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Public Storage (PSA) Tops Q1 FFO Estimates, Reiterates '22 View
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Public Storage's (PSA - Free Report) first-quarter 2022 core funds from operations (FFO) per share of $3.65 surpassed the Zacks Consensus Estimate of $3.59. The figure also increased 29.4% year over year.
Quarterly revenues of $973.4 million exceeded the Zacks Consensus Estimate of $965.7 million. Moreover, revenues increased 26.9% year over year.
Results reflect an improvement in the realized annual rent per available square foot in the reported quarter. The company also benefited from its expansion efforts through acquisitions, developments and extensions. Management restated its full-year guidance.
Behind the Headlines
Public Storage’s same-store revenues increased 15.8% year over year to $749.3 million in the first quarter, highlighting the higher realized annual rent per available square foot. This REIT experienced a 15.6% increase in the realized annual rental income per available square foot to $19.40. The weighted-average square foot occupancy of 95.6% remained flat year over year.
The same-store cost of operations increased 3.6% year over year, mainly reflecting an increase in property tax expenses, a rise in repair and maintenance expenses and an increase in centralized management costs, partially offset by a decrease in marketing expenses.
Consequently, PSA’s same-store net operating income (NOI) increased 20.5% to $561.3 million. Also, this REIT’s NOI growth from non-same-store facilities was $71.7 million due to the facilities acquired in 2021 and the fill-up of the recently developed and expanded facilities.
Portfolio Activity
In the March-end quarter, Public Storage acquired 10 self-storage facilities comprising 0.8 million net rentable square feet of area for $127.7 million. Following Mar 31, 2022, the company acquired or was under contract to acquire 11 self-storage facilities spanning 0.9 million net rentable square feet of space across nine states for $147.2 million.
In the first quarter, this REIT completed several expansion projects with 0.1 million net rentable square feet and costing $19.4 million. Finally, as of Mar 31, 2022, Public Storage had several facilities in development (2.2 million net rentable square feet), with an estimated cost of $406.1 million, as well as expansion projects (2.6 million net rentable square feet) worth $427.7 million. It expects to incur the remaining $496.2 million of development costs related to these projects, mainly over the next 18 to 24 months.
Balance Sheet Position
Public Storage exited the first quarter of 2022 with $940.5 million of cash and equivalents, up from the $734.6 million recorded at the end of 2021.
Guidance
For 2022, Public Storage reiterated its core FFO per share guidance in the range of $14.75-$15.65. The Zacks Consensus Estimate for the same stands at $15.52.
The company’s full-year assumption is backed by 12-15% growth in same-store revenues, a 6% to 8% rise in same-store expenses and a 13.4% to 18.0% expansion in same-store NOI. Further, the company expects $1 billion of acquisitions and $250 million of development openings.
PSA’s guidance excludes estimates for the impact of the potential sale of its investment in PS Business Parks, Inc. pursuant to PS Business Parks’ merger agreement with Blackstone.
Dividend Update
On Apr 28, 2022, the company’s board announced a regular quarterly dividend of $2 per common share. The dividend will be paid out on Jun 30 to shareholders of record as of Jun 15, 2022.
It’s time to look forward to the earnings releases of other REITs, including Simon Property Group, Inc. (SPG - Free Report) , Federal Realty Investment Trust (FRT - Free Report) and Ventas Inc. (VTR - Free Report) .
While Simon Property is scheduled to report its numbers on May 9, Federal Realty and Ventas are slated to release first-quarter 2022 results on May 5.
The Zacks Consensus Estimate for Simon Property’s first-quarter 2022 FFO per share is pegged at $2.74, suggesting a year-over-year increase of 10.5%. SPG currently carries a Zacks Rank of 3 (Hold).
The Zacks Consensus Estimate for Federal Realty’s first-quarter 2022 FFO per share is pegged at $1.44, implying a year-over-year increase of 23.1%. FRT currently carries a Zacks Rank of 3.
The Zacks Consensus Estimate for Ventas’ first-quarter 2022 FFO per share is pegged at 77 cents, suggesting a year-over-year increase of 6.9%. VTR currently carries a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Public Storage (PSA) Tops Q1 FFO Estimates, Reiterates '22 View
Public Storage's (PSA - Free Report) first-quarter 2022 core funds from operations (FFO) per share of $3.65 surpassed the Zacks Consensus Estimate of $3.59. The figure also increased 29.4% year over year.
Quarterly revenues of $973.4 million exceeded the Zacks Consensus Estimate of $965.7 million. Moreover, revenues increased 26.9% year over year.
Results reflect an improvement in the realized annual rent per available square foot in the reported quarter. The company also benefited from its expansion efforts through acquisitions, developments and extensions. Management restated its full-year guidance.
Behind the Headlines
Public Storage’s same-store revenues increased 15.8% year over year to $749.3 million in the first quarter, highlighting the higher realized annual rent per available square foot. This REIT experienced a 15.6% increase in the realized annual rental income per available square foot to $19.40. The weighted-average square foot occupancy of 95.6% remained flat year over year.
The same-store cost of operations increased 3.6% year over year, mainly reflecting an increase in property tax expenses, a rise in repair and maintenance expenses and an increase in centralized management costs, partially offset by a decrease in marketing expenses.
Consequently, PSA’s same-store net operating income (NOI) increased 20.5% to $561.3 million. Also, this REIT’s NOI growth from non-same-store facilities was $71.7 million due to the facilities acquired in 2021 and the fill-up of the recently developed and expanded facilities.
Portfolio Activity
In the March-end quarter, Public Storage acquired 10 self-storage facilities comprising 0.8 million net rentable square feet of area for $127.7 million. Following Mar 31, 2022, the company acquired or was under contract to acquire 11 self-storage facilities spanning 0.9 million net rentable square feet of space across nine states for $147.2 million.
In the first quarter, this REIT completed several expansion projects with 0.1 million net rentable square feet and costing $19.4 million. Finally, as of Mar 31, 2022, Public Storage had several facilities in development (2.2 million net rentable square feet), with an estimated cost of $406.1 million, as well as expansion projects (2.6 million net rentable square feet) worth $427.7 million. It expects to incur the remaining $496.2 million of development costs related to these projects, mainly over the next 18 to 24 months.
Balance Sheet Position
Public Storage exited the first quarter of 2022 with $940.5 million of cash and equivalents, up from the $734.6 million recorded at the end of 2021.
Guidance
For 2022, Public Storage reiterated its core FFO per share guidance in the range of $14.75-$15.65. The Zacks Consensus Estimate for the same stands at $15.52.
The company’s full-year assumption is backed by 12-15% growth in same-store revenues, a 6% to 8% rise in same-store expenses and a 13.4% to 18.0% expansion in same-store NOI. Further, the company expects $1 billion of acquisitions and $250 million of development openings.
PSA’s guidance excludes estimates for the impact of the potential sale of its investment in PS Business Parks, Inc. pursuant to PS Business Parks’ merger agreement with Blackstone.
Dividend Update
On Apr 28, 2022, the company’s board announced a regular quarterly dividend of $2 per common share. The dividend will be paid out on Jun 30 to shareholders of record as of Jun 15, 2022.
Public Storage currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Public Storage Price, Consensus and EPS Surprise
Public Storage price-consensus-eps-surprise-chart | Public Storage Quote
Upcoming Releases
It’s time to look forward to the earnings releases of other REITs, including Simon Property Group, Inc. (SPG - Free Report) , Federal Realty Investment Trust (FRT - Free Report) and Ventas Inc. (VTR - Free Report) .
While Simon Property is scheduled to report its numbers on May 9, Federal Realty and Ventas are slated to release first-quarter 2022 results on May 5.
The Zacks Consensus Estimate for Simon Property’s first-quarter 2022 FFO per share is pegged at $2.74, suggesting a year-over-year increase of 10.5%. SPG currently carries a Zacks Rank of 3 (Hold).
The Zacks Consensus Estimate for Federal Realty’s first-quarter 2022 FFO per share is pegged at $1.44, implying a year-over-year increase of 23.1%. FRT currently carries a Zacks Rank of 3.
The Zacks Consensus Estimate for Ventas’ first-quarter 2022 FFO per share is pegged at 77 cents, suggesting a year-over-year increase of 6.9%. VTR currently carries a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.