Public Storage Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 1, 2025
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Operator

Reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ryan Burke, Vice President, Investor Relations and Strategic Partnerships.

Ryan Burke
Ryan Burke
VP, IR at Public Storage

Thank you, Rob. Hello, everyone. Thank you for joining us for our first quarter twenty twenty five earnings call. I'm here with Joe Russell and Tom Boyle. Before we begin, we want to remind you that certain matters discussed during this call may constitute forward looking statements within the meaning of the federal securities laws.

Ryan Burke
Ryan Burke
VP, IR at Public Storage

These forward looking statements are subject to certain economic risks and uncertainties. All forward looking statements speak only as of today, 05/01/2025, and we assume no obligation to update, revise or supplement statements that become untrue because of subsequent events. A reconciliation to GAAP of the non GAAP financial measures we provide on this call is included in our earnings release. You can find our press release, supplemental report, SEC reports and an audio replay of this conference call on our website, publicstorage.com. We do ask that you initially limit yourselves to two questions.

Ryan Burke
Ryan Burke
VP, IR at Public Storage

Of course, after that, if you have more, feel free to jump back in queue. With that, I'll turn the call over to Joe.

Joe Russell
Joe Russell
President and CEO at Public Storage

Thank you, Ryan, and thank you for joining us today. Tom and I will walk you through our Q1 performance, industry views and outlook. Then we'll open it up for Q and A. Our performance during the quarter was in line with our expectations as we continued to drive stabilization across our portfolio. Move in volumes increased over 2% as we drove more people to our website and increased customer conversion.

Joe Russell
Joe Russell
President and CEO at Public Storage

With move ins up and strong in place customer behavior, the same store occupancy gap to last year closed from down 80 basis points on December 31 to down 30 basis points on March 31. Revenue growth in our same store pool turned positive and improved sequentially again after more than two years of deceleration from record growth in 2021 and 2022. Revenue growth in our non same store pool, which comprises five twenty properties and 21% of our portfolio, accelerated to nearly 11% as it continues to be an engine of growth. And all of this helped drive core FFO per share growth of more than 2% for the quarter, a 200 basis point improvement sequentially versus last quarter. We are well positioned due to our high quality portfolio, innovative platform and company wide competitive advantages.

Joe Russell
Joe Russell
President and CEO at Public Storage

These include our industry leading revenue management consistently achieves the highest revenues per square foot in our markets. We are advancing the industry's most comprehensive digital transformation with customers choosing digital options for 85% of interactions and a new, more efficient operating model that includes using AI to staff our field more efficiently. Coupled with additional advantages across the public storage operating platform, this drives same store operating margins meaningfully higher than the rest of our industry. And we have broad ancillary and external growth avenues, including acquisitions, development, redevelopment, domestic and international expansion, tenant insurance, third party management and lending. Our experienced acquisition and development teams are actively growing the portfolio.

Joe Russell
Joe Russell
President and CEO at Public Storage

The $184,000,000 we have acquired or under contract as of today is ahead of the $35,000,000 achieved at this time last year. In total, our sizable non same store pool will deliver an additional $80,000,000 of NOI through stabilization in '2 in 2026 and beyond. Our recently announced proposal to acquire Abacus Storage King, one of the leading owner operators in Australia and New Zealand, is a great example of our capabilities at play. As we demonstrated with SureGuard in Europe, we are uniquely positioned to execute on in international growth. And all of this is enhanced by the industry's best balance sheet, which provides public storage both stability and the ability to execute on growth across economic cycles.

Joe Russell
Joe Russell
President and CEO at Public Storage

Favorable industry dynamics benefit us as well. This is a needs based business that is largely driven by customer events that happen in all economic conditions. Additionally, an evolving economy creates new customers as our demand drivers shift. With low nominal dollar rents, we are also affordable relative to the other space alternatives. This, coupled with the customer need, tend to make self storage more resilient to changing economic conditions than many other industries.

Joe Russell
Joe Russell
President and CEO at Public Storage

And it's important to keep in mind that our industry is already being normalized over the past three years. Move in rents have declined significantly due to softening demand and competitive market behavior. Our new customers are moving in at very affordable rents that are in line with levels not seen since 02/2013. We are in a good position to benefit from both rising rents and occupancy in an improving demand environment. Now I'll turn the call over to Tom.

Tom Boyle
Tom Boyle
CFO at Public Storage

Thanks, Joe. We are driving growth across our broad set of capital allocation opportunities. We delivered $144,000,000 of development during the quarter and have a robust pipeline of about six fifty million that we will deliver over the next two years. While industry delivery volume is declining overall, we continue to both grow and enhance the quality of our portfolio through our best in class development team. As Joe mentioned, acquisition activity also picked up in the first quarter with 14 properties acquired or under contract for $184,000,000 through today.

Tom Boyle
Tom Boyle
CFO at Public Storage

In Australia and New Zealand, we are excited about the potential to partner with Abacus Storage King and Kai Corporation, their major shareholder, to help enhance the company's customer experience, operating performance, and portfolio growth. Given where we are in that process, we're very limited in what we can say on this call, but we'll continue to keep everyone updated as appropriate. Our capital and liquidity positions are very strong. In fact, they are getting even stronger this year with retained cash flow expected to increase by 50% to approximately 600,000,000. Industry leading leverage, balance sheet capacity, cost of capital allow us to execute in scale across our growth channels.

Tom Boyle
Tom Boyle
CFO at Public Storage

Coupled with improving fundamentals and less competitive new supply, we're poised to increase our portfolio growth activity moving forward. Now shifting to financial performance for the first quarter. Led by higher rental rates, same store revenues turned positive following three consecutive quarters of revenue declines. Same store expenses were well controlled at 30 basis points of growth, driven by our operating model initiatives and moderated advertising spend. Meanwhile, we drove good move in volume in the quarter.

Tom Boyle
Tom Boyle
CFO at Public Storage

Core FFO per share was up 2.2% year over year to $4.12 per share, representing a strong 200 basis points acceleration from the growth level achieved in the prior quarter. Our guidance for 2025 is unchanged. One note regarding the first quarter relative to the rest of the year. As expected, there was minimal impact from the fire related pricing restrictions in Los Angeles during the first quarter. However, we do anticipate it will grow and ultimately have a 100 basis point impact on same store revenue growth for the year.

Tom Boyle
Tom Boyle
CFO at Public Storage

All in, Public Storage is very well positioned today. Self storage industry is very resilient. Our leading operating platform is driving peer leading performance and acceleration across our portfolio. We are further enhancing the platform through digital and operating model transformation. And our balance sheet, while providing stability, is also allowing us to grow across our multiple channels in combination with significant retained cash flow.

Tom Boyle
Tom Boyle
CFO at Public Storage

With that, Rob, let's open it up for questions.

Operator

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. As a reminder, we ask that you please limit to one question and one follow-up. Confirmation tone will indicate your line is in the question queue.

Operator

You may press star two if you like to remove your question from the queue. Please proceed with your question.

Analyst

Great. Thank you. It's Daniel Chukarico on with Nick. I'm trying to gauge the level of conservatism in the guide. Can you help us square away the increasing confidence fundamentals bottoming with the rate gap staying down 5% through the year, implying we're just bouncing sideways along the bottom?

Analyst

At what point do comps become easy enough or demand picks up enough to see a lift off that bottom because theoretically, you don't stay in storage forever. ECRI can only get you so far in the long run.

Tom Boyle
Tom Boyle
CFO at Public Storage

Okay. Thanks, Dan. I think a couple of things to highlight there. We did have a good quarter in the first quarter, in line with our expectations, as Joe noted. In terms of the guide overall, our performance was in line with expectations.

Tom Boyle
Tom Boyle
CFO at Public Storage

As you highlighted, move in volume was strong in the quarter in positive territory. Move in rates were down circa 5%, a little bit better than 5%. As we look at April, which is maybe another indicator for you in terms of trends overall, You know, we are monitoring customer behavior very closely in this environment, given the volatility in capital markets and certainly trade policy, news flow through the month of April. And overall, I'd categorize customer behavior in April as very good. Payment patterns and delinquency were solid.

Tom Boyle
Tom Boyle
CFO at Public Storage

Move out volumes were actually down a percent. Longer term tenants remained strong through the period. And in terms of move in activity, which is I think where you were going, in your question, move in volumes up a good 3%, in the month of April. The, move in rate was down 8% in April. Again, if you look at year to date move in rates, down right around that 5% number, which is in line with the midpoint of our outlook for the year.

Tom Boyle
Tom Boyle
CFO at Public Storage

So trending, right there. Occupancy did improve, given the stronger move in volumes and the decline in move out volumes, through the month, such that, the start of the month, occupancy was down 30 basis points. Occupancy finished April, down 10 basis points. And, to your point, you know, we are seeing demand overall for storage bouncing off that bottom, and that's leading to some stabilization in in many of the metrics I just spoke to. So some encouraging trends year to date.

Tom Boyle
Tom Boyle
CFO at Public Storage

And and overall, you know, we'll you updated as as where we go from here.

Analyst

Okay. Thanks, Tom. And then as a follow-up, can you comment on the private capital raising environment for storage? How has it evolved competitively the past few years as fundamentals have softened? And have you seen a pickup at all in anticipation of a recovery?

Joe Russell
Joe Russell
President and CEO at Public Storage

Well, you're speaking to the overall acquisition environment, again, there's a lot of things that key off of the commitment that any given platform is going to make into storage. Clearly, the last several years, we've seen far more institutional capital come into the sector for obvious reasons relative to the inherent benefits that we're even speaking to in an environment like this, where we can see still the ability, to perform, draw customers to the platform. We're coming off a number of quarters now that Tom just spoke to relative to our confidence going into 2025, even with the choppy environment that's evolved over the last thirty plus days. With all that, there is still a fair amount of institutional capital that's interested in coming into the sector. With that said, however, transaction volumes in 2024 were abnormally light.

Joe Russell
Joe Russell
President and CEO at Public Storage

And going into '25, they are actually just as light, even though we've seen a few indications of a bit more transaction opportunities evolving. So we're going to have to see how this plays out relative to the commitment that other capital sources are putting into the sector. But overall, we're confident that we've got very good tentacles into a whole range of different users and owners that are likely to trade even in this environment, and we'll keep you posted on our progress.

Analyst

Great. Thanks, Joe.

Joe Russell
Joe Russell
President and CEO at Public Storage

Thank you.

Operator

Our next question comes from Ron Camden with Morgan Stanley. Please proceed with your question.

Ronald Kamdem
Ronald Kamdem
Managing Director & Head of US REITs and CRE Research at Morgan Stanley

Hey, just two quick ones, starting on the revenue side. I you've talked about sort of Google Trends and and advertising and top of funnel demand. Just love to get an update of some of what those other indicators are saying, in April and and and and what they mean.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. I'd say consistent trends, through April, which is, you know, we've seen, industry wide search trends be in positive territory year over year, as I noted, kind of bouncing off the bottom here in terms of our own, indicators in our system, across the country, seeing good trends there too with higher web visits, sales calls, and the like. So we're we're seeing that level of demand kind of bounce off the lows or the trough maybe of of 2024, but certainly nowhere near what they were in '21 or '22. Maybe looking more like, 2023 in terms of overall levels of of of interest coming into the system, which is encouraging, given the trajectory we've had over the last several quarters.

Ronald Kamdem
Ronald Kamdem
Managing Director & Head of US REITs and CRE Research at Morgan Stanley

Great. And then my second one is just, on when you sort of dissect the business, whether it's the business customer, know, whether it's specific regions, like, have you seen any sort of trends that are, you know, to the good, to the bad sort of post tariff as well would be helpful? Thanks.

Joe Russell
Joe Russell
President and CEO at Public Storage

So again, yes, Ron, there's not a lot of, I would say, trending data yet relative to what's happened over the last thirty days. As Tom mentioned, we've not seen any inherent change relative to both the trend we've seen from top of funnel demand from new customers as well as the behavior of existing customers. Across the entire portfolio regionally, actually, we were pleased to see another progression in certain markets positive. Florida, for example, we're starting to see actually returning demand factors across the entire state where it was far less so over the last year or so with the deceleration out of the peaks that that market in particular saw during the pandemic. We've now got a dozen plus major markets that are continuing to trend well that we've been speaking to now for the last few quarters.

Joe Russell
Joe Russell
President and CEO at Public Storage

So nothing that I would say has gone a different direction based on the events over the last thirty days. The benefit that we have is we run a day to day business. We move in over 100,000 customers a month, and we've got very good reconnaissance relative to how that's trending market to market. But thus far, we've been encouraged by the lack of disruption in overall tenant behavior and tenant demand.

Ronald Kamdem
Ronald Kamdem
Managing Director & Head of US REITs and CRE Research at Morgan Stanley

Helpful. That's it for me. Thank you.

Joe Russell
Joe Russell
President and CEO at Public Storage

Thank you.

Tom Boyle
Tom Boyle
CFO at Public Storage

Thanks, Rob.

Operator

Our next question comes from Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

Todd Thomas
Todd Thomas
Managing Director & Equity Research Analyst at KeyBanc Capital Markets

Hi, thank you. First question, Tom, you mentioned move in rate was down 8% in April. It seems like you picked up a little bit of occupancy though. So I'm just curious why the system pulled back on rate. If you can provide a little bit more detail, whether that was a strategic decision or or what that was, attributable to.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. Thanks, Todd. I mean, I think you're gonna see move in rates bounce around a little bit by market, by month, all those sorts of things as as we move through, the year. So, you know, in in March, for instance, move in rates were only down 2%, April down 8%. So as you highlighted, there's going to be, some movement there, but, ultimately trying to optimize towards revenue.

Tom Boyle
Tom Boyle
CFO at Public Storage

And and we saw good move in volumes, through the month of April and sets us up well here as we head into to May and June, which tend to be a little bit busier, time period as well. So, to your point, April was down 8%, a little bit lower on rate, but good volume trends. And and we'll continue to to manage the overall rate volume picture ultimately to optimize towards, longer term revenue, of the customer base, from here.

Todd Thomas
Todd Thomas
Managing Director & Equity Research Analyst at KeyBanc Capital Markets

Okay. And then, in terms of development, and how that landscape may may change or be, poised to change as a result of cost increases around tariffs and other policy uncertainty. First, what are you seeing in terms of development activity more broadly? And second, what does that mean for public storage, in in your effort to, you know, maintain the pace of starts and and deliveries and returns that you target?

Joe Russell
Joe Russell
President and CEO at Public Storage

Yeah. Todd, the multiyear deceleration of development completions continues. So year by year from the peaks that we saw 2019, we've spoken to the, again, continued decline of developments nationally. Certainly, have and continue to be a limited number of markets that are seeing outstretched development deliveries. But frankly, that trend is very healthy for the industry as a whole as we've spoken to.

Joe Russell
Joe Russell
President and CEO at Public Storage

And we're really not seeing any change going into 2025, meaning that deceleration is going to continue. It I would say from an overall supply standpoint, it has a two handle on it, meaning it's plus or minus 2% national delivery growth in 2025. So that compares to plus or minus 5% going back to 2019. So the things that, you know, will continue to potentially maintain that deceleration are what you're speaking to. More risk tied to potential costs, the availability and cost of land, labor, and other component costs.

Joe Russell
Joe Russell
President and CEO at Public Storage

And the the things that that continues to do, counterintuitively for us, it's a good window for us to come into many markets that we've been reticent to actually deploy capital into from a development standpoint because of some of those competitive factors multiple years ago, including actually other markets that we've actually put stronger emphasis to grow deeply. So it's a very good window for our development team to go out and find better opportunities in an environment where we've got fewer competitors. They're doing just that. But we're keeping a very close eye on every component cost, including what may or may not play through on tariffs, whether it's steel, whether, again, we're gonna see any labor pressure in particular markets because of immigration priorities, etcetera. So we're gonna continue to monitor that.

Joe Russell
Joe Russell
President and CEO at Public Storage

But for us, it continues to be a very good window. And we've got a deep seated team. We've got the capital structure to continue to fuel our development growth, and we're getting very strong returns that we're every bit, if not confident, we're going to continue to see.

Operator

Our

Operator

next question comes from Salil Mehta with Green Street.

Salil Mehta
Equity Research Associate at Green Street Advisors, LLC

Hi, guys. Thanks for taking my call, and congratulations on on the quarter. Just a quick one here. But do you guys have any updates on the rent restrictions that we're seeing in LA? I think the last one was, like, there was an executive order assigned by the governor to extend it to July, but perhaps you guys have intel of whether it's likely to be extended and or maybe suspended sometime soon.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. Sure. Happy to take that. You know, the the the fire related state of emergencies that were declared by the governor earlier this year, last until the beginning of twenty twenty six. And so those are the the relevant ones, and, you know, we're certainly complying with those as we go here.

Tom Boyle
Tom Boyle
CFO at Public Storage

As we get through this year and the beginning of next year, we'll see ultimately what the governor, intends to do with those emergencies, I e, letting them expire or extending them or or something in between. So, we'll know more. As it relates to the impact to us, as we've spoken about, we anticipate that the impact of those restrictions will result in about a hundred basis point impact to same store revenue, which will be back half weighted.

Salil Mehta
Equity Research Associate at Green Street Advisors, LLC

Awesome. Thanks for that. And, just another follow-up here as far as peak leasing season. But can you guys give us, like, any color on what what we can expect? You know, given that fundamentals really haven't changed much since what we saw last year, do you guys have any optimism that it'll be, like, some, return to normalcy for peak leasing this year, or is '24 kind of the base case that we're looking at?

Joe Russell
Joe Russell
President and CEO at Public Storage

Yeah. Our, base case for 2025, does not assume we would see an uptick in what you might have, you know, seen in more traditional environments where you see more of a peak leasing season. So that's not embedded in our base outlook for 2025. Month by month, we're going to see how that's trending. The demand factors that continue to drive customers to the portfolio are still broad based.

Joe Russell
Joe Russell
President and CEO at Public Storage

So we're encouraged by that. But what typically you would see this time of year is an uptick, particularly tied to existing home sale activity, movement across national markets, etcetera, and that's been muted as we saw in 2024 as well. So we'll see how that plays out as we go through the next three or four months.

Salil Mehta
Equity Research Associate at Green Street Advisors, LLC

Awesome. Thanks for taking my questions.

Salil Mehta
Equity Research Associate at Green Street Advisors, LLC

That's it for me. Thank you.

Operator

Our next question comes from Michael Goldsmith with UBS. Please proceed with your question.

Michael Goldsmith
US REITs Analyst at UBS Securities LLC

Good afternoon. Thanks a lot for taking my question. Maybe just a follow-up on the headwind from the fire restrictions. You've guided to 100 basis points for the year. It sounds like it's back half weighted.

Michael Goldsmith
US REITs Analyst at UBS Securities LLC

Does that imply that you know, it should be, you know, about a 200 basis point headwind in the back half and little impact in the first half? Or or should that kinda ramp up slowly, through the year? Like, how how should we think about the cadence of that headwind?

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah, Michael. It's gonna ramp up as as we go from here.

Michael Goldsmith
US REITs Analyst at UBS Securities LLC

Got it.

Michael Goldsmith
US REITs Analyst at UBS Securities LLC

And and then my my second question is there there feels like there's been a little bit more just sale activity within the self storage space lately. Like, when when you run a sale, is is that, you know, is that a reaction to the market environment where you're looking to, you know, where you're looking to drive drive move ins? Is it more of a function of an opportunity where you think you can capture market share? I'm just trying to get a understand understanding of of how you're using sales these days. And then maybe if you can tie that into, you know, your platform, which which you've talked I think you talked more highly about on this call than you have in the past.

Michael Goldsmith
US REITs Analyst at UBS Securities LLC

So any sort of connection with that would be great. Thanks.

Tom Boyle
Tom Boyle
CFO at Public Storage

Sure, Michael. A lot of components there. I I guess I would say sale activity, you know, it's probably a combination of all the things that that you highlighted there. You know, public storage in the industry have been running promotional sales for for decades, and we'll we'll continue to do so, through this year as we did last year, and years prior. So, there there are some benefits to doing that at certain points of the year and and certainly an ability to drive volume into the system, and ultimately, fits within our strategy to to manage for longer term revenue optimization and combined with advertising and and promotional activities.

Tom Boyle
Tom Boyle
CFO at Public Storage

So, you know, big picture, I'd agree with you. It's a whole host of things that that drive into it. We did run a little bit of a sale in April. We'll intend to run a sale at Memorial Day like we, typically do. But I wouldn't point you to any strategy shift there, more, business as usual.

Ryan Burke
Ryan Burke
VP, IR at Public Storage

Rob, let's move on to the Sure.

Operator

Our next question comes from Michael Griffin with Evercore. Please proceed with your question.

Michael Griffin
Director at Evercore

Great. Thanks. Appreciate the color on the dynamic staffing model and how that's been benefiting kind of your payroll expense. Can you give us a sense of, number one, how much of this has been rolled out into the existing platform, and and then how we should think about incremental benefits from this going forward?

Joe Russell
Joe Russell
President and CEO at Public Storage

Sure. The thing that we've been doing step by step is with the robust level of data and knowledge that we have literally right down to each and every property relative to historic and then predictable levels of not only demand that coincides with the way staffing models can be optimized, meaning, using our very effective in person labor hours to match customer demand factors, has given us very strong guidance into the way that we very differently staff our properties now on a very dynamic day by day basis. The predictability of this data continues to evolve and become more robust. And with that, we've taken iterative steps in optimizing those labor hours, with the results that, thus far, we've spoken to and you're seeing come through our p and l. You saw a nice change in optimization even in the first quarter of twenty twenty five where labor hours are down approximately 12%.

Joe Russell
Joe Russell
President and CEO at Public Storage

That continued optimization, knowledge and ability on our behalf is unique to the industry as a whole. We're seeing very good receptivity, not only relative to how those labor hours match, again, customer demand, putting our own very skilled people in front of customers when customers are, looking for that level of human interaction. But that's counterbalanced by something very effective that we're doing on our digital platform. As I mentioned, 85% of all customer interactions are now digital. Again, that's customer directed, meaning they're self selecting whether they're doing, an initial lease transaction, their own account management through our broad based PS app, to actually go ahead and, use those tools at their election.

Joe Russell
Joe Russell
President and CEO at Public Storage

And with that, we're seeing very good continued receptivity. So with all that said, we have a very good runway to continue to look for next level labor optimization. As we're doing that, we're also retooling the skill set and the priorities that our field team, is able to, deploy into their own, day to day environment that's creating different levels of promotion capabilities, skill capabilities. So this has been a win win all the way around. Good for customers, good for our employees, and good for continued development, of our cost structure.

Joe Russell
Joe Russell
President and CEO at Public Storage

So we're very committed to continue to making additional investments, that have been very effective thus far, and, we're excited about what, what's still out there to achieve.

Michael Griffin
Director at Evercore

Thanks, Joe. Appreciate the context there. And then maybe from a more macro perspective, I acknowledge you guys had a strong quarter but maintained guidance. Clearly, there's some market volatility and uncertainty out there. But can you give us a little color on maybe what your expectations are, whether it's the housing market remains muted, job growth might not be as robust as we'd have thought a couple of months ago?

Michael Griffin
Director at Evercore

How are you overlaying maybe your macro assumptions as it relates to your guidance? Thank you.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. Sure. I think there's a a number of components there that that I'll I'll I'll speak to. As you noted, we had a good quarter. As I highlighted earlier, you know, we do have LA headwinds that are, coming at us, and and we're watching the consumer, you know, very closely here.

Tom Boyle
Tom Boyle
CFO at Public Storage

I noted that through April, we've seen strong consumer trends, at this point and are encouraged by that. But it is something we're watching closely because as the macro environment can shift, so can demand and and customer behavior. You know, we haven't shifted our assumptions that that underpin our outlook. But no question, the the assumptions that underpin the lower, end of the range, do have some of the characteristics that you might see in macro weakness, I. Softer new customer demand, more move out activity, softer ECRI contribution, and the like.

Tom Boyle
Tom Boyle
CFO at Public Storage

And so, again, it's something we're we're watching closely. I've been encouraged by what we've seen through April, but we'll have to see how the macro environment plays out from here to be able to adjust and tweak from here.

Michael Griffin
Director at Evercore

Great. That's it for me. Thanks for the time.

Tom Boyle
Tom Boyle
CFO at Public Storage

Thanks.

Operator

Our next question comes from Juan Sanabria with BMO Capital Markets. Please proceed with your question.

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

Hi. Just a theoretical question, I guess, to start. Just clearly, housing has come off as a demand driver, but decluttering or an alternative space solution storage is a nice low cost option. But just curious how you think about looking at the data and the surveys, how things may change if housing comes back. Not sure when or if, but if housing comes back, does does is that would that be additive necessarily, or do you think some of the, customers that have been using it as a space solution maybe no longer need that?

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

Just curious on on those two variables and how they may interplay going forward.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. Sure, Juan. I think you're on a shift that we've seen over the last couple years. And and in particular, we've seen a reduction in new home sale driven or existing home sale driven activity for new customers. At the same time, we have seen that increase in customers that have ran out of space at home and some longer tenure there.

Tom Boyle
Tom Boyle
CFO at Public Storage

Overall, that shift has been, an impact to demand. And we think that accelerating new home sales, while you may have some customers that are no longer using space because they ran out of space at home because they've, upgraded their home and have and have bought some new space, overall, that increased level of activity, will be a net positive as we think about the the demand picture overall. We're not anticipating that that takes place this year. But as we look at the existing home sale activity, it does feel like we're we're bouncing around the bottom in terms of that level of activity. Does that come back in '26 or '27?

Tom Boyle
Tom Boyle
CFO at Public Storage

I think it's hard to predict. If you look back at at prior housing, downturns, it typically takes several years for, the housing market to recover. But in aggregate, I consider that a net positive to demand even if you give back a little bit of the folks that have ran out of space at home.

Joe Russell
Joe Russell
President and CEO at Public Storage

And I I just add one other one yeah. One one other overarching issue is, you know, the cost of shelter. Again, whether you own, rent, or even are going through that transition from, again, ownership to rental or vice versa, it's the cost of shelter that also is an inherent driver. Because as we've spoken to, self storage is a very sensible financial alternative, you know, to not have to commit to that exercise, either home that you're acquiring and or apartment that you're renting. So, again, inherent good baseline demand just from a cost structure itself.

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

Thanks. And then just as

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

a follow-up. On the third party management business, how are you feeling about the demand for that that service? And just how how successful or not you feel like you've been to date if you kinda met expectations? Or or how are you feeling about your efforts in that business?

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. No. Good question, Juan. That that's a business that we continue to to invest in and and have seen good good adoption really over the last several years. It's a business that takes time to grow, and we knew that when we were getting in.

Tom Boyle
Tom Boyle
CFO at Public Storage

It's about forming relationship, demonstrating a track record on, properties that we're, that we're managing for owners and broadening those relationships over time. And so over the last several years, we have seen a good uptick in demand for that business. I think part of that can be the tougher operating environment, frankly, that we've been living through over the past several years, and have taken some assets for new customers, demonstrated our our capabilities in that business, and continue to grow the the the groups that we're that they're managing for. So, in line with expectations, and we anticipate that that business, will will grow from here. In terms of the the strategic components for us, no question, it it it further enhances our scale in our marketplaces, grows our brand, and again deepens some of those relationships, with owner groups that we can have dialogue around working together in different manners, including potentially acquisitions over time.

Tom Boyle
Tom Boyle
CFO at Public Storage

So we feel good about that business and the trajectory that it's on.

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

Thank you.

Operator

Our next question comes from Eric Wolf with Citi.

Eric Wolfe
Eric Wolfe
Director at Citi

Just

Eric Wolfe
Eric Wolfe
Director at Citi

to follow-up on Michael Goldsmith's question.

Eric Wolfe
Eric Wolfe
Director at Citi

It does seem like your guidance is implying that the restrictions in LA lower your same store revenue by 200 basis points, at least at some point in the back half. And I think you said earlier this year that that the impacted stores are about 10% of your overall same store. So I guess that would imply that the restrictions are lowering your revenue by around 20%, for those impacted stores. Is that the right way to think about it?

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. I think the way I would think about it is the impact I don't wanna minimize the fact that we we did see an impact in the first quarter, right, we're complying with these rental rate restrictions. They they are, they impact both new customers and existing customers. That impact will grow over time as we move through the year, and in aggregate, be 100 basis points. So I don't, I don't wanna communicate that the impact will be so weighted, into the back half, which I think what what you're getting to.

Tom Boyle
Tom Boyle
CFO at Public Storage

You are going to see some impact in the first quarter, second quarter and in through the fourth quarter, And ultimately, some into the first quarter of next year, that's not obviously in that hundred basis points number, but before that, state of emergency is, expires or extended.

Eric Wolfe
Eric Wolfe
Director at Citi

Okay. And then apologies if you answered this before, but I didn't hear it. Your expenses came in pretty low in the quarter. Can you just talk about where they're trending relative to expectations? And and just based on, you know, reaffirming your guidance, it would obviously imply that it comes up somewhat meaningfully over the over the next couple quarters.

Eric Wolfe
Eric Wolfe
Director at Citi

I guess, why would that happen, you know, given some of the expense initiatives that you just mentioned?

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. There's there's a a few pieces there. One, we did, obviously reaffirm our overall expense outlook for three and a quarter, percent at the midpoint, for the year within the same store. We did have good expense control through the first quarter. I would expect that to continue in future quarters, but there were some elements in the first quarter that are unlikely to persist.

Tom Boyle
Tom Boyle
CFO at Public Storage

There were some easier comps in in property payroll, for instance, related to PM Health, plan costs, that was kind of an easy comp compared to last year. On advertising, we had advertising down 10%. We'll we'll manage that dynamically through the year and see where that ultimately plays out. But big picture, you know, we continue to drive, operational efficiency through the payroll optimizations that Joe's spoken to. The other one I would highlight is is solar power generation where we continue to invest in in solar, and we'll continue to to receive the benefits of less utility, electric utility usage, through the year as well.

Eric Wolfe
Eric Wolfe
Director at Citi

Thank you.

Operator

Our next question comes from Caitlin Burrows with Goldman Sachs. Please proceed with your question.

Caitlin Burrows
Caitlin Burrows
Vice President at Goldman Sachs

Hi, everyone. Maybe I was just wondering if you could talk a little bit more about what you're seeing on the ECRI side, today, whether there's been any changes or kind of modifications to the strategy recently, how aggressive you are. Maybe that's not the right word. But yeah.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. Sure, Caitlin. The the ECRI program is generally in line with our expectations and and very much similar to how we've managed it over the last couple years, which is we're focused on understanding customer price sensitivity as well as the cost to replace the tenant to the extent that they they leave us. And and what we've seen, over the the first part of this year is very consistent price sensitivity, and so that's encouraging, and that that holds through April as well, and a relatively stable cost to replace. And so the the the program continues to to perform well, and and we'll we'll continue to optimize that as we move through the year.

Caitlin Burrows
Caitlin Burrows
Vice President at Goldman Sachs

Got it. And then, I guess, of course, each situation ends up being different. But at this point, how would you expect the portfolio to perform in a downturn where the customer might be constrained? Or are there any certain, I don't know, things we should be on the lookout for or acknowledge as risks.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. That's a good question, Caitlin. I think I rattled off some of the areas that we're focused on, day to day and monitoring the customer behavior. We'd expect in a downturn, that we start to see some shifts in customer payment patterns and delinquency. If you go all the way back to the financial crisis, in that downturn, we saw longer term tenants vacate at a higher frequency.

Tom Boyle
Tom Boyle
CFO at Public Storage

Again, that's something we're watching very carefully and and actually saw the opposite in April, with a a decline in longer term tenant, vacate activities, so which is encouraging. And likely a shift in new customer behavior as well. Meaning, you're gonna see some of the demand drivers shift back and forth. You're gonna see some countercyclical demand drivers driven by dislocation in a weaker macro environment, help buffer some of the procyclical drivers, that may soften. Big picture, you know, storage tends to be very resilient, in times of downturn because of some of the those countercyclical demand drivers as well as the fact that we have month to month leases and can recover quickly when demand does does turn around.

Tom Boyle
Tom Boyle
CFO at Public Storage

And as it relates to new customers, I'd just highlight we're already coming off a time period where we've seen a significant move in new customer pricing. And so we're maybe with a little bit of a different setup than, we we may have other times been in before, downturns. So we feel pretty good about where the industry is set up heading into whatever, may come in in 2025 given, trade policy shifts, and we feel public storage is also very well positioned, in that backdrop.

Operator

Thanks. Our next question comes from Ravi Vlava with Mizuho.

Analyst

Hope

Analyst

you guys are

Analyst

all doing well. I wanted to ask about acquisitions. It appears that the acquisitions executed on the quarter or on average in the earlier stages of lease up. Do you expect stabilization to take longer today than it may have in

Operator

the past given lower demand levels?

Analyst

And what is your stabilized cap rate assumption or IRR target for these acquisitions? Yes,

Tom Boyle
Tom Boyle
CFO at Public Storage

sure. So we did have increased activity in the first quarter, as Joe mentioned, acquisition volumes. And the dialogue with sellers that we're having is across a variety of different property types, including lease up assets. And the lease up behavior that we saw through the first quarter was encouraging, frankly, and in line with, you know, some of the commentary I made around the same store and move in volumes and the like. So we've seen good lease up trends year to date, and so we're not shifting our underwriting methodology or otherwise as it relates to lease up assumptions from here.

Tom Boyle
Tom Boyle
CFO at Public Storage

But big picture, we're we're interested in acquiring the the full swath of of potential opportunities, obviously, depending on market and submarket and and and physical asset. And so we were more active in some of the lease up assets and have confidence in that lease up trajectory, but we're also interested in more stabilized properties as well. And some of what we have under contract is is some of that. So we'll see a a good mix here throughout 2025, as we go further. In terms of return expectations and cap rates, you know, I would I would point you to pretty consistent, playing field as it relates to cap rates, which is kinda going in yields in the in the fives to low sixes and then stabilizing at a higher level under our platform.

Tom Boyle
Tom Boyle
CFO at Public Storage

But that's been pretty consistent now for for a number of quarters. We've had, obviously, some capital markets volatility over the month of April, and we'll see where where ultimately cost of capital shakes out. But, as it relates to what's trading today, I'd point you to those same sorts of guideposts.

Analyst

Thank you. Appreciate the call.

Tom Boyle
Tom Boyle
CFO at Public Storage

Sure.

Operator

Our our next question comes from Ki Bin Kim with Truist Securities. Please proceed with your question.

Ki Bin Kim
Ki Bin Kim
Managing Director at Truist Securities

Thank you. Good morning. I just want to go back to the topic of how storage would perform in a downturn. You know, I and I know it's a probably a loaded question because what kind of downturn will we have. But if pricing is already back to I think you said 02/2013, but at least 02/2019 levels, and if housing demand is already not in the numbers as much, you know, in the looking backwards, you know, why wouldn't self storage outperform past down cycles?

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. No. I I think that there's an argument that it could. Obviously, it depends on the flavor and the context of what the downturn is ultimately. But, you know, you're pointing to a couple reasons that would suggest that that that self storage could do even better in the past, and I we wouldn't disagree with that.

Ki Bin Kim
Ki Bin Kim
Managing Director at Truist Securities

Okay. And on your retained cash flow, you said 600,000,000, up 50%. You know, what is how does that actually manifest to shareholders? Is it higher dividends or, you know, debt pay downs, or more acquisitions? Or does it change anything at all?

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. No. It's a a a great question. You know, what we typically think of is reinvesting that cash flow into the business. We just spoke about the acquisition environment and some of the thawing that we've seen through through that.

Tom Boyle
Tom Boyle
CFO at Public Storage

But I'd say, most prominently, internally, the way we think about it is reinvesting that into our development business, which as Joe highlighted has good return profile, and and generally, as we look at it, the highest risk adjusted return profile of our capital allocation alternatives. So we can pick the site, the submarket, design the building, design the unit mix, put it into our national operating platform, and and construct it with, you know, national bidding processes and our our in house construction team. So we feel very good about, reinvesting that retained cash flow into developments and acquisitions from here, and that will evidence itself in terms of higher FFO growth.

Ki Bin Kim
Ki Bin Kim
Managing Director at Truist Securities

Okay. Thank you.

Operator

Our next question comes from Jeff Spector with Bank of America. Please proceed with your question.

Jeffrey Spector
Jeffrey Spector
Managing Director at Bank of America

Great. Thank you. My first question, I just wanted to ask, I don't think you discussed specifically your business customer. I just want to confirm, have you seen any recent changes with that customer? Can you remind us the percent overall in the portfolio, business customers, if that's possible?

Jeffrey Spector
Jeffrey Spector
Managing Director at Bank of America

Thanks.

Joe Russell
Joe Russell
President and CEO at Public Storage

Yeah, Jeff. The, approximate range of our, business to consumer business so consumers make up plus or minus 85%, of our customer base. And then, business related customers are about 15%. The number is not precise because, some customers don't necessarily identify as businesses, but the range that we see is typically about that. Some properties actually may have a higher percentage of business customers based on location, trade area, proximity to the other types of economic centers in any particular submarket.

Joe Russell
Joe Russell
President and CEO at Public Storage

We really have not seen anything meaningfully different between the two groups. They're both typically very good customers, particularly once they become aged. We have a number of business customers, to my point, around the benefits of a particular location may be inherent to why they continue to store with us in and out of multiple year periods. And we service our overall customer base in very similar ways. Some business customers require different access hours, etcetera, and we can be accommodative on that front too.

Joe Russell
Joe Russell
President and CEO at Public Storage

But overall, a good percentage of the portfolio, plus or minus about 15%, and haven't seen any degradation at all in this environment.

Jeffrey Spector
Jeffrey Spector
Managing Director at Bank of America

Great. Thank you, Joe. And then my second question, I just want to confirm. It sounds like you're seeing strength across the portfolio, but please confirm, I guess, you know, we'll talk about markets with stronger income versus lower income or stronger higher density versus lower density. You know, are you seeing any differences, in the month of April?

Jeffrey Spector
Jeffrey Spector
Managing Director at Bank of America

Thank you.

Joe Russell
Joe Russell
President and CEO at Public Storage

I wouldn't be able to point to any differences in this short term period, Jeff. You know, again, very broad based. You know, most of the markets that, we operate in, we have a combination of both dense and maybe more suburban orientation, as well as, you know, a whole host of different customer, economic, types based, again, on the trade area that any particular property is in. But frankly, we really haven't seen a differentiation come through at all. It points to the overall health and resiliency of the business and the variety of ways customers, you know, continue to gravitate toward using self storage, whether it's first time and or customers that continue to, keep their space with us.

Jeffrey Spector
Jeffrey Spector
Managing Director at Bank of America

Okay. Thanks. You know, if I could just ask one more. This April, how does it compare typically to what you see in April from a historical seasonality standpoint?

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. Yeah. I would point back to the comments that Joe made earlier around, you know, we're not anticipating to see a a typical, seasonal pattern this year. And I would say that that's consistent with what we've seen year to date. I I think we've we've seen some closing of the occupancy gap, but I think that's more just broad based demand bouncing off the bottom than it is anything that you would point to seasonally.

Tom Boyle
Tom Boyle
CFO at Public Storage

And and so I'd say, generally speaking, similar to last year in terms of seasonal trends, but overall, a little bit better demand trends year to date.

Jeffrey Spector
Jeffrey Spector
Managing Director at Bank of America

Okay. Thank you.

Joe Russell
Joe Russell
President and CEO at Public Storage

Thank you. Thanks, Jeff.

Operator

Our next question comes from Eric Luebchow with Wells Fargo. Please proceed with your question.

Eric Luebchow
Eric Luebchow
Director - Senior Equity Analyst at Wells Fargo Securities

Great. Thanks for taking the question. So I wanted to ask about M and A. I know you're not going to comment directly on the Abacus deal, but as you think more broadly, are there opportunities out there in other developed international markets given your experience with SureGuard, whether it's more broad in Europe and Canada or in the APAC region, just thinking about how you can export the the PSA operating model in into other countries.

Joe Russell
Joe Russell
President and CEO at Public Storage

Yeah, Eric. I mean, clearly, we've proven that we we are capable of doing just that, meaning exporting many of the things that we've learned over our fifty plus years here in The US, and how that may or may not be transportable into certain international markets. To your point, you know, Europe and the experience we've had with SureGuard there has been a great opportunity for us to learn as they've adopted at their election, a whole host of things that, we've been able to, guide them to if in fact it suited the particular level of optimization they're looking for in whatever particular country may or may not be applicable. And we've continued to study different markets outside The US. Certainly, you know, we've gotten to know the Australian market well over the last several years based on the experience we had five plus years ago with an early interaction there.

Joe Russell
Joe Russell
President and CEO at Public Storage

And as Tom mentioned, we are very encouraged and like the opportunity that we see with the Abacus Storage King portfolio in Australia and New Zealand. There are other markets out there that we're going to continue to study and look for potential opportunities. What makes sense for us more typically than not is going into a new market outside of US borders that may have many of the things that we can more immediately impact, which would be scale, some kind of an operating platform that, again, has some proven attributes, and the way that we can infuse our own capabilities and platform optimization, that we do here day to day into those kinds of platforms outside of borders. So the Abacus opportunity is just that, and hopefully, we'll continue to find more over time.

Eric Luebchow
Eric Luebchow
Director - Senior Equity Analyst at Wells Fargo Securities

Appreciate that. And just one follow-up on the guidance. I think last call, talked about occupancy being down about 10 basis points by the end of the year. And just wanted to confirm that. And I guess based on the trajectory of how this year has played out so far through April, you know, are you kind of in line or running ahead of of internal expectations at this point on on occupancy?

Eric Luebchow
Eric Luebchow
Director - Senior Equity Analyst at Wells Fargo Securities

Thank you.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. Eric, just to to clarify, what I communicated in February was the the midpoint assumes that occupancy on average would be down 10 basis points. And so we're we're tracking, right along with that, based on year to date performance.

Eric Luebchow
Eric Luebchow
Director - Senior Equity Analyst at Wells Fargo Securities

Okay. Appreciate it. Thank you.

Joe Russell
Joe Russell
President and CEO at Public Storage

Thanks.

Operator

Our next question comes from Tayo Akhosanya with Deutsche Bank. Please proceed with your question.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Yes. Good good morning out there. Just quick one on street rates.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

So, again, down 5% in 1Q, down 8% in April. I'm just trying to understand, like, you know, relative to one of your peers where in one q, street rates were somewhat flat relative to the Yardi data where you're gonna kinda flattish, maybe down a little bit. You know, you guys seem to still be, you know, using street rates or or or, you know, to using street rates in a different way to maximize revenue, if I if I may use those words versus what some of your peers apparently seem to be doing now. I just wonder if you could talk a little bit about that, you know, in terms of why this is a better strategy versus kind of what the industry seems to be moving towards of street rates kind of flattening year over year at this point.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. Sure. I think there's a a number of components there. You know you know, I I won't speak to what others are doing. I just highlight, you know, we we consistently are looking to to optimize towards revenue over time, and that's a combination of both occupancy and rate.

Tom Boyle
Tom Boyle
CFO at Public Storage

Or as you think about it on on move ins, move in volume and move in rates, and obviously paired with advertising as well as, promotional discounts as well. So, that's a dynamic process that occurs at the unit and and property level, and one that that we have a lot of confidence in, in terms of our our ability to to execute on that objective over time given the the breadth of data and experience that we have, in operating in our markets. I think, you know, looking at the first quarter, for instance, our our rates move in rates were down, 4.6%. You know, that's a move in rent, just to be clear, not a street rent. So that's an actual rent that a a customer is paying.

Tom Boyle
Tom Boyle
CFO at Public Storage

And the volume, that we we picked up in the quarter, was healthy such that the net so the the the contract revenue or contract rents gained from move ins was down 2.3%. And so that's an improvement from where we were in the fourth quarter, which, you know, demonstrates the Oh. The stabilization that we're seeing on move ins. But to us, it's not really a a rate discussion or a a volume discussion. It's really both, as we're looking to to optimize revenue over time.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

That's helpful. And if I may ask one more question again, just given again how soft overall housing market remain and if that's not going to be a real big driver, just curious as you guys, you know, pull your tenants about why they are moving in. You know, any sense just in regards to all the other typical drivers if if any of those are kind of higher than usual or something to kinda give a a sense of if housing doesn't come back, there may be these other drivers that may actually absorb some of that demand that we're not getting from housing. It's just it was kinda curious if you're kinda seeing anything like that that kinda makes it a little bit better that you would still have decent demand even if housing doesn't come back this year.

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. No. I I think our expectation is not that, 2025 is a year of strong housing recovery. So I think you're right that, not likely to to be a big driver. But I think what we've seen year to date is more broad based demand across the other factors, which, again, existing home sale driven move ins are about 15% of our activity.

Tom Boyle
Tom Boyle
CFO at Public Storage

So the other 85% is driven by a whole host of other demand drivers. And we've seen that that that level of demand has bounced across the bottom and bounced off the bottom. I wouldn't highlight one particular driver there, more broad based improvement off the bottom here.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Thank you.

Operator

Our next question comes from Mike Mueller with JPMorgan. Please proceed with your question.

Michael Muller.
Michael Muller.
Analyst at JP Morgan

Yeah. Hi. Real quick, just going back to development for a second. Can you tie together, I guess, the comments that took out a little bit earlier where you talked about the lowest move in rents you've seen since 2013 and kind of tied to developing economics today, considering that costs have moved up? And I guess, you running into more and more situations where the math just doesn't pencil out?

Michael Muller.
Michael Muller.
Analyst at JP Morgan

Or you you're more accepting of lower going in yields because you see longer term growth? I mean, how how do we think about tying those two together?

Tom Boyle
Tom Boyle
CFO at Public Storage

Yeah. No no question. You're highlighting what's been a challenging development environment, and that's what Joe was highlighting earlier. I think industry wide, we're expecting that, overall levels of supply are are likely to continue to come down because of some of the factors that you highlighted and and Joe highlighted earlier. I think against that backdrop, you know, we challenged our team and they've been executing on a plan to to find those submarkets where there there's a good mix of of new demand that's coming in, where it makes sense for us to to plant a a new public storage flag.

Tom Boyle
Tom Boyle
CFO at Public Storage

And, again, pick that submarket, design that building, and ultimately, you know, construct that building at at at a good cost, given our national buying platforms and plug it into our operating platform. In terms of the underwriting or otherwise, we're not lowering our return expectations or or targets in this environment, but we we certainly are, experiencing some of the challenges that that others are as well. But we certainly have the balance sheet, retain cash flow, and a deep team to execute against some of those challenges.

Joe Russell
Joe Russell
President and CEO at Public Storage

Yeah. Mike, just one other, you know, part of the equation that goes into development in our sector. I mean, the vast majority of it's done on a one off, very localized basis. And, you know, to the points Tom just made, you know, the constraints that developers now have is dealing with not only what rate level they may or may not be able to achieve in this environment, but the cost structure, etcetera. And their playing field's probably not very far and wide.

Joe Russell
Joe Russell
President and CEO at Public Storage

I mean, they are going to be very focused on the individual market that they they are operating in or trying to develop in. So what we have very differently is the opportunity to go in and out of different markets where we see these pockets of opportunities that with our own data and our own level of confidence and underwriting capabilities, we're still seeing, you know, good opportunities, with far less competition to look for attractive development, opportunities. So that continues to play forth. And frankly, we continue to be more encouraged that we can expand our development capabilities based on that.

Michael Muller.
Michael Muller.
Analyst at JP Morgan

Got it. Okay. That's helpful. Thank you.

Tom Boyle
Tom Boyle
CFO at Public Storage

Okay. Thanks.

Operator

We have reached

Operator

the end of the question and answer session. I'd now like to turn the call back over to Ryan Burke for closing comments.

Ryan Burke
Ryan Burke
VP, IR at Public Storage

Thank you, Rob, and thanks to all of you for joining us. Have a great day.

Operator

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Executives
    • Ryan Burke
      Ryan Burke
      VP, IR
    • Joe Russell
      Joe Russell
      President and CEO
    • Tom Boyle
      Tom Boyle
      CFO
Analysts
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Earnings Conference Call
Public Storage Q1 2025
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