Public Storage Q2 Earnings Call Highlights

Key Points

• Public Storage raised its 2026 guidance as operating trends improved, including higher occupancy and move-in rents. Core FFO guidance increased to $16.75–$17.05 per share, while same-store revenue and NOI forecasts were upgraded.
• The company completed its acquisition of National Storage Affiliates, adding roughly 1,100 stores and 575,000 units, and expects to close its $1.2 billion acquisition of Public Storage Canada in the third quarter.
• Public Storage maintains a strong financial position, with $3.8 billion in available liquidity, net debt to EBITDA of 2.9 times and significant debt-market access. It also reported more than $450 million in property acquisitions and a $692 million development pipeline year to date.

Public Storage NYSE: PSA said its second-quarter operating trends improved and raised its 2026 guidance, while highlighting the completed acquisition of National Storage Affiliates and a planned entry into Canada through the acquisition of Public Storage Canada.

Core funds from operations totaled $4.17 per share in the second quarter, down from a year earlier and sequentially, which President and CFO Joe Fisher attributed to higher financing costs and general and administrative expenses. Same-store revenue declined 0.6% year over year and same-store net operating income fell 2.2%, though both measures exceeded the company’s internal expectations.

The company reported improving forward-looking operating indicators. Average move-in rents increased 1.6%, marking the first time since 2021 that both move-in rates and occupancy rose year over year, Fisher said. Occupancy was 92.5%, up 20 basis points from the prior year, while move-in rates rose 18% from the fourth quarter of 2025.

Guidance Raised as Operating Trends Improve

Public Storage raised its full-year outlook across key metrics. The company now expects same-store revenue growth at a midpoint of negative 0.2% and same-store NOI growth at a midpoint of negative 1.1%, representing improvements of 90 basis points and 110 basis points, respectively, from its previous guidance.

The revised outlook assumes positive low-double-digit new move-in rate growth, compared with a prior expectation for mid-single-digit declines, and occupancy growth of 30 basis points year over year, versus a previous assumption of flat occupancy.

Core FFO guidance was increased to a range of $16.75 to $17.05 per share, with a midpoint of $16.90, a $0.22-per-share increase from the prior forecast. Fisher said the increase reflects stronger same-store trends, lower-than-expected interest expense, and contributions from non-same-store properties and ancillary businesses, partly offset by higher G&A expenses.

Public Storage expects same-store revenue growth to improve in the second half of the year and turn positive in the fourth quarter. Fisher said the company’s performance in Los Angeles, where pricing restrictions have expired, will contribute to that improvement but will not be the sole driver. Stronger coastal and Midwestern markets, along with improving Sun Belt conditions, are also expected to help.

CEO Tom Boyle said June move-in rents were up 4% year over year, aided by a more consistent year-over-year promotional strategy, and July trends remained positive. July occupancy was up about 30 basis points year over year, according to Boyle.

NSA Integration Begins

Public Storage closed its acquisition of National Storage Affiliates on July 22 and transitioned the acquired portfolio of approximately 1,100 stores and 575,000 units to Public Storage systems overnight, Boyle said. The company also welcomed more than 1,300 former NSA employees.

On the first day after closing, Public Storage completed more than 1,500 reservations, transitioned 265,000 autopay accounts, began rent collections and started temporary rebranding efforts, according to Boyle.

Management said the integration has identified additional expansion opportunities. Boyle said the company found approximately 14,000 units that could be restored to inventory through repair-and-maintenance spending, creating incremental availability in the second half of 2026. The company has also identified opportunities to expand some existing NSA properties.

Public Storage maintained its expectation that NSA and the planned Canadian transaction would be neutral to Core FFO in 2026 before financing effects. Fisher said the company now expects approximately $0.02 per share of positive Core FFO impact this year from financing benefits associated with the two transactions. The benefit is primarily tied to the ability to finance part of the NSA acquisition using lower-cost Canadian borrowing after the Canadian deal closes.

NSA generated year-to-date NOI growth of 2.4%, driven by occupancy improvement and expense controls, Fisher said. Its year-to-date Core FFO was $1.14 per share, which Public Storage said was ahead of consensus expectations.

Canadian Acquisition and Capital Deployment

Public Storage expects to close its $1.2 billion acquisition of Public Storage Canada in the third quarter. The Canadian portfolio is the country’s third largest and is concentrated in Toronto and Vancouver, with properties in infill locations. Boyle said the Canadian self-storage market has per-capita supply of about 2.5, below U.S. levels.

The transaction is expected to be funded with about $900 million in operating partnership units and roughly $300 million in Canadian debt. The seller also may receive additional OP units through earn-out provisions tied to future NOI performance.

Fisher said the portfolio has 83% occupancy and 65% NOI margins, presenting potential upside through the company’s PS Next operating platform. The Canadian OP-unit issuance will allow Public Storage to finance an equivalent portion of the NSA acquisition at Canadian rates more than 100 basis points below the U.S. financing levels used in the original underwriting, he said.

Elsewhere, the company said it had acquired or placed under contract more than $450 million of properties year to date, with about 70% of that activity conducted off market. Management said it has increasingly targeted recently developed lease-up properties, which can be dilutive to near-term FFO but may offer higher stabilized returns.

• Development pipeline: $692 million across 47 projects, with targeted stabilized yields of 8%.
• Remaining development funding: $432 million.
• Lending platform: $173 million outstanding, up $30 million from the prior quarter, at a current rate of about 7.6%.
• Third-party management: 22 net new properties added during the quarter, bringing the total to more than 460 properties.

Balance Sheet and Customer Initiatives

Public Storage reported approximately $12 billion in capital-markets activity completed or committed year to date. During and after the quarter, it announced $5.9 billion of debt-related activity, including $1.4 billion of unsecured issuance, an expanded and extended $3 billion revolving credit facility, a new $1 billion commercial paper program and a $500 million delayed-draw term loan.

The $1.4 billion of unsecured debt carried a weighted average effective rate below 5%, Fisher said. The company also entered forward-sale agreements for nearly 800,000 shares under its at-the-market program, expected to produce nearly $260 million in future net proceeds.

At quarter-end, Public Storage had $3.8 billion of available liquidity between cash and its revolving credit facility, plus about $600 million in annual free cash flow. Net debt to EBITDA stood at 2.9 times.

Boyle said customer-focused initiatives are contributing to lower churn and improved sentiment. The company now receives roughly 90,000 customer surveys a month, compared with 2,000 to 3,000 previously. It also continues to expand digital tools: nearly 90% of customers interact with Public Storage digitally during their rental journey, while three-quarters complete their leases entirely online. Its AI-powered customer service agent, Ellie, has handled more than 90,000 customer interactions in recent months, Boyle said.

About Public Storage (NYSE:PSA)

Public Storage NYSE: PSA is a real estate investment trust (REIT) that specializes in self-storage services. Headquartered in Glendale, California, the company was founded in the early 1970s and has grown through development and acquisitions to become one of the largest owner-operators of self-storage facilities in the United States. It is publicly traded on the New York Stock Exchange under the ticker PSA.

The company's core business is the ownership, operation and management of self-storage properties that serve both residential and commercial customers.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.