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Results reflected a decrease in same-store net operating income (NOI) by 2.2%. Growth from non-same-store properties and ancillary operations offset weaker same-store revenues. Average occupancy improved 20 basis points to 92.5%.
Quarterly revenues rose 2.6% year over year to $1.23 billion and surpassed the consensus estimate of $1.21 billion.
PSA's Same-Store Portfolio Faces Pressure
Same-store revenues decreased 0.6% year over year to $1.01 billion. Realized annual rental income per occupied square foot declined 0.8% to $21.89, while rental income per available square foot fell 0.6% to $20.24.
Direct operating costs increased 4.3% to $227.7 million, and indirect operating costs rose 5.7% to $32.5 million. Same-store NOI fell to $746.4 million from $763.3 million. The NOI margin contracted 120 basis points to 74.2%.
Public Storage's Lease-Up Assets Fuel Growth
The non-same-store pool remained PSA's main operating growth engine. The portfolio included 441 acquisition, development and expansion properties totaling 39.3 million rentable square feet, representing 17% of its U.S. consolidated portfolio.
Revenues from these properties increased 25.6% during the quarter, while NOI advanced 21.5%. The gains helped counter pressure within the mature same-store portfolio and supported overall self-storage revenue growth.
PSA's Ancillary Operations Add Support
Ancillary revenues increased 12.7% year over year to $92.9 million from $82.4 million. Ancillary operating costs rose 9% to $36.3 million, allowing the business to generate a wider contribution to consolidated operating results.
Total self-storage facility revenues improved 1.9% to $1.14 billion. However, self-storage operating costs climbed 8.1% to $307.8 million, reflecting the combination of higher same-store expenses and the expansion of the non-same-store portfolio.
Public Storage Expands Its Investment Pipeline
During the quarter, Public Storage acquired 20 self-storage facilities with 1.5 million rentable square feet for $222.5 million. Including activity after quarter-end, the company had acquired or agreed to acquire 44 facilities totaling 3.2 million square feet for $454.9 million.
PSA also opened three newly developed facilities and one expansion project during the first six months of 2026. These projects added 0.4 million rentable square feet at a cost of $57.3 million. Its development and expansion pipeline is expected to deliver 4 million square feet at an aggregate cost of $691.7 million.
Public Storage Strengthens Its Balance Sheet
PSA ended June with $10.3 billion of total indebtedness and approximately $3.8 billion of liquidity. Net debt to EBITDA improved to 2.9X from 3.1X a year earlier, while the weighted average interest rate increased 30 basis points to 3.3%.
During the quarter, the company issued $500 million of 5% senior notes due in 2035. It also established a $3 billion revolving credit facility, a $500 million delayed-draw term loan and a $1 billion commercial paper program. Subsequent to quarter-end, PSA issued an additional $900 million of senior notes at an effective rate of 4.855%.
PSA Raises Its 2026 Core FFO Outlook
Public Storage raised its 2026 core FFO per share guidance to $16.75-$17.05 from $16.35-$17.00. The revised outlook includes 2 cents per share of expected accretion from financing the National Storage Affiliates Trust and Public Storage Canada transactions.
The company also improved its same-store assumptions. It now expects revenue growth between negative 0.7% and positive 0.3% compared with the prior range of negative 2.2% to flat. Same-store NOI is projected to decline 0.3%-2%, narrower than the earlier expected decrease of 0.5%-3.9%.
Digital Realty Trust (DLR - Free Report) reported second-quarter 2026 core FFO per share, excluding net promote, of $2.13, up 13.9% from a year ago. The figure surpassed the Zacks Consensus Estimate by 7.6%. Strong bookings, a record backlog and sharp renewal rent increases supported the quarter.
Prologis (PLD - Free Report) reported second-quarter 2026 core FFO per share of $1.63, outpacing the Zacks Consensus Estimate of $1.53. Results reflected strengthening demand, disciplined execution and expanding capabilities across logistics, data centers and energy.
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 Q2 FFO Misses on Same-Store NOI Decline, Revenues Beat
Key Takeaways
Public Storage (PSA - Free Report) reported second-quarter 2026 core funds from operations (FFO) per share of $4.17, missing the Zacks Consensus Estimate by 1.9%. Core FFO declined 2.6% from the year-ago quarter.
Results reflected a decrease in same-store net operating income (NOI) by 2.2%. Growth from non-same-store properties and ancillary operations offset weaker same-store revenues. Average occupancy improved 20 basis points to 92.5%.
Quarterly revenues rose 2.6% year over year to $1.23 billion and surpassed the consensus estimate of $1.21 billion.
PSA's Same-Store Portfolio Faces Pressure
Same-store revenues decreased 0.6% year over year to $1.01 billion. Realized annual rental income per occupied square foot declined 0.8% to $21.89, while rental income per available square foot fell 0.6% to $20.24.
Direct operating costs increased 4.3% to $227.7 million, and indirect operating costs rose 5.7% to $32.5 million. Same-store NOI fell to $746.4 million from $763.3 million. The NOI margin contracted 120 basis points to 74.2%.
Public Storage's Lease-Up Assets Fuel Growth
The non-same-store pool remained PSA's main operating growth engine. The portfolio included 441 acquisition, development and expansion properties totaling 39.3 million rentable square feet, representing 17% of its U.S. consolidated portfolio.
Revenues from these properties increased 25.6% during the quarter, while NOI advanced 21.5%. The gains helped counter pressure within the mature same-store portfolio and supported overall self-storage revenue growth.
PSA's Ancillary Operations Add Support
Ancillary revenues increased 12.7% year over year to $92.9 million from $82.4 million. Ancillary operating costs rose 9% to $36.3 million, allowing the business to generate a wider contribution to consolidated operating results.
Total self-storage facility revenues improved 1.9% to $1.14 billion. However, self-storage operating costs climbed 8.1% to $307.8 million, reflecting the combination of higher same-store expenses and the expansion of the non-same-store portfolio.
Public Storage Expands Its Investment Pipeline
During the quarter, Public Storage acquired 20 self-storage facilities with 1.5 million rentable square feet for $222.5 million. Including activity after quarter-end, the company had acquired or agreed to acquire 44 facilities totaling 3.2 million square feet for $454.9 million.
PSA also opened three newly developed facilities and one expansion project during the first six months of 2026. These projects added 0.4 million rentable square feet at a cost of $57.3 million. Its development and expansion pipeline is expected to deliver 4 million square feet at an aggregate cost of $691.7 million.
Public Storage Strengthens Its Balance Sheet
PSA ended June with $10.3 billion of total indebtedness and approximately $3.8 billion of liquidity. Net debt to EBITDA improved to 2.9X from 3.1X a year earlier, while the weighted average interest rate increased 30 basis points to 3.3%.
During the quarter, the company issued $500 million of 5% senior notes due in 2035. It also established a $3 billion revolving credit facility, a $500 million delayed-draw term loan and a $1 billion commercial paper program. Subsequent to quarter-end, PSA issued an additional $900 million of senior notes at an effective rate of 4.855%.
PSA Raises Its 2026 Core FFO Outlook
Public Storage raised its 2026 core FFO per share guidance to $16.75-$17.05 from $16.35-$17.00. The revised outlook includes 2 cents per share of expected accretion from financing the National Storage Affiliates Trust and Public Storage Canada transactions.
The company also improved its same-store assumptions. It now expects revenue growth between negative 0.7% and positive 0.3% compared with the prior range of negative 2.2% to flat. Same-store NOI is projected to decline 0.3%-2%, narrower than the earlier expected decrease of 0.5%-3.9%.
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
Performance of Other REITs
Digital Realty Trust (DLR - Free Report) reported second-quarter 2026 core FFO per share, excluding net promote, of $2.13, up 13.9% from a year ago. The figure surpassed the Zacks Consensus Estimate by 7.6%. Strong bookings, a record backlog and sharp renewal rent increases supported the quarter.
Prologis (PLD - Free Report) reported second-quarter 2026 core FFO per share of $1.63, outpacing the Zacks Consensus Estimate of $1.53. Results reflected strengthening demand, disciplined execution and expanding capabilities across logistics, data centers and energy.
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.