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Public Storage's Q1 FFO Beats Estimates on Non-Same-Store Growth
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Key Takeaways
Public Storage Q1 2026 core FFO of $4.22/share and revenues of $1.22B both topped estimates.
PSA's non-same-store pool grew revenues 24.8% and NOI 27.5%; $70M incremental NOI expected beyond 2026.
PSA targets an all-stock National Storage Affiliates deal expected to close in Q3 2026.
Public Storage (PSA - Free Report) reported first-quarter 2026 core funds from operations (FFO) per share of $4.22, topping the Zacks Consensus Estimate of $4.13 by 2.2%. Core FFO per share increased 2.4% year over year.
Quarterly revenues came in at $1.22 billion, above the Zacks Consensus Estimate of $1.21 billion by 1% and up 2.9% from the year-ago quarter.
Weighted average same-store occupancy of 91.5% provided a steady operating base as lease-up assets added incremental growth.
Public Storage’s Same-Store Trends Stabilize
Same-store revenues were essentially flat at $1.0 billion versus a year ago, reflecting modest pricing pressure offset by steadier move-in trends. Realized annual rental income per occupied square foot edged down 0.3% to $22.00, while the realized annual rental income per available square foot rose 0.1% to $20.12. Average same-store occupancy improved 0.4 percentage points to 91.5%, supporting cash-flow stability against a shifting demand backdrop.
Same-store net operating income increased 0.4% to $739.4 million. The same-store net operating income margin expanded 0.4 percentage points to 77.1%, aided by lower direct operating costs.
PSA's Lease-Up Pool Adds Momentum
Beyond the same-store base, Public Storage continues to benefit from properties in various stages of acquisition, development and expansion. The company ended the quarter with 421 primarily non-same-store facilities totaling 37.7 million rentable square feet, representing about 16.4% of U.S. consolidated net rentable square feet.
This non-same-store pool generated $127.3 million of revenues, up 24.8% year over year, while NOI climbed 27.5% to $83.0 million. Management also quantified future upside, pointing to $70.0 million of incremental non-same-store NOI expected at stabilization beyond 2026.
Public Storage's Investment Activity Stays Active
Public Storage completed targeted portfolio actions during the quarter while maintaining a sizable development pipeline. The company acquired three self-storage facilities (0.2 million net rentable square feet) for $20.8 million and completed three development and expansion projects that added 0.3 million net rentable square feet at a cost of $45.4 million.
At quarter end, it had 40 development and expansion projects in the pipeline expected to deliver 3.5 million net rentable square feet at an aggregate estimated cost of $618.4 million. The remaining $415.7 million of spend is expected to be incurred primarily over the next 18 to 24 months.
PSA's Ancillary Income & Other Quarterly Tidbits
Ancillary operations remained a meaningful contributor to top-line growth. Ancillary revenues increased to $89.6 million from $80.2 million in the year-ago quarter, led by tenant reinsurance premiums of $66.5 million and higher third-party property management revenues of $16.9 million. Ancillary net operating income rose to $55.4 million from $49.5 million.
General and administrative expenses jumped to $30.4 million from $25.2 million, while interest expense climbed to $80.0 million from $72.0 million. Real estate acquisition and development expense declined to $2.4 million from $7.4 million, partially offsetting the year-over-year increase across other cost categories.
Public Storage's Balance Sheet Remains Conservative
Public Storage exited the quarter with a strong liquidity position of $1.9 billion. The weighted average interest rate on total debt was approximately 3.3%, with a weighted average maturity of about 6.4 years, reflecting a well-structured debt ladder. Total indebtedness as of March 31, 2026 was $10.1 billion.
Leverage remained modest for the sector, with debt to EBITDA at 2.9X, and net debt and preferred equity to EBITDA at 4.1X. Subsequent to quarter end, Public Storage completed a $500 million senior notes offering at a fixed rate of 5% due Dec. 15, 2035, extending its maturity profile. PSA used a portion of the proceeds to repay the $325 million balance on its line of credit.
PSA Reaffirms 2026 Core FFO Outlook as NSA Deal Nears
For full-year 2026, PSA reiterated its core FFO per share guidance range of $16.35-$17.00. The Zacks Consensus Estimate is currently pegged at $16.95, which is toward the high end of the company’s guided range.
The company reiterated its full-year assumptions, including 2.2% decline-to-flat same-store revenue growth, a 1.5%-2.8% same-store expense increase and a fall of 3.9% to 0.5% in same-store NOI, reflecting a cautious view on the stabilized base. At the same time, management expects growth contributions from non-same-store assets, projecting $335 million to $355 million of non-same-store NOI and $222 million to $228 million of ancillary NOI.
Strategically, PSA is pursuing an all-stock acquisition of National Storage Affiliates Trust valued at an enterprise value of about $10.5 billion. The company expects the merger to add 35 to 50 cents to core FFO per share at stabilization and anticipates closing in the third quarter of 2026. The company also entered a strategic data science partnership with Welltower to advance the application of AI in capital allocation, while leadership changes took effect April 1, 2026, with Tom Boyle appointed CEO and Shank Mitra named chairman.
We now look forward to the earnings releases of other REITs — Extra Space Storage Inc. (EXR - Free Report) and Regency Centers Corporation (REG - Free Report) — which are slated to report on April 28 and 29, respectively.
The Zacks Consensus Estimate for Extra Space Storage’s first-quarter 2026 FFO per share stands at $2.01, indicating a marginal increase year over year. EXR currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Regency Centers’ first-quarter 2025 FFO per share stands at $1.21, implying a 5.2% jump year over year. EXR currently has a Zacks Rank #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's Q1 FFO Beats Estimates on Non-Same-Store Growth
Key Takeaways
Public Storage (PSA - Free Report) reported first-quarter 2026 core funds from operations (FFO) per share of $4.22, topping the Zacks Consensus Estimate of $4.13 by 2.2%. Core FFO per share increased 2.4% year over year.
Quarterly revenues came in at $1.22 billion, above the Zacks Consensus Estimate of $1.21 billion by 1% and up 2.9% from the year-ago quarter.
Weighted average same-store occupancy of 91.5% provided a steady operating base as lease-up assets added incremental growth.
Public Storage’s Same-Store Trends Stabilize
Same-store revenues were essentially flat at $1.0 billion versus a year ago, reflecting modest pricing pressure offset by steadier move-in trends. Realized annual rental income per occupied square foot edged down 0.3% to $22.00, while the realized annual rental income per available square foot rose 0.1% to $20.12. Average same-store occupancy improved 0.4 percentage points to 91.5%, supporting cash-flow stability against a shifting demand backdrop.
Same-store net operating income increased 0.4% to $739.4 million. The same-store net operating income margin expanded 0.4 percentage points to 77.1%, aided by lower direct operating costs.
PSA's Lease-Up Pool Adds Momentum
Beyond the same-store base, Public Storage continues to benefit from properties in various stages of acquisition, development and expansion. The company ended the quarter with 421 primarily non-same-store facilities totaling 37.7 million rentable square feet, representing about 16.4% of U.S. consolidated net rentable square feet.
This non-same-store pool generated $127.3 million of revenues, up 24.8% year over year, while NOI climbed 27.5% to $83.0 million. Management also quantified future upside, pointing to $70.0 million of incremental non-same-store NOI expected at stabilization beyond 2026.
Public Storage's Investment Activity Stays Active
Public Storage completed targeted portfolio actions during the quarter while maintaining a sizable development pipeline. The company acquired three self-storage facilities (0.2 million net rentable square feet) for $20.8 million and completed three development and expansion projects that added 0.3 million net rentable square feet at a cost of $45.4 million.
At quarter end, it had 40 development and expansion projects in the pipeline expected to deliver 3.5 million net rentable square feet at an aggregate estimated cost of $618.4 million. The remaining $415.7 million of spend is expected to be incurred primarily over the next 18 to 24 months.
PSA's Ancillary Income & Other Quarterly Tidbits
Ancillary operations remained a meaningful contributor to top-line growth. Ancillary revenues increased to $89.6 million from $80.2 million in the year-ago quarter, led by tenant reinsurance premiums of $66.5 million and higher third-party property management revenues of $16.9 million. Ancillary net operating income rose to $55.4 million from $49.5 million.
General and administrative expenses jumped to $30.4 million from $25.2 million, while interest expense climbed to $80.0 million from $72.0 million. Real estate acquisition and development expense declined to $2.4 million from $7.4 million, partially offsetting the year-over-year increase across other cost categories.
Public Storage's Balance Sheet Remains Conservative
Public Storage exited the quarter with a strong liquidity position of $1.9 billion. The weighted average interest rate on total debt was approximately 3.3%, with a weighted average maturity of about 6.4 years, reflecting a well-structured debt ladder. Total indebtedness as of March 31, 2026 was $10.1 billion.
Leverage remained modest for the sector, with debt to EBITDA at 2.9X, and net debt and preferred equity to EBITDA at 4.1X. Subsequent to quarter end, Public Storage completed a $500 million senior notes offering at a fixed rate of 5% due Dec. 15, 2035, extending its maturity profile. PSA used a portion of the proceeds to repay the $325 million balance on its line of credit.
PSA Reaffirms 2026 Core FFO Outlook as NSA Deal Nears
For full-year 2026, PSA reiterated its core FFO per share guidance range of $16.35-$17.00. The Zacks Consensus Estimate is currently pegged at $16.95, which is toward the high end of the company’s guided range.
The company reiterated its full-year assumptions, including 2.2% decline-to-flat same-store revenue growth, a 1.5%-2.8% same-store expense increase and a fall of 3.9% to 0.5% in same-store NOI, reflecting a cautious view on the stabilized base. At the same time, management expects growth contributions from non-same-store assets, projecting $335 million to $355 million of non-same-store NOI and $222 million to $228 million of ancillary NOI.
Strategically, PSA is pursuing an all-stock acquisition of National Storage Affiliates Trust valued at an enterprise value of about $10.5 billion. The company expects the merger to add 35 to 50 cents to core FFO per share at stabilization and anticipates closing in the third quarter of 2026. The company also entered a strategic data science partnership with Welltower to advance the application of AI in capital allocation, while leadership changes took effect April 1, 2026, with Tom Boyle appointed CEO and Shank Mitra named chairman.
PSA’s Zacks Rank
Public Storage currently carries a Zacks Rank #3 (Hold). 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 Earnings Releases
We now look forward to the earnings releases of other REITs — Extra Space Storage Inc. (EXR - Free Report) and Regency Centers Corporation (REG - Free Report) — which are slated to report on April 28 and 29, respectively.
The Zacks Consensus Estimate for Extra Space Storage’s first-quarter 2026 FFO per share stands at $2.01, indicating a marginal increase year over year. EXR currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Regency Centers’ first-quarter 2025 FFO per share stands at $1.21, implying a 5.2% jump year over year. EXR currently has a Zacks Rank #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.