Financial Data and Key Metrics Changes - The company raised its outlook for 2025 based on stabilizing operations and accelerated acquisitions, which reached $785 million closed or under contract year to date [6][10] - Same store revenue growth increased for the second consecutive quarter, with rental rates up 0.6% and occupancy gap improving to down 40 basis points [13][14] - Core FFO grew by 1.2% in the quarter, with FFO growth accelerating by 240 basis points from the second quarter of last year [14] Business Line Data and Key Metrics Changes - The non same store pool is expected to generate approximately $470 million of high growth NOI in 2025, with an additional $110 million coming through stabilization in 2026 and beyond [9][10] - Ancillary businesses, including tenant insurance and third-party management, are expanding and contributing positively to revenue [9][10] Market Data and Key Metrics Changes - The West Coast markets, including Washington D.C. and Chicago, showed same store revenue growth in the 2% to 4% range [8] - Los Angeles is expected to return to higher growth once fire-related pricing restrictions end, with current impacts unchanged [8][21] Company Strategy and Development Direction - The company is focused on capital allocation and capital access, with over $1.1 billion in acquisitions and development announced for the year [11] - The company is positioned for international growth, with successful operations in Europe and potential partnerships in Australia and New Zealand [10][125] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the storage fundamentals, particularly in Los Angeles, despite current restrictions [21][34] - The overall transaction market is up year over year by 10% to 15%, with expectations for robust second-half transactions [22][24] Other Important Information - The company is actively monitoring legislative efforts in California that could impact the business, maintaining a proactive posture [76][78] - The company is investing in solar energy to offset utility costs, which will positively impact its expense profile [109][110] Q&A Session Summary Question: Update on July operating trends and guidance implications - Management indicated that July trends are consistent with expectations, with occupancy gaps tightening and rental rates down in mid-single digits [19][21] Question: Insights on acquisition pipelines and market dynamics - The transaction market is showing increased activity, with a focus on submarket-specific opportunities rather than broad geographic trends [22][26] Question: Impact of move-in volume on pricing - Management noted that move-in rents are down slightly, but overall industry demand is improving, which should support future pricing [30][31] Question: Trends in Los Angeles market - Despite current restrictions, management remains confident in the long-term performance of the Los Angeles market [34][35] Question: Changes in underwriting approaches and market conditions - Management highlighted ongoing improvements in various markets, with a focus on submarket dynamics for investment opportunities [38][39] Question: Same store revenue growth guidance - Management provided a range for same store revenue growth, indicating potential scenarios based on occupancy and rental rates [45][47] Question: Seasonal expectations for the back half of the year - Management expects similar seasonal trends as previous years, with continued competition for new customers [52][53] Question: Expectations for LA revenue growth in the second half - Management anticipates a decline in LA revenue due to pricing restrictions, but remains optimistic about future recovery [61][62] Question: Insights on tenant insurance performance - The tenant insurance program is seeing strong adoption and higher premiums, contributing positively to ancillary revenue [118][119] Question: International growth opportunities - Management expressed confidence in leveraging successful strategies from Europe to potential markets in Australia and New Zealand [125][126]

Financial Data and Key Metrics Changes - The company raised its outlook for 2025 based on stabilizing operations and accelerated acquisitions, which reached $785 million closed or under contract year to date [5] - Same store revenue growth increased for the second consecutive quarter, with rental rates up 0.6% and occupancy gap improving to down 40 basis points from down 80 basis points at the start of the year [11] - Core FFO grew by 1.2% in the quarter, with FFO growth accelerating by 240 basis points from the second quarter of last year [12] Business Line Data and Key Metrics Changes - The West Coast, Washington D.C., and Chicago markets showed same store revenue growth in the 2% to 4% range [6] - Ancillary businesses, including tenant insurance and third-party management, are expanding, contributing to overall revenue growth [7] - The non-same store pool is expected to generate approximately $470 million of high growth NOI in 2025, with an additional $110 million coming through stabilization in 2026 and beyond [7] Market Data and Key Metrics Changes - The transaction market is up year over year by 10% to 15%, with a healthy pipeline of acquisitions and development opportunities [21] - Los Angeles is expected to return to a higher growth market once fire-related pricing restrictions end, despite current challenges [6][19] - Orange County revenues were up 3% in the second quarter, indicating strength in the broader West Coast market [32] Company Strategy and Development Direction - The company is focused on enhancing its competitive advantages through customer and employee-centric technologies, optimizing service options, and expanding its portfolio through acquisitions and development [5][7] - International growth is being pursued, with potential partnerships in Australia and New Zealand, alongside successful operations in Europe [8][123] - The company is leveraging its strong capital position to fund growth, with a $648 million development pipeline to be delivered over the next two years [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the self-storage market, particularly in Los Angeles, once current restrictions are lifted [19][63] - The company anticipates continued improvement in demand and revenue growth across various markets, with a focus on submarket-specific opportunities [37][128] - Management highlighted the importance of monitoring legislative efforts in California that could impact the business, maintaining a proactive approach [75] Other Important Information - The company is investing in automation and operational efficiencies to drive margin expansion and improve customer satisfaction [40] - The impact of the recent legislation, including bonus depreciation, is expected to provide opportunities for reinvestment into the development business [108] Q&A Session Summary Question: Update on July operating trends and guidance implications - Management indicated that July trends are consistent with expectations, with occupancy gaps closing and rental rates stabilizing [16][19] Question: Insights on acquisition pipelines and market dynamics - The transaction market is showing increased activity, with a focus on submarket-specific opportunities for acquisitions [21][24] Question: Impact of lower apartment turnover on self-storage demand - Management noted that lower turnover can be beneficial for self-storage, as renters may seek additional space due to affordability issues [99] Question: Discussion on the ECRI program and rate increases - Management highlighted consistent trends in customer price sensitivity and rent increases, with expectations for modest contributions from existing customer rent increases [104] Question: Cap rates and yields for acquisitions - Management reported that cap rates for transactions remain stable, with yields generally in the 5% to 6% range [115] Question: International growth opportunities and benefits from SureGuard - The company is leveraging its relationship with SureGuard to optimize operations in international markets, with confidence in future growth opportunities [123]

Financial Performance - Public Storage (PSA) reported quarterly funds from operations (FFO) of $4.28 per share, exceeding the Zacks Consensus Estimate of $4.23 per share, and showing an increase from $4.23 per share a year ago, resulting in an FFO surprise of +1.18% [1] - The company posted revenues of $1.2 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.58%, compared to revenues of $1.17 billion in the same quarter last year [2] Market Performance - Public Storage shares have declined approximately 2.3% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The current consensus FFO estimate for the upcoming quarter is $4.26 on revenues of $1.21 billion, and for the current fiscal year, it is $16.84 on revenues of $4.8 billion [7] Industry Outlook - The REIT and Equity Trust - Other industry, to which Public Storage belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in estimate revisions, which can be tracked by investors [5]

PART I FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents Public Storage's unaudited consolidated financial statements, detailing asset growth, net income decline, and cash flow from operations [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$20.54 billion**, liabilities rose to **$11.07 billion** due to notes payable, and total equity decreased Consolidated Balance Sheet Highlights (in thousands of USD) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$20,541,453** | **$19,754,934** | | Cash and equivalents | $1,104,603 | $447,416 | | Real estate facilities, net | $18,430,821 | $18,360,653 | | **Total Liabilities** | **$11,065,104** | **$9,941,282** | | Notes payable | $10,440,279 | $9,353,034 | | **Total Equity** | **$9,476,349** | **$9,813,652** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Total revenues slightly increased to **$1.20 billion**, but net income allocable to common shareholders significantly decreased to **$309.0 million** due to foreign currency losses Income Statement Summary (in thousands of USD, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$1,201,094** | **$1,173,211** | **$2,384,278** | **$2,330,431** | | Self-storage facilities | $1,118,658 | $1,099,736 | $2,221,656 | $2,185,781 | | **Net Income** | **$361,411** | **$521,209** | **$772,202** | **$1,032,906** | | Foreign currency exchange (loss) gain | ($146,070) | $12,449 | ($214,765) | $49,992 | | **Net Income (Common Shareholders)** | **$308,968** | **$468,366** | **$667,198** | **$927,575** | | **Diluted EPS** | **$1.76** | **$2.66** | **$3.79** | **$5.26** | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities remained stable at **$1.58 billion**, while investing activities increased and financing activities decreased Cash Flow Summary - Six Months Ended June 30 (in thousands of USD) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | **$1,577,771** | **$1,560,865** | | **Net cash used in investing activities** | **($624,797)** | **($377,659)** | | Acquisition of real estate facilities | ($303,277) | ($21,963) | | **Net cash used in financing activities** | **($295,787)** | **($1,010,125)** | | **Net increase in cash and equivalents** | **$657,187** | **$173,081** | [Condensed Notes to Consolidated Financial Statements](index=13&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the company's portfolio, Shurgard interest, significant real estate acquisitions, notes payable, and a potential major acquisition offer - As of June 30, 2025, Public Storage owned interests in 3,103 self-storage facilities in the U.S. and held a 35% common equity interest in Shurgard, which operates 321 facilities in Western Europe[37](index=37&type=chunk)[38](index=38&type=chunk) - In the first six months of 2025, the company acquired 25 self-storage facilities for **$303.3 million** in cash and completed development activities costing **$208.4 million**[44](index=44&type=chunk) - On June 30, 2025, PSOC issued **$875 million** in senior notes, and the company also entered into interest rate swaps with a notional amount of **$475 million** to convert fixed-rate debt to a variable rate[60](index=60&type=chunk)[67](index=67&type=chunk) - Subsequent to the quarter end, the company acquired or was under contract for 47 facilities for **$481.9 million** and announced a non-binding offer to acquire Abacus Storage King in Australia/New Zealand for an estimated cost of **$710 million**[120](index=120&type=chunk)[121](index=121&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting Same Store revenue growth, net income decrease due to foreign currency losses, Core FFO per share growth, liquidity, and strategic initiatives [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q2 2025 net income allocable to common shareholders fell to **$309.0 million** due to foreign currency losses, while self-storage NOI modestly increased - Q2 2025 net income per diluted share was **$1.76**, a decrease from **$2.66** in Q2 2024, mainly due to a **$158.5 million** increase in foreign currency losses[135](index=135&type=chunk) - For the six months ended June 30, 2025, net income per diluted share was **$3.79**, down from **$5.26** in the prior year, also primarily due to a **$264.8 million** increase in foreign currency losses[137](index=137&type=chunk) [Funds from Operations and Core Funds from Operations](index=32&type=section&id=Funds%20from%20Operations%20and%20Core%20Funds%20from%20Operations) FFO per share for Q2 2025 decreased **20.0%** to **$3.44** due to foreign currency losses, while Core FFO per share increased **1.2%** to **$4.28** FFO and Core FFO per Share Reconciliation (in USD) | Metric | Q2 2025 | Q2 2024 | % Change | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Diluted EPS** | **$1.76** | **$2.66** | **(33.8)%** | **$3.79** | **$5.26** | **(27.9)%** | | **FFO per share** | **$3.44** | **$4.30** | **(20.0)%** | **$7.15** | **$8.54** | **(16.3)%** | | Foreign currency loss (gain) per share | $0.82 | ($0.08) | - | $1.21 | ($0.29) | - | | **Core FFO per share** | **$4.28** | **$4.23** | **1.2%** | **$8.39** | **$8.26** | **1.6%** | [Analysis of Net Income — Self-Storage Operations](index=35&type=section&id=Analysis%20of%20Net%20Income%20%E2%80%94%20Self-Storage%20Operations) Self-storage operations analysis shows a **0.6%** Same Store NOI decrease, while Acquired and Newly Developed facilities drove significant growth, and ancillary operations also contributed positively Self-Storage Net Operating Income (NOI) by Facility Group - Q2 2025 vs Q2 2024 (in thousands of USD) | Facility Group | Q2 2025 NOI | Q2 2024 NOI | % Change | | :--- | :--- | :--- | :--- | | Same Store Facilities | $716,552 | $720,870 | (0.6)% | | Acquired Facilities | $37,600 | $32,173 | 16.9% | | Newly Developed & Expanded | $30,607 | $26,298 | 16.4% | | Other Non-Same Store | $49,182 | $46,894 | 4.9% | | **Total NOI** | **$833,941** | **$826,235** | **0.9%** | - Same Store revenue growth of **0.2%** in Q2 was driven by a **0.6%** increase in realized rent per occupied square foot, but offset by a **0.4%** decrease in average occupancy[154](index=154&type=chunk) - Same Store cost of operations increased **2.9%** in Q2, primarily due to a **4.4%** rise in property tax expense[163](index=163&type=chunk)[164](index=164&type=chunk) - Ancillary operations NOI grew to **$49.1 million** in Q2 2025 from **$45.9 million** in Q2 2024, led by a **10.3%** increase in tenant reinsurance premium revenue[199](index=199&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$1.1 billion** cash and a **$1.5 billion** credit facility, supported by high credit ratings, and faces significant cash requirements for acquisitions, development, and debt repayments - The company has strong credit ratings of **'A'** from S&P and **'A2'** from Moody's for its senior notes[216](index=216&type=chunk) - As of June 30, 2025, liquidity sources include **$1.1 billion** in cash and **$1.48 billion** available on its credit facility[220](index=220&type=chunk) - Major committed cash requirements include **$481.9 million** for property acquisitions, **$390.9 million** for development, and **$1.2 billion** in debt repayments over the next year[221](index=221&type=chunk) - The proposed acquisition of Abacus Storage King is estimated to cost Public Storage approximately **$710 million**, which is anticipated to be funded with Australian Dollar denominated unsecured debt[221](index=221&type=chunk)[229](index=229&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk stems from its **$10.4 billion** debt with a **3.0%** weighted average rate and foreign currency fluctuations related to its Shurgard investment and Euro-denominated notes - Total debt outstanding at June 30, 2025, is approximately **$10.4 billion** with a weighted average effective rate of **3.0%**[236](index=236&type=chunk)[237](index=237&type=chunk) - The company has foreign currency exposure from its investment in Shurgard (book value **$387.9 million**) and **€1.6 billion** of Euro-denominated debt, which acts as a natural hedge[238](index=238&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[240](index=240&type=chunk) - No material changes were made to the internal control over financial reporting during the quarter ended June 30, 2025[241](index=241&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but believes the likelihood of a material loss is remote - The company states that the likelihood of any legal proceedings resulting in a material loss, either individually or in aggregate, is remote[242](index=242&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 were reported - No material changes to the risk factors disclosed in the 2024 Form 10-K were reported[243](index=243&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common shares during Q2 2025, with **10.6 million** shares remaining available for repurchase under the existing program - No common shares were repurchased during Q2 2025. The company has authorization to repurchase an additional **10.6 million** shares under its program[245](index=245&type=chunk)

[Overall Financial Performance and Outlook](index=1&type=section&id=Overall%20Financial%20Performance%20and%20Outlook) [Q2 & H1 2025 Performance Highlights](index=1&type=section&id=Q2%20%26%20H1%202025%20Performance%20Highlights) Public Storage's Q2 and H1 2025 net income decreased due to foreign currency losses, yet the company raised its full-year outlook on stabilizing operations and accelerated acquisitions - The company is raising its 2025 outlook based on stabilizing operations and increased acquisition volume, anticipating over **$1.1 billion** in investment for the year[4](index=4&type=chunk) Q2 2025 Key Performance Indicators | Metric | Value | | :--- | :--- | | Net Income per Diluted Share | $1.76 | | Core FFO per Diluted Share | $4.28 | | Same Store Direct NOI Margin | 78.8% | | Acquisitions (Q2) | 16 facilities for $162.3 million | | Development & Expansion (Q2) | 0.2 million sq. ft. for $64.0 million | [Detailed Operating Results](index=2&type=section&id=Detailed%20Operating%20Results) Net income for Q2 and H1 2025 significantly decreased due to increased foreign currency losses, while self-storage NOI saw a modest increase driven by Non-Same Store facilities Net Income Comparison (Common Shareholders) | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30** | $309.0 million ($1.76/share) | $468.4 million ($2.66/share) | -$159.4 million (-$0.90/share) | | **Six Months Ended June 30** | $667.2 million ($3.79/share) | $927.6 million ($5.26/share) | -$260.4 million (-$1.47/share) | - The primary driver for the decrease in net income in both periods was a significant increase in foreign currency exchange losses related to Euro-denominated notes payable[9](index=9&type=chunk)[11](index=11&type=chunk) - Increases in self-storage net operating income were driven by Non-Same Store facilities, with a **$12.0 million** increase in Q2 and a **$25.5 million** increase in H1, offsetting slight Same Store declines[10](index=10&type=chunk)[12](index=12&type=chunk) [Funds from Operations (FFO) Analysis](index=2&type=section&id=Funds%20from%20Operations%20(FFO)%20Analysis) Core FFO per share increased for both Q2 and H1 2025, while GAAP FFO per share declined significantly due to foreign exchange losses FFO & Core FFO per Share vs. Prior Year | Metric (per share) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Diluted EPS | $1.76 | $2.66 | (33.8)% | | FFO per Share | $3.44 | $4.30 | (20.0)% | | Core FFO per Share | $4.28 | $4.23 | 1.2% | | **Metric (per share)** | **H1 2025** | **H1 2024** | **% Change** | | Diluted EPS | $3.79 | $5.26 | (27.9)% | | FFO per Share | $7.15 | $8.54 | (16.3)% | | Core FFO per Share | $8.39 | $8.26 | 1.6% | - The significant divergence between FFO and Core FFO is primarily due to the exclusion of a **$146.1 million** foreign currency exchange loss in Q2 2025 from the Core FFO calculation[16](index=16&type=chunk) [2025 Full-Year Outlook](index=6&type=section&id=2025%20Full-Year%20Outlook) Public Storage raised its full-year 2025 Core FFO per share guidance, reflecting improved Non-Same Store NOI expectations and increased incremental Non-Same Store NOI forecast Updated 2025 Full-Year Guidance | Metric | Current Guidance | Prior Guidance | | :--- | :--- | :--- | | Core FFO per Share | $16.45 - $17.00 | $16.35 - $17.00 | | Same Store Revenue Growth | (1.3)% to 0.8% | (1.3)% to 0.8% | | Same Store Expense Growth | 2.3% to 3.0% | 2.5% to 4.0% | | Same Store NOI Growth | (2.6)% to 0.3% | (2.9)% to 0.2% | | Non-Same Store NOI | $465 million - $475 million | $444 million - $464 million | | Incremental Non-Same Store NOI (2026+) | $110 million | $80 million | - The 2025 guidance includes an estimated negative **1%** impact on Same Store revenue growth and a **$0.23** per share impact on Core FFO due to temporary government pricing limitations in Los Angeles County[25](index=25&type=chunk) [Property Operations](index=4&type=section&id=Property%20Operations) [Same Store Facilities Performance](index=4&type=section&id=Same%20Store%20Facilities%20Performance) Same Store facilities experienced a slight 0.6% decrease in Q2 2025 NOI due to rising direct costs offsetting modest revenue growth, with occupancy slightly declining Q2 2025 Same Store Operating Results (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $945.2 million | $943.1 million | 0.2% | | Total Direct Cost of Operations | $200.2 million | $196.1 million | 2.1% | | Net Operating Income (NOI) | $716.6 million | $720.9 million | (0.6)% | | Weighted Average Occupancy | 92.6% | 93.0% | (0.4)% | | Realized Annual Rent per Occupied Sq. Ft. | $22.50 | $22.36 | 0.6% | - The increase in direct costs was driven primarily by a **4.4%** rise in property taxes and a **5.0%** increase in marketing expenses, partially offset by a **2.9%** decrease in on-site property manager payroll[17](index=17&type=chunk) [Non-Same Store Facilities Performance](index=5&type=section&id=Non-Same%20Store%20Facilities%20Performance) The Non-Same Store portfolio, comprising 538 unstabilized facilities, is a key driver of overall NOI growth, with the Simply portfolio generating significant NOI in Q2 2025 - The Non-Same Store portfolio consists of **538** facilities, including **211** acquired, **40** newly developed, **62** expanded, and **225** other unstabilized properties[18](index=18&type=chunk) - The Simply portfolio, acquired in 2023, generated **$77.5 million** in revenue and **$53.9 million** in NOI in Q2 2025 with an average occupancy of **88.6%**[20](index=20&type=chunk) [Investing, Capital Activities, and Strategic Initiatives](index=1&type=section&id=Investing%2C%20Capital%20Activities%2C%20and%20Strategic%20Initiatives) [Acquisitions and Development](index=5&type=section&id=Acquisitions%20and%20Development) The company maintained an active investment pace in Q2 2025 with significant acquisitions and new developments, and a robust pipeline for future growth - Q2 2025 Acquisitions: Acquired **16** self-storage facilities (**1.1 million** sq. ft.) for **$162.3 million**[19](index=19&type=chunk) - Post-Q2 Acquisitions: Acquired or under contract to acquire **47** facilities (**3.1 million** sq. ft.) for **$481.9 million**[19](index=19&type=chunk) - Development Pipeline: Projects are expected to add **3.8 million** net rentable square feet for an estimated total cost of **$648.2 million**, with **$390.9 million** remaining to be spent[21](index=21&type=chunk) [Strategic Transactions](index=6&type=section&id=Strategic%20Transactions) Public Storage, as part of a consortium, made a non-binding offer to acquire Abacus Storage King, potentially expanding its presence in Australia and New Zealand - A consortium including Public Storage made a non-binding offer to acquire Abacus Storage King (ASX:ASK)[23](index=23&type=chunk) - Public Storage's estimated share of the cost is approximately **$710 million** (A$1.08 billion), expected to be funded with Australian Dollar denominated debt[23](index=23&type=chunk) - The transaction is subject to due diligence, negotiation of a definitive agreement, and various approvals[23](index=23&type=chunk) [Corporate Governance](index=1&type=section&id=Corporate%20Governance) The Board of Trustees appointed Luke Petherbridge as a new independent trustee, bringing over 20 years of corporate finance and real estate experience - Luke Petherbridge was appointed as a new independent trustee to the Board of Trustees, effective immediately[6](index=6&type=chunk) - Mr. Petherbridge has over **20** years of experience and currently serves as the CEO of Link Logistics, joining the Nominating, Governance, and Sustainability Committee[6](index=6&type=chunk)[7](index=7&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Income Statement](index=8&type=section&id=Consolidated%20Income%20Statement) Q2 2025 total revenues increased, but net income decreased significantly due to a substantial foreign currency loss, impacting common shareholders' allocation Q2 2025 Consolidated Income Statement Highlights (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $1,201,094 | $1,173,211 | | Total Expenses | $701,095 | $687,109 | | Foreign currency exchange (loss) gain | ($146,070) | $12,449 | | Net Income | $361,411 | $521,209 | | Net income allocable to common shareholders | $308,968 | $468,366 | [Consolidated Balance Sheet](index=9&type=section&id=Consolidated%20Balance%20Sheet) Total assets increased driven by cash and real estate, while liabilities rose mainly due to notes payable, resulting in a slight decrease in total equity Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and equivalents | $1,104,603 | $447,416 | | Total real estate facilities, net | $18,430,821 | $18,360,653 | | **Total Assets** | **$20,541,453** | **$19,754,934** | | Notes payable | $10,440,279 | $9,353,034 | | **Total Liabilities** | **$11,065,104** | **$9,941,282** | | **Total Equity** | **$9,476,349** | **$9,813,652** | [Funds Available for Distribution (FAD)](index=10&type=section&id=Funds%20Available%20for%20Distribution%20(FAD)) Q2 2025 FAD increased to **$719.4 million**, leading to an improved payout ratio of **73.2%** despite stable common distributions per share FAD and Distribution Payout Ratio | Metric (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | FFO allocable to common shares | $604,494 | $756,142 | | FAD | $719,398 | $657,849 | | Distributions paid to common shareholders | $526,358 | $525,003 | | **Distribution payout ratio** | **73.2%** | **79.8%** | [Reconciliation of Self-Storage NOI to Net Income](index=11&type=section&id=Reconciliation%20of%20Self-Storage%20NOI%20to%20Net%20Income) Total self-storage NOI increased in Q2 2025, primarily driven by strong growth from Non-Same Store facilities, offsetting a slight decrease in Same Store contributions Self-Storage NOI by Facility Type (Q2, in thousands) | Facility Type | NOI Q2 2025 | NOI Q2 2024 | | :--- | :--- | :--- | | Same Store Facilities | $716,552 | $720,870 | | Acquired facilities | $37,600 | $32,173 | | Newly developed and expanded facilities | $30,607 | $26,298 | | Other non-same store facilities | $49,182 | $46,894 | | **Total Self-storage NOI** | **$833,941** | **$826,235** |

Core Insights - Public Storage (PSA) is expected to report quarterly earnings of $4.23 per share, unchanged from the same period last year, with revenues projected at $1.19 billion, reflecting a year-over-year increase of 1.8% [1] - The consensus EPS estimate has remained stable over the last 30 days, indicating analysts have not altered their initial projections significantly during this period [1][2] Revenue Estimates - Analysts forecast 'Revenues- Self-storage facilities' to be $1.11 billion, indicating a year-over-year increase of 1.1% [4] - The estimate for 'Revenues- Ancillary operations' is projected at $79.66 million, representing a year-over-year increase of 8.4% [4] Key Metrics - The consensus estimate for 'Square Foot Occupancy' is 92.7%, slightly down from 93.0% a year ago [4] - 'Rent per Occupied Square Foot' is expected to reach $22.23, down from $22.72 a year ago [5] - Analysts predict 'Depreciation and amortization' will total $285.08 million [5] Market Performance - Public Storage shares have decreased by 0.4% over the past month, contrasting with the Zacks S&P 500 composite's increase of 4.6% [6] - PSA holds a Zacks Rank 3 (Hold), suggesting it is expected to closely follow overall market performance in the near term [6]

Core Insights - Public Storage (PSA) is expected to report second-quarter 2025 results on July 30, with anticipated revenue growth and stable core funds from operations (FFO) per share [1][11] Financial Performance - In the last reported quarter, PSA achieved a core FFO per share of $4.12, exceeding the Zacks Consensus Estimate of $4.06, driven by top-line growth despite a decline in occupancy [2][11] - The Zacks Consensus Estimate for second-quarter revenues from self-storage facilities is projected at $1.112 billion, reflecting an increase from $1.099 billion in the same period last year, with total quarterly revenues expected to reach $1.19 billion, indicating a 1.8% year-over-year increase [6][11] Market Dynamics - The self-storage industry is characterized by need-based demand and resilience during economic downturns, with low capital expenditure requirements and high operating margins contributing to favorable performance [5] - Despite softer demand and lower operating trends in the first quarter of 2025, management is focusing on attracting tenants by lowering rental rates and increasing promotional discounts [7][11] Strategic Factors - PSA's strong presence in major metropolitan markets, established brand, and technological upgrades are likely to support revenue growth in the second quarter [4][11] - Strategic acquisitions are expected to further enhance revenue generation during the quarter [4][11] Analyst Sentiment - The Zacks Consensus Estimate for second-quarter core FFO per share has remained unchanged at $4.23, indicating no year-over-year change [8][11] - PSA currently holds a Zacks Rank of 3 and an Earnings ESP of 0.00%, suggesting uncertainty regarding a surprise in FFO per share this quarter [10]

Group 1 - Public Storage (PSA) and Ki Corporation have made a revised, non-binding offer to acquire Abacus Storage King at A$1.65 per stapled security, up from A$1.47 [1][8] - The consortium aims to acquire all outstanding stapled securities of Abacus not held by Ki Group, with each party set to own a 50% stake if the acquisition is completed [2] - Abacus Storage King operates around 126 properties, 21 development sites, and 75 managed or licensed locations, making it a leading self-storage operator in Australia and New Zealand [2] Group 2 - Public Storage plans to leverage its collaboration with Shurgard Self Storage Limited to enhance Abacus's customer experience, optimize operations, and accelerate portfolio expansion [3] - The self-storage market in Australia and New Zealand is characterized by strong population growth and stable economic conditions, presenting attractive opportunities for market consolidation [4] Group 3 - Public Storage has acquired 195 facilities with 14.5 million net rentable square feet for $3.1 billion from the beginning of 2023 through the first quarter of 2025, contributing a net operating income of $35.8 million in Q1 2025 [6] - The company is well-positioned to capitalize on potential opportunities due to solid access to capital [6] Group 4 - Despite the growth prospects, the industry faces challenges such as soft demand and lower occupancy rates, with expectations for a decline in the 2025 weighted average square foot occupancy to 91.8% [7] - High supply in the market is increasing competition, which affects pricing power and margins [7]

Group 1 - The iREIT® Tracker provides comprehensive data on over 250 tickers, including quality scores, buy targets, and trim targets, focusing on various investment vehicles such as REITs, mREITs, Preferreds, BDCs, MLPs, ETFs, Builders, and Asset Managers [1] - There is a prevalent misconception in the REIT sector that issuing stock is dilutive to investors, which is frequently discussed on platforms like Seeking Alpha and social media [1] Group 2 - The investing group iREIT®+HOYA Capital, led by Brad and HOYA Capital, specializes in REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives, backed by a team of analysts with over 100 years of combined experience [2] - Brad Thomas has over 30 years of experience in real estate investing, having been involved in over $1 billion in commercial real estate transactions, and has been featured in major media outlets [3]

Investment Ratings - Cold Storage REITs: Lineage Inc. (LINE, Buy) [5] - Industrial REITs: Prologis Inc. (PLD, Neutral) [16] - Industrial REITs: Terreno Realty Corp (TRNO, Buy) [31] - Self Storage REITs: Extra Space Storage Inc. (EXR, Buy) [44] - Self Storage REITs: Public Storage Inc. (PSA, Buy) [54] - Retail REITs: Brixmor Property Group (BRX, Buy) [63] - Retail REITs: Phillips Edison & Co (PECO, Buy) [74] Core Insights - The report highlights a mixed outlook across various REIT sectors, with some companies like LINE, TRNO, EXR, PSA, BRX, and PECO receiving "Buy" ratings, while PLD is rated "Neutral" [5][16][31][44][54][63][74] - Economic occupancy for LINE decreased by 290 basis points sequentially and 260 basis points year-over-year in Q1 2025, indicating potential challenges in maintaining occupancy levels [5] - Prologis Inc. is focusing on the implications of tariff policies on global supply chains, which may disrupt tenant activities and leasing demand [16] - Terreno Realty Corp is observing a shift in leasing dynamics post-tariff announcements, with domestic customers becoming more active compared to those operating across borders [31] - Extra Space Storage Inc. is prioritizing occupancy over rent in the current environment, reflecting a strategic shift in response to market conditions [44] - Public Storage Inc. is experiencing a significant impact from regional events, such as fires in Los Angeles, which account for 15% of its NOI [54] - Brixmor Property Group is seeing a steady increase in billed occupancy, which has risen by an average of 100 basis points over the last four years [63] Summary by Sections Cold Storage REITs - Lineage Inc. (LINE) reported a decline in economic occupancy and revenue per occupied pallet, with management expressing confidence in maintaining AFFO/share and EBITDA guidance for 2025 [5][6][7] Industrial REITs - Prologis Inc. (PLD) is navigating the complexities of global supply chains and tariff impacts, with expectations for occupancy and rent growth improvements in the second half of 2025 [16][20] - Terreno Realty Corp (TRNO) is adapting to changes in leasing activity and tenant retention amid tariff uncertainties, focusing on domestic customer engagement [31][36] Self Storage REITs - Extra Space Storage Inc. (EXR) is adjusting its strategy to prioritize occupancy over rent, with a focus on counter-cyclical demand drivers [44][46] - Public Storage Inc. (PSA) is managing its rent versus occupancy strategy while facing challenges from regional disruptions [54][56] Retail REITs - Brixmor Property Group (BRX) is experiencing a positive trend in occupancy and leasing spreads, with a focus on tenant credit and market dynamics [63][66] - Phillips Edison & Co (PECO) is observing volatility in the market due to tariff updates, impacting leasing velocity and transaction activity [74]