PSA-PO · Public Storage

Public Storage’s first quarter 2026 results demonstrate operational resilience amid a shifting market environment. The company achieved 2.4% Core FFO per share growth, driven primarily by margin expansion rather than top-line growth. Same Store revenues remained essentially flat year-over-year at $1.0 billion, but Direct Cost of Operations decreased 1.6%, enabling Same Store NOI to grow 0.4% to $739.4 million. This cost discipline expanded the Same Store gross margin by 40 basis points to 77.1%. Management attributed this performance to the PS Next Operating Platform, which mitigated inflationary pressures on direct operating costs. Average occupancy improved 40 basis points to 91.5%. The non-same store segment contributed meaningfully, with revenues and NOI growing 24.8% and 27.5% respectively, reflecting contributions from recent acquisitions and development projects.

The most significant strategic development is the announced $10.5 billion all-stock acquisition of National Storage Affiliates Trust. The transaction is expected to close in Q3 2026, subject to NSA equity holder approval, and is projected to add $0.35 to $0.50 to Core FFO per share at stabilization. NSA’s portfolio includes over 1,000 properties across 37 states and Puerto Rico. Public Storage will exclusively manage the joint venture portfolio formed as part of the transaction, generating customary management and reinsurance income. CEO Tom Boyle emphasized the acquisition’s potential to drive per-share earnings growth and unlock operating upside through platform integration.

Subsequent to quarter end, the company strengthened its balance sheet by issuing $500 million in senior notes at a fixed 5.00% rate maturing in 2035, using a portion of proceeds to repay its credit line. The company reaffirmed its full-year 2026 Core FFO per share guidance of $16.35 to $17.00, with Same Store NOI growth expected to range from -3.9% to -0.5%.