Public Storage Beats Q4 FFO & Revenue Estimates, Unveils Initiatives

Core Insights - Public Storage (PSA) reported Q4 2025 core funds from operations (FFO) per share of $4.26, exceeding the Zacks Consensus Estimate of $4.21, marking a 1.2% year-over-year increase [1] - The company announced its 2026 outlook, projecting core FFO per share in the range of $16.35-$17.00, with expectations of modest same-store softness offset by contributions from acquisitions and development [11][12] Financial Performance - Q4 revenues reached $1.22 billion, surpassing the Zacks Consensus Estimate of $1.21 billion, and increased by 3.3% year over year [2] - For the full year 2025, PSA reported core FFO per share of $16.97, up 1.8% from $16.67 in 2024, with total revenues of $4.82 billion, reflecting a 2.7% year-over-year increase [2] Operational Highlights - Same-store revenues slightly declined by 0.2% year over year to $936.2 million in Q4, with a 0.2% increase in realized annual rental income per occupied square foot to $22.53, while occupancy decreased [4] - PSA's same-store net operating income (NOI) fell by 1.5% year over year to $703.7 million, with a same-store NOI margin of 78.4%, down 0.8% from the previous year [5] Strategic Initiatives - PSA launched PS4.0, a strategic initiative aimed at leadership transition and long-term value creation, with Tom Boyle set to succeed Joe Russell as CEO on April 1, 2026 [3] - The PS4.0 strategy focuses on enhancing customer experience, improving margins, and driving sustainable shareholder value [3] Portfolio Activity - In Q4, PSA acquired 13 self-storage facilities for $131 million, adding 0.9 million net rentable square feet, and completed development projects adding approximately 1.0 million net rentable square feet at a cost of around $140 million [6] - As of December 31, 2025, PSA had 606 acquisition, development, and expansion properties totaling 54.1 million rentable square feet, accounting for about 24% of its total portfolio space [5] Balance Sheet and Liquidity - PSA ended Q4 2025 with a strong liquidity position of $2.4 billion, with total indebtedness of $10.3 billion and a weighted average interest rate on total debt of approximately 3.2% [10] 2026 Guidance - The company anticipates a 2.2% decline to flat same-store revenue growth and a same-store expense increase of 1.5%-2.8% for 2026, with same-store NOI expected to fall by 3.9% to 0.5% [11][12]