Public Storage(US:PSA)2025-10-29 20:41Financial Performance - For the three months ended September 30, 2025, net income allocable to common shareholders was $461.4 million, or $2.62 per diluted common share, an increase of $80.7 million, or $0.46 per diluted common share, compared to the same period in 2024 [124]. - For the nine months ended September 30, 2025, net income allocable to common shareholders was $1.1 billion, or $6.42 per diluted common share, a decrease of $179.7 million, or $1.01 per diluted common share, compared to the same period in 2024 [126]. - Net income allocable to common shareholders for Q3 2025 was $461,408, a 21.2% increase from $380,712 in Q3 2024 [131]. - Total net income for Q3 2025 was $554,008, a 2.1% increase from $542,350 in Q3 2024 [134]. - The company reported a net loss of $12,209,000 for the three months ended September 30, 2025, an improvement from a net loss of $18,455,000 in 2024 [161]. Revenue and Income Sources - Revenues from Same Store Facilities increased by 0.1%, or $2.8 million, for the nine months ended September 30, 2025, compared to the same period in 2024 [127]. - Total revenues for the three months ended September 30, 2025, were $948.9 million, a slight increase of 0.02% compared to $948.7 million in 2024 [157]. - Total revenues for the nine months ended September 30, 2025, increased by 0.1% to $2,828,661,000 compared to $2,825,867,000 in 2024 [160]. - The company acquired 260 facilities from 2023 to 2025, with total revenues from these facilities reaching $175,913,000 for the nine months ended September 30, 2025, up from $138,136,000 in 2024 [161]. - Tenant reinsurance premium revenue increased by $5.9 million or 10.2% for the three months ended September 30, 2025, and by $17.3 million or 10.3% for the nine months ended September 30, 2025, compared to the same periods in 2024 [181]. Funds from Operations (FFO) - Funds from Operations (FFO) for the three months ended September 30, 2025, was $4.33 per diluted common share, an increase of 13.9%, or $0.53 per diluted common share, compared to the same period in 2024 [129]. - FFO for the nine months ended September 30, 2025, was $11.48 per diluted common share, a decrease of 7.0%, or $0.86 per diluted common share, compared to the same period in 2024 [129]. - FFO allocable to common shares for Q3 2025 was $761,194, representing a 14.0% increase compared to $667,631 in Q3 2024 [131]. - Core FFO allocable to common shares for Q3 2025 was $758,690, a 2.8% increase from $738,243 in Q3 2024 [131]. Acquisitions and Developments - The company acquired a total of 260 facilities with 19.0 million net rentable square feet for $3.8 billion since the beginning of 2023 [120]. - The acquisition of BREIT Simply Storage LLC included 127 self-storage facilities (9.4 million square feet) and 25 managed facilities (1.8 million square feet) for a purchase price of $2.2 billion, generating revenues of $116.9 million and $113.9 million for the nine months ended September 30, 2025, and 2024, respectively [164]. - During the nine months ended September 30, 2025, the company acquired 74 self-storage facilities across 19 states for $814.6 million, with total planned or completed acquisitions amounting to $934.5 million [165]. - Newly developed and expanded facilities included 40 developed since January 1, 2020, and 63 expanded facilities, with total revenues of $134.3 million for the nine months ended September 30, 2025, compared to $117.5 million in 2024, reflecting a $16.8 million increase [168]. - The company has a total of 103 self-storage facilities with 12.4 million net rentable square feet, incurring a total cost of $1.5 billion for developments and expansions completed by September 30, 2025, contributing net operating income of $32.0 million and $90.9 million for the three and nine months ended September 30, 2025, respectively [171]. Operating Metrics - The number of Same Store Facilities remained stable at 2,565 as of September 30, 2025 [136]. - The total net rentable square footage at period end increased by 4.0% to 227,670 from 218,840 [134]. - Average occupancy across all markets is 92.2% for 2025, a decrease of 0.5% from 2024 [156]. - The average square footage occupancy for the Simply portfolio was 88.3% for the nine months ended September 30, 2025, compared to 87.4% in 2024 [164]. - The occupancy rate for 2023 acquisitions as of September 30, 2025, was 86.1%, down from 87.6% in 2024, reflecting a decrease of 1.5% [162]. Expenses and Costs - Property tax expense increased by 4.9% for the three months ended September 30, 2025, due to higher assessed values [151]. - Marketing expenses decreased by 5.3% for the three months ended September 30, 2025, compared to the same period in 2024 [153]. - General and administrative expenses increased by $2.6 million for the three months ended September 30, 2025, primarily due to transaction costs and corporate transformation costs [188]. - The total costs to acquire facilities amounted to $3,756,868,000, with $2,674,840,000 attributed to 2023 acquisitions [162]. - The total costs to develop facilities amounted to $1.53 billion as of September 30, 2025, with significant investments in facilities developed in 2023 totaling $217.6 million [170]. Debt and Financing - As of September 30, 2025, the company had $10.1 billion in outstanding notes payable with a weighted average interest rate of approximately 3.0% [192]. - The company’s total debt amounts to approximately $10.1 billion as of September 30, 2025, with a weighted average effective interest rate of 3.0% [220]. - The company has three interest rate swaps with a notional amount of $475 million, converting fixed rate senior unsecured notes into a floating rate instrument based on a SOFR index [221]. - The company has committed cash requirements of $119.9 million for property acquisitions and $381.4 million for development spending over the next 18 to 24 months [203]. - The company expects retained operating cash flow of approximately $650 million for 2025, up from $400 million in 2024 [195]. Market Conditions and Expectations - The company expects Same Store Facilities revenues in 2025 to be similar to those earned in 2024 due to various market uncertainties [148]. - The company remains active in seeking additional self-storage facility acquisitions, with future acquisition volume potentially impacted by capital costs and macroeconomic uncertainties [165]. - The company expects to add 1.3 million net rentable square feet of storage space through ongoing expansions at an aggregate direct development cost of $165.4 million by September 30, 2025 [176]. - The company has 29 additional facilities in development, totaling 2.6 million net rentable square feet with an aggregate development cost of approximately $483.8 million, expected to open in the next 18 to 24 months [178]. Shareholder Returns - The company declared a quarterly dividend of $3.00 per common share, totaling approximately $527 million, to be paid in December 2025 [210]. - The Board has authorized a share repurchase program allowing the purchase of up to 35,000,000 common shares, with 24,448,781 shares repurchased at an aggregate cost of approximately $879.1 million as of October 29, 2025 [216]. - Future levels of common share repurchases will depend on available capital, investment alternatives, and the trading price of common shares [216].