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    PSA
    Earnings call· Mar 2026(Q1 FY26)

    Public Storage Q1 FY26 earnings call PSA

    Apr 28, 2026 Source

    Executive summary

    Public Storage Q1 FY26 — PS 4.0 Era Launched with NSA Acquisition and Better-Than-Expected Results

    Public Storage launched its PS 4.0 strategy, marked by the announced acquisition of National Storage Affiliates (NSA) and continued advancement of its PS Next operating platform. The company reported better-than-expected Q1 results, driven by strong same-store NOI and improved occupancy, despite an uneven operating environment. Management remains optimistic about long-term fundamentals and value creation through strategic investments.

    Highlights

    5

    • Core FFO increased 2.4% year-over-year to $4.22 per share.

    • Same-store NOI growth was positive 0.4% year-over-year.

    • Move-in rates came in better than expected at -2.4% compared to full-year expectations of down mid-single digits.

    • Occupancy was positive 0.4% year-over-year, exceeding guidance which assumed flat occupancy.

    • Expense growth performed very well, decreasing 1.1% for the quarter.

    Concerns

    4

    • The operating environment remains uneven with lower customer move-in activity overall in Q1.

    • New supply continues to weigh on performance and pressure revenues in Sunbelt markets.

    • The Los Angeles market is hindered by a state of emergency, resulting in a negative 80 basis point impact to same-store performance.

    • Year-over-year revenue growth is expected to soften mid-year due to prior-year pressures.

    Guidance & targets

    2
    CategoryTargetConfidence
    NSA acquisition accretion
    breakeven
    high materiality
    High
    NSA acquisition accretion
    $0.35 to $0.50 per share earnings
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Same-store portfolio
    Driven by better-than-expected same-store NOI and significant growth from our non-same-store portfolio and ancillary income initiatives. Existing customers continue to perform well as demonstrated by a material reduction in churn.
    Move-in rates: -2.4% (vs. full year expectation of down mid-single digits)Occupancy: +0.4% YoY (vs. guidance assumed flat)Expense growth: -1.1%
    		flatflat—positive 0.4%
    Los Angeles market
    Continues to be hindered by the state of emergency with the most recent extension through the end of May. Expected to be a strong tailwind for performance in the future once restrictions are lifted.
    Impact on same-store performance: -80 bps (assumed for full year)
    		————
    Non-same-store portfolio
    NOI growth of 27% in our non-same-store pool and ancillary growth of 12% lifted results.
    		—27%——

    Operational metrics

    11
    Core FFO per share
    $4.22+2.4% YoY
    Q1 FY26

    Core FFO in the quarter was up $0.10 per share or 2.4% year-over-year.

    Property tax appeal wins
    $3 million
    Q1 FY26

    Earlier-than-expected appeal wins, previously expected in Q2.

    Non-same-store NOI growth
    27%
    Q1 FY26

    NOI growth in our non-same-store pool lifted results.

    Ancillary income growth
    12%
    Q1 FY26

    Ancillary growth lifted results.

    Debt-to-EBITDA
    2.9x
    Q1 FY26

    At quarter end, one of the strongest in the REIT sector.

    Debt plus preferred equity to EBITDA
    4.2x
    Q1 FY26

    At quarter end, one of the strongest in the REIT sector.

    Debt plus preferred equity to enterprise value
    low 20%
    Q1 FY26

    At quarter end, one of the strongest in the REIT sector.

    Available liquidity
    $1.3 billion
    Q1 FY26

    At quarter end, in excellent position.

    Unsecured notes issued
    $500 million
    Subsequent to Q1 FY26

    Issued subsequent to quarter end.

    Off-market acquisition activity
    75%
    Year-to-date

    About 3/4 of the activity has been off market.

    Stabilized product cap rates
    5s-6s
    Q1 FY26

    Cap rates for stabilized product trading in the market.

    Industry KPIs

    3
    MetricValueDetails
    Move in rate growth churn-2.4%%
    Self storage lending platform$143 millionUSD
    Self storage same store revenue noi growth0.4%%

    Orderbook & backlog

    2
    Development pipeline$618 millionQ1 FY26

    Stabilized yields targeting 8%; Remaining unfunded: $416 million

    Acquisitions under contract$186 millionQ1 FY26

    Acquired or under contract year-to-date

    Deals & partnerships

    2
    National Storage Affiliates (NSA)acquisition$10 billion

    Public Storage will wholly own 46% of the over 1,000 assets, with the remaining in joint ventures. Integration planning is progressing well.

    Welltowerpartnership

    Strategic data science partnership combining Welltower's capital allocation-oriented data science platform with Public Storage's operational pricing and customer analytics to improve micro market targeting and portfolio construction.

    Capital programs

    1
    Development and expansion openingscompleted
    Period spend: $45 million

    Openings during the quarter.

    Risks & headwinds

    4
    Uneven operating environment and lower customer move-in activityQ1 FY26, near-term

    lower customer move-in activity overall in the first quarter with some weather impacts and modest demand.

    Mitigation: PS Next operating platform, focus on customer experience, driving better rental rates, strong existing customer base.

    New supply competition in Sunbelt marketsongoing, modest improvement expected through '26 and forward

    new supply continues to weigh on performance and pressure revenues.

    Mitigation: Expectation that new supply will taper down, absorption taking place, development becoming harder/more expensive.

    Los Angeles market state of emergencyall year (FY26), through the end of May (current extension)

    negative 80 basis point impact to same-store performance (assumed for full year); L.A. on a same-store revenue basis does continue to get worse throughout the year, assuming that the state of emergency remains in place.

    Mitigation: High quality portfolio, low supply, high occupancy in other Southern California markets, expectation of strong tailwind in the future.

    Year-over-year revenue growth softening mid-yearQ2 and Q3 FY26

    year-over-year revenue growth as a lagging indicator will soften midyear.

    Mitigation: Leading indicators remain positive, sequential trends continue to be positive.

    Q&A highlights

    7

    Inquired about the specifics and drivers of the material reduction in churn and its financial impact.

    Joe Fisher explained that lower move-outs were seen throughout the quarter, driven by healthy existing customer payment rates and a focus on customer experience under PS 4.0. Lower churn leads to more profitable existing customers and helps new pricing.

    “we've been very encouraged by the existing customer dynamic and them staying with us longer. So we did see a pretty material reduction in that churn number and move-outs coming down in the quarter.”

    asked by Michael Goldsmith · answered by Joseph Fisher

    2 min read6 chapters

    Detailed Narrative

    01

    PS 4.0 Era and Strategic Vision

    Public Storage has launched its PS 4.0 strategy, focusing on leveraging its scale, brand, portfolio quality, "Own-It" culture, and data analytics. This initiative aims to build the next phase of the company by aligning the organization around a new strategic vision, with internal teams showing enthusiasm and urgency for execution. The strategy emphasizes combining existing strengths with enhanced data and analytics capabilities to create value.

    02

    NSA Acquisition as a Key Milestone

    The announced acquisition of National Storage Affiliates (NSA) is highlighted as a major step in the PS 4.0 strategy. The transaction is structured as a win-win joint venture, with Public Storage wholly owning 46% of the over 1,000 assets and the remainder in JVs, maintaining a strong balance sheet while deepening its brand, scale, and operating presence. Integration planning is progressing well, with teams engaged to execute upon closing in the third quarter.

    03

    PS Next Operating Platform Advancement

    PS Next is an evolving operating platform designed to enhance customer experience, optimize inventory pricing, manage demand, and drive efficiency across the business. It supports increasing digital customer interactions and is crucial for integrating NSA assets and improving the broader portfolio's performance. The platform is seen as a key advantage for the company's value creation engine, shaping how customers are served and operations are managed.

    04

    Uneven Operating Environment & Performance

    The operating environment remains mixed, with lower customer move-in activity but better-than-expected rental rates and significantly lower move-out activity, leading to improved occupancy year-over-year. While Sunbelt markets face pressure from new supply, coastal and Midwest markets show strong growth. The Los Angeles market continues to be impacted by a state of emergency, creating a drag on performance.

    05

    Value Creation Engine & External Growth

    Public Storage is actively investing in a broader value creation engine through acquisitions, development, expansion, and its lending platform, aiming to drive stronger per-share growth. This includes a strategic data science partnership with Welltower to enhance micro-market targeting and portfolio construction. The company is positioning itself to outperform as the environment improves, leveraging its capital resources across these levers.

    06

    Capital Allocation and Balance Sheet Strength

    The company maintains a fortress balance sheet with $1.3 billion in available liquidity and approximately $600 million in annual free cash flow, alongside low leverage ratios. It continues to be disciplined in capital deployment, focusing on opportunities that fit its PS Next operating platform. Recent activities include $186 million in acquisitions/under contract and $45 million in development openings, with a significant development pipeline.

    AI-generated summary of the company’s earnings call. Not investment advice.