

Analysts focused on how quickly Public Storage can recapture revenue in LA now that rent restrictions expired, and management said the benefit will be phased in and that LA contributed 30 basis points of the 90 basis point guidance increase. Questions also centered on NSA synergies and expansion opportunities; management said it identified expansion projects and about 14,000 units that can be brought back online with R&M spending, and said confidence in top-line and bottom-line synergies has increased after the overnight systems transition. Other questions probed churn, Sunbelt weakness, and the equity raise; management said lower churn is helped by more customer feedback and better service, Sunbelt markets are still uneven but improving sequentially, and the ATM was used as one more capital tool alongside low-cost debt and free cash flow to fund accretive growth.